Commons Sitting of 14 December 1977

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

    Policy (White Paper)
    Mr. Crouchasked the Secretary of State for Transport, what further response he has had to the recent White Paper on Transport Policy; and whether he will make a statement.
    Mr. Canavanasked the Secretary of State for Transport how many representations he has received to date about the White Paper on Transport Policy.
    The Secretary of State for Transport (Mr. William Rodgers): The White Paper itself did not invite a general response. However, several hundred comments have been received on the subsequent consultation papers.
    Mr. Crouch: Is the Minister aware of the sort of response that I have had from commuters in my constituency and in the wider area of the South-East who are being asked by British Rail to accept on 8th January an increase in the rail fares that they must pay? Does he realise that in some cases for my constituents travelling from Herne Bay to London this means an increase from £522 a year to £602 for the pleasure of travelling to and from work?
    Mr. Rodgers: This is not a point on which I want to argue the toss with the hon. Gentleman, who has a proper concern for commuters to London. The decision of the British Railways Board does not arise directly from the White Paper which was published in June.
    Mr. Canavan: Will the Minister pay particular attention to the submission that has been made by the Scottish Association on Public Transport, pointing out that lower public transport fares could have a tremendous benefit on the conservation of energy and also be of great benefit to people on lower incomes, including young people, old-age pensioners, and those living in rural areas? Would it not make good economic as well as socal sense to subsidise a low fare system using some of the money which was announced on Monday for energy conservation?
    Mr. Rodgers: I have sympathy for proposals that public transport should come first, and that was a plain theme in the White Paper. We have made provision for a higher level of subsidy for buses than had hitherto been anticipated. It is a difficult job to find the right balance between the level of fares and the rate of subsidy and the problem is that if fares do not rise to keep pace with inflation, subsidies must rise, and that is money out of the taxpayers' pockets.
    Mr. Temple-Morris: Is the Minister aware that the White Paper recommends another cut in road maintenance, of 5 per cent? Does he realise the burden that this places on the shire counties which have the overwhelming responsibility for roads in this country when that is allied with the rate support grant cut?
    Mr. Rodgers: I am grateful to the hon. Gentleman for drawing attention to the problem of the many claims on resources and the need to choose priorities. I recognise that some councils have genuine problems with road maintenance, but there are others with problems of maintaining public transport that I know the hon. Gentleman would want to see solved. We have to strike a balance, and I feel that we have done it, broadly, in the right way.
    Mr. Ovenden: In the White Paper, the Government accept that steep fare increases cause great hardship to commuters and should be phased. Is that not even more true at a time of Government-imposed wage restraint, and could the Government do something to ameliorate the 16 per cent. increase in fares in the South—if necessary by increasing the subsidy to British Rail?
    Mr. Rodgers: Any subsidy must be a sum of money diverted from other good causes with a claim on public expenditure, or the money must be raised from the taxpayer. The House has generally accepted that a number of rail services must pay their way, so that subsidies available should go to the lines that can never be cost-effective but where the need is greatest. There must be some hardship at a time of rising prices.
    Mr. Norman Fowler: It is not simply a choice between increased fares or subsidies; there is another factor involved with the railways, namely, improved productivity. Does the Minister agree that if the railways achieve the improvements in productivity that the British Railways Board says are possible, it would be a giant step towards containing rail costs and keeping fares down?
    Mr. Rodgers: I wish I could agree that it would be a giant step. It would be an important one, and the White Paper has made plain that improved productivity is essential and that there is no other way of securing the future of the network. However, we should squarely face the fact that as long as the level of inflation is too high we shall pay more subsidy out of the public purse through higher public expenditure, or else fares will go up—however uncomfortable that may be.

    Rural Transport
    Mr. MacFarquharasked the Secretary of State for Transport if he will make a further statement on rural transport.
    The Under-Secretary of State for Transport (Mr. John Horam): What rural transport needs now is three things—finance, basic stability and imaginative development. Government policies aim to provide the finance by a £15 million increase in annual provisions for bus services outside the conurbations, the stability by requiring shire county councils to prepare and give effect to a statutory public transport plan. As for imaginative development, this must be mainly for local initiative but our proposals for community buses and social car schemes will be of great help.
    Mr. MacFarquhar: I appreciate the efforts that have been made by Ministers,
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    but is my hon. Friend aware hat my constituents are extremely perturbed at the Trent Bus Company asking for a further 12 per cent. Increase—the fifth increase in just over two years, bringing the total increase to 55 per cent.? In order to ameliorate such situations, could he, in addition to the local initiatives that he hopes to encourage, urgently investigate reports that at least one of the national bus companies has managed to save money for itself and its customers by the imaginative and flexible use of routing and timing?
    Mr. Horam rose—
    Mr. Speaker: Order. We are getting back to long supplementary questions. I hope that we shall have shorter supplementaries and shorter replies.
    Mr. Horam: I am indeed aware of what the National Bus Company is doing in market analysis and making route changes which enable it to provide a very good service at a cheaper cost.
    Mr. Ridsdale: Will the Government introduce national concessionary bus fares? If not, will they at least implement the promise given to two councils that they may have their own schemes?
    Mr. Horam: The NBC is considering the introduction of concessionary fares on an experimental basis in certain areas, though it does not yet have full results of the experiments.
    Mr. Bagier: In his consideration of county transport plans, will my hon. Friend bear in mind the importance of rural railway services and try to ensure that when county plans are drawn up the Government do not threaten to withdraw their support because of the cost? Is he aware that in inclement weather, for example, it can be vital to have such links open?
    Mr. Horam: I agree that railways have a clear rôle to play in this respect, but I am distinguishing between what we are proposing in the county public transport plans and our proposals for discussion on local railway plans.

    National Bus Company
    Mr. Charles Morrisonasked the Secretary of State for Transport when he

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    next intends to meet the Chairman of the National Bus Company.
    Mr. William Rodgers: In the next month or so.
    Mr. Morrison: When the right hon. Gentleman does meet the Chairman of the NBC, will he ask him to explain how it is that the Bristol Omnibus Company is asking for an increase in fares of as much as 100 per cent., which will put its fares 100 per cent. in excess of those charged on buses belonging to the passenger transport department of the borough of Thamesdown? I appreciate that there is a degree of cross-subsidisation in respect of rural areas, but is not the solution to have many more locally-based and locally-owned bus companies?
    Mr. Rodgers: I shall draw the hon. Gentleman's point to the attention of the chairman and I am sure that he will be prepared to consider it. There are difficulties concerning the fare structures between different bus companies. As my hon. Friend the Under-Secretary said earlier, the NBC is genuinely trying to adapt the existing route system in the most flexible way, but it needs a reasonable level of financial support.
    Mr. Stoddart: Will my right hon. Friend pay regard to the fact that in cases such as this the position of people in rural areas is very much undermined when they see people across the road being able to travel similar distances for half the cost? Should not the NBC pay special attention to this problem and do something about its organisation?
    Mr. Rodgers: My hon. Friend recognises that the problems of operating efficiently in rural areas are very much more difficult, and, as I have said before, this can be done only if the counties are given adequate revenue suport. We cannot maintain the services in any other way. Of course, there are problems in urban areas, but there is a much greater density of traffic there, which helps to solve some of the problems.
    Sir A. Meyer: When the right hon. Gentleman has an opportunity to meet the chairman, will he ask him about companies such as Crosville, which persistently refuse to introduce off-peak fares?
    Mr. Rodgers: The chairman is fully aware of this matter, which the hon.
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    Gentleman has raised in the House before. I am sure that he is giving attention to it, though there are problems in having the NBC, with a degree of consistency, on the one hand and local option, which most of us want to see, on the other.
    Mr. Adley: Now that the right hon. Gentleman has referred to local option, will he tell us what is likely to happen when the proposals that he is bringing forward in the Transport Bill—proposals for greater flexibility and a greater say for county councils in licensing matters for rural transport and buses—conflict with the views of the traffic commissioners? What thought has he given to that matter, and who will have the final say if there are disagreements?
    Mr. Rodgers: That question goes far wider than the original Question. The hon. Gentleman should await the publication of the Bill and, in particular, the proposals in the county public trans-port plans. He will find all the details there.

    Kidney Donor Cards
    Mr. Pavittasked the Secretary of State for Transport how many kidney donor cards have now been issued to applicants for provisional driving licences.
    Mr. Horam: Nearly 800,000 since beginning this in March.
    Mr. Pavitt: Will my hon. Friend accept the grateful thanks of many renal failure patients, especially children, whose lives have been saved by his action? May I further impress upon him that it is equally possible to extend the service to applicants for all types of driving licences rather than simply provisional ones'? Will he consult the Secretary of State for Social Services in order to secure this further provision?
    Mr. Horam: I am grateful to my hon. Friend for his remarks. The problems about extending the scheme are purely ones of practicality. We should have to devise a new form, and by the time we did so most people would have driving licences that last up to the age of 70, and we would be back to the situation in which we could give the forms only to people applying for provisional licences. I do not think that we can extend the system too far.
    Mr. Michael Roberts: Is the hon. Gentleman aware that renal specialists throughout the United Kingdom appreciate what has been done, but are dismayed by the fact that so many motorists have not been given donor cards?
    Mr. Horam: We are getting on to questions of privacy, practicality and cost. I am sympathetic to what has been said by the hon. Member and my hon. Friend, and we have taken sensible action. Whether we can go any further is a serious question.
    Mr. Ashley: As there are too many Ministers making too many excuses for not co-operating in the distribution of kidney donor cards, will my hon. Friend redouble his efforts to make sure that every traveller carries a card?
    Mr. Horam: We issue forms to all people who get provisional driving licences. That is the way to achieve the maximum distribution in a sensible manner.

    Supplementary Grant
    Mr. Grocottasked the Secretary of State for Transport whether, in his grant allocation for transport purposes, he will take special account of those counties which contain towns which have committed programmes of town development.
    Mr. William Rodgers: One of the main purposes of the transport supplementary grant system is to take account of special local needs. I have examined counties' transport policies and programme submissions with this in mind in preparing for decisions on the grant for 1978–79.
    Mr. Grocott: Does my right hon. Friend agree that where a town has a committed housing programme designed to help the whole region and in line with the Government's own requirements, it deserves special consideration? Will he confirm that in the grant to Staffordshire there is special provision for Tamworth's committed programme of expansion?
    Mr. Rodgers: I know that my hon. Friend has been very assiduous in drawing attention to the problems of Tamworth. I hope that the county council will continue to recognise Tamworth as a special
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    case in making provision and application for TSG.
    Mr. Fry: Is the right hon. Gentleman aware that the amount of money being made available is wholly inadequate for most counties to provide even essential local roads? Will he look closely at this matter, particularly at improvements which would give assistance to through traffic, in view of the appalling delay in decisions on many of our proposed motorways?
    Mr. Rodgers: Of course there is less money available than we should like, but the counties get substantial assistance not only through TSG but through the rate support grant. They have to accept their own responsibilities for carrying some part of the total cost on the rates. They have to make a choice, and it is a difficult choice for almost everyone.

    Drivers (Regulations)
    Mr. Shepherdasked the Secretary of State for Transport when he will announce the final details of the transitional arrangements for the implementation of drivers' hours and distances regulations; and whether he will make a statement.
    Mr. Nicholas Wintertonasked the Secretary of State for Transport when he will announce the final details of the transitional arrangements for the implementation of drivers' hours and distances regulations; and whether he will make a statement.
    Mr. William Rodgers: As soon as I receive the decision of the EEC Commission.
    Mr. Shepherd: Does the right hon. Gentleman recognise that there is considerable uncertainty and confusion in the industry because of the delay? Does he also recognise that in the generality of today's motorways and traffic routes, the distance of 450 km. is considered to be inadequate? Will he use his best endeavours to see that this is extended?
    Mr. Rodgers: In the second part of his supplementary question the hon. Gentle man refers to one aspect of this problem where I am afraid there is no room for manoeuvre. However, I entirely agree with what he said concerning the present

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    uncertainty and confusion. I wish that we had had a firm indication before now of the stages for implementation. He can take it from me that I am doing my very best to obtain a firm reply very soon.
    Mr. Donald Stewart: Is the Secretary of State aware that the Highlands area covers one-sixth of the land mass of the United Kingdom; that the railway network is extremely meagre, and that, therefore, the implementation of the EEC directives regarding hours and distances would place an intolerable economic burden on the region? Will he keep that in mind?
    Mr. Rodgers: Yes, I shall certainly bear that in mind. That applies to other parts of the United Kingdom as well. In discussing those matters in Brussels prior to the decision on 22nd October, I was very fully aware of the importance of this matter.
    Several Hon. Members rose—
    Mr. Speaker: Order. I made a mistake. I did not follow my usual rule of calling the other Member whose Question was being answered. I call the hon. Member for Macclesfield (Mr. Winterton).
    Mr. Winterton: Is the Secretary of State aware that these EEC regulations will face haulage contractors and passenger transport contractors with new very inflexible restrictions and, in addition, that substantial extra costs will be forced not only on the industry but inevitably also on the end consumer, the customer? What action is the Minister taking? Will he now tell the House?
    Mr. Rodgers: If the hon. Gentleman had listened a little more carefully he would have been aware of the extent to which we succeeded, at the Luxembourg Council, in negotiating an agreement by which the drivers' hours regulations can be introduced over a period of three years instead of having to be implemented from 1st January 1978. The industry takes the view that this is a very substantial gain, but I recognise that it still depends upon the final decisions of the Commission and, beyond that, on the ability of the industry itself to absorb the extra cost.
    Mr. Ronald Atkins: Does my right hon. Friend agree that the shorter hours
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    and shorter distances might be as acceptable to British drivers as to those on the Continent if the British drivers did not have such absymally low basic wages for so shocking a trade, having to live, as they do, on overtime and other perks?
    Mr. Rodgers: I know that my hon. Friend is being helpful. I wish that I could entirely endorse all that he said. It is certainly true that some drivers of heavy vehicles are paid badly. I think that those firms which are responsible should look into that matter, despite the inhibitions which are bound to determine the outcome this year.
    Mr. Norman Fowler: On the subject of the distance regulations, as the Secretary of State is aware, the deadline that he has put forward is 1st January 1978. Is he expecting the road haulage industry to meet that deadline? Is he also aware that as the fitting of tachographs is the only practical way of avoiding the new distance limits, there are many road haulage firms which want to come to an agreement voluntarily with their staff? What help are the Government planning to give those companies to resolve the obvious and clear difficulties that they have with the unions on this question?
    Mr. Rodgers: Again, the hon. Gentleman raises two related but separate questions. On the first of his supplementary questions, I entirely understand that in the absence of any plain statement, though we are to implement the regulations from 1st January, the industry does not know the way in which it will be done. I regret that, but there is no way out of that impasse. I shall certainly inform the industry as soon as I have the information that is required.
    The hon. Gentleman's second question deals with the 450-kilometre limit. As I say, this is something that we are obliged to take into account, but there is a great deal of scope because it allows for the carrying of two drivers.
    Mr. John Ellis: As a member of the Transport and General Workers Union myself, may I ask whether the Minister recognises that many drivers in the Transport and General Workers Union feel that they are being subjected to pressures, since vehicles with tachographs fitted will be accepted as a way of twisting their arms?

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    This is no way in which to achieve agreement. Since these regulations will have the force of law in January and the details are not yet cleared up—another example of Common Market legislation—will he agree that there should be no prosecutions until they are cleared up?
    Mr. Rodgers: I think that we should be relatively relaxed about the situation, simply because there is no quick way round it. But I take the points made by my hon. Friend.
    Mr. Penhaligon: What advice would the Minister give to a Cornish broccoli grower who now discovers that he is 301 miles from London by the very expensively built motorway and 263 miles from London by the old A30, which goes through many villages?
    Mr. Rodgers: I would hesitate to give any advice to a Cornish broccoli grower. These are issues that will have to be sorted out by the industry. The industry has found it possible to adapt to changes in the law. It has grown, it is prosperous and it has contributed substantially to Britain's economic strength. I think that in due course these problems will be solved.

    British Railways
    Mr. Crawfordasked the Secretary of State for Transport when he next intends to meet the Chairman of British Railways.
    Mr. Skeetasked the Secretary of State for Transport when he next intends to meet the Chairman of the British Railways Board.
    Mr. Stephen Rossasked the Secretary of State for Transport when he next expects to meet the Chairman of British Railways.
    Mr. William Rodgers: Quite soon.
    Mr. Crawford: May we have a categorical assurance from the Minister that there will be no further cuts in the railway network north of Glasgow and Edinburgh? May we also have a categorical assurance from him that the London-Perth motorrail link will be maintained?
    Mr. Rodgers: I can give a categorical assurance that no proposals for rail closures are before me at present. On the second point, I shall draw the hon. Gentleman's concern to the attention of the chairman of the Board.
    Mr. Skeet: When the right hon. Gentleman has an opportunity of seeing the chairman, will he draw his attention to the poor maintenance of both locomotives and rolling stock on the line to Bedford? Will he also bear in mind that high rail fares are totally inequitable if the maintenance is not properly carried out? Will he also try to indicate to the chairman, insistently, that we should have price stability in this matter?
    Mr. Rodgers: On the first part of the hon. Gentleman's supplementary question, I accept that rolling stock is not always of the quality that we would like to see. But, as the hon. Gentleman knows, I announced earlier this year an £80 million new scheme for improvements to the St. Pancras-Bedford line. We ought to give the Board credit for the fact that for the past year there has been fare stability. It is very important that the gaps between fare increases should be no less than a full 12 months.
    Mr. Ross: Will the Secretary of State support my plea to the Chairman of British Rail to give special fare concessions to students aged 14 and over who have to travel daily from the Isle of Wight to Portsmouth, on religious grounds, because there is no schooling for them on the island, and who are now facing charges, with the increase announced for January, of up to £7 a week? I ask for some special concession for them.
    Mr. Rodgers: I shall certainly draw the attention of the chairman to that matter. It is for the British Railways Board to determine its fares structure within the framework laid down by Parliament's decisions, and decisions of this kind can be made in a commercial way in the light of the Board's need to raise income from fares, given the level of subsidy that the House has agreed upon.
    Mr. Whitehead: When my right hon. Friend meets the Board will he convey to it the fact that many people in the

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    House who are paricularly enthusiastic about railways as a form of energy-saving transport view with some alarm the fact that British Railways are introducing a scheme to phase out the carriage of bicycles—another form of energy-saving transport? Will he do so on the impeccable ground that one form of energy-saving transport should help another?
    Mr. Rodgers: I was not aware that British Rail was intending to phase out the carrying of bicycles. On the contrary, I thought that this was a new and very desirable benefit, which I would personally want to encourage.
    Mr. Emery: Will the Secretary of State impress on the Chairman of the British Railways Board that there are constant fears in certain areas about the possible continuation of rail closures? As an illustration, I refer to the line from Salisbury to Exeter. In those areas, a great deal of uncertainty is engendered by these rumours. Therefore, a positive statement by the chairman about the situation on closures is essential.
    Mr. Rodgers: If there is any misapprehension, I am sure that the chairman will wish to dispel it, but there are bound to be problems as long as some local railways lose a great deal of money and as long as the House believes that there must be some limit to the amount of money available in subsidy. Those are problems of which which the chairman and the Board are fully aware.
    Mr. Molloy: When my right hon. Friend sees Mr. Parker, will he tell him that there is a good deal of feeling in the trade unions because of British Rail's accent on catering for business men and the well-off members of the public who rush from one town to another, thus deserting the social service aspect of British Rail?
    Mr. Rodgers: I shall remind the chairman of my hon. Friend's views, but they are not wholly fair. It is by running a sensible inter-city service, which is not likely to need subsidy and which is experiencing a growth in traffic, that the available subsidy can be devoted to those lines where need is greatest. I know that my hon. Friend and I share the wish to see that money spent in the best way possible.
    Mr. Moate: If the Government expect inflation to be down to single figures by 1978, will the Minister explain why commuters must face a 16 per cent. fare increase in that period?
    Mr. Rodgers: The increases in costs which have occurred in the last year, and which are likely to continue, are not related only to the rate of overall inflation, but if we get overall inflation down to single figures, as we must all hope, some of these problems of future fare increases will be a great deal easier to solve.

    Shipping and Air Services
    Mr. Adleyasked the Secretary of State for Transport if he encourages the development of new shipping and scheduled air services as an important factor in the nation's transport infrastructure; and if he will make a statement.
    Mr. William Rodgers: Yes, so far as it is for me to do so. But, as the hon. Member knows, my responsibilities relate essentially to inland surface transport.
    Mr. Adley: I thank the Minister for that reply. Does he agree that the new scheduled air and ferry services are an important part of the transport infrastructure, particularly in areas with bad communications? In view of what he said in his reply, is it not unfortunate that in Britain alone of the EEC countries civil aviation and shipping are not the responsibility of the Department of Transport? Is it not worth while reexamining this aspect?
    Mr. Rodgers: If the hon. Gentleman will advise my right hon. Friend the Prime Minister to transfer these matters to me, I shall not quarrel. There is a need to examine these matters as a whole. That is why I am in close consultation with my right hon. Friends about the matter.
    Mr. Skinner: Has my right hon. Friend noticed that the hon. Member for Christchurch and Lymington (Mr. Adley) has only to make one speech attacking a former Prime Minister in order to be promoted? On that basis, should I not be in the Cabinet?
    Mr. Dykes: Is the Secretary of State aware that his colleague the Under-Secretary of State reiterated this morning, in Committee, that the Government are pressing ahead with the nationalisation of ports? Will the right hon. Gentleman say loudly and clearly how the creation of a new infrastructure will be helped by nationalisation or by proceeding with a plan which plainly has no support throughout the nation?
    Mr. Rodgers: Not today.

    Road Traffic Forecasts (Report)
    Mr. Ronald Atkinsasked the Secretary of State for Transport when he intends to publish the Leitch Report.
    Mr. Jayasked the Secretary of State for Transport when he proposes to publish the report of the committee on road traffic forecasts presided over by Sir George Leitch.
    Mr. William Rodgers: As soon as possible, which probably means early in January.
    Mr. Atkins: Does my right hon. Friend agree that road forecasting is a major factor in road costing, that many forecasts have been wrong, and that we need a truer costing of roads in terms of money and the environment?
    Mr. Rodgers: Yes, I agree with my hon. Friend. Traffic forecasting is an extremely difficult matter, and the Leitch Committee was appointed for the reasons that my hon. Friend mentioned. We think that these decisions are important and that we must get them right.
    Mr. Higgins: Although we hope that the Leitch Report will be helpful, is it not absurd that the Minister should make decisions on traffic forecasts that are three years out of date? Will he take note of the fact that the standard of living has been virtually stagnant in that period and that oil prices have increased? Will he give an assurance that he will make no decisions in future without up-to-date forecasts?
    Mr. Rodgers: That is a somewhat unfair rendering of the nature of the problem. I know that the hon. Gentleman has his own problems, but we cannot stop making decisions because committees of inquiry are taking place. That would be
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    a bad principle in government, as elsewhere.

    Trade Unions
    Mr. Michael McNair-Wilsonasked the Secretary of State for Transport when he next intends to meet leaders of the trade unions representing transport workers.
    Mr. William Rodgers: I meet the leaders of transport unions frequently. I expect to meet some of them tomorrow.
    Mr. McNair-Wilson: Has the Minister raised with Mr. Jack Jones the allegation made in the Press by British Rail that the Transport and General Workers Union is using "blacking" methods to prevent goods being switched from lorry to rail, and that it has used the same methods to negative the use of the Didcot distribution centre?
    Mr. Rodgers: I do not want, in the House, to comment on confidential conversations that I have from time to time on an informal basis, but the hon. Gentleman fairly indicates the sort of problem that is bound to arise from time to time, in circumstances in which men are competing for too few jobs.
    Mr. Alan Lee Williams: Has the Minister received representations from the trade unions over the artificial demarcation between his Department in dealing with the ports and the Department of his right hon. Friend the Secretary of State for the Environment in dealing with inland waterways transport?
    Mr. Rodgers: I do not think that I have had any formal representations to that effect, but my hon. Friend has drawn my attention to the need to look at matters affecting inland waterways and ports together. I am in close consultation with my right hon. Friends to ensure that there is proper harmonisation of policies in this respect.
    Mr. Gwynfor Evans: Will the Minister take note of the pressure that is being applied by the railway unions in Wales for the electrification of railways there? There is not a single mile of electrified railway in Wales, compared with 2,000 miles in England and 58 per cent. of the railway system in Norway.
    Mr. Rodgers: The railway trade unions and the British Railways Board are fully

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    aware of the advantages of electrification. I am willing to consider on their merits any proposals that are put before me.
    Mr. Bagier: Does my right hon. Friend agree that in some ways it is natural that there should be differences of opinion between the various trade unions representing their members on the carriage of traffic? Does he not agree that, understandably, discussions are taking place and that the "blacking" is a bit bad? [HON. MEMBERS: "Oh."] Therefore, will he use his good offices to encourage the leaders of the two major unions involved to thrash out these matters, in the interests of integrated transport?
    Mr. Rodgers: My hon. Friend fairly describes the problems. I do not think that there is any need for a positive intervention from me, because both major trade unions at the most senior level are aware of the need to get together in trying to solve the problem.
    Mr. Temple-Morris: When the Minister next meets the leadership of the Transport and General Workers Union, will he discuss the decision reached yesterday by 5,000 trunk route lorry drivers in Glasgow that they will strike on 1st January if tachograph proposals and regulations on drivers' hours and distances are implemented? Will he confirm that he will be introducing the tachograph as part of these arrangements from 1st January—or what will he say to the TGWU?
    Mr. Rodgers: I do not know whether I shall be discussing this matter. My discussions are informal, on common problems. We must not jump to any conclusions, and I do not think that anybody will act unwisely. We are not wholly clear what the obligation will be from 1st January, but everybody in this country has respect for the law, whatever the law may be.
    Mr. John Ellis: Does my right hon. Friend agree that in the face of criticism the TGWU—Opposition Members know nothing about its workings—in its general approach has been kind to a fault? It has recognised the difficulties of other trade unions, has always put forward its belief in an integrated road transport service, and, indeed, has been criticised for not holding its end up enough.
    Mr. Rodgers: The House would be wise to "cool it" on some of these matters. That is often the best way to find a solution to difficult problems.

    National Freight Corporation
    Mr. Rhodes Jamesasked the Secretary of State for Transport if he will announce his plans for the financial reorganisation of the National Freight Corporation; and whether he will make a statement.
    Mr. Mawbyasked the Secretary of State for Transport if he will announce his plans for the financial reorganisation of the National Freight Corporation; and whether he will make a statement.
    Mr. William Rodgers: I refer the hon. Members to the answer given to my hon. Friend the Member for Leeds, South-East (Mr. Cohen) on 12th December. Otherwise, I must ask them to await the Transport Bill.
    Mr. Rhodes James: Will the right hon. Gentleman give the House some idea of the performance of the National Freight Corporation this year? Does he stand by his policy of eliminating deficits in freight?
    Mr. Rodgers: The performance of the Corporation this year has been a great deal better than in previous years. The House agrees that there is a need for financial reconstruction, and I hope that we shall be able to accomplish that.
    Mr. Gow: Does the writing off by the Government of a substantial amount of the accumulated losses of the NFC mean that the Secretary of State has no hope of the Corporation's making a profit and of being able to repay its losses out of profits?
    Mr. Rodgers: Indeed not. I have said that freight must pay its way. We have accepted that there are some historical problems that face the Corporation. If the House remedies them, I hope that it will do so once and for all and that the Corporation will be put on a firm foundation for growth.
    Mr. Norman Fowler: On the future prospects of the Corporation, which is what financial reconstruction is all about, will the right hon. Gentleman say whether

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    the NFC has asked for a written directive from the Government to settle within the Government's 10 per cent. pay policy? If it has asked for such a directive, what reply has the right hon. Gentleman sent?
    Mr. Rodgers: I do not think that it would be right for me to disclose to the House the normal confidential correspondence between the Secretary of State and the National Freight Corporation. However, I have made it clear to the Corporation that it is within its own responsibility and its own managerial authority to seek to reach a settlement in the public sector within the 10 per cent. guideline laid down by my right hon. Friend the Chancellor of the Exchequer. I am sure that Sir Daniel Pettit and the board wish to do so.
    Mr. Mawby: Will the right hon. Gentleman give us an idea of what effect the new EEC regulations on drivers' hours will have on the charges of the National Freight Corporation?
    Mr. Rodgers: No, not at this stage, although I hope to be able to do so by the time that we discuss the Bill.

    Car Parking
    Air. Michael Robertsasked the Secretary of State for Transport whether he will make a statement on plans to introduce measures to control public nonresidential parking.
    Mr. Horam: As my right hon. Friend told the House on 21st November, he does not propose to legislate at this stage to control private non-residential parking but he does intend to enable local authorities to license privately operated public car parks.
    Mr. Roberts: Does the Minister agree that further restrictions on parking would be damaging not only to the interests of the private motorist but to employment and commerce in the city centres?
    Mr. Horam: The principle on which we operate is essentially that local authorities are responsible for implementing sensible traffic management policies and should have the power to do so.
    Mr. Clemitson: Will my hon. Friend say something about the increasing practice of motorists to park their cars on pavements—a practice that is extremely
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    annoying to pedestrians, extremely dangerous to blind persons and extremely costly for ratepayers?
    Mr. Horam: I note my hon. Friend's point.
    Mr. Adley: Have the Government now abandoned their proposals for private non-residential parking?
    Mr. Horam: We have. We announced that on 21st November.

    Construction industry
    Mr. Tom McMillanasked the Secretary of State for Transport if he is yet able to indicate the share of the construction industry package to be allocated to his Department and the purposes for which this additional expenditure will be used.
    Mr. William Rodgers: £23 million has been allocated for transport in England in 1978–79. This additional expenditure will be directed mainly to local road schemes.
    Mr. McMillan: I thank my right hon. Friend for that areply. Given the shocking state of the roads in this country, I am pleased to know that maintenance and road improvement must come before new road building.
    Mr. Rodgers: I am grateful to my hon. Friend for his comments. The proposals were designed to try to relieve some of the unemployment in the construction industry. I am glad to think that they will help to solve local transport problems as well.
    Mr. Peter Bottomley: Will the right hon. Gentleman confirm that he is considering the A2 Rochester relief road in my constituency as part of the local road schemes that he now looks on with favour?
    Mr. Rodgers: Alas, I cannot satisfy the hon. Gentleman on that.
    Mr. Crawford: The right hon. Gentleman replied to his hon. Friend the Member for Glasgow, Central (Mr. McMillan) about England. Will he now answer the Question in respect of Scotland and Wales?
    Mr. Rodgers: As I think the hon. Gentleman knows, there is an allocation to

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    try to help the construction industry in Wales and Scotland.

    Traffic Commissioners (Licensing System)
    Mr. Arnoldasked the Secretary of State for Transport what plans he has to reform the traffic commissioner licensing system.
    Mr. Horam: My right hon. Friend intends to introduce greater flexibility into the licensing system by making it easier for community buses to operate, by extending the simplified procedure for obtaining permits, and by recasting the criteria for road service licences to lay greater emphasis on the interests of the public.
    Mr. Arnold: Will the hon. Gentleman confirm that these changes will be proposed in the forthcoming Transport Bill as part of the policy of developing new services?
    Mr. Horam: The Bill will cover that sort of general area.

    Vehicle Registration (Cherished Numbers)
    Mr. MacKayasked the Secretary of State for Transport when he will be presenting to Parliament the report on cherished numbers; and whether he will make a statement.
    Mr. Horam: My right hon. Friend will make a statement on the review of the working of the new system after the recess.
    Mr. MacKay: Is the Minister aware that many people are concerned that cherished numbers may not survive? Does he agree that this harmless but eccentric practice might even make a reasonable profit for the authorities if it were continued?
    Mr. Horam: I am happy that a small profit is made out of it.
    Mr. Dykes: If cherished numbers survive but the numbers are reduced by overt or covert Government pressure or pressure from Swansea, will the hon. Gentleman have a word with all the nationalised industry chairmen who love to drive around in large cars bearing registration marks such as NCB 1 and TWA 1?
    Mr. Horam: Perhaps the hon. Gentleman will take that up with the chairmen directly.
    Mr. Bidwell: Is my hon. Friend aware that there are hon. Members who have cars bearing the registration mark MP followed by a number as a cherished number plate? Will he have regard to the fact that very soon it may be necessary to issue XMP-prefaced number plates?
    Mr. Horam: I shall take account of that rather eccentric suggestion.

    A27 (Worthing)
    Mr. Higginsasked the Secretary of State for Transport what representations he has received from the West Sussex County Council regarding an urgent public inquiry into his proposals for the A27 route in the Worthing area.
    Mr. Horam: The county council, at its meeting on 25th November, decided to urge my right hon. Friend to hold a public inquiry with broad terms of reference before detailed plans for the preferred route are prepared.
    Mr. Higgins: What is the Minister going to do about it? Is it not the case that the local authorities are unanimous in opposing the announcement of the preferred route? Is it not quite wrong that substantial public expenditure should be incurred in developing that route before a public inquiry has had the opportunity of examining either whether a new route is needed or whether the route that has been chosen is the right one?
    Mr. Horam: As the hon. Gentleman knows, there has already been extensive public consultation on the question of broad routes. There will be further public consultation on the Arundel road improvement, and there will eventually be a public inquiry. I think that that is the right way to proceed.

    Tachographs
    Mr. Temple-Morrisasked the Secretary of State for Transport what steps he is taking to implement EEC regulations on the subject of tachographs; and if he will make a statement.
    Mr. William Rodgers: I have nothing to add to my previous statements or to my comments earlier this afternoon.
    Mr. Temple-Morris: Will the Secretary of State confirm that, as promised to the EEC, he will be introducing tachographs as part of the implementation of the agreement on drivers' hours and distances from 1st January 1978?
    Mr. Rodgers: There are two separate issues. One issue relates to the general obligation that lies upon the United Kingdom to introduce the tachograph. I have explained to the House before all the obstacles that I see in moving in that direction. The second issue concerns a somewhat different provision, namely, the use of the tachograph for articulated vehicles when driven over 450 km. The obligation is not to fit a tachograph but to carry a tachograph or a double crew for journeys of over 450 km. That is not quite as simple and is not in the same category as the earlier matter. That provision will be in force from 1st January.
    Mr. Spearing: Irrespective of the merits of these devices, will my right hon. Friend consider the lack of restriction on hours of work in non-driving occupations before the driving hours start? Is it correct, for example, that a person may work hard at loading a vehicle for a number of hours and that that work will not count against the allocation later shown by the tachograph?
    Mr. Rodgers: That relates less to the use of the tachograph and more to the general question of drivers' hours and the rolling week. These are complicated matters. At the moment I think that the House is primarily concerned with the problem of the 450 km provision. I accept that this is a problem, but there are remedies to it. It concerns a very small part of the total road haulage industry.
    Mr. Norman Fowler: Surely the Secretary of State will accept that the employment of two drivers as an alternative to the tachograph will push up costs and that it is unrealistic to put it forward as a suggestion to the road haulage industry. What help, if any, will the Government give to assist in the resolving of the clear difficulties that have to be faced with the trade unions over the introduction of the tachograph on a voluntary basis? The industry will have regarded the right hon. Gentleman's answers up to now as totally unsatisfactory.
    Mr. Rodgers: That remains to be seen. I am in close touch with members of the industry. I shall know what they have to say to me when I meet them. I think that have a meeting with them tomorrow afternoon. I am not so sure that they will take the harsh line that the hon. Gentleman suggests. It is not for me to make suggestions to the industry about what it should do about the tachograph and the 450 km limit. This is a question, first, of the law and, secondly, of negotiation for those parts of the industry that are affected. There is the larger question that I mentioned earlier, of the long-term future of the tachograph. No proposals on that have been made to me by the industry to the effect that it wants to see a change.

    Greenford (Flyover)
    Mr. Molloyasked the Secretary of State for Transport if he is satisfied with the progress of the flyover construction in Greenford, Middlesex, of the London to Fishguard motorway; and if he will make a statement.
    Mr. Horam: The main contract commenced on 31st August 1977 and is substantially on schedule. Work is expected to be completed by summer 1979.
    Mr. Molloy: In that case is my hon. Friend aware that the notices on the Western Avenue will have to be amended, because they do not say that? The notices suggest that it will be a bit earlier. Is my hon. Friend aware that the considerable engineering construction is causing grave disruption in the Green-ford area and on the Western Avenue in my constituency? People understand that they have to put up with some degree of disruption, but will my hon. Friend liaise with the contractors, with the police in Greenford and with the London borough of Ealing, with a view to achieving more sensible collaboration between the three parties in trying to reduce disruption to a minimum?
    Mr. Horam: I shall certainly endeavour to do all that my hon. Friend requires. The least I can say is that there has been no delay in the completion of the final contract.

    Motorways (Maintenance)
    Mr. McCrindleasked the Secretary of State for Transport if he is satisfied with the standard of maintenance on the motorways.
    Mr. Horam: Yes, within the resources available.
    Mr. McCrindle: Is it not now becoming clear that the construction of some motorways, particularly in the vital Midlands area, is seen to have been substandard? Does the Minister agree that unless extensive repairs and maintenance are carried out, there could be a serious effect on the total motorway system? Will he resist any complacency and ensure that he continues to be satisfied with the standards of maintenance and repair of motorways?
    Mr. Horam: I do not think that any motorways were built below standard. The design life of motorways built in the early 1960s, which includes some of the Midlands motorways, is approaching its end. There is a standing committee on highway maintenance which closely monitors the situation, and we take careful note of what it recommends.
    Mr. Edwin Wainwright: Will my hon. Friend take account of the fact that the M1 from London to the Birmingham turn-off seems to require more maintenance than any other stretch of motorway of which I am aware? Is he satisfied that the base was good when it was laid? Is he also satisfied about its maintenance? All too often two lanes are out of use, and that causes congestion.
    Mr. Horam: I realise that people are concerned when a motorway is being repaired, because it can lead to congestion and in some cases to accidents. Clearly we must be concerned about that aspect. My hon. Friend referred to a rather old motorway. In many areas motorways are now approaching the end of their design life.
    Mr. Giles Shaw: Will the Minister comment on the maintenance of decisions on motorways? There appears to be some doubt whether his decision on the extension of the M1 will be maintained. Will he encourage the North-East Development Council to accept that the new route that he has selected should be the one to be pursued, rather than to argue for the one that he has rejected?
    Mr. Horam: The hon. Gentleman is once again adopting the old ploy of
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    getting in a supplementary on a Question with which it has no real connection. None the less, I am delighted to give him the assurance for which he asks.
    Mr. Penhaligon: Who designed motorways with a total life expectation of just 17 years? What was originally intended to be used after they were worn out?
    Mr. Horam: We are talking about motorway surfaces, not motorways as such.

    M40
    Mr. Dudley Smithasked the Secretary of State for Transport if he will now make a further statement about the construction of the M40 motorway and the time scale involved.
    Mr. Horam: My right hon. Friend will make an announcement as soon as he can. We regret the continuing delay.
    Mr. Smith: Will the Minister consider the advantages of making this proposed road a dual carriageway rather than a fully-fledged motorway, because of the cost that will be saved and the advantages to people living in mid-Warwickshire, who, on the whole, are against the proposal?
    Mr. Horam: I take note of the hon. Gentleman's proposal.
    Mr. Marten: Will the Minister, if he makes a favourable announcement, give a date by which the road should be completed and divide the time scale from now to then between the inquiries part of it and the actual engineeering?
    Mr. Horam: I am aware that we have tried the hon. Gentleman's patience almost beyond endurance on this matter. Clearly a road of this kind, if we were to go ahead with it, would take between eight and 10 years to complete, though that would depend on how the plans were broken up. Some sections might be completed earlier than others. The actual building usually takes about two years. It is the statutory processes that take the time.
    Mr. Madel: Will the Minister end 1977 on a helpful note by announcing the preferred route of the link

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    between the M1 and the M4, in my constituency? In view of its importance to people in Bedfordshire, will he, within the next 11 days, announce the route?
    Mr. Horam: I hope that we shall be able to announce the route fairly quickly. The question arises in respect not of the route but of the result of the feasibility study into this matter. It is a complicated matter, but we hope to come to a conclusion shortly.

    Lorries (Maximum Loads)
    Mr. Fryasked the Secretary of State for Transport what progress has been made towards agreement within the EEC on maximum loads carried by commercial vehicles.
    Mr. William Rodgers: The Commission is now completing work on detailed proposals for maximum weights and dimensions. I understand that it hopes to publish these proposals shortly.
    Mr. Fry: Is the Secretary of State aware that the British road haulage industry is at a considerable disadvantage compared with many of its EEC competitors? As the industry is now to suffer from a whole plethora of EEC regulations on distance limits, drivers' hours, and enforced training, is it not time that the Government took action to remove some of the disadvantages?
    Mr. Rodgers: The industry always claims that it will come to a sticky end, but it never does. I think that it will overcome its present problems, however much it may complain about them meanwhile. The hon. Gentleman knows that this is a divisive issue. It can be argued that larger vehicles would be good for economic growth but that they would be unsatisfactory from an environmental point of view. We have to strike a balance between the two views.
    Mr. Whitehead: Will my right hon. Friend disregard the siren song of the lobbyists on the Opposition Benches and bear in mind the fact that the heavy goods vehicles that the Opposition wish to introduce are 30 to 50 times more likely to cause accidents and serious injury than are equivalent loads carried by rail?
    Mr. Rodgers: I shall not listen to siren voices on either side of the House, even when one of those voices is that of my hon. Friend.
    Mr. Moate: The posture of the Secretary of State in all EEC negotiations seems to be to cause the maximum amount of confusion and chaos in the road haulage industry, particularly as regards distance limits, which we were once told would be abolished unconditionally but have now been accepted unconditionally by the right hon. Gentleman. In those circumstances, why should we have any faith in the right hon. Gentleman's negotiating position on lorry weights?
    Mr. Rodgers: I am not sure that I have declared my negotiating position on lorry weights. Therefore, I do not see how, or how not, the House can have faith in it.
    Mr. Ronald Atkins: Is my right hon. Friend aware that one reason for motorways being so badly worn—this matter has been raised many times—is that lorry weights are already excessive? Consequently, the damage done to little towns and historic villages is very great.
    Mr. Rodgers: My hon. Friend knows the distinction between overall weights and axle weights. It is axle weights that do the damage. Difficult issues are involved, and I think that the House will want to discuss them in due course. We are always in negotiation with the Community on these matters.

    Roads (Planning Inquiries)
    Mr. Hal Millerasked the Secretary of State for Transport what plans he has to improve the roads inquiry procedure; and whether he will make a statement.
    Mr. William Rodgers: A review of highway inquiry procedures is well advanced. I hope to announce the outcome before too long.
    Mr. Miller: Has the Secretary of State received the report of the Council on Tribunals? If so, will he tell the House whether its recommendations are included in any action that he intends to take to improve the procedure?
    Mr. Rodgers: The hon. Gentleman is right to draw attention to the work of the Council on Tribunals. We are having discussions with the Council. I shall inform the House of the outcome of these discussions as soon as they are complete.
    Mr. Peter Bottomley: Is the report on tribunals procedure likely to come before or after March? Will it come before or after the inquiry into the A2 stretch of the Rochester Way, in Woolwich?
    Mr. Rodgers: I hope that it will come before March, but I do not want to be committed to that date. It will come as soon as possible. There are real problems, and I want to try to relieve any anxieties if I can.
    Mr. Higgins: Does the right hon. Gentleman agree that it would save public funds if public inquiries took place immediately after the announcement of preferred routes rather than two years or more later, when a great deal of public money might have been spent on purchasing blighted property or on making plans for the route preferred by the Minister which a public inquiry might reject?
    Mr. Rodgers: I am in favour of speeding up these procedures, if possible. However, if we consult the public in the way that we do today—I think rightly—and follow that by a public inquiry, it will always take much longer than the actual process of construction.
    Mr. Adley: I recognise the need for improved procedures and welcome the Government's efforts to improve them. However, will the Secretary of State ensure that representations are not restricted to those who shout the loudest?
    Mr. Rodgers: Yes. The task of Ministers, in so far as they make decisions, and, obviously, the task of public inquiries, is to take account of all points of view. Sometimes those who express these less forcefully have an interest that should be respected.

    BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 13th JANUARY
    Members successful in the Ballot were:
    Mr. Malcolm Rifkind
    Mr. Arthur Jones
    Mr. Jim Callaghan

BILLS PRESENTED
  INNER URBAN AREAS
  Mr. Secretary Shore, supported by Mr. Secretary Rees, Mrs. Secretary Williams, Mr. Secretary Varley, Mr. Secretary Millan, Mr. Secretary John Morris and Mr. Secretary Booth, presented a Bill to make provision as respects inner urban areas in Great Britain in which there exists special social need; to amend section 8 of the Local Employment Act 1972; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 42.]
  TRANSPORT
  Mr. Secretary Rodgers, supported by Mrs. Secretary Williams, Mr. Secretary Varley, Mr. Secretary Shore, Mr. Secretary Millan, Mr. Secretary John Morris, Mr. Secretary Ennals, Mr. Joel Barnett and Mr. John Horam, presented a Bill to provide for the planning and development of public passenger transport services in the counties of England and Wales; to make further provision about public service vehicle licensing, the regulation of goods vehicles and off-street parking; to make amendments about British Rail and railways, and about Freightliners Limited and the finances of the National Freight Corporation and other transport bodies in the public sector; and for purposes connected with those matters: And the same was read the First time, and ordered to be read a Second time tomorrow and to be printed. [Bill 43.]

ADJOURNMENT (CHRISTMAS)
Motion made, and Question proposed,
That this House at its rising on Friday do adjourn till Monday 9th January.—[Mr. Bates.]
3.32 p.m.
Mr. Ronald Bell: The first thing that one wants to say about the motion is that the recess that it proposes is too short. There is a kind of masochistic convention whereby people speaking on this motion on other occasions always suggest that we should remain here to discuss a variety of matters. We should not settle down to as short a Christmas Recess as this and it should not be taken as a precedent for future years. This recess appears to start a week too soon and to end at least two weeks too early.
Hon. Members on both sides have better things to do than assist the progress of worthless Government Bills, but that is why we are being brought back. That description would apply to almost the whole of the Government's progress, but of course I have in mind particularly the Scotland Bill, the Wales Bill and the European Assembly Elections Bill.
Mr. Dennis Skinner: That is why we are rising.
Mr. Bell: It occurs to me that if we were to come back on the customary date of 24th January the prospect of all three of these Bills would be suitably diminished. What more especially concerns me at the moment is that there are matters which the House should debate and which cannot be so suitably debated in the two weeks between 9th and 24th January and which should be debated before we rise for Christmas.
I mention the Town and Country Planning General Development (Amendment) Order which comes into force on 1st January, for the annulment of which a Prayer has been tabled in the House. In the Lords a motion has been passed virtually unanimously calling on the Government to withdraw the order.
I do not know whether this is correct, but I read in The Times yesterday that the Government intend to brush aside all opposition, that parliamentary opposition is to be ignored and that the Government are intending to press on with the proposal.
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I appreciate that the Leader of the House does not write The Times—not now, anyway—I an sure that he will modify that version of events when he replies to the debate.
I impress upon him that this is a matter upon which there are strong feelings on both sides of the House. Those feelings have found expression in two Early-Day Motions as well as in a Prayer. There is particular dissatisfaction that time is not to be found for a Prayer before the order conies into force. The whole process of delegated legislation will be out of control if the negative procedure becomes a farce.
The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): I hesitate to touch off the hon. and learned Gentleman's peroration, but it might assist him to know that not only was The Times inaccurate on that occasion but that the Government are proposing, in response to representations, to withdraw the order. We propose to have discussions about whether it should be brought forward at a later date. All the difficulties to which the hon. and learned Member referred will not occur.
Mr. Bell: I am obliged for that intervention.
Mr. Donald Anderson: Since the hon. and learned Gentleman has had such a positive response, could he press my right hon. Friend to see whether that also applies to the Scotland Bill and the Wales Bill?
Mr. Bell: The Leader of the House must be allowed to withdraw these matters seriatim and not all in one intervention. I am immensely encouraged by what the Leader of the House has said. It was certainly worth my while to speak on this motion. I am now encouraged to move on to my second argument.
Immense increases in railway fares will come into force on 1st January. These will greatly affect my constituents and those of other hon. Members who live in the countryside around London and travel in to work.
Last week we held a short debate on general transport policy and tomorrow we shall have a debate on the new rate support grant. These two matters accumulate in their effect upon commuters. I have been finding out how my constituents will be affected on 1st January,

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while we are in recess and before we have discussions on these matters. The annual second-class rail season from Gerrards Cross to Marylebone will become £340. That is to the London terminal, but most of my constituents travel into the City. The annual second-class rail season ticket from Gerrards Cross to the Barbican will be no less than £465. From Taplow to the Barbican it will cost £529, and from Beaconsfield into the City £517.
These represent charges upon the net income of people who work as secretaries and in various other office capacities. They usually live at home with their parents, and these fares will represent a greater proportional demand on their net incomes than ever before. I impress upon the Leader of the House that people have established patterns of living and have taken on commitments in this commuter area which they cannot abandon lightly. Their way of life is being made almost unliveable.
Tomorrow we shall be discussing the massive shift for the third year running of the rate burden from the city centres to the counties. This is making life even more difficult for those people. Before we rise for Christmas we should consider what is to be done about this real problem. In some way or other, through taxation or in some other way, this problem has to be faced. I am sorry that the Leader of the House has not risen to intervene to tell me that this matter will be dealt with.
I should like to mention the problem of gipsy camps. This is a growing problem in my area, as it is in the areas of other hon. Members. A good number of hon. Members have tended to regard this as a problem peculiar to their own localities, but I have been impressed over the last few months by the number of hon. Members who, on the Order Paper and in other ways, have complained about this pest in their areas.
There is legislation requiring local authorities to provide residential sites for these Irish tinkers—often romantically called gipsies, but in no sense gipsies. I know of no other category of the population for which ratepayers are supposed to find a residence and business site in the green belt at the ratepayers' expense. These are almost entirely scrap metal merchants who make an absolute
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shambles of the countryside, and the ratepayers are placed under a duty to find somewhere for them to live and carry on their business of scrap metal merchants at public expense, and in almost every case in the green belt. Again, I am sorry that the Leader of the House has not risen to say that he will put that right before we rise.
Another matter causing a great deal of concern to my constituents and others is that the Thames Water Authority is at present making arrangements for the visit of no fewer than 10 people—five of its members and at least five of its staff—to Japan to a conference on water supply. It will be at the expense of the ratepayers, and I imagine that it could cost as much as £20,000.
Mr. William Hamilton: People have been to Japan from this House as well.
Mr. Bell: The hon. Member for Fife, Central (Mr. Hamilton) refers to the House of Commons. There are also Strasbourg, Brussels and Luxembourg. We all know about those.
Mr. Dudley Smith: Will my hon. and learned Friend accept that his experience on this is not unique? Is he aware that the Severn-Trent Water Authority is sending seven members to Japan, and that in spite of an absolute tirade of criticism from all quarters is insisting on going ahead with its proposals?
Mr. Bell: I am glad that my hon. Friend intervened. It may be, however, that seven is better than 10. I know of another water authority which thinks it appropriate to send one person, and I can imagine that that might make sense. One person might learn something from others, but it is difficult to imagine something which can be learned by 10 that cannot be learned by five or even one. The truth is that this is a jaunt at public expense. The Thames Water Authority has acquired something of a reputation for the way in which it lashes its money around on motor cars and perquisites for its members, and it is scandalous how this and other authorities are ignoring all protests when others have to practise economy, and are going ahead with the despatch of their battalion of members and officials to this party in Japan.

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I ought not to hold up the proceedings any longer with a catalogue of woe because I know that other hon. Members have many ideas on how the next week can be usefully employed for the urgent business of Parliament and who probably share my view that the two weeks in January when we are coming back to discuss these Bills could have been better employed by them in their constituencies or elsewhere.
4.44 p.m.
Mr Nigel Spearing: There is a very good case for this House rising on Monday or Tuesday next week and using the extra time to discuss one or two matters particularly relating to what the House will be doing if we come back on 9th January. I accept that whatever happened last night there will be a Committee stage on the European Assembly Elections Bill. Before we proceed further on this Bill, however, we need some further clarification from the Government concerning the powers of the EEC Assembly.
On Monday there was an exchange of views between hon. Members, and I asked my hon. Friend the Minister of State, Foreign and Commonwealth Office, whether the EEC Assembly could turn down the budget, and, if so, whether the budget for the previous year would continue to operate. This is a matter of some moment because the subject is being discussed now in Strasbourg. Unfortunately my hon. Friend could not reply. He said, as reported in column 178 of Hansard, that he would write to me about the accuracy of the pamphlet from which I had quoted.
It would be improper for me to go into this matter in detail now, but I wish to raise it in broad terms on the Adjournment motion because unless it is sorted out before the House rises we shall not be in a position when we return on 9th January to deal with the important succeeding clauses of the Bill, if we reach them. Perhaps my right hon. Friend will say that he intends to withdraw the Bill. I certainly hope so.
On page 6 of The Times today there appears a headline
"Strasbourg MPs' threat to reject EEC budget."
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and Mr. David Wood, writing from Strasbourg yesterday, reports:
"If the Parliament were to reject the budget, the 1977 budget would apply in 1978, and one twelfth of the total sum would be paid out month by month during the year. That has never happened before."
So, apparently, Mr. David Wood is better informed than the Government as to what would happen to our money in Strasbourg next year. On its main news page The Times reports:
"Council of Ministers prepared to concede half the increases in regional fund sought by MPs."
It makes it clear that the President of the Council is to meet a parliamentary delegation to discuss the deadlock that has arisen, created, it says, by the firm decision taken by the Committee on Budgets. It adds that he will report the outcome on Thursday—tomorrow. It is clear that a certain confrontation is now taking place because the hon. Member for Scarborough (Mr. Shaw) is reported in the same report as saying:
"The two sides were sufficiently close to reach agreement if they continue to use common sense."
The report continues:
"Both sides have moved (he said). We should play our part in the final movement towards reaching agreement. If we do it will be an agreement, the figures the like of which have never been obtained in the history of this Parliament. It will he folly if we are to let this prize slip through our fingers now."
This is the language of hard bargaining. This is not an industrial dispute or a dispute between equal sides. At least, that is what the Government have told us. It is a dispute between the Assembly of the EEC, indirectly appointed as it is, and the Council of Ministers. Yet on Monday the Minister of State could not tell me whether the Assembly had this power, whether it could vote out the budget completely, rather like a blunderbuss, or whether the preceding year's budget continues. It is clear from the news reports, if they are correct, that last year's budget is likely to continue. I have checked this matter with the help of the Library and it is clearly dealt with in Article 204 of the new Treaty of Rome, which states:
"If, at the beginning of a financial year, the budget has not yet been voted, a sum equivalent to not more than one twelfth of the budget appropriations for the preceding financial year may be spent each month in

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respect of any chapter or other subdivision of the budget."
So it appears that Mr. Wood is correct. This raises a very serious matter because it is clear that events have shown that my predictions on Monday of what is to happen in two years' time are actually happening this week.
Does this mean that the Minister of State was ignorant of this? If he was, perhaps the Government are ignorant of the new powers which the Assembly is apparently wielding to very considerable effect. If the Foreign Office was ignorant, was the Prime Minister aware of these powers when he told the House that we shall elect directly under the existing powers of the Assembly? The Prime Minister denied that it was a federal matter. He said that it is not federal because the Assembly does not have federal powers. If the exchanges yesterday in the European Assembly were not an indication of a federal element, I do not know what is.
I hope, therefore, that we shall at least come back on Monday or Tuesday of next week in order that the Government may tell us exactly what is the position and, indeed, whether the Council of Ministers and our regional Minister will accede to the demand from this nascent uprising in a very lively Assembly.
Mr. J. Enoch Powell: The hon. Member was referring to the inconvenience of the House rising this week and resuming in the week commencing 9th January with consideration of the European Assembly Elections Bill. Does he also recognise that the Government will now have to table a series of amendments to the Bill, and that unless those amendments have been before hon. Members for a number of days before the Bill is next taken, they will be unable to consider them properly or to put forward amendments to them?
Mr. Spearing: I am greatly obliged to the right hon. Gentleman. That is another reason for debating the question on Monday, so that the Government can table these important amendments and enable hon. Members to consider them over the recess. If they are not able to do that, the progress of the Bill will be even further delayed.
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We were looking forward to seeing one of the amendments promised 10 or 12 days ago concerning the encroachment of the powers of the Assembly on the legislative powers of this House. We were promised legislation to stop it. If I am not mistaken, it looks as if the original fund is to be substantially increased by the action of the Assembly this week. I think that we need at least another day next week in order to consider that matter.
I am equally disturbed that relevant information has not been made available. In a Question to the Civil Service Department last week, I asked whether the amendments to the Treaty of Rome set out in Cmnd. 6252 had been placed in Government offices. Have they been sent out so that people in the Foreign Office, in looking at the reference books, will get the accurate position? I was informed that these amendments have not been circulated.
I also made inquiries in the Library. The Library has not updated the Treaty of Rome. If hon. Members were to go to the Library hoping to see the new Articles 203 and 204 of the Treaty of Rome, they would find only the old ones. I asked the Library why this was so and I was told that the documents are not presented by the Government but that they come from the EEC authorities, and that it is for them to send cut the amendments.
The amendments have been in force since July of this year, but they have not yet been sent out, and no change has been made in the reference books of this House. Any hon. Member or Minister looking at them would therefore be misinformed as to the powers of the Assembly. We have been told that it is not federal, but of course it is. It has been shown to be so. This is one matter which we must debate next week. It must be debated before 9th January.
There is another very small but significant item that we ought to debate before we rise. It has been on the Order Paper since July. It is a modest proposal by the Select Committee on House of Commons (Services) that the Library should have computer-based indexing. I would not have raised this but for the matter that I have just mentioned about works of reference. As I have already said,

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this item was put down for debate in July. The Select Committee wanted it but the Lord President did not exempt the business and it was not debatable.
It has been put down almost every day since then but the right hon. Gentleman has not made time for it. Therefore I and some of my hon. Friends properly objected to its going through on the nod. It is still on the Order Paper today. If it came up in the early hours of the morning after the debate on the Consolidated Fund Bill—especially if the debate on that Bill were to fall by accident—it could go through on the nod. I hope that my hon. Friends and I may be given an assurance by my right hon. Friend that it will not be nodded through. It is certainly relevant to the updating of the copies of the Treaty of Rome which are lying in our Library unamended.
The question of indexing and how it is arranged in this House is of some importance and deserves debate, but it is quite clear that the Government would like it to go through on the nod. I do not believe that that is good enough.
I hope that if the Leader of the House cannot give us a debate next week, he will at any rate tell us what is the Government's position in the matter, and whether the Prime Minister knows about the extent to which the Assembly is acting in a federal way. I hope that we may be told what is the Government's view before we rise. Perhaps it will be possible for us to be told tonight.
4.55 p.m.
Mr. Stephen Hastings: The matters that I wish to raise concern the security of this country, and I shall submit that this House ought not to adjourn until they have been properly attended to.
In fairness to the people whom I shall have to mention—and, indeed, to myself—I am obliged to stick closely to the notes that I have made. I ask for the indulgence of the House in this respect.
What I have to tell the House is not a pleasant matter. I did not ask for nor seek this information. I have spent several anxious months considering whether I should bring it to the House. I have discussed the problem on a number
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of occasions with my hon. Friend the Member for Blackpool, South (Mr. Blaker), whom I am very glad to see in his place. In the light of the latest evidence, we have jointly come to the conclusion that there is a clear duty to do so.
I am encouraged in this decision by the conviction that all but a tiny minority of men and women in this country want our free society to continue, whether they vote Labour or Conservative; that they want Parliament to continue to be the main forum for open discussion and the protection of their liberties, and that it should never degenerate into an instrument for oppression and the concealment of the truth.
We all know that the Russians deploy massive secret resources to back their policies. We all recall the ejection of 105 KGB men in 1971 by my right hon. Friend the Member for Sidcup (Mr. Heath). The KGB is the most powerful organ of suppression and subversion in the world. Without it the Soviet State would probably collapse, and with it the People's Democracies as we know them. This sinister and all-pervading force represents the sinews of the Soviet Communist empire. No Communist State is permitted immunity from it. Every satellite intelligence service works directly for it. The KGB represents as great an enemy to liberty and to the decent aspirations of mankind as Hitler and Himmler ever did—and probably greater.
I say, therefore, that any links which may exist between those in responsible positions in this country and foreign Communist intelligence services are not simply a legitimate but a vital concern to all of us, on both sides of the House, who value freedom and the constitution.
In this connection I am concerned with information provided by a Czech defector, Joseph Frolik, who reached the United States in 1969. Frolik was a senior officer of the Czech intelligence service with 17 years' experience. During much of that time he worked at the British desk in Prague, and from 1964 until 1969 served under cover as a labour attaché at the Czech Embassy in London.
Frolik will be remembered in the House because of his somewhat spectacular assertion that John Stonehouse was a Czech spy. The right hon. Member for Huyton (Sir H. Wilson), who was Prime

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Minister at the time—and to whom have naturally given notice that I intended to raise a security matter which happened during his tenure of office—told the House subsequently that he had had the matter investigated and that there was no truth in this accusation. The Hansard reference is 17th December 1974 at column 1353. It is right that I should recall that.
It is also true that Frolik has never deviated subsequently from this assertion, which he repeated before a Senate subcommittee in Washington in 1975. Moreover, I have recently seen a letter from Frolik to a Mr. Joseph Josten, in London. I shall return to the question of Mr. Josten a little later in my speech. This letter, dated 16th March last, refers to the right hon. Gentleman's statement in the House. It is said that Frolik was much upset by that statement. I have here a copy of the letter—
Mr. Foot: I apologise to the hon. Gentleman. May I ask, Mr. Speaker, if you will give a ruling on whether you think it is right that the Adjournment motion should be used for a general debate of this sort, and whether the matters that the hon. Gentleman is now raising could be more appropriately raised, for example, during the debate on the Consolidated Fund Bill? It would then be possible, under the usual arrangements in the House, for the Minister involved to reply. Is it not the case that all the matters raised in this Adjournment debate should be related to the question whether we should adjourn for a longer or shorter period than the one proposed?
Mr. Speaker: The Lord President is quite correct. The motion is that we adjourn. The hon. Member for Mid-Bedfordshire (Mr. Hastings) must link whatever he has to say to the Adjournment motion.
Mr. Hastings: I said at the outset of my remarks, Mr. Speaker, that I thought it would be wrong for the House to adjourn before the matters to which I wish to draw attention had been dealt with properly.
I have a copy of the letter referred to, and I shall quote a verbatim translation from the Czech of the relevant passage. Frolik writes:
"Mr. Wilson accused me of lying, to the great pleasure of Prague. Three months later
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he sent to the United States a high official M15 who conveyed to me the personal apology of the same Mr. Wilson."
If true, the implications of this are to say the least surprising. Indeed, the only possible explanation would be that Frolik's co-operation was so important to the security service that the Prime Minister was pursuaded to set the record straight.
In his statement at the time the right hon. Gentleman perfectly reasonably drew attention to the possibility that a defector's memory can play him tricks. I can well imagine that with the best will in the world an intelligence officer who has chosen freedom and who has repeated all he knows for certain, might in time search his memory for further contributions and thus stray into inaccuracy. Equally it is true to say that the value of any intelligence officer who has defected must depend on objective accuracy. One lie, or one unguarded exaggeration, and his whole capital is damaged. This Josef Frolik undoubtedly realised.
According to his own account, Frolik spent weeks memorising and copying the identities of Czech agents in the West before he defected and claims to have reported about 400 names. Certainly his evidence was sufficiently important to justify his being flown to London a few days after he arrived in the United States for prolonged interrogation by our security service. Moreover, he has, I understand, again been interviewed by our security service in the United States, on more than one occasion, at length, and comparatively recently. The Government can check this, of course.
Frolik's protection was undertaken by the CIA, whose debriefing he describes as "extremely thorough". He is still under its protection.
On 19th November 1975 Frolik was summoned before a Senate sub-committee required to investigate Communist bloc intelligence activities in the United States. He was questioned at length, although some of this was in closed session. At the outset, the chairman, Senator Thurmond, said:
"I have been told of your contributions to US intelligence operations as well as to other NATO countries and wish to extend a hearty welcome to you."
I have the official reports of these sessions.

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I think that in the light of what I have said so far the House will agree that, in spite of what the right hon. Gentleman said in his statement about the Stone-house case, the dependability of Frolik as a source of information should at least be taken very seriously.
Subsequently Frolik wrote a book, or rather a translation was made from manuscripts he had written in Czech. It was published in London by Leo Cooper in 1975. It makes hair-raising reading, particularly on the subversive threat to this country and the links between the KGB and the IRA, to quote one particular aspect only. It is astonishing that so little attention has been paid to this book.
Frolik's target was a NATO headquarters in London—the office of the standardisation of weapons and the NATO command for the English Channel, to be precise. He was not particularly successful, or rather he was short-circuited by one of his colleagues—so he says. He therefore decided to try his luck among trade union leaders instead. He prefaces a chapter in his book entitled "Trade Union Brethren" by writing:
"The British Community party, as we all knew in the Embassy, was a downright failure … yet in one particular field it has shown outstanding results, in relation to its exceedingly small numbers, today Communists control over 10 per cent. of the important posts in the major unions."
If he is to be believed, Frolik was deliberately seeking to recruit important trade union leaders to serve the interests of the Czech intelligence service. He described these relationships in his book, but because of our libel laws the names are left blank.
Subsequently, about 18 months ago, Mr. Richard Stott of the Daily Mirror, who had become interested as a result of this book, went to America accompanied by Mr. Leo Cooper and a further lengthy interrogation took place, the purport of which seems to have been to re-examine the Stonehouse case and to pursue the matter of the trade union leaders. Tapes were made of these conversations and in these Frolik fills in the blanks in his book. I understand, though I cannot be certain, that copies of these tapes are available to the Government. I have listened to them carefully and I believe them to be entirely authentic. I also have copies of them which, of course, I
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shall be ready to make available to the appropriate authority.
In addition, I have had the advantage of several meetings with Mr. Joseph Josten, the distinguished Czech emigré and author, a former collaborator of Jan Mazaryk, and a man of the highest integrity and courage. According to Frolik, his assassination was under constant consideration by the Czech intelligence service. He has had about 15 hours of talks with Frolik in June of this year and he has given me the translation of Frolik's first draft which includes certain details, including the names, omitted from the book. Incidentally, Mr. Josten has asked me to say that these documents are not in his possession at his house but are kept in his hank. I understand that he has very good reasons for asking me to say this.
Taking these various documents together, and as a cross-check upon each other—that is to say, the book, the tapes, the published evidence to the Senate subcommittee and the original draft of the book—five distinct statements are made about the British trade union leaders. To understand the full implications of these statements it is necessary at least to read Frolik's book. All I can do is give the briefest of summaries.
In 1963 Frolik met the late Mr. Ted Hill of the Boilermakers' union at the TUC conference. Hill, he says, was a secret Communist. They became firm friends and he was often invited to Hill's house. There he met a Russian called Nicolai Berdenikov, ostensibly Soviet labour attaché, but according to Frolik a lieutenant-colonel in the KGB. When subsequently Frolik sought permission from Prague to recruit Ted Hill for intelligence services he received the curt reply "Hands off, that particular mare is being run from another stable close by".
Next he started to cultivate Mr. Jack Jones with whom, he says, he liked to think he got on very well.
"But—
as he puts in his book—
" such things cost money. My expenses started to mount. They were forwarded to Prague whence, a little later, I got the brisk order 'drop the Jones project, he's a horse of friends'. Again",—
he writes—
" unwittingly I had bumped into one of the Russian colonel's contacts."

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Later he started to concentrate on Mr. Richard Briginshaw, then general secretary of NATSOPA, whom he says the Czechs were trying to recruit because—
Mr. Speaker: Order. I understand that the hon. Gentleman is now referring to a member of another place. He will understand that the same rules apply and that no reflection on the honour and integrity of a member of the other House is possible or in order.
Hon. Members: Withdraw.
Mr. Hastings: All I am doing is continuing to report what this Czech defector said, Mr. Speaker.
Mr. Speaker: If that implies any reflection on the honour and integrity of a member of another place, the hon. Gentleman cannot do it this way. If he wishes to criticise a member of another place, he must do it through a substantive motion in this House, if it is possible.
Mr. Hastings: I understand the point and, in the light of what you have said, I am obliged to leave out a paragraph of my speech. I shall proceed to the next one.
Frolik subsequently says he thought he had struck lucky at last. His acquaintance with the noble Lord, Lord Briginshaw, was brought to an end due to the fact that he was instructed by the same Russian that I have mentioned to cease his acquaintanceship. Subsequently—
Mr. Speaker: Order. The hon. Gentleman is making a clear imputation which no one would regard as a compliment. At least it appears to me that he is reflecting on the honour of a member of another place. I must ask him not to do so.
Mr. Ian Gow: On a point of order, Mr. Speaker. Is it your ruling that it is casting doubt upon the integrity and honesty of a member of another place to say that he is a Communist?
Mr. Speaker: I have been listening carefully to the hon. Member's speech, and there is an implication of much more than a Communist behind it.
Sir Derek Walker-Smith: Further to that point of
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order, Mr. Speaker. Will you give your ruling on this point? It is a new point to me. The reflections, if they be reflections, which my hon. Friend the Member for Mid-Bedfordshire (Mr. Hastings) is making are reflections upon a gentleman who is now but was not at the material time a member of another place. Does the rule inhibit reference to the pre-other place activities as well as the activities while a member of the other place?
Mr. Speaker: I am afraid that it does. As long as the person concerned is a member of another House, it is not for us in this House to start criticising him personally.
Mr. Douglas Jay: Further to that point of order, Mr. Speaker. I understand that the motion before the House is
That this House at its rising on Friday do adjourn till Monday 9th January.
Is all the rubbish to which we have been listening anything to do with the Adjournment of the House?
Mr. Speaker: I have been listening very carefully. The two previous speeches linked arguments on exactly the same basis—that the House should not adjourn until those matters were dealt with. The hon. Member for Mid-Bed-fordshire (Mr. Hastings) is not out of order in that respect.
Mr. Hastings: I am grateful to you, Mr. Speaker, and, naturally, I shall make no further allusion to the noble Lord.
Frolik says subsequently that he thought that he had struck lucky at last. At an embassy party for trade union leaders, he was introduced to Mr. Ernie Roberts, then assistant general secretary of the AUEW and now, I understand, prospective Labour candidate for Hackney, North and Stoke Newington. Three weeks later, Roberts invited him to a party. At this party, out of the blue, according to Frolik, Roberts asked, "Where is Nikolai?" Frolik realised that he must be alluding to Berdenikov. Subsequently, Berdenikov personally admonished Frolik, saying "Joe, keep your hands off Roberts. You can see him socially, but that is all. You understand?" He understood.
But he continued to see Roberts socially. Then one evening, after they had had a lot to drink, Roberts said to him

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"Joe, I know you are disappointed in me. I knew what you wanted from the start; I can be of no use to you personally, but I have a good friend who might well be, I will introduce you."
Some weeks later, at another party at Roberts's house, Frolik says he was asked by Roberts to wait in an ante-room. Roberts later entered and said "You remember the friend I spoke to you about, here he is." He then introduced Mr. Hugh Scanlon.
It was soon after this episode that Frolik was summarily forbidden by Prague from having any further contact with British trade union leaders.
Mr. Hugh Jenkins: On a point of order, Mr. Speaker. I happen to know Mr. Ernie Roberts, and I also happen to know that he is strictly teetotal. The story that he had had a lot to drink must be inaccurate, unless, of course, he was drunk on lemonade. But, that apart, is it in order for the hon. Member for Mid-Bedfordshire (Mr. Hastings) to make assertions that a member of the Labour Party and a prospective Labour candidate is in fact secretly a member of another party?
Mr. Speaker: Every hon. Member who speaks in this place, especially when he is dealing with the reputation of people outside this House and when he is enjoying the rights of privilege which I believe rightly belong to us, carries a very heavy personal responsibility. The hon. Member for Mid-Bedfordshire will no doubt be aware of that.
Mr. Hastings: Certainly, Mr. Speaker, especially after the long period that I have been considering this matter. But if what the hon. Member for Putney (Mr. Jenkins) says, be true, that has nothing to do with the matter. I am accusing no one. I am repeating what a Czech defector, in circumstances that I have described, has said and written.
At this point, I must make two matters clear. Frolik is not alleging that any of the union leaders he names were spies. The word he uses is "agent", and he describes an agent as a secret co-operator of an enemy intelligence service, or a foreign intelligence service, who is working either from conviction, or under pressure from the foreign intelligence service, or for money. His role is to push a
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policy which is in the interests of the Socialist camp and against the interests of Great Britain.
Secondly, whereas Frolik in the tapes describes three of the four union leaders as agents of the KGB and one as "a Czech man", he says in the book that, although he was repeatedly warned off for trespassing on Russian territory, he has no evidence that the Russians succeeded in their aims. This remark is ambiguous and does not, incidentally, appear in the original draft. It has been added later as a preamble to the chapter on the trade unions.
Of course, important trade union leaders, like Government Ministers and many others, are required by diplomatic convention and courtesy to meet Soviet and Communist diplomats socially, but the depth and intimacy of the relationships described by Frolik are of another order. Moreover, they indicate a remorseless attempt by the KGB to subvert men who wield, or wielded then, immense destructive power in this country.
These events occurred some years ago, and the only reason this account has not emerged in public before is the existence of our prohibitive libel laws. It is right that it should do so now, for do any of us seriously think that the KGB has relaxed its efforts since that time—despite the expulsions in 1971?
The House can make what it likes of these allegations. For my part I want simply to point three conclusions.
First, in the national interest, Frolik's evidence should not be discounted without further detailed and, so far as possible, public examination.
Secondly, perhaps the best medium for this examination would be a Select Committee of the House, charged with duties comparable with those of the Senate sub-committee to which I have alluded.
Thirdly, our trade union leaders should at the very least be warned of the consequences of fraternising too frequently or imbibing too deep with foreign Communist so-called diplomats. They are virtually all intelligence officers under cover. As such they are all under direct or indirect KGB control and they are all engaged in subverting parliamentary democracy in this country.
Mr. Ioan Evans: The hon. Member for Mid-Bedfordshire (Mr. Hastings) talks about trade union leaders meeting people from Communist countries. May I remind him that his right hon. Friend the Leader of the Opposition has just returned from Yugoslavia, where she met Marshal Tito, had long discussions with him, and was highly complimentary about the development of workers' control in Yugoslavia? Prior to that, she went to Communist China. Is the hon. Gentleman accusing her of being a Communist agent because she has had discussions with Communists?
Mr. Hastings: If the hon. Member for Aberdare (Mr. Evans) seriously thinks that there is any connection between his intervention and what I am talking about, he needs to go away and take a cold bath. In consequence of his intervention, I am obliged to repeat the last part of my speech.
Thirdly our trade union leaders should at the very least be warned of the consequences of fraternising too frequently or imbibing too deep with foreign Communist so-called diplomats. They are virtually all intelligence officers under cover. As such they are all under direct or indirect KGB control and they are all engaged in subverting parliamentary democracy in this country.
Sir, the House of Commons should not go into recess until we have an assurance from the Government that these matters will be fully and properly investigated on our return.
4.17 p.m.
Mr. Dennis Skinner: I feel that we should not adjourn until we have discussed a least one other matter to which I shall refer in a moment. First, how ever, since this is a debate, I should like to take the opportunity to remind the hon. Member for Mid-Bedfordshire (Mr. Hastings) that, if we are to have a full-scale inquiry of the kind that he envisages, I think it should be extended to include those who from time to time have been on trips to Rhodesia and have helped Ian Smith to continue his régime.
Such an inquiry should also include for instance, all those who, as my hon. Friend the Member for Aberdare (Mr. Evans) said, go on trips to Communist countries. We have a considerable number
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of groupings in this House, with the Anglo-Russian this, the Angle Romanian the other, and so on. I do not go to any of these all-party meetings, but I am told that there are a great many Tories in these groupings who, not content with getting the odd trip now and again, actually take over official positions. I have in mind such people as the hon. Member for Aberdeen, South (Mr. Sproat), who is always talking about scroungers.
I want such an inquiry. I hope to hear from my right hon. Friend that we shall have an inquiry and that it will be so wide-ranging that it picks up all the bits and pieces. There is no doubt that we shall run into some flak from Opposition Members. We shall pick up some of them on the high road. It will not just be in Rhodesia, either. It will be in any country, no matter whether it is red, blue or sky-blue pink.
We want to know what the Leader of the Opposition has been whispering in Tito's ear. We want to know precisely what she said when she went to China. There is a lot of stuff in China that does not come out. I think the right hon. Lady should be made to reveal what happened when she met various Chinese leaders.
I hope that such an inquiry will also include the right hon. Member for Sidcup (Mr. Heath). I do not know whether he is a friend of the hon. Member for Mid-Bedfordshire. I do not think that he is currently, and I doubt whether he ever was. But the right hon. Gentleman, too, should be made to reveal all that happened on his many trips—even those on the railway. Whom did he meet on all those journeys when he was selling his books? I want to know what all those hon. Members do on the Select Committee trips such as that which investigated Cable & Wireless for the Select Committee on Nationalised Industries. What about all those who go to South Sea islands? I want to know what conversations take place on these trips. I would welcome this sort of open government and all these inquiries.
However, I intend to ask for another inquiry. The inquiry that I want would deal with the whole question of something that we have never debated, although I have referred to it before—the lifeboat scheme. I shall remind the House how

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this scheme was set up. There was this group of people in secondary banks and property companies—the entrepreneurs of this world—who risked capital and set about making money, particularly out of property. We are told that when free market forces apply there is a gamble and an adventure involved. These people may gain money or they may lose it. By and large these people were making money in the late sixties and early seventies at a rate that this country probably had never known before, to the extent that millions and millionaires were made.
When the property slump began, and the difficulties were hastened by the massive increase in the price of oil, it resulted in a chain reaction throughout the commodity markets, creating inflation at a rate that affected these companies to which I have referred in a way which made their income less valuable. As a result, the lifeboat scheme was established.
It was set up principally, but not wholly, with money from the big four clearing banks and propped up with the respectability of the Bank of England, for which the Government are responsible. The Bank of England contributed £120 million. The money in the lifeboat scheme was used to prop up 30 institutions. The Treasury will not tell me the names of all these institutions, but I know a few of them because I read the Financial Times and other such newspapers from time to time. These institutions have all been assisted in a way by the lifeboat scheme. The total amount that has been used in the scheme is £1,300 million, of which the Bank of England contributed £120 million. That means that the taxpayers ultimately have contributed the money that was provided by the Bank of England.
The Minister of State, Treasury, in answering a letter of mine in September, said, in effect, that much of this money would not be recovered. In other words, the taxpayer has to foot that bill. Listening to the cries from Conservative Benches about the money that has been lost in various Government Departments or that has gone astray and needs investigation, I wonder why we have not had an investigation of the lifeboat. The co-operatives were investigated by the Public Accounts Committee and there have been many
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questions asked about the amount of money lost through fraud in the DHSS. These investigations have taken place with a view to pinpointing why this happened, and how it could be stopped. I wonder why there has never been any investigation into where this lifeboat scheme money has gone, and why the Bank of England doled out money to entrepreneurs without any investigation by the House of Commons.
Mr. Tony Durant: Does the hon. Member for Boisover (Mr Skinner) intend that all this should be done before the House rises for Christmas?
Mr. Skinner: Oh yes. This year when the House of Commons is rising a week earlier than usual—we generally rise about 21st or 22nd December—we have ample time. I put this matter in front of many of the things that we have been discussing. I would put it before devolution—we all know what that is about. No, perhaps we do not know what it is about, but we know why it is on the agenda. By all means we should discuss this matter at great length, and I would hope that all hon. Members, particularly those in companies that have been assisted by the lifeboat scheme or those with friends in such companies, would take part in these discussions.
Mr. Hugh Jenkins: Before my hon. Friend leaves that subject, would he include in his all-embracing inquiry, to which he wants the Government at least to commit themselves before the recess, the question of the Central Intelligence Agency and hon. Members who have been financed either directly or indirectly by that organisation. Most of them would, of course, be on the Conservative Benches and some of them may have already spoken in this debate. This is a legitimate subject. Conservatives want us to look into the activities of the KGB. Let us make it fifty-fifty, and have a look at the CIA as well.
Mr. Skinner: Yes, that is a splendid idea, but the matter to which I am referring now is of even greater importance. Although the matter to which my hon. Friend has just referred needs to be dealt with, I suggest that the hon. Member for Mid-Bedfordshire raised it not because he was trying to get an inquiry but

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because he was trying to sell this book which, I believe, is not selling awfully well. This Czech fellow should have a word with the right hon. Member for Sidcup and get a few tips on how to sell a book and practise his handwriting and so on.
I want an investigation and debate to take place on the question of the lifeboat scheme because it is very important. If people get themselves involved in business, and subsequently face bankruptcy, most people would say that this was their own fault and that they knew the game when they started. One loses some, and one wins some. Many people go through the bankruptcy court each year, but in this case a special case was made. Unlike the one being made for the firemen, it has continued ever since. These people were entering this form of business at a time when the Financial Times Index was down to 146, as it was then. What Parliament has said, and what the establishment generally—the Bank of England and the Treasury—has said by not answering questions on this matter is that this special group, this élite, should not be subjected to any form of debate and should not have its business inquired into; and most important of all, that it should not go through the bankruptcy court in the normal way. Instead, it was propped up by the lifeboat scheme. It is high time that we knew the banks involved.
I want to refer to one or two of the companies involved. First of all there is London and Counties. The report on that company from the Department of Trade some time ago never dealt with the matter fully. This was because there were other things affecting the then leader of the Liberal Party at that time. Therefore, the Press campaign tended to emphasise the other matter and forget the real issue when the report was published. I should like to see the Press concentrate a little more on the important aspect of London and Counties. That company was the first domino in the pack, and when it fell in 1973 it pushed others down because many of these companies were interlinked. I want that fully investigated and debated.
The same is true of Slater Walker. I know that a few hon. Members would not be terribly happy if we debated Slater Walker and looked more closely at the fact that Bank of England money—in
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other words the taxpayers' money—was used to solve that problem. We all know that the company is now being operated on a completely different level, but there were one or two red faces as a result of the Bank of England stepping in.
There is something sinister about certain aspects of our public life, and this is one of them. The firemen on picket lines, who are having a pretty rough time, will not think that it is a fair world when they are trying to get a few more pounds a week from the Government and the local authorities while the people in the companies that I have mentioned have managed over the years to get away with it without too many problems. That is why I think these matters should be debated. I should also like a debate on the way in which firemen have been dealt with in the past five weeks, but that is another issue.
I suggested that these matters should be debated in the House not long ago. I referred to the involvement of a right hon. Gentleman. That right hon. Gentleman made certain statements in response to your ruling, Mr. Speaker. I have been involved with people who were connected with that company at the same time as the right hon. Gentleman concerned was connected with it. I shall try not to say anything to worry you, Mr. Speaker.
Keyser Ullman was part of the lifeboat, but is no longer in the lifeboat, According to the information that I have, the national clearing banks were the banks responsible for getting Keyser Ullman out of the lifeboat. That is not quite in accord with the impression given by the right hon. Member for Taunton (Mr. du Cann). I am not saying that he was straying from the truth, but the impression was created that somehow or other the money was paid back by the bank concerned. My information is that the money was provided by the big four banks to the extent of about £12 million.
I want an investigation into these matters. Certain directors were involved in obtaining loans from that company. That, as everyone knows, is in breach of the Companies Act. That information has percolated through. I want this inquiry to be very wide-ranging. When certain Members, particularly Opposition Members, are saying that there should be a more concentrated attack on finding out how public money is spent—there are

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a few hot gospellers in the House who tend to use that kind of language—we have to ensure that all the money is accounted for. That is one area that has never been debated or looked at. Perhaps there are too many people involved in this House and in another place and in many other places who are a little bit scared about what might be revealed. That is putting it at its lowest. Therefore, this must be debated and inquired into before Christmas. I warn my hon. Friends and Opposition Members that this matter will not go away. Some people thought that the Crown Agents affair would go away, but it did not.
Mr. Ernest G. Perry: Most of them have gone away.
Mr. Skinner: The money went away as well. I hope that that will also be looked at. Where did the money that the Crown Agents were given go? People say that £212 million went missing, so that question must be asked. I suspect that a lot of the money went abroad. The Crown Agents' affair came back after 10 years because some of us kept trying to probe and inquire into it. We were not listened to at first. Nevertheless, it has come back on the doorstep in the dirty form that we have seen. This matter will return again and again until it has been investigated and until what happened to the taxpayers' money has finally been established. Why does the Bank of England give no reports on the matter, and why has the Treasury not revealed where the money has gone?
Those matters will always be returned to, and I hope, therefore, that we can have a debate before Christmas to start the ball rolling.
4.35 p.m.
Mr. Dudley Smith: I shall deal with one subject and one only. I shall not be so hypocritical as to suggest that we should not adjourn for Christmas or should have a substantially shorter recess, since we work for longer periods of the year than does any other legislature in the world, but I consider that Parliament should not adjourn, or at least should return half a day early, in order to discuss a matter which has arisen in the past 10 days but which has signally failed to receive proper exposure.
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I refer to the recently announced amnesty for illegal immigrants. I have a great personal regard for the Home Secretary—I regard him as a man of considerable calibre—but I think it well below his usual standard when he uses the well known ploy which successive Governments have used over the years of trying to hide a difficult subject away in a Written Answer instead of coming to the House to make a statement. Patently, it was right that there should be a statement in the House about this latest amnesty, but no such statement was made. The announcement was tucked away in a Written Answer, and we have had no opportunity to debate the matter or to expose the Home Secretary to questions on the subject.
I believe that this recently announced amnesty has had a serious impact on race relations work in this country. Both in the House generally and in the Select Committee on Race Relations and Immigration I have been much concerned with the subject over the past three years. I have always taken a certain view on immigration. I believe that it should be far more restricted than it is, and I know that many of my hon. Friends take the same view. On the other hand, I yield to no one in my concern that race relations in this country should be improved, and could be improved, and I genuinely believe that the result of the latest amnesty has been to damage race relations.
Some hon. Members who do not have an immigration problem in their area may wonder why I say that. I can only tell them that those of us who represent areas with high levels of immigration know only too well the anxieties and fears of many of the white ethnic majority population when they hear announcements of this kind. There are no reliable figures of the amount of immigration at present. The Home Office admits it. It does not know the exact figures. There is no reliable estimate of the number of people who may yet come to this country in the next two decades. Consequently, people are worried about the level or potential level of immigration, and I am certain that no help what ever is given towards the improvement of race relations when we have such an announcement as this from the Home Secretary.

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Race relations in this country—let us not pretend otherwise—are in a fragile state. Despite the legislation which has been passed in an effort to improve race relations—or, perhaps, because of it—the situation has deteriorated in the last year or so. I believe that action of the sort which the Government have taken in announcing the amnesty will virtually drive a fair number of unthinking people into the arms of the National Front—that totally despicable party or, rather, organisation. I shall not dignify it by calling it a party, and I was sad to see such a boost given to it the other day by the party political television broadcast of the Labour Party. [HON. MEMBERS: "Rubbish."] One is entitled to one's opinion. I saw it, and, quite honestly, I was appalled by the presentation because of the exposure which it gave to a minority organisation which has very few votes indeed.
Although we got the message that the Labour Party is obviously scared stiff about the National Front, the presentation of the broadcast gratuitously handed a party political broadcast to the National Front in its own right. To put it at its lowest, it was ham-handed.
I have no brief whatever for the National Front, but I believe that examples of that kind and such announcements as the amnesty for illegal immigrants will make more people turn to extreme measures as they become genuinely worried.
Moreover, the amnesty shows that the Government are not really serious about tackling the vexed question of illegal immigration. I am certain that the vast majority of hon. Members on both sides believe that illegal immigration is wrong and that everything possible should be done by the Government to stop it, but if we have this sort of reaction from the Home Secretary of the day—the second time running, with a different Home Secretary but the same party in office—giving in to those who are here illegally, what can we expect for the future?
Obviously, people abroad will say that we are "soft" on immigration, that we are an easy option, that once someone has got here he has nothing much to worry about because he will eventually be given a pardon or parole and be
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allowed to stay. Indeed, others will say that it is well worth trying to come here because there is nothing much to worry about.
I believe that the amnesty will do a great deal to encourage those law breakers who have recently come here illegally and will encourage also the racketeers who run illegal immigration businesses both abroad and in this country. I have seen the work of some of these people at first hand, as have other hon. Members. It is big business. Large sums of money change hands, and the degree of sophistication is substantial.
Therefore, the Lord President must have no illusion, and neither must the Home Secretary, that we are dealing here with small numbers of people who are unfortunate enough to be exploited, who have come here by mischance, perhaps, and who should have pity rather than blame. Many of these people have come in a cynical and stealthy way, with all the apparatus behind them of a smuggling route well organised on the Continent of Europe and well organised in the Asian subcontinent.
Far from going away, the problem is on the increase, as I hope we shall be able to show before very long in a report by the Select Committee.
Before adjourning, we ought as a Parliament to say on this as on other subjects either that we believe in the laws of this country or that we do not. Parliament should be shown to support the laws which it has passed, or, if it believes those laws to be unfair or unworkable, it should abolish them. But while we have our laws they should be observed.
I believe that 90 per cent. of the country would support the Government and Parliament in the utmost prosecution of our laws against illegal immigrants. If they have no right to be here, they should not be allowed to stay. We should take note of what some other countries are doing and, when people are found to be here illegally, they should be deported.
4.43 p.m.
Mr. Hugh Jenkins: We have one matter at least to be got out of the way before we adjourn, namely the deferment of the Town and County Planning General Development (Amendment) Order, which was to have come into

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effect on 1st January. I hope that we shall be told of that deferment before very long. [HON. MEMBERS: "We have."] It is long overdue.
Mr. Gow: Apparently, the hon. Gentleman missed the intervention of his right hon. Friend the Leader of the House earlier today. He told us about an hour ago, when my hon. and learned Friend the Member for Beaconsfield (Mr. Bell) was speaking, that the Government did not propose to proceed with the order.
Mr. Jenkins: That confirms what I was saying. As a matter of fact, I went out of the Chamber a little while ago to have a cup of tea and I missed that statement, but I am delighted to know that I have been anticipated.
Mr. Foot: My hon. Friend missed the best part of the whole afternoon.
Mr. Jenkins: At least, it was good news. I hope that we shall hear some more good news before the day is out. I hope that the deferment does not mean mere deferment but that the outcome will be that this defective order will be so rewritten that it will not have the dire results—I shall not go into them now—which the local authorities which have studied it rightly fear. It would have serious results in Wandsworth and many other constituences where the release from the planning controls originally proposed under the order would have had consequences that could not have been foreseen when it was drafted. However, the matter will be looked at again and we hope that when the order comes before us again it will be in a form generally accepted to be beneficial as, indeed, some parts of the order already were. We were worried that the paragraphs we opposed would have led to disadvantage for the whole community.
However, I do not intend to suggest that we should think about that before adjourning for Christmas. There are other matters to which I wish to refer briefly. The name of John Stonehouse has been mentioned. We have no reason to suspect that he might have been a Czech agent. There are a sufficient number of other things that have been proved against him without our worrying about that possibility—not only the things for which he was recently incarcerated, but
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matters referred to in the Department of Trade report. That report makes extremely interesting reading in relation not only to Stonehouse but to a number of other people in public life who are named in it. The House should debate that issue before adjourning. This is not a matter of conjecture that it has been suggested should be looked into but a Department of Trade statement and we should decide what we think of it.
Mr. Cranley Onslow: Is the hon. Member for Putney (Mr. Jenkins) saying seriously that the fact that Stone-house has been found guilty of a number of things other than espionage is, ipso facto, evidence that he was not a spy?
Mr. Jenkins: I am saying that other things have been proved and so there is no need to spend time on this. It is improbable that Stonehouse, who was so busy in many other ways, would have had time to be a spy in his spare time.
I now turn to other matters. What are the Government's intentions about a public lending right? The Leader of the House has, from time to time, expressed his admiration of such a Bill, but he has done that so many times and so often that if I were particularly anxious to see any other measure passed, and the Leader of the House expressed enthusiasm and admiration for it, I should be greatly alarmed.
The Leader of the House has been enthusiastic, but so far the Government have not made clear their intentions on public lending right. Ideally this should be a Government Bill and I hope that the Leader of the House will be able to tell us at long last that this is now on the cards. If not, there is the alternative of a Private Member's Bill.
I understand that the hon. Member for Chelmsford (Mr. St. John-Stevas) intends to introduce a Public Lending Right Bill. I had hoped that this would be a Government Bill, but if it does come from the other side I have told the hon. Gentleman that I am ready to be on its list of sponsors. Will the Leader of the House give an assurance that if the hon. Member for Chelmsford introduces such a Bill, although he is rather low in the pecking order, the Bill will be given a fair wind and that the right hon. Gentleman will see that the Government get the Bill on the statute book at long last? Such

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legislation is supported on all sides of the House and it is seriously overdue.
Hon. Members may have seen on the "Tonight" programme on Monday an appalling film, which was one of the most terrible that I have ever seen—about the consequences of the raid carried out by the Army of the illegal Smith régime in Rhodesia into Mozambique. It was a shocking film and we understood then why it was that complaints had been made about the Foreign Secretary's condemnation being insufficiently severe. After seeing that film, one felt that a crime against humanity had been committed and that no condemnation would have been too heavy. We have a particular responsibility here. Perhaps mankind is becoming too blasé when there are natural disasters in places a long way away. We do not take enough notice of the conseqences of such disasters as the one that took place in India recently. We tend to regard only those things that happen near us as being of concern to us, and the greater the distance the less notice we take.
We have a special responsibility for the actions of the illegal régime in Rhodesia because it is there as a result of our inability to prevent it, our lack of will to do so or possibly a combination of the two. Therefore, anything that is done by that régime is something for which we are in a way, if not directly at least indirectly responsible. The complaint that the Foreign Secretary's condemnation of the brutal attack—in which mostly women and children were killed—was too mild was well justified. I hope that when the Leader of the House replies he will feel it right to add to what the Foreign Secretary said by making clear that the Government have for this action an abhorrence that will render it impossible that such an action could be taken again by the illegal régime.
I hope that the Leader of the House will address himself to these matters in his reply and that unless we hear from him on them we shall not adjourn.
4.53 p.m.
Mr. Fergus Montgomery: I realise that many hon. Members still wish to speak and I shall therefore be brief.
I endorse what has been said by my hon. Friend the Member for Warwick
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and Leamington (Mr. Smith) and ask why we cannot have a debate on the vexed question of immigration before rising for the recess. I agree with what has already been said. The House could easily continue for two or three days next week so that certain issues that hon. Members feel to be vital could be discussed before Christmas.
Last Thursday during business questions I raised the matter of immigration with the Leader of the House and his reply was a polite brush-off. The right hon. Gentleman said that there would be plenty of time to raise the matter this week. I draw the right hon. Gentleman's attention to Early-Day Motion No. 37 which refers to the Select Committee on Race Relations and Immigration, which apparently took no evidence during its recent visit to the Indian sub-continent.
We heard an entertaining speech from the hon. Member for Bolsover (Mr. Skinner), who talked about Select Committees tripping all over the globe and he wondered what was the purpose, apart from providing junkets for the hon. Members concerned. The hon. Member for Bolsover has now tripped away himself. However, I must draw the attention of the Leader of the House to the proceedings of the Select Committee on 19th May. The Chairman said:
"We did not take evidence in the countries we visited so there will not be any evidence to accompany our report. I think it is far better if we ask you rather than present evidence ourselves."
One can only wonder what was the purpose of the Select Committee. I believe, as my hon. Friend the Member for Warwick and Leamington said, that this issue should be ventilated and that the House is the proper place for discussion to take place.
I endorse all that my hon. Friend said about the announcement of the amnesty for immigrants who entered this country illegally prior to 1975. Not only are they to be granted an amnesty, but they are to be allowed to bring in their wives and children under 18. That is unfair to the immigrants who are already here, unfair to the immigrants patiently waiting their turn in the queue, and unfair to the indigenous population.
I am particularly concerned, as was my hon. Friend the Member for Warwick and Leamington, about the effect that the

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amnesty will have on immigrants who are attempting to come here illegally. It gives encouragement to them and to those who are making a great deal of money out of selling forged documents to people who are attempting to enter this country illegally. No doubt those who are making money out of this racket will say that if illegal immigrants can only get into this country all they will have to do is to lie low and a kind, benevolent Socialist Home Secretary will come up with another amnesty and all will be well.
I am particularly concerned about the way in which the announcement was made, in a Written Answer. There was no chance for hon. Members to discuss the announcement or to question the Home Secretary. That is a disgraceful state of affairs and a disgraceful way for any Government to conduct their business.
We realise that the Labour Party is very concerned about the National Front. The recent television party political broadcast was directed entirely against the National Front. I make no comment about that programme because I was one of the lucky ones who did not see it. The reason that the National Front is gaining support is that many people have no faith in our main political parties on the vexed question of immigration. They feel that they have been let down by successive Labour and Conservative Governments.
Mr. Tom Litterick: The hon. Gentleman may inadvertently be doing himself a disservice. Will he address himself to two specific points? When he asks us to consider restricting immigration, does he mean all immigration of all types of persons from whatever area they come, including the Common Market, bearing in mind that it may soon include Portugal, Spain and Greece? Secondly, does he not feel that, having argued as he has, he is in danger of being regarded as a racist?
Mr. Montgomery: I was coming to that point. I am glad that the hon. Gentleman has mentioned it.
One of the serious things that is happening in this country is that anyone who dares to question the number of immigrants or the rate of immigration is automatically branded a racist. The hon. Gentleman represents a constituency
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in Birmingham where there is a very serious problem and the right way to handle it is to have an open discussion. People are entitled to their opinions.
If the views which my hon. Friend the Member for Warwick and Leamington and I put forward are branded racist, there must be millions of racists in this country—and I do not believe that there are. Even the right hon. Member for Bermondsey (Mr. Mellish), a former Government Chief Whip, made a speech not long ago in which he drew attention to the serious problems of immigration and used the phrase, which got a great deal of publicity, "Enough is enough". That is the view that I take.
Mr. Litterick: There are racists on this side of the House, too.
Mr. Montgomery: The hon. Gentleman keeps going on about racists, but what is the definition of "racist"? Does he think that it is time to allow more and more people to come in and to go into the city ghettos?
Mr. Deputy Speaker (Mr. Oscar Murton): Order. I have been advised of, and I remember, the occasion when Mr. Speaker said that he looked upon the word "racist" as an unparliamentary word. I think that we must bear in mind Mr. Speaker's ruling in that respect.
Mr. Litterick: On a point of order, Mr. Deputy Speaker. I did not call the hon. Member for Altrincham and Sale (Mr. Montgomery) a racist. I warned him of the danger of inadvertently characterising himself as a racist.
Mr. Deputy Speaker: I understand that. I am not accusing the hon. Gentleman of using the word as a form of abuse, but I think that Mr. Speaker deplores its use even in the wider context.
Mr. Montgomery: There have been so many interruptions that I have almost forgotten the point that I had reached.
I was saying that I can see no kindness in allowing more and more people into this country to live in overcrowded areas of our inner cities, to go to overcrowded schools, and to live in overcrowded housing. Obviously, I respect your judgment, Mr. Deputy Speaker. I do not think that the hon. Member for Birmingham, Selly Oak (Mr. Litterick) was referring to me

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as a racist, although there was perhaps a hint or implication in his remarks. However, we who believe that immigration has to be halted are used to that word.
If the Government want good race relations, they will have to realise that there is no point in trying to sweep the problem under the carpet. The hon. Member for Bolsover said that it might be hoped that if no one mentioned the Crown Agents the problem would go away. The Government may be hoping that if no one mentions the vexed question of immigration that problem will go away. But it will not. I hope that the Leader of the House will read carefully the speech of my hon. Friend the Member for Warwick and Leamington.
The only answer to this problem is to have open debates when we can look at the problem openly and honestly. People will then see that we heed what they say and that we are aware of their anxieties and of the problems which have been created. If this sort of action is taken in Parliament, support for the National Front will decline. I hope that when the Leader of the House replies he will be able to give us a convincing reason why he cannot find time to debate this important issue before the Christmas Recess.
5.3 p.m.
Mr. Ioan Evans: I am in a dilemma about deciding whether we should come back on 9th January. It all depends on how we are to occupy our time in the next part of this Session. If we are to be bogged down with direct elections for Europe and the devolution Bills, rather than come back on 9th January I should prefer to come back on 19th or 29th.
I have a high regard for my right hon. Friend the Leader of the House, but I feel that we have been bogged down in these three constitutional measures. There was a telling contribution in yesterday's debate on direct elections by the hon. Member for Christchurch and Lymington (Mr. Adley). He intervened in the speech of the right hon. Member for Sidcup (Mr. Heath) and said that the right hon. Gentleman had reformed local government, the National Health Service and the water industry, and was now recommending a reform of the electoral system. The hon. Gentleman
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asked what he could tell his constituents if he supported the right hon. Gentleman on the electoral system when he knew what had happened to the earlier reforms.
The hon. Gentleman was stating a great truth. There was a tendency by the last Conservative Government to introduce change for the sake of change, and we are all suffering the consequences. I should have thought that this Government would learn a lesson from that experience and would not try to repeat the monumental mistakes of their predecessors. When we come back we shall presumably spend a great deal of time on direct elections to the European Assembly. No party in this House has a mandate for electoral reform. The Liberals have campaigned for proportional representation, but they have failed to get first past the post on so many occasions that it shows that the nation does not want proportional representation. Certainly the major parties in the House do not want proportional representation.
On the question of direct elections, it can be argued that we have had a referendum and the people have decided that we ought to remain in the Common Market. But in the referendum campaign there was no suggestion by those either for or against our membership of the Common Market that if we decided to remain a member, we would immediately proceed, before a General Election, to have direct elections in this country. Yet here we are now, finding ourselves with the major part of this parliamentary Session devoted to a Bill that had not been put forward by the major parties in this country to the electorate. I think that that is terrible.
Again, we shall find that the remainder of the Session will be devoted to the devolution Bills. I believe that the direct elections Bill is an overcooked Bill, but, of course, the devolution Bills are half-baked. What the devolution Bills will do is to compound the difficulties that have been created by the Conservative Party. In Wales we suggested that we should not proceed with local government reorganisation until we had had the recommendations of the Kilbrandon Commission. But now, of course, local government, in the way in which it has been wrongly reorganised by the Conservative

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Party, is to be left alone, and on top of that we are to have an Assembly in Wales and an Assembly in Scotland.
What shall we be doing in the rest of this Session? Although all hon. Members talk about the need to cut down bureaucracy and to get people out of administration and into manufacturing industry, the Conservative Party has created a bureacracy in the Health Service, in local government and in the water industry.
Mr. Peter Walker: Will the hon. Gentleman give way?
Mr. Evans: I shall come to the right hon. Gentleman in a moment. I know that he was involved in the bureacracy creations.
The Tory Party created three bureaucracies. We are now to support the bureacracy in Brussels by having direct elections, and we are to create bureaucracies in Cardiff and Edinburgh. I believe that the Government should look again at this programme if we are to come back on 9th January.
Mr. Peter Walker: I do not know how the hon. Gentleman explains the fact that the statistics now published by his Government show that the year following local government reform in England was the first year since the war that the number of administrative staff went down. It went down by 4 per cent. That is about the only year since the war that it went down.
Mr. Evans: I shall look at those figures. The general impression that I have—I am sure it is shared by most hon. Members—is that the method of reorganisation of local government under the Conservative Party created a greater bureaucracy. That has been said by people involved in local government itself. I see that the right. hon. Member is not intervening to query my comments about the Health Service.
Mr. Peter Walker: Certainly not.
Mr. Evans: Certainly not, yes. I can assure the right hon. Member that when the Conservative Party reorganised the Health Service it created a massive bureaucracy.
Mr. Peter Walker: You voted for it.
Mr. Evans: I was not here, so I cannot remember. But bureaucracies were created, and the present Government must be concerned about that.
I sympathise with the task of the Leader of the House, because we have a difficult situation. The Government are doing a grand job of getting us out of financial difficulties but, of course, we do not have a majority in the House. Rather than embarking on these constitutional measures, I suggest that we should deal with issues which are of concern to our constituents.
Perhaps we could find time, when we come back after the Christmas Recess—I would be prepared to come back earlier for this—to discuss the problem of unemployment. I believe that that is the major problem confronting the Government. In fact, I believe that it is more important than the wages problem or the question of inflation, though I know that they are related. We need to have a major debate
Last week a Minister of the Department of Employment said that there was a need for the Government to create 2 million jobs. I know that the Government have done much by way of remedial measures. They have put forward various schemes to try to deal with the unemployment problem. But here is a major problem. This is what the House should be debating. There should be constructive proposals put forward by the House on how we can tackle the serious problem of unemployment, which may well further increase when we have investment in manufacturing industries. Investment in industry does not create jobs; it replaces labour. That means that there is a very serious problem.
Linked with that problem, I think we ought to discuss the question of what we are to do with the proceeds of North Sea oil. I understand that the Prime Minister has asked the Secretary of State for Energy and the Chancellor of the Exchequer to explore the possibilities of what we can do with the tremendous bonus that this country will receive when the benefits of North Sea oil begin to flow. I should have thought that even before the Government bring out a Green Paper, that is an issue on which we, as a House, should deliberate. We should put our recommendations to the

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Government, because there are new arguments being put forward that we might use the revenue from North Sea oil to wipe out the National Debt and that we might use it to bring down taxation. There are other arguments. We could well invest in manufacturing industry and try to find new energy sources.
Mr. Ivor Clemitson: I should like to revert to the point made by my hon. Friend a moment ago about the way in which investment in manufacturing industry does not necessarily create jobs but often replaces them, yet over the next 15 years there will be 2 million more people seeking jobs. Should we not be thinking of alternatives to unemployment, of which employment is one but not the only one? Is it not essential, therefore, that when we are thinking about the deployment of resources from North Sea oil, we should not only think of investment in industry but deal with the effects of that investment by funding programmes of alternatives to unemployment?
Mr. Evans: Yes, absolutely. I know that my hon. Friend the Member for Luton, East (Mr. Clemitson) has made a close study of these problems, and I would welcome a debate on this issue so that he could develop the theme which he has mentioned briefly. That is the sort of issue which I think the general public would feel had some relevance to them at present and which concerned their hopes and aspirations for the future.
I think that the mass of people in this country are not concerned at all with whether we take Clause 2 of the European Assembly Elections Bill before Clause 3. They could not care less how we elect representatives from this country to the European Parliament. What they are deeply concerned about is the way in which food prices are rising as a consequence of our membership of the Common Market.
My hon. Friend the Member for Luton, East is supporting my point that we must be looking to the future and making those points from the Back Benches. We must make constructive proposals on how we can use the revenues from North Sea oil. We must try to ensure that we do not have mass unemployment.
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I do not want to speak at length, but I should like to suggest one or two other subjects. I believe that it is wrong that we, as a House, have not debated foreign affairs. My hon. Friend the Member for Putney (Mr. Jenkins) quite rightly referred to Rhodesia. I think that we should be expressing our point of view on and debating the issue of Rhodesia and South Africa. We should make the public in Rhodesia and South Africa aware of the deep feelings of hon. Members about the way in which events are developing in that part of the world. I link Rhodesia and South Africa because I am absolutely convinced that the key to the solution of the Rhodesian problem lies with South Africa. If South Africa were to cut off support for Rhodesia, the illegal Rhodesian régime would collapse.
We need to know what the Government propose to do. President Carter is giving a lead in the United States about the American attitude to South Africa. We seem to be trailing along behind the United States. I hope that our Government will give a lead and that they will consider what we should do about the question of investment and what action we should take if South Africa persists in supporting Rhodesia.
There have also been important developments in the Middle East. There has been President Sadat's visit to Israel. We all know that there has been a biblical conflict in the Middle East for generations. There now seems to be an opportunity to grasp the initiative. Surely this House should be expressing its hopes and aspirations that at long last Jews and Arabs may live in peace. What a great contribution to mankind it would be if we could resolve those problems, yet we cannot find time in this House to debate this important issue.
I must tell my right hon. Friend the Leader of the House that I would welcome an opportunity to come back on 1st January, after a short recess, to discuss these matters which are of such concern to so many people. There are important questions relating to employment, living standards and the aim of mankind in wishing to live in peace. I hope that we shall not spend time dealing with escapist problems involving forms of Assemblies in Cardiff or Edinburgh.

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I hope that we shall not give the impression to the people of Wales and Scotland that all their problems will be solved if we have new talking shops in those areas. The only way we shall solve these problems is by changing the system. Furthermore, we shall certainly not solve the problems of Europe or change the European bureaucracy just by directly electing people to the European Assembly, at salaries greater than that paid to our Prime Minister.
I hope that we shall get back to discussing the bread and butter issues which concern our people. This is why I am willing to return earlier, from the recess so that we may have an opportunity to discuss these important topics. We shall then be in a better position to deal with them in our constituencies.
5.18 p.m.
Mr. Wm. Ross: In view of the many subjects that have been raised in this debate, it may seem strange that I wish to discuss the subject of the Foyle salmon fisheries in my constituency. However, this is a matter of very great interest to my constituents and that the decline in salmon numbers is of long standing is no reason for ignoring the problem.
I wish to declare my interest in this subject. I am an angler, vice-president of an angling club, and I fish in the Foyle area. The House will be aware that recently on the Foyle we had a killer whale and the activities of that mammal in supping on the salmon no doubt led to a further decline in salmon stocks. But the work of that whale and salmon disease are the only two factors in the decline in stocks that cannot be directly attributed to human action.
The salmon fishery to which I refer was at one time extremely valuable. In 1964 the nets took 149,633 salmon and the rods 4,349. In 1976 the nets caught only roughly 38,000 and the rods 603. Disease has run its course, and the damage done by drainage has brought its problems. These matters have been responsible for a proportion of the decrease. There has also been considerable pollution. This is a less severe problem than that in Great Britain, but salmon are sensitive to water quality and its deterioration has been responsible for
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much of the decline. It is time that the Department of the Environment did something about the situation because that Department has not been fulfilling its responsibility.
I tabled a number of Questions on this matter at the beginning of December, and I was given information about the settling ponds at the Carnmoney Waterworks. I was told that those ponds, which are lagoons, are in use. They may well be in use, if lagoons full of rushes and gorse can be described as "in use". I was also told that monitoring of the River Owenreagh shows that the discharge from Caugh Hill treatment works has not had any harmful effects on the ecology of the river. The difficulty is that the discharge in question has been continuing for 30 years and nothing has been done about it. If there is any discernibly harmful effect on the ecology of the river the harm has long since been done.
I was told by the Department that the Drumahoe sewage treatment works overflowed on four occasions in the past year and that six written complaints had been made in the past two years relating to the discharge of effluent from sewage disposal or water treatment works belonging to the Department of the Environment in the Foyle area. The reason I raise this problem now is to draw attention to the fact that the Department of the Environment is the only body that can prosecute if the law is broken.
I believe that if pollution continues from the Department of the Environment works the right to prosecute should be given back to the general public who will then be prepared to do the job which the Department itself is not prepared to take on—that is, to prosecute the Department.
A further reason for the decline in salmon stocks is the amount of over-netting that takes place, particularly in the River Roe. Some years ago that river gave 6,000 salmon to the nets and a thousand to the rods. Last year the figure went down to 1,230 as to nets and 174 to rods. That cannot be described as an improvement. A total of five nets operate in the estuary and there are others in the Foyle estuary. There is not much activity by people who earn their living from fishing but only from those for whom salmon provide extra pin money.

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This is one of the principal points of friction in the area. Most of the nets are based in Co. Donegal and the Commission is a cross-border body. The west side of the Foyle basin does not have many angling opportunities and most of the anglers and spawning grounds are concentrated in Northern Ireland. The net result is that money from netting seems to go to the Commission, or to the Donegal nctsmen, and little of it comes to Northern Ireland residents. Most of the anglers, who are catching a small proportion of fish, live in Northern Ireland. Something must be done about the situation.
In addition, there is a hideous amount of law breaking. I see the Under-Secretary of State for Northern Ireland in his place, and I am glad to note his presence because he will know about the shootings at water bailiffs and the threats to Commission staff. Nothing of import seems to have been done to improve the situation in the area.
I believe that the House should not rise unless something is done about this situation. There is a good deal of poaching by nets in the estuary. There is poaching by organised gangs on the rivers, as well as gassing, snatching, and by the old traditional type poacher who does least damage of all.
There, is also the question of the protection given by the Commission and the police. I was told in a further Written Answer on 1st December that the Royal Ulster Constabulary was responsible for the apprehension of persons in four cases and the Foyle Fishing Commission was responsible for eight cases. On the River Faughan the RUC apprehended 12 offenders and the Commission only two. In the remainder of the Foyle area in Northern Ireland the RUC was responsible for apprehending offenders in 16 cases and the Commission for 19.
This is a remarkable situation when we consider that the Foyle Fisheries Commission is a full-time body and the RUC has very little time at all left after other duties to look after fishery problems in Northern Ireland. I believe that this matter should be further considered by the House and that an improvement should be brought about.
I have already said that I am an angler. Until lately there was free trout fishing
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in the area. However, although the Commission does nothing at all about trout fishing, a licence fee was imposed this year for the first time. Complaints were made by the Limavady Council in respect of Benevenagh Lake and certain figures were given to me in a letter from the Foyle Fisheries Commission. The Commission appears to suggest that it was responsible for matters on Lake Benevenagh, but they have nothing to do with it as the responsibility belongs to the Department of Agriculture. There have been endless complaints for 25 years or so from the angling clubs in the Commission's area. Nobody is more aware of the complexities of the situation and of the rights governing fishing and angling in Northern Ireland than myself. In some rivers there are fishing rights attached. Some appear to have riparian powers while others appear to have few or no fishing rights. However, fishing has been wide open to the general public.
I draw the attention of the House to the activities of the Fanghan Club, which has approached me. I make no apology for that fact. Anyone can join the club for the princely sum of £3. That gives a person the right to fish, if he buys a Commission licence, in one of the finest sea trout rivers in the British Isles. Last year the club had 1,200 members and 300 boys paying the half rate, the latter being off the streets and not throwing stones. They were much better off fishing than they would have been if engaged in illegal activities.
The fees are used to pay one full-time bailiff and two part-time bailiffs during the angling season. During the time when the club bailiffs are available the Commission staff never seem to appear on the river. The club has spent the money on bailiffs and river improvement. It has spent £1,000 on river improvement recently. It is willing to spend money on restocking, especially restocking with sea trout. The club gave me a copy of an interesting letter from the Foyle Fisheries Commission of 30th September. The letter reads:
"Thank you for your letter of 24th September 1977. I am afraid I was unable to carry out any proposals to catch sea trout for eventual stripping in Bushmills, because the hatchery there was unable to accommodate them. We can, however, try again next season if the Association would desire it."

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There is a fish hatchery available to the Commission at Newtonstewart that has been out of use for some time because it does not have proper ponds for rearing. If the Commission is serious about keeping fisheries up to scratch in this area, it should at least make some effort to get that hatchery back into shape.
Another difficulty is that angling clubs pay rates on fishing in Northern Ireland. In most of Northern Ireland they pay them as normal rates. In the Foyle Fisheries Commission area they pay them to the Commission. I have already raised with the Minister the difficulties that are found by my club and other clubs that cover the River Roe. I hope that we shall soon have an answer.
Some of the nets in the Commission area pay rates. It is significant that only five nets out of many hundreds pay rates, and that the rateable nets happen to be on the River Roe. This is a matter that much concerns the anglers and netsmen in that area. They would like to know why the present state of affairs should be allowed to continue.
In the light of the serious decline that has taken place, I should like to know precisely what the Government intend to do—if it cannot be done before Christmas, I hope that it will be done shortly afterwards—to improve matters. I do not want to be fobbed off with the information that there is an advisory council, on which anglers have a strong voice. The council is purely what its name suggests—namely, an advisory body. No one has to listen to it and no one ever does. It has no powers and I believe that it should be given some teeth. It should be given some executive function.
Consideration must be given to the future protection of salmon. The destruction of the fishery has been widespread. The destruction of the salmon has been widespread not only in the Foyle area but throughout Ireland, North as well as South. If the Under-Secretary of State for Northern Ireland who looks after agriculture and fishing is concerned about treading on someone's toes and is uneasy about approaching Dublin, I can tell him that he will now find willing support in Dublin in the shape of the new Minister for Fisheries, Mr. Brian Lenihan. In an article in the Irish Independent of
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4th October 1977 Mr. Lenihan is quoted as saying:
"The various controls that have been imposed, such as the annual close season, weekly close time, maximum length and depth of nets, are being flagrantly flouted."
He said that when the depleted stocks reached the rivers
"they were invariably subjected to widespread poaching by organised gangs who were prepared to go to any lengths to achieve their purpose."
He went on to say:
"I am not prepared to tolerate this situation and I hereby give notice to all who regard illegal fishing for salmon as part of their birthright that as from 1978 they will be facing a changed situation."
The poachers and the scoundrels who have destroyed the Foyle fisheries should meet exactly the same treatment north of the border.
5.29 p.m.
Mr. Michael McGuire: I speak against the motion, and I shall list three main reasons that demand that we should have some explanation before we go into the Christmas Recess. I believe that they are good reasons for not going into recess. One of them concerns unemployment. The second reason is one that is not raised very often in the House although I feel that it should be—namely, the situation in respect of what we refer to as the Old Workmen's Compensation cases. The third reason is the massive discrimination against the major part of my constituency that lies within the Metropolitan Borough of Wigan.
Before I deal with those reasons I refer to the speech of my hon. Friend the Member for Aberdare (Mr. Evans), whose omnibus contribution covered many of the things that we discuss in the House. He referred to various matters that we do not discuss often enough. On the other hand, he wants us to drop one or two items. I understand why he takes the view, having listened to him and having read what he thinks about devolution.
My hon. Friend the Member for Aberdare talked about the salaries that it is proposed to award to Members of the European Parliament. He thinks that they are scandalous. I think that I quote him correctly when he says "That is more than the Prime Minister gets". That is more of an indictment against us

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than an indictment against the proposed salaries. If we want Members of Parliament to be really effective, we should be examining as soon as possible in the new Session how best we can provide them with better services to enable them to do their job here. Above all, there should be provision in the constituencies, because that is where many of the problems need to be tackled and solved. We should have somebody in our constituencies to help do just that. I do not think that the proposed salaries constitute an indictment. The indictment is against us in that we are prepared to put up with unsatisfactory provision and conditions because we think that public opinion will otherwise be offended.
I return to unemployment. In my constituency there is the new town of Skelmersdale, which enjoys the highest form of grant aid and has an unemployment rate of about 17·6 per cent. There are about 40,000 people in the town. We sometimes get figures from the Department of Employment relating to little hamlets which show fairly high rates of unemployment but which in population terms are insignificant. That cannot be said about Skehnersdale.
I believe that the Government have not done as much as they promised for Skelmersdale to help us overcome the terrific losses that we suffered when we lost Thorn and Courtaulds. Those two losses robbed us of over 3,000 jobs. The balance has been slightly redressed with the help of the Government and the initiative of the co-operative society—I am sorry that my hon. Friend the Member for Aberdare, who is a co-operative society sponsored Member is not in the Chamber but I am pleased to see that my hon. Friend the Member for Brent, South (Mr. Pavitt) is present, he being similarly sponsored—by introducing a new computer servicing block in Skelmersdale. That will give us 600 jobs immediately. It is hoped that the number of jobs at the block will reach 1,000. We know that people in Skelmersdale will not be able immediately to fill those jobs, but we shall have job opportunities in future. Therefore, I welcome the co-operative society's appearance. Apart from that, the Government have done very little, and I believe that they could have done much more. My message tonight to my right hon.
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Friend is to get this information across to his right hon. Friend responsible for this and to say that we want some good news for Skelmersdale.
My constituency resides mainly in the greater metropolitan area of Wigan. I cannot understand why an area such as Wigan is so massively discriminated against on every conceivable count. My hon. Friend the Member for Wigan (Mr. Fitch). another of my hon. Friends and myself went with a deputation my hon. Friend the Member for Wigan has led three or four deputations—to plead Wigan's case a few months ago for development area status. I believe that it is irrefutable on any counts—unemployment, social considerations and industrial dereliction. On each of these three grounds, or any combination of them, I cannot understand why Wigan's case is persistently rejected.
I do not know how the needs element in the rate support grant is compiled. The last straw that broke the camel's back, so to speak, came when we found that Wigan Metropolitan Borough, which has 3 per cent. of the total derelict land in the country—mostly within my constituency—to deal with which it gets a 100 per cent. grant—had to find certain costs for which there is no aid. Therefore, the problem is not solved by a 100 per cent. grant, because the ratepayers still have to meet substantial costs. As a result, it has suffered under the new rate support grant just announced.
Two of the old townships in my constituency—Ince and Abram—have some of the worst housing facilities in the United Kingdom. Following publication of the new rate support grant, we discovered that the Wigan Metropolitan Borough was to get in money terms exactly what it got last year with no allowance for inflation. Of the 10 boroughs within the Greater Manchester area, seven have benefits of one kind or another. The other three—Wigan, Bury and Stockport—do not get any benefit. However, Bury and Stockport gain from the rate support grant. The other seven boroughs get aid under the urban renewal programme, and so on, but Wigan still does not benefit. Bury and Stockport get grants from the rate support fund which will help them and which are based on the needs element.

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When Wigan makes out a case, it makes it out very largely, I assume, on the needs of the old Ince constituency. I cannot understand why this discrimination has existed for so long. Indeed, it looks as though it will continue. I hope that my right hon. Friend will get another message across—that it is not right and that it should be put right.
The final point that I wish to make under the title of the old workmen's compensation cases has not been discussed in this Chamber for quite some time. Many men settled before the appointed day in the new Industrial Injuries Act, or the National Insurance Act as it was called, which, if my memory serves me right, was 5th July 1948. In many instances, people were persuaded to settle, sometimes against their better judgment, on a lump sum basis. The computation was somewhat convoluted. I do not think that many in this House can explain it with great precision. However, those who had to deal with this matter, particularly in the mining communities, have some knowledge of it. These men were persuaded to commute what would have been a weekly liability for a lump sum payment.
Under the new scheme no man can have his entitlement commuted on the basis of a lump sum. If he gets less than a 20 per cent. assessment, he will usually settle, unless he is getting a special hardship allowance when he has a choice on the basis of a final payment. But he always has the opportunity—this is another good aspect of the new Act—to seek a review on the ground of substantial and unforeseen aggravation. That provision was copied from the Forces' scheme. It never dies. If a man's injury worsens, even though he may have accepted a final settlement, he may apply to have it reviewed.
I come back to the old workmen's compensation cases, of which there can not be many. I do not know what the figures are, but I shall try to get them. Whether it is 500,000 or 10,000 does not matter; the principle is the same.
This House has from time to time, by retrospective legislation, provided benefits for people who, but for such legislation, would have had no benefits at all. It is time that this House considered redressing
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the situation that I have outlined. We need a real Socialist measure to achieve the result for which I am asking. The Labour Government would be doing a great service for many of our colleagues—I do not know how many, but there would be proportionately more in mining areas than elsewhere—if they introduced such legislation.
I do not want to develop the argument. I do not believe that, when advancing this kind of proposition, one should argue the merits and details of it. If the forecasts of my hon. Friend the Member for Aberdare and others of my hon. Friends are correct and the Scotland Bill, the Wales Bill and the European Assembly Elections Bill are ditched, we shall have time in which to consider seriously bringing in legislation of the kind that I have indicated.
Our old comrades and colleagues who settled for lump sum payments—I think that in many cases they were ill-advised—should have the opportunity of receiving the benefits conferred by the new Act. I want retrospective legislation to be introduced which will help them to get a weekly benefit. It would be a great act of natural justice and show this House at its best—caring for those who ill-advisedly settled for something which the law would not now permit.
On those grounds, I oppose the motion.
5.43 p.m.
Mr. John Stokes: We should not adjourn for the Christmas Recess until we have considered a number of important topics, some of which have already been mentioned.
I believe that we sit too long in this place and pass too many laws. There is a good deal to be said for the old arrangement, in the days of England's greatness, when we came down at the end of July, spent the winter innocently doing things such as fox-hunting, and did not come back until January.
Both this Government and the previous Government, who have tried to pass so many laws, should perhaps remember the dictum of Lord Melbourne, again in the days of England's greatness, to leave thins well alone.
I am concerned about the failure of this Government, in particular the Home

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Office, to support law and order with that will and determination that is so obviously necessary. I am thinking of the need to strengthen the police and the necessity to give them more pay. I speak in the context of the kind of raid that took place yesterday on the M1. Only a few years ago that would have made the headlines in the papers. But, in today's violent times, the stealing of £250,000, a gun battle and huge pieces of metal being cut out of security vans cause no concern at all. That kind of thing is happening near London today, and most people are concerned about it.
I am also worried about the state of our Armed Forces, particularly about conditions in Germany where there are shortages of men, equipment, spares and ammunition. I am also deeply concerned about the pay of our Services. I believe that to be a more important and pressing matter than the pay of firemen.
I make no apology for being the third hon. Member on this side of the House to state with force that I believe that we should not adjourn until we have considered the amnesty for illegal immigrants and the problems caused by continuing immigration in general.
I was in my constituency most of yesterday. Perhaps the Lord President will be kind enough to listen to me because I am talking about what people say about us and the House. The Lord President may find it a laughing matter, but they do not.
My constituents cannot understand why this important topic has been debated so rarely. We are spending weeks and weeks on the Scotland Bill which no one in England wants and which few people in Scotland want. This will be followed by the Wales Bill, which is even more unpopular and irrelevant to the nation's needs. We are having continual debates on direct elections to Europe about which very few people know and even fewer care. Yet immigration concerns millions of people. It touches the national character and, indeed, our whole future as a nation. The Government do not want this topic discussed because they know that people want immigration stopped. The Government lack the will and moral courage to take the necessary action.
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The second amnesty for immigrants was announced, curiously, by way of an Answer to a Written Question. This is a further blow to morale in this country. People ask "Why should immigrants be allowed this immunity from the effect of our laws which we passed and which we should presumably try to uphold?" They ask "Why should crime pay, not only for immigrants themselves but for their relations? Are the sort of people who get into this country by means of trickery and fraud the sort of citizens that we want here? Why should immigrants have precedence over those who want to come here legally? Why should immigrant rackets be encouraged in this way? When will the process of amnesty for illegal immigrants come to an end?" These matters should be debated before the recess.
It is extremely difficult to raise the question of immigration at all, even in the House. Clearly, the Government do not want the subject mentioned. Outside the House many people are frightened of mentioning the subject in public. Even the newspapers have to be careful about what they print. This almost total muzzling of opinion in England is something new and sinister in our history.
Will the present unfair immigration laws last? The subject must have regular and open debate. Those who have the courage to raise the subject are abused and yet, if a referendum were to be held, about 90 per cent. of our people would want immigration stopped, and stopped now.
The stream of immigration continues and the Government cannot and dare not give a date for when it will come to an end. The problems affecting the ordinary people when immigrants arrive and, in time, take over whole areas of our towns should be debated in detail in the House. English people never expected that this would happen to them. They never wanted it to happen and certainly they were never asked to vote upon it.
The people outside the House regard us as little less than callous humbugs because we continually refuse to face the real problems, hardships and anxieties which are placed upon our citizens in this old and historic island. No wonder the National Front flourishes when the Government are so feeble in tackling this pressing matter. This House is still supposed to be the custodian of our citizens

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and yet we see families, in town after town, in London and the suburbs and in various parts of the North of England, being dispossessed by immigrants. They have no redress whatsoever when they see the price of property fall around them and the whole neighbourhood completely change. For old people in particular, their world is turned upside down. They cannot understand why they should have to leave the areas that they have known and loved since they were children to make way for newcomers—strangers whose customs, habits and religions are utterly strange to them.
This is what England is coming to. It passes my comprehension that we do not debate this matter and put a stop to it before there is a catastrophe. Some time ago an hon. Member said of immigration "Enough is enough". Surely now that months have passed since that cry was made, the Government will listen. It is no longer a matter of saying piously that the amount of immigration is endangering good labour relations, because it is now so endangering the very character and cohesion of our own race.
5.53 p.m.
Mr. Laurie Pavitt: I shall resist the temptation to follow the argument of the hon. Member for Halesowen and Stourbridge (Mr. Stokes) because my constituency has the greatest number of new Commonwealth immigrants in this country. I find the hon. Member's views abhorrent. His contribution was antipathetic to the integration of our people and the real needs that exist.
This is only the third time in nearly 20 years that I have intervened in the debate on the Adjournment. I took the view, in spite of the fact that popular entertainers could raise a cheap laugh about politicians, that there are on all sides of the House conscientious hon. Members who work an 0-hour week, including Saturdays and Sundays. Apart from the needs of hon. Members to have their batteries recharged, they are entitled to spend a little time with their wives and families. In the last three weeks the House has risen after midnight practically every night.
But the recess should be delayed for a few days so that we can debate today's
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decision by the Law Lords on the Grunwick affair. Hon. Members will know that in 1971 all the Grunwick workers in my constituency who joined a trade union were sacked. In 1972 all the Grunwick workers in my constituency who joined a trade union were sacked. In 1976 all the Grunwick workers who joined a trade union were sacked. What has happened since then has been a tragedy for industrial relations, not only for Grunwick but for the way in which industrial relations should develop between the workers and the employers. Most companies and large firms have, for a number of years, developed a means of resolving difficulties round the table. This has been to the advantage of the trade unionists, the CBI and the employers.
The Law Lords today reached a decision about Grunwick which will create a barrier to two sides in a dispute getting round a table and negotiating a settlement. The decision will give employers the right to reject the Employment Protection Act and to refuse to co-operate with the Advisory, Conciliation and Arbitration Service. The result will mean confrontation not just at Grunwick but in every firm throughout Britain where in times of economic difficulty we are trying to achieve maximum productivity and good industrial relations. Today's decision gives carte blanche for confrontation and war rather than negotiation and peace.
I believe that the House should debate this matter for one day, perhaps next week, or at least before we are due to return. I know how difficult it is for my right hon. Friend the Leader of the House to find time to enable hon. Members to discuss the many important matters they wish to raise, and that difficulty will persist in this case unless the Conservatives provide a Supply Day.
Perhaps I may here pay tribute to the right hon. Member for Lowestoft (Mr. Prior) because in this matter he has leaned over backwards in order to seek discussion and negotiation rather than confrontation. An employer can use today's decision to prevent negotiations from taking place. Hon. Members in all parties want to avoid strikes, mass picketing and confrontation, and instead to reach a compromise which, while it does not give either side everything it wants,

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avoids stoppages, loss of production and the sort of conflict that has arisen in my constituency. When there is confrontation there is complete capitulation eventually by one side or the other, but that leads to an uneasy peace which can result in bitterness and ill-feeling festering beneath the surface and eventually rising again.
There can be agreement such as took place in a firm in Leicester which, while smaller than Grunwick, engages in a similar business of film processing. There was a five-week strike and ACAS was called in. The two sides then got round a table and reached an agreement which since last August has been operating satisfactorily.
The situation in the film processing business at the moment is similar to that which obtained in the First World War when there was a lull while the contending forces massed in preparation for the next offensive. In the photographic industry the mass of work is done in the summer when hon. Members, like everyone else in the country, take their families to the beach at Lowestoft or to the Costa Brava and keep a photographic record of the event. Once the summer season is finished, however, the lull begins. We are now in the lull and the photographic companies are facing problems. It will not be until after next Easter that business will begin to pick up again, and Grunwick will be called upon to produce hundreds of thousands of negatives and prints.
The lull is the time to seek a peace treaty. We should be trying now to avoid conflict next March, April or May when millions of pounds of taxpayers' money will be spent on trying to keep the peace in Cooper Road, Chapter Road and Cobbold Road in the London borough of Brent. I estimate that taxpayers paid £1 million in that endeavour this year. I estimate that the Union of Post Office Workers paid £500,000 as a result of the problems at the Cricklewood sorting office in NW1. I estimate that APEX paid out £500,000 in fighting for the rights of immigrant workers in connection with this dispute. I cannot say too often how proud I am of that union. Immigrants—mostly Gujaratis—come to this country and find themselves in the position of immigrants here from Europe in the early 1900s who went to work in Whitechapel,
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or immigrants in the United States whose difficulties there in sweat-shop working conditions led to the creation of the garment workers union. These immigrants speak a negligible amount of English, and I am proud of the efforts of APEX on their behalf.
Hon. Members of good will will want to avoid another summer like the last one in which the conflict involved not only the contestants but the people who live near Grunwick, people who through no fault of their own found themselves on the battleground. I speak of old-age pensioners and children who wanted to pass through the mass picketing. But today's decision makes my constituency and every other constituency vulnerable to conflict. It opens the door to enabling recalcitrant employers to provoke confrontation. What happened in my constituency this year could happen in other constituencies next. I hope, therefore, that my right hon. Friend will provide the opportunity for a debate on this subject.
I am pleased to see the hon. Member for Brentford and Isleworth (Mr. Hayhoe) in his place. He, too, has played a magnificent conciliatory rôle in this matter. I pay tribute to him, just as I have already paid tribute to his right hon. Friend the Member for Lowestoft.
If we cannot resolve these matters in a reasonable way which permits of conciliation and arbitration, we shall have agony and tragedy in constituency after constituency. Although I have spoken purely in relation to Grunwick, I assure my right hon. Friend that this is not just a constituency matter. It is a matter of national importance. I hope, therefore, to see some action which, in the light of today's decision, will avert any further warfare of this kind.
6.6 p.m.
Mr. Tony Durant: Hon. Members on both sides of the House have already mentioned a number of issues which they felt should be raised. I wish to raise one which I think the House should stay here to debate and go on debating. I refer to the firemen's strike.
I think that it is time that this matter was settled. I am very concerned that we are now heading towards Christmas.

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Usually there are more fires during that period, and I am very concerned that the fire brigades may still be on strike over the Christmas period, which tends to be a dangerous period.
I am also concerned at the undue strain which has been put on the Armed Forces, who are coping magnificently with a very difficult job. For these reasons I believe that the House ought to continue to debate the matter.
I have a specific interest in the question because in the past six months my own fire brigade in Reading lost two men in a very nasty fire in the town. It has also had two awards for bravery. These were made to two men for diving into the Thames in order to rescue some people from a motor car. Both incidents show the type of job that the fire brigade does. It is a highly dangerous job.
We have heard from hon. Members on both sides what Parliament ought to do. This is a rather interesting trend. People have been saying what we ought to be doing instead of referring to devolution, and so on. I believe that we, as a Parliament, ought to concern ourselves with three principal things. These are the defence of the realm, which is our first priority; law and order, which are our second priority, involving the police; and, thirdly, human life and the saving of property. These are the prime duties of Parliament, and Parliament began almost in order to do these things. It was Lord Melbourne who said that this was all we ought to do, and that we should leave the rest to other people. I take that view strongly. We have interfered far too much in too many people's lives and in too many matters. I believe that defence, law and order and life and property are the three vital issues to the country.
It is, of course, the job of the firemen to look after life and property. One of the tragedies of the poor firemen is that they have played a responsible role. Whenever human life has been at stake, they have broken the picket lines and gone out to rescue people. This has worked against them, because it has saved life and therefore people have not been too concerned about the continuance of tin strike. If the firemen had taken
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a really militant line and let people die, the dispute might have been settled by now. But, of course, we should not have wanted them to be irresponsible, and we should recognise that they have taken a very responsible attitude throughout the period of the strike.
The recent Government offer to the firemen is a fairly generous one—we may even regret it in the long run—but it is a generous long-term offer and there is no doubt that the firemen feel that they need something now. Recently in Berkshire the firemen turned down the National Joint Council's offer by over 200 votes to 12. I believe that something ought to be put on the table now. I say this because I feel that the firemen want some recognition of their type of job. They feel that the 10 per cent. is certainly an offer, but they want a little more in recognition of the difficult and dangerous job that they undertake.
The firemen are also worried now that since the strike started a very large number of men have been leaving the force. It is shrinking very fast. Very soon there will not be full fire brigades to operate. The strike is also causing deep bitterness between the full-time and the part-time firemen.
The Government have said on a number of occasions that other people waiting in the queue are watching what happens to the firemen's claim and that if the firemen get their claim the flood gates will open and all the other unions will come along with their claims. Frankly, I believe that is no answer to the problem. Either we govern the country or do we not. That is the issue that the House has to grasp. Either we decide something or we do not. To say that because somebody else may want it we have all got to buckle down and hold the line is an entirely fallacious argument. I want to know who are the others in the queue. I can think of some to whom I would say "Go away. You have had plenty in your time." I do not accept this argument from the Government.
In the last two days it has been stated that in private industry nationally pay has risen, on average, by 15 per cent. I have no evidence about it one way or the other. I only know that it was said in the House, and it has been mentioned by a number of people. There has been no denial from the Government.

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We have been told that the Government have a flexible pay policy. I do not think that it is flexible to say "Ten per cent. or nothing". That is not flexibility.
I believe that the firemen would give up the right to strike if they were given a reasonable deal now. Most of the firemen to whom I have spoken take that view. They are very unhappy that they had to go on strike. I am referring to the moderate, reasonable chaps in the fire brigades. But, having taken this action, they would like to see some arrangement whereby, in return for a reasonable deal now, they would no longer have the right to strike.
Mr. John Page: By intervening I will save the House having to listen to me later. Is my hon. Friend aware that over the last year the firemen have increased by 33 per cent. their appearance at incidents other than fires? This being so, does he not feel that this increased productivity provides a real basis on which part of a settlement could be made?
Mr. Durant: I was not aware of that. I thank my hon. Friend for his intervention. But I realise that there is this element in the work of the fire brigades, because I have the M4 quite near to my constituency. The firemen spend a lot of time on the M4 cutting people out of motor cars. It is one of their principal jobs. I support what my hon. Friend said in this connection.
I believe that the firemen would give up the right to strike, and if the Government would move forward to a shortening of the hours that might be something to be discussed. But this House ought to continue to try to find some solution to the problem. I am not in favour of the firemen striking, but I think that they have a case and that the Government and this House ought to look at it.
When I drive past my local fire station I am saddened to see a great notice reading
"We will accept what the miners turned down".
That, in my opinion, shows the state that we have reached on the whole question of industrial relations and pay. I urge the Government to get on with this matter and produce a settlement before
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we have a long series of tragedies over Christmas.
6.11 p.m.
Mr. Ivor Clemitson: I want to revert briefly to the subject of Rhodesia and to a particular aspect of that problem, namely, the continuing breaking of sanctions against Rhodesia by oil companies, and in particular by Shell and British Petroleum.
I suggest to the House that we should not adjourn until this subject has been noted and debated. I suggest further that we should not adjourn until we have had an opportunity to consider why it has taken so long for the inquiry, set up in April by the Foreign Secretary, to complete its work. I hope that you will allow me one or two moments, Mr. Deputy Speaker, in which to sketch the background of this matter.
It is now 12 years since the unilateral declaration of independence was proclaimed by the Smith régime. At that time, the right hon. Member for Huyton (Sir H. Wilson), then Prime Minister, made his famous remark about the rebellion being over in weeks rather than months. That prediction, of course, was wrong, even allowing for the length of one of the right hon. Gentleman's weeks in politics. It was wrong because it was based on a false assumption about the effect of sanctions, and in particular about the effect of oil sanctions.
Oil was and remains a key to the continuance of the illegal régime in Rhodesia. Rhodesia, of course, has no oil. It has to import oil and oil products, and these products in fact can come only from South Africa.
There are four oil refineries in South Africa, three of which are owned by Western oil companies—two American and one jointly owned by Shell and BP. I remind the House that as long ago as June last year a well-documented report was issued by an American group called "The Oil Conspiracy" which detailed the way in which oil was continuing to get into Rhodesia and the way in which through what was called "a paper chase" the South African subsidiaries of a number of multinational oil companies were supplying oil to Rhodesia—[Interruption.] Does the hon. Member for Woking (Mr. Onslow) wish to intervene?
Mr. Onslow: I was merely drawing attention to the fact that the Leader of the House seems to have got the infection for book autographing.
Mr. Clemitson: He is doing it from a sedentary position and not a mobile one.
I was talking about the report called "The Oil Conspiracy", published in June last year, which detailed the way in which oil was continuing to flow into Rhodesia from South Africa. That document concluded that the South African subsidiaries of the five Western oil companies have, via intermediaries, supplied virtually all Rhodesia's oil needs and that the involvement of the South African subsidiaries of the five oil companies was quite deliberate and conscious. In no sense were they unwittingly selling to South African companies without realising that those companies were reselling the oil to Rhodesia.
Since then further evidence has come to light, mainly through the activities of the Haslemere Group, about the continuation of the breaking of oil sanctions and the continued supply of oil to Rhodesia from South Africa, via these various Western oil companies, including Shell and BP.
The Government, in April, set up the Bingham Inquiry into the alleged breaking of oil sanctions, with the following terms of reference:
"To establish the facts concerning the operations whereby supplies of petroleum and petroleum products have reached Rhodesia since December 17, 1965;
To establish the extent, if any, to which persons and companies within the scope of the sanctions order have played any part in such operations.
To obtain evidence and information for the purpose of securing compliance with, or detecting evasion of, the sanctions order.
To obtain evidence of the commission of any offences against the sanctions order which may be disclosed."
That inquiry was set up way back in April. Yet as recently as 25th November, in a Written Answer, the Foreign Secretary was still talking about the appointment of specialist advisers to that inquiry, He said:
"It is too soon to indicate when I expect to receive the report of the inquiry.—[Official Report, 25th November 1977; Vol. 939, c. 949.]
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As it is now 18 months since the matter was brought to light and was first documented in the American document, and about eight months since the inquiry was set up by the Home Secretary, why is it that we still await any firm action? Before the House recesses for Christmas, I ask that we have some firm commitment from the Government that the results of this inquiry will not be long delay.2d and that the inquiry will be quickly acted upon.
6.20 p.m.
Mr. Peter Blaker: I wish to support the request of my hon. Friend the Member for Mid-Bedfordshire (Mr. Hastings) that before the House rises for the recess the Government should give a firm undertaking that the allegations of Josef Frolik will be fully and properly investigated after we return.
My hon. Friend said that he and I have discussed this matter with one another for a number of months. I confirm the account that he gave to the House. I have seen virtually all the documents that he has seen and I have listened to the tapes—to which he referred—from beginning to end. I should like to take up a point made by the hon. Member for Putney (Mr. Jenkins), who is no longer in the Chamber. We are not talking about conjecture; we are talking about hard and well-documented allegations made by a defector who, as I shall explain in a moment, has been taken seriously by a number of Governments.
I support the conclusions of my hon. Friend the Member for Mid-Bedfordshire and, in particular, his conclusion that there must be a full and independent investigation of Mr. Frolik's allegations. I see no reason why that investigation should not be mostly in public as was the investigation conducted by the committee of the American Senate. How ever, I recognise that there may be some aspects of that investigation that will have to be held in private.
My hon. Friend said that he and I have spent some anxious months considering whether this matter should be raised in the House. What finally decided us that it must be raised was the new evidence referred to by my hon. Friend, namely, the letter from Mr. Frolik to Mr. Joseph Josten which has recently

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come to our attention. As my hon. Friend explained, that letter refers in one passage to the allegations which Frolik made against John Stonehouse, that he was a spy for the Czechs, and to the statement that the right hon. Member for Huyton (Sir H. Wilson) made to the House in December 1974, in which he said that there was no evidence against John Stonehouse to support the charge.
The key passage, which my hon. Friend read out, declared that three months after the right hon. Gentleman's statement in the House he sent to the United States a high official of M15 to apologise to Mr. Frolik. I believe that Mr. Frolik's statement adds a totally new dimension to the matter, because it suggests that for whatever reason the right hon. Member for Huyton was wrong when he exonerated John Stonehouse. If Frolik is right in that statement there are some far reaching implications to be drawn.
Is it possible that the right hon. Member for Huyton made his statement on the basis of official advice that was later found to be inaccurate? If so, was the right hon. Gentleman told subsequently that that information was inaccurate? If he was, would it not have been right for him to make another statement to the House setting the record straight?
These are only some of the questions that arise from the letter by Mr. Frolik. Many others will readily occur to hon. Gentlemen, but I do not believe that this is the occasion for me to go into them.
However, I do believe that this letter powerfully reinforces the case for the full and independent investigation for which my hon. Friend and I are calling.
I have two further points to make. It is not my purpose now to argue whether Frolik is right or wrong—that will be the purpose of the investigation—but I believe that he is a witness to be taken seriously. He was flown to London from the United States after his defection and spent some time being debriefed by our security service. I understand that he has been questioned by it on a number of occasions. He has been questioned by the American intelligence service and was investigated by the Senate committee. I understand also that he
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has been examined by the appropriate authorities of France and Germany.
I suggest that the conclusion that we should draw from that is that he is a man whose word should not be taken lightly. It seems to me also probable that he was right about the RAF spy, Nicholas Praeger, who was convicted in 1971 on a charge of selling secrets to the Czechs.
The second matter that I wish to raise is a more general one. We in the West, especially we in Britain, have a lamentable, not to say ludicrous, record in failing to pay proper attention to the evidence of defectors. I give the House three factual cases, all of them mentioned in a recent book by Gordon Brook-Shepherd called "The Storm Petrels", a book which gives every evidence of being well researched.
In 1948, one Boris Bajanov defected from the Soviet Union. He had been successively personal assistant to Stalin and Secretary of the Politburo. It was as though there had defected from Britain to the Soviet Union a man who had previously been successively private secretary to the Prime Minister and secretary to the Cabinet. That is the measure of the importance of the man. He defected to India from the Soviet Union, and he was prepared to talk.
One would have imagined that the British authorities who then ruled India would welcome him with open arms, would debrief him on matters relevant to India, and would then speed him on his way to London to be debriefed here. What happened was quite astonishing. There was a series of niggles. The first was about whether he should be admitted to India at all. After that, there was an incredible series of arguments between the Government of India and the Government in London about whether anyone would be prepared to pay his fare to London. In the end, he was unloaded on to the French. Therefore, his debriefing by the British was limited solely to a debriefing in India—a debriefing that was rather cursory, and related only to relations between Russia and India. We were never able in London to debrief him as we should have done.
The second case to which I wish to refer is that of Walter Krivitsky, who was

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a KGB agent and who defected to the United States.
Mr. Foot: If there is any fresh evidence about anyone who has committed any crime, does not the hon. Gentleman think that he should submit it to some of the authorities? Does he not think that this is a reason why it should not be raised in a debate of this character? Obviously, if there are serious matters that he wishes to raise, he can submit the evidence. He should know that perfectly well.
Mr. Blaker: I shall be perfectly prepared to submit the evidence. What I am saying now is that all the evidence that is available should be the subject of a careful and independent investigation. The cases that I am now speaking about are—or should be—public knowledge. I am saying that too little attention has been paid to them.
I return to the case of Walter Krivitsky. I am astonished that the Leader of the House does not know about it. If he had paid more attention to these matters, it might have been a familiar story to him.
Mr. Michael Hamilton: Had the Leader of the House heard the earlier part of my hon. Friend's speech, he would have understood the significance of what my hon. Friend is now saying.
Mr. Maker: I should have thought so. I am obliged to my hon. Friend the Member for Salisbury (Mr. Hamilton).
Walter Krivitsky defected to the United States in 1938. He disclosed to the American authorities that Stalin had decided in 1934 to spare no effort to seek, in secret, an accommodation with the Nazi Government of Germany. He was not believed by the American authorities. He was not believed until 23rd August 1939, when an astonished world woke up to discover that the Nazi-Soviet friendship pact had been signed.
However, Walter Krivitsky was believed on one count, and that was when he correctly told the American authorities, I am glad to say, that a Soviet agent was operating as a cipher clerk in Whitehall.
The third case to which I want to refer is that of Alexander Orlov, who was a
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general in the KGB and who defected to the United States, also in 1938. He had been the head of the KGB mission in Republican Spain, where, amongst other things, he was responsible for transferring the whole of Spain's gold reserves to Moscow, where they remain today. But, in spite of that good service to Moscow, he feared that he was about to be liquidated in one of Stalin's purges, and he defected.
When Orlov arrived in the United States, he managed to secure interviews with the Attorney-General of the United States and with the Commissioner for Immigration, who allowed him and his wife to remain in the United States. But the extraordinary feature of this case is that those United States officials did not draw to the attention of the Department of Defence or the State Department or the Federal Bureau of Investigation the fact that this important former KGB general had arrived in the United States.
Orlov disappeared into American life. He came to public attention again only in 1953, when he published a book. It was only then that the proper departments of the American Government discovered that they had had in their midst for 15 years one of the people who more than anyone else in the world would have been able to tell them about Soviet motives and intentions. It was only then that they discovered that in 1938, when Orlov defected, there had been operating out of Soviet diplomatic and trade missions in the United States 18 spy rings.
If the American Administration had learned in 1938 what Orlov had to tell them, it is possible that some of President Roosevelt's naive assumptions about Russian motivations and intentions would have been removed, with the result that the story of Yalta could have been quite different, that Roosevelt would have sided with Churchill instead of making concessions to Stalin, and that the Iron Curtain would have fallen a good deal further east than it did.
There is a further feature to this case which is of interest to us directly. If Orlov had been properly debriefed in 1938 he could have told the Western authorities that Philby was already at that time a Communist agent operating as a journalist with Franco's forces in Spain.
We in the West, especially we in Britain, are slow to believe facts like

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these, and all that 1have been saying about these three cases is fact as far as I can ascertain. I believe that Frolik's allegations deserve as careful an examination as those of any other defector from the Eastern bloc, and I think that the House must make sure that that examination takes place.
I want to quote what was said by a right hon. Member on 5th December, because it is apposite to this case. He said:
"Parliament, the whole House, every part of the House, will not let go of this question until all the facts have come to light and everything capable of remedial action has been dealt with, and dealt with from now on under the constant vigilance and supervision of the House of Commons."—[Official Report, 5th December 1977; Vol. 940, c. 1059.]
That was said in the debate on the Crown Agents by the right hon. Member for Huyton. I hope that the House will show the same determination to get at the truth on this matter as it did on that one.
6.33 p.m.
Mr Jack Ashley: I have come into the Chamber to put the case, for consideration before the Christmas Recess, of the members of a number of minority groups who I believe should be given special consideration.
One of those groups comprises the thalidomide children or children who are thought to have been damaged by thalidomide and who have not yet received compensation. These are the children on what is called the "Y list".
As I walked into the Chamber a few minutes ago, I was handed a letter from the Chairman of the Distillers Company, Mr. J. R. Cater.
The background is that the Y list consists of 85 children, who are now adolescents, who have been damaged by thalidomide but whose cases are in doubt, partly because their medical records are either unavailable or incomplete. There is considerable concern that their cases will not be given due consideration as a result.
I wrote to Mr. Cater and asked him to ensure that all these youngsters were given the benefit of a full medical examination. I also asked him whether he would meet me to discuss these problems.
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In the letter that I have just received from Mr. Cater, he says that Distillers had decided that in any cases in which medical records were unavailable or incomplete the children should not be excluded on this account. I warmly welcome this assurance. The letter goes on:
"I think this indicates that the company recognise how desirable it is for the companies concerned not to have the matter argued in court if this can be avoided."
Again I warmly welcome this attitude on the part of Distillers. Mr. Cater also said that he is willing to meet me to discuss the present position in view of the misgivings. I shall meet him next week for discussions.
In addition to the statements made by Distillers, Mr. Cater says:
"Where the views of experts have conflicted, Distillers are prepared to refer the case to Professor Lems, who first identified thalidomide as the cause of deformities in Germany and is one of the world's leading experts in this field."
The company has also undertaken to accept as binding a favourable decision for the child from Professor Lems. Without committing myself or the parents of the children on any of these issues, I warmly welcome these statements, and I do not propose to press the matter in the House at the moment. However, in view of the considerable concern about these children, I thought that the House should know about the latest developments.
The second issue that I am anxious to raise with the Leader of the House is the question of those employers who are not recognising their responsibilities and employing their quota of 3 per cent. disabled people. The Leader of the House will have seen the Early-Day Motion that I put down a few days ago calling for prosecution of employers who are breaking the law.
I make it quite clear that employers do not break the law by not employing 3 per cent. disabled people, but they do break it when they do not employ 3 per cent disabled people and have no permit from the Government and then take on new workers. Nearly 50 per cent. of firms in Britain are exempted from the requirement to employ 3 per cent. disabled people by the issue of permits from the Department of Employment.

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The Department is issuing permits like confetti and flinging them around without due regard to the consequences. I hope that the Leader of the House will consider asking the Department not to issue them without careful consideration. Where such permits should be given, fine, but the issue of so many permits without proper consideration is quite wrong. Thousands of firms are breaking the law by taking on new workers without permits, and it is quite wrong for the Government to allow law-breaking on that scale.
In principle, I am prepared to agree that persuasion is better than prosecution, but the stage has now been reached when at least some prosecutions should be undertaken. I do not want to put employers in the dock, to fight them or to be bloody minded, but those who are consistently evading their legal responsibilities must have some pressure brought to bear on them. I ask my right hon. Friend to look at this matter very seriously.
I have just met a group of people who are profoundly concerned about yet another group of underprivileged people who require the help of the House—the 5,000 mentally handicapped children who are now in long-stay hospitals for the mentally handicapped. The introduction of legislation to transfer the responsibility for these children from the local authorities to the DHSS is urgent. We need the creation of a special rate support grant to enable each local authority to put an average of 30 mentally handicapped children in small family-style homes. The special grant would enable the local authority to provide the necessary units.
I hope that some consideration will be given to the plight of these mentally handicapped children in long-stay hospitals and that adequate provision will be made for their proper care outside the hospitals.
6.43 p.m.
Mr. Cranley Onslow: If time permitted I would have liked to follow the final point made by the hon. Member for Stoke-on-Trent, South (Mr. Ashley). I share his concern about the plight of these children and I believe that the reason for the present tragic situation is directly attributable to the Government and the cuts they made in the
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rate support grant. It is not possible for the Government to escape blame for this tragedy.
I rise briefly to reinforce the points made by my hon. Friends the Members for Blackpool, South (Mr. Blaker) and Mid-Bedfordshire (Mr. Hastings) about the need for a full inquiry into the allegations made by the Czech defector Josef Frolik. When my hon. Friend the Member for Mid-Bedfordshire told the House the substance of the allegations, he said that the House would make of them what it wished. I am sorry to say that some Labour Members seem to make light of them. I hope that the Leader of the House will say, however unsuitable he considers this occasion for raising these matters, that we are in order in having brought them to the House and that they deserve serious consideration. I hope that they will not be swept under the carpet, but that there will be a serious and genuine demand to establish the truth.
Part of the truth turns on the question of Mr. John Stonehouse; whether he is correct in his denials of having been an agent for Czechoslovakian intelligence, and whether the right hon. Member for Huyton (Sir H. Wilson) was correct when he told the House that there was no evidence then that Stonehouse had been a member of Czech intelligence. We should consider what other evidence there is and whether Mr. Stonehouse has any inherent credibility.
I was particularly interested to read yesterday the report by the Department of Trade inspectors on the affairs of London Capital Group Ltd., which was released to the world yesterday. Paragraph 4 of the introduction, on page 2, states:
"The evidence we have examined shows that the companies under Mr. Stonehouse's control were saturated with offences, irregularities and improprieties of one kind or another."
The paragraph adds:
"Mr. Stonehouse personally instigated falsification of records and indulged in misrepresentations in an attempt to hide the illegalities which had taken place and to avoid his own actual or potential criminal and civil liabilities for them. In relation to the subject of our investigation we concluded that for Mr. Stonehouse truth was a moving target."
If, in that respect, those words are fair comment, why not in other respects? It will not do for the hon. Member for

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Putney (Mr. Jenkins), who has now left the Chamber, to snigger and say that Mr. Stonehouse must have been too busy with his other criminal activities to engage in espionage. The hon. Member for Putney may hold that view sincerely, but I do not think that it would commend itself to those responsible for national security—at least, I hope not.
When we consider what falsifications or misrepresentations Mr. Stonehouse may have engaged in to hide his criminal responsibilities, it is interesting to see what he himself said in his book "Death of an Idealist", where there is a substantial account in a chapter entitled "The Czech spy story" of Mr. Stonehouse's explanation of some episodes which, at the least, must look very suspicious.
In particular, there was the most extraordinary incident in which, having been in Prague on official business in, I think. 1964, Mr. Stonehouse returned to the hotel at the ski resort to which he had been taken with a party at the weekend, to find two figures sitting in the darkened room, one of them clutching a bottle of wine in one hand and a glass in the other. This was the gentleman whom we know from other sources to have been the No. 3 in the Czech intelligence outfit in their embassy in London.
I shall not read at length from the passage, because I do not wish to detain the House, but I recommend anyone who is interested in this matter to look at pages 90 and 91 and reflect on whether that story is credible. Is it likely that a British Minister on an official mission to a foreign country would come back to his hotel room and find two gentlemen there who had let themselves in with a pass key, waiting there with a bottle of wine? Is it credible that this British Minister, instead of sending for his private secretary and saying "What the hell is going on?" should sit there and drink through the night with them? I find it inherently unconvincing, and I am surprised that it carried the conviction that one must conclude it did with those responsible for the investigation of security matters.
If we contrast what John Stonehouse said about his own contacts with the Czechs with what Josef Frolik says in the clearest reference possible to John Stonehouse, the contradiction is glaring.
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On pages 97 and 98 of Josef Frolik's book "The Frolik Defection" we find the following passage:
"But these two MPs pale into insignificance in comparison with the catch we made in the late 'fifties. This time both money and sex were involved. The man in question was an MP who had been involved in some sort of homosexual trap in Czechoslovakia. Not only was he blackmailed, but also given a sum of money for his services to Czech Intelligence. Fortunately he was given an interesting job in the Wilson Government in 1964, and although it was not of Cabinet rank, it did put us in a position to know a great deal about certain British military and counterintelligence operations. Again money changed hands, and a fresh traitor appeared among those men who had been selected as honest, decent, responsible men to represent their fellow citizens at Westminster."
Although the name of John Stonehouse is not mentioned in that passage, we now know, especially from what my hon. Friend the Member for Mid-Bedfordshire has told us, that the reference plainly was to Stonehouse. Indeed, with all the loose ends pulled together, it is clear that the interrogation of Stonehouse at No. 10 Downing Street, which he described in his book, was based upon statements made by Frolik. In the light of that, any idea that there is no evidence that John Stonehouse may have been in the employ of Czech intelligence is inconceivable. But that is what the right hon. Member for Huyton told the House.
I am not surprised to hear that some disclaimer was passed back, as it appears to have been, to Mr. Frolik, because, frankly, I know which I find the more credible of the two statements. I believe that, whatever the reason may have been, the then Prime Minister made a statement which, on the face of it, seems to have been thoroughly misleading. This matter must be cleared up because, apart from other episodes in respect of which it is difficult to understand why the right hon. Gentleman said what he apparently did about M15 and the security services in general, there is something extraordinary in this case.
I do not share my hon. Friends' view that the Select Committee procedure would be appropriate. I consider that it might be singularly inappropriate, because I believe that these are matters that require professional investigation, and in any case such inquiries are best conducted in camera. But that is a minor difference between us. What I am sure

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about is that there must be a full investigation, and we must have an undertaking from the Leader of the House that the Government will give serious and immediate consideration to setting that investigation going. We cannot let matters rest as they are. It is essential that we find out whether Mr. Frolik was telling the truth. If he was, something must be done about it.
6.52 p.m.
Mr. Ernest G. Perry: I shall not take up the issue raised by the hon. Member for Woking (Mr. Onslow) and his two hon. Friends the Members for Mid-Bedfordshire (Mr. Hastings) and for Blackpool, South (Mr. Blaker). I suppose that the easiest way to earn a lucrative income is to defect from the East and write for the West. If someone can get away from the East and write his memoirs in the West, he can be assured of becoming a near-millionaire. Therefore, with some suspicion, I do not accept what a lot of people say about people of that kind on either side who defect.
The matter which I wish to bring out is more germane to my constituency and to South London. The Metropolitan Police, who do a first-class job in South London, are today under strength and undermanned. The result is that in my part of South London—in Brixton, Balham, Wandsworth and many other parts—shopkeepers and traders are harassed every day by break-ins and robberies.
I wish to bring this to the notice of my right hon. Friend the Leader of the House and ask him to see the Home Secretary, who is responsible for the Metropolitan Police, to ensure that something is done in an effort to raise the strength of the police, especially in South London.
In the last fortnight, I have received two petitions referring to traders and ordinary householders and tenants who have been accosted and mugged in their shops, on the public highway or in their houses by people who have no concern whatever for the physical welfare of the victims they leave behind. One petition came from the shopkeepers in Balham High Road and the other from the shopkeepers in East Hill, who are constantly being accosted and robbed in their shops; and also at night time, when their shops
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are closed, they are robbed of goods and money.
I want to bring these incidents to the notice of the Home Secretary because they are now a serious part of life in South London. The extent of mugging and other incidents of this kind in South London now does not require careful examination because it is so intense and well known. I must add that traders in these areas are sometimes forced to close their shops because of the losses which they incur.
I assure the House that I shall not detain it for long, but I think it important for everyone to know that in South London, and especially in my constituency of Battersea, South in Balham, in Earlsfield and in East Hill, Wandsworth, shops are being raided regularly once a week, and shopkeepers are being forced to close their businesses because they cannot cope with the losses.
The Metropolitan Police are doing all they can to try to combat incidents of this kind, but, because they are under strength and undermanned, their job is extremely difficult. I ask my right hon. Friend to convey those sentiments to his right hon. Friend the Home Secretary.
6.56 p.m.
Mr. Jonathan Aitken: I agree wholeheartedly with the hon. Member for Battersea, South (Mr. Perry) about the serious consequences of the shortage of police manpower in London, and some of what I have to say is germane to his representations since I shall point out ways in which police manpower is being grievously wasted.
It is my contention that the House should not adjourn until it has considered the urgent need to reform the law of criminal libel. I say that because the way in which the law of criminal libel is today being operated has added a new terror to journalism and is a serious challenge to Press freedom. The Lord President and I have not always been able to agree on what constitutes a challenge to Press freedom, but I believe that I shall have him with me in what I have to say this evening.
The House will be startled to know that during the past few weeks three reporters from a national Sunday newspaper have been imprisoned, two distinguished television journalists and their research assistant have been committed for trial at the

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Old Bailey, a Fleet Street news editor and his deputy have been arrested, and criminal summonses have been issued or are about to be issued against a number of other journalists and media companies, including Yorkshire Television, Quartet Books, the People, the Evening Standard and the Sunday Times.
These bizarre events, affecting as they do the liberties of our citizens, are not taking place behind the Iron Curtain or in some African military dictatorship. They are taking place here in Britain, and they deserve the attention of the House and the Government, not in terms of the merits of the case—I am mindful of the sub judice rule—but because it is useful to have an understanding of the historical background of this strange affair and the current operation of the law of criminal libel.
The historical background to the affair was well set out, so I need not spend time on it now, in a debate on 31st July 1975 about the problems of runaway children, a matter which had been brought to light by the award-winning Yorkshire Television documentary—programme "Johnny Go Home". Every hon. Member who spoke in that debate, including the Minister who wound up for the Government, warmly praised Mr. Michael Deakin and Mr. John Willis, the producer and director of "Johnny Go Home", for the way in which they had brought a national scandal to public attention.
Featuring prominently both in the debate and in the programme was a gentleman called Mr. Roger Gleaves, who was accused of serious crimes, including homosexual brutality, fraud and a long string of other nefarious offences. He was sentenced by the court to four years' imprisonment for buggery, and assault leading to grievously bodily harm.
After serving half of that sentence, Mr. Gleaves came out of prison in March this year, and ever since, it is fair to say, he has been throwing writs around like confetti against those journalists who had exposed his activities.
If those writs had been for civil libel, there could be no serious cause for concern and no question of a serious threat to Press freedom, because the issue of whether Mr. Gleaves' reputation had or had not been defamed by "Johnny Go
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Home" would have been determined by the civil courts, and the defendants would, no doubt, have been able to plead all the usual defences to a libel action such as justification, fair comment on a matter of public interest and no damage to the plaintiff's reputation. Most of those defences are not available for the journalists who have been arraigned on criminal charges because he did not issue writs for civil libel. Instead, he sought and through a magistrate obtained summonses for criminal libel, and this brought the police into the case.
It is a serious matter of public concern that the overstretched police force in London has had to spend a massive amount of time in serving the summonses on journalists, attending the court hearings, making arrests, taking the reporters to Brixton Prison until they have been able to obtain bail, and in carrying out the full criminal procedures on journalists arrested, including fingerprinting. I am stating only the obvious in saying that the police were not happy at being required to carry out these duties at Mr. Gleaves's instigation against journalists of hitherto good reputation.
The law of criminal libel is an ancient legal matter which goes back to the days of the Star Chamber when society was far more violent, and when it was thought that a remedy was needed against words, spoken against such people as high officials, that could cause fighting in the streets, brawls and violence. Criminal libel was thought to have fallen into obsolescence because of the supposed requirement that to bring a prosecution the libel would have to occasion a breach of the peace, which it is difficult to show. However, earlier this year Sir James Goldsmith, in a celebrated action against Private Eye, unexpectedly revived the law from its eighteenth century tomb and proceeded to drive a coach and horses through the precedents that suggested that one had to prove a breach of the peace for such a prosecution to succeed.
The effect of that is that there is today no distinction between civil and criminal libel except that the former has more Draconian effects on the defendants. The supreme irony is that the first beneficiary of the chaos into which the law of criminal libel was thrown by the highly respectable Sir James Goldsmith should be Mr. Roger Gleaves who, far from

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being respectable, was described by his trial judge as
"a cruel and wicked man of evil influence."
Whichever way one looks at the law, this state of affairs cannot continue. Those who had hoped that the old rules of precedent should suffice may be dismayed to learn that Mr. Gleaves has put forward the argument that the alleged libels on him angered him so much that he still feels tempted to rush out and commit a breach of the peace. However, the magistrate in the case, Mrs. Audrey Frisby, of Wells Street Court, has taken the astonishing step of writing a letter to the Sunday Times about the cases still pending before her—
Mr. Deputy Speaker (Mr. Bryant God-man Irvine): Order. The hon. Member for Thanet, East (Mr. Aitken) is perhaps more familiar than the Chair with exactly what has happened in this case. Will he indicate whether charges are still outstanding? If so, he must not refer to them.
Mr. Aitken: I am most anxious not to transgress the rules of the House, but, in view of the fact that the magistrate has written a letter that has been published in the Sunday Times about the charges before her, it would be a nonsense if one were not able to refer to that in the House. However, I have nothing to add except that this is an astonishing precedent for a magistrate—
Mr. Deputy Speaker: Order. What may have happened in some other part of the country does not necessarily apply here. If there are charges preferred, the rules are that the hon. Gentleman should make no reference to them at all.
Mr. Aitken: I shall abide by the rules and bring my remarks quickly to a close, Mr. Deputy Speaker.
The law of libel is now in a mess and must be reformed by Parliament as a matter of urgency. Litigants like Mr. Gleaves have been handed a weapon that they can wield to suppress any embarrassing information about themselves from being published. Private vendettas against the Press may easily be pursued by vexatious litigants using police powers and criminal sanctions. I have said that this will introduce a new terror for journalists, and I hope that the Leader of the House
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will be able to give an assurance that the Government are taking the matter seriously.
7.5 p.m.
Mr. George Younger: I put forward but one reason why the House should pause before rising for the Christmas Recess. I refer to a distressing anomaly in the National Insurance Act which will affect and blight the happiness of hundreds of families this Christmas if something is not done to give them some reassurance. I shall briefly describe what it is about.
The House will recall that this year the Government introduced a new non-contributory pension for disabled housewives. I should like first to state clearly that I warmly welcome that, and so do all who may benefit from it. I pay tribute to the work of the Minister with special responsibility for the disabled and of the Government in introducing the measure.
Alas, when hundreds of people who are entitled to this new pension applied for it in the summer and filled in the necessary forms, they found that they had to be able to satisfy the requirement that they had been continuously resident in this country for 196 consecutive days or 28 weeks before the application that they were putting in. Certainly many hundreds of these people, including two of my constituents, put in their application and stated correctly that although they had been resident in this country during the period required they had been on holiday for two or three weeks during the summer, in the normal way. As a result of those statements that they were on holiday, about 400 families throughout the country are now disqualified, at least temporarily, from receiving this benefit.
I do not suggest for a moment that it was the intention of the Government or the House that any such thing should have happened. I am sure that the Leader of the House will agree with me on that. The provision was clearly intended to ensure that in order to qualify for this non-contributory pension the disabled housewife had genuinely to be resident in this country and had to have been here for a reasonable time. It was not intended that those who had been on holiday in the normal way should be disqualified from the new benefit.

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I ask the Lord President and hon. Members to bear in mind that we are nearing the Christmas Recess. There must be many of these families who, this Christmas, will find their happiness blighted by the feeling that they have been unfairly discriminated against. I accept that we cannot expect the Government to put this anomaly right immediately, within days or weeks, but I ask that before we rise the Government should make a statement of intent on this matter. I have been told courteously by the Minister with special responsibility for the disabled that the problem is that the matter is now before the courts and that a decision from the High Court is expected in January, but I ask the Leader of the House to reflect upon whether—whatever may be the state of the hearing—anyone in the House or Government should stand upon the position that it permanently be the case that those who go on holiday are disqualified from receiving this pension. I therefore question whether the legal case now pending is relevant to the ultimate intentions of the Government.
I have offered to introduce a Private Member's Bill to put the matter right, if the Government will give it support, and that offer stands. However, I ask the Leader of the House today to say, before we rise, that the Government's intention has never been that the people to whom I have referred should be denied this new pension. I ask that the Government should say, before Christmas, that, whatever the result of the court case, they will take steps in due course to put the matter right and to see that those who were disqualified this summer because they were on holiday will receive a backdated pension in the end.
These people have two factors in their favour. The first is that they have correctly filled in the form and stated that they have been on holiday during the relevant period. Many of them might not have put it in, or felt that it was irrelevant, but these 400 people did so and they deserve great credit for their honesty. Another factor is that most of the applications were made during the summer period, which is the normal time for people to go on holiday. Otherwise this might never have happened. If the applications had been made during the winter,
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many fewer families would have been affected.
I ask the Leader of the House to make a clear statement before we rise that, notwithstanding court decisions that may be made early next year, it could never be the Government's intention to deprive people of this allowance and that the Government will, in due course, find some way to put it right and will backdate the payments. If the right hon. Gentleman will say that, I shall be happy to agree that the House should rise for the recess.
7.10 p.m.
Mr. Ian Gow: It would not be right for the House to rise for the Christmas Recess before it receives some reassurance and explanation from the Lord President about a key element of the Government's economic policy to which I know the right hon. Gentleman has given the closest study.
Tomorrow is the first anniversary of the famous letter that the Chancellor of the Exchequer wrote to Dr. Witteveen announcing a fundamental change in many of the Government's economic policies. One key passage in that letter read:
"an essential element of the Government's strategy will be a continuing and substantial reduction over the next few years in the share of resources required for the public sector."
I emphasise that the commitment was for a reduction over the next few years. On Monday last week I asked the Chancellor of the Duchy of Lancaster for an assurance that those words still represented an essential element of the Government's economic strategy. He replied:
"I cannot give him the assurance in the form for which he asks."—[Official Report, 5th December 1977; Vol. 940, c. 1008.]
It is an open secret that the Chancellor of the Exchequer is about to send a further letter to the Managing Director of the IMF. Indeed, a first draft has no doubt been considered by those who advise the Chancellor in the Treasury and, for all I know, by the appropriate Cabinet sub-committee. I do not think that we should allow the Government to send this letter during the Christmas Recess if, as I expect, it will not repeat the solemn, clear and, for us, crucially important undertaking about the share

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of resources that will be required for the public sector over the next few years.
There are all the danger signs that the Government, slowly, perhaps, to start with and then more rapidly, are about to embark upon economic policies that can lead only to further inflation. For example, there are strong pressures in the Cabinet, led by the Lord President, for reasons that I understand, for an increase in public expenditure. There are strong forces clamouring for an increase in the rate of growth in the money supply. If we are not able to have an assurance of fidelity, particularly of the Lord President, to the commitment given by the Chancellor of the Exchequer a year ago tomorrow, I can promise the Government that they will embark once again upon a further period of inflationary economic policy with all the disasters that that will mean for our country.
I have been alarmed by the way in which the Chancellor of the Exchequer and other Ministers have set for their objective a rate of inflation no worse than that of our competitors. That objective is simply not good enough. If we are to overcome our economic difficulties and remove the cause of so much social disruption in this country we shall have to follow a long and absolutely determined policy for reducing the rate of inflation. We must not be content merely to get it down to the level of our competitors.
I fear that the failure of the Chancellor of the Duchy of Lancaster to give an assurance that the key passage in the letter of 15th December 1976 will be adhered to means that the Government are no longer committed to the policy to which they were committed a year ago. I ask the Leader of the House to give an assurance that my fears are unfounded.
7.15 p.m.
Mr. Peter Bottomley: It seems normal at this time of the year for the Government to bring out of the woodwork some rather creepy-crawly Christmas presents. One was presented to my constituency this morning, against the advice of the area health authority and following two years of public consultation.
The Secretary of State for Social Services has decided to close both hospitals
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in my constituency on the ground that there are too many acute beds in the Greenwich and Bexley Area Health Authority. He has totally ignored the fact that the hospitals do not have one acute bed between them.
I ask that the House should not adjourn until the Secretary of State comes here to defend his decision. The announcement was made in a Press release without a word of regret. The right hon. Gentleman said that he does not want the area health authority to go back for further public consultation. He knows that the public would reject his suggestion. He should come here and say why he has not considered taking away some of the 300 acute beds at the Greenwich District Hospital in the area and allowing us to retain the Eltham and Mottingham Hospital and the Memorial Hospital, both of which were set up by public collections and are being sacrificed 30 years after the creation of the National Health Service.
Consultation has been turned into a mockery, and the Secretary of State has turned democracy into a mockery. The House should not adjourn until there has been a full public discussion of the issues raised by this shabby Christmas present to my constituents.
7.17 p.m.
Mr. Francis Pym: The debate has been about the first adjournment in a Session that has some unusual characteristics, including the fact that it is dominated by three major constitutional measures. So far during this Session there have been a few shafts of light as well as some surprises. Perhaps the most remarkable of these occurred last night, when the Leader of the House voted in favour of proportional representation. Many of us found it difficult to visualise that the right hon. Gentleman would find it possible to cast that vote in any circumstances at any stage on any Bill. I do not know, but I suspect that it might have been to some extent a hypocritical gesture. Whether it will be adequate to maintain the famous pact remains to be seen. At any rate, it was a remarkable surprise and no doubt, at some appropriate moment of his choosing, the right hon. Gentleman will give us an explanation.
The constitutional Bills are taking virtually all our parliamentary time. This

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is one reason for the debate having covered such a vast range of issues and it accounts for the fact that we have had only a couple of Supply Days so far. How does the Lord President see the Supply time next term? Does he visualise giving the Opposition about one day a week, which is the normal practice?
Naturally, all the Bills are highly controversial, but this is particularly true of the Scotland and Wales Bills, which were described by the hon. Member for Aberdare (Mr. Evans) as half-baked. That is not an unfair description. Despite the votes in the Lobbies, I do not believe that there is enthusiasm or genuine support for the Bills. I do not believe that one could find 100 Members who genuinely want the Bills to become law. If we add to that the uncomfortable fact of the sharpest guillotine that constitutional Bills have ever received, it is no wonder that the Chamber has been empty and that the House has been so heavily criticised.
We should have been considering matters much more important to the well-being of this country and the prosperity of our people. We ought to have been paying more attention to matters such as unemployment, which has risen so shamefully over the last three years, or important matters such as housing, where the Government have a very poor record or the steel industry, which is in real difficulty. What about the motor industry about which we hear so much from week to week? Those are matters which ought to have been considered and to which more time should have been given. But, of course, time for debate on these matters has been largely cut out by the decision of the Government to plough ahead with constitutional measures which the House and the country do not want.
There is one matter that I should like to put to the Lord President that we ought to consider more deeply—the parliamentary control of public expenditure. Public expenditure has been rising and is rising. It is a source of great anxiety in the House that we no longer have an adequate degree of control over it. I am sure that the House ought to be giving more consideration to that.
In this connection I should like to mention the speech of the hon. Member
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for Ince (Mr. McGuire), who referred to the well-known view, shared in all parts of the House, that the facilities in the House are no longer adequate and no longer capable of enabling Members to fulfil their responsibilities in a degree that is adequate to enable them to bring to bear upon the Executive pressure that will bring public expenditure under control.
I remind the Leader of the House that when we discussed salaries and expenses in the summer he undertook to look at the rising cost of facilities used by Members, their secretarial and other allowances, because the 10 per cent. increase in salaries received by Members—in accordance, of course, with the Government's pay policy—does not apply to the expenses for which they are reimbursed. I mention that point in the hope that the Lord President will at some stage refer to it.
I also ask the Lord President whether he will give an indication of the Government's intentions about the future handling of the European Assembly Elections Bill in the light of last night's vote. We heard in the debate yesterday that the time argument has been exploded. That is to say, the argument that we had yesterday was in part about whether, if we had one type of election rather than another, we could meet the May-June target date. In fact, it was proved yesterday that there is not enough time to meet the date, under whichever of the two options available we tried to have those elections. The time argument is no longer there. We want to know definitely what sort of plans and progress the Lord President has in mind with this very important Bill.
Many matters were raised in the debate. I shall not refer to them all, but I mention first the very important issue of security raised by my hon. Friend the Member for Mid-Bedfordshire (Mr. Hastings) and subsequently referred to by my hon. Friends the Member for Blackpool, South (Mr. Blaker) and the Member for Woking (Mr. Onslow). I am quite certain that my hon. Friend the Member for Mid-Bedfordshire is right to bring an important security matter to the attention of the House. I knew nothing about what was said except what I have heard today—which was a little bit more than the Lord President himself heard.

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It did strike me that the Lord President seemed slightly sensitive about the issue, in the sense that he interrupted my hon. Friend the Member for Mid-Bedfordshire on a point of order at an early stage, and—no doubt for perfectly good reasons, about which I make no complaint—he absented himself from the House for the last two-thirds of that speech. That struck me as being rather uncharacteristic of the Lord President, who is a very assiduous attender in this place. From what I heard, it seemed to me that the allegations that were reported were well documented, and my hon. Friend offered to make anything available to the Government that the Government might think they wanted. My hon. Friend had also, quite correctly, given notice to the right hon. Member for Huyton (Sir H. Wilson).
Mr. Hugh Jenkins: Does the right hon. Gentleman not recall that his hon. Friend the Member for Mid-Bedfordshire (Mr. Hastings) was hauled over the coals by Mr. Deputy Speaker for making allegations against people who are in another place and that, therefore, what he was doing was taking advantage of the immunity of this Chamber to make allegations against people that he would not dare to make outside? That is not a very clever thing to do.
Mr. Pym: It did not seem to me that the reaction to what my hon. Friend the Member for Mid-Bedfordshire was saying, which, after all, was a security matter, should be dealt with in any way lightly, as the hon. Gentleman has sought to do and as the hon. Member for Battersea, South (Mr. Perry) did at an earlier stage. Any allegations that are brought to the attention of the House on a security matter are matters to which the Government ought to give attention, and I am sure that the House will await with particular interest the Lord President's reply.
I think it fair to say that the hon. Member for Bolsover (Mr. Skinner), who followed my hon. Friend and raised other matters, did at the same time say that he thought that he agreed—at least, he implied this—with my hon. Friend that there was something sinister about some aspects of our public life. I think that I have quoted his words accurately.
Mr. Skinner: The right hon. Gentleman should understand that what I was
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attempting to do was to draw attention to the fact that these obscure and, in some cases, specific remarks ought to be allied with some others that I made. I hope that in no way did I give the impression that I agreed with anything that the hon. Member said.
Mr. Pym: I may not have taken down the hon. Gentleman's words correctly, Naturally, I note what he said.
The matter of the amnesty for illegal immigrants was raised by my hon. Friends the Member for Warwick and Leamington (Mr. Smith), the Member for Altrincham and Sale (Mr. Montgomery) and the Member for Halesowen and Stourbridge (Mr. Stokes). They referred to the method of its announcement. It was not announced in the House. There has not yet been a chance to debate it. There has been no chance to cross-question the Home Secretary about it. It is an issue that has given rise to some bitter feelings, as hon. Members on both sides of the House can certify. It has put an added strain on the police and on the hard enough task of maintaining law and order. That point was made very clearly by the hon. Member for Battersea, South, who spoke on this matter with particular passion.
This and a great many other issues have been raised for which explanations have been asked and for which assurances or reassurances are required. They are all important issues, and many of them have been undiscussed due to the time taken by the discussion of constitutional Bills on the Floor of the House and due to the fact that we have had hardly any Supply Days. I think that the Lord President will agree that the most important questions to which I have referred in particular, but many others as well, are issues upon which the House needs to be reassured before it could in any way make sense for the House to adjourn for Christmas.
7.28 p.m.
The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): I say to the right hon. Member for Cambridgeshire (Mr. Pym) and to the House immediately that, of course, if I were absent from the House, as I was, for a short period during the debate, it was not intended as any discourtesy to hon. Members who were

583
speaking at the time. Of course, a note was taken of what they said, and in a moment I shall reply as best I can to the comments that they made. I apologise for being out of the Chamber for a short period during the debate.
I think that hon. Members will also appreciate that if I were to attempt to reply to everything that has been said. I would intrude extensively on the later Consolidated Fund debate—a period of debate when Back Benchers have rightly claimed the time of the House, and when Ministers are available to reply to the matters that they raise. It would be a bad habit for the House to get into—I am not making any criticism of the present situation, as yet—if we were to try to transform the debate on the Adjournment into a debate on the Consolidated Fund, because that would be injuring the rights of private Members rather than extending their rights. I believe that we have to be careful in that respect, too.
However, as hastily as I can and, hope, adequately, I shall reply to as many of the speeches as possible, and reply a little more extensively to one of two of the more major matters which have been raised, including those that the right hon. Gentleman raised a few minutes ago.
Mr. Pym: For the sake of accuracy, I think I am right in saying that some of the issues raised in this debate would not have been in order in the Consolidated Fund Bill debate because that debate does not include the subject raised.
Mr. Foot: I am not stating whether it is impossible for these subjects to be raised. Certainly some would be covered in the debates on the Consolidated Fund Bill. It would not be fair if this debate were used to pre-empt those later discussions. I am sure, that the right hon. Gentleman agrees with that.
I was glad that I was able to satisfy the hon. and learned Member for Beaconsfield (Mr. Bell) on the town and country planning matter he mentioned. That matter was raised on an earlier occasion and dealt with by my right hon. Friend the Secretary of State for the Environment. There will be a further opportunity in the country generally for discussions before any fresh approach is made.
On the subject of gipsies, which the hon. and learned Gentleman also raised,
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I must tell him that Ministers are concerned about the slow progress of authorities in providing sufficient sites for gipsies with the consequent danger of conflict between gipsies and house dwellers. Mr. John Cripps was asked to carry out a study of the effectiveness of the arrangements to secure adequate accommodation for gipsies in England and Wales. His report, which was published on 6th April 1977, was widely distributed and comments have been received from many interested organisations and individuals. Meanwhile my hon. Friend the Under-Secretary of State for the Environment has visited approved sites and unauthorised encampments in various parts of the country and has met gipsies and questioned residents so as to obtain a firsthand impression of the problem. Discussions have been held and more are planned with local authority associations and other organisations. All views are being taken into account in the preparation of the Government's response to the Cripps Report. I have no doubt that the hon. Gentleman's comments will also be considered.
I wish now to deal with the speech of my hon. Friend the Member for Newham, South (Mr. Spearing) and to take up his remarks about computer indexing in the Library. I know that the hon. Gentleman tabled an amendment on that subject. I recognise that many hon. Members feel that this subject should be debated. I very much regret that this important project has been delayed, because I know that the Library staff are eager to proceed. The House will be aware of the many pressures on parliamentary time, and that means that we have not been able to allot time for such a debate, but we shall reconsider the matter when the House returns after Christmas.
I have no doubt that my hon. Friend will have sustained his interest in that matter as in the more general question of the conduct of EEC affairs, and I hope that I can comment on his reference to the discussions on the European Assembly Elections Bill and the size of the Community's budget for 1978. There is a difference of view between the Assembly and the Council as to what the overall increase in expenditure compared with 1977 should be. Attempts are being made to resolve these differences by all appropriate means, and I hope that it will be

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possible in the end, as in previous years, to arrive at a budget expenditure for both institutions.
If the Assembly cannot agree to vote the budget by the time the next financial year begins on 1st January 1978, Article 204 of the Treaty of Rome as amended by the Treaty on 22nd July 1975, provides that the Commission may spend in each month of the new year a corresponding sum in cash terms of not more than one-fifth of the budget for the previous year. There are various qualifications as to the amount that may be spent, and the article also provides for means by which the Council must authorise expenditure in excess of one-twelfth after putting the matter to the Assembly if the expenditure in question is non-obligatory. I have no doubt that my hon. Friend will return to this matter, as will the Committee when we return in January. Hon. Members will then have an opportunity of discussing this matter and the new clauses and the other matters that will figure in the European Assembly Elections Bill which will again be before the Committee when we return.
Mr. Spearing rose—
Mr. Foot: If I give way to every hon. Member who has spoken in the debate, I am afraid that we shall be multiplying matters. Therefore, I hope that he will allow me to proceed because as I have already said there will be opportunities to debate these matters when we return.
I wish now to deal with the subject raised by a number of Opposition Members dealing with security. The matter was mentioned by the right hon. Member for Cambridgeshire and the hon. Members for Mid-Bedfordshire (Mr. Hastings), Blackpool, South (Mr. Blaker) and Woking (Mr. Onslow).
It was said by the right hon. Gentleman that I appeared to be sensitive on this matter, but it appears to me that the best way to raise questions of this nature is not on an Adjournment motion. It is desirable that in such circumstances arrangements should be made so that such matters can be examined and so that the Ministers involved can give an immediate reply if they think that desirable or fitting—particularly if aspersions are to be cast on individuals. I do not
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believe that it is appropriate to use such a debate as this to broach such matters.
It is not a question of sensitivity. I am sure that the right hon. Gentleman, on reflection, may think that it would have been better for such matters—matters involving charges or accusations of considerable importance reflecting on individuals—not to be raised on this occasion. They should have been raised in a different manner, and not in a debate in which we are discussing whether the House should rise on a particular date. I suggest to those who raised the matter that they should send their information to the Home Secretary or the other Departments concerned so that they can examine it and comment. That would be a very much better way of dealing with these matters.
Mr. Hastings: The right hon. Gentleman will know, from his great experience of Parliament, that opportunities for Back Benchers to raise matters of great importance at reasonably short notice are few and far between. I said in my speech that I had been considering this matter, as had my hon. Friends, for many months—I think my words were "several months". I also said that certain evidence had reached us that convinced us that it was our duty—certainly my duty—to put that to the House. That evidence was of recent date—about a week ago to be precise—and it concerned the letter from Frolik to Josten which I described. It was also too late in my understanding to raise the matter in the Consolidated Fund Bill debate. Therefore, we had no alternative but to raise the matter in this debate.
Mr. Foot: The hon. Gentleman in his intervention has proved my case rather than his. He has proved that a considerable amount of this information was available for a period of time. He said that he had certain information a week ago which led him to raise the matter in this debate. The hon. Gentleman knows that there are other methods by which such matters can be raised in the House. I do not know whether the hon. Gentleman in the month that have elapsed when he has had this information sought to obtain an answer before deciding to raise the subject in this debate. However, by his intervention he clinched the case, because he has made serious reflections on individuals.
Mr. Hastings: No.
Mr. Foot: Yes, that is so. If he has been sitting on that information for the past week, he would have been much better served, in a sense of fair play in the House of Commons, if he had taken up the matter with Ministers and dealt with it in that way. He may have a different idea of fairness from mine, but it seems to me that he has behaved in a manner that is not the best way of dealing with these matters.
Mr. Blaker rose—
Mr. Foot: If I give way to every hon. Member who rises, we shall have to continue for a very long time. I suggest that the hon. Gentleman and his colleagues who have mentioned this topic should submit the information they have to the Ministers concerned. It would have been preferable if the matter had been dealt with in that way at the beginning.
I turn to the amnesty that was contained in a reply from my right hon. Friend the Secretary of State for the Home Department to a Written Question. That was raised by three or four hon. Members as well as by the right hon. Member for Cambridgeshire. It is an important subject. It has been suggested this afternoon that all debates on immigration matters have been suppressed in the House of Commons. It is unwise for such language to be used. Some people outside the House might think that it is justified. Of course it is not. There is no suppression of immigration matters in the House. There are many opportunities for them to be raised. For example, they can be raised on Supply Days, although the Opposition have not used any Supply Days for the purpose. If the Opposition had so used their Supply Day on Monday, they might have used the day for better profit than was the case. It is not right to say that such matters cannot be raised.
Immigration arouses considerable passion throughout the country and I do not think that it is a good thing for a Member of Parliament to give apparent credence to the view that the subject cannot be or is not debated in the House. It can be debated in this place. Frequently opportunities can be used both by the official Opposition and by Back-Bench Members. Indeed, the subject
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has been raised on this occasion. The more that the amnesty is considered the more I believe that hon. Member will recognise that it involves civil liberties—the protection of the rights of individuals. It is on that basis that it should be considered.
I should emphasise that the announcement does not add directly to the number of persons who may come to this country. Indeed, all those who can qualify will already have been here for more than five years and will have been thought to be lawfully settled here. In the nature of things we cannot say how many will be clandestine illegal immigrants. Some 1,600 have successfully applied in the three and a half years since the original amnesty was announced. At the same time the Government's determination to deal firmly with those who have entered illegally in whatever fashion since the beginning of 1963 has been established and is unchanged.
The more that hon. Members consider these matters the more they will recognise that perhaps it was unwise to raise this issue in the manner in which it was dealt with by the hon. Member for Halesowen and Stourbridge (Mr. Stokes). I believe that the individuals concerned have rights like others in this country. We should be careful about the language that we use in discussing those rights.
My hon. Friend the Member for Putney (Mr. Jenkins) asked me about the public lending right Bill and my enthusiasm for the measure. I can assure him that my enthusiasm is as great as his. I believe that we should discover the means by which we can bring the proposition back before the House. I believe that that is the overwhelming view of the majority of hon. Members in all parts of the House irrespective of party. It is on that basis that we are still seeking a method by which we can overcome the difficulties. I do not believe that it can be done by a Private Member's Bill as it involves some financial implications. My hon. Friend is as well aware as I am of the difficulties.
I assure my hon. Friend that I have not given up the attempt to ascertain how we can overcome the difficulties, with the co-operation of others in the House. I believe that overwhelmingly the House accepts the principle that would be in such a measure. Certainly it is accepted

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by the Government. I hope that we shall be able to return to the matter. My enthusiasm is as great as my hon. Friend's, and together we may still succeed. I have not given up hope.
My hon. Friend also referred to Mozambique and the invasion or the events of a few weeks ago upon which my right hon. Friend the Foreign Secretary has commented. I do not believe that there would be much difference between the view of my right hon. Friend as he would express it and that which is put forward by my hon. Friend. It is essential that the world should know how strongly we feel on the subject, especially in the light of the Government's attempt to assist in securing a decent settlement in Rhodesia.
On a number of occasions my hon. Friend the Member for Brent, South (Mr. Pavitt), especially in these debates at the end of Sessions, has perfectly legitimately asked what is happening outside or inside the Grunwick factory, which is in his constituency. A judgment in the House of Lords has been given today. Whatever may be our view about the judgment and the legal aspects, there is no doubt about the serious industrial consequences that could follow from it. It could be a serious matter, and exactly along the lines suggested by my hon. Friend. It could be a judgment that affects the situation not only at Grunwick but throughout the country. Something will have to be done about it. There is not the slightest doubt about that.
I am glad to say that some of the Private Members' Bills that are being brought forward, of which notification has been given to the House, attempt to deal with some of the difficulties. When the House returns at the beginning of next year we may very soon be able to apply our minds to the consequences of the judgment. I hope that in the meantime and thereafter that which has happened as a result of the judgment will not in any way injure the work of the ACAS. Its work is of essential importance for good industrial relations. If its work were to be impaired or injured by the judgment, there would be a serious situation for the country as a whole.
I repeat that if the law is as the House of Lords says it is—it is the highest legal authority in the land—the law must be
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changed. That is the situation that faces the House of Commons. I am glad to say that owing to the facilities that are available, of which advantage has already been taken by some hon. Members, there is a possibility that we can deal with the matter at a fairly early date.
Mr. Kenneth Lewis rose—
Mr. Foot: The hon. Gentleman has not been in the Chamber throughout the debate. It would not be fair to other hon. Members who have perfectly legitimately asked that I should reply if I were to give way to the hon. Gentleman
Mr. Kenneth Lewis: On a point of order, Mr. Deputy Speaker. I must tell you, Mr. Deputy Speaker, that I have been present throughout half of the debate I have not been here throughout the whole of the debate—
Mr. Deputy Speaker: Order—the Lord President.
Mr. Foot: It is only fair that I reply to those who have taken part in the debate, especially as I have had to say to some of them that in the interests of other hon. Members it is not possible to give way on every occasion as the time allotted to other hon. Members will be impaired.
I will draw the attention of my right hon. Friend the Secretary of State for Northern Ireland to the remarks of the hon. Member for Londonderry (Mr. Ross). During the hon. Gentleman's speech the Under-Secretary of State for Northern Ireland, my hon. Friend the Member for Liverpool, Kirkdale (Mr. Dunn) was present. The hon. Member for Londonderry spoke of the difficulties of fishing on the Foyle. I understand that the Foyle Fisheries Commission, whose responsibility this is, has a management plan that will improve the situation. I know that there are problems with enforcement but I hope that the greater efforts now being made will prove effective. I repeat that my hon. Friend the Under-Secretary of State heard what the hon. Gentleman said.
I turn to my hon. Friend the Member for Bolsover (Mr. Skinner), who is the most diligent of all attenders at these debates. My hon. Friend called for another inquiry into a matter that he has

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raised on a number of occasions. I am sorry to have to disappoint him by saying that I cannot add to what has been said by my right hon. Friend the Chancellor of the Exchequer or a Treasury spokesman in reply to my hon. Friend. I cannot give him the promise that there will be the inquiry for which he has asked. I have no doubt that he will still seek to use the opportunities provided by the House to pursue the matter, but that is a matter for him. That is something that can be decided when the House returns.
My hon. Friend the Member for Battersea, South (Mr. Perry) and others referred to the manning of the police force in different parts of the country. It is a proper matter for them to raise. But they are as aware as the House of the investigation set up by the Home Secretary into the whole question of the pay and position of the police. I think that we must await that report.
The hon. Member for Thanet, East (Mr. Aitken) raised the extremely important question of the freedom of the Press. I do not underrate the importance of that matter. If the criminal law were to be used as a major weapon in that area and if that were to become the custom, rather than a rare exception, it would be a dangerous development. I do not accept every description offered by the hon. Gentleman of how dangerous the position may now be. Moreover, I am not sure how extensively the law would have to be changed to overcome the danger. I fully acknowledge that, if it were seen that the criminal law was being used regarding libel on any new extensive scale, the Government would have to act for the very reasons advanced by the hon. Gentleman.
The hon. Member for Ayr (Mr. Younger), in his innocent manner, asked me to give what he described as a very simple undertaking. The hon. Gentleman indicated that I could give the undertaking for which he asked without consultation with anybody and that he would go home happy if I would give it. I cannot give him the undertaking in that form. I shall see whether any further fresh information on the matter can be given to him before the recess. I understand that 480 claims have been identified in which absence abroad during the qualifying period, and thus the vires of
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the regulation, may be relevant. I understand that arrangements are being made to deal as fast as possible with those aspects of the claims which are not affected by Regualtion 4(2). However, I am sure that the hon. Gentleman knows as well as anyone that the decisions in these cases are for independent adjudicating authorities. They are not matters in which Ministers or, indeed, hon. Members should intervene.
My hon. Friend the Member for Ince (Mr. McGuire) asked about the old workmen's compensation cases. I fully accept the feeling that prevails in his constituency and in many mining constituencies on this subject. I cannot give him any fresh information on the subject. Indeed, my hon. Friend is an expert on this matter, and it has been raised on a number of occasions. I cannot hold out any prospect now that the whole issue will be reopened. However, I assure him that the Ministers concerned will look carefully at the points that he made.
I give a similar undertaking to the hon. Member for Woolwich, West (Mr. Bottomley) regarding the hospital closures in his constituency. I know that he was referring to an event which took place today. However, he must not regard it as sinister. Some events do take place even in the last week when the House is sitting. Therefore, I should not say that it was sinister on that account.
Mr. Peter Bottomley: Will the right hon. Gentleman give way?
Mr. Foot: If I give way to the hon. Gentleman, I shall be unfair to others.
Mr. Peter Bottomley: In exchange for the right hon. Gentleman's extension of the last week, will he put one suggestion to the DHSS—that the limit of time on comments to be sent to the Elephant and Castle should be extended by one day—from 28th February to the next, 29th February?
Mr. Foot: I shall certainly discuss that point with the Minister concerned. Naturally, the hon. Gentleman will not expect me to give an answer now.
I think that I have covered almost every point that has been made, except the more general question raised by the right hon. Member for Cambridgeshire who asked whether I would give my views

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on proportional representation, arrangements for Supply Days and constitutional measures.
I was touched by what the right hon. Gentleman said. If I recall his phrase, he said that I have been responsible for the use of the sharpest guillotine ever employed in the House. That came from a former Tory Chief Whip who was responsible for the European Communities Bill being shepherded—that is the wrong word—guillotined through the House without a single amendment being allowed, not merely here but in another place. I hope that the right hon. Gentleman will use as much influence to ensure that we do not get any amendments from the other place on the devolution Bills as he used to ensure that we did not get any on the European Communities Bill.
The European Communities Act raised far more serious and lasting infringements of our sovereignty than anything that is proposed in either of the devolution Bills currently before the House. But the right hon. Member for Cambridgeshire was quite prepared to use the sharpest of guillotines on that occasion. If I have fallen into bad habits, I can only say that he set me the example.
As the right hon. Gentleman knows, if we had not taken steps to introduce timetable motions on the devolution measures, there would be no possibility of getting them through at all. That situation has arisen on a large number of constitutional measures. But on the devolution Bills, about which the right hon. Gentleman complained, we have provided more time than has been provided for most other constitutional measures which have been passed through the House during the last 30 or 40 years. Therefore, the right hon. Gentleman should not seek to spread tales of a quite different character throughout the country. I do not mind what he says in this place, because we can deal with it, but he should not go out in the country and pre tend that we are being uniquely rigid in the way in which we are dealing with these matters. Much more extensive
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time is being provided for debates on the devolution Bills than has been provided for most other comparable measures which have been put through this House, including the measures for which the right hon. Gentleman was responsible.
We shall have plenty of time to discuss all these matters when we return at the somewhat early date, I am sorry to say, of 9th January. I know that some hon. Members have criticised the time at which we are to return, but the period of the recess is much the same as usual at Christmas. It is true that the recess starts a little earlier and that we are to come back slightly earlier than usual, but, on the whole, I should have thought that that was for the convenience of the House rather than the opposite. We cannot please everybody, as the debate has shown, but we have pleased almost everybody.
I am sure that the vote, if we have one—not that it is necessary—will show what a thumping majority the Government will get to carry forward their measures. I am grateful to the right hon. Member for Cambridgeshire for all the co-operation that he has given us today.
Question put and agreed to.
Resolved,
That this House at its rising on Friday do adjourn till Monday 9th January.

BUSINESS OF THE HOUSE (CONSOLIDATED FUND BILL)
Ordered,
That, notwithstanding the practice of the House relating to the interval between the various stages of Bills of aids and supplies, more than one stage of the Consolidated Fund Bill may be proceeded with at this day's sitting.—[Mr. Frank R. White.]

STATUTORY INSTRUMENTS, &c.
Ordered,
That the draft Asian Development Bank (Further Payments to Capital Stock) Order 1977 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Frank R. White.]

ORDERS OF THE DAY

  CONSOLIDATED FUND BILL
  Order for Second Reading read.
  Motion made, and Question proposed, That the Bill be now read a Second time.

  BBC RADIO SERVICES
  7.58 p.m.
  Mr. John Farr: I wish to raise the subject of the BBC's local and overseas radio services. I appreciate that it may be inconvenient to some people—particularly to the Government Front Bench—because these two subjects fall within the scope of two different Departments, the Home Office and the Foreign and Commonwealth Office. This administrative inconvenience could be got rid of by the restoration of the post of Minister for Broadcasting, which I am not advocating.
  Nevertheless, notwithstanding the difficulties that could arise, I feel that it is right that local and overseas radio services should be debated simultaneously, because the three facets of sound broadcasting—local, national and overseas—emanate from the same source—the BBC. It is important to recognise that each of the three facets provides interconnection and technical and material support for the other two. Therefore, a debate on these two aspects—local and overseas radio services—is not entirely inappropriate.
  First, I should like to express some views on the Annan Report in so far as it concerns local radio services. This matter was discussed in the House on 23rd May. The House will recall that the Annan Committee was forbidden by its terms of reference to deal with BBC external services. They were outside its scope of reference. All that the Committee could do was to take cognisance of that fact. Due to the shortage of time and because I was not fortunate in catching Mr. Speaker's eye, I did not take part in that debate.
  BBC Radio Leicester was the first local BBC radio station to be established, and it has been the pioneer of local broadcasting.
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  Those of us who have been associated with local radio for nine or 10 years have built up a case history of its operation. We have formed our own judgments without having the benefit of a report such as that produced by Lord Annan and without being told what to think. We have lived with local radio in Leicester and we have formed our own opinions, as have our constituents.
  A few months ago, hon. Members representing the City and County of Leicester and Rutland formed an all-party committee to consider the Annan Report and its implications for BBC Radio Leicester. Many letters were received and most praised the rôle that BBC Radio Leicester is playing, not only in entertainment value but in its valuable social work.
  I remind the House that Leicester has a large immigrant population. This has been a problem, and it still is at times. Several of the letters that we received stressed the value of the work that BBC Radio Leicester is doing in community relations, which is a special and difficult area. Several letters stressed with real force what the radio station has been and is doing to unify the communities which comprise many thousands of people from different ethnic backgrounds.
  I shall mention some of the most important letters. One came from the Leicester Diocesan Youth Committee, which expressed full support for local radio as it is at present constituted. It stressed the value of the work that BBC Radio Leicester is doing to provide important access to the air to the community and the youth services in Leicester city and county.
  The Oadby and Wigston Borough Council unreservedly supported BBC Radio Leicester. It wished to see the continuation of community radio as it has been established by BBC Radio Leicester. The importance of community work was the theme and thread which went through all these letters.
  The National Federation of Business and Professional Women's Clubs of Great Britain and Northern Ireland wrote to me supporting the efforts of BBC Radio Leicester. It not only stressed the work of the radio station on community relations but said that BBC Radio Leicester was an essential part of contemporary society in Leicester today.

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  There were many other letters to which I shall not refer in detail. They included a significant letter expressing unanimous support from the Leicestershire Association of Parish Councils and others from the Hinckley and Bosworth Borough Council and the Harborough District Council.
  Many criticisms—most of them unfounded—are made of local radio stations. These criticisms have been made in particular about BBC local stations and they refer to the content of the advisory boards which administer the stations. Each BBC local radio station has a local broadcasting council. Some critics say that these councils consist of middle-aged people with middle-class backgrounds who are out of touch with reality.
  Mr. Greville Janner: I thought it might be helpful for the House to know that the view expressed by the hon. Member who sits for a county seat and with whom it is a pleasure to disagree on many other matters, is a view that is universally held by those of us who represent Leicester city constituencies. The unanimous response of the public is that they feel the same way. We are grateful to the hon. Member for Harborough (Mr. Farr) for raising this matter. We feel exactly as he does. BBC Radio Leicester has avoided becoming a monopoly of the media and public comment. We should like to commend the hon. Member for Harborough.
  Mr. Farr: I am grateful for that intervention, but I have only just begun my speech. The hon. and learned Member for Leciester, West (Mr. Janner) has committed himself to supporting me. I only hope that I can live up to his expectations. If I cannot, I hope that he has an opportunity to retract his support later.
  Criticisms have been made about the format of local broadcasting councils. They have been said to comprise fuddy-duddies who are out of touch with reality. BBC Radio Leicester has a typical local broadcasting council consisting of 17 member. Some of them may be middle class but I thought that we lived in a classless society. Some of them are definitely middle-aged, but there is an enterprising blend of youth and occupations
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  from all walks of life. I find this refreshing.
  A number of the members of the council are in their twenties. Mrs. Root is a housewife in her late twenties. She is married to a train driver, I hasten to add. Mrs. Burnside has two young boys and is a supervisor in the hosiery industry. She is a member of a co-operative young wives' group and is also in her late twenties. Mr. Ramon Patel is about 35 and married, with two children. He was born in India. Mr. Douglas Burton is aged 55 and is married, with two daughters and one son. He is a toolmaker and an active trade unionist. There are also a number of members of the council who own small businesses. Mrs. Cook is married, with two sons and she and her husband run a small knitted fabric firm in Sileby. The Council contains representatives of the Church, of education and of the local authorities. I should have thought that that was an admirable blend.
  I stress that in Leicester the general opinion of ordinary people, not just of politicians, is that in BBC Radio Leicester we have a good thing. It is an institution that has served the community very well and has provided a service of news, information and entertainment which is popular with its audience. It makes a genuine contribution to democratic, social and cultural life. It is entirely independent. Its programme content is not influenced by considerations of advertisers. Because it does not rely on advertising revenue, it does not need to maximise its programmes in favour of pop music, and it can cater more for speech programmes and for minority interests. It is efficient, because it shares its service with the national network with mutual benefit to both branches of the Corporation.
  BBC Radio Leicester uses the BBC for training, for financial processing and for legal advice. National radio in turn benefits from Radio Leicester's news-gathering operation. It is not an expensive service. It and the other 19 local BBC radio stations cost the licence payer about 38p a year. The local station benefits from the BBC's long tradition of independence from political manipulation and outside control. Both performers and staff benefit from opportunities offered by an organisation as wide and diverse as the BBC.
  Mr. Max Madden: Before the hon. Member moves on from the virtues of Radio Leicester, will he accept that the reputation of that station has been greatly enhanced by the decision of its manager to advertise, with other people, his belief in the need for good community relations? Will he compare that with the apparently conflicting view of those who operate Radio Bristol in bringing about disciplinary action on one of their reporters, Mr. Julian Dunn, who sought recently to protest against the activities of the National Front and who now seems to be suffering the consequences of that at the hands of those who control Radio Bristol? Is that not in sharp contrast to the recent actions of those who control Radio Leicester?
  Mr. Farr: I thank the hon. Member for his intervention. I cannot speak for Radio Bristol, but I can speak for Radio Leicester, since I am a regular listener. I believe that its conduct on this and other matters of social responsibility has been exemplary.
  I was dealing with some of the benefits that Radio Leicester has bestowed on the neighbourhood. Local radio is a form of devolution, and, whether or not we like it, devolution is in the air today in many forms. It could be said that local radio was a form of devolution which provided a service drawn from the grass roots for the benefit of local people, which is undoubtedly what the local people want.
  These conclusions lead me totally to reject recommendation 20, on page 476 of the Annan Report. My personal experience tells me that the Annan Report has got it quite wrong. It advocates the establishment of a new local broadcasting authority which I and many other people believe would be a wasteful, unnecessary and undesirable duplication of services.
  The other facet that I wish to raise concerns the BBC's overseas services. I am aware of the recent publication of the review of overseas representation. It is fortunate that we are having a debate on this subject tonight because this is the first opportunity that the House will have of expressing opinion on the CPRS Report as it affects overseas representation and external broadcasting.
  The document is impressive in size and its recommendations, in paragraph 13.7,
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  on pages 226, 227 and 229, are most interesting. But the most important aspect to me are the tables on pages 226 and 227, giving total programme hours. It is interesting that since 1950 the BBC has declined in the external broadcasting league from first place, with 643 hours per week, to fifth place, now, with only 719 hours per week, a marginal increase for the BBC compared with massive increases by other countries. The top two nations in 1975 were the United States and Russia, each with over 2,000 hours per week, to fifth place now, with only formed since 1950. The other nations in the top 10 include Egypt and Albania, which have increased their external broadcasting from virtually nothing in 1950 to very close to our figure today. That trend indicates that by 1980 we shall have slipped further down the table.
  Another point in the CPRS Report relates to audibility, which is dealt with on page 229, paragraph 13.17. The recommendations in paragraph 13.19 contain a list of projects which are described as essential or desirable to be put in hand at an early date. Paragraph 13.21 contains a number of alternatives, of which one is that the present coverage of BBC external broadcasting should be maintained. I cannot understand—here I disagree with the final recommendations in the document—why no consideration was given to expanding broadcasting time abroad. When it conducted the review the CPRS had four alternatives of possible action. None of these included the possibility that total external broadcasting hours should be increased.
  I should have thought that with English becoming more and more the language of world discussion and with nearly all the nations of the world rapidly increasing their own external broadcasts, one of the options that should have been considered was the possibility of an increase, if only limited, in BBC external services.
  I believe that the BBC World Service is generally valued and respected wherever it is heard abroad. It is the voice of Britain abroad, which many millions throughout the world are anxious to hear, either in English or in some other tongue. To millions—and by no means only those of British origin—it is the voice of common sense, moderation and impartiality, and they are anxious to hear it. It is

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  a universally respected voice, even by our competitors abroad. The content of the BBC World Service—I have listened to it abroad a good many times—is generally unrivalled. The trouble is that it is no longer a powerful voice which can be listened to without unreasonable difficulty abroad.
  For the last two or three years, when travelling abroad, I have taken in my luggage a quite powerful British-made Hacker short-wave radio. It has often caused considerable difficulties with weight restrictions at airports. That radio should be able to get me the BBC World Service more or less wherever I am in the world. It is probably as good a radio as, or a better radio than, any which would be available in the country in which I am using it to listen to the BBC. Yet, even with this first-class radio, I have on many occasions had great difficulty in getting reasonable reception.
  Last year, for example, I took my Hacker short-wave radio to the eastern coast of Canada, where I tuned in whenever I could to the BBC news broadcasts. They were not broadcasts that one could guarantee to receive and if one is unable to receive a news broadcast regularly at a certain hour there is a tendency to lose interest in the station transmitting it. In this instance the difficulty was not so much that of static but rather because it was crowded out by more powerful and closely adjacent foreign stations.
  When I was in the Far East this year I kept a log of my efforts to listen to the World Service of the BBC in places such as Korea and Hong Kong. On quite a number of occasions I had to note in my log that on the three shortwave bands in which the BBC World Service was broadcasting to that part of the world, reception was either almost totally inaudible or of very poor quality. When those conditions arise, a listener, however devoted he may be to hearing the excellent quality of the BBC World Service, will not bother to try to get it, if, for reasons beyond the BBC's control, there are other foreign stations broadcasting on wavelengths very close to those of the BBC, causing reception to be bad.
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  Other countries in which reception should, I thought, have been better, are Iceland and Israel. I kept a log when I was in those countries.
  Very often the BBC World Service is inaudible to listeners abroad, and we have to face the fact that radio transmissions throughout the world, whether local, national or overseas, are becoming more competitive. New nations with new radio stations are crowding the ether, and chaos is resulting. I hope that the Minister, will be able to tell us why we cannot strengthen the voice of the BBC World Service in its transmissions overseas and why we cannot broadcast on more frequencies instead of the two or three which operate at present. Those who, like myself, want to hear the BBC World Service, would then be able to switch to another wavelength which was free of interference in time of need.
  In our national BBC services could we not strengthen our transmissions, particularly after dark? Why must we still have an early close-down of BBC national services? After quite an early hour, if one wants a transmission in English, it is necessary to tune in to Radio Luxembourg. Why is it that after dark in the Midlands foreign Continental transmissions can be received more clearly than those of the BBC?
  Finally, why cannot greater use be made of VHF for local transmissions? Why is it that in Britain only 25 per cent. of the VHF band is used for radio transmissions and 75 per cent. for police and local authorities work, whereas in most other countries the reverse is the case?
  I am well aware that in the debate on the Annan Report on 23rd May the Home Secretary said that the period for consultation in relation to the future of broadcasting was due to end at the beginning of July. I hope that the White Paper or the Green Paper, which the right hon. Gentleman is understood to be preparing, will take account of what is said in the debate tonight.
  8.26 p.m.
  Mr. Phillip Whitehead: I will not follow the hon. Member for Harborough (Mr. Farr) to any great extent on the first part of his speech. Indeed, his speech was to some extent

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  a pantomime horse. The first part galloped across the stage in the measured tones of BBC local radio, documented carefully and precisely, and interrupted occasionally by shrill squeals of pleasure from my hon. and learned Friend the Member for Leicester, West (Mr. Janner), who is obviously not aware of the fact that our debates are not yet being broadcast on the radio. Everything that the hon. Gentleman said in the first half of his speech may well be true of Radio Leicester, and I shall say a word or two about that in a moment. The latter half of the pantomime horse kicked out rather vigorously and, I thought, with some effect. I agreed with a lot of what the hon. Gentleman said.
  I want to devote the burden of my few remarks largely to the report of the Central Policy Review Staff—the so-called Think Tank—and to the dangers that lie in this line of approach to our external services.
  Wherever in the world we are situated—and I include the so-called free societies, the pluralist democracies, of Western Europe—broadcasters, because they are operating at the sharp end of the communications spectrum, are constantly under threat. What they do is a matter of controversy. Controversies within society, where the consensus is fractured, as well as controversies between States, inevitably tend to become also controversies and disputes within broadcasting.
  My hon. Friend the Member for Sowerby (Mr. Madden) referred to the producer who had been disciplined by Radio Bristol, and he may raise that matter later in the debate. It gave rise to serious concern, since few of us expect the broadcasting media in this country, the public authorities in particular, to take the posture that they are neutrals between the racialist and the anti-racialist. I shall not stray beyond the rules of order, but we have seen another example today in the vexed area of race relations. We have seen the great Tate and Lyle consortium going to the High Court to get an injunction to take off the air Mr. Anthony Thomas's documentary programme about South Africa. When a corporation can spend that kind of money on propaganda to discredit a programme and produce affidavits secured in the circumstances in which they were—
  Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. The hon. Gentleman will recall the rules governing sub judice.
  Mr. Whitehead: I apologise, Mr. Deputy Speaker. I shall not continue about this matter. But I remind the House that the broadcaster is always under threat and the injunction that has taken that programme off the air should remind us of that fact.
  Mr. John Mendelson: On a point of order, Mr. Deputy Speaker. With respect, I feel that one ought to question the application of the general rule on sub judice merely because someone has applied for an injunction. That certainly would be a serious extension of the rule which is always applied by Mr. Speaker. I do not know whether my hon. Friend wants to pursue this matter, but I certainly would not accept that for the rest of this debate this case must be ruled out because someone has applied for an injunction.
  Mr. Deputy Speaker: It may be that what the hon. Gentleman said is correct. But once the date of the hearing has been set, the case becomes sub judice.
  Mr. Whitehead: I apologise, Mr. Deputy Speaker. I shall withdraw my remarks, because I understand that the injunction has been granted by the court. I shall not continue to discuss it today. I am sure that the House will have an opportunity on another occasion to do so.
  I want to revert to the subject of this debate, namely, the BBC service. I want to say a brief word about the Annan Report in relation to local radio. What the Annan Report actually said about local radio and what it is supposed to have said in the mouths of some of its detractors are rather different matters. The report was particularly concerned with two problems of local radio, given that many excellent services have been initiated by the BBC.
  The first was the problem of cost and of licensing—not necessarily being able to stretch in times of high inflation to cover all the services which the BBC was endeavouring to cover.
  The second consideration before us was the need to allow the development within local radio—this cheap, exciting,

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  novel, flexible medium—of new methods of community radio. We thought that the great duopoly of the BBC and the commercial broadcasting organisation was not capable of doing that. That is why we wanted a new organisation to do it. That is why we thought and hoped that BBC local services would be absorbed in that and that non-profit-making trusts would be running the kind of station that we now have in Radio Leicester.
  All those admirable people mentioned by the hon. Member for Harborough would then not be involved merely as a sort of advisory body brought in from time to time to give their view about programmes, but could be directly involved as a body running the station as a nonprofit-making trust. That was the idea that Annan floated, and I believe that it is worth considering and taking further. I hope that the BBC, locally and nationally, will also consider giving it a run and will consider the possibility of affiliate status for some of its existing programmes.
  One thing that my hon. Friend should say to the House when replying to the debate relates to cost. This concerns the BBC licence fee. At the moment the BBC is in a position where the licence fee is effectively becoming a kind of annual subvention. If the BBC could plan triennially or quinquennially, it would have a measure of independence.
  I started on the Annan Committee as an opponent of the licence fee. I believed that the time would probably come when it would be replaced by a grant in aid. I accepted that it was regarded by many people as unfair and that it was unpopular with many of our constituents. I believed that we should come clean about this.
  But among many people there is the belief that the licence fee gives independence. Sometimes when something is believed to be of such importance it becomes a fact. But if the BBC is now on such short commons that it has to go from year to year with the Home Office setting the licence fee, where is the independence? Where is the possibility of the BBC continuing to run the whole range of services which it does at the moment? If it is probable, therefore,
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  that the BBC cannot run all these services in the future, it may be that local radio is one area that we should set free to be run by a different kind of authority and financed in other ways. That is all I wish to say about local radio.
  I turn to the CPRS Report. I have probably been set up already as a member of the Annan Committee, and I am known to hon. Members here as someone who is not an uncritical admirer of the BBC, although I am a firm and passionate believer in public service broadcasting. I hope that it will come very strongly from me today to my hon. Friend and to officials of the Foreign and Commonwealth Office when I say that I regard much of what is in the CPRS Report as mischievous in terms of the effect that it will have upon BBC coverage abroad.
  This is where I come squarely to agree with what was said by the hon. Member for Harborough. The CPRS Report asked a number of questions, and I think that we should pose them back at the CPRS. Is it right that we should not broadcast to those who now have free societies—in other words, to the democracies of Western Europe? Is it right that we should be broadcasting news services rather than an impression of Britain and British culture? Is it right to broadcast to some of these areas for only a few hours each day and, more importantly to stop completely for eight hours at a time out of the 24?
  All these matters are what the CPRS comes round to recommending, and it recommends them at a saving of about 10 per cent. in costs for the services but at a cost of about 40 per cent. of the overall services of the BBC externally.
  I am sure that hon. Members will agree that a slashing of 40 pe cent. of the services of the BBC externally would be a serious blow to the country. It is not a matter of the BBC and its reputation, It is the fact that world-wide these services have a high reputation. They are listened to by audiences running into millions. They rely on round-the-clock reliability in terms of the presence of the service as well as the nature of the transmissions.
  I accept the weaknesses referred to by the hon. Member for Harborough about short-wave transmissions. It is a factor which is built into them because shortwave

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  transmission is unreliable unless one is careful with it. But the presence of the service round the clock is greatly apprecited by millions of people. It is a very good national investment and one that we should keep. We should not think of cutting back on it in the way suggested in this report.
  I want to deal with one or two sentences in the report. It says that too much of the output of the services is in English. We know something of the English services because many hon. Members tune in to them. They find the broadcasts of the external services of the BBC dispassionate, fair, detailed and, in some respects at least, competing with and possibly occasionally superior to the domestic services. So that we can speak as "domestic consumers" about the success of the English language service. But the CPRS says that there is too much of this.
  The CPRS also says that we are broadcasting too much not only in English but in the vernacular to the developed free world and that, Heaven help us, 13 per cent. of the output of the BBC in the vernacular is transmitted to non-Communist countries in Europe. It suggests that we should scale that down a bit. It says:
  "It has been put to us that not all countries in non-Communist Europe are completely stable politically and for that reason the BBC should continue to broadcast to some of these countries. We do not accept this argument. We doubt whether the BBC has any influence on the political development of these countries and that if they did fall prey to political extremism it would not be difficult for the BBC to resume broadcasting to them."
  I want to quarrel with that on at least three grounds. I take the example of just one country, Portugal. We know that broadcasts in Portuguese are important in Portugal because of the arguments which have been going on in the Portuguese service about the nature of what is being broadcast, and that reflects adequately the measure of the interest that there is in Portugal.
  Portugal, acording to the CPRS recommendation, would be deprived, as would Spain, of the evening transmission. That transmission would be scrapped. The overall burden of the report is that services to Spain and Portugal should be greatly reduced.
  Suppose that happens in the present state of Portugal; the Government have
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  fallen and there is a danger now—I do not want to exaggerate—of some kind of backlash by the extreme Right, whose forces are still active. Equally, there is a possibility of totalitarianism from the Left. It is possible that Portugal will dissolve into some kind of chaos in the near future.
  Likewise, democracy in Spain is in its infancy, and it faces severe provocations and problems. If the worst happens in those countries—and I pray that it will not—is the CPRS really serious in saying that it would not be difficult to resume broadcasting? Does it know what is involved in recruiting broadcasters to get the service together? It is not something that one can turn on and off like a tap. In a successful service there is a cadre of experienced broadcasters, and it takes years to train people to that standard.
  The CPRS approach is too frivolous when one considers the influence of news broadcasts to these parts of the world. The BBC is widely and highly regarded in Spain and Portugal. My hon. Friend the Member for Penistone (Mr. Mendelson) has been to Spain for the Council of Europe and he will bear out my opinion.
  Mr. Farr: As the hon. Member knows, there is a whole host of countries in Western Europe where democracy is balanced on a knife edge. Greece and Turkey are examples. I think that it is utterly deplorable to consider abandoning broadcasting services because there is a form of rapport that broadcasters establish with an audience, and that cannot be turned off like a tap and then switched on again the next day. The hon. Member knows that better than I do.
  Mr. Whitehead: That is the point that I have been trying to make in my halting way.
  The upheaval within Bush House when a service in the vernacular is to be stopped is extraordinary. I worked at Bush House in the early 1960s and we were told that the Thai service was to be stopped. A few months later Foreign Office decisions were taken and we were asked to start the service again. But one cannot just get it started the next day. When democracy is balanced on a knife edge and the Government may fall, it is the next morning that the service is wanted, and had it been available in the

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  previous six months, democracy might not have toppled fatally off that knife edge.
  The report goes on to say that it is not merely Western European services that should be cut back in this way, but that vernacular services should be looked at and weeded out—a winnowing out of languages. I mentioned the Thai service of some years ago. The report says that Tamil and Nepali services should be dropped. It regards the Tamil service as "marginal", yet it is listened to by 50 million people in more than one country on the Indian sub-continent. This service serves people in both the functioning democracies of what was the British Commonwealth of Asia—Sri Lanka and India. In Sri Lanka democracy has been maintained without a break, as it has in India with just one interregnum. To suggest that this service should be discontinued is frivolous.
  Another service that the CPRS wants to drop is the Somali service. This reveals extraordinary maladroitness of timing—a characteristic of the report. The Somali broadcasts are crucial at the moment because of the war between Somalia and Ethiopia, and this area is the cockpit of Africa. The great Powers are involved and the régime itself is wavering in its opinions between the forces of the Western democracies and those of Eastern Europe.
  It is suggested in the report that this service is marginal. Yet it is listened to by the Somali President himself and people all over Somalia. I think that the House requires from the Government tonight an assurance that in matters like this we shall not follow the CPRS.
  The BBC's external services should be maintained. The argument that they can be cut by eight hours a day betrays sublime indifference to the clock. People are listening while getting up, having breakfast, or in the quiet of the evening, often in countries with tropical climates, at different times of the day. If Bush House goes off the air at 8 o'clock Greenwich Mean Time and goes on again an hour later, that does not mean that people in countries where it may be blazing noon will alter their living patterns and tune in to the one service that may be left to them. The dawn service in Arabic would
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  be removed. The evening service to the Iberian Peninsula, and our service to East Africa, which is not strong on the transmission front, would be scaled down. The voice of the BBC in a country such as Uganda is of the essence.
  I regard these proposals as wholly unacceptable. I do not believe that we can allow the impression to go abroad that the Government are maintaining this part of the CPRS Report. The hon. Member for Harborough stole a line from me by referring to Radio Albania. The report says that we shall fall from fifth to seventh place. The fact is that we shall fall below Albania and North Korea in the league table of external broadcasting.
  To reduce the BBC external services to below the levels of Radio Tirana would be the final insult to the finest external broadcasting service in the world. The Minister should either say himself or guarantee that the Foreign and Commonwealth Office will say very soon that there is no intention whatever of agreeing with the kind of cuts recommended in the CPRS Report.
  8.46 p.m.
  Mr. Edward Lyons: I thank the hon. Member for Harborough (Mr. Farr) for providing the opportunity for this debate. I believe that I was the first Member to have an Adjournment debate concerning local radio, in the late 1960s, in relation to Radio Leeds, which covers Bradford, in my constituency. Although Radio Leeds remains perhaps the best of all local radio stations. I have no doubt that Radio Leicester is also very effective.
  However, the main burden of my remarks is not about local radio. I wish to address myself principally to the external services of the BBC. Like my hon. Friend the Member for Derby, North (Mr. Whitehead), I am conscious of a curiosity here. Whereas internal services come under the Home Secretary, external services come under the Secretary of State for Foreign and Commonwealth Affairs. I do not entirely see the justification for this. The BBC itself is independent and, as far as I am aware, it does not take detailed instructions from the Foreign Office. In the Labour Party we have a Home Affairs Group, of which I have the honour to be chairman. By decree of the parliamentary party, all broadcasting and

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  communications come under the Home Affairs Group.
  We have the irony today that we have a Home Office Minister to reply to the debate, and the Labour Party Home Affairs Group is interested in it because it is supposed to be a home affairs matter, but the central issue affecting broadcasting today relates to external broadcasting, which comes under the aegis of the Foreign Office, and no Foreign Office Minister is present. There is a case to be investigated for the removal of external affairs broadcasting from the Foreign Office to the Home Office, little as I normally favour adding to the empire that already exists in the Home Office.
  The reason why I want to talk about external affairs broadcasting is that I believe that perhaps the greatest work for truth and freedom in the world today comes from the BBC's external services. That is a very bold claim. However, against the background that, according to the International Press Institute, only 30 of 144 member nations of the United Nations permit complete freedom of information, a country such as ours which boasts of its freedom of information ought to step into the gap and supply the truth, supplying detached and impartial information about what is going on in the world to the other 114 nations which are not allowed by their Governments to have uninhibited freedom of information and impartial news.
  That is a challenge which the external services of the BBC have largely taken up in the past. It is a great tribute to our country that we have financed the service which is doing that remarkable job.
  To bear that out I refer to a letter which I recently had from the assistant to the Bishop of Karachi in Pakistan, who used to be Provost of Bradford Cathedral. He wrote to the Bishop of Bradford about the BBC external services, and the Bishop of Bradford passed the letter on to me. He had just heard the dire news that the Central Policy Review Staff document, the Berrill Report, was advocating cuts in the BBC overseas service. He wrote as an Englishman who had recently gone to Pakistan to work, and, talking about the disturbances in Pakistan in the earlier part of this year, he said:
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  "the BBC was the only agency to report the facts and was listened to by the vast majority in English and in Urdu."
  He went on to say that Mark Tully, the BBC's reporter in Pakistan at that time,
  "was spoken of by all. He became almost a national hero".
  That was at a time when political leaders were in prison and people were, no doubt, hungry for a detached voice on which they could rely. That voice was provided by the BBC.
  The writer of this letter makes a further plea for British expatriates living abroad, who, he says, if they were to be deprived of the BBC overseas service would be
  "at the mercy of whoever controls the local radio in their countries".
  He says that in Pakistan, for example, there is no difficulty in receiving broadcasts from Radio Peking, from Russia and from other countries, but in Pakistan
  "We listen to them for amusement and sometimes for serious comparison with reports from the BBC."
  Further, as an expatriate, he emphasises how British communities abroad enjoy such things as sports reports, cultural programmes, talks and so on. Plainly, he speaks for a large number of people abroad when he expresses the hope that Members of Parliament will stand up and object strenuously to any suggestion of cuts in the overseas services.
  Recently, there was in this building a man who had just arrived from the Soviet Union, the distinguished Russian astrophysicist, Kronid Lubarsky. He and his wife had emerged from the Soviet Union, he was a dissident, and he had served time in prison. He came to this Palace as the guest of the parliamentary committee on human rights. When talking to us last month, he said that the great informer in the Soviet Union was the BBC. He told us how many people listened to it, and how important it was that that work should continue. That is an absolutely clear example given by a man who ought to know of the importance, to seekers after truth and to those who hold the lamp of freedom high, of the external services of the BBC.
  We hear arguments in the House about military and air forces expenditure and so on, but the external service staff of the BBC is an army of a different kind. It is an army providing freedom of information with an air of detachment, seeking

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  simply to make people think and to tell them as even-handedly as possible what is happening in the world. That is the kind of army which we can all support and which requires extra expenditure. What is the sub stratum of the report of the CPRS? It is based on an assumption that no British Government will spend more but will want only to spend less, and given that cardinal assumption the committee looked around for cuts.
  However, it will be a disgrace to the British Government and people if this extremely worthwhile job ceases. If people are denigrating British services more than ever now, in Britain and abroad,. there is one service that Britain provides abroad—the external service broadcast—that keeps Britain's name and reputation high. Dictator's apart, nobody says derogatory things about the BBC external service. It gives Britain a high reputation all over the world at a time when our reputation has crumbled or stands less high than it used to stand in certain areas. This is an area in which the Government should be prepared to spend money.
  The extra sums of money involved are not great. However, it is no use having a splendid BBC external service broadcast if people cannot hear it and, as the report makes clear, fewer people can now hear what the BBC puts out—excellent though it may be—because our transmission equipment is no longer what it was. What will it cost to put it all into order and to modernise it in all the desirable ways? The answer is a once-and-for-all expenditure of £52 million. Whether one regards that as a lot or a little depends on the importance that one attaches to the external service broadcasts. In my view, a £52 million once-and-for-all expenditure to put our transmission equipment into first-class repair and to give it enormous extra power for the next 10 years is worth while.
  What else is involved? The report says that it will involve a 79 per cent. annual increase in transmission costs. That sounds enormous, but when we investigate and find that the cost in 1975–76 was £3·9 million, we find that we are talking about approximately another £3 million a year being required to refurbish and repower the entire machine in terms of getting people to hear it.
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  The service does so crucially important a job for freedom, tolerance and truth that the Government should find the money. We do not need reports working on the basis that the Government and Parliament are so narrow in their view and so short-sighted that they must be looking for cuts. There must be no cuts in this area.
  It is interesting that in Saudi Arabia 73 per cent. of the population listen to the BBC. In Thailand, which is close to China, the audience for the BBC external service is 50 per cent. higher than that for Radio Peking. Where else does a Western European Power have that kind of access and influence? What sort of impression does the service make on the Saudi Arabians, the Thais, and even people in this country? It affects the products that they buy because they say that we are honest people and trying to be fair, and so must be a good country—and that not only the country but the products must be good. They believe that our institutions are worth copying because this is the sort of radio service that we produce Accordingly, if we are interested in human rights and in spreading honest information, we have to support the external services of the BBC.
  Mr. Madden: Apart from the reasons that my hon. and learned Friend has put forward, even in crude commercial terms the costs which he has postulated are peanuts compared with the cost of advertising which would presumably be necessary if the external services were abandoned in the way that my hon. and learned Friend fears and many of us would strongly resist.
  Mr. Lyons: I agree. In view of the poor effect and quality of the advertising of British commerce, when we have a ready-made weapon of this kind we should use it. Furthermore, the report concedes that an increasing amount of air time is used to spread the word about British products. The BBC is consciously seeking to arouse interest overseas, through its radio programmes, in British products, and this is a very good thing.
  The report says that we should slash the number of hours of broadcasting and manage with eight instead of 24. We do not have the times of foreign radio stations. The Radio Times does not give their times of broadcasting. Consequently, one takes a chance. If I turn

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  on the radio and that station is not broadcasting, I get fed up, and when it is broadcasting two hours later I am either listening to something else or not listening at all. I accept what the report does not accept, namely, that we have to have 24-hour broadcasting or broadcasting for a very long period. If the broadcasting time is cut by two-thirds, the BBC will lose not two-thirds of its audience, but seven-eighths. It would be interesting to have figures on what happens when such a situation occurs.
  The burden of my argument is that the tradition and high quality of BBC broadcasts must be maintained at all costs. Even to those who see the world in terms of a cold war this must make sense. The sort of honest broadcasting done by the BBC is worth a division of soldiers in propagating the cause of freedom and parliamentary institutions such as those that we have.
  I do not believe that we have an obligation to broadcast the truth solely to Communist countries. This is another underlying characteristic of the report. If we believe in democracy, we should spread the truth and the habit of thinking independently to dictatorships of any kind. The idea in the report that we have to broadcast only to Communist dictatorships is ridiculous. I agree that we should broadcast to these dictatorships, but we should also broadcast to dictatorships of all stripes and teach them the habit of critical thinking.
  I am sorry that I have gone on for so long. There are other matters that I should like to touch on, for example, the timidity of the BBC in relation to the Labour Party's National Front broadcast. I agree with the News of the World that the BBC could have taken its courage in its hands and allowed references to the previous criminal convictions of people who put themselves before the public as important political figures asking for public support.
  I am not saying that the BBC domestically is free from complaint. I remember a programme called "Open Door" when the BBC gave a party political platform to a front organisation for the National Front for half an hour of unadulterated National Front propaganda
  Mr. Madden: The BBC showed it twice.
  Mr. Lyons: It showed it twice, and it had no right to do so, because there is no provision for National Front party-political programmes. That is what that programme was, in fact.
  Mr. Deputy Speaker (Sir Myer Galpern): Order. I have to draw the hon. and learned Gentleman's attention to the fact that what he is now discussing is out of order, because he is now dealing with the National Front and what we are dealing with is BBC local and overseas radio services.
  Mr. Lyons: I accept that, Mr. Deputy Speaker. I shall depart from that point.
  None the less, having made those points about the BBC, perhaps I may say that for all its services it requires more money. I believe that it is difficult for the BBC to manage on the licence fee, some of which goes to local radio. External broadcasting, I ought to say, is not financed out of the licence fee, to the best of my knowledge, but comes from a Foreign Office allocation, so it is rather a different matter. But certainly the BBC needs more money.
  The fact that I have just criticised the BBC does not mean that overall I do not think that it does a good job. I think that it does a good job, that it ought to be encouraged and that we ought to see that it has the money to do the job.
  9.6 p.m.
  Mr. John Mendelson: I should like, first, to put on record my gratitude to the hon. Member for Harborough (Mr. Farr) for initiating the debate. I am sure that other hon. Members appreciate his action in doing so. He has just left the Chamber for a moment, but he has listened to all of it up to just now. He opened the debate with a most interesting survey of his two subjects. It is fortunate, and a matter of good luck for all of us, that this should have been the first subject in the Ballot, because we are, indeed, dealing with a most important subject.
  Secondly, although I am normally very quick to request the presence of a Foreign Office Minister, I am not the least bit disappointed that the Minister of State, Home Office is representing the Government on the Treasury Bench this evening.

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  Although I intend to address my contribution mainly to the subject of the overseas services of the BBC, I profoundly believe that this matter does not affect the Foreign Office alone; it concerns the whole Government. Where the interests of the whole Government are concerned, I am perfectly satisfied that the Minister of State is well capable of looking after those general interests, so everything that we say to him on this subject is directed to the proper source.
  I also think that the Home Office, being in a crucial position in respect of our broadcasting services, must be interested in some of the aspects of the work that the BBC does, even though the funds for the external services are supplied by the Foreign Office.
  Before I come to the part that I want to concentrate on, I should like to follow the hon. Member for Harborough in his own sequence of events in saying something about local radio services. The excellence of the Leicester radio station is known well beyond the confines of the city of Leicester and its environs. I listened with great interest to what the hon. Gentleman had to say about his own local radio station, but it is well known that Sheffield also has a local radio station. Indeed, it is one of good quality. As far as I am able to follow the London services, I think that the variety introduced into London broadcasting by the BBC local radio station has been of great value in recent years and has made a very important contribution.
  Although the hon. Gentleman naturally concentrated a great deal of what he had to say on the excellence of the station in Leicester, I think that perhaps in various degrees what he said can be applied to many of the other stations. I particularly stress one point made by the hon. Gentleman when he said that as the Leicester BBC station was not dependent upon advertising revenue, it did not have to spend so many long hours broadcasting merely popular music; it could concentrate more on the spoken word.
  We should not accept from the BBC—indeed, it is not guilty of this fault—or from the commercial radio stations the easy, facile argument that because many people want to listen to pop records 24 hours a day that justifies a public body
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  being given power to broadcast those pop programmes under licence approved by the Government and this House, because that is the easiest way of making money or attracting listeners.
  Together with a number of other hon. Members I recently attended a meeting organised by commercial radio owners. The meeting was held under a propaganda slogan "A public service without having to pay for it". When we asked questions after seeing a propaganda film, we were asked "Who are you to argue if people want to listen to pop music all the time? If they want it, we shall give it to them". That argument would justify almost anything being put out on the radio.
  It is important that local radio stations emanating from the BBC should be sufficiently well-equipped and financed not to have to compete with any other station either to provide the cheapest possible service—because in this case cheapest is not best—or to have to show enormous listening figures to achieve their ends. The kind of policy that I should like to see the Government applying to these stations would give precedence to the representation of local culture and interests. Local interests are important, because they express local culture. For example, I think that we have a right to expect, on local radio in Sheffield, special broadcasts dealing with the major economic interests of the region. I should like to see the appointment of a specialist on the steel industry to broadcast on Radio Sheffield. Therefore, on a Monday morning we would hear not only snippets of local news but information from somebody well-versed in the steel industry. Furthermore, a similar expert could be provided in a coal area or a textile area—a man who was familiar with the local industry.
  The general question "Do you want to have more and more people on the radio talking about local literature and local songs?" is designed to belittle the demand for broadcasts of local importance. I believe that people want to hear about local matters which are of cultural interest to them, and activities connected with local cultural events. The change would not happen overnight, but as time went on we would be able to build up local broadcasting services that would

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  reflect the great industrial traditions of the United Kingdom.
  I need not labour the point, because I know that it will commend itself to the Minister. I believe that these matters should be developed and that the BBC should be entitled to call for additional funds to support them. I do not go along with the complaint by the BBC that the Government are unreasonably restricting services because of agreements about licence fees for a limited period.
  I have a certain understanding for the Government's attitude. I think it can be justified. Of course, it is natural that the BBC should want to have a five-year or 10-year programme. In the longer run that would be desirable. On the other hand, we must consider the timetable that is ahead of us. I can see the Government properly justifying this temporary decision. I expect that the Minister will tell us that there were practical time reasons for the decision. I should not be especially upset to go along with that. However, I do not think that I should be satisfied if the Government advanced temporary reasons and did not at the same time tell us that they had a long-term policy that would enable the BBC to feel secure to develop services over a longer period. The Director-General is right to say that such extensions and general policies cannot be planned on a 12-month period alone.
  I turn to the external services. I must begin with a confession. The chairman of the body that produced the report, Sir Kenneth Berrill, was with me at college. I have known him all my life, but I hasten to add that I had no influence on him at any time when we were together. He was a year ahead of me. He was extremely brilliant. He was the outstanding scholar in his year. Far from my influencing him, if anything he influenced me. However, I am surprised at some of the conclusions in the report.
  I hope that the impression will not be created that the chairman of the inquiry is a narrow-minded man. He is anything but that. As is well known, he is a man of the widest possible culture and knowledge. He is one of the most brilliant men in our public life. He has a great many interests that would shut out any narrowness in his concepts. There must be special reasons within the recesses of the inquiry and the team with whom he
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  worked that produced some of the conclusions that I think are astonishing.
  Like other hon. Members who have spoken, I am profoundly dissatisfied with some of the report's conclusions. I do not want to add very much to the details that we have heard already as they have been so excellently introduced. They were introduced by the hon. Member for Harborough and taken up by my hon. Friends, including my hon. Friend the Member for Derby, North (Mr. Whitehead), who is a considerable specialist on these matters.
  I point out to my hon. Friend the Minister of State some of the considerations that must apply. I fear that on occasions it might be possible for the Government to be somewhat misled by mere audience research. In dealing with the effect of the external services, I commend to my hon. Friend the proposition that absolute figures should not be decisive. In many cases it is not merely a matter of numbers—it is not a simple transfer of an audience figure in this country for domestic services to an audience figure somewhere else.
  I have often found that whatever the total number of listeners in a foreign country to the external services of the BBC, the composition of those who listen regularly includes a large percentage of the opinion-makers in that country. That has been my invariable experience.
  My hon. Friend the Member for Derby, North referred to the visit that I made to Spain earlier this year to write a report on the Spanish political situation. I do not know the total number who listen to the BBC services in Spain—the Government probably have the figure—but among the listeners are a number who occupy significant positions. As I was about to write a political report I met a great many of them in all political parties and in many sections of the local population.
  I found that the percentage of listeners in significant opinion-making positions in Spain was extremely high among those who listen to the BBC services. That is the first point—that mere figures cannot be decisive.
  Secondly, I want to make a special plea for services in the English language. The considerations in favour of using the English language have not been properly

  621
  stressed in the report. It must be realised that we are talking not about propaganda for English. But France has a budget to advance the French language. That budget is higher than the total budget of the BBC's external services and is much higher than the £52 million mentioned by my hon. Friend the Member for Derby, North. By the decision of the French Cabinet, often under the personal leadership of the President of the Republic of France, large sums are spent on furthering interest in the French language. I am talking not about that kind of policy, although it could be justified, but about something more indirect but at the same time enormously important.
  Large numbers of people in practically every country, no matter what its internal régime, look to broadcasts in English not only as a guide to news, which is the main purpose of the BBC's external services, but as a means of acquiring proficiency in the English language. We are therefore achieving two purposes. I am referring not to the quarter-of-an-hour English by radio on the BBC's external services but to the total output in English that is used consciously by people in all walks of life to acquire proficiency in the English language. It need not be argued that that is to the good. Indeed, it goes beyond that.
  My third proposition, which I commend to the Minister, should gain support from the Secretary of State for Trade. Business men often find it easier to conduct business in a language that they understand. That is a matter of fact. Many British firms—in many cases somewhat belatedly—are now employing people who can speak foreign languages. In years past many firms were not keen on doing that. We now see the process in reverse. People who have acquired proficiency in the English language, partly by English by radio and partly by listening to the BBC's external programmes, supplemented perhaps by a local course in English, often find it easier to do business in the English language.
  This matter is imponderable in many ways. It cannot be measured directly. There are no facts and figures at the end of each year. But, taking one year with another, I am convinced that it is an important factor and that it will repay further expenditure.
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  I could add to those practical reasons other reasons of equal importance why the BBC's external services ought to be extended.
  Mr. James Lamond: I am sure that my hon. Friend would also wish to stress that, following the signing of the Helsinki Final Act, some countries, particularly the USSR, ceased jamming the BBC's overseas broadcasts. Therefore, the number of people who listen to this service will increase in years to come. That is another reason why we must strengthen that aspect of the BBC's work.
  Mr. Mendelson: I fully agree with my hon. Friend, I have not adduced any particular foreign policy reasons—although they are tremendously important and directly relevant to the Foreign Secretary's budget—because I wanted to concentrate on aspects which are not often mentioned, and those aspects go beyond departmental interest. However, I am pleased that my hon. Friend made that intervention. Anyone looking at the international scene will know that a great deal of the work that has been done in the post-Helsinki period has been in English. People have been listening to the broadcasts on the decision of the Final Act and its interpretation. Many fruitful developments which have taken place and been encouraged by the Government and the people of this country are due largely to their having become known in the first place by English language broadcasts.
  I turn to the question of broadcasting in other languages. The report has serious shortcomings. It is far too rigid to say that we should broadcast only to Communist countries and to developing countries, with certain exceptions. The report says that it does not make much sense to broadcast to countries with a properly developed democratic régime. That is a short-sighted and narrow view.
  As a constant visitor to France, I found it astonishing that during the early years of the Gaullist régime, over a period of about 12 years, all radio and television opinion that was not approved by the Gaullists in France hardly got a look in. There was a major strike by French television and radio reporters which lasted over three weeks and which had a lot to do with the censorship of those who did not agree with the régime. During that period, people were very interested

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  in BBC broadcasting. I did not believe the situation at first, so I checked it. It was not as if there was no informed opinion in France. Of course there was—one heard it on the boulevards. Everyone knew what was going on, and there was nothing that the BBC could tell the French that they did not know already. People knew what was going on, but they could not broadcast because the authorities would not let them.
  It is short-sighted to say that because a country has a democratic system there should be no BBC broadcasts. When I visited the Federal German Republic during the recent terrorist incidents, I found that people were quoting to each other the opinion of the BBC on the situation. That was less astonishing but it was interesting and worth while.
  We know that this country has its financial problems and that choices have to be made, but I hope, in view of the arguments that have been advanced tonight and that are being advanced in the country and abroad by many well-informed people, that we shall find in the Home Office a firm friend of the BBC's external services. I hope that we can count on the support of the Home Office, in co-operation with the Secretary of State for Foreign and Commonwealth Affairs, in persuading the Cabinet not only to retain these services but to extend them.
  9.29 p.m.
  The Minister of State, Home Office (Mr. Brynmor John): The Consolidated Fund Bill traditionally is the way in which hon. Members draw attention to particular problems. It is customary and almost unvarying for the Minister to start with a phrase expressing how glad he is that the matter has been raised and what a great service the hon. Member concerned has done. My trouble tonight is to convey by nuances that I am not taking a conventional attitude. The debate has been most valuable and interesting.
  I regret that the hon. Member for Harborough (Mr. Farr) is not in the Chamber to hear the beginning of my reply. No other Opposition Member is in the Chamber. That creates a difficulty because if I turn to face my hon. Friends behind me I shall be in trouble with you, Mr. Deputy Speaker. But
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  the aspect would be less wooden, or less leather, than it is because I have to face the front.
  The debate has divided itself into two very distinct facets of the problems of the services provided by the BBC. I believe that the balance could have tilted the other way in consideration of this problem. But I do not disagree with, and nor do I quarrel with, the emphasis put on the world services of the BBC, and I start my speech by dealing with that.
  As my hon. Friend the Member for Penistone (Mr. Mendelson) says, though the responsibility is that of my right hon. Friend the Foreign Secretary, this is a matter of complete Government responsibility and it is of concern to the whole Government. Since we are dealing with our subjective impressions of the external services, may I say that the thing I like about those services when I hear them is the way in which they put British news and the place of Britain in the world into proper perspective? When one listens all the time to domestic news one sometimes gets a false impression of what is happening in the world, and not the least benefit of these services is that they put that into perspective by drawing the world into the framework.
  Therefore, there can be and should be no doubt by hon. Members of the high esteem in which the Government hold the external services, and of their high reputation. If there were any doubt about that high reputation, the speeches by hon. Members on both sides of the House tonight have underlined the fact that it exists.
  The arguments in the debate have divided into two categories, yet the one category shades into the other. The first question is that of the CPRS Report. The purpose of these reports is to challenge conventional wisdom and draw reactions. If that is the yardstick, the report we are considering certainly succeeded admirably in its purpose this evening. It has drawn a very sharp rejoinder, but a very interesting and well-informed rejoinder, to many of its points. When the CPRS reports we are of course obliged—and it would be utterly wrong if we were not—to consider what it says. I must emphasise, however, that there has been no acceptance by the Government of the

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  report. We are considering the matter and the Foreign Secretary will announce the decision to the House in due course.
  Clearly, however, the Foreign Office has been listening to the debate both this evening and in the House and country generally since the report was issued. I can, therefore, assure hon. Members that no decision will be taken by my right hon. Friend without the most careful study of all points that have been adduced here and in editorials and articles in newspapers and magazines about this problem.
  The report has done a service to us in the sense that it has pointed out that one can provide the best theoretical broadcasting service in the world but if it is inaudible or is audible only with the sort of sophisticated equipment which is beyond the budget of those who are listening in the countries to which the broadcasts are directed, the effect will be largely nugatory.
  Studies have therefore, been made through the Foreign and Commonwealth Office, and with the co-operation of its posts overseas, into the question of the audibility of BBC reception. Clearly there are certain factors that we shall never be able to change. My hon. Friend the Member for Derby, North (Mr. Whitehead) pointed out that there is some inherent disadvantage in short wave reception, and that weather conditions play a large part in radio reception. But it is true that the main reason for problems is that some old equipment and equipment of insufficient power is being used by the BBC for its external services.
  I followed with care the globe-trotting odyssey of the hon Member for Harborough. He mentioned two countries in particular in which he thought that reception of the BBC World Service was bad. Questions have been asked in the last 10 days about Iceland, and our embassy reports that there are good audibility levels there. In fact, it reports that the reception is very good. In Israel the reception is said to be more variable but frequently good. The power is adequate, and the chief cause of any interference with reception is atmospheric conditions.
  As to the question of insufficient power, to which the hon. Member for Harborough
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  referred, it is not, as he suggests, merely a matter of having more powerful transmitters, because the strength of generation is the subject of international agreement. It would therefore be against the conventions which Britain has signed merely to elevate unilaterally the output of the transmitters. But there are, obviously, measures that we can take to improve audibility. Work has started in Cyprus, Masirah, Singapore and in the United Kingdom in order to improve audibility.
  My hon. and learned Friend the Member for Bradford, West (Mr. Lyons) asked about comparative costs. We accept the figures which are contained in the report. He put a very powerful case for saying that those figures are completely acceptable as a measure of Government expenditure when we come to weigh against them the benefits we derive in so many ways. These were added to by my hon. Friend the Member for Penistone. I repeat that the Government are considering this and the other recommendations. There is no acceptance of the CPRS Report and no disposition on the part of the Government to do other than come to the House to announce their decision in the light of the fullest appreciation of what has been said both here and elsewhere.
  The hon. Member for Harborough also mentioned the problem of inaudibility in Korea and other parts of the Far East. As he will know, until comparatively recently the main Far East site for transmission for the BBC external services was in Malaysia. That site has recently been denied to us by the Malaysian Government and we have had to move elsewhere. We have found a smaller site in Singapore, which is one of the places where new transmitters are being developed. That may well improve service to the Far East. I cannot guarantee that it will cover Korea, because that is a had area for reception of BBC radio, and we acknowledge that. But I hope it may be helpful to reception in the Far East generally. Masirah, which will now have new transmitters, will be taking on the broadcasting to the Indian subcontinent.
  There is a desire to improve the audibility of the service. That is being carried out in the full knowledge that many people in many countries follow

  627
  the external services regularly and set great store by their ability to receive those broadcasts.
  I repeat that it will largely nullify the effect that we hope to make if the broadcasts can be heard only by the comparatively few people who can afford highly sophisticated equipment. We are trying to aim at the sort of general audience that my hon. Friend the Member for Penistone mentioned, rather than at any narrow socio-economic class.
  With regard to local radio, I point out, as my hon. Friend the Member for Derby, North has said, that there are many more people who quote what someone has said about the Annan Report than who quote the report itself. We would do less than justice to a committee which sat for two-and-a-half years if we dismissed out of hand its consideration of local radio. There is a problem here. After publication of the report we allowed some three months in which representations could be received, as the hon. Member for Harborough said. We hope to introduce the White Paper in the New Year. That White Paper will make the Government's proposals for local radio clear.
  I believe that at present there are 20 BBC local radio stations and 19 commercial stations under the aegis of the IBA. What Annan suggested was that it would not be possible—in the present climate both of economics and the congestion of the air waves—for both to develop simultaneously.
  The Committee therefore suggested a new local broadcasting authority which would take on local radio among other duties. It said that it should be financed by advertising or that it should be operated by non-profit-making trusts. We would be wrong to ignore that aspect of the Committee's recommendations.
  Since the Annan Report was published, we have received about 2,000 letters on the subject, of which 1,300 have been about local radio and have largely been in support of BBC. These letters, along with a petition of about 60,000 signatories which was organised by BBC local radio in favour of the local stations, have been fully read and understood. The Home Secretary, for one, expressed himself as being impressed
  628
  with the loyalty which these stations have generated.
  My hon. and learned Friend the Member for Leicester, West (Mr. Janner) had the opportunity during a previous Question Time of putting this to my right hon. Friend who in turn put in his plug—if I can use that lather crude joke in this case—for Radio Leeds. But where some people outside the House—I do not accuse any hon. Gentleman of doing this—have gone wrong is that they appear to suggest that it is BBC local radio or nothing and that this was the alternative that was posed by Annan. It was not.
  Two problems immediately suggest themselves when we are considering whether the BBC or, indeed, the present independent network should carry on with its expansion. In order to expand drastically its local radio services, the BBC would either have to divert its resources from other developments within the national network or obtain more money through licences. On the other hand, with regard to independent broadcasting, there may be some problem of coverage, such as we experience with some of the independent television companies, where the notion of commercial viability contradicted, or appeared to contradict, the needs of community broadcasting in some of the more sparsely populated regions in the country.
  I have clearly in mind the experience of Wales, West and North, a television company that could not attract the advertising revenue and went out of existence. That is clearly a problem if independent broadcasting were to extend itself.
  Clearly, I cannot anticipate the White Paper. I do not think that hon. Gentlemen would expect me to do so. What I do say is that the Government's proposals are not so far advanced that they can ignore what has been said tonight. They will not ignore what has been said.
  Mr. Whitehead: One point which my hon. Friend has not touched on is the financing of the BBC fees. Is it to have an annual licence fee—which is effectively what it has got—or are the Government thinking in terms of a longer period of phasing with regard to financing?
  Mr. John: If I may propound John's Law, it is that an intervention almost

  629
  immediately precedes the point that was to be dealt with next. I wish to deal next with the question of the licence fee.
  I have in mind what my hon. Friend said, and I see the problem which arises with only an annual extension of a licence. But I agree entirely with my hon. Friend the Member for Penistone that there are certain economic objectives and imperatives which in the short run militate against a more desirable factor which is, obviously, to guarantee revenue to a public service over a longer period so that it may have more assurance in undertaking ventures.
  The decision on the annual renewal of the licence and the level of the licence fee was taken in the light of present economic conditions, and I expect that the White Paper, when it is published, will deal with the longer-term financing.
  The hon. Member for Harborough referred also to the early close-down of services on local radio. Clearly that is a matter for the BBC and its management of its programmes. It has to match its expenditure with its income, although I take the point made by my hon. Friend
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  the Member for Penistone that, above all, broadcasting should not be reduced to the highest common audience factor and that it should cater for local interests and minority tastes if it is to maintain the high level of which it is capable.
  In a very restricted financial position, the BBC has to consider how many people are up after midnight or two o'clock in the morning. I suggest that an audience of 635, which is the number of hon. Members of this House who regularly seem to be up until 2 a.m. or 3 a.m., is probably no justification for extending the hours of broadcasting. However, the BBC must judge that in the light of its experience.
  I have listened with great interest to all the suggestions which have been made on both legs of this broadcasting subject. If I have failed to answer any of the questions which have been raised, I undertake to do so by letter to the hon. Members concerned. We have understood the points which have been made and we sympathise with many of them. They will be taken into account in the decisions on broadcasting which we shall have to make on both counts in the coming year.

  TRADE POLICY (MULTI-FIBRE ARRANGEMENT)
  9.48 p.m.
  Mr. Mike Noble: At this time of the year, most people are turning their thoughts to the festive season. It appears from the empty state of the Opposition Benches that most right hon. and hon. Members, despite their constant declarations of interest in the textile industry and international trade, have gone off to stir their Christmas puddings and stuff their turkeys.
  I have a recurring nightmare that my Christmas party will consist of an unending dialogue with my hon. Friend the Under-Secretary and my hon. Friends the Members for Sowerby (Mr. Madden), Nelson and Colne (Mr. Hoyle) Bury and Radcliffe (Mr. White), and Oldham, East (Mr. Lamond), because every Christmas, Easter and summer we have a debate of some kind about textiles, and tonight is no exception.
  The subject for debate is not simply textiles; it is the Multi-Fibre Arrangement and international trade in general. At the outset, I must make it clear that although in previous years my hon. Friends and I have been critical of the Government's attitude towards international trade in the textile industry, that is not the case this year. We see my hon. Friend the Under-Secretary in the guise of Santa Claus rather than Scrooge.
  For many years now we have campaigned to reach a satisfactory level of imports of textile goods. We do not come to criticise the Government; we come to praise them, because the situation now is almost satisfactory.
  There are one or two points that I wish to press on the Minister, but no one can deny the fact that the Government have accepted the advice not just of the unions and employers in the industry but of my hon. Friends and myself. We have fought the good fight through the EEC and through the mandate that the Government accepted and the Community accepted subsequently. This has been pushed forward in a firm manner in the international negotiations that have taken place.
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  We are not the only supporters of that situation. Mr. Edmond Gartside President of the British Textile Employers' Association, speaking in my constituency and quoted in the Burnley Evening Star, said,
  "This present Government is the first of either party for very many years which is doing a good job for textiles."
  He was referring not simply to the Multi-Fibre Arrangement but to the assistance that has been passed to the industry in other ways.
  Before I talk about the Multi-Fibre Arrangement we must understand the situation that is facing the industry now. We are still in a critical position in the short term, and it will be some months before the Multi-Fibre Arrangement will have a substantial effect on employment in the industry.
  The carded yarn situation is the most critical in the whole industry. In June, stocks of carded yarn were 65 per cent. up on normal levels, and by October had reached 73 per cent. above normal levels. We have a serious problem developing in that sector of the industry and a number of redundancies.
  Within the cotton and allied textile areas alone we faced the loss of 3,000 jobs between October last year and October this year. My hon. Friend the Member for Nelson and Colne is at this moment fighting hard to preserve 350 jobs in the Courtauld factory in his constituency. The crisis continues.
  Many textile employees may get a Christmas card from the Government saying that the Multi-Fibre Arrangement has been signed, sealed and delivered, but they will have to enjoy it during an extended holiday because we have extensive short-time working over Christmas. Had it not been for the temporary employment subsidy there would be many more of my constituents unemployed. This year at 30th September, 73,000 workers in the textile industry as a whole had their jobs supported by the TES. Thus, we are talking tonight about an industry that still faces a very critical situation and is dependent very much for the restoration of confidence among employers and workers on the successful renegotiation of the Multi-Fibre Arrangement.

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  We all know the background to the arrangement. The present arrangement, which expires at the end of the year, was negotiated between 1973 and 1975. It was seen by the Government as being the answer to the textile industry's problems, but it was a comprehensive network of controls and the quotas were established at a level that took no account of the recession that has since taken place in the domestic textile market. It is still a story of continuing growth of import penetration and unemployment among textile workers.
  We see the present substance of the negotiations as being successful in dealing with the situation provided that one or two minor points are cleared up before the final signing next week. I understand that the present situation means that 25 or so bilaterals have been negotiated and agreed with the main supplying low-cost countries. I am sure that the industry would accept that the levels of imports are satisfactory, but a number of points remain to be settled.
  For example, we now have no agreements with India, Pakistan, Brazil or Egypt. Certainly the first three of those countries, India, Pakistan and Brazil, are substantial and significant suppliers of textile goods to this country, and any relaxation of the mandate must be opposed at all costs. Mr. Christopher Tugendhat, a member of the European Commission—Opposition Members should recall him—speaking in Rochdale on 14th October, said:
  "The Commission estimates that every thousand ton increase in the Community's deficit in cotton thread means a loss of 160 jobs in weaving. For every additional thousand ton deficit in cotton cloths there is a loss of 160 jobs in spinning and 300 in weaving. And every increase of a thousand tons in the deficit of shirts and blouses means 160 redundancies in spinning, 300 in weaving and 12,000 in manufacturing."
  It is against that kind of statement that we have to place the present level of imports from the countries in question, particularly Brazil, India and Pakistan.
  With cotton yarn, for example, last year Brazil exported 265 tonnes to the United Kingdom, and this year until October it exported 697 tonnes. India exported 6,200 tonnes last year and by October this year had exported 3,844 tonnes. Pakistan exported 348 tonnes
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  last year and this year until October had exported 374 tonnes.
  In woven cotton cloth, last year Brazil exported 578,000 square metres to the United Kingdom. This year up till October it exported 1,195,000 square metres. Last year India exported 173,478,000 square metres of cotton cloth and this year until October 135,173,000 square metres. Pakistan last year exported 65,954,000 square metres and this year until October exported 58,893,000 square metres.
  With figures of that size, even a relaxation of a fraction of 1 per cent. in the mandate would mean the loss of a substantial number of jobs in the textile industry in the North-West. What I must argue to my hon. Friend the Minister is that even the disappearance of the textile industry in the North-West would do little to resolve the problems in the economies of those three countries. Many people would argue that Brazil should no longer be counted as a developing country because it now has a sophisticated economy. The Government must make sure that the mandate that has been carried with 25 or so countries is maintained throughout the rest of the negotiations with the four outstanding countries. Only in that way can we avoid a substantial loss of jobs.
  The second area of concern in regard to the Multi-Fibre Arrangement is the transitional arrangements, which, as I understand it, were not agreed by the British Government but were thrown in by the EEC. There are two elements to the transitional arrangements. For goods covered by the existing quotas, it is my information that the industry accepts that it is normal practice to allow these in against this year's quota, and it is not particularly concerned about this. But there is an entirely new element in the situation. Because of the network of controls proposed, covering a wide range of commodities and a wide range of countries, it is proposed in the transitional arrangements, I understand, that new goods shipped before the end of December this year and arriving before the end of March next year will not be counted against the 1978 quota.
  If anything is designed to lead to the greyhounding of goods, as it is called, into this country, stirring up problems which, in the present critical state of the industry, could not be withstood, it is

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  that recommended transitional arrangement. I must tell my hon. Friend the Under-Secretary of State that the industry and the Members of Parliament concerned are totally opposed to it, and we hope that he will oppose it with every fibre in his body.
  Another problem will be created by certain anomalies which will develop. Many products—for example, Indian yarn—are currently subject to United Kingdom quotas. I understand that under the new arrangement they will become subject to EEC quotas. Does that mean that because a product is subject to an EEC quota it will have the three months' period of grace in which goods can be sent into this country without their being counted against the 1978 level? What will happen when these quotas change from being United Kingdom quotas to being EEC quotas?
  Third, we are concerned about documentation. One of the problems with the original MFA was that, whereas we set up a fine network of controls, my postbag and the postbags of my hon. Friends soon showed that there was considerable evasion. We found examples of free cycling of textile goods within the European Community, and we found examples—recent examples, I should add—of manufacturers or importers in Paris offering for sale on the British market duty-free goods which came from alternative sources. Like the little boy behind the Dutch dam, my hon. Friend and his Department have put their fingers in the breach whenever this has happened, but very often before they managed to do that the damage was done. We want a system of documentation which will ensure monitoring of free cycling and ensure also that where there are new sources or new products the breach is filled immediately so that damage cannot be done.
  That is how we view the MFA and the main problems which will arise—the four countries which have not settled, the proposed transitional arrangements, and documentation and control to ensure that the new agreement will not be evaded. I hope that my hon. Friend the Under-Secretary of State will give us some assurances tonight, and I hope also that my right hon. Friend the Secretary of State will carry with him to Europe a firm commitment backed by all of us
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  concerned on this side of the House, by the trade unions and the workers involved and by the manufacturers, and will stand absolutely firm on these outstanding questions as well as on the Multi-Fibre Arrangement as a whole.
  Mr. Doug Hoyle: Hear, hear. No surrender.
  Mr. Noble: The debate is about wider trade matters, too, and now is an appropriate time to talk about some of these, because the textile industry is unique in only one respect in trade in that it is the first. In terms of import penetration, the textile industry has merely led the way in the present high levels of imports coming in. Many other industries are threatened. The footwear industry in my constituency has an import penetration now over 50 per cent. Much the same applies to the car industry, the electronics industry and so on.
  The feature which many of these industries have in common is that they are based on high technology with easily transferable skills. In spinning and weaving, for example, Britain has often led the way in technology. In my constituency there is the research centre for Platt Saco and Lowell, which sells textile machinery all over the world and is making new discoveries. The Shirley Institute is renowned throughout the world for the work which it does in textiles.
  We have led the way, but now we find that the technology is easily transferred and the skills involved are often easily obtained. We now find a situation in the Third world and developing countries in which low wages and high technology are undermining industries in countries of the developed world. We are not saying that there should be protectionism to prevent development in the Third world. The Lancashire textile worker has a tradition and history second to none in dealing with the problems of the Third world. It was the Lancashire cotton worker who embargoed cotton from the Southern States of the Union 110 years ago to assist the fight against slavery, and that tradition continues today.
  However, some 80,000 people are finding that their jobs are threatened. That threat faces my constituents who are working in electronics, those in the car assembly industry and others—wherever

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  there is high technology industry with a transferable technology and skills which can be readily acquired. The General Agreement on Tariffs and Trade, which was designed to deal with the problem of world trade, is totally outdated and increasingly discredited because countries evade the main philosophies of the agreement by reaching understandings, operating blackmail and making gentlemen's agreements in order to control in some way world trade outside GATT. All they are doing is coming to terms with reality, and it is GATT that needs re-examining.
  Let us take, for example, the definitions of fair and unfair competition. The Secretary of State has said, about attitudes towards unfair competition, that today, in the mind of the developed world, unfair competition usually means competition that for whatever reason is of a kind that domestic production cannot meet. We must ask ourselves what that means. According to GATT it would mean if there was dumping, if there were Government subsidies or help, and so on, but it ought to include the circumstance in which the workers in indigenous industries are treated as nothing better than wage slaves, and that is what happens in much of the textile industry throughout the world.
  I have here a report from the International Textile Garment and Leather Workers' Federation dated December 1974 and entitled "Multinational Co-Operation in the Trade Unions". It said of the textile industry:
  "MNCs in the textile industries in Asia are either joint ventures or wholly owned by foreign companies. Some of the textile companies concerned are exclusively, or mainly, export oriented."
  That is obviously because there is no market because the workers cannot afford to buy the goods that they are themselves producing. It goes on:
  "The majority of MNCs in the textile industry originate from Japan."
  Surprise, surprise!
  It continues:
  "But other such companies come from other Asian countries in search of markets and lower wage and other costs. The majority of workers in the textile, clothing and leather industries in MNCs in Asia are still not organised in trade unions. Indeed in some Asian countries workers in MNCs are not allowed to form trade unions or to strike. Even where unions
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  are legally permitted, government policy frequently handicaps their growth. Sometimes the very absence of unions, or their being handicapped in the exercise of their functions, is presented as an incentive for investment by MNCs."
  That is absolutely disgraceful. If the workers of Lancashire were prepared to go hungry 110 years ago to free the slaves in the Southern States of America, today they want to see that fight carried to the under-developed and developing countries of South-East Asia, where people should enjoy the same rights and privileges as are enjoyed here.
  There is another myth about multinational corporations. We are told that they take employment to these countries. Another report by the International Textile, Garments and Leather Workers' Federation, issued in March 1976, says:
  "it is broadly accepted by expert opinion that MNCs do not provide a great deal of employment in comparison with the capital they invested. … The second reason why MNCs create relatively little employment is that their investment is usually highly capital-intensive. This certainly applies to the textiles and shoe industries despite the academic myth that these industries are labour-intensive. The recent example of the destruction of the hand-loom industry in Indonesia by MNC capital-intensive investment is illustrative of the damage that can be done in a relatively brief period by the MNC giants to industries that employ hundreds of thousands and upon which a whole way of life has been slowly built up over decades and even centuries. From 1969 to 1974 no less than US$ 1,156 million was invested by 97 foreign textile firms (mainly Japanese) in the Indonesian textile industry. This led to the slaughter of the Indonesian handloom textile industry which was reduced from 320,000 to only 50,000 workers. The cruel consequences of this flood of MNC capital was that no less than 250,000 Indonesian textile workers lost their jobs. Admittedly the modern MNC textile plants employed 70,000 new textile workers. But the net job losses were a huge 180,000 workers."
  That is the second myth about multinational companies which have been encouraged to go into these countries where they have destroyed employment. That example can be repeated in many of the countries in question.
  Another myth is that these corporations pay better wages. Let us look at that. The same report says:
  "One of the mighty myths about the MNCs is that they pay higher wages than domestic companies. If one thing is clear, it is that they tend to pay no more, and no less, than they are obliged to do by existing conditions in the countries in which they are established, including the strength of the local unions."

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  The multinational corporations sometimes pay even lower wages than domestic firms.
  The three arguments that have been put forward, not simply by hon. Members opposite but by free traders on this side of the House, are that if we restricted imports we should handicap the development of countries that badly need this sort of investment. However, that is not the situation.
  Workers in those countries are facing the same traumatic experience of the industrial revolution as workers in this country faced 200 years ago. It has taken 200 years to build the labour movement in this country to its present strength. We should use our experience, strength and knowledge to make sure that those workers do not suffer and do not go through the same sort of experience as textile workers in my area suffered throughout the nineteenth century. We should help them leap into the twentieth century at a reasonable pace by their own goods and the goods that we are producing. The question is how we can do this.
  The Secretary of State for Trade has argued recently that we need safeguard clauses in a new GATT which would allow more selective action to be taken in the face of disruptive imports. I concur with that. To use the words of one of my constituents, Mr. Tom Whittaker, the General Secretary of the Footwear Union, we need managed trading relations.
  At present we have a situation—and this is particularly true in the textile industry—where a minor breach in the wall can bring a flood of imports and create such a catastrophe that industrial capacity is lost for ever. Is that to the benefit of workers throughout the world, to the country producing the goods or to the importers in this country who are making a swift killing? I approve of the idea of safeguard clauses being introduced into the GATT.
  I would make a point that I have made repeatedly in the House. We also need a social clause attached to the GATT so that workers in developing countries can enjoy some of the advantages that our workers have. I know what the criticism is of this. It is that we cannot interfere in the internal Government
  640
  responsibilities of these developing countries. I wonder what the workers of those countries would say if we asked them. They would not say "For God's sake, stay away. Do not bring trade unions in. Do not have social security systems. Do not have free collective bargaining." What they need is a sustained campaign by the nations of the West to ensure that free collective bargaining and trade unions are introduced, not simply as a matter of economic convenience for them but as a matter of political responsibility and for democratic reasons.
  There can be no doubt whatsoever that there is a grave danger that democracy in the developing world will disappear. In many cases it has disappeared. All we are doing when we import cheap goods is propping up some tin-pot dictator who rules by terror. What we must do is make sure that democracy will flourish in these countries. The backbone of democracy—regardless of what Opposition Members may say—is a firm trade union movement. A fair measure of democracy is the size, structure and functions of the voluntary bodies and organisations and the non-State organisations in any community. The backbone of democracy in this country and in many other countries in the developed world is the trade union movement.
  We accept that. Why can we not say that that should be a fundamental feature of the developing countries as well? By our helping those countries to raise their standards, not only will they buy more of the goods that they are at present exporting to us, but it will mean a more international control of multinational corporations, which are the great givers to charities and which make noises about democracy, but which are bleeding these people dry. This is a crusade that this country ought to take up.
  I believe that we shall begin only when we can convince our Government, and probably the European Community, the United States and many other countries, that the fundamental rights that are enjoyed by workers here should be enjoyed by the workers of these developing countries.
  I conclude by simply reiterating that with which I started. The textile workers, employers and trade unions in my own

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  constituency and in the constituencies of my hon. Friends are looking to the Secretary of State for Trade to maintain a firm hold on the remainder of the Multi-Fibre Arrangement renegotiations. Our expectations are high. They are high because the Government have had the courage to stand up to the enormous pressures that have been placed on them, first of all in the EEC and later by the rest of the world. We applaud that courage. We ask now that between today and next Tuesday or Wednesday—whenever the signatures are finally put to the document—that courage should be maintained so that we can say to the workers in Lancashire that we are not bringing the goose home this Christmas, although the Christmas card is there, but at least the goose or the turkey will be there next Christmas, because we have established a secure and safe future for their jobs.
  10.19 p.m.
  Mr. Hal Miller: I am sure that the House is grateful to the hon. Member for Rossendale (Mr. Noble) for raising the very important subject of international trade policy and, in particular, the Multi-Fibre Arrangement. It is far too infrequently that we have the opportunity of debating these very serious matters.
  However, I beg leave to doubt whether people who are not involved immediately in their constituency interests could follow the hon. Gentleman in the suggestion that vast benefits will accrue to the workers in Indonesia, Africa, India and other countries by denying them participation in international trade and by denying them an industrial revolution—and by denying them, in fact, the very possibility of trade union organisation that the hon. Gentleman was so ardently and eloquently advocating. It is a preposterous suggestion.
  The hon. Gentleman's strictures about multinational corporations are apparently directed to foreign-based corporations. We hear little criticism of ICI or Courtauld no doubt because they are able to maintain some employment in the areas which are represented by Labour Members.
  Mr. Noble: I have in my possession a list of multinationals involved in international trade, including Courtauld,
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  Tootal, Carrington Viyella and ICI Fibres. I am critical of their attitude, not because their attitude is moulded by the strength of the trade union movement here but because they operate in countries in which high levels of profit are recouped and where trade union representation is largely reduced. I was critical of the Japanese multinationals which have moved into South-East Asia, into Malaysia and Indonesia.
  Mr. Miller: I hear what the hon. Gentleman says, but his ideas about the Japanese are as outdated as his other ideas.
  I wish to declare a past interest. [HON. MEMBERS: "Oh."] Labour Members appear to be objecting to my declaring a past interest. Some of them are not so nice about their past interests. They can confine themselves to present interests, but I declare a past interest in that for some years I was responsible for negotiating in Hong Kong certain textile agreements and for the operation of export controls. I attended the first United Nations Conference on Trade and Development, which became generally known as UNCTAD. Later I was a director of a textile manufacturing company in this country. [Interruption.] If the hon. Member for Bury and Radcliffe (Mr. White) wishes to intervene, I shall try to answer his inaudible mutterings. Obviously he has not the courage to put a question to me and, therefore, I hope he will keep quiet. I repeat that I was a director of a textile manufacturing company which from 1969 provided a steadily increasing amount of employment in the North-West. I was also employed until three years ago as a director of a textile importing company.
  Mr. Noble: Oh.
  Mr. Miller: I shall outline to the hon. Gentleman some of the benefits of that experience when I discuss the matter of import levels.
  I wish this evening to address myself to the subject of trade policy and to illustrate my remarks by referring to the Multi-Fibre Arrangement. That arrangement was a freely-negotiated derogation from international trading rights under the GATT voluntarily entered into by exporting as well as importing countries. The hon. Member for Rossendale mentioned Pakistan, India, Egypt and Brazil

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  —countries which subscribed voluntarily to the Multi-Fibre Arrangement.
  I wish to point out that the EEC's negotiating basis is in direct contravention to some of the main principles of the Multi-Fibre Arrangement. The people of Hong Kong and their Government are particularly concerned about this derogation. The concept of disruption has been done away with in the EEC's negotiating mandate. We have moved to the concept of a global quota, which was familiar to EEC negotiators before United Kingdom entry.
  I was interested to hear echoes in the hon. Gentleman's remarks of the well-known French approach towards a managed market. Those who are most opposed to the EEC now appear to be in favour of the principle of the managed market. But when we are considering disruption and the principle of "globalisation", let us remember that that embraces only 60 per cent. of trade and that the other 40 per cent.—a growing percentage—is accounted for by trade between developed countries.
  Please do not let hon. Members from Lancashire imagine that because they have shut off imports from the developing countries they are to rejoice in the fruits of the market that is left. We have had the experience in Hong Kong of imports from America and Canada taking up that part of the cloth market in this country that we voluntarily gave up to protect the Lancashire industry. Do not let anyone say that since 1959 the people and the Government of Hong Kong have not demonstrated and carried the cost of a real understanding of the difficulties of which the hon. Member for Rossendale spoke. The people in Hong Kong share with him the very real disappointment that despite the 18 years of restraint we have tonight to hear once again from the hon. Gentleman that the Lancashire industry is in a stricken condition.
  Do not let anyone lay responsibility at the door of Hong Kong, where restraint has been exercised over the past 18 years, allowing other newcomers to enter the market. I was surprised to hear the hon. Member for Sowerby (Mr. Madden) at Question Time earlier this week criticising Hong Kong when he knows that on his side of the Pennines Hong Kong is the sixth largest market for woollen textiles,
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  and his comrade, the candidate for Huddersfield, was actually in the Hong Kong Government office asking whether there was a likelihood that exports of woollen textiles to Hong Kong from this country would be endangered if Britain went ahead in insisting on the agreement contrary to Hong Kong's interest under the Multi-Fibre Arrangement.
  The derogation from the principle of disruption to which I shall refer later, is a most serious matter in international trade.
  I wish to move now to the second derogation from the principle of the Multi-Fibre Arrangement, which explains the position of the developing countries specifically named by the hon. Member for Rossendale—namely, Brazil, India, Egypt and Pakistan. I refer to the cutback of trade levels for newcomers. It is a most curious concept. It is the analogy of the overflowing cup—that to prevent the cup overflowing it is allowed to be filled only to a certain level below the lip so that any later additions to it may not overflow the rim.
  That is a direct derogation from the Multi-Fibre Arrangement and all its predecessors, which made strict provision for the roll-back to be employed where disruption had been shown. The situation was particularly severe in 1976. I refer to the levels that were adopted under the EEC negotiating position. It was a year when the United Kingdom economy was unduly depressed. I shall not go into the political reasons, but the economy was unduly depressed and the exchange rate militated against imports of any description. During that year the landings from Hong Kong were below those of 1975, which in turn were below those of 1974. That is a direct and specific derogation from the freely negotiated terms of the Multi-Fibre Arrangement.
  Mr. James Lamond: I am following the hon. Gentleman's argument very closely, and I admire the spirited way in which he is putting it forward. However, I am sure that he would like to be fair. He said that imports from Hong Kong had fallen in the last two years. That is to be set against the background of a depressed market generally. As a proportion of total sales here, imports have beer increasing.
  Mr. Miller: I shall point out why that is a totally inadequate basis on which to negotiate a five-year arrangement.
  I am now coming to the need for a review of these arrangements in the light of market conditions. I think that the hon. Member for Oldham, East (Mr. Lamond) will agree that there is no logical, economical or political reason why the exports of one established trader should be cut back to make room for putative trade from countries which have not yet participated and have not established any manufacturing or trading capacity, which, indeed, may not come to pass.
  Will the Under-Secretary of State tell us what will happen if at the end of the first year or the first period of this new five-year arrangement the vacuum that is left is not filled by imports from newcomers? Will it be redistributed among established traders for ensuing years or will it be given away to the developed countries?
  I want now to move specifically from the Multi-Fibre Arrangement, to trade policy as a whole, to which, in all fairness, the hon. Member for Rossendale addressed himself at some length in an attempt to establish, as I said in my initial remarks, that a favour would be done to developing countries if they were confined to hand-loom operations and denied the benefits of technology, increased wages and better working conditions from investment in modern textile manufacture.
  Mr. Noble: I said that the multinational corporations, according to the evidence, have not paid high wages. They have paid the rate that the market there will bear. With the massive unemployment situation there, they have paid putative wages. Yesterday in The Times, Mr. William Rees-Mogg quoted wages in Malaysia at two dollars a day. Does the hon. Gentleman recognise that bringing in capital-intensive industry, destroys rather than creates jobs? Does he also recognise that industries often move to areas where trade unions are banned or discouraged, where there is no free collective bargaining and no social security system, so that they do not have to pay the on-costs?
  Mr. Miller: I listened to the hon. Gentleman with some care. I was a director
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  of a large textile manufacturing company with factories in Nigeria and Ghana. Therefore, I have direct experience—
  Mr. Noble: How many trade unions did they have?
  Mr. Miller: They were certainly unionised—of the beneficial effects of investment. It is all very well for the hon. Gentleman to laugh. I am pointing out from practical experience the increases, if he will listen as I listened to him, in wages and employment that were brought to those countries by that kind of investment. I am proud to say that the first polyester fibre plant in Africa has now been opened by that company, with which, unfortunately, I am no longer connected. I am trying to show that those investments had a real effect on those economies. In fact, 10,000 jobs were created in Nigeria.
  Before the hon. Gentleman gets carried away by the benefit of unionisation and wages, I should like to refer him to a recent report of the Low Pay Unit regarding conditions in the garment industry in this country. It points out that there is a 50 per cent. turnover in employment and that girls of school leaving age are paid totally disgraceful wages which may be below the take-home pay of people in Hong Kong. What are we protecting? [Interruption.]
  Mr. Speaker: Order. Peace on earth and good will towards men—we are on the very fringe of it. I can hear the hon. Member quite well. If hon. Members listened carefully, they would hear him as well.
  Mr. Miller: I should like to remind the hon. Members for Oldham, East and Rossendale that a large proportion of the textile workers in their constituencies, particularly those on night shifts, are Asian immigrants. The hon. Member for Sowerby would recognise that that is also the case on the other side of the Pennines.
  Mr. James Lamond rose—
  Mr. Miller: I shall get on. The benefits of unionism and high wages are not all that apparent in some sectors of the industry in this country.
  Mr. James Lamond: I have listened as closely as I can, and it is interesting to hear the other point of view put so

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  well. I did not follow the point that the hon. Member made. I think that he said that I and others should remember that the night shift in the textile industry in our constituencies is, in the main, manned by Pakistani workers. I accept that but what is the hon. Member's point?
  Mr. Miller: I was trying to say that the benefits of unionism and supposedly higher wages and protection for Asian workers have not necessarily been fully extended in this country. [Interruption.] If hon. Members have patience I shall continue. If people in developing countries with transferable technology and a comparable level of wages—as I have illustrated from Hong Kong—are able to produce a competitive and satisfactory product we must ask why this has not happened in this country.
  The company with which I was connected set up a cloth manufacturing enterprise in this country in 1969. I am proud to say that it beat hell out of imports from India and Pakistan.
  Mr. Noble: Name it.
  Mr. Miller: I shall be happy to name the firm to the hon. Member later. From my experience I can say that when high technology is introduced in this country and is worked effectively it can easily compete with allegedly low-cost imports from developing countries.
  Mr. Michael McGuire: Give way.
  Mr. Miller: I have given way many times. I am trying to come to a conclusion.
  This is most important for the international trade policy of this country, for the North-South dialogue and for the future of our relations inside and outside the EEC. I was disappointed to hear the Secretary of State say in reply to questions earlier this week that there was an imbalance of trade with Hong Kong. He totally omitted to take account of invisible trade, I presume, when he accepted that that imbalance existed. Far less did he take account of any trade generated in Hong Kong as a centre for United Kingdom trading operations in the whole of the Far East.
  But the important question is how developing countries are to develop. There used to be the category "least
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  developed" or "less developed". Then we envisaged the gradation to "developing". This is all chronicled in the proceedings of UNCTAD. Now, lo and behold, these countries are supposed to become "developed". The hon. Member for Rossendale said that Brazil was a developed country. Am I to assume from that that he has no objection to trade with Brazil without quota as he has no objection to trade with the United States and West Germany, and perhaps with COMECON countries, although I do not know about that?
  Does the hon. Member accept that a country may become developed and in that case should not have these safeguards imposed against it? Does he imagine that the future of our trading relationships in the world is to be governed entirely on the basis of the managed market, in which case it would be a great deal more honest if he said that there should be restrictions on Canada and the United States, both of which I know from my experience took advantage of Hong Kong's restraint to increase their exports of cloth to this country?
  Mr. Noble: Does the hon. Member not agree that trade with Brazil in footwear and textiles should be conducted on the basis of reciprocal arrangements? Does he not agree that Brazil is seeking in the present negotiations almost to pose as a developing country, whereas in many respects, particularly in terms of technology, it is highly developed? Does he not think in those circumstances that if it wants an agreement on textiles it should offer us the same opportunities as it is asking of us?
  Mr. Miller: I can see that, but the hon. Gentleman is still insisting on barriers to trade from Brazil. I am not shirking this question. Take Hong Kong as an example. It was a developing country, but it has moved up the scale to "more developing", and in some senses in its textile trade it is now a "developed" country. There are no barriers to United Kingdom trade with Hong Kong. It is the United Kingdom's sixth best customer for worsted and woollen piece goods. It is a very valuable export market.
  I am astonished and depressed by the fact that the United Kingdom takes such a miniscule percentage of total Hong Kong imports. The figure is 5 per cent.

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  There is no trade barrier. Hong Kong's imports from this country are roughly equivalent to four times our exports to China, to the total level of our exports to India, and to about two-thirds of cur exports to Japan.
  We must answer some serious questions about that performance. The woollen textile industry has shown us the way. I suggest that in dealing with these difficult questions the criterion should be not import penetration but production as a whole. I know that Hong Kong has accepted for the past 18 years that these are difficult questions. Otherwise one is not taking any account of the United Kingdom proportion of production that is exported, and that would particularly apply to woollen textiles, as I have remarked more than once this evening.
  What we have to grapple with is how "developing" countries are ever to become "developed". How are they to increase their proportion of world trade? All the evidence we have before us at the moment is that trade is increasing between developed countries, the most notable example being West Germany. The Minister responsible, according to a report in the Financial Times by-lined on 8th December, said that that country already accounted for a large proportion of trade in textiles inside the EEC. This is the question to which we have to address ourselves.
  A notable contribution to that discussion has been made by the author of the Fabian Society pamphlet, Series 335, entitled "Import Controls—the Case Against". He develops a very coherent argument that intra-developed countries' trade is on the increase and that the barriers we are discussing this evening are all directed against the trade of developing countries. We are up against not only political and philosophical difficulties but very real economic and practical difficulties. That is why I very much welcome the opportunity that the hon. Member for Rossendale has given us this evening of making these remarks.
  We simply have to come to grips with this problem, and I do not think that this insistence on the EEC derogating further from the Multi-Fibre Arrangement is at all helpful in the context in which I have been discussing it, although it is understandable from the point of view
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  of the interest of the hon. Gentleman whose constituents are most immediately concerned.
  The United Kingdom has traditionally been a trading nation, with a population too large to support by our own agriculture. We have to import raw materials and export finished products. I was listening to a Member of the Tribune Group saying that in the House in those terms last week. In this context it is extraordinary that we are now concentrating, apparently, on reducing the volume of trade. I cannot see how that can be in the long-term interests of this country.
  It is highly significant that West Germany already has a higher share of imports of textiles from Hong Kong than the United Kingdom has, but the pressure is all from the United Kingdom and not from West Germany, although the job loss in West Germany has been higher in textiles than it has been in this country, and there are more jobs at risk. This is on the Germans' admission, because they have been redeveloping their industries and moving to a more capital-intensive form of textile manufacture, with an increasing share of intra-EEC trade, specifically in garments, as a result.
  We had exactly the same experience in Hong Kong when conducting negotiations with the United States of America. The United States of America was always claiming disruption and loss of employment. What was happening was that the whole of the American textile industry was being re-located from the north-east down to the south-east, and we carried the can for that. We were restricted in order to facilitate that redevelopment. Despite the difficulties, with which I am very familiar and which I understand and accept, I ask Labour Members to try to grapple with this very real problem.
  In conclusion, I would say that the consternation—it is not a word that I use lightly—created in Hong Kong by these, two derogations from the Multi-Fibre Arrangement by the EEC is very well founded. Already that example has spread to other markets. The United States has already pressed for renegotiation of its agreement with Hong Kong, although it was concluded only as late as September this year. Because the EEC derogation from the MFA has

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  leaked out, Hong Kong is now being expected to renegotiate its agreement with America.
  The Nordic countries have also taken up this challenge. I am not talking theoretically when I say that there is a real risk of spread. It is not confined to other countries with textile products only. That is the fear of Hong Kong and other developing countries which are watching the situation closely with regard to a spread to products other than textiles. Footwear and electronics have already been mentioned.
  We must therefore ask ourselves where we in this country are leading world trade policy. I believe that it is the United Kingdom which is leading the EEC in this respect. I have always been a supporter of the United Kingdom's entry into the European Community because I believed that we would lead that Community towards adopting an outward looking policy for world trade.
  Indeed, I remember the welcome given in this House to the conclusion of the Lomé Convention by the right hon. Member for Lanark (Mrs. Hart) and the good wishes that accompanied the success of that agreement. But it is no good wishing this theoretically. There are practical implications.
  Just as Hong Kong always recognised the practical implications for the United Kingdom—it has accepted restraint since 1959—I am asking Labour Members to make a similar effort of imagination and to accept that there are very real consequences of wishing the Third world to develop and of trying to get the EEC to adopt a more outward-looking posture.
  I therefore believe that we shall have to have a review of these arrangements after one year of operation in order to see what has happened particularly with regard to this notional allowance for trade from newly developed manufacturers who have not yet established any performance at all, and to see what has happened in respect of the increase in unrestricted trade from developed countries.
  Those nice, cosy developed country trading relationships need to be brought under much closer examination. If the hon. Member for Rossendale believes in a managed market, I believe that the
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  compass should extend to trade from developed countries to make certain that the restraint borne by the developing exporters is not taken advantage of by the developed exporters. That is the history of Hong Kong's whole trade in textiles since 1959, and it can be demonstrated to be so.
  I am calling for a review of this arrangement to make certain that the restraint accepted by Hong Kong is not exploited by other developed countries. I am asking the United Kingdom Government to re-examine their trade policy in the EEC towards developing countries as a whole. Finally, the people of Hong Kong ask that the United Kingdom Government reflect on their responsibility towards the people of that still remaining Colony.
  10.55 p.m.
  Mr. David Young: I bring a simple message from my constituents in Bolton. In the town, during the past eight years, we have seen 50 mills reduced to 28 and we have had 6,000 people made redundant. However, having talked to both unions and employers, I know that they agree that this Government have done more to help the textile industry than any other Government in the past 20 years. But that does not alter the fact that most of the companies are keeping going on temporary employment subsidy, and that if we cut off TES, there will be thousands of redundancies in the textile industry.
  I tend to argue—and I make no apology for doing so—that the skills of the British textile industry and its work force should be maintained against all comers. It is for that reason that I ask the Government to maintain the position that they have taken in negotiating extremely toughly on behalf of the British textile industry.
  It may be easier in certain other areas, but in the North-West no Government for 20 years have provided sufficient diversification. It is easy to talk about closing down industries if there is somewhere else for people to go. We are fighting not simply for textiles but for many inherent British skills and for maintaining our technology.
  I am not arguing essentially for soft-bedding. But I am told by the unions and managements that if recent levels of

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  incoming goods from abroad continue, mainly from the underdeveloped countries, the textile industry in Bolton will go out of existence.
  I ask the Minister once again to preserve British interests. In saying that, I repeat that I am not implying that there should be any soft-bedding. But there are many means of veiled support which go to other areas, and I have never felt that the way to aid underdeveloped countries was on the basis of their exporting on the balance of low wages.
  I thank the Government for what they have done so far. I ask the Minister to continue with the action that he has started and to maintain his tough pressure, in the interests of my constituents in Bolton.
  10.58 p.m.
  Mr. Doug Hoyle: We heard an inspired speech from my hon. Friend the Member for Rossendale (Mr. Noble), and we have just listened to the intervention of my hon. Friend the Member for Bolton, East (Mr. Young). But, between their contributions, we had a most unusual speech from the hon. Member for Bromsgrove (Mr. Miller). I am only sorry that the hon. Member for Macclesfield (Mr. Winterton) was not present to hear it, because I am sure that he would have been disappointed and dismayed by the message being put across by his hon. Friend, as I am certain all Conservative voters in textile areas will be when they read his speech. It was a defence of a Colony, Hong Kong, which I do not regard as part of the developing world. It is an area which has had a lot of investment from many of the multinational companies. What it has not kept up with is the level of wages in the rest of the developed world.
  I noticed, too, that the hon. Member for Bromsgrove did not mention the fact that trade unionism in Hong Kong is very weak. I was there quite recently, and I was shown two of Hong Kong's show pieces. One is a large electronics factory. The other is a large textile mill. I asked the managements of both factories whether they recognised trade unions. The managing director of the textile factory had to ask the general manager, and of course the answer was "No". In
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  fact, they had no intention of doing so. In the textile mill, which was very modern, some of the safety conditions were a disgrace to any country in the world, and would not be tolerated here. I would have preferred the hon. Member for Bromsgrove and Redditch to argue for better conditions for workers in Hong Kong. I hope that next time he goes there he will look at some of the ways in which conditions could be improved. I feel very sorry for the workers who have to work in these conditions.
  Mr. Hal Miller: I think that I lived in Hong Kong rather longer than the hon. Member visited there. I could show him weaving sheds operating to this day in North-East Lancashire, so that he could compare the conditions there with those in Hong Kong.
  Mr. Hoyle: Indeed, I would be delighted to go to any mills that the hon. Member names in North-East Lancashire. He would not be able to show me conditions there that were in any way comparable with those in Hong Kong.
  Mr. James Lamond: Would my hon. Friend make clear that it is not fair to compare the worst in North-East Lancashire with what we presume to be the best in Hong Kong, since it is used as a show piece?
  Mr. Hoyle: My hon. Friend makes a very good point. I am delighted to look at the worst in North-East Lancashire because I know that area very well. In the mill I visited in Hong Kong they were weaving denim. My constituency has the largest manufacturer of denim in this country and that factory has just spent £500,000 on an air-conditioning plant alone. When I was in Hong Kong there was not a single extraction fan to be seen. These are the conditions that I am talking about. I would willing go with the hon. Member to look at any mill he names.
  I have often joined the hon. Member in his fights and applauded hi actions in complaining about the import of Japanese cars into this country. How ever, he seems to apply different standards when he is considering the interests of the motor industry. He tells a rather different story then from when he is talking about textiles.
  Mr. Hal Miller: That is a travesty of the truth. I supported Government aid to the textile industry and I supported Government aid to the motor car industry. What worries me in both cases is that good use is not being made of it.
  Mr. Hoyle: I was talking about the hon. Member's campaign on imports.
  Mr. Max Madden: The answer to the dilemma of the hon. Member for Bromsgrove and Redditch (Mr. Miller), who seems to have gone from the Back Benches to the Opposition Front Bench during this debate, is that he represents a car constituency. His eagerness to tackle Japanese car imports flows from the fact that he represents a car constituency rather than a textile one.
  Mr. Hoyle: There is a lot in that. I would rather see the hon. Member for Macclesfield on the Front Bench during a debate on textiles. At least he appreciates the difficulties faced by the textile industry.
  The hon. Member for Bromsgrove and Redditch does not seem to recognise the facts. Listening to his speech one would not have known that in the three years 1973–76 3,500 textile factories closed in the EEC, that roughly 500,000 jobs were lost—or 15 per cent. of the labour force—and that many of those lost jobs were in areas where no alternative work was or is available. That is the sombre picture in the industry which we are discussing.
  As regards the Multi-Fibre Arrangement, I join my hon. Friend the Member for Rossendale in saying that the Government have done a first-class job for the textile industry. We are proud of the job they have done. What it means is that if that effort is followed through and we have a new arrangement there will be a more secure future for our textile industry. All of us with textile interests are very pleased with what has gone on. We know only too well that over many years the textile workers have said that no Government begin to look after their interests and that, because of other exports from this country, they are the forgotten people. "Very often", they say, "Britain is prepared to accept textile imports because even if we lose our jobs there will at least be other British exports taking our place."
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  Now, however, the Government have realised that something had to be done, since otherwise there would not be a textile industry to discuss.
  My hon. Friend the Member for Rossendale was right to point out that in countries such as Hong Kong what is needed to protect the workers is a strong trade union movement. It is certainly not there at present; nor is there any sign of pressure being exerted to build up the trade union movement. We know that it is derided on political grounds, and that is one of the misfortunes in Hong Kong, but there is need for the trade unions to be developed there.
  The idea of a planned import policy will find more favour on these Benches than it will with the Opposition, because we believe in a planned economy. We certainly need it, and we need it badly in the textile industry.
  In giving praise to the Government for what they have done I must add, however, that there will be a difficult period in the interim before the new Multi-Fibre Arrangement comes in and before it is of benefit to the textile industry. There have been closures already. In my constituency there is the possible closure of 350 jobs before Christmas. It will be a bad Christmas present for those workers if they receive their notices. This is a multinational company, Courtauld, and there is another point to be made in this connection.
  I realise that planning agreements are not the concern of the Department of Trade, but in the context of this debate it is right to point out that a planning agreement with a multinational company is essential, because we need to look not only at its policies for investment in this country, not only at its sales in this country and at its manpower requirements, but at its global requirements and its corporate plan. Especially in the case of a British multinational company, that is the sort of thing that a planning agreement would do.
  In the factory to which I have referred, although we are having discussions with the company, we are reacting when the closure is almost imminent. If, on the other hand, we had had a planning agreement, the workers at Oakbank Mill, Nelson, would have been aware, before this critical stage, of what the Courtauld

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  policy was. If they had been so aware, they would, I am sure, have been able to press on the management the steps which ought to have been taken to avert a catastrophe of this kind. No one can come to the House and say that the fault for any particular closure lies with the workers in the industry or that it has been due to labour disputes or lack of co-operation by the trade unions. Indeed, in the factory that I am now talking about nothing but praise for the workers is given by the management. If there is a fault it must be looked for elsewhere, in the marketing policy and management of the company, but certainly it does not lie with the trade unions there. That is why we need to look at the position.
  I repeat that we need from the Government, if we are going to have the benefit of MFA, some help meanwhile for the companies which are finding things so difficult with the market as it is—not only in the United Kingdom but elsewhere—and with a flat economy. They need Government help, and the sooner we can resolve our policy on TES—I see that an Industry Minister is now in the Chamber—the better it will be for the textile industry. One of the calamities that could befall us is that, although we are now able to offer a better and rosier future, some of the companies that need help now may not be there, unless help is given, to receive the benefits of the Government's integration through the EEC in the MFA.
  One thing is absolutely certain: if there is an upturn in world trade we shall again find that we have allowed our textile industry to decline so much in the recession that we shall have to fill the gap with imports.
  Mr. Noble: Looking at this purely domestically, would my hon. Friend not agree that with the present level of stock the most vital thing to deal with the problems of textiles and unemployment is a substantial reflation in the Chancellor's next Budget?
  Mr. Hoyle: I could not agree more, and we have argued for reflation of the economy.
  I turn to another point that needs to be looked at. The Government should meanwhile be looking at Government contracts to see whether we cannot phrase
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  in some Government contracts throughout many of the mills. I have been doing a survey on Government purchasing, and, while in many instances it is good, I was extremely surprised to receive a reply about something that we had thought was made in this country—prison uniforms. This is a small order. Increasing from 50,000 metres of imported cloth in 1976, we ordered overseas 480,000 metres in 1977. I should have though that these orders could have been placed with the British industry now.
  We need a reflation of the economy, Government orders and a definite statement on TES or some alternative to it. I see that there is now some interference from the Commission on TES. I hope that new arrangements can be worked out and that help can be given to comparries when they have used up TES.
  Mr. Noble: The Opposition do not want TES.
  Mr. Hoyle: I know that some of my hon. Friends believe that the Tories do not want to know about any subsidies unless there is a specific case. The Tories agree to subsidies in certain instances and then there is a change of tune in relation to, for example, motor cars and textiles coming into the country. However, a different point of view is usually put forward by them.
  We need help to carry us over the next few months. If that is provided, there will, thanks to the Government, be a better future coming. I must emphasise that we want companies that are in difficulty now to be able to hang on. We therefore need Government assistance extremely soon.
  11.15 p.m.
  Mr. Nicholas Winterton: I wish to make a brief contribution as an hon. Member representing an area which has considerable textile interests and as the vice-chairman of the all-party textile group. I hope that the hon. Member for Oldham, East (Mr. Lamond), who is chairman of that influential and hard-working group, will also be able to make a contribution.
  I congratulate the hon. Member for Rossendale (Mr. Noble) on raising this important subject. I hope that it will not be considered unfortunate by my hon.

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  Friends if I immediately criticise the few words that I heard my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) utter. A long-standing parliamentary engagement prevented me from being here at the beginning of the debate, but I feel that my hon. Friend was presenting a very unfortunate view which I do not endorse.
  Mr. James Lamond: I hope that the hon. Gentleman informed his hon. Friend that he would be attacking him as viciously as he is.
  Mr. Winterton: I commented as my hon. Friend passed me that I would be referring to his contribution, but I mentioned nothing about attacking him as I am not doing so. I am merely saying that on this side we do not hold the same views as my hon. Friend implied on the importance of the renegotiation of the MFA for the textile industry.
  My hon. Friend the Member for St. Ives (Mr. Nott), the Opposition spokesman on trade, made an important speech on 21st February this year about the textile industry. I am delighted that he is present for this debate. It clearly indicates that the Opposition, unlike the Liberal Party, are concerned about textiles. It is a pity that the hon. Member for Rochdale (Mr. Smith) is not here.
  Mr. Madden: The hon. Gentleman has referred to the speech of his hon. Friend the Member for St. Ives (Mr. Nott). Can he tell us whether that speech was polished up by the public relations agency with which his hon. Friend has been associated?
  Mr. Winterton: I do not wish to make a direct comment on that matter. I made considerable representations to my hon. Friend, and I believe that some of those views appeared in his speech.
  Mr. John Nott: On a point of order, Mr. Speaker. May I refer to the intervention of the hon. Member for Sowerby (Mr. Madden)? As I have kept silent on the matter of public relations agencies for four weeks, would it be in order for me to ask you whether it is in accordance with the normal courtesy of the House for an hon. Member to put on the Order Paper a motion about another hon. Member and persistently refer inaccurately to that
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  hon. Member—using invention and imagination to a quite astonishing extent—without first asking that hon. Member to whom he is referring whether what he intends to say on the Order Paper or in points of order to you is accurate? I am sorry to spring this on you. It has not seemed worth while to say anything for four weeks but this seemed an appropriate moment since I happened to be here for this debate.
  Mr. Madden: Further to that point of order, Mr. Speaker. I am sure that you will recall that the matter to which I have referred was the subject of exchanges on two days between myself, my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) and the right hon. Member for Penrith and The Border (Mr. Whitelaw) and others. It seemed then to be an extremely confusing situation. My endeavour in tabling the motion to which the hon. Member for St. Ives has referred was to elucidate the truth from the confusion that seems to pervade the Opposition on these matters.
  Mr. Nott: If the hon. Gentleman had asked me. I would have told him.
  Mr. Speaker: The answer to the point of order raised by the hon. Member for St. Ives (Mr. Nott) is that the motion is clearly in order, otherwise it would not have passed the Table Office. I can comment no further on the matter.
  Mr. Winterton: I am not sure how my speech will appear in Hansard, when Hansard is printed. I am used to being involved in controversy, but on this occasion I appear to be the innocent party.
  Mr. James Lamond: For the first time ever.
  Mr. Winterton: Having perhaps lost my train of thought and my line of argument, I return to saying that we are basically debating textiles and the renegotiation of the MFA. Like one or two other hon. Members who have already spoken in the debate—and although it may sound strange coming from the Opposition Benches—I want to congratulate the Government. To an extent they have been sustained in their endeavour by support from Opposition Members. I congratulate the Government on their very firm attitude in the renegotiation of the MFA through the EEC.
  Mr. Noble: Will the hon. Gentleman answer—
  Mr. Speaker: Order. Perhaps I may remind the hon. Member for Rossendale (Mr. Noble), who, in his interesting speech, addressed us for 32 minutes, that other hon. Members are waiting for their debates to come and that he has made four interventions since his own speech.
  Mr. Noble: Thank you, Mr. Speaker. I shall be brief.
  We accept the hon. Gentleman's rôle in the fight that we have had for the textile industry. He has played a very honourable role. But it is significant that one of his hon. Friends in the House tonight has spent 30 minutes attacking the Government for their attitude towards the MFA. That hon. Member sounded like the Member for Hong Kong, not Bromsgrove. It is unreasonable for the hon. Gentleman to pretend that the Opposition have been anything but dragged screaming and kicking behind the Government on this issue. The Opposition have not shown the kind of support that the hon. Gentleman has shown.
  Mr. Winterton: I am grateful for the hon. Gentleman's kind remarks about me and my rôle concerning textiles. However, I made it clear when I rose to speak that I did not associate myself with the remarks of my hon. Friend the Member for Bromsgrove and Redditch. I went on to say that I believe that my hon. Friend the Member for St. Ives, who is the shadow spokesman on trade, made a very positive speech on 21st February, indicating quite clearly the Conservative Party's policy on textiles. Perhaps to some extent the Government have been sustained in their policy by the fact that the Opposition have given them fairly strong support in the line that they have taken.
  I am delighted that the Under-Secretary is present. He has played a major part in representing textile interests. I pay tribute to him for the strength that he has sustained in the attack through the EEC. I know that in the textile industry as a whole the work force, the trade unions and the employers are extremely grateful to him for what he has done and for what the Government have done in the very strong line they have taken in the renegotiation.
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  This is a very important debate. I was not present to listen to the speech of the hon. Member for Rossendale. However, the temporary employment subsidy was undoubtedly mentioned. I am a strong believer in market forces and a market economy. I believe in fair competition. For many years our textile industry has faced anything but fair competition. It has faced very unfair competition. For that reason, I support the continuation of the TES or an alternative. At Question Time earlier this week I put a supplementary question to the Secretary of State as to whether his Department was considering any alternative to TES, because, as we have heard in the debate, we shall shortly, perhaps, fall foul of our European partners in the application of TES in the United Kingdom. It is right and proper that in plenty of time the Department of Employment, and perhaps other Departments, should consider an alternative to this necessary assistance to the textile industry.
  Many minutes ago—the hon. Member for Rossendale spoke for about 32 minutes and it looks as if I might be speaking for as long, but if hon. Members study Hansard they will see that I spoke for only half of the time that my speech lasted because of the interventions—I said that I wanted to quote from the excellent speech of my hon. Friend the Member for St. Ives. He said:
  "By any standards the textile and clothing industries are of great significance for our country. In spite of the major reduction in employment which has taken place, we are still concerned"—
  I am delighted that my hon. Friend the Member for Bromsgrove and Redditch has returned to the Chamber because the point that I am making in quoting my hon. Friend's speech is important. My hon. Friend continued:
  "with a larger employer than the whole of the coal and steel industries put together. Although I have not had time to do any sums, it is possible that we are talking about an industry which, employing 800,000 people, is larger in numbers than the motor industry and its allied trades. The industry is of great significance to our economy."—[Official Report, 21st February 1977; Vol. 926, c. 1104.]
  That clearly indicates that my hon. Friend, to whose presence tonight I pay tribute, is clearly aware of the importance of the textile industry to this country.

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  I think that the observations of my hon. Friend the Member for Bromsgrove and Redditch—I managed to hear only part of his speech—indicated that he was presenting a rather one-sided view and that he is not aware of the problems facing the industry. Unlike the motor car industry, which, sadly, has been riddled with industrial disputes which have caused many of the problems which face the industry, the textile industry has had an industrial relations record that is second to none. The problems that face the industry are not basically of the industry's own making but the result of unfair world competition. I take exception to the position that my hon. Friend adopted over the MFA and the textile industry—
  Mr. Madden: You will never speak to him again.
  Mr. Winterton: I do not believe that that is the case. A great deal depends upon the renegotiation of the GATT Multi-Fibre Arrangement. We have heard about the agreement that has been made with Korea and Hong Kong. Reference was made by my hon. Friend the Member for Bromsgrove and Redditch to the agreement with Hong Kong. However, those elements are only part of the renegotiation. We have a number of uncharted waters, a number of areas for which answers are not yet available. For example, there are Brazil, Pakistan, India and Egypt.
  The most important countries are India and Pakistan. They already supply a heavy tonnage to this country each year. Any increase in the amounts that they send to us is likely to be extremely detrimental to the textile industry, especially the spinning yarn and grey cloth industries. They are in the main further north than my constituency of Macclesfield, in Cheshire, but I am not making a constituency speech. I have a great interest in the whole of the textile industry, which I believe is of vital strategic importance to the country. However, in making general points I should be wrong if I did not make one or two constituency points.
  For example, Courtauld bought itself into my constituency, taking over George Swindells, a long-established family firm in my constituency. That happened some years ago. It took over the Adelphi and Clarence mills in Bollington, which is a
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  village north of Macclesfield. It is with regret that I tell the House that those two mills are now silent. Courtauld took them over. I do not know why it did so. It may be that it was motivated by our capital taxation system. Perhaps it was because it wished to remove competition. The two mills at one time produced some of the finest spun cotton ever produced in the United Kingdom. They are now silent. They are no longer part of the textile scene. Many hundreds of very skilled, responsible, moderate workers have been forced to find alternative employment. Most of them, fortunately, have done so, but a number remain out of work. That is very hard on them and their families. As Courtauld has told hon. Members on both sides of the House, many of the problems have been caused by unfair competition from the developing world and other countries exporting subsidised goods to this country.
  In the town in which I live, Congleton, in the south of my constituency, a large company, Tootal, took over Conlowe Ltd. and Condura Fabrics Ltd. Those two companies have now been closed or their operations have been transferred elsewhere. Tootal says that that has been done because of a bad recession in textiles and rationalisation, so often the excuse for that type of action. At Condura Fabrics 200 people are losing their jobs. Some are being found jobs by Berisfords Ltd., the largest ribbon manufacturers in the world, which is taking over the Condura premises, but that company is not finding jobs for all those who have lost their jobs with Tootal. The clerical staff are being transferred to a Tootal distribution depot in Longport, near Stoke-on-Trent, some miles from Congleton.
  My town is losing 200 jobs that it can ill afford to lose. In the whole of the North-West many jobs have been lost not through inefficiency or industrial disputes but because the industry is suffering from unfair competition. It has rationalised and put in new equipment to enable it to compete as best it can with the Third world, which has the advantage of cheap raw materials and cheap labour.
  The industry has had some protection under the MFA. I say to the Minister "For heaven's sake maintain the robust position which has been adopted to date. Do not concede to India and Pakistan,

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  Egypt and Brazil. You will have the support of the textile workers—perhaps in the voting booths—if you sustain this strong attitude. You will be doing it in the interests not only of the textile industry but of the United Kingdom as a whole."
  We are talking about an important industry. It is bigger than the car industry, about which we hear in the House time and time again, not only in debates but at Question Time. The textile industry does not feature often enough in the deliberations of the House. I only hope that the Government appreciate what is at stake and will sustain their very tough attitude in what remains of the renegotiation.
  I want to show an across-the-Floor attitude. I think that I am the only Conservative Member to have signed Early-Day Motion No. 127, headed
  "Textiles and the Multi-Fibre Arrangement",
  put down by the hon. Member for Rossendale and signed by a number of his hon. Friends. The motion reflects exactly what I feel. I hope that I shall not bore the House if I read it out, because it should be registered for the Minister to consider further. It says:
  "That this House calls on Her Majesty's Government to re-affirm its unequivocal support for the mandate initially accepted by the EEC on the Multi-Fibre Arrangement renegotiations; reminds Her Majesty's Government of its declaration to take unilateral action should renegotiation be unsuccessful; and calls on the Secretary of State for Trade to make an early statement on progress made in the current round of negotiations."
  Since the tabling of the motion we have become aware of some of the details of the negotiations and the agreements that have resulted. They have been good, and I hope that the remainder will be good as well.
  I should like to raise a matter that was mentioned to a number of hon. Members on both sides of the House when we recently met representatives of the British Textile Employers' Association here at the Palace of Westminster. It was pointed out to us that one of the disquieting features of the EEC bilateral negotiations has been the negotiations with a country in South America—Peru.
  I hope that the Minister will be able to provide us with some information.
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  Peru is the only producer of a particular growth of cotton called tanguis cotton. I am sure that the hon. Member is aware of this product, which has special properties of value to the knitting industry. Due to the inefficient management of the Peruvian cotton-growing estates, tanguis cotton is in very short supply, but the Peruvians have been successful in obtaining a special and substantial quota, in addition to that for the cotton itself, of yarns spun from this cotton. They are thus making their tanguis cotton available to other countries, and to this country in particular, in yarn form only.
  Surely this is a form of trading blackmail, which I believe is a very unwelcome innovation in international trading. I raise that point at the end of my speech because, while I do not think it affects the overall situation, I feel that it is a trend that requires attention. I hope that the Under-Secretary will pay some attention to it when he replies to this important debate.
  Once again, I congratulate the hon. Member for Rossendale on raising this subject. It has enabled me to say things that have been building up within my heart for a long time. I am very attached to the textile industry. What I say I do not say for party gain but because I think that the industry deserves our support, backing and understanding. After all that it has suffered in recent years it rightly looks now to this House and to the present Government, and a future Conservative Government, to do right in its interest—and I hope that right will be done.
  11.37 p.m.
  Mr. Max Madden: It is no wonder that the hon. Member for St. Ives (Mr. Nott), who has been looking more and more glum during the debate, has chosen this moment to depart, because he is faced with the awkward task, at the end of the debate, of reconciling two irreconcilables, expressed, first, by the hon. Member for Bromsgrove and Redditch (Mr. Miller), who seems to have become the self-appointed spokesman for Hong Kong, and, secondly, by the hon. Member for Macclesfield (Mr. Winterton), who, as always in these debates—unlike the hon. Member for Bromsgrove and Redditch—has been speaking up for the British textile industry.

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  It is always tempting to take up the remarks of the hon. Member for Macclesfield, but on this occaison I shall resist the temptation. I shall even resist the more provocative temptation to take up the very strange contribution of the hon. Member for Bromsgrove and Redditch. In passing, I point out that not only will his contribution make very interesting reading for textile workers in the British textile industry; he will also have upset some of his former friends who own, control and run the British textile industry. He seemed to be laying the blame for many of the difficulties of that industry on the doorstep of those who own and control it. It was an indictment of private enterprise and the competence of those who run the industry. I am sure that it will make very interesting reading for textile employers.
  Secondly, it was also a little cheeky. It certainly shows that the hon. Member has got a pretty good brass neck to lecture us about shortcomings, in terms of the pay and conditions of clothing workers, and to cite a document recently published by the Low Pay Unit. It may come as a surprise to the hon. Member for Bromsgrove and Redditch to know that a number of Labour Members contributed their first parliamentary pay increase to the Low Pay Unit to produce that publication. I believe that it was a very commendable report. It exposed the low pay and poor conditions that clothing workers, particularly in Leeds, have endured for many years. Much of that situation is due to the extreme loyalty that both textile and clothing workers have displayed over the years, as was pointed out by the hon. Member for Macclesfield.
  However, none of these matters will divert me from paying my debt of gratitude to my hon. Friend the Member for Rossendale (Mr. Noble) for having initiated the debate. I am grateful to him for providing us with yet another opportunity to discuss the problems of the textile industry and for his well-documented well-argued and incisive speech, which said for all of us what needs to be said for the industry. Therefore, I hope—indeed, I promise—to be brief.
  I am in the rare position, shared by my hon. Friend the Member for Rossendale, of expressing thanks to the
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  Government Front Bench. I am also pleased to express my gratitude particularly to my hon. Friend the Member for Oldham, East (Mr. Lamond) for the contribution that he has made in recent years in trying to assist the textile industry, and especially for the part that he has played in ensuring the negotiating position that the Government have pursued in the events leading up to the renegotiation of the Multi-Fibre Arrangement, which reflects a tough attitude. If it had not been for the attitude demonstrated by the Government, the negotiating mandate pursued by the Commission would not have been as tough as it has been. That needs to be repeated often. Indeed, to underline the point made by my hon. Friend the Member for Rossendale, that approach is appreciated by those who speak for the industry. My hon. Friend referred to Mr. Edmond Gartside, President of the British Textile Employers Association, and I should like to echo the sentiments that he expressed.
  I pointed out to the hon. Member for Bromsgrove and Redditch that the Common Market is not in the business of planning trade. It is the epitome of the philosophy, characterised in this House day in, day out, of the right hon. Member for Leeds, North-East (Sir K. Joseph). It is based on the philosophy of the free movement of capital and labour. It has nothing to do with planning trade.
  As in so many other things, we are the victims of our Common Market membership as regards the textile industry and the renegotiation of the Multi-Fibre Arrangement. The Common Market has been negotiating on behalf of the British Government. The British Government have not had independence in these matters.
  I should like to draw attention to the importance of the meeting of the Council of Ministers which is to take place on Tuesday 20th December. It appears that that meeting will be presented with extremely voluminous information about the bilateral agreements which have so far been reached between the EEC negotiating team and 25 textile-exporting nations.
  I am concerned that precise information giving details of the quotas and what these agreements mean in terms of the British market is not available. I understand that, for some unknown reason, all this information is being processed

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  through a computer in Bonn. I am not sure that the information has yet reached the computer in Bonn. However, I know that it is not available in London this week. Therefore, we do not know the precise terms of the agreements which have been reached. Still less do we know the precise impact that they would have if they were to form the basis of a renegotiated Multi-Fibre Arrangement. Understandings have been reached. On the basis of these understandings, I believe, agreements have been initialled. The Minister should give the House all the information that he has about the exact terms which have been agreed and his best estimates of their effect on the British industry and the British market.
  I am pleased that agreements have been reached with Hong Kong, Taiwan and South Korea, because those three countries import the lion's share of textiles. I hope that that agreement will help to curb the effects of imports from those countries.
  I share the concern expressed by other hon. Members about the failure so far to reach agreement with India, Pakistan, Brazil and Egypt. I understand that no agreement has been signed. This is an important grouping. It would be dangerous if any significant increase were allowed because virtually any substantial increase would lead inevitably to a further reduction in employment in the British textile industry.
  I should like the Minister to confirm that an understanding has been reached in respect of the most sensitive products limiting the average growth under the bilateral agreement between zero and 0·6 per cent. This is an important aspect of the negotiations. The British industry and our constituents are entitled to clear information.
  I share with other hon. Members concern about the transitional arrangements and their effects on the British industry. I share the concern about the sharing arrangements. There is an excellent case for trying to secure agreement with other members of the EEC for them to take a much larger share of textile imports which come to the Community.
  There is a need to improve the surveillance arrangements which have existed and about which concern has been expressed.
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  I should like an assurance that the anti dumping arrangements, which have been criticised time after time, will be secured and strengthened. I should like an assurance from the Minister that efforts will be made to improve documentation, which has been the subject of widespread concern in the industry.
  There is a need for recession arrangements to protect the British industry, which, although it has been taking a large share of the market, at times of recession suffers more than other Common Market countries because of its historic levels of imports. It is important to have better recession arrangements than we have had in the past.
  The hon. Member for Bromsgrove and Redditch referred to the importance of Hong Kong for wool and worsteds. I agree with him. I underline his comment about the excellent export record of the wool industry. But he neatly omitted to refer to the very unhappy situation that surrounds exports of wool to America. It is wholly unreasonable for the Americans to scurry around, as they were doing some weeks ago, trying to weaken our position in the renegotiation of the MFA yet justifying their own 50 per cent. tariff against British wool exports to America. I should like to hear from the Minister what success there has been in the recent efforts, aided by the new British Ambassador to America, to encourage the Americans to reduce that 50 per cent. tariff, a reduction which would greatly assist the British wool industry.
  Mr. Nicholas Winterton: Does the hon. Gentleman not accept that America, in spite of its attempts to weaken our position in the renegotiation, is the first country, at the drop of a hat, to rush to put up tariffs to protect its own industries if they are in danger of being undermined by imports?
  Mr. Madden: I entirely agree with the hon. Gentleman. Britain has been a soft touch on textile imports for a long time, and if we have a much tougher MFA in the future countries such as Hong Kong and other traditional exporters of textiles will be able to find other exporting opportunities around the world which will not have the harmful effects on the British industry that we have witnessed in recent years.

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  I make a last appeal to the British negotiators to stand firm in the talks on this matter on Tuesday. We can all understand the atmosphere in which those talks will take place. The negotiators will be confronted with an enormous amount of material which they will not have had much time to consider. There will be enormous pressure for agreements to be reached. Officials will be stressing the urgency of reaching an agreement. The negotiators are human beings, too, and there will be a great temptation for them to pack up their bags and get back to the Christmas festivities.
  In Common Market tradition the clocks may be halted and 20th December may last for just 24 hours, but it might last for 48 or 72 hours. But I urge the British negotiators not to give in on Tuesday. Much rides on the outcome of that meeting. If necessary, I would urge them to tell those who have been negotiating on our behalf that what they have agreed is not good enough and that, if necessary, they should go back and negotiate further. If necessary, the Council of Ministers should meet in January. We should not readily agree to everything that is presented on Tuesday. We should stand up for the British textile industry as we have done up to now. That is important both for the country and for thousands of textile workers and their families, whose future security hangs very much on the outcome of the talks.
  I therefore wish our negotiators success and urge them to be very tough and to get the best deal they can for the British industry.
  11.54 p.m.
  Mr. Fred Silvester: I have sat through the debate and, therefore, feel entitled to take part in it to deal with certain matters of deep concern. Although there are no textile mills in my constituency, Manchester shares a lot of the wealth of the industry and attaches much important to it.
  It is important to remember that we are considering here not merely the problems of one industry but the problems of an industry which in the North-East is central to an area which has many problems. If we pull away the support which that industry has at the present time, the problems will not only proliferate in the textile industry but will run riot through
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  the area and cause many difficulties elsewhere.
  I underline the point made by my hon. Friend the Member for Macclesfield (Mr. Winterton) that it has been, and continues to be, the case that the Government's negotiations in this matter have had the support of Conservatives, and even of Liberals—although they are not here tonight—in Lancashire and the North-West. That support has been given freely and has continued. I do not think it helps the Government's position or our likely success if we ignore that fact.
  I should like to say a word on behalf of my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller), who has come in for some stick tonight.
  Mr. Hoyle: Deservedly.
  Mr. Silvester: The hon. Member may say that, but my hon. Friend has made a point of considerable importance. Speaking, as he did, on behalf of the people of Hong Kong—if I may so put it—he drew attention to a very important point which will be relevant in the negotiations next week. A very harsh agreement has been made with Hong Kong. We think it a necessary one but the fact is that it is harsh. My hon. Friend's points were well made, and we do ourselves no credit if we fail to acknowledge the reciprocal effect of what we are doing. It will, however, be extremely damaging if the burden that we have imposed on the people of Hong Kong is thrown away and open to doubt, as it will be if we give way to India, Pakistan, Brazil and Egypt. Therefore, in asking the Minister, as others have done, to make sure that the negotiating position is not weakened in respect of those four countries, I think that my hon. Friend's warning, when he spoke of America and other countries also beginning to question again the agreements they have made, is well taken. If the position is weakened in respect of those four countries, we shall have done a great disservice to the people of Hong Kong and have opened the gates to a very unhappy season hereafter. Although we may not all agree with everything that my hon. Friend said, it needed to be said in the debate.
  We are essentially dealing here with the immediate position. We are talking

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  about the negotiations taking place next week. We are talking about the acute difficulties at the present time in the textile industry. We are talking about stock levels which are horrendous and getting worse. We have mentioned in passing the temporary employment subsidy. We have to recognise that that particular form of subsidy is in real trouble. I do not think that we shall be able to hold that line very long. It is no good beating the EEC about the head. It is quite likely that we are in breach of the EEC arrangements, and it is quite likely that the court will so find. It is also questionable whether that particular remedy is one which this country would wish to continue across all industry for very much longer.
  It is a great mistake for us to regard this as the only way of helping the textile industry. I therefore ask that the Government, combined with the texile industry, while recognising that some form of subsidy and assistance will continue to be required in the present circumstances, should endeavour to find a way of doing it which is not a continuation of the TES.
  We are particularly concerned with the period up to the time when the renegotiated agreement begins to bite. I ask the Minister, therefore, to have a word in the ear of his right hon. Friend the Secretary of State for Employment and ask him to get us out of our misery about whether TES is to be extended as soon as possible. I think it is extremely unsettling for the industry. Although I personally think that there are other ways of assisting the industry which would be better and endanger it less, an immediate or quick announcement is required to know exactly what sort of support the industry will get. The present situation is unsettling.
  I wanted to make only those two points. In the longer term we shall have to face up to the problem mentioned by my hon. Friend the Member for Bromsgrove and Redditch. It is no good saying to ourselves that we can wholly regard imports as something against which there is permanent protection. That will not be the case.
  Nor is it helpful for Labour Members to imply that the EEC is an enemy to
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  us in this respect. In many respects we can regard the EEC as a friend. More and more we shall have to move towards picking up our textile trade from trade between developed countries, and in that context our membership of the EEC will be to our benefit. We should make sure that our industry is structured to take full advantage of that.
  12.1 a.m.
  Mr. Michael McGuire: As constantly remind my colleagues, this is a debating Chamber. I want to pick up some of the points made in this debate. However much we may disagree, I would say to the hon. Member for Bromsgrove and Redditch (Mr. Miller) that we sometimes need a certain point of view expressed which we might possibly miss because the argument tends to flow in one direction.
  I wanted to intervene only because I am sorry that the hon. Member did not give way. There seemed to be some secret signs of communication between him and my hon. Friend the Member for Oldham, East (Mr. Lamond). I do not know whether it was the flashing of the eyes or the lifting of the eyebrows, but the hon. Gentleman gave way a couple of times to my hon. Friend when I would have liked him to give way to me.
  I wanted the hon. Gentleman to give way on his allegation—he said it was true—that there is a Low Pay Unit report which indicts the garment industry and which he said was absolutely shocking. I wanted to ask him who runs that industry. Who are the people running that industry who are paying those low wages?
  Earlier in his speech the hon. Gentleman poured scorn on the efforts of trade unionists. I should tell the hon. Gentleman that what caused trade unionism in the first place was employers as bad as the people he was indicting.
  I also want to comment on something said by the hon. Member for Manchester, Withington (Mr. Silvester). He was quite right to say it. He has no textile mills in his constituency. I think I am right in saying that there are few mills in Manchester. Nevertheless, the textile industry has a certain standing, not merely psychologically or emotionally, in

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  Lancashire generally and certainly in Manchester.
  If we allow that industry to be slimmed down any more the effect will not be contained within those towns where mills exist but will spread outwards and further demoralise a region that has taken more than its fair share of the hard knocks, largely through unfair competition. I seize that point because in my constituency there are tremendous social problems of industrial dereliction as well as unemployment.
  Twelve months ago we were all lamenting the closure of the Courtauld mill in Skelmersdale. It closed prematurely and paid off the workers. Most hon. Members were in deepest sympathy with me and did all they could to sustain me—for which I was grateful—when Courtauld announced that closure in Skelmersdale.
  The loss of 1,000 jobs in one fell swoop—300 had been lost earlier—meant that the male unemployment rate in Skelmersdale—now the biggest town in my constituency—was 23 per cent. I do not know the precise reasons, but Skelmersdale now has 17·6 per cent. male unemployment. Although I am glad that it has come down, it is still a terrific figure. We still have not recovered from the consequences of that closure and the demoralisation which followed it and other blows in Skelmersdale. We still have the same social problems to meet, and we get them in the rest of my constituency, which largely falls within the metropolitan borough of Wigan.
  About 12 months before the closure of the Courtauld mill, we had the closure of the Empress mill. This is an indication of how Lancashire and the textile industry have suffered. The Empress mill was a cotton spinning mill, and Lancashire, the birthplace of the industry, once had 100 per cent. of the world's spinning capacity. We are now down to less than 1 per cent., and that little mill in my constituency, which was also owned by Courtauld, had added a little to that capacity. But it went.
  In the community jobs were lost as a result. There was less money, and there was not the same opportunity for people to meet the cost of living. There was not the same money going to the local authority, Wigan metropolitan borough, but
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  still there were the same social problems and the industrial dereliction. The effect was to demoralise one of the townships in my constituency, and in the Greater Wigan area today we have an unemployment rate of 9·6 per cent. which is well above the national average of 6 per cent. and about 1½ per cent. above the North-Western average. What is more, we are virtually surrounded by areas which receive all kinds of benefits, yet we get only assisted status benefit and, as I said earlier today, it looks as though we shall lose out on rate support grant.
  These debates have come to resemble a continuous film show. When I was a boy, there were two separate houses—one at 8.30 and one at 10.30. Then came the continuous show, and people could not believe that it was possible to stay in all the way through, though I may say that the novelty soon wore off. Inevitably, people fell asleep after seeing the programme once, and after a time they would rub their eyes and say "This is where we came in."
  That is my impression of these textile debates. This is where we came in last time. We seem to rehearse the same old topics. The difference this time, however, is that there is a sense of hope. Just before the House returned after the Summer Recess, about eight of us Labour Members—I think that a group of Conservatives did the same earlier—went round some of our spinning mills and weaving mills to get some first-hand knowledge of the views of people in the industry.
  I gained the impression that there was a feeling that something would be done to arrest the decline and that the Government had taken a firm stand in this renegotiation and offered some hope to an industry which had become almost paralysed with fear. Until then, the feeling in the industry had been that there was nothing that could be done, that Parliament repeatedly debated the problems, but that the demands of the so-called poor or developing countries, collectively or individually, for a bigger share of our market were paramount, that we were a soft touch and that the inevitable end would be the total decline of the textile industry in Lancashire, bearing in mind that its work force is down from many hundreds of thousands in its heyday to about 80,000.

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  I am pleased to see that my hon. Friend the Member for Oldham, West (Mr. Meacher), the Under-Secretary, will be answering the debate. We could not have a man with a better and deeper understanding of the problems—unless it was my hon. Friend the Member for Oldham East. Maybe we should have a combination of the two.
  In this period of hope we must not be carried away too much. There are still many things to battle for. I hope that when my hon. Friend winds up he will tell us some of the sticking points where he sees difficulties, and that he will urge caution on hon. Members with textile interests. I do not have many textile interests now—my mills have slipped away from me—but I take an interest because I believe that the industry is a matter of importance to the prosperity of North-East Lancashire as a whole.
  I urge upon my hon. Friend the same message as he has heard from my colleagues—stick firm. No other developed industrialised country in the world has allowed the import penetration that we have allowed. I can see why the textile industry is the first industrial enterprise in which developing countries engage. People have to be clothed and so it is the threshold of industrial take-off. It is so attractive that any country in the world, once it is beyond the agricultural state and wants to get into industry, goes automatically for textiles. But there is no country in the world that has taken penetration as we have.
  The hon. Member for Bromsgrove and Redditch made a stink about the problems of Hong Kong. I have been there, but I do not claim to be as knowledgeable as he is. I have great respect for the people of Hong Kong. They frightened me to death with their ability to work. Obviously, we have to play the game with them. We cannot impose pretty strict restrictions on them and let others play old soldiers. We cannot give others what we deny Hong Kong. Does the hon. Member think that it would benefit other countries if our capacity to produce textiles was eliminated altogether? I believe that they need a country that produces enough to take not only their textile products but other products that they are starting to produce and will produce in greater numbers.
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  The fact is that the Lancashire people, in particular, have a great tradition for looking after the interests of people from poorer regions. A classic example is the attitude of the Lancashire cotton workers of the time to the question of slavery in America. Their stand on this matter must have put them out of work and caused them and their families great hardship, but this sort of behaviour is a strong and honourable tradition.
  The hon. Member for Bromsgrove and Redditch represents a motor car manufacturing constituency. Many of his constituents work in the industry. In the past, he has made statements about motor car import penetration and has asked the Minister to say how many British people are opting to buy foreign as opposed to British cars.
  Without being critical of the motor car industry—I do not know too much about it—I believe that many of its problems are self-inflicted. But that cannot be said of the textile industry. Textile workers do not receive anything like the wages in the motor car industry, but their industrial relations record is an example to the nation. Yet, as I have said, they have constantly seen their industry whittled away simply because of the competition. Even if they were on half their present wages, they could not stand up against it.
  Mr. Hal Miller: My point was that the people of Hong Kong and the industry there had always understood the difficulties in this country, and they had shown it once again by reaching an agreement entailing a serious cut-back, but they were concerned that if that gap were filled by developed countries or others without such a claim, the situation should be reviewed when the trade became better.
  As for the analogy with the motor car industry, both industries, as I said in response to an earlier question, have had Government support which they needed to restructure, and part of that restructuring inevitably involves a loss of jobs.
  Mr. McGuire: I am glad that the hon. Gentleman has cleared that up. I shall not pursue it further. I shall listen keenly to my hon. Friend the Under-Secretary of State. If it be possible to stiffen his resolve by repeating what he has heard about 40 times already, I add only this. We have confidence that he will not let

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  the textile industry down when our representatives get round the table this coming Tuesday. The textile workers of Lancashire have every confidence in him, knowing that he will protect their interests.
  12.17 a.m.
  Mr. James Lamond: This debate opened some time ago with an excellent speech by my hon. Friend the Member for Rossendale (Mr. Noble), and I know from the wistful tone in which you remarked that it had lasted only 32 minutes, Mr. Speaker, that you greatly regretted having missed it.
  Mr. Speaker: I was here for it, and for the speech which lasted 35 minutes.
  Mr. Lamond: I apologise, Mr. Speaker. Obviously, your patience has suffered more than I had given you credit for.
  It has been an extremely interesting debate, and many good speeches have been made, but I congratulate the hon. Member for Bromsgrove and Redditch (Mr. Miller), in particular, because he made it a real debate, which is somewhat unusual when we discuss textile matters. Our debates on the textile industry over the past few years have tended to be rather one-sided in that there has been unanimity across the Floor. I thought the hon. Gentleman's speech valuable because it cleared our minds a little. Had I been called earlier—I appreciate your difficulties, Mr. Speaker—I should have wished to launch into a lengthy analysis of the points that he made. I shall now refrain from doing so, but I must say that I agreed with the hon. Gentleman on several points.
  For example, I support the proposition that we should try to get as great an extension of trade throughout the world as we can. That would be greatly to the benefit of workers everywhere, and in Britain in particular. That is one of the reasons why I was so concerned to support the deal we made with the Polish Government the other day, because it will make possible not only trade between us and the Poles but more ships in the world to carry the increased trade. I support that fully.
  I also share a soft spot for the people of Lancashire. I knew when I saw the hon. Gentleman coming into the debate that he would be taking the line that he
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  did, because I knew of his particular interest in the Crown Colony. It behoves all of us to take an interest, because it is a Crown Colony, and there is some merit in his argument about our unfair treatment that has been meted out to Hong Kong. I am not saying that the level of imports should be increased because of that, but within the levels that are being imposed or agreed Hong Kong could reasonably say that it has not been as fairly treated as it should be because of its special position. On that account I agree with him also.
  The hon. Gentleman also suggested that the analysis that has been made of the difficulties—not only by hon. Members and trade unionists who have a lifetime in the industry but by employers and owners of the industry in Britain who have also had great experience—was not entirely correct. He suggested that we should examine the position again and that there should be more investment, that we should examine the technology of the industry, its organisation and so on. I think he will find that perhaps most of his experience of the industry has been outside the country, but there has certainly been great investment in the textile industry. It has moved from being labour-intensive to being the second most capital-intensive industry—second only to chemicals—in the country. There cannot be an argument on those grounds.
  We have heard several references to the excellent industrial relations that exist in the industry, and, in passing, we might rightly say that the low wages of which the hon. Member and I and others in the industry complain may be due to the rather compliant attitude of the trade union movement in the textile industry. I could not follow all the argument of the hon. Gentleman about immigrants manning the night shifts in the main, but that is so. However, if he was saying that they are not union members he was wrong, because there is good trade union organisation among them and many play an active part as shop stewards and so on. I therefore did not think that his analysis was correct.
  We cannot protect the long-term interests of the industry with the hope that we can get by with a continuing series of such agreements. At the end of the day we must liberalise trade.

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  My hon. Friend the Member for Rossendale mentioned some letters that he had received from Mr. Edmund Cart-side, President of the British Textile Employers' Association. Mr. Gartside is not alone in his opinions. We are now speaking about emergency action to try to prevent the annihilation of the industry. "Annihilation" is an emotive word but it is not mine. It was contained in a letter that I and other hon. Members have received from Mr. John Longworth, Chairman of the Textile Industry Support Campaign and Secretary of the Oldham and District Employers' Association. He said:
  "It is now widely recognised that certain sections of the textile industries of the Western World are at risk of annihilation as a result of low cost exports—particularly from the Far East."
  I accept that analysis by those who have a fairly deep knowledge of the industry. I make no such claim for myself. I merely hope to represent people here but I want to see jobs for my constituents. That is my long-term aim. I recognise that the textile industry has diminished considerably during the last 70 years and that it is now a mere shadow of its former self as an employer, but I do not object to that. I should rather have the balance of diversified industry in my constituency that there now is than the position that prevailed 70 years ago when almost everyone in Oldham was employed directly in textiles or in the making of textile machinery.
  I like the better balance that we have now, though, of course, I do not want it to diminish until it disappears completely. That would be the result if we had not had such emphatic and strong representations from the Government in the negotiations. I congratulate them, and I hope that they will be able to sustain their arguments to the point where they emerge successfully from the negotiations. I am sure that what they have done on behalf of the textile industry will be widely recognised by working-people and employers in the Lancashire textile industry.
  12.26 a.m.
  The Under-Secretary of State for Trade (Mr. Michael Meacher): We have had a fairly extensive Second Reading debate on textiles, and it has been a passionate
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  and rousing occasion in parts. I should like to express my gratitude to my hon. Friend the Member for Rossendale (Mr. Noble) for his generous tributes to the Government, and I should like to give credit to him for the diligence, perseverance and single-mindedness which he and other hon. Members have repeatedly shown in pursuing their campaign on behalf of the textile industry. I am entitled to make that statement since I am often on the receiving end of that campaign.
  The British textile industry has some very good friends in this House to whom it should show considerable gratitude for their perseverance and effectiveness. I am pleased that my hon. Friend the Member for Rossendale quoted the statement of Mr. Gartside who has enormous experience in the Lancashire industry. My hon. Friend can take a lot of credit for keeping the Government up to the mark and is responsible for the interesting state of mind of Whitehall on this subject. It was put to me recently by a civil servant that the whole of Whitehall is decidedly twitchy about the subject of textiles. My hon. Friend can take a lot of personal credit for that excellent state of affairs.
  The MFA is only the latest of a series of GATT arrangements regulating international trade in textiles and clothing. Like previous arrangements—the hon. Member for Bromsgrove and Redditch (Mr. Miller) was correct in what he said about this—it is essentially a bargain under which developing countries accept discriminatory controls against their exports in return for assurances of the growth of their exports to the developed market.
  The arrangement came into operation on 1st January 1974 and it expires at the end of this year. By the time renewal came to be considered, it was widely accepted that in the economic circumstances that have developed, particularly the world recession which has hit the textile industry particularly hard, the arrangement did not give adequate protection to our industry or to the industries of Western industrialised countries. I need hardly stress the importance of the textile and clothing industry.
  My hon. Friend for Nelson and Colne (Mr. Hoyle) spoke eloquently on the subject. As the hon. Member for Macclesfield (Mr. Winterton) pointed out, the

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  industry employs 800,000 people. Although, as my hon. Friend the Member for Oldham East (Mr. Lamond) reminded us, that is not as many as it used to employ, the great majority are in assisted areas where unemployment is high. Since we are talking not just about employment but about the industry's importance to our national economy, it should be pointed out that its export, last year totalled £1,345 million—7 per cent. of our total export trade.
  I think that the hon. Member for Bromsgrove and Redditch was an unnecessary Jeremiah in suggesting that if there was a cutback in countries such as Hong Kong, our industry, if given the breathing space to reorganise and consolidate, will not be able to take up any slack which is brought about by any reduction in countries such as Hong Kong. In fact, I am glad to say that our clothing exports to the EEC in the last year or so have been going very well. That shows the capacity of our industry, given the chance to compete very effectively.
  I am sure that we—many hon. Members have emphasised this—certainly could not, and would not, stand by and allow these vital industries to be disrupted by the flood of low-cost imports which continues to come into the country.
  In renegotiating the MFA we had two objectives. First, the growth rate in the existing quotas, which was 6 per cent., had been agreed at a time when expectations of growth for the textile industry were much higher than they are now, and it was important that the growth rate should certainly be reduced. Second, the existing agreement covered only 75 per cent. of our low-cost imports—still quite a high figure, but 75 per cent. and no more—and gave no protection against the problem of cumulative disruption. This occurs with the imports from a number of suppliers, often including new suppliers—I shall return to this point because it is important to the hon. Member for Bromsgrove and Redditch—but each possibly in themselves quite small matters but nevertheless, as a whole, becoming damaging to our industry.
  After a great deal of discussion at the GATT textiles committee and with EEC member countries and the European Commission, it was decided that the best way to proceed would be for the
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  importing countries to negotiate direct with the exporters to agree reduced quota levels and coverage, and only when this had been done would the MFA be renewed, if it was going to be renewed.
  The next step, therefore, was to agree the negotiating mandate under which the European Commission would negotiate with the exporters on behalf of the nine EEC member States. We in the United Kingdom took the lead by pressing for a very tough mandate, and we refused to allow the negotiations to begin until we had satisfactory assurances on a number of sensitive areas, of what the quotas, for example, proposed for imports into the EEC as a whole meant in terms of the level of imports into the United Kingdom.
  Satisfactory assurances on these points were achieved, following detailed discussions with the Commission, and the negotiating mandate was approved by the Council of Ministers on 18th October. Negotiations with the supplying countries began immediately afterwards.
  I need hardly say that the negotiations proved to be extremely tough. I am sure that hon. Members would have expected that; we certainly did, as well. We are asking some of the exporting countries to accept very large, sharp cutbacks in the level of trade that they would have enjoyed under the old MFA. I hope that my hon. Friend the Member for Ince (Mr. McGuire) will accept that after these negotiations we shall never again be regarded, I think, as a soft touch, if indeed we ever were.
  However, I say to the hon. Member for Bromsgrove and Redditch, about the essential point of his speech—I hope that he is the Member for Bromsgrove and Redditch and not for Hong Kong—that it seems to us to be impossible to provide for stabilisation or increased security for our own industry and for extra room for new countries coming into textiles as they industrialise, which may well be smaller and less rich than Hong Kong, without at the same time requiring some cutback from the larger, older, more established and richer supplying countries. It is impossible not to have some cutback. I think that the hon. Member is unfair if he does not recognise that that is inevitable—unless he is prepared to sacrifice Lancashire jobs or, indeed, textile jobs elsewhere in the country.
  Mr. Hal Miller: I think that the hon. Gentleman will recall that I was asking him only for an assurance that there would be a review at the end of a period to see what had happened to the gap that had been left for newcomers and to see whether developed countries or which others had filled that gap, and, if so, whether there would be any redistribution. That is what I asked.
  Mr. Meacher: It is British industry that will fill it if it is not taken up by new suppliers. I can give the assurance that it is our understanding that there will, if necessary, be a review. No one can foresee the state of the international economy. We do not know whether in two years there will be a deeper recession or a marked recovery. There will be the opportunity for such a review.
  The Commission made it clear in respect of the cutbacks that we were demanding, that in the absence of a satisfactory agreement it would in the last resort be prepared to take unilateral measures to restrict low-cost imports. I am glad to say that by and large the exporting countries recognised that if an orderly trade in textiles was to be maintained their best interests lay in reaching an agreement with the Commission. As a result, the Commission has now reached agreement, or is expecting shortly to reach agreement, with 27 countries. Unilateral measures will also be taken against Taiwan, which is not a member of the GATT. The results of the Commission's negotiations are now being carefully examined by ourselves and the other EEC member States, and a decision on whether the Commission's recommendations can be accepted and the MFA renewed will be taken, as my hon. Friend the Member for Sowerby (Mr. Madden) said, at the important meeting of the Council of Foreign Ministers next Tuesday, 20th December.
  I turn to our response to what the Commission has achieved. Our first task has been to consider whether the Commission has managed to reach agreement within the terms of the mandate. That is a little less straightforward than it might seem since the Commission has been negotiating on behalf of the whole of the EEC. It is necessary for as to consider the result of the negotiations as they affect the United Kingdom. The
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  calculations—I can vouch for this—are extremely complex. We are dealing with nine EEC States, over 30 supplying countries and over 120 products. Although the Commission's negotiations with the supplying countries were going on right up to the last moment, even now all the details are not yet fully available. However, I think that the general pattern is clear. It is worth emphasising again that the fact that the Commission has initialled an agreement with a number of countries does not in any way bind the Council of Ministers, and that as of now the United Kingdom's position is fully reserved.
  The new MFA will, in our view, represent an enormous improvement over the old agreement. I shall indicate why we take that view. First, the coverage will be a great deal more comprehensive. The present coverage of restraints is equal to only about 75 per cent. of low-cost imports of textiles and clothing by volume proportions. Bilateral agreements will increase that to 95 per cent. The coverage will rise to 98 per cent. if we include quotas outside the MFA which have been agreed with some Eastern European countries.
  My hon. Friend the Member for Rossendale spoke of the desirability of a managed market. I suggest that what we now have is something that goes a long way in that direction.
  Secondly, we have secured certain global ceilings for the eight most sensitive products so that in no circumstances will imports of these products rise above the ceilings laid down, even if new suppliers do enter the market. The eight products account for no less than 60 per cent. of our total low-cost imports.
  Thirdly, we have more realistic base levels, which is of great importance as new quotas will be based on actual trade in 1976 rather than on quota levels, which in many cases were under-used. In some cases 1976 trade is below the level of 1977. Therefore, the quotas here represent a cut in existing levels.
  Fourthly, a very important feature of the proposed new MFA is an automatic trigger mechanism to bring under restraint any products not yet under quota if exports to the Community or any member country rise above a certain level.

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  Fifthly, growth rates are substanially lower than in the existing MFA, particularly for the most sensitive products.
  Sixthly, the number of product categories covered has been greatly extended, from about 60 to over 120. The products themselves have been defined more precisely in order to cut down the scope for evasion, and the amount of flexibility between products—so that, for example, an exporting State may transfer the unused proportion of a quota in one product to increase trade in another whose quota is fully used—has been greatly reduced.
  All this amounts to a degree of protection going far beyond anything that our industry has enjoyed in the past, and I believe that it will provide it with a sound basis for its future development. By any standards, therefore, the new agreement is a great improvement over the old, but we need to consider to what extent the Commission has succeeded in keeping within its negotiating mandate and how far we are satisfied with the outcome of the negotiations. Here I shall be more critical.
  With regard to the 27 countries with which the agreement has been reached, the Commission has been able to keep very close to the mandate. It has not been able to keep within it in every case, but I think, frankly, in the nature of things—given that there has been some very hard negotiating—it would have been surprising if it had been able to do so.
  The departures from the mandate can fairly be described as small. Present information is that they should not affect those products of greatest sensitivity to the United Kingdom. In the case of the eight most sensitive products in Group 1, which account for over 60 per cent of total United Kingdom low-cost imports, the Commission has, with certain exceptions, kept closely to the terms of the mandate. The excesses range from nil on jerseys to 2.4 per cent on blouses. These are all provisional figures.
  In the case of the 18 sensitive products in Groups 2 and 3 not subject to global quotas, preliminary indications are that the Commission has settled for growth rates of between 5 per cent. and 9 per cent. rather than the 4 per cent. to 7 per cent. laid down in the mandate.
  I turn to a point that many hon. Members raised. There are four countries,
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  which have been regularly named in the debate, with which the Commission has not been able to reach agreement within the terms of the mandate. They are important supplying countries, and agreement with them is necessary if the renewal of the MFA is to take place as planned. One of the factors which we need to consider, and which will be considered by the Council of Ministers next Tuesday, is whether we could justify giving something extra to those four countries in order to reach agreement. Every hon. Member who has taken part in the debate has expressed the strong view that there should be no departure from the mandate, that no departure is acceptable. That is the clear message, and I have a great deal of sympathy with that view. But we need to consider the consequences of such a stand. If we were to take such a stand we would have to ask the Commission to take unilateral measures against those four countries, and we would also need to carry the Commission and the other EEC member States with us in imposing measures more restrictive than we had been able to achieve by negotiation. That would be the meaning of such a stand.
  This is one of the central issues to be discussed in the Council of Ministers, and no decision has yet been taken by the United Kingdom Government; nor, indeed, can it be taken at this point.
  I want to emphasise the fact that whatever decision is taken the effect—this is not an unfair judgment to make—will be small, in the context of the agreements that have been successfully negotiated, and it certainly needs to be judged in perspective, in comparison with the improvements, which I have outlined, which the new MFA offers compared with the old one.
  I now want to turn to some of the more specific points raised in the course of the debate. My hon. Friend the Member for Rossendale asked in particular whether when there was a transformation from United Kingdom into EEC quotas, it meant that the amount of the product coming into the United Kingdom specifically was any longer restricted. I can assure him that if there is such a transformation it will in no way affect the parcelling-out of the original distribution within the EEC. The United Kingdom position will be safeguarded.
  Mr. Noble: My question was: will knitting yarn quotas transferred from this country to the EEC be treated as new quotas in terms of the transitional arrangement, which would allow them to be shipped before 31st December this year and to arrive before 31st March next year? Will they then not be counted against 1978 quotas?
  Mr. Meacher: I understand my hon. Friend's point. I am sure that they will not be treated as new quotas; they will be regarded as a continuation of the existing quota. Therefore, the loophole to which my hon. Friend referred will not exist in respect of the interim arrangement. Where there is no quota prior to 31st December, if goods are shipped before 31st December and arrive before 31st March next year they will not count against the 1978 quota. That would not apply in the case of Indian yarn quotas.
  My hon. Friend referred to the safeguard clause in respect of the multilateral trade negotiations. It is our intention to seek a selective application of article 19, which could certainly have an influence in respect of other countries, although it would probably have little effect now in respect of textiles precisely because of the very wide coverage of quotas under the new MFA; but it is our intention to negotiate that, and we are pressing for that as one of our objectives.
  My hon. Friend also referred to the social clause in his remarks about the myth concerning the role played by multinational corporations investing in underdeveloped countries. I am sure that he is right when he says that people in those countries want better working conditions and more security, and in that context the social clause would work in their interest. But we have to negotiate with Governments—and when we ourselves have rightly taken a stand in respect of attempts to increase extra-territoriality, particularly in respect of American jurisdiction over its multinational corporations operating in this country, it would be very difficult for us to impose, albeit with proper and honourable motives, a similar infringement of sovereignty on other countries, particularly developing countries.
  I refer my hon. Friend briefly to the point about the evasion of origin. This worries many hon. Members. There are
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  strict rules to ensure that goods do not evade quota restrictions by being shipped via countries to which no quotas have been applied. I accept that this kind of thing can never be entirely eliminated, but we normally expect to be able to prevent its becoming a serious threat to our system of controls.
  Two separate points are involved. The first is that evasion in most cases will be stopped by the application of the origin rules. Secondly, it will become more difficult anyway because of the extension of the MFA into more countries and products.
  On the first point, all goods imported under the MFA will be required to have certificates of origin. We are constantly on the alert for cases of abuse of the certificate of origin system. I do not deny that such cases exist. But Customs and Excise has full powers to investigate where evidence is presented that indicates that abuse may be taking place.
  On the second point, evasion of this kind will be more difficult, because of the arrangements under the new MFA. In the first place, far more countries will have negotiated bilateral agreements and more products will be under quota. Therefore, the scope for evasion will be much less.
  In the case of countries which have signed bilateral agreements, the trigger mechanism would come into play before any significant damage could be done.
  In the case of MFA signatories where there are no bilateral agreements, our intention—we have assurance from the Commission on this point—would be to impose quotas when exports reached levels no greater than those laid down by the trigger provisions of the bilateral agreements.
  That leaves only countries which have not signed the MFA, and we would expect the Commission to deal with any quota evasion through them, which would also quickly come to light on a similar basis. In most cases this would involve invoking the safeguard clause in existing trade agreements.
  When the detail of what I have just said has been carefully read, it will be seen that, to a large degree, we have an effective framework for checking evasion under the new MFA.

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  My hon. Friend the Member for Rossendale asked about goods in transit on the last day of the year. Under the GATT rules we are bound to allow into this country goods which are in transit at the moment that a quota is imposed. That is the nature of the predicament. Quotas in all the bilateral agreements negotiated by the Commission start from 1st January next year.
  For the 75 per cent. of products at present under quota, that makes no difference, since products not covered by the 1978 quota will fall to be counted against that for 1977. For products not at present under quota—the extra 20 per cent. to which I referred—I agree that there could be a rush to beat the new quotas when they are imposed. To that extent, there is a loophole. Where there is clear evidence of this happening, we are certainly prepared to intervene with the country concerned. I should add that in the only case of this kind that has yet come to light, we have already done so.
  At worst, this is a once-and-for-all operation. With barely two weeks of the year to run, the danger of disruption from this source is not great. If any hon. Members have evidence from their industrial sources showing or suspecting any use of this loophole, I hope that they will let us know quickly.
  I was going on to refer to other points, but time is short.
  Mr. Nicholas Winterton: Before the Minister sits down, may I remind him of the special cotton from Peru? Have his civil servants yet managed to give him any advice on that matter? I agree that, when compared with many of the matters that have been mentioned, this may seem a trivial point. However, as it is a form of industrial blackmail, I believe that it should be dealt with now so that, if it occurs in any other form in future, we can deal with it effectively. Has the hon. Gentleman had any information on this subject?
  Mr. Meacher: I shall deal with that in a moment. First, I should complete my previous remarks.
  I know that there has been a suggestion that "goods in transit" might be so loosely described as to offer continuous disruption in 1978. The term "goods in transit" is not a loose phrase.
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  It is described specifically as "goods for which there is evidence of shipment prior to the cut-off date." It is not sufficient to place an order or state an intention to place an order. Our normal criterion is a bill of lading. I do not expect any significant evasion of the spirit of the law.
  I have never heard of Peruvian tanguis. I am not sure that my officials have either. I shall investigate the position and write to the hon. Member for Macclesfield. Since the EEC claims that the global quotas for cotton yarn and cloth have not been exceeded, any extra for Peru must have been balanced by less for somewhere else. Presumably the situation means that there is a right to concede this to Peru and perhaps we extracted less of another product from Peru.
  I hope that I have given the assurance that this is a valuable and important new deal. I do not deny that it is not in accordance with all our wishes but it provides a framework for world trade in textiles which offers enormous gains for our industry. I hope and believe that in the light of any modifications that might be agreed by the Council it will at least provide a structure for the regeneration for which our industry has sought for so long.

  CIVIL AVIATION (SCOTLAND)
  12.58 a.m.
  Lord James Douglas-Hamilton: I refer to Vote on Account, Class VI, Vote 6. It gives me great pleasure to pay tribute to the work of the Civil Aviation Authority and the effective services which it has given both in its headquarters and in the Highlands and Islands airports of Scotland, including Inverness and Wick, Kirkwall, Sum-burgh and Stornaway, Islay, Tiree and Benbecula. There is considerable evidence that it has carried out its duties with immense efficiency and as much economy as possible.
  I shall give three examples which establish beyond any possible doubt the very high levels of efficiency to which it operates. In 1976–77 the CAA spent £1·2 million on the Highlands and Islands airports to handle 650,000 passengers.

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  In comparison, the BAA spent £10 million for 4,600,000 passengers. This means that the expenditure by the CAA for each passenger handled for that year was £1·80 and that the expenditure for each person by the BAA was £2·20. That shows that the CAA operated with greater economy. These figures exclude depreciation and indicate conclusively that the CAA operates these airports more economically than the vast BAA monopoly could ever do.
  The second fact relates to the ratio of members of staff employed to passengers handled for the year 1976–77, In that year the number of management staff for the Highlands and Island airports was 110 and for the BAA Scottish airports 1,065. The number of passengers handled by the CAA was 651,000 and by the BAA 4,576,000. For every one of the CAA's airport management staff 5,918 passengers were handled and for every one of the BAA's airport management staff 4,295 passengers were handled. This means that the CAA employee can, and does, handle more passengers than the BAA employee under the present two systems in Scotland. This proves conclusively that the CAA operates on a more efficient and less bureaucratic level in the running of small and very small airports.
  The third case that I would take for the year 1976–77 is a comparison between the productivity of two Scottish oil-related airports—Sumburgh and Aberdeen. The latter is operated under the BAA and the former by the CAA. At Sumburgh 22 members of the management staff handled 268,000 passengers for that year. The BAA in Aberdeen used 135 members of management staff and handled 882,000 passengers. This means that for every passenger handled by the BAA at Aberdeen the CAA at Sumburgh handled 1·86 passengers. Therefore, the CAA employee can handle nearly twice as many passengers as the BAA employee. That means that in practice the CAA is operating more economically and in cost-effective terms more effectively.
  What is the significance of these facts? To use an old Scottish saying, "Facts are chiels that winn a ding." These three cases demonstrate that the CAA's considerable experience in running airports
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  since 1945 should be allowed to continue, and that the Government would be wise to support the outstanding example of an efficient sector of a public body rather than to encourage monopoly control.
  In the light of this very compelling evidence, I hope that the Minister will consider confirming the CAA as the long-term owner of these airports so that it can get on with the business of serving the vital needs of the oil industry and continue to foster the excellent relationship it has already established with the communities that these airports serve.
  The crux of the matter is that there is a very great difference between administering large airports and small airports. Some of these airports consist merely of small landing strips. As the former chairman of the CAA, Lord Boyd-Carpenter, said in a recent speech, very often the handling of traffic is done by one man whose traditional form of duties consists first of chasing the sheep off the runways, then talking the aircraft down and then carrying the baggage to the terminal. All that is done by one man. Almost always he is a local man whose heart is in the job and who is proud of the fact that he is running the airport, which under modern conditions is the hub of these remote islands.
  I am glad that the right hon. Member for Western Isles (Mr. Stewart) is present. He can confirm whether I have painted an accurate picture of what happens at Stornoway and Benbecula. Similarly, the hon. Member for Argyll (Mr. MacCormick) may feel moved to state what the position is in his constituency.
  In other words, those working for the CAA, are closely integrated into their communities as well as doing a highly efficient job, and it would be a human tragedy for any of them to be threatened needlessly with redundancy. This applies particularly to those who work at Aviation House in my constituency where the headquarters staff are carrying out their jobs with great dedication.
  The Minister may ask, at a time of high unemployment, what a few dozen more job losses mean. But he is dealing with human beings who have considerable expertise, and if they are thrust into unemployment by a costly bureaucratic exercise there will be no guarantee of other suitable employment for them.

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  Is it the case that if this transfer were to go ahead the small number of executive staff at CAA airports would not be offered jobs? Would there not be redundancies at these airports as well as at Aviation House? The needs of these employees should be sympathetically considered by the Minister before he comes to any hasty conclusion.
  But it is not primarily the question of redundancy which concerns most Scots and most Britons. There is a very important principle at stake, that the transfer of responsibility from the CAA would lead to increased costs, and that fact has certainly been put before the Minister by the Scottish Council for Development and Industry. If there are increased costs it is inevitable, surely, that sooner or later this will lead either to increased fares, which will be contrary to the interests of the Highlands and Islands communities, or to substantially increased taxation. Either way it would be unsatisfactory.
  It is, of course, a fact that the total number of passengers handled by the BAA in Scotland is a small percentage of its total numbers, and any decision by the BAA might well be a corporate interest decision rather than one taken in the specific interests of the communities in the Highlands and Islands.
  Furthermore, as the British chambers of commerce have confirmed, there is very strong opposition throughout the chamber movement, both in Scotland and in the rest of the United Kingdom, against these aerodromes being transferred to the BAA.
  It is also worth noting that the Chairman of the Highlands Air Transport Consumer Council, Major Hunter Gordon, has made certain representations in this matter. Not only is he Chairman of the Highlands Region of the Scottish Council. He also represents a broad cross-section of industry, commerce and local interests, quite irrespective of any political commitment which he may have. Even if this gentleman were a Labour candidate, he would still represent in his professional capacity a cross-section of industry, commerce and local interest. He has written stating that in view of the complete agreement of the elected representatives in the local authority and that of industrial and commercial air travelers
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  represented by the Highlands Air Transport Consumer Council, the council feels that the changeover from the CAA to the BAA should not proceed. Indeed, late this afternoon, before the debate began, I received a telegram from him which states:
  "Highland Air Transport Consumer Council deeply concerned about any possibility which would lead to increased operational costs. The existing high air fares already over one hundred pounds return are a disincentive to development representatives and buyers. On island routes air travel fulfils vital social need and costs must be kept to minimum."
  It is not only that consumer council which takes that view. It is of interest that virtually all the light aircraft operators are satisfied with the CAA charges, and invariably where the BAA has taken over airports, costs have escalated for landing and parking fees. If the Minister checks up with the light aircraft operators he will find that there is substantial opposition to any proposed takeover.
  I regret to inform the Minister that that was not the only telegram I received this afternoon. I received another, this time from a wholly different source—the Convenor of the Shetland Islands Council. He states:
  "I understand that you will be raising the question of the proposed BAA takeover of Highlands and Islands airports in the House of Commons today. You have the Council's strongest support for any action which prevents a possible increase in air travel costs to this community which is already experiencing major financial stresses and strains as a result of oil development but which tolerates them in the national interest. The proposed takeover can only result in an increased cost burden on the Shetland Islands people despite assurances by the BAA to the contrary."
  That is sent by the Convenor, Shetland Islands Council, Mr. A. I. Tulloch
  I quote next from Lord Boyd-Carpenter, who probably knows as much about aviation as any man living. He made it clear that the Highlands and Islands airports were there not for economic reasons but for social services, and that they provide the only means of maintaining civilised standards of life for the persons in the remote communities concerned. He said:
  "It seems the height of folly to alter what is plainly the most economic system, in order to substitue for it a system which, in the nature of things, must be more expensive and therefore must increase the bill which the taxpayer in one way or another will have to meet."
  The Under-Secretary of State for Trade (Mr. Clinton Davis): I have listened with interest to the telegrams that the hon. Gentleman has received. Can he indicate whether he has received any message at all, telegraphic or otherwise, from the Scottish TUC, for example? Can he indicate whether he has consulted the STUC?
  Lord James Douglas-Hamilton: I am grateful to the Minister for asking that question. That was precisely the question that I was going to ask him. We are well aware that the Minister has been having conversations with the STUC. But my understanding is that the STUC was sworn to secrecy and was not in a position to state what representations it had made to the Minister. Perhaps the Minister can tell the House exactly what line the Transport and General Workers Union has taken. We should be most grateful to know.
  Perhaps the Minister can also tell the House what specific terms the BAA has put forward concerning a possible takeover. Can he also tell the House whether it is the case that two years ago senior civil servants in the Department of Trade decided in principle that a policy should be adopted to take over the Highlands and Islands airports? Is it not the case that the Minister is coming under considerable pressure from his senior civil servants in this connection?
  May I ask the Minister why is it that British Airways has not been consulted? We all know, of course, that the 13 AA has been consulted throughout. Is it not astonishing and extraordinary that British Airways has not been consulted in this whole process? If British Air ways had been, is it not possible that the Minister's picture of this matter might be somewhat different from the picture that he now has?
  The Minister will be aware that in February 1974 the CAA requested that its airports should be looked after by a subsidiary company in Edinburgh with a Scots board receiving assistance from the staffs of the CAA. If the Government are still not prepared to consider this proposal seriously, will the Minister at least accept the recommendation of the Scottish Council for Development and Industry that the CAA's responsibility, with all its advantages of flexibility and
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  experience, should continue until a far more comprehensive review of Scottish airport services can be undertaken?
  After all, there is the awful warning to the Minister of local government reorganisation. In two years of local government reorganisation in Scotland more than 24,000 extra officials have been created. If this proposed take-over is thrust through we seriously believe that it will be exactly the same story all over again and that there will be a large increase in bureaucracy.
  In the debate in the other place six days ago, on 8th December, the Solicitor-General for Scotland said that the Government had not reached a decision. I suggest to the Minister that this matter could be regarded by senior members of the Department of Trade as a peripheral matter compared with all the other decisions which go across his desk. But in Scottish terms it is not a peripheral matter but a matter of considerable importance, especially to the Highland and Islands communities themselves.
  I hope that the Minister, who in the past has listened to our representations with great courtesy, will appreciate the substantial strength of feeling throughout Scotland on this issue. If he interferes with men performing their duties with great efficiency and dedication he will be taking a great risk. If the CAA and the Highlands and Islands communities are unjustly treated this could well become a cause célèbre.
  1.14 a.m.
  Mr. Donald Stewart: I am pleased to have been called after the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) because of the excellent case that he has made against the proposed transfer of the Highlands and Islands airports from the CAA to the BAA and also because of the way in which he has pursued this campaign with tenacity and vigour. This is a matter of great anxiety and concern for workers at the airports concerned, not least in the Western Isles—my constituency—at Benbecula and Stornoway.
  As Lord Boyd-Carpenter, the Chairman of the Civil Aviation Authority, said in another place, there is all the difference in the world between large airports and the techniques involved in operating them

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  and the small airports. The hon. Member for Edinburgh, West went into that in some detail, and I need not repeat what he said. The noble Lord went on to describe the unique job structure at airports on the islands, and I can confirm what he said. Apart from the jobs mentioned, workers double up by cutting the grass, tending the fire tenders, and so on. There is a very different job structure from that at a British Airports Authority airport where the very nature of the organisation means that jobs have to be divided among several categories of worker. That is the basis for the very real fear that jobs will disappear. On behalf of my constituents, I view with the greatest hostility the possibility that even one man may be added to the dole queue in an area with consistently the highest unemployment in the United Kingdom.
  I want also to express anxiety on behalf of people in my constituency who travel by air or might wish to do so. We have appallingly high air fares. It is possible to fly from the United Kingdom to Canada for the fare that has to be paid to fly from Stornoway or Benbecula to London. If this proposed transfer goes through, the possibility that higher landing fees will be added to the astronomical fares is viewed with the greatest anxiety.
  Lord Boyd-Carpenter said that it seemed the height of folly to alter what plainly was a most economical system by substituting for it a system which would increase the bill to the taxpayer. That is the nub of the matter.
  We have had assurances that our fears are unfounded, and I do not cast any doubt on the sincerity or good faith of the people who have given those assurances. But I have found too often that assurances of that kind are altered within a year or two on the excuse that circumstances have changed.
  Then there is the possibility that one of the functions of the proposed Scottish Assembly will be the running of these airports. For that reason, at least, any final decision should be delayed.
  Those right hon. and hon. Members with airports in their constituencies are totally opposed to any transfer of the kind proposed. All the staff at the airports wish the status quo to be maintained, and that should have some weight
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  with a Labour Minister. After all, there are considerations more important than administrative tidiness. There is no demand, nor, I believe, any need for the change. There is total opposition from the people most closely concerned. I say to the Government "Leave well alone".
  1.18 a.m.
  Mr. Iain MacCormick: I congratulate the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) on raising this subject and I applaud the energy with which he has been pursuing it for some time. I am also grateful to the Minister for the courtesy with which he received the hon. Gentleman and various other hon. Members representing Scottish constituencies when we discussed the issue.
  However, now that we have a chance to discuss the matter on the Floor of the House, there are a number of aspects of it that I should like to bring to the Minister's attention.
  I have the great privilege to represent what is probably the most scattered constituency in the United Kingdom. It comprises not only a very large part of the mainland but probably the largest number of inhabited islands of any constituency. Many of the islands are served by air, and the needs of the people of the islands are usch that they rely absolutely on the ability to fly straight to centres of population such as Glasgow. It may be for urgent medical reasons. That is why the Air Ambulance Service is important. Or, of course, it may be a matter of convenience. Most people in my part of the world rely on air travel in a much more real sense than those who live in urban conurbations such as Glasgow. If one lives in Glasgow one can travel to London by bus, train or plane. But if one lives on Islay or Tiree or Coll one has no option but to fly.
  When discussing the running of airports, it is most important to bear in mind the degree of flexibility that is possible under the present system. We have a system in which everyone knows everyone, and everyone can do the job. There are no demarcation lines between unions. Firemen can become baggage unloaders, and the airport manager can

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  become a jack-of-all-trades. We think that this is not a bad system.
  I have asked the Minister to come to Islay and Tiree, and I hope that he will do so. I shall be glad to introduce him to the staff of the airports and to members of the local communities.
  One can extend the argument further. There was a time when services to my constituency were run by British Airways, the biggest airline in this country. Now they are run by Loganair, a small independent company, helped by subsidies from public funds—
  Mr. Dennis Canavan: Exactly. They are subsidised by the State.
  Mr. Deputy Speaker (Sir Myer Galpern): Order. If the hon. Member for West Stirlingshire (Mr. Canavan) wishes to intervene, he must do so in the proper way and not from a sedentary position.
  Mr. MacCormick: There might be another way out. If we have a situation in which it is better to have a small airline with small aeroplanes, it might be possible some day to make further economies by allowing that airline to be responsible for running the airports on the islands.
  I am looking at this purely from a constituency point of view. I admit that if any particular airport grows to such an extent that it becomes a major airport, it must be looked at in a different way. But no one can tell me that Tiree or Islay airports will become major centres of international traffic and, therefore, must be taken over. There is a very strong case for looking at them separately.
  I urge the Minister to have regard to all airports in the Highlands and Islands in the same way and to realise that certain airports will never be great commercial airports. We could suffer from having them put under the blanket control of the British Airports Authority instead of leaving them as they are under the Civil Aviation Authority. In the long run the solution might be different, but it is dangerous and wrong to make up one's mind about these airports, take a difficult decision, and then reverse it later.
  1.24 a.m.
  Mr. Dennis Canavan: I have a great deal of sympathy with the views expressed by the right hon. Member for the Western Isles (Mr. Stewart) and the hon. Member for Argyll (Mr. MacCormick) about viable air services to their constituencies, particularly to the islands in the West of Scotland. The only way in which we can get a viable service to the West of Scotland is by having a Socialist public transport policy and State intervention. The hon. Member for Argyll admitted that when he said that formerly British Airways ran the service and latterly it has been run by Loganair. But Loganair could never do it on its own as a private enterprise concern; it can be done only with State intervention, and State intervention, to my mind, is the very essence of what Socialism is all about.
  The hon. Member for Western Isles finished by saying "Let well alone". To suggest that the present standard of service to his constituency is well shows considerable complacency. I do not think that it is well. I do not think that we should "Let well alone". We should improve the standard of public transport to his constituency.
  Mr. Donald Stewart: When I said "Let well alone", I meant it on the basis of the old saying "Better the devil you know than the one you do not know".
  Mr. Canavan: Whether he thinks that British Airways is a devil, whether he thinks that Loganair is a devil, or whether he thinks that the CAA is a devil—whatever he thinks about devils—the hon. Gentleman must admit that the status quo for his constituency is far from well. It is very imperfect, and the Labour Government are intent on improving it. The only way to improve it is by getting a greater degree of co-ordination of the existing services. That is why the Government are coming forward with the present proposal.
  The hon. Member for the Western Isles may shake his head and come out with his nationalist argument, and the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) may come out with his Tory argument about leaving it all to free enterprise and so on, but the truth is that there would not even be a service to the Western Isles or

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  to Argyll if it were not for State intervention. The Labour Government are now trying to rationalise things in a reasonable way.
  Mr. Donald Stewart: I want to get this on record, and I apologise for intervening again. At a CAA hearing in London two months ago it was admitted by British Airways that the airlines to the Western Isles and to the Orkneys and Shetlands are in the black, paying their way, whereas the services in the internal parts of Scotland, such as the one which the hon. Member represents, are in the red Let him put that in his pipe and smoke it.
  Mr. Canavan: This is nonsense. For example, the British Airways shuttle service is the most profitable service in the United Kingdom. But if British Airways or any other airline were operating purely on the basis of profit it would not even bother to go to the Western Isles. It is nonsense to say that one can run a profitable enterprise going to the Western Isles or to Argyll.
  In my view, what the Government propose is a reasonable solution to get some integrated organisation into the whole concern so as to provide decent services to these Tory areas of Scotland where the people do not even have the gumption to vote Labour. If they did vote Labour, they would have had a decent transport service perhaps a century ago.
  1.29 a.m.
  Mr. Teddy Taylor: Once again the hon. Member for West Stirlingshire (Mr. Canavan) has shown that he is in a very agitated state this week, and I think we understand the reasons for it. But it should be said at the outset that this debate is not about nationalism, about Socialism or about Conservatism, or about air services, shuttles and the like. It is about the management and control of a number of airfields, and to that extent we are grateful to my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) for raising the matter. He has pursued this cause with vigour and tenacity, and, without doubt, his argument tonight has been excellent.
  I remind the hon. Member for West Stirlingshire that when we talk about the British Airports Authority and about the Civil Aviation Authority we are not talking
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  about one Socialist efficient organisation and one inefficient capitalist one. They are both State organisations.
  The Minister has kindly received a deputation, including me and two SNP Members. I know that the Minister is a busy man who has many important problems to look at which need to be resolved and which are crying out for action. However, the general message from the Opposition and those who are involved at a constituency level is that here is a problem in which the Minister would be well advised not to look for trouble. As the right hon. Member for Western Isles (Mr. Stewart) has said, the Minister should let well alone unless he can successfully prove that his alternative proposals would be of advantage to the communities invomved.
  The Under-Secretary of State for Scotland, the hon. Member for Glasgow, Queens Park (Mr. McElhone), has been kind enough to attend the debate and show his continuing interest in this matter, and I should like him to talk to the Secretary of State for Scotland about what happened in the House yesterday. There was an announcement by the Secretary of State about teacher training colleges in Scotland that was the culmination of a long battle stretching over 10 months in which the Government had originally had a report prepared that was presumably based on expert advice.
  Mr. Canavan: That is irrelevant.
  Mr. Deputy Speaker: Order.
  Mr. Taylor: The House knows all about it, but I simply put the point that in this matter a proposition was put forward by experts although it was totally opposed by Scottish opinion.
  Mr. Deputy Speaker: Order. We are not discussing teacher training colleges in Scotland, and I ask the hon. Gentleman to remember my ruling on the matter. [Interruption.]
  Mr. Canavan: Behave yourself, skinhead.
  Mr. Deputy Speaker: Order. I have indicated that I shall not allow discussion on teacher training colleges or what happened in the House yesterday.
  Mr. Taylor: I can make a general point without referring to that. It is sometimes unwise to proceed with plans

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  based on expert advice and to have to alter them later when opposed by local community opinion. The Minister should bear in mind that the proposals that have been put forward have been opposed by the Scottish Council, the chambers of commerce, the local communities and hon. Members. I am sure that if the right hon. Member for Orkney and Shetland (Mr. Grimond) and the hon. Member for Inverness (Mr. Johnston) were here tonight—and we understand that they have had a busy and trying day—
  Lord James Douglas-Hamilton: Is the hon. Member aware that the right hon. Member for Orkney and Shetland (Mr. Grimond) wanted to be here very much but was unable to attend because of a pressing engagement and that he is going to send strong representations to the Minister on this subject?
  Mr. Taylor: Yes. Like other Liberal hon. Members, the right hon. Member for Orkney and Shetland has had a trying day today, and I can fully understand that.
  Local hon. Members, the Highland and Islands Transport Consumer Council and other local interests have made it clear that they do not like the proposals, and the Minister, although he has indicated in an intervention that some bodies in Scotland may take a different view, should bear in mind that those directly involved—those who use the airfields—and the local communities are of one opinion: they are happy with things as they are and are extremely concerned and apprehensive about a major change.
  There was a discussion on this in the Lords on 8th December, and there was given then an indication of some of the reasons—they were advanced by the Solicitor-General for Scotland—that might be argued for the change. Only two arguments have been generally advanced and those were the ones that were raised by the Minister at his meeting with us. The first was that it would be useful and constructive to have the Scottish airports brought into one package in the event of the Government devolution Bill going forward. That is laughable. It might go forward and be approved in a referendum or it might not, but it was said that it might be administratively useful at that time to have all
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  the airports in one package to prepare for devolution.
  The words used in another place were:
  "The transfer of the eight Highlands and Islands aerodromes to the BAA and their incorporation with the other Scottish airports in a single organisation with headquarters in Glasgow, perhaps or, possibly, Aberdeen, would therefore be wholly consistent with, and would facilitate, the Government's approach to devolution."
  It would be a major mistake if the Government envisaged two major organisational changes in airports in Scotland in preparation for something which might or might not happen.
  I was worried to read in some newspapers, including that Scottish paper called The Scotsman, on 31st May a report that the BAA had told the Government that it was prepared to take over four of the Highlands and Islands airports. I am not sure whether that has been confirmed, but if it were proposed to transfer only four of the airports, that would be a new fragmentation and the Government would not even have the argument that something was being put in one package.
  The second argument concerns commercial exploitation. The words used in another place—which were similar to those used by the Minister—were:
  "Another way to reduce the losses is to exploit other means of income which airports have."
  Much of this argument has been centred around Sumburgh airport. Many of the oil men are going through there and there might be considerable exploitation available from those who go through there. The BAA has considerable experience of this, but has the Minister any evidence that this cannot be done by the CAA, which, as far as Sumburgh is concerned, has shown a great deal of commercial expertise?
  Another point that worries me is that it was said in another place that the Government have not been given convincing evidence that the transfer of airports to the BAA would result in increased overall costs. That is not the sort of argument that is acceptable to hon. Members representing Scottish constituencies. We want an assurance that there is evidence that there would be advantages from transfer and not that

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  there was no evidence that there would be no disadvantages.
  Transport is so vital to Scotland that any possibility of additional costs understandably causes enormous concern. It is no part of the case of those who oppose change that the BAA is inefficient or costly. All the indications are that it is extremely efficient in running the airports it manages at the moment. Few people could produce convincing evidence that it is an inefficient organisation. It has major problems, particularly with trade unions and others, but it copes pretty well. However, that is different from saying that an organisation which has experience of managing its present airports could necessarily manage other airports better than the CAA.
  There are a number of particular points that I hope the Minister will be able to answer. There is concern that the changeover may result in increased costs. There is no doubt that at CAA airports one has quite different management and labour arrangements from those organised by the BAA. This was summarised brilliantly by one or my noble Friends in another place who said:
  "very often the handling of traffic is done by one man whose traditional form of duties takes the place, first, of chasing the sheep off the runway, then talking the aircraft down, and then carrying the baggage to the terminal. All that is done by one man. Almost always he is a local man, locally recruited".—[Official Report, House of Lords, 8th December 1977; Vol. 387, cc. 1838, 1824.]
  I do not know whether that was an extreme example or a paraphrase of what may happen. There is no doubt that the flexible arrangements at these airports contribute to reduced costs. If there were to be a division between the airport and the management functions, there would be increased costs.
  There is no doubt that if we were to have this change of ownership, it would not mean the CAA disappearing from these airports. It would carry out some of the functions, and the other functions would be carried out by the BAA. There would be a real danger of duplication of what is done by one person or organisation now.
  Has the Minister given any consideration to what might be the additional costs of dividing into two the responsibility for airports for which at present
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  the CAA is entirely responsible? [Interruption.] Or the CIA? I am not allowed to mention teacher training colleges—
  Mr. Deputy Speaker: Order. Hon. Members should not make sedentary interruptions.
  Mr. Taylor: The second point concerns landing fees. There is very real concern that if the changeover takes place, the BAA might increase landing fees. That would undoubtedly have an effect on air fares. The Minister must come to some of these Scottish airports to realise how acutely concerned people in the area are about the high level of air fares. It may be that some commercial travellers engaged in the oil industry will not be so conscious of fares, but the high level of fares is causing serious concern and anything that would result in fares increases would be of enormous concern.
  Third, private fliers, operators of small aeroplanes of their own, have given reports that in places such as Aberdeen, where there was a change, the costs have risen considerably.
  There are four additional questions that I hope the Minister will be able to answer tonight. First, how many complaints has he or the Scottish Office had about the CAA's management of the airports that it controls? That is often a good guide. My experience of these airports, particularly Inverness and some of the island airports, generally gives me the impression that most travellers and local residents are very happy indeed with the way in which the airports are managed.
  Secondly, will the Minister give an assurance that he will visit the airports and consult the employees and travellers?
  Thirdly, will the Minister assure us that in the event of his going ahead with the proposals, there will be no question of having a further division, of having, as was suggested, perhaps four airports being transferred to the BAA and the rump being transferred to some other body?
  Fourthly, will the Minister give a clear assurance that he will not advocate a change unless he can present convincing evidence to the House of Commons, the local community, the local councils and other bodies that the change will be for the better?

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  It would be only fair to tell the Minister that on the basis of the opinions that I have gathered in Scotland and of the speeches that the Minister has heard tonight and the representations that he has received, there is little doubt that if this proposal were to go forward without absolutely convincing evidence that it would result in an improvement, the Minister would be facing a very major battle.
  My final point is very important. In the discussion on a Question in the House of Lords, there was a statement by the Solicitor-General for Scotland that a decision was expected round about the end of the year. The words used were,
  "Around the end of the year, the Government plan to publish a White Paper … on airports policy, and it is my expectation that a decision on the aerodromes will be reached by them and announced at that time."—[Official Report, House of Lords, 8th December, 1977; Vol. 387, c. 1842.]
  We are almost at the end of the year. Some of my hon. Friends have been buying Christmas presents. There is no doubt that the end of the year is approaching. When does the Minister expect this decision to come? Unless he can provide the most convincing reasons for change, will he let well alone, let the CAA get on with the excellent job that it is doing for the eight airports and let the BAA continue to manage the other airports in Scotland, for the management of which it can take credit?
  1.44 a.m.
  The Under-Secretary of State for Trade (Mr. Clinton Davis): This has been an interesting debate. From my point of view, as one who has to make a decision or, at least, to recommend a decision to my right hon. Friend the Secretary of State, it is helpful to garner hon. Members' views. Indeed, as has been mentioned, I have heard every one of the hon. Members who have spoken in the debate, apart from my hon. Friend the Member for West Stirlingshire (Mr. Canavan), because they came to visit me and made almost exactly similar representations on that occasion.
  I want to make it clear that although it is true that the White Paper will be published, it is hoped, early in the New Year—it will not be before the end of this year—the Government have made
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  no decision on this particular point at present. We would wish to announce our decision in the White Paper. It is right that at this stage I should not commit the Government—indeed, I am not in a position to do so—to a particular point of view. However, having heard the arguments for maintaining the status quo, it is only right that I should present the arguments on the other side of the balance-sheet so that the public at large may be aware of the respective arguments. That is what I propose to do.
  The hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) is not directly affected in terms of constituency interests by the operation of the Highlands and Islands airports. His interest lies in the fact that the Civil Aviation Authority has its headquarters in Edinburgh. In that sense he is concerned primarily with a constituency interest, although I am certain that he is entitled to take into account wider interests in Scotland. He is concerned about any possible redundancies that might affect about 15 employees at the Edinburgh headquarters of the CAA.
  Lord James Douglas-Hamilton: Will the Minister accept that the much more important principle is that of my constituents who have to travel to the Highlands and Islands, who suspect that they may have to pay substantially increased fares or higher taxes? That is a much wider principle affecting many more people, and it also affects my constituents.
  Mr. Davis: I shall come to that argument. It was my impression that the hon. Gentleman was primarily concerned with the possibility of a loss of jobs at Edinburgh. That seemed to be one of the most important points that he made to me in his representations. I do not complain about that. I shall deal with that argument.
  I am fully aware that there is opposition to the proposals. I have had not only a substantial amount of correspondence on this score from hon. Members but the sort of representations to which the hon. Gentleman referred during the course of his introductory remarks. He did not exactly catch me by surprise when he read out the telegrams. I do not think that the money was very well spent as everyone was well aware of the position that the various bodies were taking.

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  However, in the first place I shall deal with the argument that the hon. Gentleman made rather more emphatically when he came to see me than tonight—namely, the future of the Edinburgh office of the CAA. I do not believe this to be an argument of substance, although the loss of 15 jobs is not something that one relishes. However, if it were in the interests of a more efficient operation to take such a course, what view would the Opposition take? Opposition hon. Members constantly regale us with talk about overmanning, and the right hon. Member for Leeds, North-East (Sir K. Joseph) never stops talking about it from one weekend to another. I can understand the hon. Gentleman's reticence in broaching the subject tonight.
  It is true that if the BAA took over the Highlands and Islands aerodromes about 15 jobs would disappear. That would have the effect immediately of reducing the overheads and providing a saving on the costs of the running of the aerodromes. It is accepted that any loss of jobs is regrettable, so we have asked the CAA, which employs another 100 or so people in the Edinburgh office who are unconnected with the operation of the Highland and Islands airports, for an undertaking that the people employed in Edinburgh on aerodrome management work would be found other work. I have not yet had that undertaking.
  It has also been suggested, more particularly in the representations I received from the hon. Gentleman earlier, that if those 15 or so people lost their jobs the CAA's office in Edinburgh would no longer be viable. I have asked the CAA management about that as well, and it has not yet responded. I find it difficult to accept that the future of the Edinburgh office could be jeopardised by the loss of these relatively few jobs. That would be ludicrous. If it were so, it would call seriously into question the authority's judgment in acquiring an expensive new headquarters site in Edinburgh. Therefore, I do not believe that that is an argument of substance, and I understand the hon. Gentleman's reticence in not referring to it tonight.
  Lord James Douglas-Hamilton: What evidence is there that the BAA could run these airports more efficiently, in the light of the fact that the CAA has operated
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  them efficiently and effectively over past years?
  Mr. Davis: The hon. Gentleman must not imagine that I shall sit down at this stage, although hon. Members who want to get on with the next debate might reasonably desire that I should. I shall deal with these points.
  I come to the question of the future ownership of the aerodromes. The argument has been adduced that the Government have sought to introduce this idea simply for the sake of administrative tidiness. There are far more serious and fundamental reasons. There are three principal considerations that I would put to the House as matters that should go into the scales of the debate on this issue.
  First, the CAA was established for the purpose of regulating civil aviation and to run the National Air Traffic Service. Incidentally, the service would not be devolved. The Highlands and Islands airports are absolutely essential to the communities they serve. They are vital to the Scottish transport system, but they are peripheral to the main functions of the CAA. On the other hand, the British Airports Authority was established exclusively for the purpose of running aerodromes. That is the distinction between the functions of those two bodies.
  The second consideration relates to Sumburgh. It would be wrong if I were to hide my concern about the way in which Sumburgh has been utilised and developed by the CAA. Sumburgh has expanded rapidly, but it clearly requires expertise in the planning of new facilities, the control of investment and the exploitation of commercial opportunities which is not available in the CAA to anything like the extent that it is within the BAA.
  I said that I was disappointed by the CAA's failure adequately to develop the opportunities for commercial exploitation. I am disappointed that the previous chairman of the CAA did not cast his mind sufficiently, or at all, over this important aspect. My noble Friend the Solicitor-General for Scotland was right to assert that there was an opportunity for taking advantage of people who could afford to pay considerable sums of money, who could take advantage of restaurant facilities and shops, and the rest, which provide the infastructure of the modern

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  airport. That opportunity, so far, has been lost, and it is a regrettable loss. It means that the income which could have been used to sustain the whole operation of the Highlands and Islands has been lost.
  Mr. MacCormick: I agree with much of what the hon. Gentleman has said, but does he not appreciate the fact that the real opposition to the proposal set before us is not to try to create a dividing line between those airports run by the BAA and those run by the CAA? We are not saying that just because one airport has always been run by the CAA it should not be run by the BAA. The point is that some airports are not capable of being commercially expanded in the sense to which the hon. Member is referring.
  Mr. Davis: It is an extraordinary thing that in this debate hon. Members should exercise such impatience. I am coming to that point—but I must deal with the points one by one, and I must express my disappointment at this lost opportunity. In that respect I do not sense that there is any great disagreement between the hon. Member and myself.
  The hon. Member for Edinburgh, West presented some very unfair comparisons. I think it was Lord Boyd-Carpenter who on one occasion talked about comparing apples with pears. That is precisely what the hon. Member was doing when he read out his statistics. The sorts of operations carried on by the airports run by BAA and those carried on by the airports run by the CAA are quite different. The general undertaking is of quite a different character.
  Here we have an example where the expertise to seize the commercial opportunities that are available has gone by the wayside thus far, and I think it is a pity. I think I have the hon. Member for Argyll (Mr. MacCormick) with me on that point.
  Mr. Teddy Taylor: To be fair to the CAA, we accept that a great deal of money can be made by selling sticky buns and tartan pencils at airports, but some of the catering facilities at airports run by the CAA, certainly in Inverness, are among the best in Britain.
  Mr. Davis: I was not referring to the hon. Member's tastes when he visits airports;
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  I was talking of tastes that were somewhat more selective. There can be no doubt that at some airports the facilities that could have been provided have not been provided.
  I do not want to labour the point. [Interruption.] The hon. Member must take drink for what it is worth. If I went into a debate about drink I am sure that you, Mr. Deputy Speaker, would rule me out of order.
  Mr. Deputy Speaker: The one sad omission was that the hon. Member for Glasgow, Cathcart (Mr. Taylor) did not mention haggis.
  Mr. Davis: I feel rather a stranger in this debate in some ways.
  The third point—I find it difficult enough already; heaven knows what I shall run into when I try to answer all the points that have been made—deals with the question of devolution. The hon. Member for Glasgow, Cathcart (Mr. Taylor) is wholly opposed to devolution. I shall not become involved in a debate about the principle; the House is now considering the issue of devolution, the Bill having been given a Second Reading by a considerable majority. I want to refer to a number of questions that I think are relevant to that principle.
  At present, the British Airports Authority already has Scottish airports, under an executive director. It has in mind—I have this from the chairman of the British Airports Authority—to establish a board under the present deputy chairman, who would be the chairman of the Scottish board, so that Scottish airports would be provided with a greater degree of autonomy. I do not think that hon. Members representing Scottish constituencies would cavil at that suggestion, which I think is desirable.
  The proposal for the Highlands and Islands airports is to establish the control and management of the western airports from Glasgow and the eastern airports from Aberdeen, thereby again providing a closer and more localised area of control than exists at the moment.
  There is another factor, which has been left out of the speeches made tonight on this subject, which I might interpose at this point. The British Airports Authority has a considerable record of consulting local opinion. Indeed, it is

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  duty bound to set up consultative committees. Only two months ago the Civil Aviation Authority set up a consultative committee at Sumburgh. I pay tribute to the present chairman of the CAA, who applied the expertise that he had gained when chairman of the BAA, for taking that step. I think that it is a great pity that his predecessor had paid such scant regard to local interests and had not considered it necessary to establish a consultative committee earlier. That is certainly an advance. I welcome it as a move in the right direction on the part of the CAA. I know, however, that it would be part and parcel of the duties and functions of the BAA to establish consultative committees in respect of every aerodrome if they were to be transferred to the BAA.
  Perhaps I may summarise the position regarding devolution as I understand it. I do not claim to be an expert in this area. Hackney, Central is far removed from this matter.
  As I said before, airports would be devolved under the Bill, but there would be no automatic devolution of the BAA or the CAA. Indeed, the CAA, except in its functions as an airports authority would not have its functions devolved at all.
  The devolution of those bodies, as airports authorities, would arise only if the Scottish Secretary made a request to the Secretary of State for Scotland for that purpose or if the Scottish Assembly should legislate to remove the BAA from Scotland altogether. That would be an alternative proposition. It seems to me that already the BAA has established a mechanism that is more available and flexible in this regard than that which operates under the CAA.
  In the light of these considerations, the Government formed the view that there were good grounds for asking the authorities to consider a change of ownership.
  Earlier this year Mr. Norman Payne, the Chairman of the BAA, told the Secretary of State that his authority was willing to take over the aerodromes if the Government wished that to take place on certain stated terms.
  Mr. Nigel Foulkes, the Chairman of the CAA, took the view—frankly, he has always taken this view, even when he was
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  with the BAA—that there would be no benefit to be gained from his authority, the CAA, relinquishing the aerodromes.
  Since that time we have had a substantial number of representations. I have gone to a great deal of trouble, as has been acknowledged by hon. Members, to try to sort out the views of people who are interested in this matter, which is very important to the people of Scotland, in particular to the Highlands and Islands. It may be considered by some—particularly English Members—not to be a matter of great concern, but I do not share that view.
  Only a few days ago I went to Scotland where I met and had further consultations with the Scottish TUC. I have discussed this matter with the STUC on two separate occasions. It is only right that I should tell the House that the STUC is firmly of the view that it would be right for the BAA to take over the aerodromes. That is one point of view as against the others that have been mentioned. Of course, the unions are anxious to ensure that the new terms of employment for their members are satisfactory.
  Lord James Douglas-Hamilton: Does the Minister deny that some senior members of the STUC have expressed a contrary view? Why was British Airways not consulted?
  Mr. Davis: I shall deal with British Airways later. I did not sense that there was outright opposition to the proposals for a BAA takeover. Concern was expressed about a number of issues which would be dealt with in the course of ordinary industrial relations negotiations. I have just referred to that.
  Mr. MacCormick: The Minister has implied that we are to be faced with a situation in Islay and Tiree in which everyone will be totally unionised and that there will be demarcation lines and even disputes about who does which job.
  Mr. Davis: That is a rather frivolous intervention. I shall deal with the question of one man having two or three jobs in a moment.
  The question of British Airways really relates to the whole process of consultation that has taken place on an unprecedented scale. At the outset I took the view, as did my predecessor, my right hon.

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  Friend the Member for Stepney and Poplar (Mr. Shore), that it was right notwithstanding the delays and uncertainities caused by delays, that there should be the fullest possible consultation. Throughout the country everyone had the opportunity of submitting to the Department his views on the two consultation documents. British Airways took a wholly neutral attitude. It made no representations to us to the effect that we should not proceed along these lines or that we should do so.
  I now turn to the points made in the debate. I shall attempt to answer them all.
  Mr. Canavan: Can my hon. Friend clarify exactly what the STUC said during discussions? Is part of the reason why it was in favour of BAA rather than CAA that the industrial relations of the BAA are better and that the SNP and the Tories oppose the BAA changeover because both the Tories and the SNP are opposed to trade unions?
  Mr. Davis: I do not want to hot up this issue unnecessarily. The basis of the STUC submission was that it favoured an integrated transport policy. It saw the BAA as being more readily able to achieve that. The CAA was already a fragmented operation. This was the crux of its submission.
  The hon. Member for Edinburgh, West seemed to be arguing two different cases at the same time. He was anxious about redundancy in one argument and concerned about too much cost being involved—presumably by overmanning—in another. He cannot have it both ways. He argued a contradictory case.
  The hon. Member said that senior civil servants decided on this policy two years ago and that Ministers simply owed their policies to articulate expressions made in support of them by senior civil servants. That is not the way that my right hon. Friend approaches his job.
  The hon. Member asked for a far more extensive review of Scottish airports. That would be ludicrous. We have already had this prolonged period of consultation. Everybody has had the opportunity to make submissions to the Department, and we have had more than a thousand of them. I do not believe
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  that creating further uncertainty would be the right approach. There is no case for a further extensive review.
  The right hon. Member for the Western Isles (Mr. Stewart) and the hon. Member for Argyll essentially made the same points and I shall bracket them together. They make an unholy duo. They were concerned about the significance of air travel for their constituents. They were critical on the points concerning flexibility of employment duties. I agree absolutely, and I understand from the BAA that there would be no question of breaking down the existing flexibility that operates. Where one man is doing a couple of jobs it is in the BAA's interest to continue with that.
  The BAA prides itself on running its activities profitably. A justifiable tribute was paid to it by the hon. Member for Cathcart, who obviously was not impressed by the argument he heard earlier from the hon. Member for Edinburgh, West about the BAA. The BAA would want to carry out its undertaking with its usual standards of efficiency and profitability. There would be no joy in its undertaking the sort of bureaucratisation of the Highlands and Islands airports that some hon. Members have flippantly described.
  Mr. Teddy Taylor: Does the Minister accept that what he said about my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) is just not fair? There is a great deal in which we believe that the BAA does well. On the question of flexibility, did the Minister get the agreement of the STUC to the continuation of the present practices of the CAA?
  Mr. Davis: The STUC did not go into details with me, nor would it have been proper for it to have done so until a decision is made. Then it becomes a matter for negotiation. But the STUC understands how the operations work. There was no suggestion that this sort of procedure should not be persued.
  I was invited to visit Tiree and Islay. I shall try to go there. I have, however, visited more airports in the United Kingdom than any other Minister holding this position. I shall make the visit if I can, notwithstanding the beguiling influence which I fear from the hon. Member for

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  Argyll. I cannot make a commitment that I shall do so. However, these airports have been visited by numerous people and I have had full reports about them. I do not dispute the arguments adduced in that regard in the House tonight.
  The hon. Member for Argyll proposed that Loganair or some other operator might operate these services in the future. I am not convinced that that is a viable operation that we should consider, but I will not rule it out simply because it was suggested by the hon. Member. We shall, of course, look at what he said.
  My hon. Friend the Member for West Stirlingshire (Mr. Canavan) rightly pointed out the importance of State intervention in the running of the Highlands and Islands airports. That is a most important factor. The hon. Member for Cathcart said that it was sometimes unwise to be seen to advocate plans which have been put forward by experts. That is a bit of a cheek coming from him. It was his Government who implemented plans put forward by experts for the reorganisation of local government and the National Health Service, both of which have cost this country a great deal of money.
  The hon. Gentleman asked me what consultation has taken place. I have already dealt with that in some detail. He went on to ask me whether the British Airports Authority would be prepared to take over four of the airports. That, I believe, is not something that the BAA would wish to do. I think it is concerned about running a tidy operation, certainly. There is the possibility of looking at Sumburgh separately. That is something that we might have to do, but I do not think that we ought to embark upon consideration of that proposition at this stage.
  The hon. Gentleman spoke about landing fees and blandly asserted that the BAA might increase landing fees. It is that sort of assertion that really does not help in a debate of this kind. Bare assertions do not necessarily reveal the naked truth, and it does not help merely to make that sort of blind assertion. Indeed, I must tell the House that when the CAA puts forward proposals for increased air traffic services, this meets
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  with tremendous disapproval from local authorities and others who are concerned. That is not unnatural.
  We are really concerned here with whether the taking over of these airports by the BAA would lead to increased charges. In my view, the arguments are really against simple assertions, and there is nothing to support the suggestion that the BAA would suddenly, because it descended on these airports, add enormously to their charges. This has been the constant theme, however, in the debate and in the representations made to me.
  What we have to face, clearly, is that some people suggest that nothing at all should be done to increase aerodrome charges. Whether we carry on under the CAA or have a transfer to the BAA, there can be no guarantee given that there will be no increase in aerodrome charges. Aerodrome charges reflect—or should reflect—the cost of running aerodromes. If I may stress the point, it is important to distinguish between, on the one hand, increases in costs which are directly attributed to a BAA takeover which would not otherwise occur and on the other hand, increases in costs which will occur irrespective of who owns the acrodromes.
  We have no evidence that transferring the aerodromes to BAA would result in increased costs, and no evidence has been adduced tonight, nor could it be. It must be recognised, however, that for a variety of reasons costs will increase, even under the CAA. But there are those who suggest, as I say, that aerodrome charges should still be held down and I want to say a word on that.
  In general, it is our policy that those who use air services should meet the cost of providing them, either directly through air fares or indirectly through the profits made on commercial activities such as the sale of duty-free goods. We recognise that this policy cannot apply, in its pure form, in the Highlands and Islands. Those in the region who rely on air transport as an essential social service cannot be expected to meet the full cost of the service, which therefore must be subsidised. But for many passengers, especially at the aerodromes serving the oil industry, the air service is a normal commercial operation and there is no reason why the taxpayer should subsidise such passengers.

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  We have to strike a balance between subsidies to keep down air fares, on the one hand, and the varying ability of different categories of passengers to pay an economic rate, on the other. It is not axiomatic that a subsidy has to be applied to aerodrome charges. There are other ways of keeping down fares where this is considered necessary. We have these various issues very much in mind but they are essentially separate from the question of who should own the aerodromes.
  There are other points with which I wish to deal, but that would be unfair to those hon. Members who want to take part in other debates. Perhaps I may summarise briefly the three points that I have made. It is said that the BAA has no experience of running small aerodromes. When it took over Aberdeen, which is not a small aerodrome in comparison with the aerodromes that we are talking about—but perhaps it bears a relationship to Sumburgh—it took over that operation with distinctive success.
  It is said that the BAA is somehow an enormous entity operating from London whereas the CAA is a sort of Freddie Laker of public enterprise. That is almost the terms in which this matter has been put to me. Again, that is far removed from the truth. The CAA is a very much larger body than the BAA, and the BAA has done much to ensure that there is a local responsibility, particularly in Scotland.
  Lastly, I want to deal with the effect on unemployment. I assure the House that the BAA has given me an undertaking that working conditions and the people who are currently employed in the airports themselves are matters which it takes seriously. I ask hon. Members not to dismiss that assurance.
  More particularly, if the transfer takes place it is right that the BAA should be given the opportunity of showing the country that it is capable of operating these airports successfully. I therefore believe that I have made out a case on the other side.
  Mr. Teddy Taylor: I do not agree.
  Mr. Clinton Davis: The hon. Gentleman would not find any case put forward by a Labour Government appealing to him. His basic principle is to reject anything
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  which a Labour Government do regardless of its merits. I do not take that observation very seriously.
  I believe that these are important issues and that we are right to debate them. We have not made up our mind about them. I have put the argument as strongly as I can on the other side so that the country does not have a one-sided perspective of what has taken place. I hope that our proposals which will be announced shortly will be given a reasonable opportunity to work. We understand that we cannot win. We are talking about a national airport strategy as against the chaos that has hitherto existed when constituency interests have impinged on this, and the Government understand that it will be difficult to convince everyone.
  But, in taking our decision, our concern primarily will be to ensure that the Highlands and Islands aerodromes are operated as safely, efficiently and economically as possible for the benefit of the communities which they exist to serve. I believe that to be a worthy objective.

  EMPLOYMENT (YOUNG PERSONS)
  2.24 a.m.
  Mr. Frank Hooley: Unemployment is a curse. It is socially indefensible, and it is economic nonsense. But it has a particular evil for young people. This is the problem that I want the House to pay some attention to this evening.
  Overall, the unemployment figure is about 1,500,000 but within that figure 708,000 are under 25 years of age. Within that figure 93,000 school leavers were unemployed last month. The trouble is that unemployment hits the most vulnerable hardest.
  From January 1972 to January 1977 there was a 120 per cent. rise in the number of 16–17-year-olds unemployed in Great Britain compared with a 45 per cent. rise overall in unemployment. In 1970, 35 per cent. of the young unemployed were girls. This rose to 49 per cent. in 1977. A much more frightening statistic is that the number of young black people unemployed trebled between 1973 and 1977.

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  This problem is not only one of particular categories of boys and girls. It is a geographical problem, too. In the inner cities, the population is of the order of 7 per cent. of the total, while the number of unskilled people in those areas is about 12½ per cent. One of the difficulties which will compound the problem in the next few years is the rising population trend.
  The Manpower Services Commission, in its report "Young People and Work" of May 1977—for the sake of brevity, I shall refer to it as the Holland Report—gave some figures. In 1977, the number of school leavers coming on to the labour market was 671,000. Next year, it will be 689,000. In 1979, it will be 703,000. In 1980, it will be 718,000. In 1981, it will be 725,000. So, in four years we shall have to deal with a labour demand by school leavers which has increased by 50,000, which is a formidable problem in itself, quite apart from the trends and difficulties of finding work for young people.
  This raises the fundamental argument about whether the problem that we now face in relation to the unemployment of boys and girls is what is called cyclical—that is, simply a function of the downward trend in the economic recession—or structural, which is whether we are facing a problem in which, owing to our present economic arrangements and industrial development, something has gone wrong with the structure of our employment pattern and we face a much more intractable problem than even the very serious problem of the downturn in the economy.
  I quote from the admirable Seventh Report of the Expenditure Committee, dealing with the job creation programme. In paragraph 19 on page 16, it says:
  "As a result of this shift in view from a cyclical to a structural theory of unemployment, which is echoed by many other authorities, it is urgent that we should think about the unemployment problem in terms of policies for the next few years, not the next few months."
  What are the factors which are making this problem so difficult and so challenging? First, there is the change in the technological and occupational base of industry. Industry is demanding more highly skilled people. It is becoming more capital-intensive, even in our own
  724
  society, which is somewhat backward compared with West Germany, Japan or the United States. The technology is changing and becoming more sophisticated, and the demand for skilled people is higher, whereas the demand for the unskilled is less. In fact, it is a curious irony that even today, with so much high unemployment generally and amongst school leavers particularly, there is still a shortage of skilled workers. There is a shortage in Sheffield at the moment.
  Secondly, there is a tendency for older people to stay longer in the same employment. Some of this derives from the very proper legislation that this House has enacted in terms of security of employment, redundancy payments, and so forth.
  Thirdly, there is a comparative lack of mobility among younger workers. One may think that the young are foot-loose and can go here and there in search of jobs, but in practice they live at home with their families and are not as mobile as people sometimes imagine.
  Fourthly, and extremely important, there is the enormous importance of the public sector as an employer. Unfortunately, the policies of the Chancellor of the Exchequer in this respect in restraining and even cutting back the growth of certain important areas in public services and even in public corporations have a serious repercussion on jobs overall which plays back into the job opportunities of young people.
  The Manpower Services Commission's forecasts of posisble figures of youth unemployment over the period 1978–81 make extremely grim reading. The graph shows that the possible peaks in that period range from 250,000 to 350,000 unemployed young people, and even the troughs—the immediate outflow from schools and the gradual absorption into the labour market from Easter to the autumn—show figures of between 100,000 and 200,000 in the 1978–81 period. Therefore, if the Manpower Services Commission's figures are right, we are faced with problems of having between 150,000 and 300,000 boys and girls unemployed in each of the next three or four years.
  I do not want to give the impression that I am unaware of any of the very important programmes that the Government have launched in the past couple

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  of years in order to cope with various aspects of the problem.
  First of all, there is the question of training in industry through the Training Services Agencies and the Industrial Training Boards, on which £121 million has been spent. In the current financial year 41,000 places have been made available through the training services programme.
  Secondly, there is the Training Opportunities Scheme—TOPS—which applies to older workers as well as youngsters. This has cost £10 million and has given training opportunities to some 13,000 young people.
  A much larger scheme is the job creation programme. This is coming to an end at the end of this year, although it will be replaced by other schemes. It has cost £130 million, and by March this year it was estimated to have provided 68,000 job opportunities. Unfortunately, there has been a decrease in the numbers of young people involved in the scheme—from 57 per cent. in the earlier days to 40 per cent. currently. Apparently only 20 per cent. of those involved in the job creation programme have been girls. Nevertheless, it has done valuable work, as was indicated by the Expenditure Committee's report.
  I quote one particular scheme in Sheffield. This involved the creation of Sheffield's first new park for 40 years. A local planning officer commented:
  "There were tips of rubbish, four-foot high weeds, brickwork and stone scattered about, it was an eyesore.
  Altogether some 350 people have had jobs on the project. A formal entrance garden has been made, miles of new paths laid, a cycle speedway created and four football pitches have been drained and improved.
  One of the main improvements has been the planting of more than 67,000 trees and bushes. During the next few years, with continued maintenance, it will keep on improving as trees and bushes become more established and we will have another park to be proud of.
  An extra bonus is the fact that, of those who worked on the project, about 50 are being offered permanent jobs—some in the park they created."
  That indicates that the job creation scheme in some respects and in some areas has had a valuable and permanent spin-off.
  Then there is the work experience programme, which cost £19 million and provided
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  about 16,500 places for young people. Under this heading about 55 per cent. of those involved were girls, thus offsetting the lower percentage of those benefiting from the job creation programme.
  Apart from the specific training and work schemes, there have been major subsidies. The youth employment subsidy for boys and girls under 20 placed 12,500 young people and cost £3·7 million. The much wider scheme, affecting adult employment, as well as youth employment, was the temporary employment subsidy, which will cost £430 million to March 1978 and may have saved some 400,000 jobs. Again, this is a scheme which has some value in Sheffield. I quote this time from the Morning Telegraph:
  "A Sheffield firm and nearly 80 jobs have been saved by the Government. Workers at Chapeltown dishwashing machine and catering equipment manufacturers, Dawson MMP, have been told that the firm's application for a temporary employment subsidy has succeeded. Redevelopment plans, which could mean new jobs next year, will now be able to start as hoped."
  Unfortunately, there are serious and alarming suggestions that the temporary subsidy is being threatened by the Brussels bureaucracy. Whether that is true I do not know, but, if it is, I sincerely hope that any such threat will be firmly and absolutely resisted by our Ministers. The temporary employment subsidy has been widely praised as a valuable technique for preserving jobs and, incidentally, holding skilled workers in firms where they will be useful as the economy expands, and it would be quite outrageous if this scheme were to be destroyed because of some technical pedantic objection from the Brussels machine. I hope that my hon. Friend the Under-Secretary of State can give us an assurance about that.
  The Government have gone further than these various schemes and haw asked the Manpower Services Commission to provide a more comprehensive scheme drawing together the individual programmes and ideas. This was published by the Manpower Services Commission in May this year under the heading "Youth Opportunities Programme", but perhaps it is more generally known as the Holland Report. The intention is

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  to draw the experience of the job creation programme and the other subsidies and schemes into something more comprehensive to tackle more systematically the problem of youth unemployment.
  Broadly, there are three heads in the Holland Report. First, there is the proposal to provide various preparatory courses to prepare young people for going into work, perhaps giving them a bit of help, advice and encouragement on how to present themselves and sell themselves to employers. These courses will last anything from two to 26 weeks. Then there are actual work experience courses either with employers or with various training projects or community service. These courses will vary from six months to one year in duration. Third, there are incentive training grants and Community Industry schemes, which will last for a year.
  The total throughput, as it is rather inelegantly put in the report, of young people in these schemes is estimated to be 234,000 in the course of a year, at an annual gross cost of £168 million, though the net cost will be somewhat less because one has to offset the unemployment pay and other social benefits to which the young people would otherwise be entitled.
  This is an ambitious and sophisticated scheme. I suspect that it may well be one of the most sophisticated efforts among the EEC countries as a whole, if not in the world. I wish to say nothing which would denigrate it or suggest that it should not be pursued, but I fear that it is not drastic enough to cope with the formidable problem which we shall face in the next two or three years and which the Manpower Services Commission's own figures reveal to us.
  The scheme has three or four weaknesses. First, for individuals—I realise that the proposals can extend year by year—the projects are short term. Most of the courses or work experience schemes will last for six months or less, although in some cases they will be for a year. Boys and girls who get involved in the various schemes are faced with the prospect that they may be in a scheme for three months to a year but then what happens? They have been trained or had work experience but then they are back on the roundabout.
  728
  The work experience programme, which actually involved boys and girls with employers and which I regard as the most important idea within the whole report, will cover only about 60,000 within the total of 234,000 boys and girls involved at a cost of £28 million out of the total of £168 million. I should like to have seen that principle much more strongly embedded in the scheme and I shall speak more of this later.
  There is also the basic point that young people want a job. They want to be at work and not shunted around from this, that and the other course and at the end find that they are still unemployed and with nothing to do. I discussed this matter with an officer of the Training Services Agency. She said "It is quite clear that those who have been on schemes or have been unemployed want only employment. They are simply not prepared to consider any other alternatives." That may be a rather strong way of putting it but there is a lot of force in that. It is true that offering people courses, training and preparation is useful but the boys and girls want a job.
  Another weakness of the Holland Report is that it does not basically compel employers and trade unions to face up directly to their responsibilitites for the unemployed boys and girls, except in the case of the work experience programme, which forms but a small part of the whole scheme. Holland asks a whole series of Government agencies—capable civil servants and training service officers, of whom I make no criticism—to try to grapple with this terrible problem of 200,000 to 300,000 young people without work, while the people who should be forced to grapple with it directly and immediately are the employers and trade unions within the trades and industries involved.
  In the not-too-distant future we shall be forced to adopt a much more drastic plan. My proposals would be along the following lines. I am assuming that the total number of unemployed 16-19-year-olds—that is, those above 16 years and under 20—will be about 400,000, which may be a slightly high estimate. One can arrive at slightly different figures by talking about different ages but I think that that is about right, and if it is a bit high the problem is slightly simpler.

  729
  The total registered work force in the United Kingdom is roughly 24 million, so young unemployment is equivalent to about 1½ per cent. of those in work. The essence of my plan is that every form of employer, in the public and private sectors, would be required to take on as supernumary to the normal work force the unemployed boys and girls at an agreed percentage. Small firms with fewer than 25 employees might be exempt, firms with 25 to 100 employees might be required to take on one boy or girl, those with 200 to 300 employees three young people, and so on pro rata up the scale. In effect, the right to work would be absolutely guaranteed to young people up to the age of 20 years. It would then be clear how many young people had jobs, how many had gone into full-time or further education and how many remained officially unemployed in each area. The manager in each area would be required to produce a form which provided space for the name and address of each unemployed boy and girl, some brief account of his or her qualifications and a list of the 20 or so main types of employment in the area. In Sheffield, for instance, this would obviously include steel works, engineering, machine tools, construction, cutlery, food processing, the retail trade, local government, the Civil Service, the Health Service, education, railways and so on. Not every type of employment need be included separately but all forms should be included somewhere in the main groups.
  Each boy or girl would indicate his or her preference, ranked one to six, for the types of employment listed. In the meantime, every employer, public and private, from universities and hospitals to steel works, with more than 25 employees would be required to make a return to the employment exchange of the size of its work force and the pro rata number of supernumaries that it would expect to be allocated. The percentage allocation would vary from area to area, but the national average would be about 1½ per cent of the total of employees in each firm.
  Employment exchanges would then allocate the boys and girls in the light of individual preferences they have expressed and the quota of each firm. If people do not like the idea of the allocation
  730
  being done by civil servants, perhaps an informal committee of trade unions, employers and a representative of the MSC could be set up to deal with the problem.
  The duty of the employer would be to produce useful work and/or training or day release for each boy and girl in close co-operation with the shop stewards or trade union representatives in the establishment. This is essential. The scheme can work only if it has the wholehearted backing of the trade unions on the shop floor and nationally.
  Every young person would be paid the normal rate for the job he or she was doing. There would be no question of undercutting wage rates, but perhaps a Government subsidy of £10 or £15 a week could be paid to an employer employing young people in the scheme who were surplus to his actual needs. This could cost £200 million or £300 million a year, but, of course, the gross cost would be reduced by the social security benefits otherwise payable. The net cost to the taxpayers would probably be rather less than £200 million a year plus a small addition to the total labour costs of the nation.
  Can it be argued that this scheme is sweeping under the carpet and trying to push it out of sight? I do not think so. I would regard it as formal recognition by the unions and employers of the need to bring into the environment of the workplace, whether factory, hospital, office or college, boys and girls who look like being shut out for a long time. It would accustom them to the atmosphere of work and useful activity instead of the boredom of the street corner, an empty house or a betting shop. It would impose on them the discipline of clocking on and leaving at regular hours and give them a modest earned income instead of the unearned miserly dole. It would bring them into daily contact with trade unionists, supervisors and managers and destroy that yawning endless vacuum of month after month on the dole. There is no reason for it to hamper or retard the expansion of training, day release or apprenticeship schemes. Indeed, it might throw up new needs and suggest new techniques.
  About four-fifths of young people would, I believe, welcome such a scheme. About 20 per cent. would, for one reason

  731
  or another, not fit in, and they would need special care, advice and guidance from careers officers and the TSA.
  Is there any advantage in having young boys and girls bored and fed up at work rather than at home or on the street? It would be the job of the manager, foreman or shop steward to see that the young people were not just dumped in a corner with nothing to do. At worst the individual would be in a working environment with a chance of learning something about the working world and not on the street corner, cut off and shut out.
  More than that, there is all the difference in the world in the expectation of permanent employment by an employer who knows a boy or girl as an individual and a young person trying to get a job from cold on the basis of a written application to someone who has never heard of him. There is nothing in my suggestion which would prevent the individual from applying quite freely for a permanent job, if he wished to do so, in any other place.
  Clearly, such a scheme would have immense applications, and there would be immense difficulties in implementing it, and, indeed, in persuading employers, and some trade unions, to accept it. But my own belief is that we shall not grapple with the problem of youth unemployment successfully unless we go for something much more radical than what is included at present in the Holland Report, although, as I have said, I do not wish to play down the value of the suggestions in that report.
  Finally, I should like to quote again from the report of the Select Committee, because I think that it has something very important to say on this whole problem. I quote from page 35, paragraph 112:
  "Employment prospects are now such that young people face long periods of joblessness, particularly those of low educational attainment, but also special groups such as newly qualified teachers.
  There are dangerous social consequences, apart from important economic ones, from young people in many areas (especially the inner cities) having to cope with long periods of unemployment without the life experience of older people.
  It is therefore imperative to have a comprehensive and continuing programme to combat unemployment among all age groups and both
  732
  sexes, but primarily among the 16 to 18 year olds."
  I am not suggesting that the proposals that I have put forward are in any way the last word, but I am quite sure that something more drastic and far-reaching than what we have in the Holland Report will be required if we are to grapple successfully with what I regard as the most formidable social problem that we have on our hands at present.
  2.52 a.m.
  Mr. Esmond Bulmer: The hon. Member for Sheffield, Heeley (Mr. Hooley) is to be congratulated on raising this issue. There is nothing of greater importance at present. The hon. Member has presented the House with a great many statistics. I should like to add one set only from my constituency experience.
  In Kidderminster, taking the September figures, in 1975 there were 205 young people leaving school for whom there was no job; in 1976 there were 387; in 1977 there were 460. It is calculated that next year 50 per cent. of those leaving school will have no job to which to go. If that figure does not ring alarm bells, nothing will.
  A society that does not look after its young people must be sowing the seeds of its own self-destruction. The hon. Member was quite right to point to the most obvious pressure point, but I think that it must be our overriding priority as a society to see that our young people have a proper start in life. I do not believe that the Minister will be able tonight to offer any immediate comfort. As I understand the figures, neither the Government nor the MSC can see the point in the future at which unemployment will drop below 1 million.
  The unemployment from which we are suffering at present is both structural and cyclical, unfortunately. The cyclical problems that were brought upon us so viciously by the increase in oil prices were compounded by the Government's overspending and by the pressure that that overspending brought upon industry. From my own experience I have seen at first hand the demoralisation that is caused by Government over-reaction and and by excessive intervention. If a person running a company cannot fix the price of his product, cannot employ the people

  733
  he wants and cannot pay them as he wishes, he feels that he is running the business with one hand behind his back. Many of those in industry feel that the rewards are not there. They feel that the decisions that they wish to take are frustrated and that their companies are not being run to the best advantage. Until there is more confidence that the Government understand the problems and are reacting to them, I do not believe that industry will offer the jobs that are within its power to provide and on the scale that we want to see.
  The starting point—I think that the Secretary of State for Employment recognised this in his contribution during the Queen's Speech—must be that we as a nation have to compete in the world, and that our competitive edge is all important. If our industries are to be competitive, a great deal of flexibility is required. That flexibility will not be forthcoming unless those who lose their jobs recognise that there is some hope offered by the alternative schemes produced by the Government.
  Clearly, the Holland Report is an important contribution. What else is there that we can do? I wish to put a few thoughts to the Government.
  First, we must improve our intelligence. I find it disturbing that the Manpower Services Commission has still not received any projections on the jobs that will be offered in future or the impact of technology on various skills. How can the country prepare young people for the future if we have not done our homework?
  Some of the information to which I have referred will be available in the next few months. I hope that the Secretary of State will make it available to the House. He promised to consider doing so. No doubt he has some natural reservations about making available information that might induce greater gloom than perhaps he feels is justified. However, I think that he should consider the contribution that can be made at local level. The TUC is now becoming more aware of that factor. It is important that we get groups of people together, especially in towns and areas that are over-dependent on one activity, In that way we can get better intelligence
  734
  than that obtainable through sector working parties and develop strategies more responsive to the needs of the community.
  In my constituency I have seen that system working at first hand. A group of people representing employers, unions, the council and those giving careers advice, for instance, is in a position to make a direct examination of the problems on a regular basis. It also has regular contact with all the major employers so that it can monitor both current reaction and future expectation.
  It must be said that of 52 companies in my constituency only two expect to be taking on more employees within the next four or five years. Certainly half expect to be employing considerably fewer. What can we do about that? We are clearly at a disadvantage, not being a favoured region or in receipt of any special benefit, against the areas that have such benefits. We can ensure that land is brought as quickly as possible into a condition in which it can be used for industry. We can promote a much greater exchange between schools and employers. We can perhaps bring forward job creation schemes.
  I would like to refer to some of the difficulties that are exprienced within the job creation scheme as it is now operating. It is still in the do-it-yourself stage, but I believe that it is potentially extremely important for the future if it can be developed. At present some of the constraints are too strict. The fact that a scheme cannot last beyond a year means that the young people working on it know that they have only a limited time. Towards the end of the 52 weeks they tend to lose interest. There are problems in getting the right level of supervision. There are problems in getting the right candidates put forward for the right opportunities. Sometimes there are difficulties with trade unions. But this approach should be developed.
  I ask the Minister also to consider the special problems of rural areas, where the allowances for overheads are insufficient. The sum of £10 goes nowhere near covering fitting out somebody for forestry, which requires about £100. The cost of travelling is a powerful disincentive. Most bodies, such as the National Trust, have a separate cheque book and

  735
  separate bank account for each scheme they operate.
  Perhaps the most important thing a local group can do is to enlist employer good will to see that the schemes put forward are advanced. Where possible, key managers spend time talking to those about to leave school and make themselves available to those in education to bring home to them future prospects in a way to which they can respond. It is particularly important that young people receive training in companies rather than at outside centres. It would be helpful if the Government allowed any employer who was training in a skill known to be one that the country required to recover the costs of that training in full.
  But there is a limit to what can be done locally. Above all, we look to the Government to provide stability, and particularly to control inflation, because that is the great job destroyer; to raise the level of economic literacy; to provide cash for training; and to avoid the sort of interference that makes company longterm planning impossible. Examples of the interference to which I refer are arbitrary taxes, such as the 25 per cent. VAT, the violent fluctuations in interest rates from which we suffered a year ago as a result of the Government's mismanagement, or sudden cuts in Post Office contracts. The Government should in particular consider how to encourage the will to innovate and small business.
  I recently talked to the sixth form in a school in my constituency. I asked the 112 boys and girls how many were going into industry and found that only one was. There is a great deal to do to bring home to those in education the real problem that we face and the extent to which it is competitive industry that pays for all the things they require in the future.
  I hope also that the Minister will look again at the Employment Protection Act. There is a Private Member's Bill which would extend the qualifying period for unfair dismissal and redundancy to 52 weeks. I hope that when that Bill is introduced it will have the hon. Gentleman's blessing. When a similar clause was debated in Committee it had the blessing of the Secretary of State when he was
  736
  Minister of State. I believe that the Act is a powerful disincentive to small businesses taking people on.
  The Minister might think again about how to bring together people, materials and money locally to get new business off the ground. This is not the time or place to relate the success of the Man-dragon experience in Spain. Many managers in their early 50s from big companies such as ICI can offer expertise. Many skills are not being used. We know that money is available to back the right schemes. What is lacking is a framework in which these can be brought together locally.
  My constituency has suffered from the refusal of IDCs. I hope that the Government will reconsider the whole problem of mismatch in their regional policy to mitigate the appalling problems of youth unemployment. I hope that they will recognise that industry must have priority, that there must be a back-up for all those who face retraining and for young people, and that no young person should be without a worthwhile activity at least up to the age of 18.
  But I think that we have to look at the question of structural reform, to the shorter working week and earlier retirement, and that can be done only in the context of a united European effort, because if one country acts on its own, it will put itself at a disadvantage. I hope that the Minister will pursue initiatives in this field as hard as he can.
  So we approach Christmas and should be giving tidings of some comfort, but I regret that there are no such tidings at present. I hope that there will be combined action in this matter by all those of good will in the coming year and that some solutions will be offered.
  3.6 a.m.
  Mr. Jim Craigen: I agree that my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) deserves support for raising the important issue of youth unemployment. There is no doubt that there is a good deal of parliamentary consciousness about the problem of unemployment, although I suspect that there is less concern about the particularly acute nature of the problem of unemployed youth.

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  It is a few years since we lowered the voting age to 18. At the last General Election there were little more than a dozen Members of Parliament under the age of 30, and we are all three years older now—not that I was then in the category of the under-30s. Perhaps this relative absence of younger people from our political institutions reflects our seeming indifference towards the sensitivity that exists when one is looking for one's first job at the age of 16.
  Only last week we had some staggering figures from the Secretary of State for Employment concerning the number of people who will come on to the labour market in the next decade or so. We are reaching the stage at which unemployment will be a way of life for many young people. In some homes it is almost a heredity factor, because the fathers or mothers have often undergone long periods of unemployment. In an area such as Clydeside the main forms of employment have been the traditional apprenticeship for boys and office work for girls, but this pattern is changing. The traditional apprenticeship itself is changing. The job opportunities for many young girls are shrinking as many offices organise their employment in such a way as to reduce the need for the same employment.
  In the last few years we have seen employers revising their employment practices as a result of the raising of the school leaving age. We have seen the expansion of further and higher education, which, in its turn, has resulted in greater job expectation on the part of youngsters. Yet at the end of the period of further and higher education many of those youngsters have found even greater difficulty in getting jobs.
  I was interested in the report that has just been published by the Manpower Services Commission on training for skills—"Programme for Action". As I understand it, the industrial training boards will have to assess the future needs for skilled manpower. I wonder, however, whether they will also take on board an assessment of future changes in technology—because every new technology puts jobs at risk. I am not suggesting that we should set our faces against technology, but increasingly in our political decision-making we should recognise the impact
  738
  that it is making on employment prospects. The more we automate, the more we decrease job opportunities. There is increasing pressure to eliminate routine work, therefore removing the need for people to do such work, but job opportunities are not being created in other sectors of our economy.
  I shall not bore the House, at ten minutes to three in the morning, with statistics about unemployment. The OECD and member countries recognise the seriousness of the situation. Indeed, the Director-General of the OECD stressed the importance of youth unemployment when he addressed the Council of Europe in Strasbourg recently. The European Commission also seems to recognise that there is a serious problem here. What is lacking is a co-ordinated effort on the part of member Governments to produce a number of major social changes, which I think will be forced on us whether we like it or not, to overcome the growing unemployment figures.
  Even if we get a substantial increase in industrial demand in this country, increasingly improved investment would seem to result in fewer jobs. Many firms openly say that they could get more production with the present numbers employed by them.
  A lot of discussion is going on at this time about the spending of North Sea oil profits. Last night we discussed the European Commission's proposals for social security equality. I feel that an opportunity was lost to take action in that regard when we put through Parliament the Pensioners Payments Act, which is due to come into effect in April next year. It was felt that the cost of lowering the age at which men retire to 60 would be too great.
  I wonder whether we should revise our views about weighing the social cost of such a step against the cost of not doing anything in that respect, quite apart from the fact that it would remove the discrimination between men and women regarding retirement. I understand that about 3 per cent. or 4 per cent. of the working population would be involved if we were to reduce the retirement age for men to 60. I hasten to add that, in my view, we ought not to force people at the age of 60 out of jobs, because many are mentally and physically fit enough

  739
  and want to continue working. However, we should certainly change our social security legislation to enable men to retire at the age of 60. Indeed, many people in the white-collar sector, particularly in the Civil Service, already have that provision in their conditions of employment.
  My hon. Friend the Member for Heeley was right to stress the need to look at the longer-term trends in employment—for example, a shorter working week with perhaps a different pattern of working week. A serious attempt should be made by the Government to discuss with the trade union movement the possibility of reducing overtime working. Such a step would, of course, require some changes in pay policy, because overtime working in many firms is simply a way of topping up the pay packet.
  A year ago the Department of Employment published some interesting statistics projecting the trend in new employment opportunities up to the early 1980s. It was significant that the major expansion was seen in the white-collar and non-manufacturing jobs. In many ways that runs counter to the Government's industrial strategy in the sense of expanding the manufacturing base. More investment often results in fewer jobs but higher production.
  The latest Manpower Services Com mission's report suggests that about 10 million job changes take place each year That figure staggered me. I thought that the figure was nearer 7 million. This might indicate greater mobility and greater instability in the employment market with fewer gold watches being handed out at the end of a person's working life.
  This has implications for young people I do not wish to go over the ground that was covered by my hon. Friend the Member for Heeley by describing the various measures which the Government have introduced in the last few years in an attempt to reduce the incidence of youth employment. I shall refer to the attempts that have been made to assist local authorities in the work of careers officers.
  One of the best ways of assisting careers officers is to put more jobs on their books. There are limitations on the amount of advice that they can give to youngsters if there are no jobs on their
  740
  registers to Which they can direct them.
  This year we are spending a great deal of time on job creation for politicians, not only by introducing direct elections to the European Assembly but by preparing for devolved Assemblies for Scotland and Wales. We really must concern ourselves more with employment opportunities for the rising generation. I fear that if we do not we shall have not only a generation gap but a real conflict of generations. There will be a growing resentment by younger people of the older section of the community which is not sufficiently concerned to create the type of job opportunities that they are seeking.
  I do not want to knock my hon. Friend's suggestion that firms should take on additional young people. But when I examine the sectors of industry that are likely to take on additional labour I find that the nationalised industries are in the process of contraction and that there is great pressure on both the Civil Service and local government to restrict staff intake. I do not see the multinational companies becoming generators of additional employment opportunities. That leaves us with just the small firms, of which my right hon. Friend the Chancellor of the Duchy of Lancaster is, I understand, making a special study.
  I do not think that we should fall back too much on to the idea that we should encourage firms to take on labour that they do not need. That would just build up a lot of bored workers in industry, and that is not a healthy state of affairs. The Government will have to act much more purposefully with other countries in the EEC and OECD to try to achieve changes in the pattern of the working life, the working week and the working year. Otherwise this problem of unemployment will remain and, because of the demographic changes in this country, become even greater and more alarming than at present.
  3.22 a.m.
  The Under-Secretary of State for Employment (Mr. John Grant): This is not the first time that I have replied to my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) in a debate of this kind. As always, he has raised these matters in a thoughtful and constructive way. The whole House shares his view that

  741
  youth unemployment is a matter for grave concern. That is certainly the Government's view.
  All unemployment is a serious matter but, without wishing to suggest that its effect on adults is unimportant, I think it is true to say that youth unemployment is particularly wasteful. Its economic and social consequences are especially serious. Work is a crucial factor in the transition to adulthood. If a job cannot be found, the impact on self-confidence and morale can be shattering. The opportunity for investment in human resources, if that is once lost, certainly is not easily regained, and the level of youth unemployment is now higher that it has been since the war.
  My hon. Friend talked about youngsters being left on the street corner. My hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) has referred to the conflict that could arise between generations. There is a very real danger that today's jobless school leaver could be tomorrow's vandal or football hooligan or maybe tomorrow's National Front recruit, or perhaps all three. This problem is storing up trouble, and it represents a serious challenge to the Government. I shall describe how we have tried to meet that challenge, but let me first put the matter into perspective and underline certain points that my hon. Friend has made. I do this because of the way in which my hon. Friend has framed his approach to our debate. The subject he has raised is the problem of youth unemployment. Let us look at the dimensions of the problem so that we all know exactly what we are dealing with.
  This year over 845,000 young people left school in Great Britain. By November, some 780,000 of them had found jobs or training or further education. There were still 68,000 young people registered as unemployed who had never had a job since leaving school, and that is a worse figure for November than in any previous year. It is 68,000 young people too many to have on the unemployment register. But I mention the figure, and the number who left school, because I think it is important that we realise that the majority of school leavers do find jobs within a few months.
  I do not make this point in order to minimise the size of the youth unemployment
  742
  problem, which, as I have already said, is a grave one. No Government can afford to be complacent about a problem the size of this. But I want to make the point that the characteristics of the unemployed are as important as the numbers when it comes to deciding on a policy to help them. When unemployment and youth unemployment are very high the weakest go to the wall. The better qualified youngsters will generally find jobs, even if the jobs are not as good as they had hoped, and that means that better qualified school leavers are taking the jobs that the less well qualified would normally have got. So the youth unemployment problem today is very largely about the most vulnerable section of our young people—the less able, the disadvantaged, the handicapped, the black, the youngsters in the inner cities.
  My hon. Friend the Member for Heeley mentioned the rising population trend, and I point out that, because the numbers of young people leaving school each year are rising, the difficulties faced by the less able are likely to be compounded. In 1972 we had 573,000 youngsters leaving school and looking for their first job. As was pointed out, by 1981 we can expect the number to be about 725,000. It will not be until 1983 that the figure should begin to drop.
  I say to the hon. Member for Kidderminster (Mr Bulmer) that this ought not to be in any way a subject for party points, and I am not accusing him of treating it in that way. It could be said that successive Governments have woken up too late to the scale of the problem. Action should have been taken earlier, but there is now very substantial action being taken.
  The problem is not confined to school leavers either. It is less well known, perhaps, that unemployment among the 19 to 25-year-olds has increased enormously as well. Young adults often suffer disproportionately from "first in, last out" redundancy policies. They have not had time to build up long periods with an employer. They have at least had experience of work, and that in itself helps them when it comes to finding another job. But the fact remains that a growing proportion of our total unemployed are well under 25.
  The question of protective legislation was mentioned and the disincentive that

  743
  that is to the employment of young people. We are not convinced by arguments that employment protection legislation has acted against the interests of young people. The evidence for this is somewhat shaky. I have seen the same argument quoted in other countries as well. It tends to rest on assumptions rather than facts. My right hon. Friend the Secretary of State has recently announced that we are mounting research so that we shall have the facts available. But in general I share the view that the Employment Protection Act is an achievement and not a liability.
  I think I can reasonably say that the Government responded fairly quickly to this very serious situation. We began our programme of special measures to help the unemployed in 1975. Between them those measures have helped 300,000 people in two years, about one-third of them young people. The measures were, I accept, introduced piecemeal. The main need was to act quickly, and we have done that. My hon. Friend the Member for Heeley mentioned his own gratifying example from Sheffield under the job creation scheme. The hon. Member for Kidderminster talked about specific constraints. I think that the most sensible thing I can do is to draw his examples to the attention of the Manpower Services Commission.
  Although the temporary employment subsidy is not specially applicable to young people, my hon. Friend asked me for a comment on that. My right hon. Friend the Secretary of State and, indeed, the Prime Minister have both made very plain the importance they place on the temporary employment subsidy. There are informal technical discussions going on with the Commission in Brussels at the moment on this issue. Certainly TES is due for review. It is not a static concept. We may want to alter the scheme in some way. But I repeat what I said at Question Time on Tuesday, that anything that undermines the basic purpose and effectiveness of the scheme would be viewed by us with great concern. I hope that we do not get into that sort of situation.
  To return to the specific measures, by the beginning of this year it was clear that there was a need for a long, hard look at youth unemployment as a basis for a more coherent programme for dealing
  744
  with it. The result was the Manpower Services Commission's report "Young People and Work" and, subsequently, the youth opportunities programme for the 16–19-year-olds announced to the House by the Secretary of State at the end of June. The House is familiar with the details. The programme, which is to be run by the MSC, will offer a wide range of opportunities combining work experience and training within a single framework designed to adapt easily to the needs of individual boys and girls. They will be able to move from one element of the programme to another depending on their needs. Some 230,000 opportunities will be on offer each year, double the present provision. Above all, it is the Government's firm intention that no Easter or summer school leaver who is still unemployed the following Easter will be without the offer of a place under the programme.
  What we have tried to do with this programme is to concentrate help where it is most needed—on those youngsters who would not get jobs without it. That is why we have put the main thrust of the programme into help for the 16–19year-olds who have just left school. Resources will be concentrated, too, on areas where youth unemployment is highest—allocation will be in proportion to the level of youth unemployment. Our experience with the measures we have already operated suggests that this is the best approach. We have tried to ensure that the programme does not interfere with employers' normal recruitment of school leavers, and we are putting the emphasis, for this age group, increasingly on work experience gained in a normal industrial or commercial setting rather than on straightforward job creation. This is likely to prove most attractive to potential employers. The present work experience programme is bringing good results as far as finding permanent jobs for the trainees is concerned, and we want to build on that.
  So far I have concentrated on the needs of the 16–19-year-olds. We have not neglected the over-19s. Their needs are rather different. They have had some experience of employment and have less need of work experience and need jobs where they can build on and develop skills already gained. So for adults we are keeping job creation in the new

  745
  Special Temporary Employment Programme—STEP, as it is called. This will give priority to the 19–24-year-olds, who will take up as many places as they do on the present job creation programme.
  All this amounts to a major commitment by the Government to tackle youth unemployment. We are mounting perhaps the most comprehensive, and certainly the most coherent, programme of any European country. We are doing it on the basis of voluntary co-operation and agreement with the many organisations and individuals round the country who have become involved in the programmes. Employers, trade unions and local authorities are working hand in hand with the MSC to put its proposals into action. The MSC has got full agreement from the organisations concerned, and from the Government, for its proposals to ensure local involvement in the new programmes. We cannot expect success without local co-operation. Here I agree very much with the remarks of the hon. Member for Kidderminster.
  I now want to mention the disadvantages to the less qualified. I want to turn briefly to the particular problem among young black people which has been highlighted by my hon. Friend the Member for Heeley. Since the beginning of the present recession in November 1973 the number of unemployed in the racial minority groups has grown faster than the rate of total unemployed. The difference between the two rates of increase was most pronounced in the year ending November 1975, when total unemployment figures rose by 80 per cent. but the minority group figure rose by 217 per cent.
  From November 1975 to the present time the rates of increase have been more closely related, with the total figure rising by 40 per cent. and the minority figure by 50 per cent. Some encouragement can be drawn from the fact that the rise in minority group unemployment has been levelling out in the past two years and has more recently fallen below the overall rate. But there can be no room at all for complacency, because unemployment among the minorities is still unacceptably high.
  Various reasons can be advanced for the fact that young people under 25 have
  746
  suffered disproportionately in the current recession, as I said earlier, and there is a high proportion of young people in the minority groups. Unskilled workers have suffered disproportionately in the recession, and, again, the minorities tend to contain a high proportion of unskilled and semi-skilled. Recent immigrants have special difficulties very often arising from newness or language problems, so they find it more difficult to get work. Some of the increase will also be due to further immigration.
  All these factors have had some effect, but it is undoubtedly the case that racial discrimination and disadvantage almost certainly play a significant part in the relatively high level of unemployment. The Government are taking positive steps to try to deal with these problems through the Manpower Services Commission's programme, which is aimed at all young people, whether black or white. But it is designed to help those most in need, and as members of the minorities are disproportionately represented in this respect, they will benefit accordingly.
  I mention one other important feature in the area of black unemployment. We have been disturbed by reports that there are areas throughout the country where unemployed young people, especially blacks, fail to register for employment at employment or careers offices. That means they are unable to take advantage of the opportunities which are otherwise available to them. To deal with that problem the Government have provided funds for the employment of 20 additional officers whose task will be to reach out to those young people and encourage them to make contact and make full use of the services available to them.
  I turn now to the quota proposal suggested by my hon. Friend the Member for Heeley. I have talked about the need for co-operation and for all-round involvement in making a success of the MSC programme. I stress co-operation because it is one of the keys to the operation. My hon. Friend has put forward an interesting proposal for a quota scheme for young unemployed people. I want to assure him that the Secretary of State has given his proposal—my hon. Friend was good enough to send a very detailed and constructive memorandum—a great deal of thought. But we do not believe

  747
  it is the right response to the present unemployment problems of young people. My hon. Friend said that there were immense problems, and I cannot see any way of making an allocation system work without a considerable degree of compulsion on employers and young people, and I do not believe compulsion is acceptable. I do not think local employers and unions are going to be willing to accept an agreed quota, regardless of the circumstances in a particular firm. We would almost certainly lose all the good will of employers and trade unions which has been built up—not, in the early days, without some difficulty. I think compulsion would alienate young people. It would be impossible to monitor a scheme as big as this one would be and to ensure that all the young people allocated to employers were getting something useful out of it. I can see some problems on the shop floor if employers are forced to take additional young people regardless of the situation in the workplace. But the real stumbling block remains the element of compulsion. We have had direction of labour only in war time, and that is how it should be.
  My hon. Friend the Member for Maryhill referred to technological change, and he rightly said that the training boards would have to be looking forward at future skill requirements in their industries. They are doing that. They cannot deal with these requirements without taking account of changes in technology, and they already do so. The Engineering Industry Training Board has published the results of some useful studies showing clearly how the skill shortage, skill structure and skill requirements of the industry are changing.
  Another matter raised by my hon. Friend the Member for Maryhill and the hon. Member for Kidderminster concerned international trade. There is, of course, a great deal of international concern about youth unemployment. Following the Downing Street Summit earlier this year, the OECD was asked to mount a high-level conference on youth unemployment as a means of exchanging experiences on a problem common to most industrialised countries. The Secretary of State and my hon. Friends the Under-Secretary and the Minister of State for Education will be attending the
  748
  conference, which begins tomorrow. We welcome the conference as a valuable means of bringing together Governments who, faced with a common problem, have reacted with a great diversity of measures. We can do nothing but learn from discussions with them. There is a continuing involvement through the EEC.
  My hon. Friend the Member for Maryhill referred to the EEC. Following its tripartite conference involving Economic and Labour Ministers, together with representatives of trade unions and employers, that conference had a remit which is now being pursued by the Commission. The remit was to find a Community approach to look at measures such as the shorter working week.
  There are very great difficulties in most of the changes in this field. If such changes are to be contemplated seriously there are major advantages in a Community approach.
  What we have tried to do, as I said earlier, is to find out the real problems of youth unemployment and to concentrate our resources—which are not unlimited—on the areas of greatest need. We have also tried to concentrate them on the ways of helping young people which we know from experience are most effective in helping them into permanent jobs at the earliest possible time.
  We have also looked for ways of getting the maximum number of opportunities out of available resources, but not at the expense of making the right kind of provision. It is essential that what we do for young people is adapted as closely as possible to their needs. The programme we have asked the MSC to run is a flexible one, because young people's needs vary so enormously.
  In the last analysis, we all know that youth unemployment is going to fall substantially only when the economy begins to grow again. So young people's prospects depend on the success of the industrial strategy and our fight against inflation. There are encouraging signs here, but we know that youth unemployment is going to remain unacceptably high for some time. That is why we have put the programme on a medium-term footing. We shall be reviewing it every year, but the resources will be there to maintain it for as long as it is needed. It is one area where the whole

  749
  House will agree that a reduction in required expenditure would be more than welcome. In the meantime, we must do all we can to help the most vulnerable of our unemployed.

  LIVESTOCK INDUSTRY
  3.43 a.m.
  Sir Paul Bryan: I, like many other hon. Members, have received a bundle of letters from worried livestock farmers in my constituency. I am impressed by the detail into which the farmers have gone to explain to me the dire situation on their farms. The letters are informative and very convincing.
  A sizeable reduction in the cattle and pig herds is clearly taking place, and all logic points to the fact that this can reach catastrophic proportions if action is not taken by the Minister pretty soon.
  The crisis in livestock production is the certain and inevitable outcome of our having a Minister of Agriculture who has always been hostile to Europe and clearly has little regard for British agriculture. He has no qualms about cheating in his use of the green pound, because that is what his manipulation of the system is, in order to squeeze quite unjustified, disgraceful and humiliating food subsidies out of the EEC, despite the damaging effect on the industry which he should be proud to serve and promote.
  By his too-clever-by-half conduct at Brussels, the right hon. Gentleman has forfeited respect, and he has got a far less good deal for Britain than he would have done had he been reasonable and co-operative. The clever lawyer who was going to run rings around the simple Europeans has turned out to be the not-soclever bull in a china shop, and the farmers are left to pick up the pieces.
  We in Humberside—or the East Riding, as I still prefer to call it—have about 600,000 pigs, which is the largest number in any county area. Last year, we had over 90,000 cattle, other than dairying, which, although a modest number compared with some other countries, is of significance in the way in which yarded cattle is a traditional and useful enterprise on many farms in the area, and it is a system which complements the established farming policy in many cases.
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  I doubt that the Minister realises the extent to which one part of a farm enterprise depends upon and helps the remainder. One very good farmer from the Howden area has written to me to say:
  "I suppose it would be easy not to have beef production and thereby stop the losses. However, this is not realistic because the farm production cycle revolves round the beef, and we use all our straw and hay with the beef cattle and all the manure is used on the potato crop, saving quite a lot of expensive artificial fertilizer.
  I am afraid that all major capital projects for 1978 will have to be cancelled. These include 100 acres of drainage, three tractors and a new potato store. This will mean that other people's livelihoods will be affected by these cutbacks."
  Those last remarks are confirmed by the latest report I have from a leading machinery dealer in the area, which shows a striking drop in his turnover.
  There are a large number of farmers in the East Riding who have not bought any cattle this autumn, partly because they cannot see the sums working out to give a profit and partly because of the lack of confidence in the future. They see Government policy for expansion in shreds, and beef producers' fingers have been burnt too often in recent years. Where yards are stocked with cattle, this is either because the farm runs a suckler herd or rears from calves, and such systems are slow to run down. It is the producer who buys stores who is reaching the decision not to do so.
  I illustrate the general situation with those particulars from my own constituency not only because this is the area which I know but also to point out that if the situation is as threatening as that in the East Riding one can be sure that it will be a good deal worse in many other agricultural areas. The East Riding is particularly well formed. The size and structure of the farms, by good fortune, happen to be particularly suitable for modern farming methods.
  On the pig front, I could cite farmers who have given up pig production, but the position is more a slow contraction and the shelving of plans for future expansion. If this is happening in a county with many of the most modern pig units in the country, I dread to think what is happening in other areas.

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  Now let us look at the situation which has led farmers to make these retrenchment decisions. Britain's beef industry is in a mess. Since the middle of June, the market for clean fat cattle has slumped by 10p a kilo. During the same period of the MCA madness has made it attractive for foreign producers to ship in almost £20 million worth of extra beef compared with the same period last year. In addition, that same monetary system made it good commercial sense to ship thousands of 50-kilo calves out of this country to replenish the European stockyards. So the crazy cycle is kept in motion. Meanwhile, in the markets store cattle prices fall at a time when production costs are at record levels.
  The chief depressing factor in the beef sector is the excessive imports of Irish meat. The Irish farmer is enjoying what is, in fact, a subsidy of about £75 a beast. In addition, there are United Kingdom Exchequer payments on Irish carcase beef imported into the United Kingdom under Article 5 of the EEC beef premium regulations. Not surprisingly, imports of Irish meat have practically doubled in the past year. The chairman of the Irish Meat Board has recently said that in 1976 Ireland exported to this country meat to the value of £135 million. The expected figure for 1977 is £265 million. It is no good the Minister saying, as he has done in the past, that this is but a small proportion of the total market. We all know that it is this marginal quantity that decides the price.
  Sir Henry Plum has pointed out that the operation of the green pound in relation to Ireland is even more ridiculous than with the EEC. We use the same currency as the Irish when trading in motor cars and other products, but with agriculture the Irish are presented with a 30 per cent. subsidy. Farmers have called this legalised dumping, and I challenge the Minister to say that they are wrong. According to the Department of Trade, dumping is:
  "Selling abroad at a price below the exporter's domestic price."
  The Department adds that the EEC, which is now responsible for taking action against dumping, insists on evidence that the dumping is:
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  "causing or threatening material injury to the Community industry."
  There is certainly no shortage of evidence that that is so.
  The pig problem has much in common with beef in that it suffers from the same handicaps of the green pound and the MCAs. Since we joined the Common Market in September 1973 the United Kingdom breeding herd has dropped by 20 per cent. Of particular concern is the fact that within the herd the number of gilts continued to decline for the fifth successive quarter, and at September it was estimated that there were only 96,000 gilts in the United Kingdom. This represents a drop of about 25 per cent. over the previous year. The total percentage for the bacon market held by home-produced supplies continues to drop and for this year will be about 45½ per cent. compared with 46½ per cent. for 1976.
  Although that does not appear to be a significant reduction, this share of the market has been held so far only as a result of producers selling below production costs for a period of nearly 18 months. Furthermore, imports of canned hams and bacon have increased by 10 per cent. in the first nine months of 1977. With the EEC pig-breeding herd again on the increase and the United Kingdom herd now in decline, the prospect for 1978 is for lower United Kingdom output and a massive increase in the import of processed pigmeat from other European countries, such as Denmark and the Netherlands.
  Present bacon price levels, which are unlikely to be held after Christmas, are insufficient to enable bacon curers to pay pig producers the average price for pigs and make any profit. Indeed, currently curers are making substantial losses. This has put in jeopardy the future of the bacon contract, which in past years has done so much to stabilise the pig industry. It is hard to see a break-even situation, let alone a profitable one, returning to the pigmeat production and processing industry within the next few months. This means that curers may have no alternative but to close factories, making workers redundant.
  In case the Minister thinks I am taking an alarmist line, may I read to him a letter that I received on 8th December from the managing director of Porkshire

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  Limited, which runs an extremely substantial factory in my constituency? It says:
  "Dear Sir Paul, It is with much regret that I enclose a Press release concerning redundancies at our Malton factory. After a very thorough investigation by a set of Management Consultants we have been forced to reduce our labour force as we can no longer sustain our throughput of bacon on the face of subsidised imports from within the EEC. I feel I do not need to labour this point with you as in the past you have kindly assisted us in trying to stave off this evil day. Yours sincerely, F. C. Lyon."
  The Press release said:
  "Porkshire Limited very much regrets that it has had to announce 80 redundancies at its Malton factory. Despite the support of its parent company and the Government, Porkshire Limited has found it impossible to compete in the home market with imported bacon which is subsidised by MCA at approximately £250 per ton."
  We have been building up to this serious situation ever since the Minister took office. We have had to suffer the right hon. Gentleman's superior "I know best" attitude for too long. Surely he can see that unless he takes action on the green pound, agriculture in this country will suffer lasting damage.
  One of my constituents from the Driffield area writes:
  "As a young farmer specialising in pig production and having invested a large amount of time (15 years training and studying), energy and money establishing my herd, I would like to know if it really is being too optimistic to hope that one day my efforts will be rewarded."
  This is the question being asked by hundreds of young farmers all over the country.
  This is not just a short-term slump or dip in the cycle. Farmers have always been suspicious that a Labour Government, with their main support in the towns, would let down agriculture. Now they have a new fear. North Sea oil gives us a guaranteed balance of payments surplus for some years to come. Does this, in the eyes of the Government, mean that agriculture can safely be allowed to decline if, in one way or another, cheap or subsidised food can be got from abroad?
  The conduct and attitude of the Minister of Agriculture leads farmers to believe that this is precisely the view of the Government. I ask the Minister in his reply to convince us that it is not so.
  3.56 a.m.
  Mr. Colin Shepherd: The whole question of Government support for the United Kingdom livestock producers makes the Government's attitude towards the measures proposed by the EEC Commission one of importance and utmost urgency if the Minister is to maintain and restore the confidence of United Kingdom producers.
  The Commission has published new proposals for a change in the operation of the beef regime based on the outcome of a study of the operation of support measures between 1974 and 1977. Although the review of the regime was initiated as long ago as March 1976, I understand that the present proposals are intended to come into force from the start of the 1978–79 marketing year—that is, next April.
  Based on the experience of various member States using differing methods of market support, coupled with the varied circumstances of the EEC beef market—namely, a scarcity in 1972–73 and a surplus since 1974—the report on the review concluded that both intervention and the variable slaughter premia have been of significant benefit to producers and consumers but that neither method of market support is enough when used by itself.
  Plain intervention buying has maintained producers' incomes at relatively modest cost to the EEC budget but has resulted in quantities of beef being stored rather than eaten, and, when they have been returned to the market in periods of shortage, the reduction in quality has substantially offset any benefit that the consumer would otherwise have gained from the increased level of supply. There have also been the physical problems of lack of suitable refrigerated storage space.
  The use of the variable slaughter premia has maintained producers' incomes, but at the same time it has enabled consumers to maintain their beef-eating habit. I am sure that the industry will give full credit to the Minister for its introduction. The contra to this has been the cost of the premia plus the lack of frozen stocks to draw upon and restrain price increases when supplies became more scarce.
  It appears highly desirable that both methods of support should continue to

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  be used together and in conjunction, for the United Kingdom at least. The report of the review recognises the virtues of the variable premium system as at present operated in the United Kingdom and recommends that it be extended throughout the entire Community. So far, so good. But our present system of variable premia is authorised by a regulation—applying only up to the end of the current marketing year. A continuation of this regulation would bring a valuable fillip to confidence in the United Kingdom beef sector. Will the Minister be bringing forward new regulations, and will he be supporting the concept in the Council of Ministers?
  The report also recognises the value of aided private storage. What are the Minister of State's views on support for the provision and extension of these facilities?
  Lastly, the report indicates that the adoption of a common support scheme on a Community basis would mean that United Kingdom premia would be paid entirely from Community funds rather than 75 per cent. from the United Kingdom Government. Will the Minister be pursuing such an objective? It seems to be good for the United Kingdom.
  The Minister is well aware of the price sensitivity of the beef sector with regard to consumers' purchasing willingness. The report on the review of the beef regime advocates a "cautious" price policy. The stress on a cautious price policy means that, if the United Kingdom producer is to be compensated for his ever-increasing level of costs, there will have to be substantial devaluations of the green pound to increase the United Kingdom support levels adequately without allowing the Community guide price to rise.
  The Minister will no doubt be aware of Early-Day Motion No. 83, standing in the name of my right hon. Friend the Member for Yeovil (Mr. Peyton), calling for a 7½ per cent. devaluation of the green pound forthwith. Does the Minister recognise that this step really needs to be taken now, before the concept in the 1978–79 marketing year is fully developed?
  The report does not adequately consider, however, the problems of green currencies in the beef sector. The Minister
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  will be well aware of the distortions being created by the enormous disparity between the Irish and the United Kingdom green pounds, to which my hon. Friend the Member for Howden (Sir P. Bryan) referred in his excellent speech. The present low level of United Kingdom prices and high levels of subsidised beef imports, from both Eire and others of our EEC partners, emphasise the difficulties that the green pound differential continues to cause United Kingdom producers.
  I draw the Minister's attention to a brief extract from an article in the issue of the British Farmer and Stockbreeder dated 10th December, in which the reporter, Donald Taylor, indicates that
  "One of the ironies of the present situation is that Britain is having to make two separate payments to Irish exporters, which encourage them to ship their beef to the UK, and then having to pay UK farmers deficiency payments to counteract the effects of these shipments.
  Irish beef exporters collect an MCA of 28p/kg on all shipments to the UK, part of which is funded by the UK. On top of this, under the Anglo-Irish Free Trade Agreement of 1965 and the EEC regulation on the payment of the beef premium in the UK, the Irish exporters get a further 10p/kg to remove the incentive to ship animals live to the UK to collect the variable premium payment, now about £15 a head. In effect the UK Government pays the Irish Government (who pass it on to Irish exporters) a variable premium on carcase shipments to the UK at a rate equivalent to what the animals would have earned had they been shipped here live."
  In fact, it seems as though we are paying the Irish to export to us, to the detriment of our own market.
  In October I wrote to the Minister of State drawing his attention to the sub-economic returns being obtained by producers in the markets of Hereford and Ross-on-Wye. He replied in confident vein, stating that
  "Whatever the level of imports, our dual support system of intervention and premiums underpins the market and producers' returns."
  Those are fine words, but certainly not inspiring enough for Herefordshire producers to be facing the future with confidence.
  I draw the Ministers attention once again to the headline written by Donald Taylor in the British Farmer and Stockbreeder of this week
  "Slaughter premiums now failing to support collapsing beef market."
  That is the measure of the urgency of the problem.

  757
  In his reply, the Minister went on to say:
  "We do"—
  I take it that that is his Government—
  "of course, recognise and understand producers' concern about the level of the green pound but we do not accept that a devaluation would be justified at the present time. We have, however, always maintained that if at any time we felt that a green pound devaluation were necessary from the point of view of the agricultural industry and would not damage the rest of the economy, we would not hesitate to recommend it. It must be remembered that a devaluation does not help all farmers; the real key to helping UK farmers is the level of returns and profitability in British agriculture and the green pound is only one of a large number of factors in this."
  What is the measure of the damage that has to be sustained by the agricultural economy before the hesitation is overcome? The green pound may be only one of many factors relating to the level of returns and profitability in British agriculture, but is it not in reality the key factor, the linchpin around which all the problems and distortions revolve?
  The Minister of State's right hon. Friend the Minister of Agriculture, Fisheries and Food has now acknowledged that a green pound devaluation is necessary, but only in principle. The right hon. Gentleman has declined to say by how much it should be devalued. That is understandable in the light of his price review negotiations in Brussels.
  Why does not the Minister suggest that he gets on with a 7½ per cent. devaluation now and haggle about the rest during the course of his negotiations? I am worried because I suspect that he is not interested in a 7½ per cent. devaluation and that he will settle for 3 per cent. or 4 per cent. However, he must remember that the disparity with Ireland is of the order of 19 per cent. He will need to go some way towards eliminating that if he is to reduce the distorting effect of the differential to which I have drawn the Minister of State's attention in the article from which I have quoted.
  Admittedly there will be an effect on food prices at consumer level if there is a 7½ per cent. devaluation of the green pound but that will have to be faced at one time or another. Such a devaluation would have a 2 per cent. effect on the cost of food and about a 1 per cent.
  758
  effect on the cost of living. That would be spread over a period. It would take time to come through. It would not happen all at once.
  I said in my letter to the Minister that the freeing of some disposable income brought about by the Chancellor's reduction of income tax thresholds enabled the impact of devaluation to be absorbed. There will never be another opportunity like this, and the Minister should take advantage of it now. Will he not recognise that in all probability it will be in the consumer's longer-term interest to face the problem now rather than later? Putting it off could lead to a traumatic situation in 12 months or more for both the consumer and the producer.
  I terminate by drawing the Minister's attention to some remarks made by a constituent of mine, a farm manager who is a veritable technocrat of farming know-how who took a decision in 1967 to move his beef herd from cereal feed to grass forage. He made the necessary investment. He says:
  "This entailed a complete reorganisation. A new fattening building was erected in 1967. A calf rearing unit was added to it in 1970. This complex won a CLA farm building award in 1971. In 1974 a slatted floor house was erected for cattle at an intermediate stage.
  This large investment in cattle buildings completed the main development stage; the housing now relates fairly closely to the grassland acreage for cattle grazing and silage.
  A great deal of effort has been put into increasing animal performance from silage since the late sixties.
  In the period for 1968 to 1971 we reduced the cereals fed per pound of grain by 63 per cent. with no loss on animal performance. Over the last few years we have had groups showing a saving of 75 per cent. over the 1968 figures, but"—
  here is the crunch—
  "we are still no better off financially."
  He asks,
  "Where do we go from here?"
  He acknowledges that there is still room for
  "tidying up the performance, even at the expense, if needed, of a further cut in stocking rate."
  He was purchasing 360 calves a year until the spring of 1976. Since then, purchasing has been cut by 20 per cent. He says:
  "We are seriously considering a further cut of 20 per cent. unless there are definite signs

  759
  of return to a more stable and profitable future for beef."
  That is the case for the devaluation of the green pound—to restore that confidence.
  4.10 a.m.
  Mr. Michael Hamilton: I am glad that my hon. Friend the Member for Howden (Sir P. Bryan) was fortunate in being able to initiate this debate, even at this hour of the morning. He has been extremely loyal to the industry. He spoke in the agriculture debate in November last year, the first occasion on which the right hon. Member for Deptford (Mr Silkin) appeared in his new role as Minister of Agriculture. Perhaps we were naive, but some of us hoped that his advent would signal better days for agriculture.
  I would not wish the Minister of State to imagine that problems in the livestock sector are confined to the Yorkshire Wolds or the West Midlands. The story in Wiltshire is the same. Within the past fortnight I attended a meeting of pig producers who had come together from a large area. They expressed their deep concern. There were big and small farmers, farmers to whom pigs are a sideline and farmers for whom pigs are their entire livelihood. It is those farmers, whether big or small, who specialise and whose capital is solely locked up in pig breeding and fattening who command my sympathy today.
  If the Minister can come with me this weekend, I shall take him to a farm to the south-west of Salisbury which I have known for more than 10 years. There is a young and efficient farmer there. He works all the hours of daylight and more. He has about 1,000 pigs on the breeding side of the business and about the same number on the fattening side. He is not given to exaggerating his difficulties. Last year he lost £17,000. If the Minister should think that I am taking an extreme example, I shall take him to other pig farms where the story is the same, where the losses are comparable.
  Where will this end? How much further will the decline in the breeding herd be allowed to continue? Does the Minister wish to see these men go out of business? How much longer will he be content to accept responsibility for the well-being of agriculture? How much longer will he be talking about a fair balance between
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  producer and consumer while the producer is hard up against his final overdraft limit at the bank?
  I am one of those who have always supported our membership of the EEC. My views on the matter are on the record in Hansard as far back as 1961. I have always been entirely confident that Wiltshire farmers are more than a match for their counterparts on the mainland of Europe. Farms in my area average between 400 and 500 acres. There is nothing amateurish about those who manage them.
  But the Minister knows as well as I do that our farmers are not competing on level terms. He knows that the falling value of sterling and the disparity of the green pound mean that our farmers are competing with one hand tied behind their backs. He also knows that in Denmark and Germany the small pig producers are prospering. There are colour television sets by the firesides of the small pig farms there, and there are new extensions to the farmhouse for the grandparents. There is an air of prosperity. The right hon. Gentleman also knows that in contrast the British farmer has been sacrificed and allowed to fall behind.
  I beg the Minister to alter the balance and to inject new life into the livestock industry before it is too late.
  4.15 a.m.
  The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. E. S. Bishop): If I say that I am grateful for this opportunity of being here this morning I hope that hon. Members will not accuse me of being insincere, because the matters that have been raised are of concern not only to the industry but to the Government and my right hon. Friend.
  I have listened carefully to the points that have been made. Hon. Members have expressed concern about the support mechanism for livestock. Fears have been expressed about the good faith of the Government in dealing with agricultural problems. I remind the House that it was a former Labour Minister—Tom Williams—who was responsible for laying the foundations of British agriculture—this is accepted by many people in the European industry—guaranteed markets and guaranteed prices, and support mechanisms generally. With the contributions

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  of succeeding Governments, this has helped to make our industry one of the most efficient in the world. It is our aim to keep it that way.
  Comments have been made about the uncertainty facing the industry. I remind hon. Members of the fact that we are going through the final stages of transition. We are in the process of renegotiating or reviewing the common agricultural policy. Surely no one will disagree with the need to do that. We are in the final stages of transition, on terms that were laid down by the Conservative Party when in office. My right hon. Friend's task is a very difficult one, but I believe that, provided the industry and hon. Members do not engage in unjustified criticism, he will succeed in restoring to the industry some of the certainty that was there in former times. This task must be carried out by any Minister of Agriculture. My right hon. Friend is doing a good job, not only in looking after the national interest but in the greater perspective of the European scene. This is the job of any Minister.
  I am pleased to have this opportunity, at this early hour of the morning, to comment on some of the points that have been made. I also represent an agricultural constituency, with over 80 villages and more than 450 square miles of territory, with poultry, mixed farming, sugar beet and the rest. I am aware of some of the problems to which reference has been made.
  I want to set the scene by describing some of the main features of our support mechanism for the livestock industry. For beef, United Kingdom producers' returns are protected by our dual support system of variable premiums and intervention. This point was made by the hon. Member for Hereford (Mr. Shepherd), and I shall return to it in a moment. We set great store by this and we are determined to keep the dual approach. This is one of the successes of this Government. We said that we wanted to underpin intervention and we voted to keep the variable premium system. We are aiming to ensure its continuance. It has recently been strengthened by the reintroduction of steers "M" as a category eligible for intervention. The level of the target price—which is more or less the guaranteed return—is now rising
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  on the seasonal scale and will continue to do so until next March, giving returns substantially above the level of a year earlier. The level of the intervention price, which provides the back-up, goes up with the ending of the transition period on 1st January.
  Sheep have not been mentioned but I should like to say briefly that for sheep we have the guaranteed scheme, which has served us well. The guaranteed price for sheep was raised by 24 per cent. at the last annual review and the wool guarantee for the 1977 clip was increased by over 30 per cent. We now await the Commission's proposal for the Community régime, but here again I think that there was a fair return.
  For pigs, excluding the temporary subsidy in the first half of the year which transferred £17 million to the industry, we do not have national support arrangements, but our pig industry benefits from the Community support arrangements, which include aids for private storage of pigmeat, protection against third country imports and subsidies to encourage exports.
  Our overriding concern in this sector has been, and still is, the competitive framework for our producers within the Community. That is why we have put unparalleled efforts into improving the basis of the calculation of the monetary compensatory amounts which apply to imports of pigmeat. This has been a difficult sector. We recognise the problems of the industry. However, my right hon. Friend has used every possible opportunity to see what can be done legally within the framework of the Community. It is not our fault that the £17 million subsidy was not continued.
  We are changing the support system in the dairy sector. The guarantee ends on 31st December. Ministers will then no longer fix the precise level of producer returns but will determine the statutory maximum wholesale prices of milk for liquid consumption. Taken together with the boards' returns for manufacturing milk, the level of maximum prices that the Government have just announced should enable the boards to give producers a price significantly above that resulting from the present guarantee.
  Mr. Michael Hamilton: The Minister of State said that his right hon. Friend

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  has made every effort to get the MCA changed. Does he agree that one reason why the EEC negotiators are less than co-operative is that he will not give way at all on the green pound?
  Mr. Bishop: That is not exactly true. I am not suggesting that the hon. Gentleman is misleading the House, but I remind him that devaluation of the green pound has amounted to about 21 per cent. already. My right hon. Friend has shown flexibility. The hon. Gentleman will know of the last change of 2·9 per cent. not so long ago.
  The hon. Member for Hereford referred to lack of flexibility. I remind hon. Members that on 1st December, in reply to the right hon. Member for Yeovil (Mr. Peyton) who suggested a devaluation of 7½ per cent., my right hon. Friend said that, even if he did agree, although he certainly would not say so at that time, he could not imagine anything that would have a greater effect on speculation, but he was prepared to listen. That is certainly what we are doing. Therefore, there is flexibility, not a rigid doctrinaire approach.
  As I said earlier, transition means a period of uncertainty, and I can well appreciate the concern of the industry. We are in close touch with the industry. My right hon. Friend and I and the Parliamentary Secretary spend a lot of time going round farms in the regions. I have been to the East Midlands recently, my right hon. Friend and I have been to the Northern Region, and only a few weeks ago I was in Northern Ireland. We get about and we recognise the concern of the industry.
  With regard to the end of transition and price parity by 1978—a point which is often raised by the industry—the final transitional step will strengthen support from 1st January by a 4 per cent. increase in the intervention price and will at the same time encourage carcase exports by reducing the export MCA levy. On 1st January our intervention price for beef will be the same as for the rest of the Community when expressed in units of account. What no one could foresee in 1972 was the monetary turmoils of recent years.
  We could not now accept that parity means coming into line with the "snake"
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  currencies. That would mean devaluing the green pound by 30 per cent. We bear the need for a flexible approach very much in mind. I am sure that no one here would recommend a devaluation of that extent, but I agree that there is justification for keeping the matter in mind.
  I turn now to the support system for the industry. Whatever the market price, our support system effectively maintains producer returns and aids the stability of the market. Currently, a sizeable premium is being paid in England and Wales. The target price is now rising and will continue to do so until next March. We have just strengthened our intervention arrangements by reintroducing the category of steers "M" and the EEC has recently introduced a new scheme for private storage of beef carcases.
  I come next to the EEC report on premiums and intervention. I remind the hon. Member for Howden (Sir P. Bryan) that a great deal of work has been done by officials on the Commission's report on the reform of the internal beef regime. Hon. Members may have seen that in the first round of proposals for prices in 1978 the Commission has said that it did not think that the time was yet ripe to make changes on the internal beef regime. Naturally this is disappointing, but at this week's Council meeting my right hon. Friend made it clear that, whatever the Commission might propose for the Community as a whole, there could be no going back for the United Kingdom on the current mixed support system of premiums worked in conjunction with intervention. This was of great value to us during the difficult beef market from 1974 onwards when a serious position had to be corrected, particularly during the autumn and winter. The Commission has specifically commended the advantages of such a dual system for the Community as a whole.
  I turn to the state of the market. Home marketings affect the market as much as imports. In the early part of this year, home production was down by 14 per cent. In the last quarter of 1977, the United Kingdom cattle sales are likely to be the heaviest of the year and about 4 per cent. up on the same period last year. The market is bound to be weakened by these extra supplies.

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  A useful development is that our exports of carcase beef are rising, and there are signs that the Christmas trade is beginning to firm the market. Although the imports of live cattle have been increasing recently, they are still low in relation to the traditional levels. To the end of October we imported 245,000 Irish animals compared with the 638,000 animals which the Irish were expected to send to the United Kingdom annually under the agreement. The trade in Irish cattle and beef is a traditional feature of our market. We actually imported less Irish cattle in October than in October 1976.
  Comments have been made about the financial effects of this trade. Following the precedents set in the Anglo-Irish Free Trade Area Agreement, EEC legislation, which produces the authority for the variable premium scheme, states that beef originating in the Irish Republic and intended for consumption in the United Kingdom should receive the same advantages as home-produced beef. The variable premium is calculated on the quantities of carcase beef imported from the Irish Republic which meet the quality standards required for beef premium certification in the United Kingdom. Payments are not made on individual consignments or to individual exporters but are aggregated and paid about three months in arrears on a Government-to-Government basis. Any market effect is therefore remote.
  Reference has been made to the decline in our breeding herds. After the high levels of breeding herds and production in 1974, we are still on the downward part of the beef cycle. The future direction of our support policy for beef is a matter for the annual review, which is now under way, and for the CAP price-fixing.
  The hon. Member for Howden raised the question of the problems in the curing industry. We are conscious of the problems facing not only the pig industry but the curing industry, which is facing particular difficulties. The curing industry is in the front line in facing the competition from imports which benefit from the unfair MCAs operating in this sector. The Government are fighting for better condition of competition for the industry and we have sought a meeting
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  with Mr. Gundelach, the Commissioner, to impress upon him the seriousness of the situation.
  Both the Government and the industry have submitted evidence to the Commission in its study of the MCA system to demonstrate the distorting effects of the present arrangements on the pigmeat sector. Government policy here is well known with the initial change of 8 per cent. and the persistent pressure we have exercised since.
  Devaluation of the green pound is put forward as the panacea for many of our ills. Such a change is not necessarily the best way of helping this sector, although that could play its part. The green pound is not selective like the MCAs. The industry would like an immediate devaluation since that would also reduce the pigmeat MCAs, but that is no substitute for getting the calculations on to a proper basis. Our case is that the present system of calculation provides a large degree of over-compensation to our competitiors. This persists whatever the level of the green pound.
  We must continue our efforts to change the system. Our policy on the green pound is clear. We will devalue when we regard it as in the national interest to do so. We will give full weight to the interests of the pig sector in reaching our view on the timing and the extent of any change.
  I should like, in conclusion, to summarise our approach. First, on beef we recognise the force of farming opinion that in order to strengthen the market we should devalue the green pound so as to reduce monetary compensatory amounts on beef imports. We fully understand this point of view and the anxiety which is felt by producers. I would not dispute for one moment that the MCA position has influenced the pattern of prices on our beef market this year. But other factors have been at work, particularly the increase in marketing of Irish export slaughter-houses, compared with 1976 and a return to a more normal seasonal pattern of marketings here. It is the latter which dominated the market in the last few weeks. Indeed, imports from all sources were lower in September and October than a year earlier. The market has now become firmer and we must hope

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  that stable consumer demand and the support mechanisms will help towards a more buoyant outlook. As for the green pound, we have no objection in principle to changing the United Kingdom representative rate—we have made a 21 per cent. change in the last year or two—but we have always stressed that the timing is very important.
  We have to look after the wider interests on this, however. On the one hand, if prices rise too high there is consumer resistance, and that does not help the farmer. If prices are too low, the producer gets no encouragement to produce. The Minister of the day has the difficult job of keeping a balance of the interests.
  On pigs, we recognise that the producers have faced a long period of difficulty on the present pig price while production costs have risen. There has been an improvement in recent months with feed costs falling and pig prices up about 10p per kilogram deadweight above the lowest point earlier this year. We welcome this improvement in the position of producers. We recognise the problems, and the Minister is pressing hard for an early decision on the review of pigmeat MCAs. This is not easy because there are those in the Community who benefit from the present system and are opposed to our ideas for change. We believe, however, that our case is fully justified and we are encouraged by French and Italian support. We are therefore taking every opportunity to maintain pressure for a change.
  The industry would like an immediate devaluation of the green pound because that would help to reduce pigmeat MCAs, but there is no substitute for getting the calculations right, and that is worth fighting for if we can get it on to the right footing. It would enable our industry to compete on fair terms at whatever value of the green pound may be in operation. At the present time, as hon. Members know, one of the problems is the encouragement for imports from other parts of the Community.
  We recognise that there has been anxiety in the dairy sector. But producers now have the details of the new arrangements, and it is the Government's intention that the new arrangements should permit producers to get the returns
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  necessary to secure the production we need. We are satisfied that the sort of return that the boards will be able to give producers in the coming quarter will be adequate to achieve this. We predicted in the spring that producers would have a good year, the best for a long time. This was widely disputed at the time but there is no reason to dispute it now.
  In the light of the assurances which I have given and which my right hon. Friend has given over the last few months, hon. Members will recognise the extent to which the Government have given support to the livestock industry. But we are not able to act unilaterally in these matters. We have to work with the Community. It is no good talking about the Minister's attitude in Brussels as being like that of a bull in a china shop and so on and then accusing him of not being firm enough with the Community in bringing back a better deal.
  We fully understand the point of view of the industry. Equally, we know the point of view of the consumers as well. The interests of the two groups are very much tied up. We have to keep the balance of the argument. The duty of the Government is to look at the national interest as a whole and not pursue the interests of only one sector. That would not be a service to the sector concerned. We shall therefore continue to weigh all the considerations in an objective and fair manner and do our best to look after the agriculture and food industry as a whole.
  With the price review now under way and with the EEC negotiations which are taking place, all the factors raised in the debate and by the industry generally will be taken into account, so that in the period of transition we can give the assurance that we are not only sensitive to the problems of the industry but have the determination to see that we get the right result.
  4.38 a.m.
  Mr. Michael Jopling: My hon. Friend the Member for Howden (Sir P. Bryan) has done us a great service in initiating this debate, even at such a late hour. He has very clearly drawn attention, supported ably by my hon. Friend the Member for Hereford (Mr. Shepherd) and my hon. Friend the Member for Salisbury (Mr. Hamilton), to the crisis within the livestock industry. He

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  has brought out the great uncertainty which faces it, and the realisation that people engaged in livestock farming in this country have not had the opportunity, which they were promised when we joined the Community, to be able to compete with the rest of the agriculture industries of the Community on level terms. This has not been fulfilled. The frustrations which face livestock farmers today were made very clear to the Minister of State before he began his speech.
  I must at this stage declare my own interest as a farmer. But even if I were not a farmer the speech which the Minister of State read out to us could not fail to infuriate me. We have become accustomed to his coming down to the House over a number of years and reading out bland, platitudinous Civil Service briefs. I have never heard a more absurd speech than the one he has made to the House tonight. On a number of occasions he told us that the points were being taken note of and that he would look into them and bear them in mind. He nearly ran round in a complete circle with his platitudinous remarks.
  I am getting increasingly fed up with speeches of this sort which the Minister reads out interminably on these occasions. It was an impertinence for him to talk to us of Tom Williams. I would have thought that Tom Williams would be turning in his grave if he knew what this Government were doing to the country's livestock industry.
  My hon. Friends have drawn attention to the fact that in so many sectors of the livestock industry breeding herds are declining and the industry is suffering seriously.
  The right hon. Gentleman went on to say that the present Minister of Agriculture is doing a good job for European agriculture. I suppose that that is probably true. Farmers in Germany, Holland and Denmark are rubbing their hands with glee at the opportunities that have been opened to them for sending their produce here because of the actions of the Minister of Agriculture.
  The Under-Secretary of State for Energy (Dr. John Cunningham): The hon. Gentleman should have thought about these problems before he stampeded us into Europe.
  Mr. Jopling: I shall come to the point made by the hon. Member for White-haven (Dr. Cunningham). I must confess that I have never before heard of his interest in agricultural matters. If he took such an interest, I dare say that we should get some rather more sensible speeches than the one to which we have just listened.
  The Minister said that of course there had been uncertainties caused by the end of the transition and that this was based particularly on the terms on which a Conservative Government took us into the Community. I would point out that when a previous Conservative Government took us into the Community it was no part of that Government's plan to take the agriculture industry into the CAP and put it at such a disadvantage with regard to the green pound. [HON. GENTLEMEN: "Rubbish".] Hon. Gentlemen may say "Rubbish," but that was no part whatever of the Conservative Government's plans. It was a disadvantage that was not foreseen, and such a suggestion is unreasonable and unfair.
  I do not intend to talk at length. The Minister ended his speech by using the phrase "in view of the assurances that I have given". I did not hear any assurances. There was no comfort at all for the agriculture industry, and particularly the livestock industry.
  The Minister went on to say that in view of the assurances he had given hon. Members would recognise the Government's support for the livestock industry. That is really the most platitudinous rubbish, and he should not come here and read it out to us. I do not know who wrote it. How dare the Minister tell us that his Government have done more than we have ever done? He confounded his own argument when he told us that beef production had dropped drastically since 1974 when under our Government we built up beef production in this country to—
  Mr. Bishop: What about the fatstock guarantee scheme?
  Mr. Jopling: Perhaps the right hon. Gentleman will put that on the record.
  Mr. Bishop: The hon. Gentleman's Government got rid of the fatstock guarantee scheme. It was my Government who in 1974 had to bring in the variable

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  premium scheme to underpin the intervention. I do not know why the hon. Gentleman is being personal. I would not have thought that this was the time to expect me to come to the House and make major pronouncements about an industry when the whole matter is under review.
  Mr. Jopling: I should have thought that when the House of Commons seeks to discuss these matters, whatever the time of night, the Minister should give us the facts. I have said nothing personal to the Minister. How dare he accuse our Government, compared with the actions of his Government, with regard to support for the beef industry?
  The right hon Gentleman's memory fails him, but I can tell him that there was only one occasion in the fortunes of the beef industry since the days of Tom Williams—and that was in the summer of 1974—when the industry had no support of any kind from the Government. That was when the present Government refused to use the intervention system, which was the recognised system in the Community. When the beef premium system was introduced, it was after there had been pleas from the Opposition for the introduction of such a system.
  This is a highly unsatisfactory situation. The Opposition have made it clear that there should be an immediate 7½ per cent. devaluation of the green pound to restore the fortunes of the livestock industry and the size of the breeding herds.
  It is the intention of the Opposition to raise this matter as soon as possible in time provided for the Opposition. We shall ask the House to make up its mind about whether there should be an immediate 7½ per cent. devaluation of the green pound to attempt to make good to the livestock industry the ravages that the present Government have caused.

  ENERGY CONSERVATION
  4.47 a.m.
  Mr. Peter Rost: At this hour, when we should be conserving energy in bed rather than burning it up at Westminster, it would be churlish of me not to congratulate the Government on having at long last introduced their first major programme of energy conservation.
  It is also appropriate for me to acknowledge the contribution to that programme made by the Under-Secretary, who has worked very had to get this initiative finally off the launching pad. It is not that the hon. Gentleman has lacked advice over past years. He has only to look back on his own contributions in the House before he was promoted to his present post to see his speeches and the work he did with me on the Select Committee on Science and Technology and its report on energy conservation. Three or four years ago he was urging action on energy conservation. Therefore, I have no doubt that he was able to start on the right track with the right advice. My only regret is that it has taken the hon. Gentleman such a long time to win the support of his colleagues in the Government.
  In return for my acknowledgment, I hope that the hon. Gentleman will respond by admitting that many of the initiatives in the latest energy conservation package are not novel ideas but are ones which have been urged upon him persistently by me and other right hon. and hon. Members. Of course, it is improper to criticise the Government on a package which to some extent incorporates suggestions that have been made by myself and others. However, I shall make one or two critical comments, but, as always, in a constructive way.
  The first critical question that must be posed, and to which there is no really adequate answer, is why this has all taken so long. The energy crisis, which is the way in which we describe the fourfold increase in the price of oil and the shortage of supplies, was four years ago. We are now facing the fourth winter since that occurred. Although we have had a few small measures, including a comprehensive promotion campaign, it is

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  really only now that that we have anything like the beginnings of a comprehensive energy conservation programme. Yet in the past four years there has been a huge volume of reliable and informed advice available to the Government.
  I shall list one or two selected areas from which advice has been offered. First of all, there was the CPRS Report in July 1974 on energy conservation which included many very important recommendations for action. That was three years ago. At the same time we had the NEDO Report "Energy Conservation in the United Kingdom", which offered a comprehensive series of recommendations for action. In June 1975—two and a half years ago—there was a most important document from the Building Research Establishment on energy conservation in the building area, with particular reference to insulation and building materials. That document pointed out the areas in which investment was then cost-effective.
  At about the same time—in July 1975—the Select Committee on Science and Technology published the First Report of the Energy Sub-Committee on energy conservation. As the Minister knows, this contained a list of very sound recommendations, some of which have been adopted. But the fundamental recommendations of areas for action have only now been implemented. Many recommendations have not yet been implemented. That report resulted from years of hard work by the Select Committee, including a very wide-ranging investigation. It has been highly recommended outside the House. Yet that was two and a half years ago, and we have not yet debated it in Government time. In the evidence in the report, dated March 1975, there was a comprehensive memorandum from the Department of Energy itself. Had the proposals contained in it been implemented, we would have seen earlier action.
  Then, in July 1975—again, two and a half years ago—we had an important series of recommendations from the Advisory Council on Energy Conservation, the Government's own advisory body, chaired by Sir William Hawthorne and comprising many other prominent members. That was a report to the Secretary of State making some important recom
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  mendations, many of which have not been implemented even now.
  In July 1976 we had the Plowden Report on the structure of the electricity supply industry, with its significant and critical advice that the statutory restraints in the present structure of the industry are an
  "obstacle to the more efficient use of natural resources",
  that the present structure prevents flexibility in co-generation, district heating and combined heat and power, and that this leads to a less efficient use of energy than would otherwise be the case. That report also has not been debated, and its basic recommendations on energy conservation are not included in the latest programme.
  I have listed a few of the more important pieces of advice which have been available to the Government not for a few months but for years, and there are many others of good authenticity from outside bodies. I return, therefore, to the question why all this has taken so long and why we are now facing the fourth winter and only beginning with a comprehensive programme.
  While praising the Government for having at last done something, we must not become too self-congratulatory. I hope that the Minister will take this criticism in good part, because I know that he has done more probably than anyone else on the Government Benches to try to get matters under way. We cannot afford to be self-congratulatory or complacent, bearing in mind the time taken thus far. The Government could and should have acted sooner and done more.
  I turn now to the programme announced by the Secretary of State this week. How does it match up to needs and to the national interest? First, there is the proposal to provide assistance for insulating public buildings through the Property Services Agency. I regard this as excellent. Of course, more should have been done sooner, but it is good that we are getting on with that at least. We all know that the main problem in an insulation scheme is one of incentive. Where the user of a building is not personally or directly responsible for facing the heating bills, there is often lack of action on insulation and waste in consumption as well. Therefore, the major

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  priority must be in public buildings—schools, hospitals, local authority buildings and so on—where no one else would otherwise provide the insulation investment or ensure that energy was used more efficiently.
  But we are to have only £5 million a year, even though the Property Services Agency has proved investment for this purpose to be highly cost-effective. It has said that in its own reports. How soon does the Minister believe that with this projected programme all the buildings within the ambit of the Property Services Agency will be effectively energy-proofed, as I like to describe it? What proportion of the buildings are still energy wasters, and what proportion of them are upping the standard?
  There is, rightly and excellently, an allocation of investment for other public buildings, for the National Health Service, education and, presumably, other Government Departments—although this was not specified in the Secretary of State's statement. I assume that we include prisons and other public buildings of every description. Such investment where there are now inadequate insulation and insufficient heating systems must be highly cost-effective. I therefore ask again what proportion of these buildings are now adequately insulated and effectively heated and how long will it take for all of them to be covered. The question is relevant and I hope that the Minister accepts it, because continuing waste is paid for by the taxpayer. As investment in insulation is recouped within two to three years with this type of building through the energy bills saved, it is an extremely relevant question for the national economy.
  Having supported the proposals, I must now make a somewhat more critical comment on the programme to provide full Government aid to insulate all council dwellings. The programme specifies that over 10 years 2 million homes are to be insulated by Government and local authority grants. This is rather unjustified discrimination against the private owner-occupier, and we should have some explanation of why the Government think that only council houses should be entitled to this form of aid. Other countries have provided tax incentives, allowances and grants or part grants for all domestic homes, and yet here we
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  have the Government apparently excluding incentives for domestic privately owned and occupied homes. Surely the Government are not under the misapprehension that all people in council houses are poorer and less able to finance their own insulation than those living in their own homes. I am sure that the Minister will agree that that is not so.
  Many people living in their own homes are on supplementary benefit, pensions or even family income supplement. There are even the unemployed, the disabled, the sick, the elderly and so on who are worse off and less able to pay for their own insulation and, indeed, who are unable to pay their heating bills as easily as many of those who live in council houses, where in many cases there is a substantial income coming into the home.
  I hope that the Government will think again about this. We accept that resources for this budget are limited. They should have been allocated in a fairer way and on a more selective basis so that those most in need would get most aid. I am sure that the Minister will have studied the report on insulation prepared by Mr. David Green and published by the National Consumers' Council. It particularly highlights the problem of the less-well-off sectors of the community and says that less-well-off owner-occupiers are one of the real hardship areas where help with insulation may be needed far more than in many council homes. A fairer, if selective, distribution of the aid should be considered, and I hope that the Government will look at this again.
  It is strange that VAT is to be retained on do-it-yourself insulation materials. Surely, if we are to have co-ordination between Government Departments on energy conservation, it would have been sensible to provide some incentive for people to do the job themselves. There is a further justifiable criticism of the Government's programme in that they seem to assume that everyone in a council house must have the insulation installed for him by the Government or the local authority and that these people are incapable of doing the job while everyone who lives in his own home can automatically do the job himself. This is an odd sort of discrimination. Many people, whatever sort of house they live in, are capable of providing their own insulation. They have the resources to

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  do it and should be given incentives to get on with the job rather than automatically get a subsidy. Aid should be allocated to those most in need, whether a person lives in a council or a private home.
  Another major defect in the proposals is the neglect to modify the building regulations. The Secretary of State said that consultations were continuing to impose insulation standards for all domestic buildings. It is time that building regulations for thermal insulation were agreed for non-domestic buildings. This is an area where a great amount of energy is consumed, yet there are no regulations at all.
  It is surprising that after all this time we are still only at the stage where consultations are taking place. It was a strange admission from the Secretary or State that domestic insulation regulations were still under consideration. Every one concerned with energy conservation—though perhaps the building industry still wishes to discuss the matter with the Government—believes that the present regulations, particularly the roof regulations with their 2-inch provision are inadequate.
  I am not expert on this matter and I would not wish to make any recommendation. That is not for me. I can only say what other experts are telling the Government and what happens in other parts of Europe. But what certainly is apparently agreed is that in this country, with present energy prices, it is cost-effective to roof insulate between 6 in. and 8 in. Surely it is time that the building regulations were improved a little from 2 in., even if the increase is only to 3 in., so that at least we make surey that new buildings start off with a higher standard.
  I come to what I regard as a final major omission in the package. That is, that there is no mention whatsoever about Government initiatives to make better use of resources in the area of electricity production. We are well aware—and there has been plenty of supporting evidence—that this is a major area in which energy conservation can make a big contribution. It is happening increasingly in industry, where we are getting more co-generation. It would have happened far more in this country, as it has on the Continent of
  778
  Europe, if the present electricity supply industry was not continuing to penalise industry that wishes to generate its own supply through the tariff system.
  The Plowden Report has clearly highlighted the problems that there are statutory restraints and that there is lack of co-operation, whereas the financial incentives now exist because of the price of fuel. There are artificial restrictions which inhibit the development of a mole flexible system which would be far more effective in the use of fuel. I hope that we shall not use an endless series of further Government inquiries as an excuse to stall on this matter.
  It is well known and acknowledged that the balance between our national demand for low temperature heat and for electricity is such that by using the available systems nearly all our electricity could be produced by co-generation, saving approximately half of the fuel that is at present consumed in electricity production.
  We know that Dr. Walter Marshall's further investigations are proceeding and we look forward to the report, but in the meantime the Government could be giving more encouragement by removing the statutory restraints and artificial restrictions which prohibit the natural evolution of a more efficient form of fuel burn.
  I believe that there is some evidence that the Government have taken on board and acknowledged the role of conservation but there is little evidence that they have yet accepted that conservation is more than just a narrow definition of encouraging less wasteful use of energy. Conservation is really far more than that. The Government have to produce evidence that they understand this. The right incentives really must be provided so that we do not merely encourage less wasteful consumption but concentrate more on investment in less wasteful production of energy. So far, the Government have really only started on the consumption end, whereas a great deal of the waste of resources takes place in the production of our energy.
  Although the measures so far introduced are a useful start and should have come sooner, we have a long way to go before we provide the fiscal incentives, which are not here yet, before we use the price mechanism more effectively—in

  779
  other words, the carrot and the stick—and before we have a fairer allocation of priorities.
  The Government should by now have set a specific target, as has been strongly urged by the EEC, for a conservation programme. We have not had that yet. Although we have at least some acknowledgment by the Government that energy conservation produces benefits to the economy, can maintain and improve our standard of living and help the balance of payments, and, of course, help us to maintain self-sufficiency in energy, the Government have not yet acknowledged that investment in energy conservation in the sense of more rational use can be cost-effective. In other words, conservation reduces the resources that are required to supply more energy.
  By investment in conservation we can save public expenditure, because we shall not have to invest so much in developing new energy sources and new energy supplies such as new power stations. It is that aspect of the overall energy conservation strategy that has not yet been grasped.
  There is a consensus at last that energy conservation has a role to play—namely, that it will help us to buy more time as part of an overall strategy, perhaps help us find the right solutions in the longer term, and reduce the risk of an energy gap and the problems that might result from being forced into a crash programme in a direction that we might not be sure is right. However, the emphasis must surely be less on increasing supplies and more on increasing efficiency in the second stage of the Government's conservation policy, and that we have not yet seen.
  We must stop wasting national wealth. We can no longer afford to squander costly and finite energy; nor is there any necessity for us to continue doing so. The more rewarding alternative options are available to us, and perhaps we should be thankful that at last the Department of Energy has begun to accept that.
  Conservation in its wide context must form an essential integral component in the development of energy policy. It is only if that is accepted and policies are implemented that we can maintain our competitive position, our growth potential and our standard of living.
  5.20 a.m.
  Mr. Nigel Forman: It is my privilege to begin by paying the warmest possible tribute to my hon. Friend the Member for Derbyshire, South-East (Mr. Rost), who was first in the field in energy conservation matters in this House. He is a long-acknowledged expert on the subject. He has great knowledge and he has been the scourge of the Government on this important matter, at least since February 1975. He has instigated much of the scant parliamentary debate that there has been. I also thank the Under-Secretary for going to the considerable inconvenience of being with us at this ungodly hour of the morning to talk about a subject that should have had much more parliamentary time at peak hours devoted to it.
  I agree with virtually everything my hon. Friend said in his excellent speech, and not least with the way in which he successfully put the case for conservation into the broader framework of the case for a more rational energy policy. That must include taking a view on the way in which energy is used and the extent to which Government action, the price mechanism and every other method available can influence the pattern and total level of energy demand.
  As the official Opposition spokesman, my hon. Friend the Member for Bridgwater (Mr. King), said in response to the Secretary of State's statement on Monday, the Opposition warmly welcome the Government's conservation package, but we feel it a tragedy that so much time has been lost in bringing that package forward. If the Government had moved faster, there would have been more savings and they would have come through more quickly. In short, another winter will have been lost, because the package comes into operation only in the financial year 1978–79, although the Secretary of State on Monday often spoke of bringing the package in on a phased basis, saying that it was not necessarily the Government's last word that it would start in 1978–79. I can only hope that he meant that there might be an opportunity to bring forward the operation of the package.
  Although £321 million over four years may seem a large amount of public

  781
  spending, only half that sum, as I understand it, will require additional allocations of public money. Money invested in energy saving is one of the most cost-effective investments any Government can make these days. What it really amounts to is spending money today to save bigger sums in the future.
  The Secretary of State has made clear that his Department is firmly in overall charge of this important subject. As he put it in his statement,
  "Conservation will now rank with the energy-producing industries as an essential element in our energy policies."—[Official Report, 12th December 1977; Vol. 941, c. 32.]
  We on the Conservative Benches welcome that.
  I am tempted to think that the Secretary of State was perhaps following the lead of my hon. Friend the Member bor Bridgwater, who said in his wide-ranging speech at Banbury:
  "the first priority for policy must be the encouragement of energy saving. It is surely indisputable that whatever view we take on future energy supplies there is no possible case for wasting any at all."
  That thought is very much in keeping with the mainstream of the argument put by my hon. Friend the Member for Derbyshire, South-East.
  As the Government now take the view that this important matter is a central concern of the Department of Energy, why are they content to leave the political impetus to the Under-Secretary who has kindly come along tonight? In our view, the matter should have had the more continuous and sustained backing and involvement of the Secretary of State himself.
  Why is there such small representation of what I would call conservation interests on the National Energy Commission? If one looks at its membership, one finds that Sir William Hawthorne is on it but that precious few of the other members could be said to have a direct knowledge of or a direct interest in energy conservation. Does this not indicate a certain lack of political commitment on the part of the Government when we see evidence of the way in which the Department of the Environment has been dragging its feet on one or two important matters dealing with building regulations and so on? In
  782
  short, is it not time, as my hon. Friend said, for the Government to broaden their view of energy conservation to include not only savings with energy use but, even more important, much more efficient means of conversion and distribution of the energy that we produce?
  One has only to look at the figures to see that the United Kingdom is still painfully low in the European thermal efficiency league. We are not making fast enough progress with combined heat and power or industrial co-generation, and there is a need, with the present energy situation, to look critically at an electricity supply system that is only 30 to 35 per cent. efficient and in which perhaps 17 per cent. of the energy involved is lost in high voltage transmission.
  We know that we can expect some legislation, as foreshadowed in the Queen's Speech and in the light of the Plowden Report, and I hope that the Minister can say something positive about that tonight, because if the Plowden Report were followed through in certain conservation respects, we could see some beneficial changes in that direction.
  Several times the Secretary of State said that the 12th December package that he was introducing—his 11-point package—was not the Government's last word. He spoke of bringing forward further measures as and when these were necessary. Can the Under-Secretary give the House more precise indications of what the Government have in mind in that regard and say when further measures will be brought forward? As my hon. Friend said, it is not only by setting overall targets—such as the 20 per cent. overall reduction in final energy consumption by the end of the century, the target mentioned on page 19 of the recent Energy Commission Paper No. 1—and then working to attain them that we shall achieve the savings that we need. Is not that the sort of target that should have been incorporated in this package of energy conservation measures? If we are to get savings of the dimensions that we need, would not that have been a more purposeful way of going about it?
  There are one or two points of important detail that I want to put to the Under-Secretary, and I invite him to comment upon them. If he is not in a position to do so this morning, we shall

  783
  understand; perhaps he will then be kind enough to write to me later about them.
  As I understand it from public speeches by Ministers, the nation now spends about £13 billion a year on its energy. Last Monday the Secretary of State said that existing policies of energy conservation had contributed towards an energy saving worth about £2 billion over the past four years. That works out at £500 million a year, on average, or a little less than 4 per cent. a year savings. I suggest that is not good enough.
  The Secretary of State said that the Property Services Agency is aiming at a target of saving 35 per cent. of the fuel used in 1972. I ask the Under-Secretary whether that 35 per cent. figure applies to all the 11 points in the Government's conservation package. If not, ought it not to do so in view of the right hon. Gentleman's acceptance of the point made by my hon. Friend the Member for Exeter (Mr. Hannam) on 12th December, when the Minister was asked about this matter? The Secretary of State agreed that it would be a satisfactory and more worthwhile objective if in fact the 35 per cent. target could be adopted rather than the minimal target, which had been the case before.
  The Government are obviously determined to secure energy savings in non-domestic local authority buildings, but that will depend on the outcome of discussions, no doubt, with local authorities. Ought not these discussions to have been going on long ago, and ought they not now to be reaching practical conclusions?
  Is the Minister aware, for example, that it was nearly four years ago, as my hon. Friend the Member for Melton (Mr. Latham) pointed out in the exchanges on Monday, that this House passed powers for the Department of the Environment to make building regulations on insulation? Looking at the answer that my hon. Friend got on that occasion, it would appear that the Secretary of State was either confused or trying to dodge the real issue. We would appreciate a clearer answer from the Under-Secretary this morning.
  Once again, the Government's 10-year programme for public sector dwellings is long overdue, as my hon. Friend the Member for Derbyshire, South-East said. But in saying that spending for this purpose
  784
  will be made eligible for central Government housing subsidies, which is the way that the Secretary of State put it, will the Under-Secretary confirm that ratepayers throughout the country in the private sector of housing will not be obliged to help finance insulation in public sector housing? If so, I assure him that it will be a welcome reassurance for an important section of the population who, it seems, are to derive no direct assistance from these measures, even if, on the pattern of the 100 per cent. tax allowance for installing insulation in existing industrial buildings, there might be a case for grants or tax incentives for insulation in private housing.
  On that point, it is interesting that the National Council of Building Material Producers was reported in the Financial Times today as saying that it believed that the package discriminated against two-thirds of householders and it was concerned that perhaps landlords in the private sector were unlikely to respond to indirect encouragement to spend on insulation without corresponding financial benefits—that is, benefits corresponding to those which will be available in the public sector.
  If the methods of persuasion and exhortation, methods of allowing real energy prices to increase and even mandatory measures, such as building regulations and appliance, standards, prove insufficient to meet the kind of targets that the Government must set for themselves in energy conservation, will they give urgent consideration to some kind of incentive structure of grants or tax allowances, or a mixture of both? We would like some indication on that important question.
  Why has it taken the Department of the Environment so long—I know that this is an unfair point to put to the Under-Secretary, because he is not responsible for that Department, but he has this co-ordinating role within Whitehall—to come forward with proposals for new thermal insulation standards in new non-domestic buildings and for the provision of appropriate heating controls? Is this not yet another example of Government Departments dragging their feet on this important issue? Does it not underline how all the ministerial and other co-ordinating committees which are now in existence in Whitehall have proved unable so far to

  785
  give this programme the vital political impetus which it deserves?
  The Government have announced the allocation of a small sum to an expanded programme of demonstration projects as part of the package. We would like to know what exactly the Government have in mind. Perhaps the Minister will give us a few examples. Is it likely that this aspect of the package will be expanded further? I notice that it is already somewhat larger than was envisaged in the autumn at the time of the conference of energy managers, and it seems to be growing all the time.
  It might help the House and those who will read the debate to have some examples of the type of demonstration projects that the Government have in mind. One often requires a demonstration programme to convince doubting people.
  Ministers have spoken of the contribution that oil savings could make and, in particular, of how more efficient motor vehicles could help. That is an important area given that the likely energy gap—if such a thing exists—will mean a shortage of cheap liquid hydrocarbons. In their discussions with the motor industry, how much consideration are the Government giving to the promotion of either weak-mixture petrol engines or dieselengined vehicles? Mercedes-Benz in Germany now manufactures more dieselengined than petrol-engined vehicles. Is not that the direction in which our motor vehicle manufacturers should be moving?
  In their working document on energy policy, which was submitted to the Energy Commission, the Government said that there were strong arguments in favour of international collaboration on energy conservation going beyond the exchange of information and technology. I agree with that. The Minister would do the House a service if he told us what measures of that kind the Government have in mind and what measures they would like to see implemented by the Nine.
  I press the Minister to agree that this is an area in which the Community has a useful role to play, if only to discourage any one member State from trying to seize short-term advantages to the detriment of the longer-term interests of the
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  Community as a whole. Those interests must include the most efficient use of the energy available.
  I reiterate that we on this side of the House stand by the warm welcome that we gave to the package. Our main criticisms are that it should have come much earlier, that it could have had greater effect if it had come earlier, and that it lacks the necessary political impetus because the Government have not shown sufficient evidence of giving it the political weight that a programme of such importance deserves.
  5.38 a.m.
  The Under-Secretary of State for Energy (Dr. John Cunningham): It would be misleading to say that I welcome any debate on any subject at this time of the morning, so I shall not say it. I shall respond as briefly and as comprehensively as I can to the points that have been raised by the hon. Members for Derbyshire, South-East (Mr. Rost) and for Carshalton (Mr. Forman), whom I welcome to the Opposition Front Bench.
  The hon. Member for Carshalton said that he hoped I would respond to the views which have been expressed in the debate. The views are so many and varied that I doubt whether I shall deal with them all. If the hon. Member feels that I have not adequately covered specific issues, I shall write to him. I give both hon. Members full marks for political cheek, if not duplicity. They talked a great deal about intervention in the private sector of industry and about the need for the Government to do more and dramatically to increase public expenditure commitments. They talked about the need to use the carrot and stick and about taxation, higher prices and the need to give more aid to industry.
  All those things are in total contradiction to what right hon. and hon. Gentlemen say from the Opposition Front Bench about what the Government should be doing, and in this specific sector I wonder how the two hon. Members who have spoken reconcile themselves to that fundamental and harsh political point. I certainly do not intend to let it pass, because it is a major difference between the parties and one which it is far too easy for the Conservatives to gloss over in putting many of the suggestions which I welcome and support but which in other ways they are totally opposed to.
  Mr. Forman: It is relatively easy to meet the point that the Minister has made by saying that he and the Government have admitted that spending on energy conservation is spending money now to save more later on, and that it is a very good investment of either public or private funds.
  Dr. Cunningham: Of course the hon. Gentlemen is absolutely right, but that does not obviate the need to provide the funds in the first place. That is the very point that he has failed to deal with.
  There are a number of general points to which I shall reply. This was not the first package in the Government's progressive energy conservation policy, of course. The statement in the White Paper of July 1974 heralded the Government's conservation measures, and there have been a number of admittedly smaller announcements since then. The Government's energy conservation policy has been well established. It is an evolving one and it is internationally recognised as one of the most comprehensive of any Government in the Western World. I say that advisedly. The International Energy Agency certainly supports that view and I believe that it will continue to do so in the future.
  We are, therefore, not afraid of international comparisons, and we do not accept the point made by the hon. Member for Derbyshire, South-East that we lag behind. The reverse is the truth. There is a significant amount of evidence to show that we are one of the world leaders in taking initiatives on energy conservation.
  Mr. Rost: I do not wish to be misunderstood. I said specifically that we lagged behind in the more efficient conversion of fuel into electricity and heat, and that is an acknowledged fact.
  Dr. Cunningham: The second general point is that the measures announced by the Secretary of State on Monday are a major extension of a continuing and developing programme. This is a far-reaching programme involving major public sector expenditure, and clearly the Government have a continuing duty to act in the public sector, where they have very great responsibilities. The third general point—I say this in acknowledgment of many matters that the hon.
  788
  Gentlemen have raised tonight—is that there is more to be done and we plan to do more. We do not regard this by any means as our last word on the subject.
  I want to emphasise the wide-ranging nature of the work that has been going on in industry and to stress that we see energy efficiency as one of the key factors in raising overall industrial efficiency. I find myself in accord with the remarks about the need not only to reduce energy use but to develop much more adequately than anyone has done hitherto the more efficient production of energy in the first place. So the energy industries themselves have a general rôle to play in this approach.
  There have been some rather adverse comments about lack of commitment in the course of the debate. This is another general point. It seems strange to make it within 24 hours of the Prime Minister making a major speech at the Coal Industry Society's three hundredth anniversary lunch yesterday when he dedicated his Administration totally to aggressive and far-reaching energy conservation measures. The Secretary of State has on numerous occasions, despite what the hon. Gentleman implied, made clear his own commitment. It is spelt out in the document quoted by the hon. Gentleman, Energy Commission Paper No. 1, prepared by the Department of Energy setting out our thinking on the present situation. It makes it quite clear that we regard energy conservation as one of the fundamental cornerstones of Government policy.
  Mr. Forman: If there is this political commitment at such a dizzily high level, why have not the Government been more successful in knocking heads together, particularly in relation to the Department of the Environment?
  Dr. Cunningham: If the hon. Gentleman will allow me, I shall come to that in a moment. We have given a great deal of ministerial time and commitment to this, not only in the Department of Energy but in the Department of Industry. My hon. Friend the Under-Secretary of State for Industry made a major speech this week in Newcastle upon Tyne about the Department of Industry's commitment, and my hon. Friend the Under-Secretary of State for the Environment, who is at this moment on the Front

  789
  Bench and is a member of the ministerial committee on energy conservation, has worked very hard indeed to bring about the kind of commitment from the Department of the Environment to which the hon. Gentleman referred.
  I do not intend to enumerate all the details of existing energy conservation measures and policies. I do not want to attribute arguments that hon. Gentlemen did not use, but it seemed to be implied that somehow this is an easy area in which to act. I assure them that it is not. Nothing could be further from the truth. This is a totally unco-ordinated area of activity. It is much easier to co-ordinate action in energy production than it is in energy use. There is a very great difference between the ability of the Government to control energy supply as opposed to controlling energy demand, which results from millions of individual decisions taken every day in millions of different establishments, many of these decisions being taken several times each day. That is a very disaggregated problem to tackle.
  It is not easy to come along with quick across-the-board general solutions to get to grips with energy demand and energy use. I hope that, whatever else hon. Gentlemen may disagree with my remarks, they will at least burn that into their general thinking and approach to policy making in this area. It takes time, because one needs to be specific in the approach to various sectors in energy use and to try, as far as it is ever possible in policy making, to tailor-make solutions to individual situations. I hope that hon. Gentlemen will accept that point.
  It is well known that industry uses about 40 per cent. of all our national energy, and there are major opportunities to improve efficiency and competitiveness through energy conservation. Nevertheless, even before the present package we had by no means neglected the domestic sector. The main thrust of the "Save It" campaign and the information campaign, which has cost about £8 million to date, has been in the domestic sector. Its effectiveness has been reflected in the way in which, for example, the purchasing of the various materials used for home insulation has tended to follow and reflect the level of that advertising. A considerable number of local authority buildings have
  790
  already been insulated through the job creation programme. We would have liked to see many more, but, nevertheless, some progress has been made.
  As the House knows, we have organised the programme in such a way that substantial funds are available, and substantial discounts have been available for materials too. About 170 applications have been received by the area action committees under that general heading. However, this still leaves a massive area for action in the local authority housing sector. Over 2 million council houses lack basic insulation of any kind.
  My right hon. Friend's statement on Monday included £114 million in the next four years for the start of a 10-year programme to bring public sector dwellings up to basic minimum standards of thermal insulation. Hon. Members have asked a few questions about this.
  Let me try to say why we have acted in this area first. Obviously, it is for the fundamental reason that this is the biggest single area in the domestic sector where we could make progress rapidly. Approximately two-thirds of all local authority houses need bringing up to basic standards. It is much easier to organise, plan and cost, and, therefore, it is much easier to get action and results quickly. That is why we have acted in this area first.
  It is true that in the private sector about one-third of the housing stock in broad general terms also comes into this category. This will be much more difficult to organise, whatever scheme hon. Gentlemen may envisage. But I would point out that, even now, through the DHSS, local authorities can take action to help the elderly and disabled in private sector housing. Hon. Gentlemen should encourage some of their colleagues who control many, if not most, of our local authorities to get on and do that. I should like to hear them make some speeches to that effect.
  The Prime Minister had something to say about this at the Coal Industry Society lunch yesterday. I do not wish to add anything to that at the moment except to make this point. Hon. Gentlemen said that the Government should undertake to look again at this problem. We have not stopped looking at the problem. It is not a question of looking at it

  791
  again. We recognise that there is a problem, and in no sense do the Government mean to be discriminatory in their approach to the problem of house insulation.
  There is also the question of how work can be done. It was suggested that we assumed that people in council house needed to have it done for them. We do not assume that. We have encouraged them to do it themselves, just as people in the private sector are encouraged.
  In general terms, we have produced a lot of helpful technical advice to people. We shall be updating our booklet "Compare Your Home Heating Costs" and improving it. It will, we hope, be a further success, as the first edition was. More than 600,000 copies were taken up very rapidly indeed, and the updated version should be available within a few weeks. This is an area of the domestic sector which uses about 26 per cent. or all our national energy. Again, it is fundamentally important for us to continue to develop policies in that area.
  Transport has also been mentioned. This is undoubtedly an area where we need to make progress and where, to date, little has been achieved. We know now that by improving the existing internal combustion engine performance significant improvements in fuel consumption can be obtained.
  As the House knows, we are taking action to remedy what I have said about the lack of progress. The fuel consumption testing order will come into effect. That has been agreed with our home industry. We have begun further talks to make even further progress in this important area. But it is important that proper consultation takes place. We cannot afford to do anything—indeed, it would be folly—which disadvantaged our own domestic motor manufacturing industry vis-à-vis its international competitors.
  This consultation will again take time. I emphasise the need for proper consultation simply to rebut the accusation that we are moving slowly and dragging our feet or that we could make progress more quickly. It is not easy when one is proceeding on the basis of consultation and discussion as wide ranging as it can possibly be and on the basis of consent rather
  792
  than on the basis of the approach of some other countries and taking statutory measures.
  We are also establishing a close working relationship with the British Standards Institution, which is to hold what we think will be an important conference on standards and conservation in January of next year. I hope to be attending. It is likely that the Government will need to devote additional resources towards assisting with the drafting of standards, and we are looking at how best we may be able to do this.
  One further general matter concerned what we were doing internationally to promote more effective energy conservation policies. The Secretary of State was recently at an Energy Council where certain conservation measures were on the agenda. In general, however, we do not support the idea of open-ended, vague, wide-ranging attempts to bring in directives in an EEC context, because we do not think that there is any point in having statutes which are ignored, ineffective or may need so much detailed policing as to render them not worth the trouble.
  We are keen on having more specific co-ordination internationally, but it has to be on a comparable basis. We do not want to agree to measures which are promoted through some international body if they are not on a proper basis of comparability of standards and specifications. Again, we have our own industrial interests to think of in taking that view, and I think that we are right to take it.
  As my right hon. Friend also announced in his package, energy conservation in industry will be given further assistance in the development of demonstration projects. We have made further money available. We have developed projects based on the recovery of waste heat. Currently, we are drawing up a list of priorities for further action in this area. Our own technical advisers have ideas, but we have widely canvassed industry so that it, too, can come to us with suggestions, and we have received a number of interesting propositions already.
  Combined heat and power is another topic mentioned by both hon Members. We shall be receiving from the working

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  party a fairly comprehensive report early in the new year. We do not have to take any action until we have considered that report carefully. We certainly would not proceed with any action that would undermine the CEGB and the tremendous public investment in the grid. We would want to be absolutely sure that what we were doing was in the general interest of the industry which supplies energy as well as of consumers. Clearly there is a conflict here. The hon. Member for Derbyshire, South-East shakes his head, but obviously it would be nonsence to aid one and damage the other. Certainly we shall not choose until we have considered the report. I wonder what the hon. Member and his colleagues would do. They continually press us for action, but we never hear their views on this matter.
  I turn now to international comparisons. Other countries have approached the problem in other ways. Having spoken in some detail to the French, we believe that our results are comparable with theirs. We are saving about 6 per cent. of primary energy demand, and the French have done the same. They have taken a different road and have gone for fiscal penalties and legislative measures. They have taken a more legalistic approach to the problem. Despite the total contradiction in the two approaches, the results have turned out very similar. Perhaps this is because our energy use patterns and economic backgrounds are very similar.
  Other countries reflect different national situations, attitudes, and historical approaches to energy and housing provision. This explains why many have more combined heat-power installations than we have. As for the thermal efficiency league, we do not believe that some of the Press articles are working on the same basis of comparison. We want comparisons to be on a standard basis before we will accept them. We believe that our programme is one of the most forward-looking and the most cost-effective.
  I have dealt with housing, and I do not intend to deal with VAT. I do not think that this was too serious a point, and it is certainly not one over which I would be willing to spill blood with the Treasury. I do not believe that I would win
  794
  anyway, and VAT is not a serious drawback to energy conservation.
  Building regulations were roughly doubled in 1975. There is an argument for taking further action in the domestic sector, and we are discussing that now. In the non-domestic sector, I have been asked why it all takes so long. This is because the consultation processes are laid down and it is necessary to meet these requirements. It is a question not of dragging our feet but of going through the proper procedures that are laid down—publishing the proposals, inviting comments, assessing those comments and reaching a conclusion.
  In the industrial building sector, people have the right to have 100 per cent. of the cost of insulating a building allowed against taxation. That includes the cost of installation as well as of the materials.
  I am not convinced that the setting of rigorous targets by the central Government is a good idea. When I looked at this in Select Committee in some detail, I thought there might be something in it. But I would be much happier to see industrial sectors consider this themselves and set their own targets. Many companies are doing this and are showing increasingly good results. I think that that is a much better approach than our sitting in Westminster and saying what we think people should do, without the detailed information.
  Mr. Forman: Would it not be possible for the Government to build up what one might call an aggregate target on the basis of disaggregated information fed to them by the different sectors of industry and other sectors of consumption?
  Dr. Cunningham: We make very broad statements, for instance, that everyone can save at least 10 per cent. of energy consumption by adopting obvious good housekeeping methods. That is a broad generalisation in itself, and to go much beyond that would involve a disparate amount of effort. I think that there are easier, simpler and more effective ways of doing it.
  I was asked about the PSA's target. The PSA's target is 35 per cent. That is for the PSA's own programme, and it has nothing to do with the programmes in health, housing or education. There is

  795
  no basis for comparison. It is not generally applicable across the board and was never intended to be.
  I was asked about local authority expenditure under the package as announced and the consequences for ratepayers. The hon. Gentleman was being cheeky here. He knows as well as I do that it is not for us in the Government to decide. Local authorities will decide for themselves how and where they apply any charges where necessary. They will get the money and the loans as two-thirds of the cost of borrowing under the normal housing loan finance arrangements, as the hon. Gentleman rightly said. Any residual small cost to a local authority will be recovered as it thinks fit, and, no doubt, individual authorities will do it in their own way. I cannot give the guarantee which the hon. Gentleman so cheekily asked for. He knows that I cannot do so, since the Government have no authority to give any such guarantee.
  Mr. Rost: On the question of the grants available for council house occupiers and none for occupiers of their own homes, the Minister defended that by saying that it was easier to administer. Is he admitting none the less that the system as proposed would be completely unfair?
  Dr. Cunningham: No, I did not defend it just on the basis that it was easier to administer, and I said also that it was not a question of looking again at this problem. We have not stopped looking at it. I did not accept the hon. Gentleman's argument that it was our intention to discriminate in the first place.
  Praise from the hon. Member for Derbyshire, South-East is praise indeed. Our statement on Monday was widely welcomed in the House, it was welcomed in another place, it was welcomed in the Press and it has been welcomed internationally. At last, rather grudgingly, the hon. Member for Derbyshire, South-East gives it a welcome. I am pleased about that.
  There is no doubt in anyone's mind now—there certainly should not be, and there is no doubt in my mind—that the political commitment is there within the
  796
  Government. There is no doubt in my mind that the momentum for energy conservation is developing in industry in particular. I spend a lot of time in the regions and I go on industrial visits almost weekly, talking to people about these matters. The general feeling is that the arguments—I agree that they are selfevident—that investment in energy conservation is one of the lowest-risk investments that anyone can take today are gaining ground. When I say that it is one of the lowest-risk investments, I include the Government, people in their own homes and industry. The pay-back periods are often very short and the benefits, whether we are talking of ourselves as individuals, or industrial organisations or of the nation as a whole, are large and obvious.
  That momentum is developing, and the arguments are gaining ground. I think that they will continue to do so because, if for no other reason, we in the Government intend to keep up the fight for those policies and arguments. There will be further measures announced in due course. I am asked when and on what. I cannot be specific as to when and what. Clearly, the interdepartmental and Government discussions are going on, as are discussions and consultations with the Advisory Council on Energy Conservation and in the Energy Commission.
  The hon. Gentleman was most unfair in his views on the Energy Commission. Sir William Hawthorne is there, and so also is Dr. Pearce. They are totally committed to supporting the Government's policy, as Sir William pointed out in his speech in Liverpool recently. Sir Derek Ezra is there, and he has recently spoken in support of Government policy. Eric Sayers of the CBI also comes into that category. There is, therefore, plenty of support in the Energy Commission for what we are trying to do.
  In spite of my earlier remarks, I have enjoyed speaking in this debate. I sometimes think that that is difficult to justify, but I hope that I have dealt with the points of major importance. However, if there are any points that hon. Members may wish to raise with me. I shall be happy to correspond with them on any issues they might like to pursue.

  AGRÉMENT BOARD
  6.5 a.m.
  Mr. Michael Latham: This short debate at this godless hour of the morning is basically about what we can do to prevent buildings from falling down. I want to raise the matter of the Agrément Board, which is contained in Class No. 8 (1) of the Supplementary Estimates on page 120, where we read that the present provision of £60,000 has been raised to £275,000 which is a
  "revised estimate of the contribution required to meet the Board's expenditure for the year".
  It is such an enormous under-provision—because the increased figure is about four and a half times bigger than the provision—that it should not go unexamined.
  So remarkable an increase of such magnitude requires the House to look closely at the work of the Board as a whole. It is a slightly odd animal. It is a company limited by guarantee whose council members are appointed by the Minister. Its origin and intention have not been the slightest matter of party controversy because following a meeting held at the Royal Institute of British Architects in 1963, when discussion took place on the French system of agrément, my righ hon. and learned Friend the Member for Hex-ham (Mr. Rippon) set up the Gibson Committee in February 1974 to investigate the French procedures and to see whether we needed a similar arrangement. The committee reported in favour the following year to the Minister for Public Building and Works, Lord Pannell, and the Agrément Board was set up in January 1966 with general and widespread support.
  Over the years its workload, fees and income have been expanding. At first the process of granting agrément certificates for materials and components was slow. By the end of March 1968 only eight certificates had been supplied, although the staff had then mounted to between 11 and 18 employees and the Board had already received a total of £112,000 in Government grants. I recall that the right hon. Member for Bermondsey (Mr. Mellish), who was then Minister for Public Building and Works, was critical at the Dispatch Box of the Board for its progress. I add immediately that things have improved considerably since. The latest figure that I have for
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  certificates issued is for this time year when it was 400.
  As for grants-in-aid from the Government, these have increased steadily. For the year ending March 1976, for which the figure has been published, the grant-in-aid was £182,000, being 46 per cent. of the total of £397,500 that the Board had as total revenue, the balance coming from fees and so on. The Supplementary Estimate would raise the figure for the current year from £60,000 to £275,000 for the grant-in-aid. The Board has tended to negotiate with the Government on a three-year basis for its allocation, and the latest period is for the period 1976–79. Clearly the Board must have asked for a sum in excess of last year's £182,000 and obviously the £60,000 provided in the Estimates cannot have been intended as a serious offer by the Government, unless the Government envisaged dramatic policy changes, because that would have been the lowest figure since 1969 when the Board issued only 22 certificates. On the other hand, £275,000 is not particularly excessive, as I understand privately that the grant figure up to 31st March 1977 was about £265,000—although that has not been published.
  The first questions to which we need answers are these: what did the Board receive in the financial year 1976–77 as grant from the Government? Was it £265,000 as I privately understand? Secondly, what bid did the Board make for 1977–78 and 1978–79 in grant-in-aid? Thirdly why was an obviously derisory figure of £60,000 included in the Estimates in the first place? Why is it being increased so dramatically now? I have my suspicions about this latter point and I shall air them in a moment.
  I now turn to consider the question of grant-in-aid itself and how it could be controlled or eliminated. I have on several occasions inside the House and outside argued that our methods in this country for preventing building disasters and failures need more attention. As the House knows, I am a director of house-building company and another company in the group to which I belong holds an agrément certificate.
  This issue of building failures must not be exaggerated because failures represent only a minute proportion of buildings and there will always be some degree of risk in anything in any walk of life. But

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  let us mention a few of the problems which have taken place in the life of the Board. There was Ronan Point, with its inherent design failure and the inadequate building regulations and code of practice which the inquiry found—four people killed and millions of pounds of taxpayers' money necessary to put things right. There was the awful incident at Summerlands, with 50 deaths and further amendments to the building regulations becoming necessary. There was high alumina cement, which was controlled by the French Government as long ago as 1928 and 1935 and was banned in Bavaria in 1962, but on which no adequate action was taken here until two years ago.
  There is the continuing controversy over calcium chloride, on which the Minister answered a Question yesterday, and polyurethane ceilings which the GLC actually took out of buildings at Thames-mead and several other places at a cost to the ratepayer of £850,000. There were the extremely unhappy incidents over the lowering of U-values in 1974–75 about which I shall say more briefly in a moment. There was the woodwool slabs affair at New Malden. There was the "Clasp" system's fire at Fairfield in Nottinghamshire and there have been other such dramatic incidents. It was because of all these deplorable cases that I argued in the House in 1975:
  "the Department should strengthen its policy-making side by merging the Agrément Board and the BRE, and make the head of the BRE report directly to the Secretary of State. Furthermore, I should like to see the BRE with a proper 'doomwatch' section, whose job it is continually to evaluate new technologies before they are permitted or obtain 'deemed to satisfy' status."—[Official Report, 13th February 1975; Vol. 886, c. 763.]
  I argued the same at greater length in an article in the magazine Building in August 1975, about which I had some very helpful correspondence with the Minister for Housing and Construction. I was naturally pleased when the Minister set up such a doomwatch section in June 1976, the Building Integrity Division of the BRE.
  I now believe that we need to link that firmly in with the Board. It is totally unsatisfactory that the Board's testing scope does not cover all new materials and components automatically before they appear on the market, let alone existing products used in a new
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  combination, requiring different standards, or the assessment of new prototypes.
  The magazine Building Design estimated in November 1976 that the scope of the Board's activities covered only about 20 per cent. of the potential market. The Board itself told me in 1974 that it thought it was covering about 50 per cent. of new products, but only just beginning with the assessment of prototypes. It is certain that the scope is nothing like 100 per cent. and that there is little prospect of its becoming so. I must say to the Minister that this will not do. The public has rightly been alarmed at building failures which it usually has to pay to sort out.
  Indeed the Government have taken a rather unenthusiastic attitude in this regard. When I asked the Minister for Housing and Construction on 30th November last year what proportion he estimated by number and by market value of the new building components and products coming on to the market had received an agrément certificate and what action he proposed to widen the scope to nearer 100 per cent., the right hon. Gentleman replied:
  "I doubt whether sufficient evidence is available to make a reliable estimate of this kind. Action to increase their market coverage is primarily a matter for the Agrément Board."—[Official Report, 30th November 1976: Vol. 921, c. 72.]
  I regard that as a quite unsatisfactory reply. Imagine what the reaction of the House would have been if the same attitude had been taken by any Government to, say, private house building.
  Since February 1966, when the late Mr. Richard Crossman brought it about, it has been axiomatic that private house building must be covered by the NHBC certificate in the interests of consumer protection. I believe that what goes for private housing should go for all forms of building.
  Therefore, what I feel we need to do now is to move towards either voluntary agreement in the trade or, failing that, some legislation to widen the scope of the Board to 100 per cent. over, say, a two-year or three-year period. I believe that this matter should be a priority for consideration by the Minister's National Consultative Council or by the Construction

  801
  Industry Liaison Group. One hundred per cent. coverage on the basis of a proper fee would undoubtedly give the Board the authority that it currently lacks and would help to eliminate the grant-in-aid and make it self-supporting, thus, of course, assisting the taxpayer.
  While my suggestion is being processed, if it were to be processed—I appreciate that it would obviously take time and require proper discussion with the trade—I believe that the Department should put its weight properly behind the Board, which it has not done so far. I visited the Board some 12 months ago at the kind invitation of the director. I met many of the staff and saw the testing arrangements at Garston. Without breaking any confidences, I must say that the staff felt then that the Department of the Environment did not give them as much co-operation or support as it ought to give. I have already mentioned the Minister's rather unhelpful reply on the scope of the Board's activities, but I am sorry to say that there have been other examples.
  Firstly, the Department produced, on 14th September 1976, a very controversial document, called BRA/668/68, dealing with the testing of building materials for the purpose of establishing U-values for insulation—something that was discussed in the previous debate. I was appalled to trnd that not only did the Agrément Board's experts publicly dispute the advice that the Department had put in the document, which they said contained serious shortcomings likely to lead to problems in the future, and which contained mathematical and other errors, but also that the Ministry had not even consulted the Board before issuing the document. Indeed, the Under-Secretary himself, in answer to a Question from me on 8th November 1976, said:
  "It is not customary to consult the Agrément Board before issuing advice of this sort."—[Official Report, 8th November 1976; Vol. 919, c. 4.]
  With respect to the hon. Gentleman, it certainly should be customary, because not only has the Board very considerable knowledge and expertise—indeed, it caught the Department out on this occasion in errors which have still never been admitted since—but it is actually involved in testing materials for cavity fill, as I
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  saw with my own eyes at Garston last September. Indeed, the Board's certificates for cavity fill have done a great deal to clear the cowboys out of that business. Therefore, I hope that the Minister will insist that the Board be automatically consulted in the future and will give instructions to the Department to that effect.
  Secondly, there was confusion over the Department of Energy's Press advertisement in March 1976 about cavity wall insulation, which was specifically intended to help the public. This made no effective mention of the agrément certificates, despite the request by the Board that it should do so. Indeed, the Under-Secretary of State for Energy, the hon. Member for Whitehaven (Dr. Cunningham), told me on 30th November last year that it was on the advice of the Department of the Environment that positive recommendations to stick to products with an agrément certificate had been specifically left out of the advertisement, because he said, to put them in would be
  "less than fair to installers who did not hold Agrément certificates but who might, nevertheless, be competent."—[Official Report, 30th November 1976; Vol. 921, c. 119.]
  I find that very hard to accept, given that the Board is a body which is publicly financed and its members are appointed by the Minister. Either the Government should back it or they should pull out. But to be neutral in such circumstances, when there is a big push on energy conservation, is very odd and simply devalues the work of the Board on this important issue.
  There was another example—namely, the very unsatisfactory affair of the Department and the proposed type-approval system. I very much suspect that that is the real reason behind the peculiar Estimate tonight. At present the Board is not able to do properly that which the Gibson Committee intended—namely, that certified products should be given "deemed to satisfy" status for the purposes of the building regulations. For various reasons—all perfectly good—that has not proved possible. Instead, powers were taken under the Health and Safety at Work etc. Act 1974—I was a member of the Committee that considered the Bill and I remember it well—to allow for a type-approval system. After a great

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  deal of trouble a type relaxation appeared for cavity wall insulation in 1975, but only because of the cowboys who had caused so much trouble during the insulation boom.
  Ministers have been stone-walling detailed questions from me on departmental progress in setting up a type-approval scheme in answers on 30th November 1976, 3rd February 1977, 19th April, 15th June and 5th July. On the last occasion, in July, the Minister for Housing and Construction talked about making
  "a statement as soon as possible, I hope before the recess."—[Official Report, 5th July 1977; Vol. 934, c. 491.]
  Alas, a statement was not made before the Summer Recess, and a statement will not be made before the Christmas Recess unless the Under-Secretary of State makes one when he replies.
  It is my suspicion that it had originally been intended to fix a new three-year agreement that assumed the introduction of a type-approval system, which would have involved direct Department of Environment financing, leading to the phasing out of the concept of grant-in-aid. However, that idea has run into financial and administrative snags and the Department is going cold on it anyway. Indeed, there are rumours that the Health and Safety at Work etc. Act is poorly drafted and would allow too many applications to come before the Department for approval, and that it requires a fixed fee scale to be devised that has been impossible to implement and that may well prove difficult to work out fairly. It is also suggested that there is departmental concern about the liability of the Secretary of State personally in the event of failure of a system that had been approved by his Department under a type-approval system.
  If I am right in my suspicions, or anything like right, the nettle must be grasped at once. If the 1974 Act needs amending, let us get on with it. I hope that we can come to an agreement that the public need proper protection from failures, that the present arrangements are far from satisfactory and that this is an urgent matter.
  I do not normally criticise public officials even obliquely, but I am far from satisfied that the Department has handled this whole issue with sufficient competence or imagination for many years under
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  Governments of both parties. If the fact that we are having this little debate at half-past six in the morning has required the Department to produce a comprehensive brief for the Minister and thereby pushed this crucial matter involving the safety of buildings up the political agenda, it will not have been in vain. I have too much liking and respect for the Minister to believe that he will be fobbed off with vague and inadequate information from the Department, and I look forward to his reply.
  6.28 a.m.
  The Under-Secretary of State for the Environment (Mr. Ernest Armstrong): The hon. Member for Melton (Mr. Latham) has shown, not for the first time, his interest in the work of the Agrément Board and in the part it can play to the benefit of the construction industry and construction product manufacturers. I welcome the attention the hon. Gentleman has given to this subject, both tonight and from time to time at Question Time. I assure him that I shall read carefully tomorrow in Hansard what he has said and that I shall be in touch with him. I shall consider carefully what steps should be taken, apart from what I have to say in reply to the debate. I assure him that I take the matter very seriously.
  The Board was set up in 1966, by the then Minister of Public Building and Works, to assess and certify new building products. The decision to set up the Board followed an investigation of the French agrément system made by the Gibson Committee. At the time, hon. Members will recall, there was great pressure for innovation in construction, and a legitimate fear that such innovation could prove very dangerous if new products were not thoroughly tested and appraised by an independent body of recognised competence.
  Over the past 10 years or more of its existence the Agrément Board has appraised many products. By the end of last March, the end of its last financial year, 462 certificates had been issued. I think it only fair to say that there have been few complaints of failure of products certified by the Board, at least when used in conformity with the terms of their certificates.
  I readily recognise and pay tribute to the value of the Board's certification work.

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  The existence of a means of assessment of new products goes a long way to encouraging innovation by assuring users of the acceptability of such products; it extends the means available for providing necessary safeguards against faulty building and it is a help to our exporters of building materials in the seal of approval provided by an Agrément Board certificate, and through the Board's links with the European Union of Agrément.
  The hon. Member has raised a number of questions. He asked about the Board's financial position, and I must admit that the Government are not happy about that. When the Board was set up it was hoped—indeed, it was expected—that it would become self-financing in due course. There was never any doubt, of course, that Government assistance would be needed initially, because the outgoings, particularly on the development of new methods of testing products, would clearly be more than could be recovered in the fees which manufacturers would pay for certificates.
  The intention was, however, that the Government grant to cover the Board's deficit would be needed only for a limited period as an interim measure. This interim has now gone on for over 10 years and the deficit in the last complete year amounted to £265,000, nearly half the cost of the Board's operations. The reason why the grant appears to have increased five-fold in a single year is simply that, because we were in intensive discustion with the Board about its financial prospects, at Estimates time we were able to make provision only for the £60,000 that was definitely required at that time. Discussions about the future financing of the Board, and in particular its progress to self-sefficiency, were taking place. The Supplementary Estimate that the hon. Gentleman mentioned is to cover the additional drawings from the Contingencies Fund which have been authorised to pay grant to cover the Board's unavoidable expenditure over and above that level.
  The main direct beneficiary of an Agrément certificate is the manufacturer of the product to which it relates, and he judges its value by the extent to which it helps him to sell his product. If industry as a whole does not judge agrément certificates to be worth the full cost of providing them, there need be no good
  806
  grounds to justify the Government in subsidising them.
  Clearly, there are arguments which can be advanced in favour of continued Government support on a permanent basis in recognition of the benefit which the country as a whole derives from the testing of new products. But the House would expect us to look very carefully at the extent to which we put public money in, and over the last year we have had many and full discussions with the Board about ways in which its reliance on grant-in-aid might be reduced and the Board become self-financing.
  It was originally envisaged that agrément certificated products should be given "deemed-to-satisfy" status under the building regulations. This, while it would not have absolutely precluded the use of uncertificated new products, would have provided a considerable incentive towards a wider adoption of agrément certification by manufacturers seeking to market new products. In the event, legal problems prevented this solution, and so the original concept of agrément was falsified by events.
  The hon. Member asked what more could be done to improve the status and thus the attractiveness of agrément certificates. This brings me, of course, to the question of type approvals. Under the powers conferred in Section 67 of the Health and Safety at Work etc. Act, my right hon. Friend the Secretary of State may himself approve—or delegate the power to approve—any particular type of building matter as complying with the requirements of the building regulations.
  As my right hon. Friend the Minister for Housing and Construction has said, we are considering the possibility of using this power and setting up a system of type approvals for new building products. Its benefits are clear: quicker consideration of applications; uniformity of assessment; an easier task for control authorities; certainty for designers that products would meet no difficulty at the control stage; commercial advantages for the manufacturers of approved products; the identification of unsatisfactory products through careful testing.
  But there are considerable problems which require detailed consideration and consultation—resources, for example. A scheme of type approvals could make

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  very heavy demands in terms of skilled scientific and technically trained manpower and in terms of investment in buildings and equipment. This could be so despite the existence of the Agrément Board and the test houses, with their skilled and experienced staff.
  Of course, the manufacturers and others who would benefit from approvals would be expected to pay a considerable part of the cost of carrying out the work, but setting up a type-approvals scheme would still be costly. That follows from the nature of the task. To do the job thoroughly we would have to create an organisation to assess virtually everything that goes to make up a building in terms of whichever of the building regulations applied. We would have to include a system of quality control that would ensure as far as possible that all the subsequent examples of an approved type were of the same standard.
  These are some of the formidable problems, and it would be foolish to offer even a limited start to type approvals before they had been very carefully investigated, but my right hon. Friend hopes to make an announcement on this soon, and I shall draw my hon. Friend's attention to the very proper reminders that the hon. Member gave me tonight.
  The hon. Member also raised the question of consultation between the Department and the Agrément Board in matters where the latter's interests are affected. I have, of course, told him that we will do so in appropriate cases, and officials of the Department and the Board have met to review the arrangements.
  On the particular issue that prompted his question, there was a need for the Department to issue urgent interim advice to building control authorities about procedures to assess the thermal insulation performance of certain types of concrete block. No substantive advice on the subject was available in the current guides issued by the professional bodies concerned. The Department and the Board disagreed on the nature of the advice to be given. In such circumstances the Department, which is responsible for making the Building Regulations, must have the deciding word. The hon. Member may know that the British Standards Institution is now revising its recommended procedures to take account of the
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  new blocks. Both the Department and the Board are or will be associated with this work.
  I have tried to deal with the hon. Member's concern on this subject. Certainly I can assure him that we do not underestimate the importance of ensuring that while new products are encouraged wherever they seem likely to produce economic or other benefits, they are not used in buildings unless they satisfy the stringent requirements of building regulations, which are there to protect the health and safety of the user and, indeed society at large. The Agrément Board has played an important rôle in this and I hope that it will continue to do so.

  AEROSPACE PROGRAMMES
  6.39 a.m.
  Mr. Ron Thomas: I am sure that my hon. Friend the Under-Secretary of State will understand when I say that I am disappointed that the Minister of State is unable to be with us at this early hour of the morning. I say that because, with one or two honourable exceptions, I do not know of any other Minister who has continually made himself so readily available to listen to the representations of those who work in the aerospace industry and, indeed, has been prepared to go to all parts of the country to hear what aircraft workers have to say.
  I think my hon. Friend will also agree that, if Britain is to retain any semblance as a manufacturing country, we need to concentrate more of our economic resources on industries of high technology—industries which push forward the frontiers of technological advance and which have a high value-added or conversion ratio. Few, I think, could dispute that the British aerospace industry leads the field in these requirements. What better example is there of pushing forward the frontiers of technological advance than Concorde, which, of course, is a supreme example and a credit to the innovating skills, talents and creative energies of aircraft workers?
  In terms of added value—the essence of any exporting nation—the aircraft industry is well ahead. Its exports of over £800 million in 1976, which are likely to be £1,000 million this year, are, of

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  course, high technology products. They contain little, if any, import content. Their considerable export value is almost wholly made up of the injection of the creativity and skills of aircraft workers. Even given North Sea oil, our survival as a manufacturing nation still depends on our real and only indigenous resource—the skills and creative energies of our working people.
  Bristol, as my hon. Friend the Under-Secretary will know, has the highest single concentration of aircraft workers in the country, and Bristolians are rightly proud of a long record of aerospace achievement, culminating in Concorde. I regret that it was not found possible to site the headquarters of British Aerospace in Bristol, because there clearly, I think, was its natural home.
  In my judgment, by far the majority of aerospace workers in Bristol welcome the public ownership of BAC and the other airframe manufacturers. At the same time, however, I must in no uncertain tems make clear to my hon. Friend that at the moment there is considerable concern, apprehension and frustration among the aircraft workers I represent. In essence, they are calling for decisions—clear and immediate decisions—to give them confidence for the future regarding their jobs and the industry.
  We are told that outside the Soviet Union there are about 1,700 airliners which are eight to 10 years old and about 500 ranging from 14 to 19 years old. Equally, we are told that the estimated potential civil aircraft market will be in the region of £25,000 million in the 1980s and 1990s. Again, we are told that, for example, there is a positively identified market for about 1,200 of the 150-to 160-seater class aircraft by 1990.
  I think it is fair to say that aircraft workers want an assurance from the Government that everything conceivable is being done to ensure that British aerospace factories get a sizeable chunk of that market. I want to say as strongly as I can that in no circumstances will aerospace workers, or certainly Labour MPs from Bristol who represent those workers, even begin to tolerate our publicly owned aerospace industry becoming some sort of sub-contractor either to the Americans or, indeed, to anyone
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  else. Of course, we fully realise that a new generation of civil projects will, because of costs and achieving markets, demand a collaborative approach. But the strength and potential of our industry demand that we should take the lead in a more positive, thrusting and aggressive way.
  The workers at Filton are angry and frustrated with the threats of redundancies and with the actual redundancies. They want to know what is the Government's attitude to a new supersonic aircraft. They have faith in supersonic travel and see the Americans poised on the touchline ready to come in and exploit our effort. The workers want an assurance that, now that we have a publicly owned entity the work that is available will be shared equitably among the establishments. They want an assurance that there will be a decision on the HS146, as promised. I understand that a decision was promised for January and that a promise was made that the HS146 would be flying in 1981. The Rolls-Royce workers in Bristol want an assurance that the RRM45 engine, and not the Canadian engine, will power that aircraft.
  Aircraft workers also would also like to hear the Minister tell Mr. Ross Stainton, the Deputy-Chairman of British Airways, that they and many hon. Members are very angry indeed at his recent prima donna negotiating posture in New York. His statement was the height of irresponsibility, especially at a time when we are engaged in important negotiations with the Romanians on the 111. It is indefensible for the deputy chairman of a nationally owned national carrier to dismiss this aircraft. It would be the economics of lunacy to buy aircraft from the Americans when British Aerospace is capable of producing the product that is required.
  No doubt we shall hear a lot about commercial advantage and economic viability, but never in such cases do we see a detailed balance sheet showing the real industrial and social costs to our national industry and the multi-powered effect of such decisions.
  When private firms use such arguments, they are always tainted with hypocrisy. For example, a few days ago we were told that the saving of imports, which is linked to British Airways new

  811
  orders was sufficient to justify giving £10 million to Unilever, a multinational company. For its £100 million investment in Workington, that company will get a 22½ per cent. investment grant—that is an other £22½ million. On the assumption that this investment results in a profit, the firm will receive a 100 per cent, depreciation allowance. In 10 years' time the taxpayer wil have paid for it all.
  We have the right to expect that publicly owned industries have a wider vision of the total repercussions of their actions. We are not clear whether Government thinking in terms of the future is one project based on our own resources or more than one project in co-operation with other European countries. If the latter is the case, I suggest that aircraft workers also want to see a much more confident, hard-hitting and aggressive approach in support of the X-11 to carve out a chunk of the market mentioned earlier of about 1,200 medium civil aircraft by 1990.
  I understand that the X-11 is ready for launching while the A200 is unlikely to be ready before the two American competitors enter the field. I understand also that work would be immediately available to the airframe industry if a way can be found to co-operate over the A200. There are in essence, therefore, a whole range of decisions which are urgently and positively required to give workers in the industry confidence in the future, and that is something they have a right to expect from a publicly owned industry and a Labour Government.
  Mr. Geoffrey Pattie: In view of the hon. Gentleman's well-known reticence on defence matters, does he welcome the F111 repair work that his workers are doing in Filton, or does he think that that work should be done in some other part of the British aerospace industry?
  Mr. Thomas: I have always made it clear that I would much prefer that the innovating skills of the workers in the aircraft industry were used on something other than defence. I have also made it clear, however, that while we have a million and a half people unemployed, I am not advocating that we put skilled aircraft workers into dole queues. But it
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  would be indefensible to suggest that the only way we can employ the wonderful skills that these workers have is on weapons of destruction, because if that is the case it is clearly an indictment of our society and it is something that I and, I hope the hon. Gentleman would very much regret. When hospitals in my constituency are crying out for kidney machines and I see the sort of work done by Lucas aerospace shop stewards, it makes me want to see the workers now engaged on defence work employed on something much more socially desirable.
  I turn now to the overall structure of the industry. Rightly or wrongly, I have always believed that our nationalisation proposals should have embraced both the airframe and the engine sectors in one publicly owned aerospace industry.
  I realise that there are arguments suggesting that Rolls-Royce should remain under the umbrella of the National Enterprise Board, but there are more convincing arguments for a fully integrated aerospace industry. Those arguments will be even more convincing in the future. We need to examine more closely the relationship of the national carrier to British Aerospace. That has become even more urgent in view of Mr. Ross Stainton's remarks, although I am not surprised, with some of the people who are appointed to public boards, at the sort of statements we hear. I remember one individual, I think on the day he was appointed to a board, making it clear that he was absolutely opposed to nationalisation.
  I am far from happy with the management organisation proposed by British Aerospace. The report published in October by British Aerospace on the structure of the industry proposed the splitting of the organisation into two groups, aircraft and dynamics. In my judgment, this will lend itself far too easily to a future Tory Government, if we ever get one—it looks very doubtful at the moment—hiving off the profitable military guided weapons group, or part of that group, the profits of which are guaranteed by the taxpayer.
  I believe that at Filton the proposal would create divisions between groups of workers, who to all intents and

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  purposes share a common site and common services, rather than what is suggested in the British Aerospace report:
  "An essential feature of the new organisation is a desire to maximise the advantages of unity and to encourage loyalty to the new Corporation."
  The idea that at Filton there should be this far more clear-cut division than we have at the moment between guided weapons and dynamics and airframes seems to be rather ludicrous. The proposed structure is hardly likely to assist the proposals on industrial democracy which are set out in the other report which has just been published.
  In any event, I make it clear to my hon. Friend that I find the industrial democracy report very disappointing, indeed. The amendment which the Government accepted, that "it shall be the duty of each Corporation to promote industrial democracy in a strong and organic form", was almost word for word the amendment which my colleagues and I pushed in Committee. In the report, however, the definition is written in terms of joint consultation, participation and so on, and not, as we had hoped, in terms of real and effective involvement in decision-making. I am sure my hon. Friend will know that over much of British industry joint consultation is seen by management simply as telling the workers what management intends to do.
  I remember the famous report on the Ford Motor Company. When it was suggested to the employers that the unions had a complaint because there was not sufficient consultation, Ford's response was "We do not understand why they should make that compaint, because we always tell them what we are going to do." It is either a system of telling workers what they are to do or a system in which there are long discussions about the canteen tea and the state of the toilets.
  The aircraft workers' support for public ownership of the aircraft industry was based, as I am sure my hon. Friend realises, on a vision of a different kind of public ownership from that which we had in the past. The key to unlock that vision, in my judgment, is contained in the section of the Act placing for the first time a duty on the board to develop industrial democracy. I can only hope
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  that these interim proposals are soon replaced by some positive steps towards meeting the demands of those who work in the industry to be really involved in the decisions which affect their working lives.
  6.59 a.m.
  Mr. Norman Tebbit: I suppose that I might observe to the hon. Member for Bristol, North-West (Mr. Thomas) that the degree of interest and concern which Her Majesty's Government show for the aircraft industry, which affects the constituents of the hon. Member so greatly, is perhaps best expressed by the fact that we are discussing that industry at 7 o'clock in the morning, that to answer the debate we have the most junior Minister that the Government could find, and that, despite all we have sought to do, we have still not had any Government time to discuss the proposals from the Commission relating to the European development of the industry or the Commission's proposals for a programme of research for the industry. That puts it in its proper setting.
  What we heard from the hon. Member for Bristol, North-West was, I suppose, a typical Adjournment debate speech. It could have been made any evening had the hon. Gentleman been fortunate enough to have gained a debate on the Adjournment. I suspect that the quality of the reply will not be very different.
  Of course I hope—I always live in hope—that things may get better. I hope that the Minister will make a sensible, responsible speech that is full of information and full of answers to questions that hon. Members have asked. I hope that we shall hear whether the HS146 is to be launched. I hope that we shall hear what the Government are going to do about organic growth, and all that sort of industrial democracy stuff, in the industry. I hope that we shall hear about the X-11, what the precise status of that project is and what were the Government's reasons for agreements that have been reached about that project with the French.
  I hope that we shall hear precisely what the Government are going to do about the next generation of supersonic transport and which engine will go into the 146 if it is produced. I take it that the Minister knows. Perhaps I am asking too much. I take it that somewhere

  815
  there is a civil servant who is capable of writing the answers on a piece of paper and that the Minister is capable of reading them out.
  I shall not approach this subject in a partisan manner. The hon. Member for Bristol, North-West laughs. But I am repeating his questions and asking for his questions to be answered. I have a feeling that as we walk out of the door at the end of this debate the hon. Gentleman will say "We did not get any answers, did we?" He knows darned well that we shall not get any answers.
  I shall not be partisan, because until the next Government are elected the question of the ownership of the industry is not at issue. The question of how it will earn its living is at issue, and that is what we are talking about. The Government must understand that they own an industry and that they are responsible for providing the capital which the industry requires or for telling the industry why it cannot have the capital.
  Mr. Ron Thomas: I am grateful to the hon. Gentleman for giving way at this terrible hour. By implication, he was suggesting that if perchance a Tory Government are ever elected they will possibly denationalise the airframe part of the industry or even Rolls-Royce. Is that what the hon. Gentleman has in mind?
  Mr. Tebbit: The hon. Gentleman is unnaturally perceptive for this hour of the morning. That is not what we are discussing at the moment. The Government have to run the industry—good God, let us save it from being run by the Government. Rather, they have to provide the funds and see that they are prudently used. I take it that the half-dozen of us who are present in the Chamber at 7 o'clock in the morning to discuss this great industry are at least agreed that there should be a British industry.
  I take it we are agreed that there should be an industry for reasons of defence. As I understand it, however, the hon. Member for Bristol, North-West would prefer that we did not have any defence. So would I, if I could believe that there was not a potential threat against us.
  I take it we are agreed that we should have a policy for the purpose of backing
  816
  the industry's great efforts in the export market and with regard to import substitution—the area to which the hon. Gentleman referred—and for the spin-off of a high technology industry, not least management techniques.
  I take it we are agreed that we should have an industry for the effect that it will have as a research and development pacesetter and as a market for other advanced industries and, not least, for the employment opportunities it offers, especially in the regions. After all, distance is no object when one is manufacturing aircraft. There is no particular economic disincentive for running such an industry in the regions.
  On the other hand, the industry is greedy in its demands for resources. That is the very subject of this debate. It hogs a large proportion of Government research and development funds. It hogs many skilled technicians which, it is conceivable, could be better used elsewhere. It hogs a large part of Government aid to industry. Lastly, it is seldom profitable on civil projects.
  I fancy that it would be out of order to dwell upon the military aspects of the industry, but they are an important backcloth, and sometimes I wonder whether, even now, Government Ministers and Back Benchers realise that when the TSR2 was cancelled the cost of Concorde were vastly escalated, because from that moment Concorde was the only user of the supersonic version of the Olympus engine. That made a great deal of difference to the look of the Concorde costs.
  In broad terms, the civil side of the industry employs about half as many people as the military side, so it will be a long time before the hon. Member for Bristol, North-West sees come to pass his dream of an industry which is dependent primarily on civil work.
  Over the years, our performance on the civil side of the industry has been mixed. If we are to consider the wise use of this and other money that the Government may bring forward for the industry, we ought to recollect how mixed it has been.
  There have been a number of failings too often present. Concepts have often been too advanced for the technology available or for the state of the market. I think of projects such as the Comet 1, the Brabazon, the first airbus, which was

  817
  probably 30 years too early, and Concorde, the first supersonic transport, probably in advance of the technology available to do the job commercially. One can even go back to the R101.
  One has to ask on many occasions how many of these projects have been political as opposed to commercial projects. We have exhibited a preference for new projects rather than for the development of current aircraft. We have neglected the development of families of aircraft in favour of going for another new one. Perhaps this is a case where the Americans have shown us that family planning means bigger families and not smaller ones. Perhaps that has been because it has been easier to obtain launching aid and other Government aid for new projects than it has been to get assistance with carrying through projects to their proper fruition.
  We have suffered from excessively close tailoring of projects to the requirements of BOAC, BEA and now British Airways—the so-called captive home market. It may have been captive, but it has often seemed to escape, and the hon. Member for Bristol, North-West is upset now that the market may escape again. He would do better to ask himself why that market escapes. He would do better to consider how it was that BEA favoured the Apollo rather than the Viscount originally and got it wrong, how it close-tailored the design of the Trident in a way which prevented its being a success on world markets, how it rejected the 111, which is the closest thing to a success that the British industry has had in recent years, and how it specified the Vanguard and the VCIO, neither of which was successful in the world market.
  We have the traditional British failing of a rather poor world market assessment, of marketing which could have been better and of a lack of political support in export markets by Governments. We have suffered often in the past from less than good project management, from time slippage which is cost slippage, and from time slippage which means slippage in orders. We have suffered from poor labour productivity and an inability to shed labour to keep the industry viable when the market has decreased.
  That is how Boeing has got to the position where it sells half the civil jet trans
  818
  ports in the world. It is flexible and has been able to contract and expand as the market has contracted and expanded. Boeing builds aircraft for customers. It does not engage in occupational therapy for its workers. They are successful. I would rather work for Boeing than BAC if I were an aircraft worker. At least my job would be more secure.
  We suffer from restrictive practices, inflexible labour and short production runs. The figures show just how short—and I am dealing here with comparable aircraft. The figures are: VCIO, fewer than 100; Boeing 707, almost 1,000; Trident, 80; Boeing 727, 1,500; BAC 111, 250; DC9, 850. Only the Viscount with around 500 had any real success in commercial terms.
  If we are to get it right, we must remember the things in our favour. We have very able design teams, highly skilled labour and a work force that is hungry for work at all levels from the top to the bottom. Over the past five years there has been an increasing awareness of the faults and an increasing determination to cure them.
  How is this money to be spent against that background? Let us turn to Rolls-Royce. Can the Under-Secretary say whether the corporate plan is expected to be approved very soon? Back in April we were told that it would be. What progress has been made on that front? What are the prospects for new sales opportunities for the RB211? Tri-Star sales are still not good and the RR747 has not sold, other than to British Airways. How much of the money will go towards getting the performance of this aircraft, with Rolls-Royce engines, up to expectations. Prospective customers know that it is not up to expectations. Rolls-Royce maintains—and I think it is true—that it can bring the aircraft up to performance. What progress has been made?
  Are any decisions being made for extension of the RB211 family? It has been suggested that there will be. Is any of this money going towards the M45 programme? If it is to be supported, into which aircraft will the M45 go? Which engines will fill the gap between the M45 and the RB211? I hope that the Minister is taking note of these questions. He does not appear to be writing anything down, but perhaps

  819
  he has an extremely good memory or is relying on his Civil Service briefs.
  On 27th April the Public Accounts Committee interviewed NEB representatives about Rolls-Royce. They told the Committee that the company had been spending more than £50 million a year on R & D. Is any of that money coming from the Vote? Lord Ryder gave some interesting replies about that. Intriguingly, he observed that, had it not been for the fact that £50 million was spent on R & D, Rolls-Royce would have made a profit, not a loss. That may be fundamental arithmetic but it is irrelevant to running a company. How much was out of funds voted by this House? The Committee was told by Dr. Lickley that whether the new civil aircraft had two by 50,000-lb. trust engines or three by 30,000-lb. thrust engines, Rolls-Royce would be well placed to supply them.
  Can the Minister remind us what engines it is proposed to put on the BACX11 if that were ever to be launched, or on the collaborative JET, the joint European transport project? Am I right in thinking that in both cases it is proposed that it will be the CFM56, an engine of about 20,000-lb. thrust? If so, was Dr. Lickley right in giving the view of the National Enterprise Board that Rolls-Royce was well placed to get the order to put the engines on the new transport? What is Rolls-Royce doing to secure orders on this class of aircraft which, it is proposed, will be constructed in Europe?
  I turn now to airframes and refer first to Concorde. As the Eighth Report of the Public Accounts Committee points out, and as is generally known, the line runs out in 1978, and this huge investment, equal to one year's losses on the British Steel Corporation and the Crown Agents' City adventure combined, is likely to be gone without any further result. What are the plans to exploit that expenditure? Is there any spending on this programme to see whether there is a commercial use for the technology which we have gained? Is there an intention to go for a new supersonic transport?
  I take next the Hawker Siddeley 146 programme. I remind the Minister that I advocated the fifty-fifty venture between
  820
  Hawker Siddeley and the Government, and that formula was proved to be correct when Hawker Siddeley pulled out on commercial grounds. The company made plain that, if the Government wished to indulge in a non-commercial course and proceed, it would act as a contractor, and the project would have become a sort of mini-cost-plus Concorde, because there would have been no incentive fur the manufacturer to keep costs down. Because Hawker Siddeley was sharing profit and loss fully with the Government, it had to decide whether the project was commercial.
  Nothing that I have heard since that cancellation makes me believe that that has become a more commercial venture. Indeed, the current proposals, which, understand, are for a collaborative project, which is certain to increase the cost, and with engines which the hon. Member for Bristol, North-West advocated, which are not optimum engines for the aeroplane, suggest to me that the commercial liability of the aeroplane is lower now than it was at the time it was cancelled. My fear is that it will be launched for political and not commercial reasons. We recall that Hatfield is a marginal seat. and the Hawker Siddeley factories in Manchester are not all that far from Ardwick, so we have our doubts about the motives for launching the project.
  Now we have had the bad news of the so-called shelving of the BACX11. I say "bad" because the X11 team showed every sign of having taken on board almost all the failings which I have listed. It has understood them, and in the X11, in my view, it has dealt with them. But the X11 is not shelved. It is in the garbage bin. My hon. Friend the Member for Chertsey and Walton (Mr. Pattie) will deal with that in detail, and I say only that the effect on prospective customers of setting the X11 aside for the JET proposal, apart from the seriousness of the delay itself, is to put the X11 under not a dust sheet but a shroud.
  Now we have the JET, the joint European transport—or perhaps we do not have it. I understand that British Aerospace originally claimed that it should have design leadership, final assembly and control of marketing of such a project. Is the Government's intention to

  821
  support the JET project if those conditions are not met? Is it true that those demands are already being watered down?
  It is no good the Minister reading the notes for the speech he got ready before he came into the Chamber. It is about time he started taking some notes to answer some of the questions which are being put to him.
  Finally, since I do not want to detain the House and hold up other debates, let me turn to a completely different area. I wonder how many hon. Members realise that last year the Beech Corporation delivered 1,250 aircraft, and Piper delivered its one hundred thousandth aircraft last year. Cessnar pushed total sales of its 150 to 23,000 units, of its 172 to 27,000 units, and the twin-engined 310 series to 4,500 units. Do the Government know about the light aircraft industry, and have they any proposals for a light aircraft industry? Do they care? Are they interested? Has the Beagle experience finally convinced the Government that there is no prospect for a British light aircraft industry?
  Does the Minister know that there is a proposal for a design competition for a commercially viable British light aircraft in a mass market? Would he feel that such a competition should be supported? Would he consider using funds from this account to invite a technological miracle of British design to out-fly and outsell rivals in the States and on the Continent? It is no good the Minister looking bored and huffing and puffing. I know that it is 7.20 a.m., but it is his job to answer the debate and he had better start thinking of the answers.
  Would £100,000 of petty cash out of this account be suitable to stimulate construction of prototypes and development of a marketable project?
  The subject tonight is too wide for one to be able to do more than dip lightly here and there, and from the attitude of the Minister I fancy that even that will be a waste of time. It is a matter of the deepest regret that the House has not yet been able to discuss the industry and its relationship with Europe. I hope, at least, that the Minister might think just for a moment of answering some of the questions instead
  822
  of spreadeagling himself in a pose more suitable for the British aircraft industry, because that has been crucified, too.
  Mr. Terry Walker: The hon. Member for Chingford (Mr. Tebbit) has posed a number of questions to the Minister, the answers to which will take up perhaps the whole of his reply, and in the course of what I have to say I shall be posing a few more questions to my hon. Friend. However, I should say to the hon. Member for Chingford that I enjoyed his look back into the recent past—since the war—and the projects that we have undertaken as a nation. It strikes me that, as the hon. Member said, on a number of occasions, we were probably ahead of our time and we have suffered because we have launched projects ahead of time. There was the Brabazon, which was an aircraft ahead of its time, and we in Bristol suffered dearly for it. We thought then of the lunacy of such a large aircraft flying in the skies, yet we have only to look at the jumbos to see how wrong we were.
  The need for the United Kingdom to come forward with new aircraft projects is now overwhelming, and many employed in the industry and many hon. Members are impatient for the new corporation, British Aerospace, to come forward with firm plans for the future. Development of the industry is extremely important. We rejoice at the birth of British Aerospace and hope that it will not take too long to make up its mind about which way it will move, because all the time—this point has already been put today—our competitors, both in Europe and in America, are watching and waiting to see which way the British industry will develop. British Aerospace has to create its own identity as a new corporation. It was born from companies like BAC and HSA, and to think in terms of British Aerospace as a corporation will take a long time for many of us.
  I always think that when Bristol people talk about BAC they are referring not to the British Aircraft Corporation but to the Bristol Aircraft Company, which disappeared many years ago. Old attitudes die hard, and old opinions can often adversely affect the thinking of new companies. It is important for the new corporation to have a new start and a fresh approach.

  823
  Many people in the British Aerospace management structure made up many of the managements of the old companies, and they fought hard and long against nationalisation of the industry. Many of those in the management structure of the old companies failed those companies. If British Aerospace is to thrive, as we all hope it will, those attitudes must change.
  One of the problems of public ownership has been getting the right people to run the nationalised corporations. I am a little concerned about the way we are developing. The overriding problem is to get people of the right calibre with the vision and drive to run these corporations when we bring public ownership proposals to fruition. This is a matter that the Government will have to consider carefully, especially in future appointments to the board. I shall say no more on that subject, because, to be fair to the individuals concerned, it is early days yet. We want a more positive attitude in future, because the lives of many of our constituents are at stake.
  Mr. Tebbit: I do not want to develop this topic in a personal way, but would the hon. Gentleman accept that the take-home pay of the top management in our nationalised corporations looks pretty ridiculous when compared with what men of ability who run organisations of a similar size receive in the United States, Germany or France? Is it not about time that we recognised the old American adage that if we pay peanuts, we get monkeys? Many people apply that adage to this House as well.
  Mr. Walker: The hon. Gentleman has a point. The calibre of people is importtant, and I would not shirk the responsibility of paying the rate for the job. That is where we fall down. We think we can penny-pinch, but we cannot. We get second class rather than top class. We need the best if we are to succeed.
  The British aviation industry is fighting for its life against its competitors. If we do not expand and prosper, we shall shrink and in future we shall be compelled to rely on our competitors to produce aircraft for us. Our technology will quickly be exported. I recognise that the projects that we hope British Aerospace will bring forward will have to be considered carefully and will have to be viable, but while we await them decisions
  824
  have to be made. Reference has already been made to British Airways having to decide on the replacements for its short-haul fleet. That decision will not wait very long, and it is important that British Airways should know exactly what is happening in British Aerospace.
  The proposal by Mr. Ross Stainton, the Deputy-Chairman of British Airways, to consider buying American aircraft as replacements for British Airways' older short-haul aircraft is the height of irresponsibility. It is a kind of madness that we should spend £120 million on American aircraft when our own industry, if it is properly organised, is perfectly capable of producing the aeroplanes required.
  To my mind, the BAC111 is perfectly capable of fitting the bill. I recognise that that there have been problems with regard to the Spey engine and that there is a noise factor about this which inhibits the development of BAC111s, but improvements are a distinct possibility. What we all hope is that if modifications to the engines are made they will be acceptable, and certainly it will be 111s that British Airways will go for. It is of the utmost importance, because at a time when we are trying to sell BAC111s to the Romanians what would they think if our own flag-carrying airline did not have the confidence to purchase 111s itself?
  Secondly, I believe that to buy aircraft from America would be going very close to economic suicide and would result in a loss of jobs and job prospects within British Aerospace. For a long time the Americans have done their best to bring about the ruin of the British aircraft manufacturing industry. They have not helped us much by keeping Concorde out of New York for so long. To go to them to produce aircraft for us would be most galling, indeed, and would be a blunder of baffling magnitude, and it could eventually lead to the end of Great Britain as an aircraft producer.
  I believe that British Airways must certainly be kept in close touch with the situation within British Aerospace. When a decision has to be made about replacing the Tridents, British Airways should be persuaded to buy British if that is at all possible. I hope that there will be close liaison between my right hon. and hon. Friends at the Department of Industry and

  825
  those at the Department of Trade, because, of course, it is the responsibility of the Department of Trade to supervise the affairs of British Airways. It is certainly very important that close liaison is exercised to overcome the problems that we now face.
  As I have said, I believe it is important that we come forward with proposals for the future. My hon. Friend the Member for Bristol, North-West (Mr. Thomas) has mentioned the go-ahead for the HS146 project. That project has been kept on ice for a long time. It has been funded by the Government. I believe that a decision must be made now one way or the other. It is fair that a decision should now be made. There is a need for this kind of aircraft.
  My hon. Friend the Member for Bristol, North-West also mentioned the M45 Rolls-Royce engine. If it is at all possible, I think that we should go ahead with the British engine because there is a need, and certainly our information is that there is a need for more work at Rolls-Royce as well as at the BAC works at Filton. We should be thinking of job prospects within the industry. If that project were proceeded with, it would overcome the problems of the run-down of the Concorde lines in the Bristol area. Surely that is something that has to be done. Too often in the past we have tended to dilly-dally. The decision, for example, on the HS146 has been delayed too long. The answer should be given one way or the other. That cannot be shirked.
  Reference has been made to the X11 as a medium type aircraft. The hon. Member for Chingford naturally made reference to it because there are not only rumours but articles about it in the newspapers. There is a need for a reply to be given about the present position, which is extremely worrying.
  It is true, as has already been said, that there is a world market for about 1,200 X11 aircraft by 1990. The Americans are trying their best to delay the European decision as long as they can because they have their aircraft, the DC 9-80. They have already been given orders for that aircraft. The British Aerospace X11 and the French A200 are both 150-seaters and are in a lucrative market
  826
  that the European collaborative set-up must not allow to escape. Whether we proceed with the X11 or whether we go in for JET, there is a need for some decisions to be made.
  It would be futile to go ahead with a project of such magnitude on our own. I believe that it would be beyond our financial capabilities. We must go forward with some kind of leadership, because we need to get some partners within Europe if we are to proceed. The options now seem to be narrowing themselves down. Newspaper reports seem to indicate that we are ditching the whole idea of the X11. It is said in one newspaper report that we are going
  "into a kind of fall-back position".
  I do not see how we can go into that sort of position. As has already emerged in the debate, we are thinking of building not only for home consumption but for selling to the airlines of the world. To go into a fall-back position really means the end of the whole affair in terms of making it a viable proposition. The reports need to be clarified.
  The Concorde programme is of concern to my hon. Friend the Member for Bristol, North-West and myself. The statements over the past few days following the visit of the French President to the Prime Minister in London seem to indicate that the Government and the French Government have reaffirmed their position of the past that there should be no further Concerdes built until such time as there are further orders. We have reluctantly accepted that position. I cannot say that all those to whom we speak in the industry would accept it. However, I believe—I have said this in the House to my hon. Friend the Under-Secretary of State and to the Minister of State in his Department—that, because of the money that has been spent and the high level of technology that we have developed, there is a need to get together both production teams and design teams so that when there are further orders, as I believe there will be, we are in a position to build more Concordes.
  We are doing work on the military side, and I believe that that is completely acceptable in order to keep the work force together. It is a sensible thing to do, but I do not want us to be simply servicing F111s for ever. We cannot keep a

  827
  viable aircraft production unit in Bristol if we merely service a few aircraft for the Americans occasionally.
  However, as Concorde is now into New York, the whole future of the Anglo-French supersonic aircraft is different. Sooner or later Pan-Am and TWA will have to consider leasing Concorde from us if they are not to be left behind in the Atlantic race. It would be helpful if my hon. Friend could say something about that. There have been discussions about the matter between my right hon. Friend the Prime Minister and the French President. There have been reports to the House and newspaper reports, but we all want to know a little more of the thinking behind the whole matter.
  At the back of all our minds is the belief that there must be a possibility of developing a stretched version of Concorde at some time. I realise that any stretched version would have to have a much longer range, a larger payload and quieter engines. We should need the Americans in as well for it to be a viable proposition.
  I emphatically believe that supersonic travel, as initiated by Concorde, is here to stay. It will not go away, whatever happens in America and whatever pressures are put on the viability of the present Concorde. We do not want to waste all the money we have spent, all the technology we have gained and all the sweat of our work force over the past 15–20 years. We want to be in a position to talk to our partners and the Americans about the possibility of going ahead with such a project some time. It will come, and I want to be sure that we are there when a decision is made.
  British Aerospace must produce policies to ensure employment and the stability of employment of our highly skilled manufacturing staff, the labour force and the excellent design teams that we have developed. I pay tribute to my hon. Friend the Under-Secretary for all he has done to help us and to the Minister of State, my hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) for all that he has done. I must thank them both for the very courteous way in which they have always met Bristol Members when we have had queries. Some of those queries may have seemed rather small to them, but to us they were rather large.
  828
  I must also thank my hon. Friend the Minister of State for the courteous way in which he has received members of the shop stewards' joint committee when they have come to London and for the help he has given us in furnishing it with information. I am indeed grateful.
  I hope that the Government will use their best endeavours to get British Aerospace to come forward with its plans a little more quickly than was at one time envisaged in order that we can outstrip our competitors, in economic and environmental terms, well into the 1980s and the 1990s and keep our lead in the development of aircraft production, of which we are proud.
  If we can do that, I am sure we shall ensure prolonged employment for all those in the industry and that we shall be able to keep our industry viable in every sense. But it is important to make decisions looking far ahead in the sure knowledge that we have the skilled work force and the necessary high technology. To achieve that, we must be very sure that we do not become bogged down and lag behind.
  7.46 a.m.
  Mr. Geoffrey Pattie: It is very important that we should be having a debate when key decisions have to be taken affecting the British aerospace industry. One does not have to be clairvoyant to see that the civil part of the aircraft industry will face disaster if the right decisions are not taken very quickly.
  In this debate we have had a very interesting historical review. My hon. Friend the Member for Chingford (Mr. Tebbit) reminded us of the history of the British aerospace industry. Many exceptional projects—some before their time, some killed by inadequate marketing or being talked to death—have failed to come to fruition. It would not take long for us to have a debate reviewing the existing or potential projects in civil aerospace industry.
  We know that Concorde, sadly, must end in the middle of next year, and the only other project at the moment, apart from some work on the Trident, is the BAC111, which the national airline does not wish to purchase. For the future—in which we are all interested at the moment—we are looking to the HS146

  829
  and the XII. The HS146 is a political aeroplane, and political aeroplanes are rarely, if ever, successful in sales terms. The XII has at least the advantage that it has been extremely well researched. It has been widely toted around the airlines of the world, showing—as my hon. Friend the Member for Chingford so aptly described it—that for once a British sales team seems to have learnt the lessons of the past and to have remembered the American adage, which is simply "Give the customer what he wants."
  There has been criticism of the European aerospace industry and of people producing aircraft that have been suitable for indigenous or captive airlines but not so saleable in other parts of the world. But the X11 team has gone round and ascertained what it is that the medium-level interlinked airlines want.
  The hon. Member for Bristol, North-West (Mr. Thomas) said that his constituent workers in the industry are calling for decisions. I would say that he is getting those decisions, although they are not being arrived at in the organic way that he pleaded for so eloquently on so many occasions during the passage of the Bill. I do not think that he ever believed that they would be arrived at in that way. I think he had that sinking feeling that things would go on exactly as before, only worse, and that the name over the gate would change but that, instead of having some of the best of the management that we had before, we would have other people. We have all been thinking of one person; his name never remains out of our debates for long. There is the feeling that the name over the gate has changed but that the decision-making process goes on as we knew it before.
  The hon. Gentleman also told us that Labour Members of Parliament would not tolerate this absence of decision. It is clear now that a decision on the future of the X11 has been taken. The Prime Minister, when he made his statement on the Summit visit of President Giscard, said that in future commercial considerations would be paramount. I am sure that the Under-Secretary recalls it well.
  At the moment, in the key sector of 160-seat aircraft, everyone whose opinion one must value on this kind of matter seems to agree that there is a market for
  830
  1,200 aircraft of that type in 1990. The question is who will get that market.
  We have been dithering about on the edge of the pool long enough already. British Aerospace has spent £2 million working up the X11 to its present position, and it has talked to the airlines that I have mentioned. While we still hesitate and wonder whether the water will be too cold, in come McDonnell Douglas with an aircraft which will do the job but will not be as good as the X11 will prove to be. No doubt Boeing will also enter.
  Therefore, we find ourselves asking: are there to be three entrants in this market—the third being the X11 if it is allowed to enter—or four entrants, the fourth being some other aircraft designated variously as the A200, which the French are keen to produce?
  One thing that I regret in this kind of debate is that, for shorthand reasons, one is forced into talking about the British project and the French project. I should make clear that which, for reason of space, I was not able to do in an article of mine which appeared recently in The Times—namely, that the X11 is, by historic standards, by no means a British project. The engines, for example, would be French, and various other work would not be produced in Britain. Therefore, we are talking about a project which will be no more than 50 per cent. British.
  When I argue for the XII, I am arguing for a project which is now ready to go and which would give the British taxpayer a reasonable prospect of a good return, because all the market research has been done. The team went out and spoke to the airlines, and the airlines said "Yes, we like it. Will you now tell us that you mean business?"
  The most serious condemnation of the way that British Aerospace is being run is the suggestion that it is apparently making at the present time. The teams, having gone round the world selling this project, will now be asked to wait until there has been consideration of the A200 project. The hon. Member for Kingswood (Mr. Walker) referred to the Daily Telegraph, which talked about a fall-back position. It sounds to me like a long fall-back. It has been put on the shelf, or whatever the phrase is.
  Mr. Tebbit: The drop dead position.
  Mr. Pattie: Or, as my hon. Friend said, the drop dead position. I suggest that, no matter what market we are talking about, in straightforward human, psychological terms, there is no way that any sales team from any country with any product can offer that product and, a short time later, say "We are not offering that product. We are offering another product in its place" and then, some time later, say "Do you remember the first product that we offered you which was replaced by another product? Well, we have dropped the replacement product, and we are now going to offer you the first product."
  What would a prospective purchaser, whose money had to go on the table, say to that? We have not got the market to ourselves. While newspaper reports are coming out saying that the X11 is canned in the fall-back position, McDonnell Douglas and Boeing, being the good competitive people they are, will be placing those Press cuttings before the bosses of Ozark and other airlines which are, or were—one has to use the word "were"—close to signing letters of intent. Within weeks we were actually receiving letters of intent to purchase the X11, but the project has been held back in the fashion of a latter-day Grand Old Duke of York who marched his troops up the hill and then marched them down again. There is no way that we can revitalise the project.
  Many people in the industry would welcome the choice that was put before the manager of British Aerospace. On the one hand, there is the X11, a derivative aircraft with known technology with none of the extra risks involved in a totally new project and which is ready now. On the other hand, there is the A200, which is to be studied by a joint engineering team. It is a new aircraft of which the world aviation consensus is that it will not be economically desirable or feasible for this purpose.
  It will cost an extra £100 million on top of the cost of the X11 to go for the A200. That extra cost will mean that the unit cost per aircraft will be higher, it will be more difficult to sell and more will have to be sold to reach the break-even point. I should have thought that the glimmerings of an inclination towards a decision might emerge from that.
  832
  It is not a case of whether it is invented here or whether it is given to France—which we do not like to do. It is the case of two projects—one of which will make a loss and the other of which will make money. If the Prime Minister says that commercial considerations are paramount, I hope that the Under-Secretary will say that commercial considerations are paramount and that the Government will step in. Let the Government step in and make these decisions which the hon. Member for Bristol, North-West wants and which have been taken already without his knowing anything about them.
  This is a plea for the future of a once great industry. Can the Minister say whether a memorandum of understanding has been signed already which, in effect, not only takes account of the X11 being put on the backburner but waves away the so-called rights that we were hoping to have in the A200? Even if we go for the A200, we should build it. But can anyone imagine that the French, with their determined chauvinism, would allow that? If one believed that, one would believe anything.
  I have reason to believe that a document already exists bearing certain key signatures and which indicates not only the death of the X11 but the surrender of whatever rights all hon. Members wish to see maintained for British Aerospace. The French are determined to maintain their aerospace effectiveness, and they do not mind at whose expense they do this. We all know at whose expense it would be.
  In the last few days, with no accountability to Parliament and no debate in the House, a decision has been taken which is tantamount to saying to British Aerospace that it should get into a warm bath and cut its wrists. None of us wants to see that.
  8.0 a.m.
  The Under-Secretary of State for Industry (Mr. Les Huckfield): I welcome this opportunity to debate the present and future of what I, too, regard as a very important industry, though I regret the hour at which this is being done. I can only say to the hon. Member for Ching-ford (Mr. Tebbit) that if he really feels that matters concerning the aircraft industry ought to be pursued with the vigour with which my hon. Friends the

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  Members for Bristol, North-West (Mr. Thomas) and Kingswood (Mr. Walker) pursue them, the Opposition have their own ways of doing that within the parliamentary timetable. I am sure that the hon. Member, who has been here a fair amount of time, understands the ways which are open to him.
  Mr. Tebbit rose—
  Mr. Huckfield: I would prefer not to give way to the hon. Gentleman but to make progress, particularly after some of the nasty and insinuating comments that I had to listen to while the hon. Member was on his feet.
  I congratulate my hon. Friends on the vigour with which they have pursued the interests of their constituents and of the British aerospace industry. Certainly they have made significant contributions, and I believe that they have the interests of British Aerospace and their constituents at heart. They are right to do this, particularly in view of the successes which have been achieved and the successes which the House should hear about, and particularly when one recalls the overall performance of the British aircraft industry. It is far from mixed as the hon. Member for Chingford suggests. To date, some 219 BAC 111s have been delivered, about 150 of them to export markets. British Aerospace is actively pursuing discussions with Romania and Japan for future sales of 111s. If those discussions are successful, they will mean substantial export earnings and employment for the United Kingdom.
  Some 313 HS748s have been delivered, about 260 of them to export markets. While there have been problems, we hope that there will be further sales, particularly of the Coastguarder version. No fewer than 367 HS125s have been delivered, over 300 of them being exported. Nor should I neglect to mention the success of the Harrier and those two splendid collaborative programmes, the Jaguar and the Tornado. Finally, there is the recent success of Concorde, which is now in service on two routes on the North Atlantic. Negotiations are in progress for other routes, and I am pleased to note the progress made so far on the Singapore route.
  It is success such as that which represents the auspicious start for nationalisation
  834
  of British Aerospace. I certainly depart from the gloomy prognostications that we have had from the Opposition.—[Interruption.] I note the audible version of the article in The Times of 13th December by the hon. Member for Chertsey and Walton (Mr. Pattie), and I shall be replying to it in due course.
  The hon. Gentleman referred to some unfortunate remarks about the future of the BAC 111 deriving from remarks attributed to the deputy-chairman of British Airways. I should, perhaps, therefore explain in some detail the precise procedure that is followed.
  The purchasing policy of British Airways is, of course, principally for my right hon. Friend the Secretary of State for Trade. However, I think it would be useful if I outlined the procedure which exists for the sanction of purchases of aircraft by British Airways. Under the British Airways Board Act, the approval of the Government needs to be sought by the airline for the acquisition of any aircraft.
  It has been widely known that at some time in the next few years British Airways would need to begin to replace some of the older aircraft in its European and domestic fleets. That is nothing new. The precise timing of the replacement has been dictated by the operating economics of the existing fleet and of possible replacement aircraft, but the airline now feels that it must shortly take a decision on a short-to-medium-range aircraft of 100 to 130 seats with which to begin the replacement programme.
  As the House will know, British Aerospace has been approached for a quotation on the same basis as other manufacturers. British Airways has yet to complete its evaluation of the various types of aircraft on offer, including the British BAC111, the Boeing 737 and the McDonnell Douglas DC9. The initial evaluation process is one for British Airways to make on the basis of its requirements in terms of aircraft size, range and other operating factors governed by the markets which it serves. I can assure the House that the British Airways Board has not yet decided on a replacement aircraft.
  Once the airline has made up its mind, it will need to seek Government approval for its intentions. While each case has

  835
  to be considered very carefully on its merits, I can assure the House that the Government will, of course, take into account all the wider implications of national interest, and particularly the interests of the British aerospace industry, before coining to a decision. They will, of course, have to take into account some of the factors which have been mentioned by my hon. Friends in the debate.
  I turn now to possible future projects, and I think that it has been right to raise them today. I think the House is well aware that any new civil aircraft project, at least for the 130–170 seat and larger markets, must be collaborative. Collaboration is necessary not only to spread the very large expenses of development over several partners but to improve market prospects. Having said that, I may say that it has been the policy of my Department and of the present Government to maintain as much of an independent manufacturing capacity as we possibly can.
  British Aerospace and the French, Dutch and German aircraft industries have had studies in hand for some months to evaluate possible derivatives of the A300 airbus and a new aircraft for the 130–170 seat market. The industries have recently agreed on the next stage of these studies. While they are still at the stage of studies—and it is clear that a decision to launch any new project must depend on satisfactory market prospects and satisfactory arrangements for finance and work-sharing—I am sure the House will welcome this evidence of progress with our European partners.
  Let me assure the House that the next stage of these studies does not carry a commitment to launch any new project and, by extension, does not ultimately exclude any project from consideration at the end of the day. Whether we should go for a new design rather than a derivative of an existing aircraft such as the X11 is in the first instance a matter for British Aerospace's commercial judgment, but I assure my hon. Friends particularly—and also by way of responding to the audible version of the article in The Times to which I have already referred—that the arguments they have put forward will be carefully considered by British Aerospace and by the Government when we consider in due course
  836
  the detailed proposals which emanate from the corporation. We certainly have not got to that stage as yet.
  As an indication of the importance which both we and the French Government attach to collaboration on civil aircraft projects, I point out that this was one of the items discussed at the meeting between the Prime Minister and President Giscard d'Estaing earlier this week. The Prime Minister made it clear that decisions should be taken essentially on commercial, not political grounds. We have no wish to saddle the aircraft industry with unmarketable projects, but we are also anxious that we do not delay so long as to miss the market. The Prime Minister stressed the need for early decisions.
  Mr. Tebbit: Will the Minister answer two specific questions? Has work on the X11 ceased? Have the salesmen who were engaged in selling the X11 been brought home and told not to continue selling it?
  Mr. Huckfield: I cannot go further than what I have just said. I was very specific and I was deliberate in what I said. I hope that the hon. Gentleman will take account of that. I want to assure him that the kind of concrete decision-taking stages, which one or two commentators seem to think have been arrived at have not been arrived at. We have not yet come to a commitment to launch. We have not yet reached the stage of a specific proposal from British Aerospace.
  I should emphasise that, although British Aerospace has been giving priority to discussion with European manufacturers, this is by no means intended to exclude the possibility of eventual collaboration with the United States. On the contrary, we should welcome such collaboration, provided that it was on a basis which was fair to both American and European partners.
  As I said before, the matter of market prospects and the size of the work that British Aerospace will get is naturally uppermost in our minds. I want to assure my hon. Friends that, although events appear to have concentrated recently on one particular direction, that certainly does not exclude going in other directions.
  Mr. Terry Walker: Can my hon. Friend give us more guidance? My hon. Friends and I have the problem of keeping the work force together at Filton. If these decisions are not to be made fairly quickly, there is a date by which the next number of redundancies will have to be considered under the old arrangement with the former company. Can my hon. Friend give some indication about when decisions are likely to be made, because we have that hanging over us and it is a difficulty?
  Mr. Huckfield: Obviously, I take on board the significance of the timing, but I am sorry that I cannot give my hon. Friend a date at this juncture. He obviously knows the kind of time scale in which these decisions have to be taken, and we appreciate that decisions need to be taken as quickly as possible. But I am sorry that I cannot be more specific than that at the moment.
  Perhaps I may refer to the comments of my hon. Friends with regard to the advanced supersonic transport and its possibilities. I want to tell my hon. Friends that the Government's position on Concorde remains, as was stated in another place on 27th July this year, that further production would be considered only if all 14 saleable aircraft had been sold and if further projects would not increase the overall loss to the two Governments.
  The House will realise that we have had the opening of the two new routes in the recent past. I hope that that will encourage more airlines to consider operating Concorde services. I would certainly hope that that would have an effect on the demand for Concorde in future. However, the Government's view on further production remains as it was stated in another place in July this year.
  Of course, at this juncture we have no plans to embark on work on advanced supersonic transport, although we shall keep in touch with the French on developments in this area. We feel that for the time being our priorities must lie in the subsonic field and in consolidating the experience we have gained on Concorde.
  Last, but by no means least, I turn to the HS146. By contrast with the other projects I have mentioned, this is a project for which collaboration is not essential,
  838
  though it would certainly be very welcome. British Aerospace is proceeding with the present preliminary programme while further evaluation on the HS146 and other civil aircraft options continues with a view to making a firm recommendation to the Government at around the end of the year. It is worth stressing that the Government's decision to keep the project alive in the period immediately before nationalisation has made it possible for the HS146 to be continued.
  I must say that, in contrast to the Government's attitude in keeping the HS146 and 111 projects going, we had a rather incredible statement from the hon. Member for Chingford, which I hope will be noted outside the House. That was the hon. Gentleman's statement that he would rather be an aircraft worker working for Boeing than for British Aerospace. I hope the hon. Gentleman knows what he meant by that. I hope that people outside this House will understand what he meant by that. It was a most peculiar statement for the hon. Gentleman to make, and I know that it will be taken notice of by people in the constituencies represented by my hon. Friends.
  Mr. Tebbit: What I said, and what the Minister might have heard me say had he been paying attention to the debate instead of rereading his previously prepared speech of non-statements was that had I been an aircraft worker I would have regarded my job as safer if I had been working for Boeing, especially in the long term, than if I had been working for British Aerospace, particularly with a Minister in charge of it who cannot take a decision, even when it is served up to him on a plate.
  Mr. Huckfield: I always think that the hon. Gentleman sounds better when one is not looking at him. However, he made that statement and he must live with it.
  The other progress to which I wanted to refer was that which has been made by the British Aerospace Corporation in the two important papers that have now been issued on management structure and industrial democracy, and I take note of what my hon. Friend the Member for Bristol, North-West said about both. These reports were laid before the House on 6th December.

  839
  From 1st January next year, British Aerospace will operate through two groups—the Aircraft Group and the Dynamics Group. The British Aircraft Corporation and Hawker Siddeley as such will no longer operate as named units. The report on management organisations shows that the corporation is working to establish an integrated management structure which strikes a balance between the decentralisation of management—an objective mentioned in the Act—and the need to promote unity and consistent policies within the corporation. British Aerospace has emphasised that changes in management structure will follow as experience and decisions on major projects make these necessary. Already, as a result of consultations with certain groups of work force, there have been some minor adjustments. But, since we have only just embarked upon a new chapter in the history of British Aerospace and have had nationalisation only from April of this year, my hon. Friend will appreciate that there are still a number of developments in this direction to go through.
  When my hon. Friend talks about industrial democracy, naturally I take to heart what he said, because I recognise the contribution he and his hon. Friends made in getting this amendment carried into the legislation. It was a very important amendment, and it has become a very important part of the Act.
  The report on industrial democracy which comprises the recommendations to the joint working party established by British Aerospace and the Confederation of Shipbuilding and Engineering Unions envisages a series of participatory councils composed of management and employee representatives. The corporation has accepted the general approach of the joint working party. The detailed recommendations are to form the basis of further discussions with British Aerospace employees. It is the firm intention of the corporation to seek agreement with those concerned to make the speediest progress in the development of industrial democracy in a strong and organic form.
  British Aerospace will also be including in its annual report a statement about the performance of its duty to promote industrial democracy. Here I pay tribute to the activities of the director with responsibility for industrial relations matters,
  840
  Mr. Les Buck, who, with his experience as general secretary of a very significant union, as president of the Confederation of Shipbuilding and Engineering Unions and as a member of the TUC General Council, is now giving British Aerospace the benefit of that experience and showing a great understanding of trade union matters and trade union representation in these affairs. I understand that my hon. Friend the Member for Bristol, North-West is making arrangements to have a further discussion with him. I am sure he will find that discussion very useful. I hope that he will be able to put his views forward on that occasion.
  There are those in this House and outside who have criticised the proposals as inadequate. British Aerospace has been in existence for less than eight months and the corporation is determined to build on firm foundations which are acceptable to its workers rather than be guided by theoretical blueprints which do not fit its own circumstances. It accepts that what it has done so far is only a beginning—in the time available it could not have been otherwise—but it is confident that it is the right beginning. So am I.
  I will conclude, Mr. Speaker, with some remarks about the position of Rolls-Royce, which has been referred to by hon. Members on both sides. The firm's future business in military engines looks assured for the next few years. In particular, the prospects for the RB 199 engine, which powers the Tornado, look very promising and should secure a very satisfactory work load. Future sales of the Pegasus engine are heavily dependent on the success of the Harrier, particularly in export orders, but we are confident that this aircraft will do well in the future and that important benefits will accrue to Rolls-Royce from this business.
  The civil side of Rolls-Royce's business will continue to depend very largely on the RB211. The original RB211-22 version, which was a remarkable technological achievement, has done well; over 500 of these engines have already been sold, and it is expected that they will continue to sell well into the 1980s. It is a mark of Government confidence that we have continued to show faith in this very important engine development by

  841
  funding the uprated version—the 524 version—at a time when conditions in the aircraft and aero-engine business have been extremely difficult world-wide. There are signs that airlines will need to embark on a substantial re-equipment programme within the next few years but the timing of such investment and the likely aircraft and engine requirements are notoriously difficult to predict with any degree of precision.
  Rolls-Royce expects and I hope that the RB211–542 engine will achieve a fair share of the future aero-engine market. However, it would be rather foolish not to recognise that the firm will face intense competition from its American rivals for this new business. Success in this—and, indeed, all markets—will depend very largely on producing reliable, high-quality engines at a competitive price. Progress is being made in improving efficiency and productivity in Rolls-Royce plants, but it is now more than ever necessary for the company to sustain its efforts in all directions with the active co-operation of all employees.
  In the last few days my Department has received the NEB plan for Rolls-Royce covering the period 1978–82, and this is now being considered. Hon. Members will understand that consideration of the plan will take some considerable time, and that is why I cannot give any detailed answers. It would be improper for me to make any comment on it at this stage.
  Mr. Tebbit rose—
  Mr. Huckfield: I have given way to the hon. Gentleman on a number of occasions.
  I am grateful to my hon. Friends for the strength of their representations and I note the enthusiasm, keenness and willingness to pursue these matters on the part of the hon. Member for Chingford. He has been here long enough to stimulate his own party into doing something about getting these matters on the House of Commons agenda. I hope that he will pursue that within his own party. My hon. Friends have shown determination to get these matters debated, and I only hope that the Conservatives, with the hon. Gentleman's assistance, will do the same.
  Mr. Tebbit: What about R and D?
  Mr. Pattie: Will the Minister give way?
  Mr. Huckfield: Since this is the hon. Gentleman's first intervention, and he is a nicer man—
  Mr. Tebbit: Give way.
  Mr. Speaker: Order. Even at this time of the morning, we cannot have two hon. Members on their feet at the same time.
  Mr. Huckfield: I was about to be nice to the hon. Gentleman, Mr. Speaker, and say that since he puts his points in a more gracious fashion than does his hon. Friend the Member for Chingford, I shall, of course, give way to him.
  Mr. Pattie: I am grateful to the Minister. Could he tell us how much R and D expenditure is covered in the Rolls-Royce document?
  Mr. Tebbit: And out of this Vote.
  Mr. Pattie: Albeit that it has just been received, he must have seen what it is, and he must know how much comes on this Vote, which, after all, is what the Consolidated Fund Bill is all about. How much is the R and D?
  Mr. Huckfield: I think that the hon. Gentleman is rather confusing the issue. The corporate plan has only just been received by my Department within the last few days and I cannot go into that detail at this time. I note, of course, the willingness and determination of the hon. Member for Chingford to pursue these matters—I see that he has just left the Chamber—and I hope that those for whom he pretends to speak will take similar note.
  I believe that British Aerospace has made an auspicious start. We have some valuable endeavours and initiatives which it has been undertaking so far. I hope that the success of the projects which I listed at the beginning of my speech will be continued and built upon and that the efforts of my hon. Friends' constituents will play their rightful part in ensuring that we maintain a successful, productive and efficient exporting aerospace industry in this country.

  PUBLIC EXPENDITURE
  8.26 a.m.
  Mr. Edward du Cann: I begin by saying how grateful I am to my hon. Friend the Member for Blaby (Mr. Lawson) and to the Minister of State, Treasury for their presence here this morning, after a long debate, to comment as they see fit upon the matters which I propose to raise. The relationship between cash limits and the Estimates is a matter of first importance. It is not yet recognised to be so, but inevitably it will be, and I take the presence of my hon. Friend and the Minister here this morning as an immediate acknowledgment of that fact. Because I believe it to be of such significance, I have been willing to wait 17 hours for a chance to discuss it.
  All of us who are privileged to be Members of Parliament conceive over the years much affection for this place, and you, Mr. Speaker, set us a fine example in that regard, but our affection and respect for its traditions should never, I believe, be uncritical. It is a commonplace to say that we live in an era of change. The truth is that we live in an era of change which is the most rapid that the world has ever known or experienced. Little would I have thought when I first became a parliamentary candidate, and little would I have thought 22 years ago when I first became a Member of Parliament, that State expenditure would grow at the prodigious rate it has, now occupying, as it does, the dominant proportion of the gross national product.
  Institutions must adapt to modem circumstances. In debating cash limits this morning and their relevance to the Estimates one is bound also to debate Parliament's attitude to control of public expenditure.
  The cash limits system was introduced in the fiscal year 1976–77. It now covers approximately 65 per cent. of Government Supply expenditure—say, some £25,000 million out of the total Supply expenditure of about £40,000 million—a not inconsiderable sum, one may think, and also a not inconsiderable proportion of Government expenditure. But it is not only the absolute figures in themselves which are significant, though they are significant enough. It is the implications of the cash limits system which are
  844
  even more impressive. Some are far reaching indeed.
  I shall quote now from the Third Report last Session of the Public Accounts Committee, of which I have the honour to be Chairman. That report has been before the House since last March, and in it we read:
  "The Government's incomes policy, by enabling accurate estimates to be made for increases during the year in public service pay, had undoubtedly contributed to the successful introduction of the cash limits system; public service pay represented just under half the total expenditure covered by cash limits. The Treasury acknowledged that what happens in the future in settling pay will be important for the operation of the system; if for any reason changes in public service pay in the course of a year cannot be forecast with reasonable accuracy it will be more difficult to determine the cash limits which can be made to stick."
  The Committee did not examine in any depth the relationship between cash limits and the settlement of Civil Service pay. However, certain matters were entirely clear. The Times brought out certain aspects of this fear extremely clearly in a leading article of 14th April entitled "A Success is to be Exploited." In that article, commenting on the successes of the cash limits system so far, it said that the system should be applied in future so as to limit the total amount that the Government were prepared to spend on pay, the clear implication being that if pay settlements were higher than the Government thought right, action should in some way be taken on numbers. That leading article drew a predictable response from the General Secretary of NALGO in The Times correspondence columns a day or two later. If I quote from the leading article the point will become abundantly clear:
  "Cash limits ought to be imposed not merely in expectation of the likely level of wage settlements but as a definite statement of what the Government are prepared to accept. Only then will negotiators see clearly that cash limits are not just a mechanical conversion into real money of long-term expenditure plans but a positive tool for control of policy."
  The Prime Minister, speaking in the House on 20th July in the economic debate just before the Summer Recess, in effect confirmed that that was so. That was a most important declaration of policy. So we have a wholly new situation in which cash limits are and will be applied to control the number of civil servants.

  845
  So far the matter has been almost wholly overlooked by the commentators. That may, perhaps, be surprising, but it should not be surprising that it has been overlooked in the House. The bearing that cash limits have on the matter that the House is now considering is fundamental. Some weeks ago I put a business question, while you, Mr. Speaker, were in the Chair, to the Leader of the House and pointed out that the House had not yet debated cash limits.
  I hate to appear critical in any way of the Leader of the House, for although I differ from him fundamentally, I have—like almost all of us—much respect for him. I want the House to think it a matter of wonder—to put it no more strongly—that there should not have been a debate in the House on cash limits as a new system of monitoring and controling expenditure. There has not been such a debate in the two-years existence of this Government. Does not the House consider it remarkable that, given the appropriateness of an individual limit on defence, health and other parts of the Civil Service and that some 125 cash limits were specified in the 1977–78 White Paper, they have never once been discussed in the House? The Leader of the House told me, in effect, that cash limits could be debated whenever, under the rules of the order, one could raise the matter. So I have taken this first opportunity thereafter and I am most grateful to you, Mr. Speaker, for that chance.
  I am bound to complain that this is not the way for Parliament to manage its and the nation's affairs. It is not and should not be acceptable for a new system of control of expenditure to be introduced without any form of parliamentary sanction; it is not and should not be acceptable for the total cash limits to be decided by Ministers in private or by the Treasury, with no consultation with Parliament. It is intolerable that the Public Accounts Committee, one of our senior Select Committees, has reported on the system—as has the Expenditure Committee through the agency of its General Sub-Committee—and that there should not yet have been time during two not especially busy Sessions to debate the reports.
  846
  We have had this Consolidated Fund Bill debate throughout the night and into the early morning. We have not been talking about Estimates or Supplementary Estimates both of which involve vast sums of money. The occasion has been used for a series of Adjournment debates on favourite subjects—all very important, valuable and meritorious in their way, but hardly an exhibition of effective financial supervision or control on the part of this Mother of Parliaments.
  In Gladstone's day—and I mention his name, advisedly because he was the founder of the PAC—we led the world in techniques of control, supervision and the like. Today, we give to outsiders the clear impression that we are amateurs and inexpert and, indeed, muddled in what we are trying to do.
  If democracy is to function effectively in a nation without a written constitution, parliamentarians have a duty to display special vigilance and control over the Executive. The easiest route is through control of the purse strings—but that is precisely what we do not do. I have said many times in the House, in broadcasts, writings, speeches in the country and in every way open to me that in recent years Government expenditure has increasingly slipped outside parliamentary control. We no more control it from the Back Benches than Canute controlled the tide. We are increasingly failing to control the Executive. We permit the expenditure of hundreds of millions of pounds on the nod. The total Supply Estimates to date are about £40,000 million, of which this document comprises the great part. The supplementaries which we are supposed to be discussing and examining come alone to £2 billion. We discussed it in the way that I have described in the middle of the night in an almost empty House of Commons.
  If I looked for authority or longed for it at any time, it would be simply to change that situation, because I believe that it is impossible to overestimate now the importance of the development of cash limits, on which, as I say, the PAC produced a separate report last March.
  By general consent, I think, cash limits have greatly helped to keep central Government expenditure within the limits

  847
  originally agreed. Through their application to the rate support grant, about which we shall be talking later today, they have also contributed to the welcome restraint on local authority expenditure. This imposition of short-term budgetary cash control of large areas of public expenditure is a most welcome development. As the Minister of State will recall, in that report in March the PAC warmly welcomed it. We believed—and the Treasury and other departmental witnesses confirmed this—that the need to work within firm cash budgets had had a marked and advantageous impact on the way that Departments handled their own business at all levels, and we gave full credit for that.
  However, we also drew clear attention to the necessity for improving Parliament's own control. However effective they may be, cash limits, as I may already have indicated, are a purely administrative system introduced by the Government and not subject to any formal parliamentary procedure. They must be so subject. We therefore recommended that the cash limits and the system of parliamentary Estimates and accounts should be brought together into one integrated and fully effective system. We recognised that, although that objective can be stated quite simply, it involves major reform of a system which has been long hallowed by tradition but which, frankly, is now of little more than historical interest, as I am sure my hon. Friend the Member for Blaby and the Minister of State will confirm.
  We were glad to see that the Treasury accepted that view in principle—that such an integrated system, if we were to have it—and have it we must, sooner or later; preferably sooner—would mean, among other things, that Parliament could once again concentrate effectively on the much smaller number of Supplementary Estimates that would then come before us, instead of being faced with inexorable demands, as it has seemed over the years, for very large sums of money to meet pay and price increases, as at present.
  The PAC had its first deliberative meeting of this Session just a few days ago. The Financial Secretary was present. I had the pleasure, in the Chair, of welcoming him most warmly, because his presence, traditionally, at the first meeting
  848
  of the PAC is a symbol of the co-operation and good will that exist between that Committee and the Treasury I am sure that the Minister of State would warmly confirm that the PAC and the Treasury are indeed strong allies.
  We told the Financial Secretary that it was the intention of the Committee to examine further, and as promptly as possible, the operation of the system of cash limits. He was good enough to note that, and, as one would expect—and we were grateful for it—he offered us every co-operation on the part of the Treasury. Knowing how busy Treasury officials traditionally are at this season of the year, that offer of immediate and prompt co-operation was particularly appreciated by the Committee.
  In the meantime, before the examination is made and before a report in usual form is made to the House, there are a number of points that can be made and upon which it would be agreeable and useful from the point of view of the House as a whole to hear the comments, if they will be good enough to make them, of my hon. Friend the Member for Blaby and the Minister of State, Treasury.
  At the moment of publication of the Estimates and Supplementary Estimates—the four House of Commons papers that we are studying—there was issued a three-page memorandum from the Treasury. I do not know how many of my colleagues have seen it. I do not know whether you have seen it, Mr. Speaker. It was a useful document that sought to indicate the changes that have been made this year in the presentation of the Estimates and Supplementary Estimates. The changes have been made because of the incidence of cash limits. I congratulate the Chancellor and the Treasury team of Ministers on having updated, as it were, the Estimates and Supplementary Estimates in that way. It would be most useful if we could hear from the Minister of State something of the thinking behind the amendments that were made.
  I shall quote again from the Third Report from the Select Committee on Public Accounts that was published in March 1976. I refer especially to paragraph 20 at the end of the paper, the part

  849
  headed "Conclusions and Recommendations". It reads:
  "As regards further development of the system"—
  that is the system of cash limits—
  "we recommend that the Treasury should (a) consider dividing the larger cash limit blocks to increase the precision and effectiveness of the control."
  I remarked earlier that in the White Paper for the current year 1977–78 there are no fewer than 125 different cash blocks listed covering various aspects of Government expenditure. I think that you will be staggered, Mr. Speaker, to hear that the size of the limits varies widely. For instance, the whole of the defence budget is on one block of over £5,000 million, while at the other end of the scale we find a cash limit of as little as £5 million. Obviously, it must be for the better and more effective working of the system for the divisions to be more even than they appear to be at present. I ask the Minister of State to tell us how the Treasury is getting on with the division of the cash limits and their equalisation.
  I turn to the next recommendation in the paragraph, which reads:
  "(b) seek to reduce the number of different revaluation factors which are used to convert expenditure figures at constant prices into out-turn prices for the year."
  When Select Committees publish their recommendations it is usual for comments to be made available. In the case of the recommendations made by the PAC in its reports it is customary for a Treasury Minute to be published. Promptly after the publication of the report in March of this year in the previous Session the Treasury published its minute in June. Besides saying that it would pay attention to the size of the blocks in future, it commented at some length on the recommendation. It would be valuable to hear from the Minister of State whether there has been further thinking in the Treasury on the matter.
  The third recommendation states:
  "(c) Be ready, by the use of appropriate adjustments to maintain the effectiveness of cash limits if movements in wages and salaries at any time in the future should become less closely predictable than they were during the first year of operation."
  I think that we are all gratified by the success of the Government's voluntary
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  incomes policy—that is to say, those of us who support incomes policy of that kind. While it continues, prediction is plainly much easier. But it would be valuable to hear the Minister's comments upon that recommendation in the light of experience. Remembering what I have already said about the huge dominance of pay and salaries in the total of Government expenditure, Mr. Speaker, you will readily appreciate the importance of cash limits from the point of view of the size of the Estimates and Supplementary Estimates in general.
  I have already remarked on the closeness of the liaison between the Treasury and the Public Accounts Committee and have paid my tribute to the Treasury for that. Another example came in a letter addressed to the Clerk of the Committee by one of the senior officials, Mr. McKean, who is an old friend of the Committee. In that letter of 9th December he commented in particular on the consideration that the Treasury is giving to the scope for assimilating cash limits with parliamentary estimates and accounts. He added that the Treasury was pressing on with its study as fast as it could and would certainly want to consult the Public Accounts Committee. How long does the Minister think it will take before there is a full assimilation?
  In the meantime, as the letter made plain, and as the whole House should be aware, there are some interim arrangements. One is that the Treasury has informed all Departments that
  "in future, whenever a cash limit is increased, a Supplementary Estimate should be presented.… As the counterpart of this, the Treasury will also take account of the cash limits in dealing with requests for virement between subheads."
  As was made clear in the correspondence, these new arrangements are no more than a first step, but they go some way towards harmonising the operation of Estimates and cash limits. It is important for the House to have from the Minister an estimate of the rate of future progress.
  Finally, I would ask the hon. Gentleman how he sees the scope for further development of the cash limit system. The Treasury Minute of 10th June said that the matter was under examination. How is that examination going? What progress is being made? What progress does the hon. Gentleman hope will be made?

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  In sum, Government expenditure has grown hugely over the years, and while it has grown we have allowed supervision and control in this House largely to lapse. Matters cannot remain as they are. In any case the introduction of the cash limit system transforms the position. Parliament must reassert its historic function and provide itself with adequate tools to do the job.
  Do not assume, Mr. Speaker, that I am in any way an opponent of public expenditure. I thought that the Prime Minister made an admirable point in a speech soon after he became Prime Minister when he gave examples of the way in which expenditure by the State could be of the utmost benefit to our fellow citizens. I agree with him about that, but in the aggregate it is the greatest inflationary force that there is. What is more, we cannot be certain, if the House is not doing a proper job of supervision, that we are getting value for money, which the electorate particularly looks to us to provide. It should not look in vain.
  I hope that in reply the Minister of State will be able to indicate to us and to the nation that progress is indeed being made and that he is anxious to see it accelerated, if possible.
  8.55 a.m.
  Mr. Nigel Lawson: I shall intervene only very briefly. I do so first in order to pay tribute to my right hon. Friend the Member for Taunton (Mr. du Cann), not merely for raising this very important issue of cash limits and parliamentary scrutiny and control of public expenditure—which he has done at this early hour of the morning after sitting right through the night—but because this is yet another instalment in the long campaign that he is waging, with the authority of his distinguished chairmanship of the Public Accounts Committee. He has been campaigning for some time in and out of Parliament—by speech and by way of the excellent pamphlet that he wrote, which was published earlier this year—to make people alive to the importance of the subject and the need to get back for this House of Commons the proper scrutiny and—if the word is not too ambitious—control of public expenditure, which has got completely out of hand.
  My right hon. Friend was right to focus attention on cash limits, not as the be-all
  852
  and end-all but as one of the most important tools that we now have before us to achieve this task. As he rightly says, at the moment it is helping Government to achieve that task, but not very considerably—because of the way in which we conduct our affairs in this House—is it helping Parliament to assist in that task, one of the first importance to Parliament. We have only to think of the debate that we had not long ago on the Crown Agents to know how important it is that we should have a much tighter scrutiny of the money being spent, in the taxpayers' name, by the various agencies, Government Departments and bodies of one kind and another who have the responsibility for spending this money. It is one of the great historic tasks of Parliament to control Supply. If we break down in doing that we fail to discharge our overriding duty.
  As I said, I shall intervene only briefly. My right hon. Friend put a number of pertinent questions to the Minister of State. On behalf of the Opposition I wish to associate myself entirely with all the points that he made and the questions that he put. We shall need to hear what the Minister of State has to say by way of answer. I hope that he has had time to bone up on his cash limits. Earlier this week we had a debate, late at night, on the Local Loans (Increase of Limit) Order, a debate in which I put a number of questions on cash limits—questions accepted by the Chair as being in order and which echoed the sense of importance that I, like my right hon. Friend, attach to this subject. The Minister was unable to give me any answers. I hope that in the intervening period he has had time to brief himself thoroughly.
  One other thing that my right hon. Friend stressed was the desirability of bringing the Estimates on to a cash limit basis. We now have three bases on which public expenditure figures may be presented. We have the old-fashioned historic Estimates basis; we have the funny-money PESC figures in the public expenditure White Paper; and we have the cash limits.
  It is clear that the PESC system offers no means of financial control of public expenditure; indeed, it was never intended as a means of such financial control. It is a method of what is known as planning

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  real resources. I believe that it is an imperfect method even for that, but it is certainly not a system of financial control of public expenditure.
  In recent years we have learned how desperately dangerous it is to lose financial control. Therefore, cash limits offer us the possibility of a way back. That way back could be greatly improved if—as the Public Accounts Committee, under the distinguished chairmanship of my right hon. Friend and, indeed, the General Sub-Committee of the Expenditure Committee earlier, of which at that time I had the honour to be a member, urged—the Estimates were brought forward to Parliament in cash limits terms. That is what we want now. Indeed, when the Estimates procedure was started in the dim and distant past, it was intended to be a cash limits system, because it was based on the assumption of a stable value of money. Therefore, the figures were put forward in a way that reflected prices at that time under the confident assumption that those prices would continue to prevail. Now they do not.
  We are not trying to overturn the Estimates system but to bring it back to what was its original raison d'être. If that could be done, the whole business of Supplementary Estimates could be given the importance which it used to have long ago, but which it no longer has. A Supplementary Estimate, when originally introduced, was an important and significant matter which the House of Commons had to consider, because it was for expenditure on a particular head that had turned out to be more than the Government had intended and planned and they sought Parliamentary approval to spend more money.
  Now, under the Estimates procedure in an era of inflation, that is no longer the case. The figures are put in originally in a form which does not mean very much, and everybody knows that there will be Supplementary Estimates and probably further Supplementary Estimates later.
  A cash limits system might get us back to a situation where, the cash limits having been promulgated, if there is an increase subsequently for any reason, it has to be justified, first, by the Department to the Cabinet and, if the Cabinet is agreed, to the House of Commons.
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  I should like to make one further comment on this important point of the bringing together of the Estimates and the cash limits systems. Of course, although it would be helpful to do just that, it will not help us all that much—I do not know whether my right hon. Friend will agree with me—unless we can at the same time—I think that my right hon. Friend was saying this—bring back the procedures whereby we can debate these matters.
  Mr. du Cann: That is absolutely right.
  Mr. Lawson: The trouble is that the Estimates figures go through on the nod and the Supply Day system is now used for totally different purposes. If we are to have cash limits figures and they are to go through on the nod, it will not be a tremendous advance. Therefore, we want not merely to bring the two things together but to get back to some method by which the House, having got figures which mean something, can debate, first, the original promulgation of cash limits and, secondly, supplementary cash limits if they should be required. From time to time changes in cash limits will be required.
  My right hon. Friend asked the Minister of State a number of specific questions, which I am sure the hon. Gentleman will do his very best to answer. I should like to comment briefly on these points seriatim.
  The first point concerned the documents published with the other Consolidated Fund documents on, I think, 2nd December. Another document was published at the same time, but in a very funny way. It was a deposited paper which found its way to the Library but was never available in the Vote Office. The Vote Office knew nothing about it. Indeed, the Library, when I first asked about it, knew nothing about the document. Several phone calls were made to the Chief Secretary's office, but no one there knew anything about it. Of course, somebody in the office must have known something about it, but the first three people whom the Library kindly telephoned on my behalf knew nothing about it. Eventually it was tracked down. That deposited paper, in a typewritten duplicated form, is the crucial document which shows the profile of cash limits over the first half

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  of the year and the outturn and how that compares with what was originally projected. That really is a very important document. It should be given far more prominence, published in the proper way and laid before Parliament in the proper way. It should not be presented in this rather hole-in-the-corner way.
  I know that it is of some embarrassment to the Treasury that one of the few blocks that was overspent was the Treasury's own block. I have no doubt that the Minister will explain why that is. The document is one of importance and we are grateful to the Treasury for producing it.
  My right hon. Friend referred to the need to divide the big cash limit blocks into smaller blocks. He is absolutely right. I am not sure, in the case of the Ministry of Defence, to what extent security reasons would limit the extent to which it could be divided. I have no doubt that the Minister will enlighten us on that. But I am sure that it is not necessary to have one block.
  The defence block is not the biggest block. The biggest is the rate support grant block. It is very unsatisfactory indeed. I hope that the Minister will be able to say something about the Government's thinking on the possibility of dividing up the rate support grant block, either in terms of different authorities or in terms of different local government services.
  The present system is wholly inadequate as a method of financial discipline—which is what cash limits are meant to embody both in the Government field and the local authority capital field.
  My right hon. Friend's third point concerned the need to reduce the number of various different revaluation factors. I am at one with him on this. The revaluation factors have often been a surreptitious way of allowing public expenditure to get out of control. The more of these factors that there are, the more likely that is. Going back to the PESC system, it is clear that the relative price effect has been a major way in which the Government have lost control of public expenditure.
  One of the things that would help the Treasury considerably would be to change the whole PESC system so that instead of figures being produced in funny money terms, they would be considered in cost
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  terms. The relative price effect would be included and that could not be used as an excuse to cover up surreptitious over-spending or increases in quantative terms.
  The fourth important area mentioned by my right hon. Friend concerned the whole question of the control of public sector pay. My right hon. Friend also mentioned this in his earlier comments. We all know that this is a very difficult problem indeed. It is quite right that it should be approached as my right hon. Friend approached it, not from the point of view of an incomes policy of which the public sector is a part, but from the point of view of the control of public expenditure, of which public sector pay is a large part. I am sure that that is the right approach.
  The manner in which the Government appear to be conducting themselves over the dispute over firemen's pay appears to us to be the height of irresponsibility, because it seems that they are saying that provided the firemen stick within the limits for this year, it does not matter if we relax next year and the year after. If we are to have proper control of public expenditure, that is one thing we cannot do. Perhaps it does not matter in one particular case, but if this is to be a precedent of how the Government are to approach public sector pay settlements, it is very serious indeed. If high expenditure is being pushed off to future years simply to keep things under control this year, the Government are then storing up a tremendous amount of trouble for the future.
  Perhaps 10 minutes past nine in the morning is not the time to be cynical, but I cannot help feeling that the Government may be aware that the future to which they are deferring these problems lies on the other side of a General Election when a different Government would inherit them. But the idea that somehow a problem has been solved by pushing it forward with interest to a future year is an idea which I cannot accept and which I find highly irresponsible.
  My right hon. Friend the Member for Taunton was right to say that the existence, particularly during stages 1 and 2 of the Government's incomes policy, of these fixed increases—first the £6, then the 2½ per cent.

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  and the 41½ per cent.—has made the setting of cash limits much simpler. He asked the very pertinent question of what happens to cash limits when we are moving in the orderly way that the Government want to free collective bargaining. This is a subject in which I have been interested for some time. When I was a member of the General Sub-Committee of the Expenditure Committee, I put this very point to Mr. Leo Pliatzky, now Sir Leo Pliatzky, a very distinguished civil servant who was at that time the head of the Treasury's public expenditure side. He said—I should be grateful for the Minister of State's endorsement of this—that in that event the cash limits would become the incomes policy. I think that that is a fair statement of what would happen. It would be helpful for the Minister of State to elaborate on that and tell us about the planning and implementation of this approach.
  Certainly this is the way in which we have to move and I think that this is the way that the Chancellor of the Exchequer had in mind when he said:
  "For 1978–79 the assumptions used for cash limits will reflect the Government's policy on pay. Spending authorities will not be able to rely on supplementary provision beyond the cash limits."—[Official Report, 15th July 1977; Vol. 935 c. 993.]
  I assume that he is saying that the Government will decide on public sector pay within the overall framework of what the public purse can afford and what the taxpayers are prepared to pay—and they are paying far too much at present—and then, within that, the need for recruitment to particular sectors. Then the cash limits would be the discipline within which the unions and the public sector would have to operate, just as the unions in the private sector have to operate within the discipline of market forces.
  The fifth question was one I have already dealt with. My right hon. Friend asked how long it would be before there was full assimilation of the cash limits and Estimates. That is something that we should all like to know. It would be helpful if we could be assured that the next full-year Estimates to be presented to us will be on a cash-limits basis.
  Finally, my right hon. Friend asked about the further development of the cash limits system. This links up with a
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  Question I asked the Minister of State earlier this week which he was unable to answer. There has been one further development this year. It is quite an important one. This year, unlike last year, house building by local authorities has been cash limited. In the first year the Government thought that they could not do it. It was not the sort of thing that they thought could be subjected to cash limits. This year they have, and it is far and away the most important block of local authority expenditure.
  It would be of some help if the Minister would tell us how this experiment in cash limit house building by local authorities is working out. I think that he is saying to me that it is working out very well. I am glad to hear it. We who have long urged it are very glad that our ideas have been borne out.
  There has been in the past a considerable reluctance on the part of the Treasury to adopt the technique of cash limits. I have never had the great honour and privilege of serving under my right hon. Friend on the Public Accounts Committee, but I did serve for some time on the General Sub-Committee of the Expenditure Committee. We argued there all the time for cash limits and we had evidence from the Treasury that it could not be done, that it was impossible, and that there were tremendous problems involved. The Treasury asked what would happen if the money ran out after 10 months and there was nothing left for the remaining two months. But the Treasury, having told us solemnly in evidence that it was quite impossible to do this, is now doing it, and we welcome that.
  One does not want to assume that it will always work as well as it has been working, but, as far as I have been able to discern, it has been a very salutary discipline at national and local government level. I hope that much further progress will be made. Certainly the next Conservative Government will take cash limits a great deal further along the lines that my right hon. Friend has been suggesting.
  I close by again welcoming the fact that in this long and sometimes inconsequential debate on the Consolidated Fund Bill my right hon. Friend has struck at the very root of Parliament's task in bringing before the House a subject of the first importance.
  9.18 a.m.
  Mr. Frank Allaun: I shall not take five minutes, Mr. Speaker, but I think this is the most important subject facing the Government today, and I make no apologies for speaking on it. It is the key issue, far more important than the other subjects on which we are wasting day after day and night after night in the House.
  I can tell you, Mr. Speaker, that my constituents do not care two hoots about devolution or about elections to the European Assembly, but they care very much about their essential services being taken away from them by the public expenditure cuts.
  All the pundits are telling us that we must cut public expenditure. The Conservative Opposition are clamouring for it daily. The International Monetary Fund and the Confederation of British Industry, practically all the newspapers, the other media, and top Treasury officials themselves are at it. Incidentally, I think that the top Treasury officials should keep their mouths shut if they have any sense of shame. As they have made the little mistake recently of £2·5 billion in their estimate of public expenditure, they should remain silent. If you, Mr. Speaker, or any other right hon. Members here this morning, made an accounting mistake of £2·5 billion, they would be joining some other hon. Members in goal where they should be.
  Mr. Lawson: The hon. Gentleman has mentioned rather scathingly the matter of top Treasury officials and the IMF calling for public expenditure cuts. Are his constituents so different from mine? Do not his constituents say that they would like to see taxes cut? How does he propose to cut taxes unless there are economies in public expenditure?
  Mr. Allaun: There is a little thing called North Sea oil, and I am coming to that. There will be considerable revenues, as we all know, from North Sea oil. Since the hon. Gentleman has asked me how I would deal with taxation, I say that I am in favour of tax relief at the present time because it would help reflation, which is what this country needs. But I would not do it in the way in which the hon. Gentleman and his party would do it, by reducing the rate of taxation, because that would help the
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  rich more than the poor. I would do it in the direction on which we have already started, by increasing personal allowances and thereby removing hundreds of thousands, if not millions, of people from paying tax at all.
  I see that one of my hon. Friends is looking at me in a vexed manner. If I cannot spend five minutes on this vital question of opposing cuts in public expenditure, I am in the wrong place. I intend to take my five minutes without apology.
  When North Sea revenue becomes available, estimated at £3½ billion a year, I maintain that half of it at least should go to reversing the cuts in public expenditure. That will do two things. First, it will relieve the mass of human misery resulting from the shortage of housing, hospital beds, home helps and nursery schools. That is the first thing that any self-respecting Member of this House should do.
  But at the same time, by reversing the cuts in those directions, we would reduce this intolerable figure of 1½ million unemployed. That is the official policy of the party which I try to represent and of the TUC. Indeed, the policies of both organisations are not merely about reversing the cuts but, in housing, are about a massive programme of house building and house improvement. House improvement is of great importance because it can be started quickly, without waiting the two years that is sometimes involved in starting to build a new house. In addition, the improvement of older houses by installing baths, hot water and inside lavatories—which are basic essentials—is highly labour intensive and would put many of the 260,000 unemployed building workers into employment.
  A visitor arriving here from Mars would think that we were absolutely bonkers to see, on the one hand, 9 million men, women and children going to bed tonight in houses without a bath, hot water and inside lavatory, or houses unfit for human habitation or needing major repairs to the extent of more than £2,300, and 260,000 unemployed building workers, on the other hand. He would think that we were crazy, and he would be quite right.
  Finally, I want to refer to the attitude of the newspapers to this subject. The

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  newspapers will not deal with it. They will deal at length with ridiculous stories like the one we have this morning in all the popular newspapers suggesting that respected trade union leaders are Fifth Columnists or spies from behind the Iron Curtain. Every self-respecting journalist—I have been a member of the NUJ for 32 years—must know that that story is absolute balderdash. It is a fair bet that perhaps only one in 10 of the most credulous of the population will believe that Jack Jones, Hugh Scanlon or the rest are paid agents of Moscow. For the newspapers to talk about that and to give no publicity at all to the subject now under discussion reveals an absolutely distorted sense of values.
  I will give an instance. Last week the Labour Party published its 36-page comment on the Housing Green Paper. Most of it was devoted to the question of restoring the cuts. As chairman of that committee I said publicly that these four volumes of the Green Paper on housing were not worth the paper on which they were printed until the cuts were reversed.
  But on what did the Press concentrate attention? It concentrated on cuts in tax relief on mortgages, where we said that those getting relief above the standard rate, the very rich people, were virtually buying their houses for nothing, whereas poor people got relief at most at the standard rate of tax and that the ceiling of £20,000 mortgage on which tax relief is granted should be brought down nearer to the average. The subject of mortgages was all that interested the Press. With one exception, there was not a word about reversing the cuts.
  The damaging cuts in public expenditure, which the Opposition support, have been brushed under the carpet, and it shows the false sense of values of our newspapers and of Members of Parliament if they persist with them. This is the most important issue facing the British public today from the point of view both of relieving unemployment and of relieving the misery caused by these cuts. I make no apology, therefore, for having intervened on this vital issue.
  9.25 p.m.
  The Minister of State, Treasury (Mr. Denzil Davies): First, let me add my congratulations to the right hon. Member
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  for Taunton (Mr. du Cann) on raising this very important issue. As my hon. Friend the Member for Salford, East (Mr. Allaun) said, this is an important matter. The right hon. Gentleman, as chairman of the Public Accounts Committee, has pursued the Treasury on it, and I have no doubt that he will continue to do so, quite rightly.
  Unlike the hon. Member for Blaby (Mr. Lawson), I have the advantage of having served an apprenticeship under the right hon. Member for Taunton. Perhaps the hon. Gentleman would be benefited from a period of service on the PAC, as I have. The hon. Gentleman made a characteristically brief intervention, for which we are always grateful, and put more or less the same arguments as his right hon. Friend.
  Perhaps I may try to deal with some of the matters raised. This debate goes to the heart of the control of public expenditure. I do not believe that it is a debate about the level of public expenditure in terms of the cuts in public expenditure. The levels of public expenditure are determined by the Government according to priorities. But with cash limits, we are concerned mostly with the control of public expenditure in an era where inflation rates tend to be higher than perhaps they were in Mr. Gladstone's time when the present system of Estimates was devised.
  I recognise the complexity of the situation where Estimates are introduced more or less in money values at the time of their introduction or at the time that the Estimates are drawn up, whereas we have inflation sometimes increasing money values to higher levels. I recognise, too, the difficult for hon. Members and for Treasury Ministers as well in scrutinising Estimates, then having Supplementary Estimates, then having cash limits, and then having the public expenditure survey, often at different prices.
  The right hon. Member for Taunton implied that one reason why he wished to align the cash limits to the Estimates or to insert the cash limits into the Estimates was that he believed that this might again give Parliament its old rôle—if there was such a role, which presumably there was at one time—of a greater control over public expenditure.

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  He will know, of course, that the Supplementary Estimate now provides that control, at least in theory—[Interruption.] The hon. Member for Blaby seems to be amused. In theory it provides that control. However, in practice, because of parliamentary procedures, that control has become a very theoretical one.
  Perhaps I may digress for a moment. Because we are living in a different world, it might be possible for Parliament to reassert a rôle which it had when the Executive did not sit in Parliament. If one goes back a long time to when the Crown did not sit in Parliament, one finds all these splendid constitutional cases set out in Dicey. Parliament did control money for the Executive. We have a different situation now in which the Executive is here as part of Parliament. We tend to forget that we do not have separation of powers, with the Executive sitting somewhere else. This creates problems that are not easy to solve, save by changing our constitution.
  Mr. Lawson: I would be grateful if the Minister would clarify this. Is he saying that there is no need, desirability or possibility of improving parliamentary control over public expenditure?
  Mr. Davies: I know that it is very early and the hon. Member for Blaby has probably been up all night, but he should not try to tie me down to a detailed answer when I was making a valid point about the difficulties, where the Executive sits in Parliament, of talking about control of public expenditure in the same way as in cases where the Executive does not sit in the legislature, as in the United States. At one time the Executive did not sit in Parliament, and Parliament's function was to deny money to the Executive. Now it seems that the modem development has been for Parliament to vote money to enable the Executive to carry out its obligations to the electorate. But the hon. Member is not in the mood to pursue this point now.
  I return to the cash limits system. The hon. Member for Blaby made play of the profiles and said that the Treasury cash limits were being exceeded. If he read the report of the Public Accounts Committee—
  Mr. Lawson: I have.
  Mr. Davies: Then he should know that there is a distinction between profiles and cash limits. That is why the figure for the Treasury cash limit is different. These are profile figures, not cash limits.
  The right hon. Member for Taunton referred to paragraph 20 and addressed his questions to its conclusions. Paragraph 20 (a) asks that consideration be given to dividing the large cash limit blocks in order to increase the precision and effectiveness of the control. The Treasury is now engaged in work to see whether it is possible to do this, but it is not an easy matter. It goes to the root of how Departments themselves deal with money provided for them. The Ministry of Defence case is particularly difficult. We are doing some work to see whether it is possible to move towards this recommendation.
  Paragraph 20 (b) seeks to reduce the number of different revaluation factors. The point is taken, but there is a difficulty when one is seeking to apply inflation valuation—we are going back to the problem of the Sandilands Committee in applying inflation accounting, and the figures that one should apply.
  Because Government expenditure is so diverse, it is inevitable that there will be more than one inflation factor. This matter is exercising us now. The hon. Member for Blaby talks about the general index and glosses over the difficulties in the characterisic way of the Opposition Front Bench generally.
  Third, subparagraph (c) deals with what is perhaps the central issue, or one of the main issues, in the cash limit problem—namely, incomes policy and how we apply cash limits to the income or wages part of the cash limited public expenditure. As the Third Report makes clear, almost half, or perhaps over half now, is wages. This goes to the heart of the problem, and the hon. Member for Blaby ducked it. His right hon. Friend did not. He said that he favoured an incomes policy, and that is consistent with his view and wish to align the cash limits with the Estimates, because without any form of incomes policy in the public, sector, and without the kind of stability of foresasting—to put it no higher—which an incomes policy gives, it would be difficult to bring forward the cash limit figure with the

  865
  Estimates in the way that the right hon. Gentleman seeks.
  We are dealing here with the crucial issue, because, if that be the case, the House of Commons is then asked to vote, if I may put it in a general way, some kind of incomes policy for the public sector. If the Estimates include the cash limit figure, bearing in mind that the cash limit amounts include at least half in respect of wages and salaries, the House of Commons is being asked to vote, in effect, some kind of incomes policy for the public sector.
  That may be a good thing or a bad, and I understand that some of the public sector unions would support the right hon. Gentleman in wanting to see the Estimates presented within an amalgamation of the Estimates and the cash limits. I am not saying that it is a good thing or a bad, but I am pointing out the situation. The House of Commons is then saying "Yes, there is some kind of incomes policy in the public sector for public employees because we have voted the money for it."
  Mr. Michael English: My hon. Friend speaks of "some" unions in the public sector. He will realise that it could be a little stronger than that and he could say that the President of the TUC, for example, and his union, among others, advocate an incomes policy in the public sector.
  Mr. Davies: I think that Ministers are by nature cautious and they prefer not to make strong statements if they can make weaker statements. I shall not follow my hon. Friend along that road. I understand that some unions in the public sector would wish to see the kind of parliamentary control which the right hon. Gentleman advocates.
  Mr. Lawson rose—
  Mr. Davies: I shall deal with this point and then give way. The Opposition Front Bench is in a dilemma and it has not been able to get out of it. The hon. Gentleman is a monetarist. He does not believe in an incomes policy, yet he believes in cash limits. I suggest that if he is suporting, as apparently he is from the Front Bench, the right hon. Gentleman's recommendation for an alignment of the two, he must support some kind
  866
  of incomes policy in the sense that the incomes figure has to go into the cash limits figure with the Estimates. Otherwise, I do not see how he can get stability of forecasting at least into the cash limit figure. So on this, as on other matters, the Opposition Front Bench does not know which way it is going.
  Mr. Lawson: The hon. Gentleman is getting a little mixed up. I quoted the answer or summarised the answer, of Sir Leo Pliatzky in which he referred to the cash limits on pay blocks, which, incidentally are not composed simply of rates of pay, as the hon. Gentleman misleadingly supposed. As my right hon. Friend pointed out, they are a combination of pay and numbers, which is an important point which adds flexibility and gives something which trade unions can negotiate about. It is said that that could take the place of an incomes policy in the public sector. The hon. Gentleman must know that there have been periods without formal incomes policies in which there has still been, and there must be, a proper control over public expenditure. So these two things should not be taken as inseparable. But if the hon. Gentleman is asking for explanations of policy, perhaps he owes it to the House to explain what the Chancellor is cooking up for phase 4.
  Mr. Davies: I am sorry that I gave way to the hon. Gentleman, because he does not recognise the dilemma, or he pretends that he does not recognise it. There is a real dilemma here, because on the cash limits we are concerned with figures or percentages for incomes in the public sector.
  Perhaps I can now return to my speech, which has been written very well for me by the Treasury, to see whether there is anything in it that I should say in relation to this matter. I hope it will at least satisfy the right hon Member for Taunton if I say that I take extremely seriously the point that he has made. Treasury officials are working on the recommendations that were made by the PAC. The Financial Secretary to the Treasury told the PAC this week that we hope that in the New Year Treasury officials will be able to go back to the PAC and discuss these matters further in the light of the work that they have been carrying out, because it is not merely

  867
  a question of principle whether we should align the Estimates and cash limits and how that would affect the objects of Departments and the way that they control their budgets. We believe that this is an important and serious issue and Treasury officials will come back to the PAC early in the New Year.
  Finally, it may be that at the end of the day, if the cash limits are aligned to the Estimates, this will to some extent improve parliamentary control. But I think that we should still look at our own procedures here. This is not a matter that can be delegated or in which responsibility can be shunted off to either Treasury Ministers or civil servants. It is up to us. Possibly the Procedure Committee could look at it to see whether our inadequate debates in this regard can be made more adequate, because we could very well, if there were a new system, get back to some of the Supplementary Estimates going through without much debate and there could be increases in the limits. What should we do then? We are considering things that could have tremendous consequences.
  This is a serious and important matter and I hope that Treasury officials will discuss it again with the Committee soon in the New Year and that we can eventually come to a satisfactory conclusion.

  MICHAEL MCMAHON
  9.42 a.m.
  Dr. Oonagh McDonald: I want to talk about the case of Michael McMahon, who is now in Long Lartin Prison and who was convicted of the murder of the Luton postmaster in 1970 along with Patrick Murphy and David Cooper. All three were sentenced to life imprisonment with a recommendation that they should serve a minimum period of 20 years before being considered for release on licence. They were convicted largely on the evidence of Mathews, who had originally been charged with the murder, but after a recommendation from Commander Drury, the officer in charge of the case, Mathews was allowed to turn Queen's evidence and the charges against him were dropped and he was set free. Mathews also received £2,000 reward money, again on Drury's recommendation.
  The conviction of McMahon and the others turned on Mathews' evidence, corroborated
  868
  at the time by selected eye witnesses whose evidence now appears to be suspect. Potential defence witnesses were either hidden from the defence or pressured into changing their evidence. No forensic evidence was given at the trial, although the police had taken samples of hair, saliva and so on and the police exhibits included cigarette butts.
  Since that time, disturbing facts have come to light that were not known in 1970 but that have led to the release of Murphy in 1977, his conviction having been quashed. Murphy is now free, and Mathews obviously lied about his part in the murder. At the time all three asserted their innocence, and they have continued to do so. At the time of the trial, each refused an offer made by the prosecution to plead guilty to lesser charges in exchange for the charge of murder being dropped.
  McMahon has been in prison for almost eight years. He has always insisted on his innocence and has worked to prove it. Every day in prison is taken up with that task. There is no point in offering him education or welfare services, because for him they are merely distractions from his aim. Of course, it is simply a waste of taxpayers' money to keep him in prison for murder on insufficient evidence.
  Yesterday, an article in the Evening Post Echo produced some new evidence. James Humphreys, the one-time porn king, said that Mathews was
  "instructed to organise the raid".
  He said that Drury had told him that. Humphreys's story has never been brought before the courts. It is known to investigators from A10, but no action has ever been taken. Humphreys's claim is supported by the deal over the reward money with Mathews. He received a large reward. According to Humphreys, some of it was paid to Drury and later evidence which emerged at appeal court hearings substantiated that.
  A second reward money deal took place, according to Michael Good, who once owned the shotgun that was used to kill the Luton postmaster. Good claims that after the original trial he was summoned to Scotland Yard. There Drury gave him a cheque for £500. He was taken to a bank by "his" detective, because he was a police informer and his

  869
  detective was Falon. He cashed the cheque and gave the money to Falon. He assumed that he would give the money to Drury. So Drury recommended that the reward money should go to Mathews and Good, among others. Both were police informers, and Drury received at least some of the reward from them—again, according to Humphreys and Michael Good. Humphreys also claims that the Luton murder was a put-up job.
  In what follows I shall suggest a possible interpretation of the events of September 1969. I do not claim to have substantial evidence for all I say, but I want to direct the attention of the House to these matters in the hope that substantial evidence may be forthcoming.
  In the late spring and summer of 1969, armed robbers carried out a series of raids on North and North-East London sub-post offices and banks. Common features of the raids were a lack of planning and the use of violence. The police believed that one team was responsible.
  According to Humphreys, the police decided to set up a special job to trap the team. Mathews was called in and told to make the arrangements. As the Evening Post Echo story has it, these arrangements went dramatically wrong. The officers who had primed Mathews became implicated in a murder. The investigation would have to be completed before anything leaked out, and Mathews may have fallen in with the plan to get himself off the hook.
  Why, then, did Drury take part in the cover-up operation, if that is what he did? There is evidence—an investigation is in progress—that at least one senior officer, and possibly more, in the Flying Squad at that time was actively involved with top criminals. They set up and staged robberies and other crimes. The police arrested the petty criminals involved; the others were allowed to escape and the proceeds were shared between the criminals and the police. Many Flying Squad officers and divisional detectives associated with Drury in 1969 have since resigned or been required to resign.
  The officers would have been known to Drury. Although at that time he was detective chief superintendent in the Serious Crimes Department at Scotland
  870
  Yard, he had been with the Flying Squad for a year in 1955 and with the No. 9 Regional Crime Squad in 1965. In April 1971 he was made commander-in-chief of the Flying Squad. He was suspended in March 1972, he retired in May 1972, and now, of course, he is in prison on a corruption charge.
  No reasons for Drury's resignation were given in May 1972. Between 1964 and 1969 he worked in Scotland Yard in close co-operation with the Flying Squad, and the officers of CI, his division, and the squad were well known to each other. It may well have been that Drury realised that there was more in the case than met the eye when he went to Luton in 1969. It was certainly a hasty investigation, perhaps because Drury was looking for Mathews from the start. Once he had found Mathews and Mathews turned Queen's evidence, it was not difficult to find McMahon and the others.
  What Humphreys's statements provided, together with the interpretation that I have provided, is a reason for Mathews naming Murphy, Cooper and McMahon as his partners in the crime. He has already been proved to have lied about Murphy. If Mathews was involved with Drury in a cover-up operation, naming these three men makes sense. Three other culprits had to be found as quickly as possible, and McMahon and the others, who were well known to the police, were suitable choices.
  Much more evidence has come to light since the 1970 trial—over 30 pieces in all. I shall not list all that evidence. Let me direct attention to one important piece of evidence which is now being investigated by the Home Office. This is a statement from one Richard Hurn. Hum provides McMahon with an alibi. On the afternoon on which the murder took place, Hum saw McMahon, with others, standing by a red Mercedes in London. Hum was talking to a friend of his, Frederick Lawrence. The first time when Hum saw McMahon was early afternoon; but Hum saw McMahon two hours later at roughly the time at which McMahon should have been in Luton if Mathews's story were true.
  This evidence has come to light some years later. But Hum and Lawrence, between them, are able to identify the day in question because it was the day

  871
  on which McMahon appeared in court in London, and so the date can be identified.
  McMahon appeared in court early that afternoon and was alleged to have left quickly for Luton, in what the courts have always described as a carefully planned murder, in order to take part in the robbery later that afternoon.
  The evidence for keeping McMahon in prison now seems to be thoroughly unsound. The more one looks at the case and at the number of statements that were taken from the witnesses for the prosecution before they finally provided the identifications which the prosecution wanted, the more one looks at Drury's involvement, the fact that Mathews received a large share of the reward money, and that Michael Good, for some extraorinary reason, received a share of the reward money as well, and the more one suspects a certain background to the case, the more one comes to the conclusion that this case stinks, that it is a waste of public money and that it is a gross injustice to keep this man in prison any longer.
  The evidence on which McMahon was convicted is inadequate. The conviction is unsafe. Clearly, the Home Secretary cannot send this case back yet again to the courts for further consideration, but he should exercise the Royal Prerogative of Mercy to quash this conviction, because McMahon has suffered for too long in prison knowing that he is unjustly kept there.
  9.55 a.m.
  The Minister of State, Home Office (Mr. Brynmor John): As I have metaphorically carried my bat throughout the debate, I should begin by asking for the leave of the House to speak again, Mr. Deputy Speaker.
  I am grateful to my hon. Friend the Member for Thurrock (Dr. McDonald), who has a constituency interest in this case, who with others has made a number of representations on the case that clearly concerns not only my hon. Friend but all those who have read the case. Without determining guilt or innocence, or even questioning the sentence of the court and its decision, it is obvious that the case is out of the ordinary run. Already during the case, wherever there were grounds to do so, my right hon. Friend the Home Secretary has taken appropriate action.
  872
  I start by explaining the general background. I believe that it is important to do so. There is a limit to what any Home Secretary can do in cases of this sort. First, I shall explain the functions of my right hon. Friend with regard to convictions and sentences imposed by the courts.
  It is clear that under the constitution the proper authority for determining questions of guilt or innocence is the courts. The Home Secretary cannot reassess cases on the basis of evidence which has already been before the courts. He can intervene only if new considerations arise which have not previously been before a court—and even then it is desirable, whenever possible, for him to refer the case to the Court of Appeal under the provisions of Section 17 of the Criminal Appeal Act 1968. If for some reason—for example, if the new material does not amount to evidence which the Court of Appeal could properly receive and consider—this course is inappropriate, the Home Secretary may recommend the exercise of the Royal Prerogative. If the new considerations fall short of anything that would justify a free pardon but show grave and positive doubts about the conviction, he could remit sentence.
  But action by the Home Secretary in any of these ways can be justified only if there are genuine new considerations which can be properly evaluated. The Home Secretary cannot act merely on the basis of rumours, suggestion or opinion, or on the opinion that my hon. Friend has quite properly brought in in interpretation. The Home Secretary could not act on his own opinion or own interpretation of the facts.
  As this point is an important one and bears directly on what I have just said, I repeat a reply to a suggestion made before in Adjournment debates. The suggestion is that the criteria upon which the Home Secretary will intervene in the case of alleged wrong conviction were progressively relaxed by the previous Home Secretary, Roy Jenkins, and have been tightened up again. I assure my hon. Friend that that is not the case. Although the form of words in letters may have been different, the criteria upon which these applications are made have been applied consistently by successive Home Secretaries for many years. They remain the same now as they were when the previous Home Secretary was in office. I have described the

  873
  limitations on the Home Secretary's powers, but where it is proper the Home Secretary can take action. I think that Mr. McMahon's case illustrates the point.
  As my hon. Friend told the House, Mr. McMahon, Mr. Cooper and another man, Mr. Murphy, were convicted in March 1970 of the murder of a sub-postmaster in Luton and were each sentenced to life imprisonment. They were convicted largely on the evidence of a Mr. Mathews, who, by his own admission, had taken part in the crime but who turned Queen's evidence. The three men applied to the Court of Appeal for leave to appeal against their convictions, but in February 1971 their applications were refused by the full court. Subsequently, a statement was made by another man, Mr. Edwards, who purported to give Mr. Murphy an alibi for the time of the offence. Since this constituted new evidence within the definition that could properly be given in court, the previous Home Secretary referred Mr. Murphy's case to the Court of Appeal in May 1972.
  The court, though expressing some reservations, decided that the new evidence cast doubt on Mr. Mathew's identification of Mr. Murphy, and that in the light of this the right course was to quash Mr. Murphy's conviction as being unsafe. This judgment immediately raised a similar question in relation to Mr. McMahon and Mr. Cooper, because it cast doubt on the validity of the evidence given against them as well. Accordingly, the former Home Secretary referred their cases to the Court of Appeal. On this occasion, when the court delivered judgment in February 1975, the appeals were dismissed, the court saying that if the jury at the trial had heard the evidence that had led to the quashing of Mr. Murphy's conviction they could well have found Mr. Murphy not guilty but Mr. McMahon and Mr. Cooper guilty. The court had examined various items of additional evidence but found that there was nothing to lead it to overturn the convictions, and it declined to have Mr. Mathews cross-examined on that occasion.
  One of the complications, as my hon. Friend fairly said, is that Commander Drury is involved, and he was recently convicted of several offences.
  874
  Mr. Humphreys, to whom my hon. Friend also referred, said during 1975 that Mr. Drury had told him that Mr. Mathews had been put in to set up the Luton raid. A statement by a new witness, a Mr. Slade, appeared to confirm the alibi which Mr. Cooper had sought to establish at the trial. In the light of these factors, the then Home Secretary again agreed to refer this new evidence to the Court of Appeal.
  This matter is important not only because it is historic in the sense that it is the only time a case has twice been referred by the Home Secretary to the Court of Appeal but because on this occasion Mr. Mathews was allowed to be fully cross-examined, as was Commander Drury, and evidence on behalf of the accused was called. The case lasted several days, and at the end the court did not find the new alibi evidence credible and again refused to quash either man's conviction. It is important to realise that where the Home Secretary has new considerations that meet the criteria he acts as he acted in this case.
  The judgment of the Court of Appeal resulted in a great deal of criticism in the Press, among the public and elsewhere. The criticism has been on the ground that it is scarcely credible that the court should have taken the view that, although Mr. Mathews's evidence on other aspects, particularly his own role, was inaccurate, there was no reason to doubt his evidence about Mr. McMahon and Mr. Cooper. But that is not a matter on which the Home Secretary could properly comment, far less act, because, as I keep on insisting, the independence of the judiciary means that it is not for the Home Secretary to substitute his own view for that of the Court of Appeal.
  Mr. Robin Corbett: My hon. Friend said that on the second time the matter went to the Court of Appeal both Commander Drury and Mr. James Humphreys were cross-examined.
  Mr. John: Not Mr. Humphreys.
  Mr. Corbett: Have not matters moved on since then? Commander Drury was found not merely to be bent but positively crooked and was convicted of corruption—and that largely on the basis of evidence and testimony given by Mr. James

  875
  Humphreys. Does not that give a new view of the whole essence and guts of the case?
  Mr. John: I was not seeking to extrapolate past experience into the present situation. I was only describing the past, particularly the allowance of cross-examination of Mr. Mathews, the man whom my hon. Friend the Member for Thurrock rightly made a central point of her speech. I was simply saying that on the second occasion he was cross-examined, as was Commander Drury, and that witnesses were called on behalf of Mr. Cooper and Mr. McMahon. It was not a paper-only exercise in the Court of Appeal. I was going on to deal with the up-to-date situation.
  In November 1976, my hon. Friend the Member for Leyton (Mr. Magee), to whom I also pay tribute for his close interest in the case, put into my right hon. Friend's possession detailed statements obtained by newspaper reporters and Mr. Cooper's solicitors, which, it was claimed, provided grounds for further action. Those statements were very carefully investigated by the police, but, as my right hon. Friend then told my hon. Friend, they provided no new grounds on which further action could be founded.
  That illustrates the difficulty in the case. On investigation, all that we were left with was the unsupported statements of two men both of whom were unwilling to give evidence in court and whose statements in several respects contradicted each other and, where they were capable of verification, were found to be incorrect. I mention that only because of the difficulty that sometimes arises when apparently strong evidence is examined and dissolves very quickly.
  In April this year, Mr. McMahon's solicitors forwarded evidence by a Mr. Richard Hurn which, together with evidence from another man, purported to provide Mr. McMahon with an alibi for the time of the murder. This, too, was investigated by the police, who submitted their report in July, but by that time my hon. Friend the Member for Leyton had submitted further material, so that as my right hon. Friend was on the point of coming to a decision on that he had to postpone it until he had examined the material which appeared in a television programme, because that raised not only the evidence referred to but new evidence.
  876
  Again, when delay is talked about I must point out that when there are masses of material relating to different aspects of a case which involves two men it inevitably takes a considerabe time adequately to investigate it.
  The final police report on all the issues raised was received a few weeks ago, and after very careful consideration my right hon. Friend has now reached a decision. This has not been easy, because, as I said, Mr. Hurn's evidence referring to Mr. McMahon does not stand on its own; its relevance to the case depends on the evidence of another man, who had made a statement previously. The evidence of both men is based on their memories of events that occurred more than eight years ago, and the police inquiries were unable to produce anything to substantiate or rebut it. My right hon. Friend has therefore decided once again to seek the assistance of the Court of Appeal.
  A case can be referred to the Court of Appeal in two ways under Section 17 of the Criminal Appeal Act 1968. Under subsection (1)(a) the Home Secretary can refer the whole case, and if he does so the case is treated for all purposes as if it were an appeal by the person concerned. Under subsection (1)(b), which is less frequently used, if the Home Secretary desires the assistance of the court on a specific point arising in the case he can refer that point alone to the court for its opinion on it.
  As I have said, the cases of Mr. McMahon and Mr. Cooper have already twice been referred to the Court of Appeal. Consequently, with the men's original appeals against their convictions and the reference of Mr. Murphy's case, to which I referred earlier, the Court of Appeal has had on four occasions to consider the facts of the Luton murder, and it has done so exhaustively. It would therefore not be right to put it in the position of having to go into the whole matter yet again on the basis of evidence which, at the end of the day, it might feel unable to receive. It is not required to receive all evidence offered to it, but under Section 23(2) of the Criminal Appeal Act it is required—unless it is satisfied that, if received, it would not afford any ground for allowing the appeal—to receive any evidence that appears likely to be credible and would have

  877
  been admissible in the proceedings from which the appeal lies and it is satisfied that there are good reasons why it was not adduced at the trial.
  Accordingly, my right hon. Friend has decided, in the exceptional circumstances of this case, to exercise his power under Section 17 (1) (b) and to ask the Court of Appeal to give an opinion—if it feels able to do so—on the question whether, if the new evidence were tendered in the course of an appeal arising from a reference under subsection (1) (a), the court would regard itself as required to receive it by virtue of Section 23 (2) of the Act He will do this as soon as possible, and when he has received the court's opinion he will consider further the representations that he has received.
  Despite the explanation that I gave earlier, it may be that my right hon Friend's decision will again be interpreted in some quarters as meaning that he considers Mr. McMahon and Mr. Cooper to have been wrongly convicted. I emphasise again that the reference of a case, or a point in a case, to the Court of Appeal means nothing of the sort. It means no more than that there is a new consideration of substance that has not previously been before a court and which the Home Secretary is satisfied should be considered by the Court of Appeal and which he can properly refer to it. Having said that, I assure my hon. Friend that, as his present action shows, my right hon. Friend fully appreciates the strength of feeling in this case.
  Question put and agreed to.
  Bill accordingly read a Second time and committed to a Committee of the whole House; immediately considered in Committee, pursuant to the Order of the House this day; reported, without amendment.
  Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 93 (Consolidated Fund Bills), and agreed to.
  Bill accordingly read the Third time and passed.

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

  HOUSING (FINANCIAL PROVISIONS) (SCOTLAND) [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act of the present Session to make new provision for Scotland with respect to grants for housing authorities and grants and loans to voluntary organisations concerned with housing, and to provide for grants and loans by local authorities to meet expenses of repairing houses in a state of disrepair, it is expedient to authorize—

  A. the payment out of money provided by Parliament of—

  (1) any expenses incurred by the Secretary of State under the said Act in making—

  (a) housing support grants to local authorities;

  (b) grants to the Scottish Special Housing Association and development corporations; and

  (c) grants and loans to voluntary organisations;

  (2) any increase attributable to any provision of the said Act in the sums payable out of money provided by Parliament—

  (a) under sections 5 and 6 of the Housing (Financial Provisions) (Scotland) Act 1972 in paying rent rebate subsidy and rent allowance subsidy;

  (b) under section 12 of the Housing (Scotland) Act 1974 in making contributions to local authorities in respect of expenditure incurred by them in making improvement grants and repairs grants;

  (c) under section 24 of the Housing Subsidies Act 1967 in making payments to the Scottish Special Housing Association in respect of expenditure incurred by them in making loans;

  (d) by way of rate support grant;

  B. any increase attributable to any provision of the said Act of the present Session in the sums which may be issued out of the National Loans Fund by virtue of section 25 of the Housing (Financial Provisions) (Scotland) Act 1968;

  C. the payment into the National Loans Fund of any increase in the sums received by the

  879
  Secretary of State by virtue of the said section 25 which is so attributable.—[Mr. Robert Sheldon.]

  HOUSE OF COMMONS (LIBRARY)
  Motion made,
  That this House doth agree with the Select Committee on House of Commons (Services), in their Fifth Report, in the last Session of Parliament, on Computer-based Indexing for the Library.—[Mr, James Hamilton.]
  Hon. Members: Object.

  JOHN ROY WILSON
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. James Hamilton.]
  10.12 a.m.
  Mr. Alan Lee Williams: John Roy Wilson, aged 25 years, is a patient in Rampton Hospital and has been there since 1970—seven years ago. He suffers from subnormality and has a history of maniac depressive episodes. Earlier, he was admitted to South Ockenden and Warley Hospitals but was discharged, in my view, too soon after admission.
  His parents could not cope with him at home, so, following an incident with his father in 1970, it was realised by his parents that he needed more help. His father took him to court for assault. The court acted in pursuance of Section 5(1)(c) of the Criminal Procedure (Insanity) Act 1964. Because of his dangerous and uninhibited behaviour, the court decided that he required treatment under conditions of special security. The Home Secretary issued a warrant for his admission to Rampton.
  In accordance with Schedule 1 to the 1964 Act, John Roy Wilson was subjected to a hospital order under Section 60 of the Mental Health Act 1959, together with an order under Section 65, which, as my hon. Friend the Minister of State will know, can mean that he can be detained without limit of time and that he may not in fact be discharged or transferred without the consent of the Home Secretary.
  John Roy Wilson responded well to treatment at Rampton, although not without difficulty. My information is that in the last two years he has progressed
  880
  relatively well. His consultant psychiatrist, Dr. Rodriguez, has indicated his desire to release John Roy Wilson from Rampton, and he placed him on a waiting list on 30th January 1975, stating:
  "I do not wish to detain John in Rampton any longer than is absolutely necessary."
  John Roy Wilson has been on the transfer list now for three years. A social worker, in a letter dated 10th October 1975, wrote:
  "John's father seems to have been led to believe that John would require a locked ward and therefore has no alternative but to remain in Rampton. This is not so and the fact that he has been approved for transfer from Ramp-ton indicates that it is no longer felt that he needs conditions of this level of security. Needless to say, with the trend towards making more hospitals open, there is sometimes some anxiety about accepting special hospital patients on transfer, but this is by no means an obstacle which cannot be overcome."
  Since that time some two years ago, the parents of John Roy Wilson have been coming to see me at my advice bureau and I have written letters to a number of Ministers, including the Minister of State, Department of Health and Social Security. I have consulted the medical officer for Barking and Havering. Because of the difficulties in finding him a place in the two local hospitals, I have suggested that the Department might try to find a bed for him in either Sussex or Kent. In correspondence I have suggested a number of alternative hospitals.
  There is a particular difficulty at the Warley Hospital because of a dispute with the union COHSE. I understand that there are difficulties there about admitting patients who might be difficult.
  In my view, my constituent has been detained in Rampton for too long. His continued detention there is unjustified. I know that this is accepted by my hon. Friend the Minister of State, by the hospitals and by all the authorities concerned. But the difficulty of finding him a bed remains.
  How many cases of this sort are there? How long will it be before John Roy Wilson is transferred from Rampton to a local hospital? Although his history is difficult, one must not draw too much from the past. He was a young man at the time. He is still a young man, and there is no doubt that he has responded to treatment.

  881
  His past difficulties were severe, but the consultant psychiatrist believes that he is now safe to be moved. I appreciate the anxieties about this type of patient. Many people are misled to believe that because a patient is from Rampton he is necessarily dangerous. That is not so, any more than a patient from a normal hospital is necessarily not dangerous.
  The time has come for the red tape to be cut and a bed to be found for John Roy Wilson. His continued detention is unjustified.
  10.18 a.m.
  The Minister of State, Department of Health and Social Security (Mr. Roland Moyle): I am grateful to my hon. Friend the Member for Hornchurch (Mr. Williams) for raising this important matter in the House and for his continued interest in this case. He has already written more than once to my Department about it and we have discussed the case. He has been remarkably assiduous in pursuing his constituent's interests.
  As my hon. Friend has said, we are discussing the case of John Roy Wilson, at present a patient in Rampton Hospital. Rampton is one of the four special hospitals for those who require treatment under conditions of special security on account of their dangerous, violent or criminal propensities.
  John Wilson is now 25 years of age. He appeared before the North-East London Quarter Sessions on 20th August 1970 and was found to be under disability and unfit to plead to a charge of assault occasioning actual bodily harm. The court made an order under Section 5(1)(c) of the Criminal Procedure (Insanity) Act 1964 and he was admitted to Rampton on 23rd September 1970. The effect of the court order is that he is as if subject to a hospital order under Section 60 of the Mental Health Act 1959, together with an order under Section 65 of the Act restricting discharge for an unlimited period. This means that the consent of the Secretary of State for the Home Department is required for transfer or discharge.
  The circumstances leading to John's being charged are as follows. During 1970, while living at his parent's home, he caused damage to the house and furniture during episodes of violence, and attempted to set fire to the house. In
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  June 1970 he attacked his father with a piece of wood and then chased his parents from the house with threats. As my hon. Friend said, his parents felt that they could not cope with him. Ten days later the police were called to the house and took John into custody for using threatening behaviour in the street.
  Unsuccessful attempts were made by the police to have John admitted to Warley Hospital, a mental illness hospital where he had been before, and, as his parents refused to have him back home, he was charged with threatening behaviour and with the assault on his father. This, as I have said, led to his being admitted to Rampton Hospital.
  John had the misfortune of having been born with a hare lip and cleft palate deformity. Surgery was performed when he was only 18 months old but, sadly, left a severe speech defect. He developed a progressive emotional disturbance from about the age of 13 and thereafter he was admitted on several occasions to Warley Hospital. He also spent over a year in South Ockenden Hospital, which is a mental subnormality hospital. After improvement there he was discharged to the care of his parents in early 1970. The offence with which he was later charged took place in June of that year.
  John made slow progress at Rampton. He was suspicious of those who were trying to help him. But one of the heartwarming aspects of this case is the constant and devoted way in which Mr. and Mrs. Wilson, John's parents, have visited him at Rampton, one or both of them coming to see him every week. John's case was heard three times by the Mental Health Review Tribunal, on 13th July 1972, 31st May 1973 and 17th December 1974. In March 1975, acting on the advice of the tribunal, the Secretary of State for the Home Department consented to John's transfer to a National Health Service hospital if a suitable vacancy could be found. We have been trying to find such a vacancy since then—that is, for over two years. We have corresponded with the Essex Area Health Authority, the Barking and Havering Area Health Authority, and the North East Thames Regional Health Authority. I am sorry to say, however, that so far we have not succeeded. We have also considered the possibility of

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  his discharge direct into the community from Rampton, but on the whole it is felt that this would be a premature step.
  Mr. Alan Lee Williams: I agree with my hon. Friend. That is the view of his parents. They do not wish to have him directly released so that he comes home.
  Mr. Moyle: We are all agreed, therefore, that the best thing is to transfer him to a local National Health Service hospital, from where he could be eased back into community life. But we are having some difficulties in implementing that course of action. Where a patient is to enter hospital, whether from the community or from a special hospital, the views of the staff of the hospital to which he is to be transferred are of great significance. They will want the answers to two questions. First, is the problem one which will respond to the form of treatment and care available to them? Secondly, is it in the interests of the other patients and staff to admit a particular person?
  Psychiatrists at Warley Hospital have held that the diagnosis is one of a behaviour disorder in a mentally handicapped patient, that social rather than health care is appropriate and that the hospital lacks the skills, staff and security facilities that Mr. Wilson would need. South Ockenden Hospital believes that the degree of mental handicap does not really place him into the category of patients for whom it cares. There is a conflict of clinical opinion here between the three hospitals. A further consultant, who has received the case notes but who has not seen the patient, has stated that he believes that there has been better control in the conditions provided in Rampton, but there is no evidence of clinical improvement. Other consultants have differing views. Even if there were unanimity of opinion among the consultants, there is the need to consult the nursing staff and the staff unions in the hospitals concerned.
  Although doctors see patients from time to time, nurses have round-the-clock responsibility for their patients. We have to face the fact that staff are not unnaturally concerned about their own safety and the safety of other patients whom they may be called upon to treat in the same premises.
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  Very few members of the hospital staff would deny care and help to patients, however difficult they have been in the past, if it were possible to look after them under conditions which ensured staff safety. But in some of our large mental hospitals it is unfortunately true that there are times when there may not be enough staff on hand to cope with unexpected incidents—for example, at night when a nurse may be alone in a ward. If that ward contains more than a few patients whose behaviour is thought to be unpredictable and at the worst potentially violent, some staff may believe that it is in the interests neither of other patients nor of the nursing staff to accept the risk involved.
  The result is that in some mental hospitals staff impose a sort of blanket prohibition. For example, staff will not accept patients who are under certain sections of the Mental Health Act 1959 or those who have been in-patients at one of the special mental hospitals. Any ill-considered attempts to force the admission of a patient in those circumstances could, indeed, lead to industrial action. I understand the fears and the feelings which prompt the staff to impose blanket bans of this sort, but I am bound to say that I regard them as being unfortunate and misconceived, because bans of this sort can cause real hardship and injustice to some individual patients. Once the attitudes based on blanket bans have developed, the problem becomes essentially an industrial relations problem. The matter has to be discussed with the staff with a view to removing misconceptions.
  Unfortunately, a blanket ban of this type exists at Warley Hospital, the mental illness hospital which on a geographical basis is the one to which John Wilson ought to go. The mental handicap hospital for the area, at South Ockenden, has a somewhat different problem. It is faced with very heavy demands on it, with tremendous pressure for admissions. Faced with a waiting list, the staff have difficult choices to make. Naturally they go for the types of patient whom they feel they are best equipped to deal with, and they do not feel that. John Wilson falls into that category.
  Where problems such as those at Warley arise, we have to discuss with staff interests the precise nature of the problem, consider the problems posed by the

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  admission of different categories of patients and what facilities are needed, and see what can be done to make the appropriate facilities available. In other words, the risks which might face staff have to be carefully assessed to see how real they are and how best they can be minimised. But the problems at Warley in that respect have not been overcome.
  Other hospitals have been approached. My hon. Friend mentioned Kent as an area, for example, where we might look. But, of course, a number of our mental hospitals are under considerable stress, and it is our policy to provide each district with a mental hospital service by a specified hospital, or division within that hospital, so that we can have fair play in admission and opportunities for good clinical work, enabling us to treat patients as close to their homes as possible and as close to their family and friends as possible. Individual professional teams within the hospital can provide a sensitive local service for their particular communities. It is, therefore, not surprising to find that hospitals at a greater distance from a patient's home are loth, particularly if under pressure, to admit a man who is not accepted by the hospital normally responsible for his district. That is
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  another of the problems that we are facing.
  My hon. Friend asked how many cases of this sort there are. I cannot give him precise figures, but I can say that cases of this sort are not unusual and are not by any means unique to his part of the world.
  My hon. Friend asked when I could promise that John Wilson will be transferred. All I can say, I am afraid, is that it will be done as soon as we can manage to solve the problems that my hon. Friend and I have been discussing. We are not complacent about the situation. I think it is fair to say, too, that many patients who no longer need the security of a special hospital are transferred to local hospitals and that no problems arise. But in some cases, of which this is one, we encounter difficulty. We have not lost sight of John Wilson's case. I sympathise with his wishes and those of his loyal parents that he should not remain at Rampton longer than is absolutely necessary, and we shall continue to do all we can to secure his transfer to a local hospital just as soon as it can be arranged.
  Question put and agreed to.
  Adjourned accordingly at twenty-nine minutes to Eleven o'clock a.m.