Commons Sitting of 15 June 1977

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

    Middle East
    Mr. Luceasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the latest developments in the Middle East.
    Mr. Waltersasked the Secretary of State for Foreign and Commonwealth Affairs what progress has been made to achieve a peaceful settlement in the Middle East; and if he will make a statement.
    Mr. Moonmanasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the latest developments in the Middle East.
    The Secretary of State for Foreign and Commonwealth Affairs (Dr. David Owen): It is too early to make a statement. Intensive efforts are being made to establish an agreed basis for a peaceful settlement and now that the Israeli election is over I would expect a further round of discussions. In particular, I welcome the high priority that the new United States Administration are giving to this issue.
    Mr. Luce: In view of the very urgent need for progress towards the Geneva Conference, will the right hon. Gentleman seek a fresh Community initiative to this whole issue that is designed to persuade the Israelis to desist from constructing settlements in Arab-occupied territories, and equally to persuade the Palestinians at the very least to recognise Israel's right to exist?
    Dr. Owen: The details of a peace agreement are for negotiation, but we have made it clear that we regret anything, including the Israeli policy of establishing settlements in the occupied territories, that might impede the beginning of negotiations. We hope that it will be possible to reconvene the Geneva Conference in the autumn, as the United States Government have proposed.
    Mr. Roy Hughes: Would it not now be a commendable gesture for Her Majesty's Government to invite Mr. Yasser Arafat to London for negotiations so that we might be able to find out at first hand what are the legitimate objectives of the Palestinians? After all, this gentleman has far more credibility than the present leader of Israel.
    Dr. Owen: I find it difficult to agree to meet Mr. Arafat until the PLO has recognised the State of Israel, or has gone rather further than it has done to recognise—[Interruption.] I agree with my hon. Friend that it is necessary for moves to be made on both sides. I do not deny in any way that one must be ready to speak to many differing people. However, there is no hiding the fact that a greater acceptance of the right of Israel to exist would make matters easier. That is a fact of life that all of us recognise. I also recognise that that poses problems for the PLO, but there is no doubt that it is one of the barriers to having the sort of discussions that my hon. Friend has suggested.
    Mr. Marten: The Secretary of State did not exactly answer the supplementary question of my hon. Friend the Member for Shoreham (Mr. Luce)—namely, what initiative is the Community going to take? Does it speak with one voice on this issue?
    Dr. Owen: The hon. Gentleman's zealous regard for a Community statement is touching. I shall take it into full account. The fact is that the Community has spoken with one voice on this issue on many occasions in the past. It is a matter of concern and it is discussed among the Foreign Ministers of the Nine at every political co-operation meeting.
    Mr. Hooley: Does my right hon. Friend agree that the situation has recently become much more dangerous in

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    the Middle East and that time is running out? Does he recognise that time is not on our side, and that much more urgency should be shown by the Western world in moving towards a solution of this problem?
    Dr. Owen: I agree. I think that the situation is urgent. It has been given a very high priority by the United States Government and by many other Governments. I have visited some of the major countries involved and I hope to visit others in the next few months. We should not automatically assume that the result of the Israeli election will necessarily mean a setback to peace negotiations, although it is clearly an unexpected result in some people's minds. I hope that the new Government, once they have been fully formed, will show a readiness to negotiate and a flexibility rather in advance of what they have said hitherto on the subject.

    United States of America (Nuclear Bases)
    Mr. Hugh Jenkinsasked the Secretary of State for Foreign and Commonwealth Affairs if he is aware that President Carter is willing to co-operate in the closure of United States nuclear bases in the United Kingdom; and what is holding up this policy.
    The Minister of State, Foreign and Commonwealth Office (Mr. Frank Judd): I am not aware that President Carter has expressed himself in the sense suggested by my hon. Friend.
    Mr. Jenkins: Is my hon. Friend aware that the policy advocated here is in accordance with the Labour Party's programme and, furthermore, in accordance with the general philosophy expounded by President Carter? If the Foreign Secretary points out to President Carter that it is part of the Labour Party's election programme and in accordance with the President's policy, is he aware that the President's response is likely to be to agree to a negotiated agreement? Will my hon. Friend press this matter?
    Mr. Judd: We welcome President Carter's initiative. As our manifesto stated, starting from the basis of multilateral disarmament we shall seek the removal of the United States bases. It is our intention to establish conditions in
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    which we can all have permanent confidence in our security. We are pursuing several practical measures on arms control and disarmament, but we are still some way from establishing such conditions.
    Mrs. Bain: Is the hon. Gentleman aware that all those of us who are members of the Campaign for Nuclear Disarmament find it strange that the Government are taking so long to strike up a new initiative in this area? If talks are initiated with President Carter, will the hon. Gentleman bear in mind that this is already party policy for the Scottish National Party, and that we intend to carry out this commitment much more quickly than does the Labour Party?
    Mr. Judd: It is not for me to comment on the policy of the Scottish National Party. I assure the hon. Lady that we have positively welcomed the President's initiative and that we are determined, together with our other allies, to do everything possible to support what he seeks.
    Mr. Frank Allaun: Is it not correct that the President has concurred with the recent surprising Soviet proposal that Britain should join the super-Powers in talks to end all nuclear test explosions? Will we join those talks, and in any case should not Britain therefore cancel its tests in Nevada?
    Mr. Judd: Of course, if we can achieve international agreement on the cessation of nuclear tests, so long as we can be sure that peaceful tests are not disguised for military purposes, we shall do everything possible to co-operate. We are determined to do that.
    Mr. John Davies: Will the Minister, however, confirm clearly that his understanding is as mine—that is, that President Carter has in no way suggested that there should be a unilateral state of disarmament of any kind, in the face of the existing state of Soviet armament?
    Mr. Judd: What the President is clearly committed to and what we are committed to support to the hilt is a genuine and full commitment to effective and genuine multilateral disarmament. However, as I have said before, succeeding generations will not thank us for cosmetics in this sphere.

    Concorde
    Mr. Adleyasked the Secretary of State for Foreign and Commonwealth Affairs if he will seek a meeting with Mr. Vance to discuss the implementation by the United States of America Government of the treaty signed by Her Majesty's Government and the Federal Government allowing Concorde to land in New York.
    Mr. Judd: As I told the hon. Member on 4th May, the United States Government are well aware of our views. We and the French are urgently and carefully considering yesterday's decision by the United States Court of Appeals, but until these considerations are complete and the airlines have been consulted it is too soon to say what steps will be taken.
    Mr. Adley: But is it not clear that, unless and until Mr. Carter accepts his presidential responsibility for implementing federal treaty obligations, the courts will continue to uphold the discriminatory ban by the Port of New York Authority? What are the Government doing to remove the feeling in many quarters that, in the case of Concorde, the signature of the United States Government on a treaty is rather less valuable than the signature of the Soviet Government on the Helsinki agreement?
    Mr. Judd: I am sure that with his specialised knowledge the hon. Gentleman will recognise that this is a complicated issue, which raises fundamental points about the principles of the rule of law, to which I know he is deeply committed. I can assure him that the Prime Minister has spoken to President Carter himself several times, and we have raised the matter with Mr. Vance. The Secretary of State for Trade also spoke to Mr. Brock Adams expressing concern when he was in the United States recently.
    Mr. Russell Kerr: Is my hon. Friend aware that the continued frustration currently being experienced by British Airways and Air France in regard to Concorde is doing nothing but build up a heavy anti-American groundswell of public opinion in this country? Will he therefore use his best ministerial endeavours to put pressure on President Carter to drop his Nelson-like approach and to come down firmly on the side of
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    a co-operative gesture, which could only help Anglo-American relations?
    Mr. Judd: I thank my hon. Friend for those comments. It would be wrong to underestimate the feeling in this country about the issue. So far as I am aware, that is well recognised in the United States, and, as I have said, senior British Ministers have been at pains to make sure that the President and the United States Secretary of State are well aware of how we see the issue on this side of the Atlantic.

    Cambodia
    Sir John Hallasked the Secretary of State for Foreign and Commonwealth Affairs if he is now in a position to say what further action Her Majesty's Government propose to take to initiate international action to persuade the Cambodian Government to change their present policy of mass murder.
    The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Evan Luard): I have at present nothing to add to the reply that I gave to the hon. Member on 4th May.
    Sir J. Hall: Does the Minister agree that to suggest deferring raising this matter until the next meeting of the United Nations Commission on Human Rights in February 1978 is to abrogate the responsibility of this Government? Is it not deplorable that we should be prepared to allow a Government like the Cambodian Government to continue their policy of genocide, resulting in the loss of many hundreds of thousands of innocent lives, without apparently being willing to take any action to rouse public opinion against that Government?
    Mr. Luard: First of all, we have expressed our own views about this matter in no uncertain terms. Second, it is not the case that it is a special responsibility of this Government to raise this question with the United Nations. However, as I have told the hon. Gentleman before, we should like to raise the question in the appropriate body of the United Nations. The appropriate body is the UN Commission on Human Rights, which unfortunately does not meet until February of next year. None the less, we are considering whether there is any other way in which we might raise it.
    Mr. MacFarquhar: In view of the special connection of France with that part of South-East Asia in the past, has my hon. Friend had any consultations with the French about a joint initiative?
    Mr. Luard: We are considering whether there is any action that we could take in conjunction with other Governments, and the French Government might certainly be one. There is one possibility. The UN Commission on Human Rights has a Sub-Commission on the Prevention of Discrimination and Protection of Minorities, and it is just possible that we may find a way of raising it there.

    Diplomatic Service (CPRS Report)
    Sir Anthony Royleasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the CPRS Report on the Diplomatic Service.
    Dr. Owen: I hope to have a printed copy of the Report shortly. After discussions with my colleagues I hope to be able to publish the Report to allow for public discussion.
    Sir A. Royle: But what action will the right hon. Gentleman take to restore the morale of the Diplomatic Service, which has been affected by the strange attitude of some members of the CPRS team as they have gone round our missions abroad? Is he aware that we on the Opposition Benches trust that he will support the Diplomatic Service against those who seek to undermine this important British interest through either envy or malice?
    Dr. Owen: This country has been extremely well served by its Diplomatic Service over many generations and we owe it to the service to ensure that any examination of what are only recommendations to the Government should be carried out seriously. That is what its members want. When I go around talking to diplomats in many parts of the world I find that they are not reluctant to see the service examined. They realise that it must change with changing circumstances, but they want an unprejudiced look at their service, and a recognition that they have played an important rôle in the past and will continue to do so in future.
    Mr. Grocott: But is it not a fact that the Diplomatic Service is overmanned and overprivileged? Can my right hon. Friend explain why it is necessary, for example, to keep the same level of representation at European capitals, when, so far as one can discover, planeloads of Ministers and civil servants make constant trips to and from European capitals—Brussels in particular?
    Dr. Owen: I do not want to prejudge the discussions that will take place on the CPRS Report, but on the question whether the service is overmanned I must tell the House frankly that I think that there are some places in the world where one needs to consider whether there could not be some judicious slimming of the service.
    Mr. Russell Kerr: Washington, for example.
    Dr. Owen: I do not object at all to what my hon. Friend says. However, there are also places where the Diplomatic Service is understaffed and is doing a difficult job in adverse circumstances. In such places I should like to increase the representation to support our trade efforts.
    Mr. Paul Dean: Does the right hon. Gentleman recognise that remarks like that made by the hon. Member for Lichfield and Tamworth (Mr. Grocott) damage the morale of the Diplomatic Service? Does he agree that Britain still has an important rôle to play in the Commonwealth, in Europe and in the world, and that to achieve that effectively we must be effectively represented abroad by those who feel confident in the service which they serve?
    Dr. Owen: Yes, I agree with that. We need to be effectively represented throughout the world. I am not a believer in sectoral withdrawal in any aspect of our life. I think that we need to draw the lesson that, in our obsession, naturally, with the arguments about our entry into Europe, we may have got too orientated towards Europe. At the Commonwealth Prime Ministers' Conference, I was struck by the number of people who asked us to remember that we still had major trading interests all over the world. We need to look after those trading interests and ensure that our representation still covers all aspects of our trading and diplomatic activity world-wide.

    Republic of Ireland (Foreign Minister)
    Mr. Hendersonasked the Secretary of State for Foreign and Commonwealth Affairs when he next intends to meet the Irish Foreign Minister.
    Mr. Judd: My right hon. Friend hopes to do so at the next meeting of the Foreign Affairs Council on 21st June.
    Mr. Henderson: When the Foreign Secretary meets the Irish Foreign Minister, will he assure him of his full support for the Irish Government's stand on a 50-mile conservation limit round the Irish coast? Will he take a leaf out of Ireland's very courageous stand on the matter and do the same himself?
    Mr. Judd: The Irish Government have not declared a 50-mile limit. What they have done is to ban certain large vessels, including their own, for conservation reasons. But I can assure the hon. Gentleman that we are determined to fight vigorously for the interests of the British fishing industry in all negotiations with the Community.
    Mr. Marten: On behalf of some of the members of my party, may I support the hon. Gentleman in what he said about a 50-mile limit?
    Mr. Judd: I repeat that we shall fight with all the vigour necessary to protect the interests of the British fishing industry.

    Israel
    Mr. McCrindleasked the Secretary of State for Foreign and Commonwealth Affairs if he has any plans to visit Israel.
    Dr. Owen: I hope to visit Israel as soon as it is convenient.
    Mr. McCrindle: In the meantime, and while recognising that ultimately concessions will no doubt have to come from both sides if peace in the Middle East is to be maintained, may I ask the right hon. Gentleman to resist undue pressure on the new Israeli Administration in regard to the evacuation of territory, and to use the time between now and his expected visit to press the Palestinian interests to recognise the existence of the State of Israel?
    Dr. Owen: I have already indicated that I think that a movement in this area
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    of recognition would certainly help, although I realise the complexity of the problem. The Government's attitude to settlements in the occupied territory has been made absolutely clear. I agree with what the hon. Gentleman said about the new Government. They are a new Government, democratically elected, and they must be given the benefit of any doubt or anxieties that people may have about the future position over a negotiated peace settlement. I hope that when they look at the issues they will enter into the negotiations for a settlement with a readiness to reach an agreement that will bring stability to the area. It is certainly in that spirit that I approach the new Government.
    Mr. Rifkind: Remembering that the British Government officially condemned the Arab boycott against Israel, will the right hon. Gentleman undertake to follow the example of the United States, Canada and the Netherlands by instructing officials of his own Department to stop authenticating signatures of discriminatory certificates of origin, as this is the one way in which the British Government actively enable the boycott against Israel to be continued?
    Dr. Owen: I cannot accept that the certification of documents by the Foreign and Commonwealth Office in any way implies that we condone or endorse the boycott. We do not. I have made the position clear on that. All that is certified is the signature of the public official.
    Mr. Tapsell: Has the right hon. Gentleman noted that since the Israeli election Mr. Begin has publicly stated that he will go to Washington on the basis of Resolutions 242 and 338? Is not this a rather encouraging sign?
    Dr. Owen: Yes, Sir. I think that it reflects the fact that the Israeli Government are ready to negotiate. I hope that that is the position. It is very important that we do not judge a Government by statements during the election period. I think that most of us would recognise that the best way of judging Governments is by what they actually do in office.

    Washington, DC
    Mr. Canavanasked the Secretary of State for Foreign and Commonwealth

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    Affairs when he next expects to visit Washington.
    Dr. Owen: I shall visit the United Nations General Assembly in New York at the end of September and may well visit Washington then.
    Mr. Canavan: Is my right hon. Friend aware that in the autumn thousands of people from Scotland and elsewhere in the United Kingdom will be marching in protest against the presence of American nuclear bases in the Holy Loch and elsewhere in the United Kingdom? Will he pay more attention to the Labour Party manifesto commitment in this respect, and will he pass on appropriate information to the American President, Jimmy Carter, and to our whizz-kid ambassador?
    Dr. Owen: I can assure my hon. Friend that the whole issue of disarmament is one in which I have taken a great deal of interest when sitting on both sides of the House, and I shall continue to do so. The question is one of achieving genuine measures of disarmament. We can look at the whole question of a comprehensive test ban treaty. We can encourage greater progress in the SALT negotiations. We can contribute to the mutual and balanced force reduction negotiations, which are continuing. In all three areas we are extremely active at present.
    Mr. Blaker: Will the right hon. Gentleman assure the American Administration that he welcomes President Carter's confirmation that he proposes to continue his campaign on the subject of human rights? Will he assure the House that, in co-operation with the United States Government and our other partners, we shall do our best to ensure that at Belgrade there is a serious and thorough examination of the record of the parties to the Helsinki agreement on all aspects of the agreement, including human rights?
    Dr. Owen: My position on human rights is well known. I support the stand of the United States Administration. I recognise that it is a very important aspect, but only one of many aspects that will be discussed in Belgrade. We recently had a debate on this matter in the House, when I think that there was a broad measure of agreement that we need to see all parts of the Helsinki
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    Final Act implemented. We shall approach Belgrade in a spirit of trying to ensure that there is full implementation. It will take time, but we are determined to achieve it. The fact that there is a human dimension to détente is one that I fully support.
    Mr. Hugh Jenkins: When my right hon. Friend sees President Carter will he encourage him to think of the human rights of Arabs in Israeli-occupied territory as being equally as important as the human rights of Jews in the Soviet Union?
    Dr. Owen: I know from conversations with President Carter that he is concerned about human rights everywhere in the world and judges the matter on its merits. As his actions have shown, he by no means sees the issue of human rights as being confined to the Soviet and Communist countries. He will look at the matter in the Middle East, the Far East and even in his own country.

    Secretary of State (Engagements)
    Mr. Greville Jannerasked the Secretary of State for Foreign and Commonwealth Affairs whether he will list his official engagements for 15th June.
    Dr. Owen: This morning I attended a meeting of the Commonwealth Heads of Government. I had meetings with the Prime Ministers of Malaysia and Fiji, and with Mr. Joshua Nkomo. I expect to attend a further meeting of Commonwealth Heads of Government this afternoon and the Prime Minister's reception this evening.
    Mr. Janner: When my right hon. Friend meets the Commonwealth Heads of Government later today, will he express to them this House's appreciation of their unanimous and forthright condemnation of the Amin régime in Uganda? Will he accept the appreciation of the House for the part that my right hon. Friend the Prime Minister and he took in encouraging the Heads of Government to reach that decision? Does he not feel that now is the appropriate time for us to cease trading with Uganda, both in respect of the Stansted whisky run and all other trade with this thoroughly racist and atrocious régime?
    Dr. Owen: The world can be in no doubt about our view of President Amin's régime. It is a source of great satisfaction to us all that many Commonwealth leaders have taken such a firm stand on this issue. I am glad that my hon. and learned Friend accepts that the Government's decision to do everything possible to make sure that the Commonwealth came together in London and was able to discuss this has been justified. However, we have no quarrel with the people of Uganda, and it would be a very serious step to attempt to embark on a policy of trade sanctions. [Interruption.] I can assure hon. Members that the situation in Uganda is such that it is worth considering measures, even if we may find them of a very serious nature. I recognise the concern of the House on the question of the Stansted flights, and I am examining the matter.
    Mr. Michael McNair-Wilson: In view of the recognition of the new régime in the Seychelles, do the British Government now have a high commissioner in the Seychelles? Has anybody from the Seychelles played a part in the Commonwealth Conference, other than Mr. Mancham, who is deposed?
    Dr. Owen: We have had a High Commission in the Seychelles and have had one throughout this period. No one from the Seychelles has taken part in the Heads of Government meeting. It would have been open to the new President to nominate somebody. When the matter was discussed in the opening stages of the conference, when the issue was not clear and President Mancham asked to speak to the conference, it was decided that the matter was best dealt with by discussions outside the conference. The Seychelles has not been formally represented, although the position has been kept for it and its name-plate has been left open.
    Mr. Ron Thomas: Will my right hon. Friend spare a little time today to take some effective measures against the sanction-busting by the major oil companies in supplying oil to the illegal régime in Rhodesia, especially in regard to British Petroleum and Shell and British companies which are supplying oil through their intermediaries and subsidiaries in Southern Africa?
    Dr. Owen: As my hon. Friend knows, I established an inquiry, under the powers and provisions provided for this purpose, to look into the allegations that have been made and to see whether there is any evidence on which the Director of Public Prosecutions would then have to decide whether the evidence was such that action could be taken.
    There is no doubt that oil has entered Rhodesia despite the United Nations resolutions, and it is coming through South Africa. The problem is whether it is coming from the subsidiaries of major international companies and whether, under our own national law, we can enforce a control of the subsidiaries of such companies. But these are issues that Mr. Bingham will be looking into in his inquiry.

    Turkey
    Mr. Viggersasked the Secretary of State for Foreign and Commonwealth Affairs if he has any current plans to visit Turkey.
    Mr. Judd: My right hon. Friend has no immediate plans to do so.
    Mr. Viggers: Is the Minister aware of some disenchantment in Turkey resulting from both the British withdrawal of troop commitment to the southern flank of NATO and lack of progress in the European context? What special steps have the Government in mind to take with the new Turkish Government to improve the situation?
    Mr. Judd: I am sure that the hon. Gentleman will know that following the 1974 defence review the Government decided to concentrate the United Kingdom's defence effort in those areas where it could make the most significant contribution. This included the central region, the Eastern Atlantic and the Channel areas. We have, however, offered to carry out—I think this is what the hon. Gentleman has in mind—various compensatory measures of special value to the southern flank. These measures were detailed in the 1975 and 1976 defence White Papers.
    Mr. Townsend: Has the Minister seen a report in The Times today that exports from the northern part of Cyprus to Britain have played a large part in boosting the weak economy of that part of

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    Cyprus? In the light of the recent court case, of which he is aware, concerning Kyrenia hotels, what fresh action will the British Government take over this matter, bearing in mind that we are a guarantor Power for a free and independent Cyprus?
    Mr. Judd: If the hon. Gentleman will put down a Question on that specific issue I shall answer it.
    Mr. Atkinson: Returning to the Minister's original answer, will he offer the House his thoughts about meeting the new Prime Minister, Mr. Ecevit, and perhaps joining with Cyrus Vance of the United States in a series of propositions that should now be put to the new Administration in Turkey concerning the future of Cyprus?
    Will the Minister now welcome the election of the new Government and the coming of Mr. Ecevit? Will he also persuade his right hon. Friend to take some initiatives in arranging an early meeting, so that these discussions can take place?
    Mr. Judd: I can assure my hon. Friend that the Government have high in their priorities effective relations with Turkey, whatever Turkish Government are in power, and we shall welcome Turkish Ministers at any time on visits to the United Kingdom.
    As for Cyprus, we are very glad that the inter-communal talks started in Vienna are continuing in Nicosia, and anything that we can do, with the Nine or with the United States, to bring them to a fruitful conclusion we shall do.

    Namibia
    Mr. Hooleyasked the Secretary of State for Foreign and Commonwealth Affairs if he will propose in the Security Council that a firm date be fixed by the Security Council for the termination of South Africa's illegal occupation of Namibia, and that Chapter VII of the United Nations Charter be invoked if South Africa does not comply.
    The Minister of State, Foreign and Commonwealth Office (Mr. Edward Rowlands): The five Western members of the Security Council are engaged in an initiative to secure the earliest possible independence for Namibia. We believe considerable progress has been made. The
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    timing of South Africa's withdrawal is naturally one of the topics under con-sideration.
    Mr. Hooley: It is useful that the South African Government have abandoned the Turnhalle proposals, and this is a step in the right direction, but does my hon. Friend accept that the patience of the African countries is not infinite? Does he further agree that unless the Western world shows a greater sense of urgency in this matter we shall have a situation as dangerous in Namibia as we have in Central Africa?
    Mr. Rowlands: I agree entirely with my hon. Friend's comment on the patience of the African countries—and the patience of the international community as a whole is not infinite. We are moving with urgency and speed towards trying to find the best possible solution to the situation in Namibia and the earliest possible independence for the country.
    Mr. Rifkind: To what extent are there suggestions from the South African Government that they are willing that any elections in Namibia may be supervised by the five Western Powers instead of by the United Nations?
    Mr. Rowlands: There has been considerable agreement about the United Nations involvement in the elections for a constituent assembly. That is one of the most important steps forward, as it accords very much with the intrinsic criteria laid down in Security Council Resolution No. 385, on which the Western Powers have been making their demands to South Africa.
    Mr. MacFarquhar: What is my hon. Friend's reaction to Dr. Kaunda's proposal that, rather than take the problems of Southern Africa separately, we should take an attitude that views the whole of the Southern African problems, in South Africa, Namibia and Rhodesia?
    Mr. Rowlands: We accept that there is a great inter-relationship between all three problems, but there are special features of each of the problems, as anyone who studies the situation that we face in Rhodesia, or the efforts that we are now making in Namibia, will know. There is an inter-relationship, but every problem relating to Southern Africa has to be the subject of individual efforts.
    Mr. Wall: Will the Minister bear in mind that South Africa subsidises this territory to the tune of 200 million rand a year, and that if South Africa removed its military forces the MPLA and the Cubans would walk in tomorrow?
    Mr. Rowlands: The security of independent and free Namibia is a major issue that is concerning us. I am sure that the South African Government will bring to attention their support to Namibia, and that the international community can also do a lot to help Namibia when it achieves independence.

    Humanitarian Law (Geneva Conference)
    Mr. Robin F. Cookasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Her Majesty's Government's attitude to the Diplomatic Conference on Humanitarian Law currently meeting in Geneva.
    Mr. Luard: The Diplomatic Conference on the Reaffirmation and Development of Humanitarian Law in Armed Conflict has just completed its fourth and final session in Geneva with the adoption by consensus of two protocols additional to the Geneva Conventions of 1949.
    The United Kingdom delegation has played an active and positive rôle throughout the conference and has attempted to ensure that the texts which emerged were sensible, enforceable and widely acceptable.
    The texts adopted raise many complex issues, not only legal but also political and military. Her Majesty's Government will be giving them careful study, in conjunction with our allies, with a view to reaching a fully informed decision on the question of signature and eventual ratification of the protocols.
    Mr. Cook: I welcome the agreement on the two protocols, but will my hon. Friend say what is the Government's attitude towards the resumption of the work of the ad hoc committee on conventional weapons which was unable to reach agreement before the close of the conference? Do the Government accept that the work of the committee in updating the Geneva and The Hague Conventions is long overdue?
    Mr. Luard: The Government see great value in the work of the ad hoc committee on weaponry. As my hon. Friend knows —we have had discussions about the matter—the committee was discussing a number of very important topics. The question of the resumption of the meetings has not yet been decided.
    Mr. Kershaw: Does the Minister agree that the conclusions of the conference were in some way unsatisfactory? When will another opportunity arise for them to be reconsidered by Her Majesty's Government?
    Mr. Luard: I do not accept that the results of the conference were altogether unsatisfactory. Her Majesty's Government have voted in favour of the two new protocols, and I understand the concern that has been expressed in some quarters about certain aspects of the protocols, but in many cases this concern is based on a misunderstanding of the exact meaning of these protocols.

    Rhodesia
    Mr. Blakerasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the latest situation about Rhodesia.
    Mr. Wallasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Rhodesia.
    Mr. Biggs-Davisonasked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a further statement about Rhodesia.
    Mr. Brocklebank-Fowlerasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statement on Rhodesia.
    Dr. Owen: Following my visit to African capitals in April, an Anglo-United States consultative group has held bilateral discussions with the parties in Southern Africa on possible elements in an independence constitution. Its report is being assessed by both Governments, and further consultations are likely soon. I have put in the Library a copy of a statement which I issued at the Commonwealth Heads of Government Meeting describing the latest situation.
    Mr. Blaker: Is it not clear that until there is a greater willingness to agree on the part of the Rhodesian nationalist leaders, the chances of securing a peaceful solution to the constitutional problems of Rhodesia will be much reduced and the possibility that, even if there were a peaceful solution, there may thereafter be continued fighting will be much increased? Can the Foreign Secretary report any progress in securing agreement between the Rhodesian nationalist leaders?
    Dr. Owen: I think that on the constitution it is not too difficult to see a way of getting agreement among the Rhodesian nationalist leaders. The problems there may well be with the Rhodesian Front, but of course the constitution is only one part of the problem. There is the problem of the transitional arrangements for elections, and there is the whole question also of law and order. In addition, we are all trying to ensure the economy of an independent Zimbabwe. All these elements come together in any negotiated settlement, and I am afraid that we shall have to try to reach some agreement with all the parties on all aspects if we are to reach a negotiated settlement.
    Mr. Speaker: Order. I must ask for brief questions and answers, since it is nearly time to turn to EEC matters, but I shall allow the House to finish this Question.
    Mr. Wall: Does the Foreign Secretary not agree that any settlement will need the good will of both black and white in Rhodesia? How will this good will be helped by the Government's unworthy decision to ban the visit to this country of five black and five white crippled children?
    Dr. Owen: As the hon. Gentleman knows, that matter is dealt with under the legislation that was passed in this House, which prohibits all people coming here from the illegal régime. The hon. Gentleman knows the law of the land on this issue. I quite agree with him that the settlement will be achieved if we can reach an understanding between both black and white people who are to live under an independent constitution in Zimbabwe, but I have constantly stressed that there must be consent on both sides in this issue.
    Mr. Biggs-Davison: When the present Chancellor of the Exchequer was Secretary of State for Defence, did he not authorise the pursuit of hostile forces across the Indonesian frontier at the time of the Malaysian confrontation? Why, then, does the right hon. Gentleman condemn the Rhodesian forces for using this means of defending British subjects whom the Government are powerless to help against brutal terrorism?
    Dr. Owen: The hon. Gentleman knows that "hot pursuit" has an international legal meaning and that it is not compatible with an announcement by a general that he intends to stay 50 miles inside another country and to keep his forces there for a matter of some days. This outraged world opinion, quite rightly, and was something that threatened the whole territorial integrity of countries. In no sense is that hot pursuit, and the hon. Gentleman knows that well.
    Mr. Clemitson: May I refer to the inquiry into alleged sanction-breaking by British oil companies? Does my right hon. Friend not think that there has been a long delay in this inquiry starting work? Will the inquiry or any parts of it be held in public?
    Dr. Owen: Under the legislation it is not held in public. In some respects the inquiry is on a narrow point of law. It is not an overall inquiry into the whole question of oil sanctions and the breaking of them. This is one of the issues that have been discussed in the Commonwealth Heads of Government Meeting. Without prejudging the communiqué, I think that they will all address themselves to the opportunity that there may be for a wider look at the whole question of sanction-busting that has gone on for many years.
    Mr. John Davies: Does the Foreign Secretary not agree that with the almost daily reports of murder and escalation of atrocities in Rhodesia the rate and momentum of activity seems to us mani-festly inadequate to bring about the solution that is needed in that country. Will the Government now please take account of our repeated advice to them to consult the people of Rhodesia, in whose hands the decision should rest?
    Hon. Members: How?
    Dr. Owen: The House asks "How?" That is one of the most difficult questions to answer. We have been consulting a very wide cross-section of opinion. I held consultations myself and they have been held recently in the Anglo-United States consultative group. That group will be going again into Rhodesia at the end of this month.
    I agree with the right hon. Gentleman that time is running out in this issue. The violence is escalating and there is a real risk of a serious breakdown of law and order and of a violent solution. Time is not on our side. I can promise the House that I am pushing ahead as fast as is humanly possible, but it is not easy when there are so many disagreements.

    Uganda
    Mr. loan Evansasked the Secretary of State for Foreign and Commonwealth Affairs if he will raise in the United Nations Commission for Human Rights the International Commission of Jurists' reports on the situation in Uganda.
    Mr. Rowlands: The reports of the International Commission of Jurists formed part of the evidence considered by the United Nations Commission on Human Rights at its recent session.
    Mr. Evans: Does my hon. Friend realise that while we on the Government Benches condemn racialism in South Africa, Namibia and Rhodesia, we also condemn events in Uganda? In view of the fact that Idi Amin is now setting himself up as a black Vorster and a black Hitler, what action are the Government proposing to take to end his régime?
    Mr. Rowlands: As my hon. Friend knows, we take a vigorous view in the Human Rights Commission, and an equally vigorous view has been taken in the Commonwealth Conference among many African leaders themselves. Many Commonwealth leaders have stood up to be counted and have spoken bravely and firmly on the question of Amin's behaviour.
    Mr. Ford: Is not the least we can do to cut off President Amin's supplies of whisky?
    Mr. Rowlands: My right hon. Friend has already commented on that. We are looking at the matter.

    Dominica
    Mr. John Huntasked the Secretary of State for Foreign and Commonwealth Affairs if, in the light of the recent Dominica constitutional conference, Her Majesty's Government will agree to the request for a referendum to be held before the island becomes an independent sovereign State.
    Mr. Luard: The conference resulted in substantial agreement on an independence constitution for Dominica. The report will be published in due course.
    We must now allow time for a public debate in Dominica, which I hope will result in agreement on the method of timing of a move to independence.
    Mr. Hunt: May we be told where Her Majesty's Government stand on the specific issue of the referendum? Does the hon. Gentleman agree that it would be helpful to have an up-to-date assessment of public opinion in Dominica on the subject of independence prior to that event? Will he give the House an indication of the Government's feelings and reaction to the request that has been made to this effect by substantial sections of opinion on the island?
    Mr. Luard: The position is that if Her Majesty's Government were to recommend to Parliament that Dominica should proceed to independence, as we are able to do under Section 10 (2) of the West Indies Act, we would need to be assured that the demand for independence was widely shared amongst the population of Dominica. The principle of independence was not really at issue in the independence conference over which I presided only two or three weeks ago. Both the Government party and the Opposition party want independence. The difference between them is only one of timing. We are to have further consultations about this matter. But it seems to us at present that there is very little doubt that the view of most people in Dominica is that they should enjoy independence.

  EUROPEAN COMMUNITY

    Foreign Affairs Council
    Mr. Skinnerasked the Secretary of State for Foreign and Commonwealth Affairs when he next expects to meet

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    other EEC leaders; and if he will make a statement.
    Dr. Owen: The next meeting of the Foreign Affairs Council, which will be the last one under the current United Kingdom Presidency, will be held in Luxembourg on 21st June.
    Mr. Skinner: When my right hon. Friend meets this motley crew, will he tell them that there is a massive majority among the British people who are against Britain's continuing in the Common Market, especially now that it has been revealed that the EEC is to lay its hands, in an emergency, on at least 10 per cent. of British oil? Will he point out to them that on the question of direct elections we find that Common Market democracy is at such a low ebb that in Britain Ministers are gagged on a supposedly free vote and in France they are not even to be allowed to vote?
    Dr. Owen: When I speak to my colleagues in the Foreign Affairs Council—eight of them are elected Members of their own Parliaments and are far from being the motley crew that my hon. Friend describes—I shall be prepared to tell them that this country decided by an overwhelming vote in a referendum that Britain would remain a member of the European Community. I shall tell them that although we may be having disagreements on some issues, such as the common agricultural policy and the common fisheries policy, we shall pursue our disagreements within the framework of the European Community, that we shall uphold our national interests as we have every right to do, but that we shall play a full part in the European Community for many years ahead.
    Mr. Reid: When the right hon. Gentleman next attends a meeting of the Foreign Affairs Council, will he initiate discussions on Scotland's future links with the Communities? In particular, will he tell his European colleagues that when Scotland regains her independence there can be no question of England's carrying on as the United Kingdom's successor State and that both partners in the present Union will have to renegotiate?
    Dr. Owen: Like the majority of Members in this House, I believe in the
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    United Kingdom and I shall continue to speak for it in Brussels or anywhere else.
    Mr. Loyden: Will my right hon. Friend accept from me that describing the CAP as a difference that can be ironed out is to make the understatement of the year? Is he aware that the CAP has been the cause—not exclusively, I agree—of the price increases that housewives in this country must pay, and that it is a situation such as that that has developed a strong anti-Market feeling throughout the country?
    Dr. Owen: I do not deny that one of the reasons for the dissatisfaction with the EEC that is reflected in the opinion polls relates to the effect on food prices. However, I was grateful to my hon. Friend for putting the issue fairly. Not all the food price rises are the result of the CAP, although some of them are. This was always one of the liabilities that we accepted on entry, although we did not accept them as a permanent fact but accepted that we would try to reduce that liability. Most of us always felt that we would prefer a policy other than the CAP. We would have preferred the traditional system introduced in this country in 1947, but we accepted that we would work within the framework of the CAP to try to reform it.
    Mr. Blaker: How will the Foreign Secretary explain to the other Foreign Ministers of the EEC that it is consistent with the British Government's promise to use their best endeavours to secure direct elections for the European Assembly next year that Government Ministers should be allowed to vote against such elections?
    Dr. Owen: It is my view that this will give us a better chance of getting the legislation through the House of Commons. [Interruption.] I mean that quite seriously. This is a constitutional issue for which I suspect there is a majority in this House. That has obviously yet to be proven. I believe that by allowing Members of Parliament to exercise their own independent, free judgment on this issue there is more chance of this legislation being carried through to the statute book. I have no objection to that. I argued within my own party for a free vote on this issue in 1972. I regret that there was not one then, and I am happy that there should be one now.
    Mr. Raphael Tuck: What plans has my right hon. Friend for pressing the EEC leaders to make vital changes in the CAP, which so far has been a disaster for this country, as President de Gaulle forecast it would be?
    Dr. Owen: My right hon. Friend the Minister of Agriculture, who is also responsible for food, has vigorously pursued a policy of trying to get a reform of the CAP. He has done so with my full support. I think that has had some success, but my right hon. Friend would be the first to say that this success is only limited. What we need is a three-to-four-year structural plan for reform, particularly as it affects surplus commodities—milk products, wine, and a number of other things.
    Mr. Hurd: Will the Foreign Secretary elaborate on his extraordinary, obscure and tormenting answer to my hon. Friend the Member for Blackpool, South (Mr. Blaker)? How can he expect his own efforts, which I acknowledge, to be taken at all seriously inside the Community if Government Ministers are allowed to speak, and now, we understand, vote, against Government policy?
    Dr. Owen: The hon. Gentleman talks as if a free vote on this issue is a constitutional innovation. I remind him that when his party was in Government it used a free vote on this issue. I do not know whether it was a genuine free vote or a disguised free vote. I was under the belief that it was a free vote. [Interruption.] If we are now told that it was a free vote for everyone other than Ministers, we can now understand the true status of that vote.

    Audit Court
    Mr. Spearingasked the Secretary of State for Foreign and Commonwealth Affairs under what auspices and to which body the new EEC Audit Court will be accountable.
    Mr. Judd: My right hon. Friend the Chief Secretary explained the position in answer to my hon. Friend's Question on 19th May. The treaty of 22nd July 1975 provides that in the performance of their duties members of the court shall be completely independent and shall neither seek nor take instructions
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    from any Government or from any other body.
    Mr. Spearing: Does my hon. Friend remember that on 19th July, in c. 1413 of Hansard, it became apparent that the existing Audit Board heavily qualified the Community's agricultural accounts and said it had not been able to look at the previous year's accounts and could give no opinion on the management of that fund? If the Audit Court is able to go into the accounts of intervention boards of other countries, as well as the central fund, will it be authorised to do that so that for the first time the agricultural accounts of the Community can be properly looked at and properly audited?
    Mr. Judd: I am sure that my hon. Friend will appreciate that I have not got to hand the precise Hansard reference to which he refers, but I can assure him that the Audit Court will have considerably extended powers over those under which the Audit Board had to operate. This should help in achieving the kind of objective that he has in mind.
    Mr. Marten: Will the Audit Board as reconstituted be as good as our Public Accounts Committee?
    Mr. Judd: Having served for three years on the Public Accounts Committee, I think it would be difficult to find a more effective body anywhere in the world doing that kind of work than our own Public Accounts Committee.

    Council of Ministers (Presidency)
    Sir A. Meyerasked the Secretary of State for Foreign and Commonwealth Affairs what he considers to be his principal achievement during his tenure of his Presidency of the Council of Ministers of the EEC.
    Dr. Owen: I hope to publish in July a White Paper on community affairs during the period of our Presidency of the Council. I would also refer the hon. Gentleman to the speech that I gave in Brussels on 24th May, a copy of which is in the Library.
    Sir A. Meyer: With his outstanding record in this area, is not the right hon. Gentleman dismayed at the way in which so many of his ministerial colleagues, in pursuit of the shortest-term popularity,

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    have thrown away long-term British interests in Europe, have damaged the prospects for European co-operation, and diminished this country's reputation?
    Dr. Owen: I must tell the hon. Gentleman that I come to a completely different conclusion. What has dismayed me more than anything else is that when Ministers have legitimately stood up for national interests, and constantly argued their case as they have every right to do and ought to do in Brussels, this has been attacked by the Opposition Benches as in some way being an illegitimate use of ministerial powers in the Brussels dialogue. I urge the hon. Gentleman to recognise that were we not to argue our case and put it vigorously and firmly in Brussels we would be undermining the whole essence of the European Community.
    Mr. Roy Hughes: Is it not time for the Government to face the reality of membership of the Common Market, which has been an unmitigated disaster? Is it not now legitimate for the Labour Party to go into the next General Election with a specific promise in its manifesto that a future Labour Government will negotiate our withdrawal?
    Dr. Owen: It is perfectly possible for the Labour Government to enter into an election on any manifesto that is agreed between the Cabinet and the National Executive. That is the normal way of drafting a manifesto. It is open to argument whether that would be a recipe for electoral success. In my view it would be a recipe for electoral disaster. I believe—this is a legitimate view, although hon. Members may not agree with it—that the British people do not like a Government or a party to change course only two years after having put the issue to them in a referendum. It may well be that the British people and this Parliament, as they have every right constitutionally to do, may wish to reassess the question of British membership. That is open to them at any time, but I believe that to do so after such a short period would be little short of disastrous.
    Mr. John Davies: I return to the answer that the right hon. Gentleman gave to my hon. Friend the Member for Flint, West (Sir A. Meyer). Does the Foreign Secretary not recognise the difference between defending the national interest within the normal framework of
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    discussion which exists in the Council and developing a situation in which the reaction to the behaviour of this country and the Presidency of the Council is little short of disruptive to our future comportment in the Community?
    Dr. Owen: I recognise that I am as close as anyone in this House to the feeling in the European capitals. I do not believe they hold that view of the British Presidency. I challenge the right hon. Gentleman on that. He would have done the standing of the British Presidency better had he not started to say this after only a couple of months of that Presidency.

    Passports
    Mr. Martenasked the Secretary of State for Foreign and Commonwealth Affairs what is now his estimate of the date when he will introduce the Euro-passport.
    Mr. Judd: It would be premature to make any forecast about the date of introduction of the British passport in the uniform European Community design.
    Mr. Marten: Presumably that would be so, because we have been promised a debate about it. Can the Minister say what are the outstanding areas of difference between his partners in the Community over the provision of this Euro-passport? Why are the Government so obstinate in refusing this House the right to decide the issue? I recognise that we have been offered a debate on the subject, but we have not been offered the right to decide it. That has to be done by the Foreign Minister using his Royal Prerogative. May we not have an agreement from the Government that the House should decide the matter?
    Mr. Judd: On the second part of the question, I recognise the strength of feeling that exists in the House but I have nothing to add to what I said on this at a previous Question Time. On the first part of the hon. Gentleman's question, to be candid, a great deal remains to be agreed. I am sure that the hon. Gentleman will not be altogether discouraged by that. There is a great deal of argument about cover design and the languages to be used inside the passport, and I imagine that it will be some time before we are able to come to a decision.
    Mr. Spearing: If the House is not to decide, and the Government take the decision and advise Her Majesty to exercise or withhold her Prerogative, as would be the constitutional position, are not the Government flouting the control of the House in saying that the executive in Brussels is superior not only to Her Majesty but to this House?
    Mr. Judd: I can assure my hon. Friend that the reason why we give so much priority to having a debate before a decision is made is to enable us to take the views of the House fully into account.

    QUESTION OF PRIVILEGE
    Mr. Speaker: I have given careful consideration to the complaint made yesterday by the hon. Member for Thur-rock (Dr. McDonald) about the terms of a news-letter issued by the Society for the Protection of Unborn Children. I have concluded that the publication does not raise issues such as would justify me in giving precedence over the Orders of the Day to a motion relating to it.
    BILL PRESENTED
      RESTRICTIVE TRADE PRACTICES
      Mr. Secretary Hattersley, supported by Mr. Michael Foot, Mr. Chancellor of the Exchequer, Mr. Secretary Varley, Mr. John Fraser, and Mr. Robert Maclennan, presented a Bill to provide for the disregard of certain matters in determining whether an agreement is one to which the Restrictive Trade Practices Act 1976 applies; 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 133].
BILL PRESENTED
  RESTRICTIVE TRADE PRACTICES
  Mr. Secretary Hattersley, supported by Mr. Michael Foot, Mr. Chancellor of the Exchequer, Mr. Secretary Varley, Mr. John Fraser, and Mr. Robert Maclennan, presented a Bill to provide for the disregard of certain matters in determining whether an agreement is one to which the Restrictive Trade Practices Act 1976 applies; 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 133].

  BUSINESS OF THE HOUSE
  Ordered,
  That, at this day's sitting, Mr. Speaker shall put any Question necessary to dispose of Proceedings on the Second Reading of the New Towns Bill not later than Seven o'clock.—[Mr. Tinn.]

EMPLOYMENT PROTECTION (HOLIDAYS)
3.32 p.m.
Mr. Greville Janner: I beg to move,
That leave be given to bring in a Bill to increase the holiday entitlement of employees and otherwise to amend the law relating to holidays.
The Bill has three separate objects. The first is to provide for a minimum four-week holiday entitlement. The second is to ensure that employees who are dismissed during the course of a year have a pro rata entitlement so that they get a proportion of their holiday pay. Many at present get none. The third is to ban the sort of incredible behaviour such as that exhibited by the Leicestershire County Council in insisting that State schools remain open during the industrial holiday fortnight, thereby forcing parents either to keep children away from school during that fortnight or not to take their children with them when they go on their annual holidays.
It is a surprise to most people to learn that there is no legal right in this country in most cases to any holiday other than the eight statutory days. Only where such a right is secured by contract or where employees are covered by wages council regulations or agricultural wages council regulations are they entitled to certain minimum periods. In all other cases, rights depend totally upon agreement. Although in most cases where unions represent employees agreements have been arrived at which are fair and reasonable, in many cases, even for union members, there is no such agreement in existence. Although the Council of European Communities recommended on 22nd July 1975 that four calendar weeks should be the minimum standard for annual paid holidays by the end of 1978, we have no minimum standard whatsoever.
There have been previous efforts in this House to obtain such minimum rights, and I pay special tribute to my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell), the present Minister responsible for sport, who introduced the Employment (Holiday Extension and Early Retirement) Bill, which, alas, did not reach the statute book.

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I ask, at the start of this annual holiday period for our entire nation, that we should recognise that there are many thousands of workers who will get no money unless they are at work, who take their holidays entirely at their own expense, who very often have entered into employment believing that they were entitled to normal holidays and in fact find that they have none, and who are entitled to rest as well as to work. We in this House have recognised the right to work. We fought for it. There is also a right not to work and to have reasonable holidays with our families.
Secondly, where an employee is dismissed within 26 weeks of the start of his employment, normally he is unprotected against unfair dismissal, and his rights to holiday entitlement depend entirely upon his contract. Probably the majority of contracts of employment, other than those negotiated by large unions, provide that an employee must work for a full year before he acquires his first holiday entitlement. This is wrong and unfair. An employee who has worked so as to earn a holiday entitlement should acquire a pro rata or proportional entitlement for the period that he has worked. An employer may dismiss a person after 24 or 25 weeks and not only remove the employee's rights under the Employment Protection Act in most respects—and certainly the right to unfair dismissal remedies—but also the right to accumulated holiday pay. That, too, is wrong.
In these two respects, I pay tribute to the efforts of a number of unions. I have in mind especially the Amalgamated Union of Engineering Workers whose Leicester District Secretary, Bridget Paton, has told me that
"unless a company is federated to the Employers' Association or recognises the Collective Trade Union National Agreement, they are not required by law to pay other than statutory days of holiday pay."
Although there is provision in the Contracts of Employment Act 1972 that employees should be given written particulars of their terms of service, there are hundreds of thousands of employees who either have none or who do not read them or understand them, or who do not realise that their holiday rights are mutilated and miserable. As Bridget Paton says, there are many small employers
390
who try to evade their duties in respect of contracts of employment, and that
"in smaller unorganised firms people go along and take a job thinking that they are entitled to holiday pay as a matter of course and, when they do not get it, they just leave."
Finally, in certain areas all Over the country there are traditional holiday weeks or fortnights, or wakes weeks or industrial holidays. By tradition, schools in those areas stay closed so that, for the period concerned, employees are able to take their children away on holiday with them. It is surely a basic, sensible and reasonable request to employers not merely that they should close at that time but that they should apply pressure on educational authorities to ensure that the schools in those areas are closed.
By tradition, schools have always closed for the wakes week or the industrial holiday fortnight in every area that I have known. In Leicestershire, since time immemorial, people have taken their children away for the first two weeks of July. Now, with that traditional county Tory lack of understanding of the needs of the cities, the county education authority has decreed that schools in Leicestershire and, in particular, in the city of Leicester must remain open for the first week of the industrial fortnight.
Mr. Terry Walker: Stupid.
Mr. Janner: It is not only stupid, as my hon. Friend the Member for Kings-wood (Mr. Walker) says. It is callous, It is also very bad administration. It forces parents into a disastrous choice. Either they teach their children that school does not matter very much— "Never mind; miss a week and come on holiday with us"—or they give up one of the two weeks of the holiday that they are entitled to enjoy with their children. Either way, it is the kind of decision that we have come to accept is likely to be made by a Tory-dominated county education authority which has not a scrap of under standing of the needs of city schools.
This Bill would require schools to be closed during the traditional fortnight's industrial holiday to enable parents to take their children away with them. This would ban the sort of behaviour that is making a mockery of the Leicestershire Education Authority and that shows why

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education should be brought back within the purview of district councils.
Question put and agreed to.
Bill ordered to be brought in by Mr. Greville Janner, Mr. Tom Bradley, Mr. Dennis Canavan, Mr. Robin F. Cook, Mr. Bruce Grocott, Mr. Doug Hoyle, Mr. James Lamond, Mr. Austin Mitchell, Mr. Nigel Spearing, Mr. Leslie Spriggs, Mr. Edwin Wainwright, and Mr. Ian Wrigglesworth.

EMPLOYMENT PROTECTION (HOLIDAYS)
Mr. Greville Janner accordingly presented a Bill to increase the holiday entitlement of employees and otherwise to amend the law relating to holidays: And the same was read the First time; and ordered to be read a Second time upon Friday 15th July and to be printed. [Bill 134.]
ORDERS OF THE DAY

  NEW TOWNS BILL
  Order for Second Reading read.
  3.42 p.m.
  The Secretary of State for the Environment (Mr. Peter Shore): I beg to move, That the Bill be now read a Second time.
  The Bill seeks the approval of the House to an increase in the current limit on borrowing by development corporations and the Commission for the New Towns. The last such Bill was in 1975 and a further increase is now needed in order that the work of the new towns can continue.
  The practice of setting borrowing limits on new towns allows the House to review from time to time the progress of the new towns and the value which they give in return for the substantial public investment in them. For this reason it is the practice for money Bills to cover the foreseeable need for borrowing for only a fairly short period, say two years or so ahead, thus providing the House with the opportunity for a wide-ranging debate on new town matters. This Bill thus provides a timely and welcome opportunity for such a debate, for which many hon. Members have pressed, following my reappraisal of the new towns programme, which I announced in my statement in the House on 5th April.
  First of all, however, I shall deal with the need for and provisions of the Bill itself. In May last year, when the limit was last raised by order, we estimated that the existing limit of £2,250 million would not be reached until towards the end of this year and that a Bill further to raise the limit would not need to be presented until the autumn. Our present estimate here is that the limit will be exhausted in about September or October.
  This is only a little earlier than we had estimated previously, but it has meant that we have had to come to the House with a new Bill late in this Session rather than very early in the next. Forecasting the rate at which borrowing approvals will be taken up is not easy, but inflation and the recent exceptionally high interest rates have combined

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  to increase expenditure in new towns, as elsewhere, and to bring forward the date at which a new borrowing limit is required.
  These two factors explain why we are seeking the approval of the House in this Bill for an increase of £500 million to £2,750 million in the existing borrowing limit. Following the pattern of the previous New Towns Act of 1975, this Bill also provides for a further increase of £500 million in the limit to be made by order. Such an order will require approval by affirmative resolution of the House.
  In my statement to the House of 5th April I outlined my proposals for the reshaping of the programmes for the third generation of new towns. In the longer term this can be expected to produce substantial savings in capital expenditure by development corporations. This is being assessed in detail as part of my present consultations about their revised targets. However, these savings will not begin to accrue for some years, and for many reasons we need to keep up the present momentum in the development of these towns even though the ultimate targets for new town growth have been substantially reduced. I do, however, expect that it will be possible to make some savings in the earlier years providing an opportunity for redeployment of about £10 million in 1978–79 and £20 million per year thereafter.
  Clearly, the spending of money on the scale implied by the proposed borrowing limits must be justified by the value which new towns represent to the country as a whole. An investment programme of this size cannot expect to produce its financial returns in the short term, but some of the earlier towns have already produced surpluses, which have accrued to the Exchequer, and thus make a return on the money and faith which have been put into them.
  But, just as the investment in new towns is not only in bricks and mortar, roads and factories, but in the people who make them working communities, so the return to society at large is not simply a matter of financial surpluses. It is also to be seen in the improved living conditions for their residents, the jobs which have been provided, and the
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  contribution which the commercial and industrial activity in new towns makes to the economy of the country as a whole. But I think that the whole House will agree that the record of our new towns is one of solid and lasting achievement for the pioneering role in which they have won international respect.
  The measure of their achievement is in the 280,000 houses they have built or assisted others to build and in the 200,000 industrial jobs they helped to create, often in the new and expanding high technology industries of the future. The measure, too, is in the social infrastructure of shops and schools, recreational and community amenities, provided because they are necessary to weld the many people of widely different backgrounds into working communities which can continue to develop and respond to their changing needs.
  The new towns have an important role in catering for the elderly and the disadvantaged members of the community. Their record in the provision of housing for old people is creditable, perhaps less so for the disabled, although it is improving. In my discussions with development corporations I have made it clear that I am looking to the new towns to reinforce their efforts in this direction.
  I also hope to see an increase in the number of people in new towns owning their own homes. Development corporations are free to make land available to private builders building houses for sale, and in 1976 land was made available in 19 out of the 28 new towns in Great Britain.
  I expect to see more private house building, especially in the six third-generation towns that will go on building well into the 1980s. I hope that private firms will take the opportunities that are available to them in these towns.
  Mr. Stanley Newens: Will the Secretary of State place on record that at the same time the priority in new towns must be in the provision of homes for those who are most in need? It is not desirable to sell off homes while there are long waiting lists of people who have no means of getting a mortgage. It is important, accordingly, to give priority to those in need—those who are only able to get into rented accommodation.
  Mr. Shore: I understand that point very well. I am just coming to the part of my speech that touches on that. The Government's attitude to the sale of new town houses was set out in May of last year by my right hon. Friend who is now Minister of Agriculture. Under this we agreed to receive applications for general permission to sell whenever the waiting period for houses to rent for the main categories of tenant was three months or less. This is a carefully considered approach of balancing the need for rented houses with the desire of many to become owner-occupiers.
  Fourteen corporations in Great Britain have recently applied for permission to sell rented houses and permission has been given in each case. An application from the Commission for the New Towns in respect of its four towns is currently before the Department. In the remaining 10 towns the view has so far been taken that the demand for rented houses is such that sales cannot be resumed. This balance precisely reflects the assessment by the new towns, in conjunction with the Department, of the actual need in each individual new town.
  Mr. Peter Hordern: I thought that the Minister said that he had received an application from the Commission for the New Towns covering Crawley, Hatfield, Hemel Hempstead and Welwyn. But those are first-generation towns with long waiting lists. Is the right hon. Gentleman saying that the Commission, in the knowledge of the Minister's remarks last year about the length of waiting lists, should still feel it right to sell houses to existing tenants?
  Mr. Shore: We have had an application in that respect, although the detailed proposals for each of the new towns will differ. We are considering the matter. Obviously the case as advanced will reflect the situation in the new towns.
  In some of the earlier towns the work of the development corporation is now substantially completed. They are moving towards a more normal situation with the impending transfer of their rented housing and certain other assets to the local authorities for their area. The second and particularly the third-generation towns still have much to do, and it is for this further development that the money which
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  new towns will be authorised by this Bill to borrow will principally be spent.
  But problems and priorities inevitably change with time. During most of the post-war period the problems of the cities have been overcrowding, inefficient and substandard housing, and poor quality environment. The new towns, by making accessible public rented housing and readily available jobs amidst pleasant surroundings beyond the green belts, have enabled people to move away from the congested cities. This requirement still remains, particularly in certain areas of London. In recent years, however, the problems of many of our cities have become those associated not primarily with overcrowding but with the loss of population and employment.
  I know that there are some hon. Members who would like to use the opportunity afforded by this debate to probe the relationship between the problems of inner cities and the growth of our new towns, and indeed I have today published a White Paper giving further details of the Government's policy on the inner cities.
  Mr. Eric Moonman: I am sure that my right hon. Friend will take the opportunity to emphasise that there is no inherent conflict between the new towns and inner city areas; nor is it the case that new towns have created the decay of the inner cities, as I am sure he will agree. No doubt my right hon. Friend will also confirm that only 10 per cent. of the population from inner city areas have moved to the new towns.
  Mr. Shore: I shall be commenting on one or two of those points in my speech, but I should like to take this opportunity of thanking my hon. Friends who represent new town constituencies for their persistent refusal to regard the interests of the new towns as being in conflict with those of the inner cities, but rather to see the essence of the relationship as complementary—a relationship in which the new towns and the problems of the inner cities can be seen together so that the one can assist the other. I am grateful to them for their understanding of that relationship.
  Our policies for inner cities and for new towns must be co-ordinated and what we do in the new towns must take into account our plans and policies for the

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  inner cities. We must, as I have stressed, ensure that those who go to the new towns include a fair share of the unskilled and disadvantaged. We have made a start on this and we intend to do more. We must also take care that the continued growth and prosperity of the new towns is not at the expense of the inner cities.
  The connection between recent changes in the two policies should not be exaggerated. It was a voluntary and unplanned exodus from our cities and not planned decanting to the new towns that accounted for more than 90 per cent. of those leaving the conurbations. Furthermore, my reappraisal of the towns programme was made necessary primarily by radical changes in the forecasts of population growth. A consequence of the review is that the resources released can be put to good use—for example, in the inner city areas—but it would be wrong to suppose that the provision of these resources was a main purpose of the review.
  The third generation of English new towns was launched in the mid-1960s against a background of a projected growth of population in England and Wales to 60 million in 1991 and 66·5 million by the year 2000. On this basis the new towns as originally conceived would have taken about 5 per cent. of the increase. But. as the House knows, there has been a continued decline in the birth rate in recent years. Last year, for the first time, the population of Britain actually went down, and recent projections are that the population will rise by only 2 million—not 11 million— by 1991—to 51 million, and only by another 1 million—to 52 million by the end of the century.
  Population projections are notoriously difficult, but the latest projections are more likely to be correct at least for 1991. Certainly, even if there were now a dramatic upturn in the birth rate, attainment of the mid-60s projection for 1991 is almost—and I choose my words with care—unconceivable.
  Mr. Arthur Jones: Does the right hon. Gentleman see any conflict in the vast resources proposed under the Bill, amounting to £1,000 million, and his announcement that £100 million should be made available for the inner cities and the vast problems in those
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  areas, problems that require solution rather than that there should be expansion of the new towns movement? Will he refer in the remainder of his speech to the use and rolling over of the assets created in the new towns—in other words, the use of existing assets rather than additional resources?
  Mr. Shore: I promised to consider that point and I shall do so. Any question of comparison is vitiated, because we are not comparing like with like. The expenditure figures in the Bill cover the total expenditure on new towns, namely, all the capital programmes, housing programmes, roads and other services. When we talk of a figure of £125 million a year in terms of a programme for the inner cities beginning in 1979–80, we assume that that will continue for a substantial period, because it is a longish-term problem.
  In other words, I am referring to a programme that is additional to the main spending programme by Government Departments, in addition to their housing programmes and to all the expenditure that they undertake, principally with the help of rate support grant and their own local resources. Therefore, it is not a fair comparison. It would be useful to try to obtain a fair basis of comparison in terms of the expenditure on the two separate projects—the new towns on the one hand and the inner cities on the other.
  Offsetting these lower population projections which I have rehearsed is the rate at which households are formed. It will be some 10 years before the household formation rate reflects the lower birth rate since the late 1960s. On top of this overall national situation it has been necessary to take into account demographic changes region by region and the changing needs of the conurbations with which the new towns have traditionally been linked. In the light of their own population decline, some of the major conurbations—London, the West Midlands, Merseyside and Greater Manchester—have revised their own dispersal programmes. Another important factor bearing upon the new towns programme has been the reduction in the amount of mobile industry available to shift to new locations.
  My broad conclusions from all these considerations was that in aggregate

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  there was substantial over-provision in the existing planned programmes of the new towns. Significant extensions of the first- and second-generation new towns would in national terms have been inconsistent with this conclusion—even thought, in the local context, the case seemed strong. Indeed, it was clear that the time had arrived to examine the way in which these new towns could be completed and the development corporations wound up within the next five year, with the responsibility for providing for local needs being transferred to the local authorities.
  The main scope for making reductions in the new towns programme as a whole lay with the third-generation new towns, all of which had the major parts of their programmes still ahead of them. With the exception of Telford, there had been no review of the long-term population targets of these new towns since they were designated. In the case of Telford, the interim target population set in 1975 was, in any event, subject to further review in the context of a review of the regional strategy in the area. At my request, the chairmen of the five new towns in question—I could not talk to Central Lancashire New Town because I had a decision to make about its future at that time—provided detailed information about possible development options and the likely consequences of pursuing them.
  The towns involved were Milton Keynes, Northampton, Peterborough, Telford and Warrington. The evaluation of this information took into account the needs of the area which each new town is serving, the stage and nature of its present development, the best use of expenditure already incurred, the value for money of future expenditure, the extent of commitment to private investors, the view of local authorities as far as they were known and the need to finish up with viable communities.
  I also visited each of the five new towns in order to see at first hand the extent of their development. My aim has been to produce sensible proposals for revised target populations for the five towns in order to provide a basis for public consultation with the development corporations and local authorities and others concerned.
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  These consultations are now well under way. The consultations are thorough and will involve not only the development corporations themselves but all the local authorities involved, host authorities and exporting authorities and those concerned with regional strategic planning. I hope that, on the basis of the results of these consultations, I shall be able to announce to the House new, firm, population targets for the six towns before the Summer Recess.
  Reactions to my statement on 5th April were generally favourable. Most commentators have acknowledged that the dramatic fall in the population forecasts made inevitable some cut-back in the new towns programme. Equally, however, it was recognised that if we had abruptly halted a capital building programme of the size of the new towns, more harm than good could have been caused. Indeed, it seems to be well understood that the new towns have a continuing and valuable role to play for a number of years to come in providing an environment in which people and industry thrive. Particularly well received was the proposal that the new towns should do more to help the inner cities by taking their disadvantaged on a greater scale than hitherto, and the firm intention is to translate this proposal into action. This should go some way to meet criticism that the new towns sap the vitality of the inner cities.
  Mr. Mark Carlisle: The Secretary of State has said that he hopes that by the end of July he will be able to give a clear population target for the other towns, including Warrington. Does that mean also that there will be a reduced population figure and will the Secretary of State look at the existing size of the designated areas and see whether some of those areas should be redefined?
  Mr. Shore: The size of the designated areas must follow the determination of the size of the new towns concerned, I shall have something to say about that, I hope, at the same time as I make the final statement, but we need a little longer to consider the full physical implications of the new population target.
  I should like to say a special word, however, about the reasons for my decision to continue with the development of

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  CLNT. These in many ways reflect views expressed in 1965 by the late Richard Crossman when first announcing the Government's intention to designate a major new town in the area. As well as providing for population overspill from Manchester, he said that the new town
  "'should contribute to the industrial revival of the whole region, and form a new focus for urban renewal"—[Official Report, 24th February 1965; Vol. 707, c. 399.]
  There was a second reason as well as the overspill reason that Crossman emphasised. CLNT is well located geographically for growth and, although the changed demographic picture means there will no longer be any major overspill from either of the region's two conurbations, Manchester and Merseyside, it is still in the interests of the regional economy that industrial investment should be stimulated in the three towns of Chorley, Leyland and Preston, which lie within the new town boundary, and for there to be renewal of the older parts of their urban fabric. These are tasks in which the development corporation can play a substantial and important rôle.
  Nevertheless, changing circumstances made a re-examination necessary of the growth rate originally set for the new town. A major factor is that the population growth in the North-West has been about the smallest of all the regions in England. The best available information on demographic trends, housing need and supply and the likely availability of mobile industry were all carefully considered. It was also necessary to take into account the new infrastructure provided by the corporation, the need to round-off developments it had already started, and the need to facilitate British Leyland's important expansion in the area.
  The House will know that I decided to approve the outline plan in a modified form to provide for a greatly reduced intake of 23,000 people, with the new town's future beyond that subject to consultations with the local authorities concerned and the development corporation. That 23,000 figure compares with an original target figure of 100,000. These consultations are currently in hand and I intend to visit the area on 1st July.
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  I should also like to refer to the Com mission for the New Towns, which since the early 1960s has managed four of the earlier new towns—Crawley, Hatfield, Hemel Hempstead and Welwyn Garden City. I well understand that, with the transfer of the housing to the district councils in all four towns next April, Commission staff are concerned about their future position and prospects. So too, are the staff of those corporations that are expected to be wound up in the next five years who might have expected to secure continued employment with the Commission.
  But over two years ago when we were debating the last New Towns (Money) Bill my right hon. Friend the Member for Deptford (Mr. Silkin) looked forward to the transfer of housing to local authorities and stated that the new rôle of the Commission would lie in the management of the commercial and industrial assets, a statement he reaffirmed in various other debates last year on the New Towns (Amendment) Act 1976 and one that I also confirmed on 6th April in reply to a Question from my hon. Friend the Member for Chorley (Mr. Rodgers).
  I see the Commission for the New Towns continuing to have a vital rôle for the foreseeable future in managing the non-housing assets both of the four towns that are already its responsibility and of further towns as the development corporations are wound up. I forecast in my statement on 5th April that this was likely in at least eight towns within the next five years. Consultations on this have also been put in hand since my statement.
  The Commission will thus have a major task ahead of it. But the task will be different from its present one and will become more specialised. As the local authorities take over the housing in the elder new towns I should like to see them lake over on appropriate terms what I term "community related property"— parks and woodlands and some community centres—property which ought essentially to be a local responsibility and which in old established towns is normally a local responsibility.
  Similarly, I have promised to consider whether, where local authorities wish to acquire commercial and industrial property from the Commission—and have

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  the necessary resources—they should be able to do so. I want to see—and I think many hon. Members on both sides of the House will want to see—local authorities playing an increasing rôle in the older new towns—some of which are already over 30 years old.
  But this will still leave the Commission for the New Towns with an extensive and vital rôle to play for many years ahead—a rôle in managing the great bulk of the industrial and commercial assets of the new towns which have been financed at very considerable Exchequer expense and in respect of which it is right that the Exchequer should get back a proper return on its investment. The Commission has built up valuable expertise in this field and it is our firm intention that it should continue to deploy it in the national interest, performing a complementary task to the increasing rôle of the local authorities in the older new towns.
  I hope that the debate will provide the House with the opportunity to discuss the Government's latest thinking about the rôle of the new towns. Changes in our social and economic circumstances and increasing awareness of new problems have led to a reassessment of the future rôle for our new towns, but I have already made clear that changes would take place gradually and in an orderly way and that there would be no abrupt reversal of strategies. Although the longer-term population targets for the newer new towns will need to be revised considerably, we still see the need for a steady flow of investment in them over the next few years. This Bill will enable that to happen and I commend it to the House accordingly.
  4.12 p.m.
  Mr. Keith Speed: The Bill gives us an opportunity to debate new towns generally and the Government's strategy and it enables those who have new towns in their constituencies to air detailed knowledge and ideas. It is a pity that it is only on such Bills that we get these opportunities, and I shall have more to say about the parliamentary aspect of our relationship with the new towns.
  I thank the Secretary of State for sharing his thoughts about the strategy, but what he said about the expenditure
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  of £1,000 million was rather fleeting and we shall wish to go into the whole question of the funding of new town expenditure. The right hon. Gentleman glossed over this point and it was only a question from my hon. Friend the Member for Daventry (Mr. Jones), who apologises that he has had to leave the Chamber to chair a Select Committee, that prompted the Secretary of State to touch on any alternative.
  New towns and their development are now in a period of considerable change. It is not their fault and it is due not to any failure or shortcoming on their part but rather to population and social changes. I am glad that planners, whether family or demographic, are proved wrong from time to time and that we get these changes that show that human spirit can emerge triumphant over planners.
  This has meant that many grandiose plans of Governments of all political persuasions in the past 10 or 15 years have had to be cut back, and this coincides with our facing severe economic problems and a severe constraint on public expenditure.
  There has already been much talk, and I suspect that there will be a great deal more, about the problems of inner cities and the London docklands. I hope that it will not go by default that there are substantial problems of urban decay—perhaps on a smaller scale, but just as important to the people involved—in our smaller towns and cities that are not in large urban areas. I am thinking particularly of North-East Lancashire, parts of the Midlands, the Potteries and elsewhere. When talking about resources, which must inevitably be limited, and applying those resources, whether money or expertise, to the inner cities, we must remember that there are other parts of England with similar problems that must not be neglected.
  We broadly accepted and welcomed the Secretary of State's announcement two years ago of a substantial downward revision of the population targets for new towns. It was realistic and took account of the true facts of life. We also accept that it would be a nonsense for new towns such as Milton Keynes and Telford that have a substantial existing intrastructure investment to have it suddenly cut off, leaving roads and sewers all over the North Buckinghamshire countryside with

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  no jobs or people to take advantage of them. My hon. Friend the Member for Buckingham (Mr. Benyon) has been assiduous in making representations to us that this would be a nonsense, and he is right.
  Clearly we must consider what the Secretary of State has said about the Central Lancashire New Town. I was in the area at the end of March, and the local authorities there have mixed views. I listened to the Secretary of State with interest, and I appreciate the problems of British Leyland and the industrial regeneration of that part of Lancashire, but I wonder —and I put it no higher than that— whether the revised population target of 23,000 is the best decision. I am not entirely convinced that it is and I shall listen with interest to the views of hon. Members on this matter.
  Mr. Moonman: I understand the hon. Gentleman's reluctance to accept some of the Secretary of State's proposals, but this is a viable project involving a considerable number of people. The hon. Gentleman represents the Opposition and if he is unhappy about the proposed solution, what would be his alternative?
  Mr. Speed: I am not sure that it is a viable project. I have yet to see figures to show that it is. The original project envisaged a population of well over 100,000 and was very much bigger altogether. I have not seen figures to show whether the new proposal is viable. Looking at the problems of Liverpool and the enormous area there that has infrastructure—the whole site looks like the scene of a blitz—the south docks in Liverpool, certain parts of Manchester and the Warrington and Runcorn new towns, that are expanding at a much slower rate under the new plans, I wonder whether we are not making over-provision. If I were to be brutally frank, I should have to say that the top priority from the social point of view must be Liverpool.
  Mr. George Rodgers: I represent the area concerned, and although I appreciate the hon. Gentleman's arguments, the local authorities in the designated areas—Chorley, South Ribble, Preston and the Lancashire County Council—all of which are Torycontrolled, are in favour of the revised project.
  Mr. Speed: I know that there are mixed views among the local authorities in the area because they have been put to me. I am not being dogmatic. I merely wish to pose a number of questions about whether the substantial downward revision is the right solution. My view—and this must be a subjective judgment—is that the top priority in this area must be Liverpool and what has to be done there.
  Turning to the detailed provisions of the Bill, it appears to increase the borrowing powers by about 44 per cent. In a debate of three hours and 10 minutes, we have to discuss a public expenditure increase of £1,000 million by way of two tranches of £500 million. This is a great deal of money. It is not Government money; it is the money of our constituents and the taxpayers generally. My hon. Friend the Member for Horsham and Crawley (Mr. Hordern), who is to wind up the debate for the Opposition, will have more to say about the public expenditure aspects.
  We are critical of the Bill, and I shall invite the House to reject it because we believe that the Government are seeking the easy way out in financing their future new town expenditure. I hope that my hon. Friends and I have said enough to show that we are not anti-new towns, but we believe that by bringing the Bill forward in this form the Government are not helping new towns to make the best use of resources or to have money at the most advantageous rates.
  First, the increase in the borrowing power is massive, and the borrowing will come from the National Loans Fund. The Government seem to have set their face firmly against other forms of financing, certainly at present. The right hon. Gentleman, in answer to my hon. Friend the Member for Daventry, said that he was looking at this matter, but the fact is that in August 1975, the Expenditure Committee, in paragraph 68 and 70 of its Thirteenth Report, said specifically that there should be much greater flexibility in regard to new town borrowings. This could save the new towns, as it saves local authorities, considerable sums of money.
  I should like to know why the Government have apparently set their face against that greater flexibility. It may be

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  a Treasury argument. It may be an argument from the right hon. Gentleman's own Department. I do not know which. But, certainly, the Select Committee advanced a strong argument, and the local authorities accept that great sums of money can be saved by borrowing in a flexible way, choosing the appropriate moment and using the various means of the money market. In my view, this should be extended to new town borrowings.
  But there is another way, and that involves the assets and funding of the new towns themselves at the moment. We all know that the amount of money which will be available for new towns, for inner cities, for urban renewal, for dereliction and all the other purposes will be limited. I am sure that the Secretary of State could have put in much greater bids than the money which he will get. That being so, it seems to me that we must look carefully at the way we raise this money.
  Why should we not do what companies have to do when faced with a situation of this kind? They look at their assets to see whether some can be released and to see whether money can be rolled over in order to provide finance for future expansion plans. We believe that free enterprise, both in the individual sense of the householder, shopkeeper or whatever it may be and in the larger sense of companies and pension funds, could and should now play a much more dynamic ô in financing the new towns.
  I am told—I shall be grateful if the Minister will correct me if I am wrong— that Telford New Town, for example, had businesses which wished to set up there and wished to buy industrial sites on a freehold basis but were not allowed to do so. This seems unfortunate because it denies businesses the sites they wanted in the area and it denies Telford money which, presumably, could help it. That is a small example, but it highlights what seems to be a general problem.
  Mr. Gerry Fowler: I suspect that what the hon. Gentleman is discussing is not a small but a tiny example. Can he tell us about the example to which he refers?
  Mr. Speed: I cannot give specific details, but I have it on firm authority
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  that there were several businesses which wanted to buy freeholds. They are prevented from doing so, not by the development corporation but by the Department of the Environment. If the Department says that it is possible for businesses to purchase freehold sites in all these new towns, I shall be the first to say that that is fine, but I believe it not to be so.
  However, the matter goes further than that, and I should not for a moment argue that such a move would by itself solve the new towns' problems. On the other hand, I certainly argue that by having a much more dramatic policy for making use of new town assets, releasing or selling assets and rolling over their finance, we should not need to have a Bill of this type before the House asking for a further £1,000 million from public funds over the next few years to fund the new towns. On both questions—on the question of existing methods of borrowing and on the question of new methods of financing and releasing assets—there have been criticisms of the Government, and the Government have not met those criticisms.
  On the other aspect of the matter, the right hon. Gentleman said, if I understood him correctly, that the reduced programme that he announced two months ago will mean savings of about £10 million in the first year and £20 million in the next. I presume that the £20 million will eventually grow over the programme which had been expected, because the reductions are quite substantial and these seem to me to be rather small sums of money. Perhaps the Minister could expand on that in winding up the debate.
  On the question of expenditure priorities as between inner city areas and urban renewal and the new towns, the Secretary of State has already said that he would like to look at the matter to see whether he can produce some figures so that the House and the country may have a fairer and more realistic view of what is being done. I know about all the problems of rate support grant, housing subsidies and the many other things which must be taken into account, but I think that that would be extremely helpful.
  However, the reason for our disappointment—indeed, more than disappointment, since we intend to vote against the Bill to night—was the attitude expressed by the Under-Secretary of State, who, I

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  believe, will be winding up the debate for the Government, when he replied to Questions on 18th May. I have to refer here to one of the mammoth tomes of photocopied pages which we have to use because we do not yet have the printed Hansard, and I quote from page 28. The point was put very fairly to the hon. Gentleman by my hon. Friend the Member for Hove (Mr. Sainsbury), who referred to the very considerable assets now involved in the new towns, running to many millions of square feet of industrial space, office space and shop space.
  When asked whether there was to be an early valuation of these assets, the Under-Secretary of State replied:
  "It would be an expensive job to undertake a full revaluation of assets. The purpose of revaluing them presumably is to sell them. That is not the Government's present intention. Therefore, I do not see the purpose in proposing it."
  Then, in reply to his hon. Friend the Member for Hemel Hempstead (Mr. Corbett), he said:
  "I can only repeat that this"—
  this being the new towns' assets—
  "is a sound investment of public money. In that respect I would be totally opposed to the sale of such sound investments."
  Two points arise there. First, it appears to us that the Government have totally set their mind against disposing of assets in any way which could help the funding. Second, and more important, how does the Minister know that it is a sound investment unless he has an up-to-date revaluation? If a revaluation showed that the return was extremely low, it might not be a sound investment. Indeed, there might be a great deal of sense in selling the assets anyway, irrespective of the funding arguments in relation to the new towns.
  I come now to a number of questions which I hope the Minister will answer, because they are germane to this whole issue. First, for how long does he expect the two tranches of £500 million covered by the Bill to last? In other words, what are the present expenditure trends?
  Second, if the Bill were not to be enacted—this is always possible; there could be a General Election or something else which stopped it—the present limits would be reached in two or three months, so what would be the situation
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  then? Presumably, there is some contingency provision.
  Third, notwithstanding his rather negative attitude on 18th May, I think that it would be helpful if the Minister told us what he regards, or what his Department and his advisers regard, as a realistic estimate of the current value of the new town assets.
  Mr. Leo Abse: As I understand it, the hon. Gentleman is seeking a revaluation in order that this publicly owned property should be sold. If the revaluation shows that it was a poor investment or an inadequate investment, what does he propose? Is it intended that the assets should be sold at heavy losses to speculators outside? Is that the programme which he is proposing?
  Mr. Speed: The hon. Gentleman gave the game away when he used the emotive term "speculators". I am not proposing that at all. What I am proposing is that the assets would be divided into a number of different types. First, there would be the easily realisable assets, even down to such an individual asset as a house which an owner-occupier could buy. My hon. Friend the Member for Horsham and Crawley put an interesting question to the Secretary of State about that, but there was no adequate reply.
  Second, there are those assets which could be sold on a longer-term properly organised marketable basis. I shall be honest with the hon. Gentleman here, and I think that the Minister will agree: I believe that the assets now have a very high value, and it would probably make a great deal of sense if some of them were sold off. That would go a long way towards funding the £1,000 million which we are discussing.
  Third, there are the very long-term assets in regard to which there would be no question of sale, for one reason or another. But until we embark on this exercise no one really knows, and I am asking the Minister to give us a view about that. If there is still to be no revaluation, we must, with respect, have a better reply from the Minister than the one he gave at Question Time a month ago.
  Next, I hope that the Minister will be good enough to tell us what meaningful steps the Government have taken now—

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  it is no good the Secretary of State merely saying that he is still considering it—to change the method of finance. He should be looking at the alternatives and at what the Expenditure Committee said. We should be given some idea about that.
  There is also the question of demographic changes. I must ask the Secretary of State about a matter that must be at the back of the Government's thinking in view of the down-grading of the population targets. We read in today's national newspapers that in eight years' time 2½ million fewer children will be in our primary and secondary schools. It has also been reported from time to time that by mid-1980 there will be a substantial surplus of houses.
  These two facts—if they are facts— must have been borne in mind by the Government. Does the Secretary of State envisage that there will be a further downturn in the population targets to match a static, if not falling, population? I appreciate the difficulties of anticipating these matters, but a reply from the Minister would be helpful.
  My last question has not yet been mentioned but it is germane to the debate. How do the Government see the overspill agreements with the expanding towns, particularly around London? They have played a significant part in helping London and Birmingham, for instance, to deal with the population problem. The trouble is that although the letter of the law may still be the law, the spirit has largely evaporated and neither of the main political parties in London is prepared to export populations. I represent an expanding town and I have therefore an interest in the problem. It would be helpful if the Minister could say how he sees the problem in the context of the new towns.
  I turn to the question of parliamentary control. We face a problem in that respect. The hon. Member for Hemel Hempstead has raised this subject at Question Time on several occasions. The problem of democratic control must concern the House. Locally, democratic control is exercised in local elections. In the House we have debates every year or so when we may briefly discuss new towns. We cannot go much further than that. Each new town development corporation has to lay with the Secretary of State its
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  account and report. I should like to see at least in the regional committees of the House and better still in the Chamber, a full day's debate on those reports. Hon. Members could then express their views and they could be read by those who run the corporations. It would result in a more open debate than we have had in the past. We could do more about transport and new towns, which are controversial subjects in a non-party political sense.
  Large sums of money are spent on the new towns and many thousands of people are involved. Yet the House has not played a full part in the development of the new towns. I hope that the Minister will accept the principle of my suggestion. The idea should commend itself to the House.
  Mr. Newens: I regard the hon. Member's idea as desirable. He has made a number of critical comments about certain powers. Before he sits down will he make clear what is the Opposition's policy towards the financing of new towns? If the House opposed the Bill today would that not cut off all finance to the new towns, for a period of time at least, and result in redundancies and abandoning of plans?
  Would the hon. Member also make clear what he intends to do about selling off new town houses? Does he object to my right hon. Friend's policy? Does he wish to sell off new town houses regardless of the waiting list of people who are desperate for accommodation?
  Mr. Speed: We have made our policy on the thon. Member's last question quite clear. My hon. Friend will deal with all those matters later.
  We resist the Bill not because we are anti-new towns or because we do not understand that they have ongoing commitments for which money is needed. I am critical of the overall strategic parliamentary control of the new towns. We believe that an opportunity is provided by the Select Committee Report for the Government to be more flexible in dealing with borrowing. The Government have spurned the suggestion in the report, which has been with the Secretary of State for nearly two years.
  Another aspect of the borrowing problem is that we believe that there are commercial and industrial assets for which

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  people would be prepared to pay a reasonable price. We are talking about the money in pension funds, some of which will belong to trade unions. Let us not use emotive terms such as "speculators". This would produce a fresh injection of new, free enterprise money into the system and the Government would not have to come back for more money at a time when public expenditure constraints are upon us all.
  We are not saying that there should be no money or that there should be massive redundancies. We are saying that the Government have again taken the easy way out. They have been shown the way forward by the Select Committee, but they have set their faces firmly against those ideas. That is why we shall show our displeasure by voting against the Bill.
  Mr. Deputy Speaker (Sir Myer Galpern): I should tell the House that Mr. Speaker has asked me to make an appeal for brevity. The debate is to be concluded at 7 pm. I hope that hon. Members will bear in mind that if those who are called to speak fail to exercise self-discipline on the length of their speeches, it will not be possible to accommodate all those who are anxious to participate in the debate.
  4.38 p.m.
  Mr. Leo Abse: I shall endeavour to conform with your direction, Mr. Deputy Speaker.
  The people in the new town of Cwmbran will have noticed with interest the curious speech made by the Tory spokesman who approved of the goal lucidly expressed by the Secretary of State but at the same time sought to deny the means by which that goal might be reached. The people of Cwmbran will realise that if, alas, we ever have a Conservative Government it will be their intention to put on sale all the publicly owned assets that have been carefully husbanded over so many years. They will recognise that because those assets are showing an increased value—as the Conservative spokesman acknowledged—the Tories will start selling them off. They will sell factories, shopping and commercial centres, all of which are owned by the community.
  We must be grateful to the Opposition spokesman for spelling out so clearly and explicitly that he would put Cwmbran
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  and other new towns on the market to be purchased by whatever speculators come along.
  I am particularly concerned about the situation in Wales. The Secretary of State patiently explained that the belief that the main purpose of his statement lay in his concern for the inner town areas was to no small degree mistaken and that what was weighing fundamentally in his mind in his recent policy statements was the demographic factor. Nevertheless, we are all aware that he rightly has in mind the urgent needs of the inner town areas.
  Those of us who have had the benefits of the new towns all recognise how clamorous are those needs, and how dangerous it would be to ignore the needs of the inner town areas. But, of course, as has been intimated already in the debate, it is not enough to talk in broad generalisations. It is important that we examine, case by case, each individual town, and within the Principality we have a very special and very real problem.
  The Secretary of State is too well aware of the condition of the housing stock of Wales, particularly of South Wales and its valleys, to have any illusions about the position. At present in Wales we have a housing stock half of which was built before 1919. The Under-Secretary of State for Wales who is at present on the Front Bench—my hon. Friend the Member for Rhondda (Mr. Jones)—will know, as he pointed out not so very long ago, that within his constituency, if the improvement work in old stock were to continue at the rate that it has been continuing during recent years, it would take 50 years before those older houses had the intended improvements completed.
  The fact is that my hon. Friend's constituency in the Rhondda is a microcosm of whole valley communities, such as the community of my hon. and learned Friend the Member for Abertillery (Mr. Thomas), my own and all those inside Gwent. Therefore, having, as we have, so high a rate of increase in the number of unfit houses in Wales—probably about 150,000—the one new town that we have has made a particular and very special contribution to the needs of the Principality.
  The truth is that Cwmbran New Town is a veritable oasis amidst a wilderness of old and often unfit houses in the valleys of Gwent. Therefore, if there

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  were any suggestion that even the modest proposals that are now being considered by the Minister concerning an expansion of the designated area—modest proposals realistically presented by the development corporation, recognising the realities, economic and otherwise, and recognising the demographic factors —were to be in any way rebuffed, it would be grievously interpreted inside the Principality. It would mean that Wales would be put at a very serious disadvantage as compared with England and Scotland in relation to new town funds, as England would still have second-generation new towns and Scotland too, and have new towns completed as originally planned, whereas Wales would have only a very small project at Newtown.
  Therefore, I am putting a special plea that there should be an avoidance of any action that would affect the small increase in the designated area that is now being considered and the comparatively small number of houses and new factory sites which it is intended to place upon that area. I urge the Minister to bear in mind the reverberations that would go right throughout the Principality if it were felt that Wales was being ignored and that inner town areas in England were getting a special preference that was being denied to those who are so keenly aware of the wide extent of obsolescent housing inside our old valleys.
  I acknowledge the demographic factors nationally, but, of course, one has to examine the particular and individual situation. Inside Cwmbran new town we have housed young married couples with children from the beginning. The age profile of the town is far younger than the national average. Children are leaving school and will for some years continue to leave school in greater numbers than the natural wastage of population through retirement and death. As a consequence, the population, in particular the labour force, will continue to increase materially in the next decade, and unless for the whole of that period the development at Cwmbran continues there will be a shortage of jobs and homes to meet the needs of the increased population.
  I am concerned that in an area such as Gwent there must be mobility of
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  labour, because of the very fact that in the tops of our valleys great industries are inevitably known now to have to need considerable unloading of existing labour. Whether desirable or not, there has to be mobility into other areas in the southern parts of our valleys, in areas such as the new town. It is important that we have inside the new town at least this modest contribution, to make certain that those people who are at present travelling and will in the future travel a great deal into the new town should have the opportunity of having homes in the new town.
  But, no less important, there should be no betrayal of the second generation of those in Cwmbran New Town, in comparison with what is taking place in Scotland and England.
  What has been requested is a very modest demand indeed. It is something that can largely be encompassed or serviced by the existing amenities, and it would indeed be a considerable waste if the designated area as proposed and as originally canvassed by the Secretary of State for Wales did not in fact come about.
  I hope that the decision will be taken speedily now. We have waited for a very long time. There is inevitably restiveness amongst the staff, who do not know their own future. They are a dedicated staff, who have done considerable work there, often splendid work. I trust that the indecision that was necessary while consideration was being given will now come to an end and that there can be a certainty about what is likely to take place.
  I add one further comment. I ask the Secretary of State to consider this matter in relation not only to Cwmbran but to other new towns. I ask him to consider the state of housing in Wales and the lack of capacity of so many of the local authorities to be able to match up to the demands placed upon them, to deal with the acute problems in Wales.
  Mr. Jeffrey Thomas: Does my hon. Friend also agree—I do not for a moment underestimate the problem—that the position would be immeasurably better throughout the whole of Wales if local authorities in Wales spent all the money that has been made available for housing?
  Mr. Abse: My hon. and learned Friend has pinpointed part of the problem, and it helps me to move into the point that I was making. The very size of the problem and the lack of capacity—which my hon. and learned Friend is indicating —on the part of the local authorities means, in my view, that it would be tragic if a development corporation were wound up and all its considerable sophistication and expertise in Wales were totally dissipated, as a result of the existing statutory limitations upon the functions of development corporations preventing its operating outside designated areas. The whole of Gwent, as I am sure my hon. and learned Friend would agree, and many parts of South Wales, would benefit considerably if assistance by the development corporation could be given to local authorities which are not able to do the tasks that we would like them to do. All that expertise of the development corporation should be placed at their disposal.
  It will be highly unfortunate if a time comes when a development corporation that has shown its excellence in its standards of housing and design, and has got together a good team, is completely dissipated, with the consequence that all the work that is needed to be done in Abertillery, Pontypool, the Rhondda and many other areas does not have the assistance that could be given.
  Surely we should allow sophisticated development corporations to tackle problems outside designated areas. We should not be so hidebound by our existing statute that corporations are inhibited from doing something that would be welcomed by most sensitive local authorities. I am sure that that would be welcomed by those who represent constituencies in the Principality.
  Having borne in mind your injunction, Mr. Deputy Speaker, I trust that the briefness of my plea for Cwmbran New Town will not mean in any way that the anxieties that exist there and within the Principality—anxieties that Wales might be disadvantaged—will be thought to be unreal. There are considerable anxieties, but in view of the realism of the demand to expand the designated area that is being made they could be removed and a full understanding achieved. Even if the more grandiose schemes cannot be met—for example, we
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  hoped that Cwmbran could grow to 75,000 people and not 45,000—at least the modest target that is presented should be met, so that the second generation of Cwmbran will know that it has not been let down by our Government.
  4.52 p.m.
  Mr. W. Benyon: I should like to use the opportunity of this short debate to indicate the disquiet that I and many others feel about one particular view of the new towns.
  I am grateful to my hon. Friend the Member for Ashford (Mr. Speed) for what he has said about Milton Keynes and new towns in general. To some extent I was also reassured by what the Secretary of State for the Environment said about the issue that I wish to raise—namely the relationship between new towns and the inner city areas.
  There is a danger that we are facing a typical British sequence of events. At the very moment that we have achieved a major success, a situation which is not widespread in our economy at present, and just as we have produced something which is the envy of the rest of the world —in any other country of the Western world our new towns would be lauded abroad as a great success both economically and socially—we are turning on this achievement and using it as a whipping boy for the deficiencies in the centres of our large conurbations.
  Obviously, we all support the idea of city-centre regeneration. The decay has gone far too far. However, it is not true to say that new towns are depriving the city centres of finance on the one hand and jobs on the other. The last study carried out in relation to London showed that 70 per cent. of the loss of jobs in London were jobs that vanished and did not reappear anywhere else. It indicated that 20 per cent. of them moved to areas which were unplanned. They were not new towns or expanded towns. Only 10 per cent. of them moved to new and expanded towns. The number of jobs that the new towns have taken from London is very small.
  If we want to attract investment from home sources and overseas sources, the new towns, with their planned environments, modern housing and low-cost industrial sites, have a vital rôle to play.

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  Only yesterday I was talking to an industrialist in Milton Keynes. Incidentally, he had to wait five years before he obtained his industrial development certificate to allow him to move to the area. He told me that when he and his fellow directors had to decide where they were going to go, they were not moved by investment grants or the cost of the site but were influenced entirely by financial and commercial considerations as to where they should put their new plant.
  This is relevant in relation to dockland. The regeneration of the inner city areas, especially dockland, will take a considerable time. I see this regeneration as being a very gradual process. That is borne out by what the Secretary of State said about the financial assistance that is being given to these areas in the coming year. I emphasise that new towns are not in competition with the city centre areas. Both are necessary and both have their part to play.
  I ask the Under-Secretary of State to answer two specific questions that are worrying local authorities in my area concerning the handover procedure, when it comes, for the third generation of new towns. Obviously, the first and second-generation towns have grown up since the war. Their rent and salary levels are roughly the same as the levels of the local authority that will receive them. That will not be the case for the third generation.
  In my area, the existing local authority has housing that it has controlled for a long time. It has produced a rent policy and a rent level that is below the level that exists in the new town. That discrepancy will widen and not close as time passes, especially if inflation continues. When the takeover takes place, will the receiving authority be allowed to make the case that in respect of salary and rent levels no burden should fall on the existing ratepayers of the receiving authority? Is this taken into account by the Secretary of State in arranging the financial formula at the time of handover?
  I entirely agree that the method of financing new towns needs changing. At present, all the borrowing for new towns is at high rates of interest over 60 years. The net result is that the new towns are subsidising the Treasury, which does not borrow on the same time scale. There is a pressing need for the flexibility to which
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  my hon. Friend the Member for Ashford referred. There is a need to borrow short and to roll over the assets. My hon. Friend need have no worry about the strictures that came from the hon. Member for Pontypool (Mr. Abse). It is understood that enormous assets are available that can be used more productively. Clearly, BP has shown us the way. We want to encourage investment by the private sector in all its forms. In my new town, for example, an investment of £25 million has already been made by the Post Office Pension Fund. That is something that should be encouraged.
  There is a growing need for a new method of controlling the day-to-day finances of new towns. There should be more emphasis on a block grant without the restrictions of the yardstick. There is no need for organisations with the expertise of the corporations to be going backwards and forwards to the Department of the Environment to discuss small aspects of contracts. Such matters could be conducted much more efficiently.
  The more that I see of new towns— this goes for many other aspects of our economic life—the more I see the rôle of the State as priming the pump, to get things started and then to allow private enterprise and initiative in housing, commerce and industry to take over and make new towns a success in their own right.
  5.0 p.m.
  Mr. Gerry Fowler: Like my hon. Friend the Member for Pontypool (Mr. Abse), I have been horrified to learn today of the Opposition's attitude to new towns. The hon. Member for Buckingham (Mr. Benyon) referred to "priming the pump". It was a Conservative Government who established the precursor to my new town of Telford, namely, Dawley New Town, in 1963. They did so deliberately on an area of derelict land where there was considerable social deprivation and with full recognition of the fact that, but for the establishment of a new town, with the long-term provision of public funds, there was not the slightest chance of new industry or people moving into the area. That new town is now making a substantial contribution to the industrial and population needs of the West Midlands—partly, I freely confess, because of the foresight of a previous Conservative Government as

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  well as of my right hon. Friends when this party was last in government.
  How sad has been the decline of the Conservative Party to its present nadir of arguing that what we want to do with new towns is put in money, make a quick profit and sell them off to the private sector, so that there is no more private development, and no more opportunity to attract industry to areas where we want it to go rather than where the speculators would willingly take it.
  I want to talk primarily about the statistical base of the projections which have been made, leading to the statements before Easter about new town policy by my right hon. Friend and his statement about inner city policy. In his White Paper, "Policy for the Inner Cities", my right hon. Friend says:
  "The further development of the English new towns has been determined in the light of lower demographic forecasts".
  He says that this has led to a reduction of the targets for the third generation new towns, adding:
  "but over the next seven or eight years, the momentum of new town development will be substantially maintained".
  I question the precision of the forecast which has led to that reassessment. The passage refers to the substantial maintenance of momentum over the next seven or eight years, yet my right hon. Friend has told us today that, whatever happens to the national population, the number of households will continue to rise for at least the next 10 years.
  That was a very conservative estimate We all know that not only has average household size been falling, for a variety of reasons, but that the birth rate peaked in 1964 and remained at an historically high level throughout the mid-sixties and that new households are generally formed 18 to 30 years after children are born. Those are the peak years for marriage. On that basis alone, it is apparent that what my hon. Friend has said today is the most conservative statement that one can make.
  Certainly the total number of households nationally will not decline over the next 10 years, but it is arguable that even if the total number formed per annum thereafter begins to decline, there may still be for some years thereafter an increase in the total number of house-
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  holds each year, because one is looking there at a net effect, not simply at the rate of household formation. That is likely, but I do not want to argue that it will happen. I merely want to put a question mark against the matter and ask whether my right hon. Friend has sound statistics upon which to base his new policy. There are reasons for doubting it.
  I should like to quote from another recent Government publication by the Central Policy Review Staff, "Population and the Social Services":
  "Forecasts of housing demand and needs cover 10–15 years ahead only, and the crucial factor is the projected number of households rather than simple population projections."
  The report goes on to talk about the projections reflecting
  "a long-term trend towards more people forming separate households".
  In an annex, the report discusses that matter at some length, saying that more important than demographic factors are
  "changes in the proportion of people in each age/sex/marital group who head separate households. For the last 20 years, 'headship' rates have been rising. More married couples head their own household. More single young people live alone or with other young people. More middle-aged single women are living alone. Widowers and widows are much less likely to go to live with relatives. As a result the number of households has been rising much faster than population and the average size of household has been falling, with a large increase in one-person households. This trend, which has been under-estimated in the past, is expected to continue. The causes are not well understood".
  Again, in the main text, the report says:
  "Further work now in this area and on the methodology of forecasting housing demand could avoid further timelags in policy reflecting new trends".
  To that, I can only say, "Hear, hear".
  I strongly suspect that in the announcement of the policy changes that we have witnessed in recent months, not only this House but the Department of the Environment still lack adequate statistical projections upon which to justify the firm policies which it is its tradition and our tradition to devise.
  I draw two conclusions from that. First, it would be highly desirable if these detailed and complex projections, and alternative projections—I do not expect my right hon. Friend to have any firmer knowledge of the future than I do— could be laid before the House, so that we could judge their value. Second, we

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  should try to get away from the notion of fixed long-term target populations for new towns and look rather at forecasting for the next five or six years what the population growth of a given new town should be, but not going firm more than that far ahead or saying whether growth should continue thereafter or what that rate of growth should be, because every time we do that, we are bound either to under-estimate or over-estimate need and either way we cause great difficulties. If we over-estimate demand, we exacerbate the trend which exists in any event —and which has little in origin to do with new towns—for people to leave inner cities and the conurbations generally. If we under-estimate demand, we ensure that, in the long run, people will continue to leave the inner cities, not for new towns and planned development but at the cost of the erosion of the green belt.
  I suspect that the cost of that erosion is a high one to public funds—although this cannot be quantified—in terms of the infrastructure which must be provided for substantial private development within and just beyond the green belt in small towns and large villages. The cost has never been quantified and we have never debated it. I therefore hope for a more flexible approach in future.
  The trouble with lurches in policy can be well seen in the fear of many members of the staff of new town development corporations, not least among the third generation new towns, about their future —justifiably and understandably. As my hon. Friend the Member for Pontypool said, they have built up a considerable expertise. I hope that we can begin to consider how to use that expertise in the redevelopment of the inner cities and in dealing with other urban problems if it is necessary to run down the staff of the corporations. However, what we must avoid at all costs is making policy by lurch, which simply leaves these people not only out of work or uncertain of their job prospects but with their expertise wasted and lost to the nation.
  Is there a genuine connection between new town policy and inner city policy? I accept everything that has been said about there being no obvious and direct connection in terms of the policies themselves. I accept every word that my hon. Friend the Member for Pontypool said
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  about the desire on the Labour Benches to see the inner cities redeveloped. Incidentally, I believe that our problem has been not that we have spent too little public funds on the inner cities but that we have spent the money incoherently, with housing, welfare, employment and education policies all pulling against each other or at least not in unison. We could obtain much better value for the same amount of money as we have spent in the past, but neither I nor any of my hon. Friends has any hostility towards the inner city policy.
  What worries me is that although there is a connection between the policies it is not a policy connection but a financial connection. It is only fair to spell that out. We all know that by far the largest single element in the Department of Environment's budget is the rate support grant, over the detailed expenditure of which it has no control. From my own ministerial career, I am familiar with the same problem in the Department of Education and Science, where we had very little direct control over the vast bulk of our own expenditure. The result of what I have described is that there are relatively few areas where the Department of the Environment has direct control over the sums it spends.
  One of those areas now, since the changes of last autumn, is the urban aid programme, since the Department inherited it from the Home Office. Another is new town policy. That is where I suspect there is a connection. If one increases the amount of money spent on one of those areas, under present economic constraints one necessarily reduces it in another. That explains why momentum in the new town programme will be maintained over the next seven or eight years, whereas my right hon. Friend said today that the number of households nationally would not decline for at least the next 10 years. That is a financial connection, not a policy connection. I regret it but have every sympathy, because I have operated under similar constraints. At least we should get this out into the open.
  A further point that I wish to make concerns what my right hon. Friend said today, and said again in his White Paper, about the rôle of the new towns in catering for the elderly, the disadvantaged and the like. That is splendid. My own new

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  town has a good record in respect of the elderly, as do many new towns. But the disadvantaged are a separate problem. In Telford New Town we have taken a high proportion of disadvantaged. We started with an area that was highly disadvantaged in any event.
  Earlier this year, when new town policy was under scrutiny, I sought to obtain social indicators from a series of Government Departments to compare the area of my new town with the nearest inner city area, which is Birmingham. So many of my right hon. and hon. Friends told me that they regretted that the information was not available that I began to regret that the Government could take decisions on such an inadequate factual base. Of course the information is not available—although where it is available, it indicates that my new town is an area of substantial deprivation. Its unemployment rate has always been higher than the average for the West Midlands and it has normally been well above the national average, Today the female unemployment there is much higher than in Birmingham or the Black Country.
  Derelict land is dealt with in a separate section of the new White Paper. I have done my homework, reading it very quickly. We are told that greater priority will be given in future to clearing derelict land in inner city areas. I am all in favour of that. Before the development corporation came, my new town contained the largest continuous stretch of derelict land in the whole of Britain. No assisted area aid was given for clearance.
  I am not making a constituency speech. I am not arguing a special case for Telford. I am making the simple point that when we make blanket statements that there should be clearance of derelict land in one part of the country, that it should have priority over clearance elsewhere by category and not by specific area, and when we say that the new towns as a whole must take more disadvantaged people, we are making a profound error. We should say that overall this will be a policy objective but that each case must be examined carefully on its merits, that assistance must be given where it is deemed necessary after hard examination of the local situation, and that we should ensure that there is a
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  balanced examination of need, so far as possible, not only in the inner cities but in the new towns.
  I already have a startlingly unbalanced population in Telford New Town, and I am sure that this is so in some other new towns. I very much hope that instead of imposing a blanket policy my right hon. Friend, when he comes to turn his intentions into reality, will carefully examine the needs of each new town, and ensure that they are met in terms of the allocation of resources given to them and of the targets in respect of particular social groups which those new towns are asked to house.
  5.15 p.m.
  Mr. Michael Morris: The contribution of the hon. Member for The Wrekin (Mr. Fowler) deserves detailed consideration, with the exception of his earlier remarks, which were unworthy of him. I think he knows in his heart that what he said at the beginning was untrue. We on the Conservative Benches have said that we welcome the whole concept of the new town. I support it, and I believe that it has the support of my hon. Friends as well.
  I should like to take up four or five points arising from the Secretary of State's draft proposals and his speech this afternoon. First, I very much welcome the fact that we are to have a firm policy before the Summer Recess. I urge the right hon. Gentleman to urge upon the Lord President that we should have time for a debate on those firm proposals when they are submitted. It would be a great tragedy if we were not able to comment on them, for the record, until late in the winter.
  I should like to spend a few moments on the problems of the disadvantaged. I do not think that the policy has been thought through. That is why I listened with care to what the hon. Gentleman said. I understand that nobody has yet defined exactly who are the disadvantaged who are to come to the new towns. It seemed initially as if we were talking about those who were physically or mentally handicapped, single-parent families, and the like. Then it appeared from a number of submissions that the category included the elderly, who are obviously a charge on society.

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  I think that there is common ground that the elderly should be very much welcomed to the new towns, because they provide the community with an age balance and stability. My experience in Northampton—and, I believe, the experience of my hon. Friend the Member for Buckingham (Mr. Benyon) in Milton Keynes—is that in the past few years, when the numbers have been building up, they have provided a valuable part of life in our new towns. But the Secretary of State needs to recognise that, welcome as they are, the elderly are a more expensive part of the community. Their demands on the medical and social services— demands that are well documented—are fairly extensive.
  The Secretary of State, as a Member for an inner urban area, will probably recognise that the health and social services facilities available in inner London and the other inner city areas are considerably more advanced than they are in the county council areas outside. That is a historical fact. When I hear the right hon. Gentleman talk about the rate support grant, as he does at every Department of the Environment Question Time, I worry very much when he indicates that there will be a further transfer of resources from the county councils to the the inner urban areas. He will have to think very hard to find a means of ensuring that adequate resources are made available to the new towns in the county areas, which are taking on the increased burden of disadvantaged people.
  I think that the right hon. Gentleman knows that in recent weeks I have had to spend a little time in Northampton dealing with the Department of Health and Social Security. I find it amazing that under the new proposal for the distribution of resources there is the bland statement that no allowance will be made for the pressures of new towns on the health services.
  I find that an extraordinary statement, because whereas at one end of the spectrum there are young married people with lots of young children, and the new towns are among the few places in which the birth rate is still increasing, at the other end of the spectrum we have the right hon. Gentleman's statement that we should take more old people. We welcome this, but they are putting extremely
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  heavy pressure on the geriatric side of the service, and the DHSS blandly ignores this and says that it will make no financial allowance.
  I urge the right hon. Gentleman, before he comes back to the House, to have consultations with the DHSS and with his right hon. colleague in order to knock some sense into this policy. I say quite sincerely that unless some financial provision is made, good and proper services cannot be provided to these new communities.
  There are proposals to close a major geriatric unit in Northampton simply because of a cut-back in resources. This will give the right hon. Gentleman some indication of the problems that we face on the ground at this time.
  With regard to the roll-over of assets, I am disappointed that the hon. Member for Pontypool (Mr. Abse) has departed from the Chamber, because it has always seemed to me that, far from flogging off the assets to the speculators, we are returning the assets to the community. It is, after all, the community that provides them in the form of taxation, and it is right that we should turn over those assets and turn them back to the people.
  I say to the right hon. Gentleman that if it sticks in the gullet a bit to liquidate the assets in toto, serious consideration could be given to the liquidation of the assets of the first-generation new towns, to provide the assets and resources for the development of the third-generation new towns and the inner city areas. The money would thereby be kept within the public sector, and there would be one further advantage. There is little doubt in my mind—I suspect that the right hon. Gentleman will have to admit this when he makes a statement in July—that the rate of expansion of the third-generation new towns will have to slow down, because the resources are not now available to the extent that they were hitherto.
  If that is the case, I believe that the right hon. Gentleman needs to think very hard whether it would not be a better solution to consider rolling over the assets of the first-generation new towns and making the resources available for a quicker, and in the end cheaper, development of the third-generation new towns

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  I turn now to the question of job opportunities. We have already had an explanation of the situation in Telford I have noted some worrying statistics in my own area of Northampton, which is traditionally an area of below average unemployment. It is interesting that over the last six to eight months, whereas nationally unemployment figures have begun to decline, in Northampton and other East Midlands towns they are remaining constant, or are marginally rising. I believe that the right hon. Gentleman has had a submission from the East Midlands Economic Planning Council indicating its great concern about job opportunities for the future.
  I should like to quote very briefly from a combined submission from the general managers of Milton Keynes, Peterborough and Northampton New Town Development Corporation on the Lambeth Inner Area Study. It gives their reactions to the consultants' report. There is one paragraph that sums up the situation. Talking about new town jobs and where they will come from, the managers say:
  "For the future, we see much the greater part of employment growth in all three towns coming from the expansion of established firms and services and from firms attracted from the South East outside London. In so far as firms do move from London, we expect them to be mainly in offices rather than the manufacturing sector."
  I do not think that the right hon. Gentleman will quarrel with that conclusion. The implications are that we should be careful about the increased rate of acceptance of unskilled labour.
  I am sorry to burden the right hon. Gentleman with yet further consultations with colleagues, but he needs to consult very closely with the Department of Industry. We have an extraordinary situation concerning one company in Northampton. We take advertisements in the Financial Times, The Times and other newspapers urging industrialists to come to Northampton, yet the Department of Industry is telling one of our medium-sized manufacturers who wishes to expand that it is terribly sorry but he cannot do this in Northampton and must go north.
  In the rephasing and reassessing of the new towns there needs to be close consultation with the Department of Industry concerning the industrial development certificate policy. Certainly for the next
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  few years the principal growth in the five third-generation new towns will come from local manufacturers who are already there. They may be people who have come in in the early stages. They may be traditional firms who, for one reason or another, have wanted to expand before but are only now able to do so. It would cause enormous disruption to the whole concept if we were to invite industry to come to the new towns and at the same time have to tell those who happen to be there already that they must go elsewhere. That would be nonsense. Therefore, I hope there will be some consultations in this respect.
  I believe that it is absolutely essential that the policy of selling new town houses should be extended. There are, however, two problems concerning the implementation of such a policy. One is the problem of mortgage availability and the slowness of building societies to move in and support, by way of mortgages, the purchase of some new town properties. There should be consultation with the nominated building societies which are already helping local authorities, and we should urge them to act generously in regard to the sale of new town houses.
  I wonder whether the time has come to move outside the top 10 to some of the regional building societies. In Northampton we have the headquarters of the thirteenth, fourteenth or fifteenth largest building society, but it is outside the scheme. Particularly in regard to new town houses, some of the large and medium-sized building societies could be encouraged to give assistance.
  There will be a problem in the not-too-distant future as to the price at which some properties can be sold. This is not necessarily the fault of anybody at this time, but it is a hard fact of life that in the third-generation towns we are dealing with some houses that were built earlier on and may be selling now for £7,000 or £8,000, whereas those built in the last year or two, at a cost price of £15,000 to £17,000, have a market valuation of only about £11,000 or £12,000.
  I urge the Department to give consideration possibly to allowing development corporations to average their costs across the totality of their stock. This would be a more realistic approach, and one, I believe, that the general managers themselves would very much welcome.

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  Very little has been said today about dockland, probably rightly so, because we have not had a chance to see the White Paper that the right hon. Gentleman announced today. At least two years ago hon. Members on both sides were suggesting to the Government that the expertise in the new towns should not be confined to the green field developments, that there was an expertise, a drive, an enthusiasm and a competence there which was badly needed in inner city areas. I say that as one who has been deeply involved in an inner city area.
  We would be less than realistic if we did not tell the Secretary of State—or his successor, if one of my right hon. Friends takes over—that it cannot be left to the inner London boroughs and the GLC to solve the problems of London's dockland. I do not believe they will ever solve it, and all of us need to be sufficiently strong minded on this issue. I know that I shall not be too popular with some of my hon. Friends for saying that, but this problem need to be taken hold of, and the expertise in the new towns is available for that purpose.
  On the whole, the right hon. Gentleman's White Paper is sound and I welcome it very much. I welcome the speed with which we are to get a response and I hope that we shall have an opportunity of a good debate before the Summer Recess, so that we may continue the good work that has been done to date.
  5.52 p.m.
  Mr. Eric Moonman: This is probably the most worrying of all the debates on new towns that I have listened to or taken part in the last 10 years. It is not that the Government's case is so crystal clear that I can necessarily embrace everything that my right hon. Friend said, although I appreciate his earnestness and determination to reassure some of us about how new town strategy will be developed.
  I am, however, concerned about the way in which the Opposition are now treating the whole question of new towns. It is not good enough to suggest that certain of my right hon. Friend's remarks were not particularly worthy. He, too, senses his feeling and mood. If we study Hansard tomorrow we shall see that the hon. Member for Northampton, South (Mr. Morris) indicated that he thought
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  that a Division at the end of the debate was somewhat irrelevant. He was complimentary to many of the things associated with new towns.
  The hon. Member for Buckingham (Mr. Benyon) said nothing to suggest that this was a matter on which the House should divide. If there is a Division it will not be understood in the new towns, and in that event I hope that the Conservatives will realise the absurdity of the position.
  The hon. Member for Ashford (Mr. Speed), however, declared war with the Government Benches on the question of new towns. He made much of the fact that a Select Committee report dealt with the question of financing. I was a member of that Select Committee. When I was re-elected to the House I was responsible for getting published the evidence that accumulated while I was away from the House.
  In that report we said, in looking at the whole question of financing, that there should be other ways of financing new towns. We did not suggest that this was a matter to be implemented within a couple of years, nor was it right to take the issue through the Division Lobbies. The only argument that the hon. Member for Ashford has advanced for having the Division is based on references to the Select Committee. This is humbug and hypocrisy and I am afraid that the good people of the new towns in Britain will not understand his intentions.
  I wish to endorse what was said by my hon. Friend the Member for Harlow (Mr. Newens), who pointed out that many people's jobs could be threatened if the Opposition managed to defeat the Government tonight. There is another consideration. Because of the finely balanced nature of the House these days I do not believe that the Opposition can act as they might act in other circumstances and force a Division, knowing that they could not succeed—tonight they might do so. I do not know what arrangements the Whips have made, but I am certain that this is not a frivolous matter. We cannot engage now in the parliamentary gamesmanship that goes on when the Government party has a more substantial majority than is the case today.
  I am the chairman of the Parliamentary Labour Party's new towns committee.

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  Many of my hon. Friends on that committee will not be here to speak in the debate, but they feel as strongly on the issue as I do. I believe that it is widely accepted that I do not attempt to create political issues out of the new town movement. We are on a serious course this evening, and in view of what the Opposition intend to do I draw attention to what was said by their housing spokesman— the hon. Member for Hornsey (Mr. Rossi) —three weeks ago. He said:
  "We are realising almost too late that the success of our new towns has been bought at the expense of our inner cities."
  That declaration is an attempt to polarise feelings in the two areas between the inner city areas and the new towns, and it is very different from what was said by the hon. Member for Buckingham. The tone of that declaration was not in the spirit of the new towns debates of the last 10 years. It was not even in the spirit of the new towns movement. Conservative Members who have some interest in new towns will have to do a great deal of explaining at the next General Election to justify the type of behaviour that we have seen this evening.
  Mr. Hordern: I do not know how the hon. Member for Basildon (Mr. Moon-man) works out his comments or whether he thinks carefully about them beforehand. Is he not aware that Members on the Conservative Benches have at least as much experience as he has of new towns, and at least as much regard for them? However, we also have regard for the inner cities, and if we think that the Government's policy is inappropriate we shall say so and vote accordingly.
  Mr. Moonman: The hon. Gentleman probably did not listen closely enough to what was said by my right hon. Friend the Secretary of State. The hon. Gentleman is saying that there is no contradiction here. Surely the critical issue is the way in which the new towns have developed, and not at the expense of the inner city areas. These areas have their own peculiar problems. If the hon. Member for Horsham and Crawley (Mr. Horden) doubts that, let him visit Liverpool or London. Let him go along to the constituency of my right hon. Friend the Secretary of State.
  Underlying some of the pressure on new towns in the last six months is the feeling that somehow they have been
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  rather more favourably treated than the inner city areas. Some of us have been trying to erase this impression. I do not think that anyone gains by such distortions. If the hon. Member for Horsham and Crawley is now saying that the needs of the two areas are complementary, we are not in dispute. However, I do not want the people in the new towns to feel that they have achieved their better standards at the detriment of the inner city areas. We should avoid polarising the different communities in this country.
  Mr. Timothy Raison: No one wants a conflict between the inner cities and the new towns, but there is a problem of resource allocation. Either one can put the money into the inner cities or one can put it into the new towns. One can put some of it into both, but one must make up one's mind about the priorities, and that is the problem.
  Mr. Moonman: That has been the basis of my right hon. Friend's statements before the Easter Recess and now. He has decided to cut back. This is an active Government response to the argument that the hon. Gentleman has put forward in suggesting that we cannot go ahead with development in certain towns.
  More positively, we must put on record the fact that Britain's new towns are unique. Their reputation is worldwide. They are admired not only by industrialised nations such as the United States and Japan but by the underdeveloped countries of Asia and Africa. One of the difficulties is that we tend to take them for granted, and we have forgotten how widely respected are the principles underlying them.
  Reference was made to the competence and expertise shown in the way in which the new towns have been developed. This is one aspect that should be applied to the inner city areas. If there is something successful in the new towns, why not try to use that competence as specialised skills in the inner city areas?
  However successful the first 30 years of the new towns, we must look to the future. I welcome the Minister's consultation document for the assessment it makes of new town achievements, problems and possible solutions. One of the main aims of the new towns is to keep housing and employment growth in

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  balance. This has not been achieved over the last decade, largely because there has not been any incentive to get manu facturing industry into new towns unless they were in development areas. New town development must be part of a total strategy in which the rôle of the new towns must be considered in any national employment planning, for houses without jobs is one kind of planning nonsense.
  One point is that after 25 years the housing responsibility of the new town is twofold—to accommodate newcomers from the inner city areas and to acommodate the second generation. One of the interesting comments mentioned earlier was the importance of having a series of reports on the various activities of new towns so that we can look at some of the specific problems, such as the second generation, which in the Essex new towns is causing quite a dilemma.
  The other point is how far the new towns succeeded in creating real communities. Between 1946 and 1977 more than 2 million people have come to live in the designated new towns. It is big business, in terms of the number of houses, shops, schools, factories and offices. Governments arc constantly having to look to the development corporation and the agencies to see how successful that has been.
  I now turn specifically to the Minister's statement with regard to the cutback. The cutback as outlined before Easter affects mainly the third-generation developments—Milton Keynes, Northampton, Peterborough, Telford, War-rington and Central Lancashire. Central Lancashire was planned for a population of 500,000 but is now scheduled to end up with only 23,000. As envisaged in the 1960s, these developments between them were ultimately targetted to provide homes and jobs for about 1,172,000 people. This has now been scaled down by about one-third in the light of the radically changed population forecasts for the country as a whole.
  Personally I believe that the serious trimming will also start taking effect in other ways. Although one may wish to make this trimming and cutback, I am concerned that it may affect the attitude of industrialists who will see that a particular project will not be completed and that they will not have the range of
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  employees and skills. That could be quite serious.
  There is also the problem of the £100 million set aside in the Budget to finance construction work in certain inner cities. Incidentally, it will provide work for some of the 250,000 building workers currently unemployed. But that, as some of my colleagues have been quick to point out, has to be offset against other moves, like the £57 million taken away from the housing associations, which do much work in run-down city areas and the £20 million which has been lopped off Liverpool's home improvement plans.
  The latest surgery is based on the premise that the United Kingdom population, once anticipated to reach 60 million people by 1999, now looks like attaining only 51 million people. As a result, some Whitehall forecasts now look forward to a substantial housing surplus in the mid-1980s. But my main fear is that the ambiguity of the Government's intentions will frighten off industralists whose manufacturing and marketing plans were based on the assumption that Telford and the rest would attain their full original size.
  I conclude with a reference to my own constituency. In talks that I have had with the development corporation it appears that there are some items which ought to be given close attention by the Government. The first is that the handling of the announcement of any alteration in the new town structure can cause considerable anxiety to the staff.
  In Basildon we are faced with an intensive programme over the next five years at least but already many of our best young professionals are thinking seriously of leaving us. Some have already done so. What I am arguing is that confidence in the future must be restored. The staff are not unreasonable and they clearly see that there is a job to do in finishing the town properly, and they believe it is a task which they should be allowed to complete.
  The other point is that in a town like Basildon there is an intensive programme of housing, industrial and commercial development. But the failure to finish the town in a sensible manner could bring with it the real possibility of creating a depressed area for the future.
  Mr. Shore: I can assure my hon. Friend that there is every intention of completing the town of Basildon. All that has been said is that when a town is completed a terminal date must be set and there must be a transfer of housing assets. I hope that that allays my hon. Friend's anxieties.
  Mr. Moonman: The point that I was making was that the announcements prior to my right hon. Friend's statement in April needed some clarification. This goes back to my right hon. Friend's first statement in October last year. I am only offering my right hon. Friend the views of those who could be affected. We have lost professional staff in the new town development corporation because there was a feeling that their work was coming to an end. That may have been a mistaken impression, but that is exactly what happened. The feeling among people I have spoken to is that if the corporation is not allowed to plan and execute the completion of Basildon there is every reason to believe that it will never be done.
  I believe that there is a whole series of areas that will cause concern, not only from the point of view of the way this is done but also to people in the new town, if one of the techniques for the future is to establish the Commission for the New Towns and run-down of the development corporation. If that is the case, I hope that my right hon. Friend will take into account the fact that one would like to see the democratisation of the Commission for the New Towns, because the development corporations, perhaps in some cases more than others, have been criticised for the way in which they have taken decisions. In some cases there has been a much closer relationship than others, but if we are to see the ending of that relationship with the individual Member of Parliament, the Commission for the New Towns could become rather more authoritarian and remote than what we have experienced up to now. That is another case for looking rather more into the future about how this can be done.
  These are some of the problems which I believe are worthy of attention, rather than some of the suggestions made earlier in the debate, which could polarise the two sides.
  5.47 p.m.
  Mr. Hal Miller: If I were a betting man I would not have been laying money on a horse at Ascot this afternoon but rather on the fact that a new towns debate would be taking place during Ascot week.
  I should like to deal with the anxieties expressed by the hon. Member for Basildon (Mr. Moonman), although I am not privy to the thoughts of my colleagues on the Front Bench on this matter. The hon. Gentleman suggested that somehow the Conservative Party has declared war on the new towns on the basis of political bias, and he was concerned—I share his concern—that a dichotomy has been made between the new towns and the inner-city areas. I believe that Conservative Members are concerned with the management of assets that have been created. Up to now the whole concentration has been on the creation of the assets of the new towns. We are saying that it is right that the public authorities should pursue a policy of active management of those assets in order to provide the resources needed to continue the programme of development in the new towns. They should complete these new towns and carry on the development of the third-generation towns.
  If those resources are not available out of taxation because of competing demands from inner cities—I shall shortly make a plea for rural deprived areas, for do not let us imagine that deprivation is unique to the inner cities—the Government have a duty to see whether the assets and the resources can be found to enable new town development to be continued and completed in accordance with all our hopes.
  It is not a question, as the hon. Member for Pontypool (Mr. Abse) suggested, of these assets being made available to speculators, to do what they like without planning control and all the other horrors that his fertile Celtic imagination raised. It is a question of selling freeholds to pension funds and the like in order to raise more funds to continue the development of infrastructure and other public uses. It is not a question of building Centre Points or whatever—
  Mr. Abse Mr. Abse rose—
  Mr. Miller: I am sorry not to give way, but I should like to continue. It is a question of enabling public development to be continued. It strikes me as perfectly proper that public assets should be actively managed, just as we would wish to see the real estate assets of British Rail actively managed in order to provide for continuing investment in the railways. I hope that that is a ground on which we can all meet. There is no point in creating an asset and leaving it idle, whether it is in the public or the private domain. The problem is to manage it and to produce what the main object is. In the new towns, our common object is to proceed with their development and completion.
  Mr. Abse: Taking only one of these examples, does not the hon. Gentleman appreciate that in many cases the reason why the freehold should not be sold in any circumstances is that, once the freehold is disposed of, it is impossible sufficiently to embrace control of the property? Therefore, to suggest that it is possible, even after disposing of assets, still to maintain the level and quality of planning which is now possible is to fly in the face of the facts.
  Mr. Miller: The hon. Gentleman's understanding goes a great deal deeper than he tries to pretend. If he is suggesting that developments cannot be controlled if they are not in the public domain in the new towns, that is a proposition which even on his own second examination will not stand up for a moment.
  In discussing the management of new town assets I wish to move on to refer especially to a matter which has been raised by several hon. Members with new town constituencies—the failure of any Government so far in their capital expenditure to provide for health facilities to match the growing populations. In my own case, it is exceedingly serious that there is no hospital in Redditch. A hospital has been in the public programme since 1962, but there is still no realistic prospect of its being built. In the meantime, in the cottage hospital, which is available, there is no casualty service after hours or over weekends in a manufacturing centre.
  This is a matter which I raised with the Department of Health and Social Security when I first came to the House,
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  and I have been trying ever since to impress it upon the Department of the Environment in various debates. I understand that there was a joint official working party set up to examine whether something could be done about this, but still nothing seems to have transpired. I hope that the Minister will be able to make some reference to this very serious matter before the conclusion of today's debate. Although other capital facilities, amenities, infrastructure, roads and schools are provided, there is still no apparent means of dovetailing in the necessary medical provision.
  I want also to echo the fears expressed already on behalf of the receiving authorities of the assets to be transferred on the winding up of the development corporations, about the assistance to be made available to them to meet disparities in rents and, in particular, the burden of interest charges. This was a matter discussed when we debated the New Towns (Amendment) Bill. With the creation of continuing higher-valued assets, the increase in the loan charge and interest burden is very considerable, and there is a real apprehension amongst receiving authorities that they will be in difficulty in meeting them.
  This problem is emphasised and accentuated in new towns in rural constituencies—the shire counties—by the reduction in the rate support grant. We have the ludicrous situation where our population is expanding and schools especially are very hard pressed but where the rate support grant has been cut. The education provision in the county as a whole has had to be cut, although the school population is expanding. The only way that it has been possible to meet even the bare statutory commitment is to deprive the more rural areas of the county. This is becoming a real problem.
  I hope that the Minister will not go away with the thought that there is only urban deprivation. There is real rural deprivation in terms of transport, schooling and other social facilities. This problem is accentuated in our case by the the cuts in the rate support grant, despite the presence of an expanding new town and an expanding population, with its call on facilities. Those facilities can be stretched severely in the case of the elderly and the deprived. I should not like the Minister to imagine—it seems to

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  be a sort of blanket concept in his Department—that new towns do not have elderly or disabled persons or single-parent families.
  I wish that he had been with me at some of the Jubilee celebrations in my new town. He would have met a great many elderly and disabled people and a considerable number of one-parent families, and he might have been told of the real difficulties new town communities experience in providing services. For example, only recently has it been possible to extend the meals-on-wheels service into the new town area. Many elderly people lead very lonely and deprived lives, with inadequate, expensive transport, and very few community facilities of which they can take advantage.
  New town blues is a real phenomenon. The community health council recently has been studying the problem of alcoholism, which is one of the unfortunate consequences of new town deprivation. I share the view of the hon. Member for Basildon that new towns should not be regarded as fortunate and blessed in all respects. They suffer from real social problems.
  I shall be joining my right hon. and hon. Friends in voting against this Bill because—apart from the need to maintain public assets actively—of the continuing failure to do anything about the necessary co-provision of medical facilities; the continued failure to appoint members to the board of the Redditch Development Corporation to fill posts which, apparently, have been kept vacant for political reasons for an excessively long time, despite the need to provide guidance and experience in the handover of the assets to the local authorities in what is now a very short-time scale; the uncertainty about the relief which will be available to the local authorities on the handover of the housing assets; and the uncertainties in the minds of the staff about their future—all of which are far from being resolved.
  5.59 p.m.
  Mr. George Rodgers: The New Towns Bill enables us to discuss afresh the situation that has arisen from the changed position facing new towns in the light of the observations made today by my hon. Friends and the recent
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  decision by my right hon. Friend the Secretary of State to restrict the immediate advance of the new towns programme.
  I say at once that in the Central Lancashire New Town, which is a development of enormous interest to people in my constituency, there is great relief that the long period of waiting and uncertainty is ended, and a general welcome has been given to the revised scheme.
  The Central Lancashire New Town— it is a very cumbersome title, and I hope that the Department will come up with another name for the project—remains the focus for industrial and economic growth and a spearhead for urban renewal. The process of revitalisation is essential for Lancashire and the whole of the North-West Region. Therefore, the project continues to have the support of all the local authorities in the immediate vicinity. Chorley, South Ribble, Preston and the Lancashire County Council are all anxious to see the development corporation press ahead by building on the foundations that have already been laid.
  A document issued very recently after consultation with the development corporation and with the agreement of all parties gave full approval to the revised scheme. This intends that there should be an induced intake of 23,000 on the present population of 247,000, and, together with natural growth in the area, this will give a population of 285,000 in the mid-1980s. There is considerable satisfaction that the capacity of the land use allocation endorsed by the Secretary of State can well accommodate the needs of the area, reflecting this revised population.
  Somehow the fallacy lingers that the Central Lancashire New Town is based on a requirement for overspill. This is simply not the case, although it is widely believed both in Merseyside and Manchester. In fact, the new town attracts a greater number from the South-East than it does from Merseyside and the development is performing its acknowledged role in attracting people from all parts of the country.
  We must accept that people who are seeking a new environment and job opportunities cannot be caged or contained in desolate areas. If the new towns offer an opportunity for prosperity

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  and brighter horizons we should accept that people have the entitlement to move into these new areas. It is folly to deny them the opportunitiy for a better life.
  The changed pattern of the Central Lancashire New Town enables variations to be introduced and despite the reduced scale of the programme the concept remains vast, in that it embraces three boroughs—those of Chorley, South Ribble and Preston.
  I sound a note of warning. Unless some of the saving envisaged by the diminished nature of the development is directed towards the renewal and strengthening of the old inner cores within the existing boroughs, the whole exercise will be placed in jeopardy. It is essential, too, that the development corporation should concentrate to a much greater extent than previously on the relocation of existing industries rather than devote its attention to attracting new industries.
  There is a positive welcome for the Secretary of State's decision on the corporation's involvement in urban refurbishing. With the support of a little of the financial saving made possible by the curtailment of the original programme, a real impact can be made on the problem of decaying areas on the fringe of the new town development. The changed circumstances will allow a partnership between the local authorities and the development corporation to be brought about with considerable speed. There is room for much greater co-operation on housing construction and allocation, land planning and usage, and transportation.
  Since the early days of the new towns there has been a great improvement in the relationship between the local authorities and the towns already existing in the designated areas. For too long the new town corporations appeared to be aloof and almost isolated from the locally elected bodies. Happily, this situation has been largely remedied, and the better the co-operation the more successful the new town enterprise. Indeed, it would be absolute folly to neglect or ignore the knowledge and know-how available in the existing community.
  I conclude by declaring my faith and optimism in the Central Lancashire New Town and in the overall concept of new towns generally. This concept has proved
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  a post-war success story in the United Kingdom. With a few exceptions the new towns have created good living conditions and prosperity. They have proved a sound and splendid investment. I accept that there is room for improvement, but I am uneasy about the attitude of Conservative Members. Apparently they intend to vote against the Bill tonight— there is no confusion about that. The confusion arises over their motives and their purpose. I do not find the reasons that have been put forward very satisfactory.
  Of course there is room for improvement in the scheme of things, but it is essential that the vision and boldness on which the programme was founded should not be allowed to wither because of current economic difficulties. Much can be accomplished, at little cost, if the democratic principle is encouraged and those who serve the existing community are invited to participate in the development of the new town rather than merely witness its progress.
  Central Lancashire New Town will make a substantial contribution to the economic well-being of a deprived region and it will enhance the quality of the lives of people who have long been at a disadvantage when their lot is compared with that of those living in more fortunate regions. The Bill before us will assist in securing these worthy aims, and I support it.
  6.7 p.m.
  Mr. Timothy Raison: I was interested to hear the comments by the hon. Member for Chorley (Mr. Rodgers) about the Central Lancashire New Town. I spent a day there last year, and I came away with the feeling that the Government have to face a very difficult problem over this new town. In surrounding parts of Lancashire there is a good deal of opposition to the continuance of the new town. My hon. Friend the Member for Ashford (Mr. Speed) talked about the case for putting the investment into areas such as Liverpool, and North-East Lancashire where people in the old cotton towns have lost their traditional livelihood and have pretty crummy surroundings, and can do with the money that is going to Central Lancashire. I believe that some hon. Members on both sides of the House are not all that

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  enthusiastic about this new town development at the end of the day.
  However, I am inclined to think that the Secretary of State is right. Obviously the Central Lancashire New Town has economic potential which does not attach to other contenders for the money in that part of the world. Also, if Central Lancashire does not get the money there is no guarantee that it will go to North-East Lancashire or Merseyside instead. I have no doubt that the Treasury would find ways of disposing of it very satisfactorily.
  I do not advocate spending money for the sake of it, but it has always been inherent in the Central Lancashire case that it is good to put money into areas where it will pay off. The whole essence of this is that Central Lancashire is a potential growth area. I am more worried about the espousement of various projects in inner city areas and I wonder whether we are now using money spread across the country to prop up decaying areas at the expense of those areas that have a capacity to grow.
  Central Lancashire is sited very well in terms of communication and transport— much better than other places in Lancashire.
  Mr. Eddie Loyden: When the hon. Member for Ayles-bury (Mr. Raison) refers to decaying parts of the region I take it from his previous comments that he means Merseyside. Is he aware that Merseyside has lost a quarter of a million of its population? The city of Liverpool had to establish the wherewithal to provide education, health and other essential services for a major conurbation, and now these services are becoming under-used. This is having a direct effect on the people in the area. While we do not want to throw out the baby with the bath water in relation to new towns, the Government must recognises the balance in remedying the problem of places like Merseyside and continuing with the programme of new towns.
  Mr. Raison: I am aware of all those facts and I do not think that I would dispute any of them, but one has to make difficult judgments: is it best to prop up areas which have declined for profound and hard-to-dispose-of economic
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  reasons, or to pick out those areas with growth potential and put money into them? There is a risk in pouring money into Merseyside because, although one may produce some kind of temporary alleviation, a certain number of jobs and better conditions of life for people whose conditions are bad, one will weaken the structure of the economy overall.
  One could put more resources into Merseyside and the London docklands by having a strong economy instead of diverting limited resources to areas where the return on investment, in harsh economic terms, will not be satisfactory. A vast problem underlies this argument, and I shall not seek to develop it now. I believe that the Minister is right to see the potential of the Central Lancashire New Town, and I am glad to see that it has not been chopped off.
  In other respects I very much agree with what has been said by my hon. Friends. I believe that we are right to vote against the Government on this matter. I hope that the Government will consider the points made about hospital provision in new town areas, although I appreciate that this involves a different Department. My hon. Friend the Member for Buckingham (Mr. Benyon) represents Milton Keynes and knows the enormous problems of hospital provision caused by the creation of new towns. It is almost immoral of the Government suddenly to decide that it does not matter too much if there is over-provision of hospital facilities in London—as unquestionably there is—because that involves inner city areas, and because it is Government policy to support inner cities, when there is true hardship and under-provision of a grave nature in counties such as Buckinghamshire and Northamptonshire. I hope that the Minister will underline to his colleagues in the Department of Health and Social Security that there is great concern about these problems.
  My hon. Friend the Member for Ash-ford and others were right to criticise the Secretary of State for his complete failure to say where the money is going. We are talking about a great deal of money—£500 million which, following a subsequent order, can rise to £1,000 million. I repeat that it is a vast amount of money. It is interesting to note that the money employed in the new town programme from 1947 to the present time

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  amounted to £2,250 million. The Government are now asking the House to vote a further 1,000 million. Only two years ago the House passed legislation allowing the Government to have in their hands a similar large sum of money in this context. It is intolerable that the Government now come to the House asking for this enormous sum without explaining the purposes for which the money is needed. The Minister should tell the House how this money will be used. He should say why a reduction in the new town development programme has not produced anything resembling a comparable reduction in the amount of money that needs to be spent.
  Several of my hon. Friends have made a powerful case about the effective use of new town assets. The Secretary of State said that he would think about the matter. It is much too late in the day for him to take that view. About a year ago, a number of my hon. Friends and I were engaged in the legislation involving the transfer of new town assets. We seized all opportunities to make the point that the transfer of assets should apply to commercial assets, and that they should be capable of being transferred or sold of to the private sector. The Secretary of State should not adopt the attitude, as he appeared to do, that this is a new idea that nobody has thought of before and that he would have to think about it. The idea has been floating around for a long time and was raised by many of my hon. Friends a year ago.
  Mr. Hal Miller: The Secretary of State said that he was contemplating allowing the sale of such assets to local authorities. Will my hon. Friend comment on that aspect?
  Mr. Raison: The right hon. Gentleman said that it might be reasonable to sell these assets to local authorities, just as housing assets are being sold. It is a bizarre argument to advance at a time when there is a desperate shortage of money in the hands of local government to finance anything. To encourage them to think that they might buy up town centres is ludicrous, especially in present economic circumstances. I can see no objection to allowing the Commission for the New Towns to sell off these town centres to would-be commercial buyers. I should qualify that my saying that I
  448
  believe the right policy is not to say that the Commission has an absolute duty to sell off these properties, but that it has a duty to manage them commercially in the most effective possible way. It should be in a position to make a commercial judgment whether it is best to sell freeholds or to issue very long leaseholds. There are a number of arguments in the property and new town worlds as to the most appropriate use to be made of these assets. I do not wish them to do other than act in the most effective and business-like manner.
  It makes no sense for the hon. Member for Pontypool (Mr. Abse) to talk about the planning considerations. As I understand it, he is probably happy to see leases that may run for 99 years or so and that inhibit planning changes, but the hon. Gentleman then wishes to put his foot down on the sale of freeholds. The truth is that this is a piece of outmoded dogma, which is part and parcel of the same philosophy that produced the ludicrous and disastrous Community Land Act, which has now become the object of so much ridicule. I should have thought that the Secretary of State for the Environment—who possesses less dogma than his right hon. Friend the Member for Deptford (Mr. Silkin), who was responsible for these matters at an earlier period and who was addicted to public ownership of land—may have the sense to see that there is a strong case for making the best use of these huge assets.
  There is no doubt that the value of the commercial element in the new towns is enormous, so that we may get that money back and use it to alleviate the desperate problems that exist in London's docklands or anywhere else, or to reduce public expenditure. I hope that the Minister, in reply, will explain what the money is needed for, and will produce solid reasons why these assets should not be sold off— or, preferably, will give a positive indication that the Government will have a change of heart on this matter.
  6.18 p.m.
  Mr. Peter Hordern: We have had a very interesting debate, as are all our debates on new towns. This debate is unusual, because on this occasion the Opposition intend to vote against the Second Reading of the Bill.

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  The reason is plain and important— namely, that the sums of money involved are very large indeed by any standards, even judged by the standards of this profligate Government. The fact that £1,000 million is to be added to the public sector borrowing requirement is very significant indeed. It would have been totally irresponsible for the Opposition to let the Bill go through without showing that we are consistent in our view that Government expenditure and borrowing should not rise by this amount unless very good reasons are adduced. So far, as my hon. Friend the Member for Aylesbury (Mr. Raison) said, not a single reason has been advanced.
  It is as though these sums of money are to be voted for reasons which the Government will be pleased to bring forward at their convenience instead of at the convenience of the House. This will not do. The sums of money are so large that we could not possibly pass the Bill without a vote unless and until we obtain a clear explanation of why the money is required.
  The hon. Member for Basildon (Mr. Moonman) was not right to suggest that the Opposition have any antipathy towards the new towns. I do not think that any such charge should be levied at my hon. Friends or at me. The hon. Member for Basildon has no monopoly of knowledge about new towns.
  The progress of new towns is a matter of wide interest. As far as I am aware, no Conservative Government have ever suggested contracting the programme for new towns. The present Government have done that. My hon. Friend the Member for Aylesbury was correct in saying that the programme and the Secretary of State's announcement on new towns must be looked at carefully and and in the context of inner cities. We are now at an important phase—although it has been going on for years—because it is only recently, possibly only in the debate today, that the problem of inner cities in all its horror has been recognised by the Government. The two must be linked together. I do not mean by that that we are any less fervent in our appreciation of the rôle of new towns or their achievements in past years.
  I am a representative of one of the older new towns, and possibly one of the most successful of all—Crawley New
  450
  Town—because it has a high employment record and a good record of industrial and social achievement. It is worth looking at the problems of the new towns in the context of the problems of the inner cities and inner centres. The two must be looked at together, and those of us who represent new towns are perhaps best fitted to look at the problems of the inner cities because we know about our own successes.
  I have said that we see no reason for the extraordinary sums of money included in the Bill and that we intend to vote against it on Second Reading because we have received no proper explanation. We are seeing the end of an era. This is the first time that the new towns programme has been cut by any Government, and it is being done by a Labour Government. It is no longer possible to build new towns as a solution to overcrowded conditions in large cities. My hon. Friend the Member for Buckingham (Mr. Benyon) talked about his own constituency and about Milton Keynes in particular. He said that it would be quite wrong to stunt one of the few success stories that the country has had—new towns—just because of the problems of inner cities.
  I must put this point in passing. I have observed in my constituency in Crawley New Town that the firms that came there originally moved from London, and I am sure that any hon. Member representing a new town constituency could say the same. I doubt that those firms would have prospered as well in London as they have done in Crawley. The hon. Member for Liverpool, Garston (Mr. Loyden), who intervened, also made this point. I shall come to further evidence later. There has been a loss to the inner city areas when not only the population has moved out but industry has moved out too. That cannot be ignored.
  It is right to look at the new towns in the context of the inner cities and all their problems—and those problems are formidable. They are not solved by encouraging people to move to new towns or by refusing to allow a firm to expand unless it moves to a development area. The problems certainly are not solved by the work of the Location of Offices Bureau. I hope that the Minister will say something about this state of affairs.

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  What is the Location of Offices Bureau doing now? Is it inviting firms to leave London or to come back to it? The House has not been told of its present function and would be relieved to know about it. I dare say that the Location of Offices Bureau itself would be relieved to know.
  What is the Government's strategy for both new towns and inner cities? I know that we have had a White Paper today, but the old concept of new towns is plain enough, and that is to relieve overcrowding in large and growing cities and to plant acorns from oak trees. Certainly in the first generation of new towns these acorns took root and grew. The new towns have made a contribution to exporting industry and to the people in the new communities. They have surely proved to be an outstanding success.
  There is a chain of events in these affairs. When the economy is expanding and industry is growing, there is an impetus for expansion for which new towns are particularly suited, but when the economy as a whole is staggering, unemployment is rising and the population in the inner cities is declining, the growth of the new towns naturally comes into question.
  The situation is far more serious than the Government have recognised so far, because when the population in major cities starts to decline seriously, as it has done in London and Liverpool, these problems become all the more pressing. Services continue to expand while those who can pay for them have departed. This has also happened in the United States and France, in New York and in Paris. In both those cities, firms were driven out by high rates and because better communications made their departure possible. This has been happening here for many years and its progress is seemingly inexorable. It is becoming more serious, particularly in London, where rates are going up steeply and people are moving out, not through planned departure but because they cannot afford the rates any more. That is also true of industry.
  If we take London as an example, we now find a net loss of 100,000 people a year. The population has declined from 8 million to 7 million and the rate of
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  unemployment in some areas of London is over 13 per cent. The situation is also serious in Birmingham. Large numbers of people have gone to Telford and Redditch, and unemployment in some parts of Birmingham is at the rate of 7·8 per cent. In Newcastle 23,000 jobs have been lost in 10 years and many of the best workers have gone to Washington New Town. Unemployment in Newcastle is 11 per cent. In Bristol the number of manufacturing jobs has fallen by 11 per cent.
  In Liverpool there was a massive urban clearance in the 1960s. The Minister knows about this. Some 30,000 homes were bulldozed in 10 years and many people have moved, as I believe the hon. Member for Garston said in his intervention, to the new towns of Runcorn and Skelmersdale. It is not only big firms that have moved, but small businesses have done the same. They have taken with them some of the rate revenue. In 10 years the population declined from 850,000 to 560,000. In Manchester 82,000 houses have been demolished and scores of small businesses have gone. The population has fallen from 700,000 to 500,000 and the rate of unemployment in some parts of the city is 16 per cent.
  These are massive problems in themselves, and in transferring responsibility from the Home Office to the Department of the Environment the Government have not done nearly enough to recognise the scale of the problems. Neither is it enough either simply to step up the funds available from £30 million to £125 million by 1979-80, especially when one takes into account the £57 million that has been taken from the Housing Fund. Ministries and money alone can solve nothing. All that can be said with certainty is that much money will be wasted unless great conurbations such as London and Liverpool are allowed to attract industry and business on the same terms as the development areas do and as the new towns originally did. I do not mean that the growth of new towns should be stunted but that their opportunities should be given to London and Liverpool also.
  London has not declined simply because of the attraction of the new towns, but that the new towns have an attraction cannot be denied. Whole areas of

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  London, such as the docklands, have gone out of business. The same is true of Newcastle, except that the industry affected there is shipbuilding and not the docks. It has declined because some firms have moved to development areas and new towns, but it is declining most of all because of the demise of small businesses in inner cities. This is true in London and Birmingham and, I should guess, in Liverpool and other cities.
  There is nothing inevitable about this decline of small businesses. They can survive any normal competition, but they cannot survive high interest rates, high levels of direct taxation and constant Government interference. If the Government were really anxious to help these businesses, they would not bring forward a Bill such as this, which can only have the effect of increasing the borrowing requirement and interest rates far above what they would otherwise have been.
  The Government's prescription, through the Bill, is likely to be a contributory cause to the disease. High interest rates are the greatest enemy of small businesses, and the situation is far more serious than the Government have acknowledged. Essentially, the problem is not how to deal with expansion and overcrowding, but how to deal with contraction and decay in industrial areas. These problems are not solved by moving people out of the declining urban areas into new towns. That results in life becoming even more intolerable for those who are left in the urban areas and forces them to move out as well.
  Mr. Moonman: I understand the framework within which the hon. Gentleman is making his argument, but I hope he will point out that people do not leave inner cities solely for new towns We have to consider the expansion of suburbia. Many people moved into the Essex new towns, but not all came from East London.
  Mr. Hordern: The hon. Gentleman was not here when I started my speech. I referred to some of the points that he made. Certainly not all the people who have moved out of inner cities have gone to new towns. It is generally accepted that only about 10 per cent, of them have done so. However, the new towns around London almost all started with large and successful industrial firms which
  454
  originally came from London and a lot of people came with them. They acted as a magnet for work. It is the disappearance of these firms that causes the problems in inner city areas today.
  In his statement on 5th April, the Secretary of State said that the population of England and Wales seemed likely to be only 51 million by 1990 instead of the 60 million that was forecast in the 1960s. He sought to meet the situation by reducing the populations of third-generation new towns by about 380,000. I suggest that there may be another reason for his decision—namely, the considerable cost of third-generation new towns. This is an important factor.
  My figures come from the accounts prepared to the end of March 1976, and I imagine that the sums involved are higher and the rates of interest may be even more onerous now. The Central Lancashire New Town has received loans from the Secretary of State totalling £48 million at an average rate of interest of 13·9 per cent. Milton Keynes has borrowed £147 million at an average 12·3 per cent., Northampton has received £62 million at an average 12·3 per cent., Peterborough has received £88 million at an average 12·6 per cent., Telford has received £117 million at an average 11·3 per cent, and Warrington has received £55 million at an average 12·45 per cent. Taken together, housing and land account for about half of the total capital cost of these assets that, we understand, are to be handed over to the local authorities at what are bound to be a record high cost. This means that, unless extra taxpayers' money is provided, rents in these towns will be the highest in the country.
  The more houses that are built, the more onerous the rents will become. The rate of interest paid by the Central Lancashire New Town is more than twice that paid by the Harlow Corporation. It is difficult to see the justification for this or why Harlow residents should subsidise tenants in Central Lancashire. As Harlow has been going for 30 years, I assume that its housing assets will be handed over to the council next year.
  The hon. Member for Harlow (Mr. Newens), who is not here at the moment, asked whether it was Conservative policy that houses built by the Commission should be sold in places where there was

  455
  a long waiting list. The answer is "Yes, most certainly". It is not the length of the waiting list that matters but the best method of getting more houses built, and if we get a higher contribution by selling to tenants than from rents it is much more sensible to sell.
  Quite apart from any question of the size of the population, the high cost of these new towns would have acted as a severe restraint in due course and will do so. Therefore, this is a fitting time for a reappraisal of development strategy and of the future of the new towns.
  The Government have not done anything like enough to recognise the desperate problems of London, Liverpool, Newcastle and Birmingham. It is no use spending money on a piecemeal basis. We need a substantial redevelopment of the London and Liverpool docklands. I am glad that my hon. Friend the Member for Northampton, South (Mr. Morris) made this point so ably in his speech. There should be a redevelopment corporation for the docklands in both cities. They have become increasingly derelict over the years and jobs have become increasingly difficult to find. That is the direction in which we should move—the resuscitation of our great cities.
  The role of the New Towns Commission, which will be expanded by the handing over of commercial and industrial assets from the other corporations, should not be simply that of managers of some industrial and commercial trust. That is not what it was intended to do. It was intended to build new towns, and it still has a considerable task to perform in this area.
  The problem of finance lies at the heart of the debate and it is one of great urgency. In our view, finance should come from the development corporations and the Commission's own resources—that is, from the sale of their industrial and commercial assets. There can be nothing sacrosanct about assets that were built on behalf of the community and should be used to the best purpose for the community. There can be nothing objectionable about the sale of these assets, especially as the buyers would be pension funds and insurance companies acting on behalf of the people through their savings. There could be no better way of selling
  456
  the assets. The Government have sold the pass on this question by offering BP shares not just in this country but in the United States as well.
  Mr. Abse: My constituents will be interested to learn whether the Conservatives are prepared to sell assets to the United States. Do they intend that the city centre of Cwmbran should be sold to the United States?
  Mr. Hordern: The hon. Gentleman is always helpful, and never more so than on this occasion. It is not we who wish to sell assets to the United States; it is the Government. We have no intention of doing so. The Secretary of State has given the game away. He is not averse to selling the commercial and industrial assets, but he does not want the people who put them there to have them. He wants the local authorities to have them, although I cannot imagine how he can believe that the towns under the Commission could possibly have the resources to buy commercial and industrial assets. He should ask his advisers to show him the latest balance sheets of local authorities. They will show the impracticability of such a scheme. The right hon. Gentleman is concerned not with the principle but only with the fact that the people should not get these assets through pension funds and other means.
  There is no particular merit in selling commercial and industrial assets as opposed to borrowing money, but there is a clear optimum benefit between borrowing money and the disposal of assets and their proper management. No industrial or commercial company would borrow on the expectation of future earnings of the industrial and commercial assets at these rates of interest.
  I offer it, therefore, purely as a matter of judgment, which is what we on this side are concerned with, that it is much better to put those industrial and commercial assets to their best and proper use by selling them to the people and by using the money for expanding new towns or for expanding docklands than simply to keep them in some extraordinary industrial and commercial holding company for which they were never originally intended.
  Therefore, whatever the figures may show, unless there is some change in the

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  financing of new towns their future development must be in doubt. What would be tragic would be to stunt the development of new towns while allowing the old cities to continue to deteriorate.
  Nothing that the Secretary of State has told us can allay our fear that he does not understand the gravity or urgency of the situation, and he is not prepared to use the assets of the new towns to proper effect. I therefore invite my right hon. and hon. Friends to vote against the Second Reading of the Bill, since we are being asked to allow the Government to borrow up to £1,000 million for reasons which they have made no attempt to explain and for purposes which in any event are totally unnecessary at this time.
  6.41 p.m.
  The Under-Secretary of State for the Environment (Mr. Guy Barnett): The debate has enabled hon. Members representing new towns, as well as others who are interested in new towns and the problems of inner cities, to range fairly widely over the whole area of policy which has been developed over relatively recent time.
  I recall, for instance, that only last week the New Towns (Amendment Bill became law, and that at present housing transfers are taking place, or schemes are being prepared, in some 11 towns. I recall also that over the last few months my right hon. Friend has undertaken a considerable reappraisal of the new towns programme, and, in addition, the White Paper on the inner cities has been produced. No one, therefore, can accuse the Government of inactivity or lack of interest in the substantial issues that have been raised in the debate.
  I imagine that many of the hon. Members who have taken part in the debate are aware that in the whole area of policy involving planning in the new towns and inner cities there are a number of fundamental questions which need to be asked in the light of population projections and the rest. Indeed, those questions have been asked in the debate.
  I am glad to echo what has been said by hon. Members on both sides who have made clear that they do not believe that there is necessarily any opposition between the interests of new towns and the interests of inner cities. My hon. Friend the Member for Basildon (Mr. Moonman)
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  spoke strongly on that point. I echo what has been said, because the suggestion has been put about by some—not, I am glad to say, in the House—that the main purpose behind my right hon. Friend's reappraisal was to find money for the inner cities from the new towns programme. I am quite sure, from what has been said in the debate and from the description which my right hon. Friend gave of what formed the reappraisal programme, that it is now fully understood in the House that the Government expect a continuing programme in new towns for some years to come.
  Even though the population projections show a slowing down of growth, so that we are expecting to reach by 1991 a population not of 60 million but of 51 million, so that the demands will not be so great, nevertheless, as has been said, the amount of household formation which will take place during the years up to 1985 means that there will be a continuing need for homes.
  My hon. Friend the Member for The Wrekin (Mr. Fowler) had certain suspicions about that but, in the light of the figures, the Government see a continuing need for a house-building programme in the six third-generation new towns in the light of the demand presented to us by the extent of household formation which will be taking place during the 1980s as a whole. The house building will need to go on during the next seven or eight years, and it is that, in part, for which the Bill is intended.
  I have been asked by the hon. Members for Aylesbury (Mr. Raison) and for Horsham and Crawley (Mr. Hordern) to go into greater detail on the purposes to which the £1,000 million is likely to be devoted. The House knows that the new town development corporation spend their money on roads, on housing, on servicing industrial estates, on building factories and the rest. The Bill is designed to provide moneys to enable new town corporations to borrow money as and when they require it.
  Our difficulty is that we do not know precisely when new town corporations will need to raise certain sums of money in order to continue their programme, and, for reasons which my right hon. Friend explained—the rise in interest

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  rates and the fact that there has of late been considerable activity by new town corporations—the present borrowing limits will unfortunately run out a month or two earlier than we had expected. That has necessitated the Bill now before us.
  I am surprised to hear that it is the Opposition's intention to vote against the Bill.
  Mr. Raison: I wanted to ask the hon. Gentleman a question on the passage in his speech which he has just passed. Can he at least tell us how long the £500 million or £1,000 million will last?
  Mr. Barnett: Not with absolute certainty. I should say about two years, but I cannot be certain how long it will last. It will depend upon the speed with which new town corporations are able to get on with their job. It will depend upon what the interest rate happens to be next year and the year after. There are unquantifiable factors, and I cannot give a precise answer to the hon. Gentleman's question. That is the difficulty we are in.
  Mr. Raison: But this is important. The public expenditure projections must contain something about the rate of spending for this purpose.
  Mr. Barnett: Indeed. If the hon. Gentleman is interested to have specific details about a new town, I shall certainly give him any information I can about the progremme which the town is planning and the speed with which it hopes to proceed, but the fundamental point I make is that there are variables, about which we cannot be absolutely certain at the moment, which may determine the speed at which money is being spent after a year or two.
  As I say, I am surprised at the Opposition's intention to vote against the Bill. It is apparent from the debate that they have some ideas about raising finance by other methods. My right hon. Friend has explained, and we have explained in answer to Questions, that the Government are interested in the ideas which are being put forward by the Opposition and by others. However, whatever ideas they may have, I should at this point make clear to the Opposition the dangerous implications of their voting
  460
  against the Bill. They ought to realise that whatever proposals they may have for raising money cannot be adopted in the next two years on the sort of scale which would remove the need for further provision under the existing arrangements.
  My hon. Friend the Member for Harlow (Mr. Newens) said that we must bear in mind the serious effect upon the development corporations' staff if their contribution to the development of new towns were to be subject to the decisions of private investors. Such investment— in new town assets—may or may not be attractive to the new towns, and is so speculative a basis on which to work that it would be irresponsible to adopt it.
  Mr. Speed: The Minister is suggesting that the House should vote £1,000 million over an unspecified period to be spent on something about which he cannot give us any details. He is asking us to take that on trust. We are in an economic crisis. What the Minister has just said reinforces me in the conviction that the House should throw out the Bill.
  Mr. Barnett: This has been the practice of the new towns programme since it began. Both parties have indulged in it. The country is in economic crisis, but it would be in a far worse crisis if, through voting out the Bill, the House denied the new town corporations the money that they require to pursue their programmes.
  The debate has been useful and well-informed in some respects. However, the hon. Member for Ashford (Mr. Speed) seemed to assume that if the Bill were rejected some simple way could be found of continuing to fund the new towns programme. By rejecting the Bill the House would vote to bring the new towns programme to a halt within a few months. That would be the direct consequence of the House throwing out the Bill on Second Reading.
  The Opposition have every right to be interested in the Bill, but the Second Reading is hardly the occasion for discussing matters of detail. The House has procedures by which it can discuss details which individual hon. Members may wish to raise about new towns in their constituencies or which they know and have visited.

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  I turn now to the Opposition's proposals. As has been said by several hon. Members, there is a restraint on public expenditure. The idea that the Opposition have put forward certainly has its attractions in that context. My right hon. Friend has said that he is considering the idea. It is a new idea for the Opposition. They have never implemented it nor put it in their programme in previous years. Now they find there is an urgency to take it on board. Frankly, it is a new idea, which the Government must carefully consider. Although the idea may have merits, the House must bear in mind that we are discussing sound public investments. They are potentially very profitable public assets which are appreciating in value. The Commission has a duty to enhance their value. In the 15 years since it was established it has accumulated a substantial gross operating surplus, part of which has been paid into Exchequer funds for other programmes. It is important for hon. Members to bear that in mind, and to recognise that the case would have to be very convincing before we changed our present policy.
  I cannot believe that the attitude which either my right hon. Friend or myself have taken on this issue is sufficient justification for the Opposition suddenly to decide that they are right to vote against the Bill and, as a consequence, endanger the future of the whole new towns programme.
  I must now deal with issues raised by hon. Members from both sides of the House. First, I shall deal with the questions posed by my hon. Friend the Member for Pontypool (Mr. Abse). He knows that I am not responsible for new towns in Wales. A decision on the extension of designated areas will be announced by the Secretary of State for Wales in the near future. That decision will take into account the needs of Cwmbran as well as the needs of Wales. That is the only assurance that I can give my hon. Friend at the moment. I found his speech very interesting. He made a number of interesting comments.
  The hon. Member for Buckingham (Mr. Benyon) spoke about Milton Keynes, the new town in his constituency. I was glad he said what he did about the complementary relationship which exists, and will continue to exist, between new towns
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  and inner city areas. He asked me about the likely consequences of housing transfer when it takes place in Milton Keynes. The only answer that I can give him is that the business of housing transfer is well ahead in the future for Milton Keynes and Redditch and some other new towns. But the terms that we are working out now will not necessarily predetermine the terms that will affect second or third-generation new towns. The hon. Member was a member of the Committee that considered the New Towns (Amendment) Bill. We shall try to ensure that no undue burden falls upon the ratepayers of any district where transfer takes place. Hon. Members who represent constituencies in which first-generation new towns are situated will agree that we have behaved fairly and reasonably so far.
  My hon. Friend the Member for The Wrekin talked about the statistical situation. I have tried to deal with that. He also suggested that one of the dangers is for Governments or public opinion generally to indulge in policy making by lurch. I cannot agree more about that danger but I hope that we are now avoiding it. Where there has been an unfortunate concurrence between the need to examine inner city policy and new town policy, some people have regarded that as implying an enormous lurch in one direction. I hope that the shape of my hon. Friend's statement on new towns and inner cities has demonstrated that there has been no sudden lurch of policy, and that we are continuing the new towns programme in a responsible fashion.
  The hon. Member for Northampton, South (Mr. Morris) was particularly concerned about the problems of the disadvantaged and the elderly. He was worried about the burden that might be placed upon the social services and about the inadequacy of hospital provision. I am aware of complaints in a number of new towns about the inadequacy of hospital provision. All I can say is that I shall certainly examine that argument. I shall have discussions with Ministers to see what can be done in the hon. Member's area.
  I am sorry that there will not be time for me to deal with other speeches hon. Members have made. This has been a useful debate. I hope that we have been

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  able to assure the House of the need for the Bill, and that the details can be properly considered at the proper time and in the proper place.
  Question put, That the Bill be now read a Second time: —
  The House divided: Ayes 179, Noes 140.

  Division No. 1511

  AYES

  [7.00 p.m.

  Abse, Leo

  Graham, Ted

  Pavitt, Laurie

  Allaun, Frank

  Grant, George (Morpeth)

  Penhaligon, David

  Anderson, Donald

  Grant, John (Islington C)

  Phipps, Dr Colin

  Atkins, Ronald (Preston N)

  Grocott, Bruce

  Price, William (Rugby)

  Atkinson, Norman

  Hamilton, James (Bothwell)

  Radice, Giles

  Bagier, Gordon A. T.

  Hardy, Peter

  Reid, George

  Bain, Mrs Margaret

  Harrison, Rt Hon Waller

  Robertson, John (Paisley)

  Barnett, Guy (Greenwich)

  Hatton, Frank

  Robinson, Geoffrey

  Barnett, Rt Hon Joel (Heywood

  Hayman, Mrs Helene

  Roderick, Caerwyn

  Bates, Alf

  Heffer, Eric S.

  Rodgers, George (Chorley)

  Beith, A. J.

  Henderson, Douglas

  Rooker, J. W.

  Benn, Rt Hon Anthony Wedgwood

  Hoyle, Doug (Nelson)

  Rose, Paul B.

  Bennett, Andrew (Stockport N)

  Hughes, Rt Hon C. (Anglesey)

  Ross, Stephen (Isle of Wight)

  Blenkinsop, Arthur

  Hughes, Roy (Newport)

  Ross, Rt Hon W. (Kllmarnock)

  Boyden, James (Bish Auck)

  Jeger, Mrs Lena

  Sandelson, Neville

  Brown, Hugh D. (Provan)

  Jenkins, Hugh (Putney)

  Sedgemore, Brian

  Brown, Robert C. (Newcastle W)

  John, Brynmor

  Sheldon, Rt Hon Robert

  Buchanan, Richard

  Johnson, Walter (Derby S)

  Shore, Rt Hon Peter

  Campbell, Ian

  Jones, Alec (Rhondda)

  Slllars, James

  Canavan, Dennis

  Jones, Dan (Burnley)

  Silverman, Julius

  Cant, R. B.

  Kerr, Russell

  Skinner, Dennis

  Carson, John

  Kilroy-Silk, Robert

  Smith, Cyril (Rochdale)

  Carter-Jones, Lewis

  Lamble, David

  Smith, John (N Lanarkshire)

  Cartwright, John

  Lamborn, Harry

  Snape, Peter

  Cocks, Rt Hon Michael (Bristol S)

  Lamond, James

  Spearing, Nigel

  Cohen, Stanley

  Lee, John

  Spriggs, Leslie

  Coleman, Donald

  Lestor, Miss Joan (Eton & Slough)

  Stallard, A. W.

  Colquhoun, Ms Maureen

  Lewis, Arthur (Newham N)

  Steel, Rt Hon David

  Conlan, Bernard

  Lewis, Ron (Carlisle)

  Stoddart, David

  Cowans, Harry

  Loyden, Eddie

  Summerskill, Hon Dr Shirley

  Cox, Thomas (Tooting)

  Luard, Evan

  Taylor, Mrs Ann (Bolton W)

  Craigen, Jim (Maryhill)

  Lyons, Edward (Bradford W)

  Thomas, Dafydd (Merioneth)

  Crawshaw, Richard

  Mabon, Rt Hon Dr J. Dickson

  Thomas, Ron (Bristol NW)

  Crowther, Stan (Rotherham)

  McCartney, Hugh

  Thorne, Stan (Preston South)

  Davidson, Arthur

  McDonald, Dr Oonagh

  Thorpe, Rt Hon Jeremy (N Devon)

  Davies, Bryan (Enfield N)

  MacFarquhar, Roderick

  Tinn, James

  Davies, Denzil (Llanell)

  MacKenzie, Rt Hon Gregor

  Tomney, Frank

  Deakins, Eric

  Mackintosh, John P.

  Tuck, Raphael

  Dean, Joseph (Leeds West)

  Maclennan, Robert

  Wainwright, Richard (Colne V)

  Dempsey, James

  McMillan, Tom (Glasgow C)

  Walker, Terry (Kingswood)

  Doig, Peter

  Madden, Max

  Watkins, David

  Dormand, J. D.

  Magee, Bryan

  Watt, Hamish

  Douglas-Mann, Bruce

  Marks, Kenneth

  Weetch, Ken

  Duffy A. E. P.

  Marshall, Dr Edmund (Goole)

  Weitzman, David

  Dunnett, Jack

  Meacher, Michael

  Wellbeloved, James

  Edge Geoff

  Mendelson, John

  White, Frank R. (Bury)

  English, Michael

  Mikardo, Ian

  White, James (Pollok)

  Ennals, David

  Millan, Rt Hon Bruce

  Whitehead, Phillip

  Evans, Fred (Caerphilly)

  Miller, Mrs Millie (llford N)

  Wigley, Dafydd

  Evans, loan (Aberdare)

  Molloy, William

  Williams, Rt Hon Alan (Swansea W)

  Fernyhough, Rt Hon E.

  Moonman, Eric

  Williams, Rt Hon Shirley (Hertford)

  Fitch, Alan (Wigan)

  Morris, Rt Hon J. (Aberavon)

  Wilson, Gordon (Dundee E)

  Fletcher, Ted (Darlington)

  Moyle, Roland

  Wise, Mrs Audrey

  Foot, Rt Hon Michael

  Mulley, Rt Hon Frederick

  Woodall, Alec

  Forrester, John

  O'Halloran, Michael

  Woof, Robert

  Fowler, Gerald (The Wrekin)

  Orme, Rt Hon Stanley

  Wrigglesworth, Ian

  Garrett, W. E. (Wallsend)

  Ovenden, John

  Young, David (Bolton E)

  George, Bruce

  Padley, Waiter

  Ginsburg, David

  Pardoe, John

  TELLERS FOR THE AYES:

  Gould, Bryan

  Parker, John

  Mr. Joseph Harper and

  Gourlay, Harry

  Parry, Robert

  Mr. Joseph Ashton.

  NOES

  Adley, Robert

  Brittan, Leon

  Cooke, Robert (Bristol W)

  Arnold Tom

  Brooke, Peter

  Cope, John

  Atkins, Rt Hon H. (Spelthorne)

  Brotherton, Michael

  Costain, A. P.

  Bennett, Dr Reginald (Fareham)

  Brown, Sir Edward (Bath)

  Crowder, F. P.

  Benyon W

  Buck, Antony

  Dean, Paul (N Somerset)

  Berry, Hon Anthony

  Budgen, Nick

  Dodsworth, Geoffrey

  Riff on John

  Bulmer, Esmond

  Drayson, Burnaby

  Biggs-Davlson John

  Carlisle, Mark

  Eden, Rt Hon Sir John

  Blaker, Peter

  Chalker, Mrs Lynda

  Elliott, Sir William

  Body Richard

  Clark, Alan (Plymouth, Suttoft)

  Emery, Peter

  Boscawen, Hon Robert

  Clarke, Kenneth (Rushcliffe)

  Eyre, Reginald

  Bottomley, Peter

  Clegg, Walter

  Falrbalrn, Nicholas

  Braine Sir Bernard

  Cockcroft, John

  Falrgrleve, Russell

  Farr, John

  Lawson, Nigel

  Sainsbury, Tim

  Fell, Anthony

  Le Merchant, Spencer

  Shaw, Giles (Pudsey)

  Finsberg, Geoffrey

  Lester, Jim (Beeston)

  Shelton, William (Streatham)

  Fookes, Miss Janet

  Luce, Richard

  Shepherd, Colin

  Forman, Nigel

  McCrindle, Robert

  Silvester, Fred

  Gardiner, George (Relgate)

  MacKay, Andrew James

  Sims, Roger

  Gilmour, Rt Hon Sir Ian (Chesham)

  Mates, Michael

  Sinclair, Sir George

  Glyn, Dr Alan

  Mather, Carol

  Skeet, T. H. H.

  Goodhew, Victor

  Maude, Angus

  Smith, Dudley (Warwick)

  Gow, Ian (Eastbourne)

  Maxwell-Hyslop, Robin

  Smith, Timothy John (Ashfield)

  Gower, Sir Raymond (Barry)

  Meyer, Sir Anthony

  Speed, Keith

  Grant, Anthony (Harrow C)

  Miller, Hal (Bromsgrove)

  Spicer, Michael (S Worcester)

  Grieve, Percy

  Mills, Peter

  Stainton, Keith

  Griffiths, Eldon

  Miscampbell, Norman

  Stanbrook, Ivor

  Grist, Ian

  Moate, Roger

  Steen, Anthony (Wavertree)

  Hall, Sir John

  Monro, Hector

  Stradling Thomas, J.

  Hampson, Dr Keith

  Montgomery, Fergus

  Taylor, Teddy (Cathcart)

  Hannam, John

  Moore, John (Croydon C)

  Thatcher, Rt Hon Margaret

  Harvie Anderson, Rt Hon Miss

  Nelson, Anthony

  Thomas, Rt Hon P. (Hendon S)

  Hodgson, Robin

  Neubert, Michael

  van Straubenzee, W. R.

  Holland, Philip

  Newton, Tony

  Viggers, Peter

  Hordern, Peter

  Page, John (Harrow West)

  Walder, David (Clitheroe)

  Howe, Rt Hon Sir Geoffrey

  Page, Rt Hon R. Graham (Crosby)

  Walker, Rt Hon P. (Worcester)

  Howell, David (Gulldford)

  Page, Richard (Workington)

  Warren, Kenneth

  Hunt, David (Wirral)

  Percival, Ian

  Weatherill, Bernard

  Hurd, Douglas

  Price, David (Eastleigh)

  Wells, John

  Hutchison, Michael Clark

  Raison, Timothy

  Wiggin, Jerry

  James, David

  Rathbone, Tim

  Winter ton, Nicholas

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

  Rees, Peter (Dover & Deal)

  Wood, Rt Hon Richard

  Jones, Arthur (Daventry)

  Renton, Tim (Mid-Sussex)

  Young, Sir G. (Ealing, Acton)

  Kershaw, Anthony

  Rhodes James, R.

  Younger, Hon George

  Kimball, Marcus

  Ridley, Hon Nicholas

  King, Evelyn (South Dorset)

  Roberts, Michael (Cardiff NW)

  TELLERS FOR THE NOES:

  Langford-Holt, Sir John

  Rossi, Hugh (Hornsey)

  Lord James Douglas-Hamilton and

  Latham, Michael (Melton)

  Rost, Peter (SE Derbyshire)

  Mr. Peter Morrison.

  Question accordingly agreed to.
  Bill read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Coleman.]
  Committee tomorrow.

  NEW TOWNS [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act of the present Session to increase the limit imposed by section 43 of the New Towns Act 1965 on the amounts which may be borrowed by the development corporations for the new towns and the Commission for the New Towns, it is expedient to authorise any increase in the sums—

  (a) falling to be paid out of or into the National Loans Fund or the Consolidated Fund;

  (b) falling to be paid out of moneys provided by Parliament;

  being an increase attributable to the provisions of the said Act of the present Session increasing to £3,250 million the limit imposed by the said section 43 of the amounts outstanding in respect of borrowing by the development corporations and the Commission.—[Mr. Shore.]

CONTROL OF OFFICE DEVELOPMENT BILL
As amended (in the Standing Committee), considered.
CONTROL OF OFFICE DEVELOPMENT BILL

  Clause 1
  CONTINUANCE IN FORCE OF PROVISIONS RELATING TO CONTROL OF OFFICE DEVELOPMENT
  7.13 p.m.
  The Under-Secretary of State for the Environment (Mr. Guy Barnett): I beg to move Amendment No. 1, in page 1, line 12, leave out 'fourteen' and insert 'seventeen'.
  The principle of the Bill was approved by the House on Second Reading, when my right hon. Friend the Secretary of State explained why the continuation of the office development control system was required. It will be noted that the amendment reverses the amendment that was secured in Committee by the hon. Member for Hampstead (Mr. Finsberg) to prolong the control for two years rather than five years as the Government proposed.
  I am in no doubt that the extension of the office development control powers should be for five years. When the control was first introduced, it was given a life of seven years—that is, from 1965 to

  467
  1972. When that period had elapsed, it fell to a Government supported by hon. Members on the Opposition Benches to decide whether to renew the control, and the period they chose was five years. That seems a very reasonable one to choose and I am quite content to adopt it on this occasion.
  By contrast, two years would be quite unsuitable. As I said in Committee, it would lead to uncertainty in the office property world and among local authorities in the area in which the control applied. People would very soon find that within the time scale of development they were planning they could not tell whether office development control would be in operation.
  From the point of view of Parliament, I am sure that two years is an unreasonably short time to have to go through the process of promoting fresh legislation, if the control is still required. Nor am I attracted by the suggestion made by the hon. Member for Hampstead in Committee—namely, that at the end of two years the powers should be continued on an annual basis, subject to affirmative resolution of both Houses. Although that would take up less time than legislation, I am sure that it would be wrong to ask the House to reconsider this question so frequently. I believe that it is quite unnecessary to get into that position when Section 86(1) of the Town and Country Planning Act 1971 enables the control to be brought to an end by Order in Council at any time before the end of the specified period.
  Mr. Graham Page: The hon. Gentleman said that in Committee, but if he looks at Section 86(1) he will see that it provides "unless Parliament otherwise determines". As far as I know, that cannot be interpreted as meaning by Order in Council. An Order in Council is when Her Majesty determines. It should surely be by resolution of both Houses—an affirmative resolution—rather than by Order in Council.
  Mr. Barnett: I cannot answer the right hon. Gentleman immediately. I have put before the House the advice that I have been given—namely, that office development control can be varied, as indeed it has recently been varied, by Order in Council. That seems to be the correct
  468
  process. If the right hon. Gentleman wishes, I shall check the point that he has made.
  Everything points to renewing the control, if it is to be renewed—and that was the decision of the House—for a reasonable period. I contend that five years is a reasonable period. If circumstances change within that time, the control can be terminated if that course seems appropriate.
  Mr. Geoffrey Finsberg: I think that the Minister is being a little too ingenuous. He is saying that, among other things, uncertainty would be caused if the Bill were passed with a two-year life. He might be right if we were starting from scratch. However, the Bill is continuing existing powers for a further two years. That is what the Bill would be doing if the Government were prepared to accept the will of the Committee.
  I suggest that the hon. Gentleman is not being quite open with the House in the way in which he has put forward his argument. This is an extension of existing powers, subject to the fast ball that my right hon. Friend the Member for Crosby (Mr. Page) bowled, which I hope can be answered before the end of the debate. The Committee took the view that the period should be changed. There have been many changes of policy, and they are all to be welcomed—for example, relaxations in industrial development certificates, the reversal concerning the Location of Offices Bureau and the changes announced in respect of office development permits.
  Life should not always be made too easy for the civil servants. It is so easy for civil servants to say to Ministers that they should have a Bill that will run for five years because otherwise they would have to go to the trouble of preparing another Bill within a shorter period, parliamentary time would have to be found and it would be difficult to get parliamentary time. I do not think that the House should accept what the hon. Gentleman has said. A simple Bill could be introduced if necessary and if the Government of the day felt that they wanted a further Bill. That would be the time for a fresh Bill.
  As I said in Committee, we would not oppose the Bill if it merely had to be extended on an annual basis by affirmative

  469
  resolution. I am not certain that the Minister has answered that point especially effectively. At least a Minister could obtain time for an affirmative resolution, which is rather different from obtaining premium time from a busy House in normal circumstances.
  On Second Reading the hon. Member for Swansea, East (Mr. Anderson) was a trifle confused and there was not time to correct him. He said, as reported at column 354 of the Official Report, that the Bill was being opposed by the new GLC and by the Conservatives. I tried to make it clear, as I made clear earlier in the debate when the hon. Gentleman was not with us, that the old GLC and the new GLC both wanted to get rid of office development permits. I told the hon. Gentleman that I would clarify that matter. There has been a bipartisan approach all the way through.
  The hon. Member for Ealing, North (Mr. Molloy) was unhappy in Committee, although on Second Reading he was clear that he liked the principle of the Bill. He said:
  "I have some apprehensions about the Bill and am not entirely happy with it. However, there is enough in it to tempt me to support it."—[Official Report, 17th May 1977, Vol. 932, c. 340.]
  I hope he will feel, therefore, that he can support the principle of the Bill without going along with the amendment.
  I see that the hon. Member for Swansea, East has now come in. I referred to him, but in a kind way, so I hope that he is not too upset to have missed it.
  In Committee, the hon. Member for Ealing, North said something which was not accurate. Following a comment to the effect that the GLC wanted this relaxation, he said:
  "But that was not the view of the London boroughs, whether Tory or Labour."—[Official Report, Standing Committee A, 24th May 1977; c. 10.]
  Speaking as one of the parliamentary panel of the London Boroughs Association, I know that they do not want a continuation of ODPs. They said so in evidence to the Department when they submitted their paper on inner cities. That is still their view, and I wanted to place that fact on record. The hon. Member is a good local government man and I do not want an inaccuracy to stay on the record.
  470
  There is no justification for the Government's attempt to reverse the amendment on which the Committee decided after a long and interesting debate. As I said, two years is just as good as five when we remember that we are not starting from scratch but are renewing existing powers. The right way of proceeding is by affirmative resolution or a new Bill if necessary but not, at this stage, by a five-year extension which allows the things to stay on the statute book for too long.
  Mr. Stephen Ross: I rise to speak with some trepidation, because I intend to advise my hon. Friends to vote differently from the way in which my hon. Friend the Member for Cardigan (Mr. Howells) voted in Committee after having heard the persuasive words of the hon. Member for Hampstead (Mr. Finsberg). In fairness, I must say that the hon. Member misled my hon. Friend somewhat, although, of course, not deliberately. My hon. Friend was under the impression that this was a matter on which we had supported the Opposition on Second Reading, when that was not so.
  The matter arose from the statement of the hon. Member for Hampstead that all parties in the previous GLC, which had two Liberal members, favoured the lifting of office development permits. I accept that, but the Government have gone a long way in raising the figure in the Bill to 30,000 sq. ft.
  The commercial and industrial property page of the Evening Standard on Monday 30th May contained the statement:
  "The sun is beginning to shine brightly for a change on the beleagured property world; a new Tory administration at County Hall, a new role for the Location of Offices Bureau and no need for office development permits for buildings of below 30,000 square feet."
  The article went on to describe the improved activity in the property world in London, and concluded:
  "Figures just published by Richard Sanders and Partners in April show that the amount of office space let within the City was 115,820 square feet—half the amount of the previous month. Overall, the amount of space available for letting in that area is a record 3,387,721 square feet."
  I should have thought that this House was opposed to further vast office building at this time. A big area is already permitted without an ODP.

  471
  Four or five years ago, many people felt strongly about the vast number of office blocks that were being built when we should have been building houses and factories. Much of this space will not be taken up in the next couple of years. One has only to walk down Tottenham Court Road to see the number of offices which are vacant. I am sure that the property world would prefer the controls maintained so that some of these buildings can be taken up. The same is true in the provinces. Portsmouth, for example, is full of empty office blocks. Five years is a fair compromise.
  Let us concentrate on getting the available finance into the right areas and not give another boom to office building. The Opposition more than anyone—I support them on this—want to cut back bureaucracy.
  The local authority at Richmond, I understand, intends to build an office block of 36,000 sq. ft. Apparently, the local MP and many local people are completely opposed to the project, which is connected with a car park. The development was to have been done by a Government Department, which, fortunately, no longer intends to do so. But the local council has an ODP and apparently intends to go ahead with this speculative building, despite indignation in the borough.
  The Government are right to bring in [his legislation, and I shall support them tonight.
  Mr. Hugh Rossi: It is an interesting admission by the Liberal spokesman, the hon. Member for the Isle of Wight (Mr. Ross), that his party places on Committee people who do not understand what they are doing. That is the import of his speech. But he is less than fair to his hon. Friend the Member for Cardigan (Mr. Howells), who followed the arguments closely, intervened several times and was convinced of the necessity for the abolition of ODPs. One notes with interest the difficulties that the Liberal Party has in deciding exactly how to vote at any given time.
  As for the argument of the hon. Member for the Isle of Wight about surplus accommodation, if his figures are accurate he should be arguing for the abolition of ODPs. What is the point
  472
  of keeping controls if they are not needed? Who will build if there is a surplus of accommodation? The more the hon. Gentleman talks, the more ridiculous a posture he gets himself and his party into.
  We have argued this matter at length and researched it carefully. On Second Reading we gave abundant evidence that the ODP system was completely unnecessary and damaging to inner London rents and that it affected our competitiveness in insurance, commerce, banking and mercantile shipping. There is no need for it to be retained. The only justification is to maintain the present bureaucracy for longer than is necessary. I hope that my hon. Friends will adhere to our view and oppose the amendment.
  Mr. Guy Barnett: I must first give the right hon. Member for Crosby (Mr. Page) the answer to the fast one he bowled at me. He will be surprised to learn that Section 86(1) to which I referred was amended by Section 5 of the 1972 Act. That is the justification for what I was saying.
  It will not do for the hon. Member for Hampstead (Mr. Finsberg) to say that to extend the control by a couple of years, even though it is only an extension and not a new control, will not bring uncertainty to the property market. That is precisely what it will do. The hon. Member said that all parties on the GLC are opposed to office development control. That matter was aired in Committee. No doubt the hon. Gentleman and office developers know that his party on the GLC is opposed to control and that the Government have deliberately produced a reappraisal of policy which implies some flexibility in the operation of that policy. If one were to add a reduction of the length of control from five to two years, property developers and local authorities would gain the firm impression that the days of office control were numbered. That would certainly be a dangerous situation.
  That is my answer to the hon. Member for Hornsey (Mr. Rossi), who, echoing the interesting information given by the hon. Member for the Isle of Wight (Mr. Ross)—that interest in office development is at a low ebb at the moment— said that that proved that there was no need for office development control.

  473
  Admittedly there may not be much at the moment, because there is not much mobile office development in the current year, but with the upturn in the economy there almost certainly will be
  The Opposition's amendment which was made in Committee would have had the effect of maintaining office development control during the period when little office development was likely to take place, and when the upturn in the economy came the whole question would be in doubt. Whatever office development might be taking place now, however little, could well be delayed in the expectation that after a couple of years control might be lifted. This could create massive uncertainty in the property market and among local authorities.
  As I said on Second Reading and in Committee, the Government are firm about the need for office development control The Opposition have been critical, but, although we have tried to make it clear to them, they have failed to realise that office development permit control must be seen as part of the policy which includes new terms of reference for the Location of Offices Bureau and the regional grants provided by my right hon. Friend the
  Secretary of State for Industry as an encouragement for offices to move to the assisted areas, where office jobs are badly needed.
  Therefore, I am not convinced by the arguments advanced in this debate. The argument, which has been put again, that all parties in the GLC are against ODP control does not move me, even though I am a London Member, because the purpose of office development control is a regional purpose, to help constituencies such as that of my hon. Friend the Member for Swansea, East (Mr. Anderson), where, as in many other parts of Wales, there is a considerable lack of employment opportunity and offices, a matter which we want to redress.
  We believe that by the Government's new policy, of which the Bill is a part, we can move towards a fairer balance of employment opportunities in different parts of the country. Therefore, I must ask my hon. Friends to support the amendment.
  Question put, That the amendment be made:—
  The House divided: Ayes 119, Noes 94.

  Division No. 152]

  AYES

  [7.33 p.m.

  Abse, Leo

  Fletcher, Ted (Darlington)

  Miller, Mrs Millie (llford N)

  Anderson Donald

  Forrester, John

  Molloy, William

  Ashton, Joe

  Garrett, W.E. (Wallsend)

  Moonman, Eric

  Atkins, Ronald (Preston N)

  George, Bruce

  Moyle, Roland

  Atkinson, Norman

  Ginsburg, David

  O'Halloran, Michael

  Bagier, Gordon A. T.

  Gould, Bryan

  Ovenden, John

  Barnett, Guy (Greenwich)

  Grant, George (Morpeth)

  Padley, Walter

  Beith, A. J.

  Grocott, Bruce

  Parker, John

  Bennett, Andrew (Stockport N)

  Harper, Joseph

  Parry, Robert

  Blenkinsop, Arthur

  Harrison, Rt Hon Walter

  Pavitt, Laurie

  Brown, Hugh D. (Provan)

  Hatton, Frank

  Penhaligon, David

  Brown, Robert C. (Newcastle W)

  Heffer, Eric S.

  Phipps, Dr Colin

  Campbell, Ian

  Hoyle, Doug (Nelson)

  price, William (Rugby)

  Cant, R. B.

  Hughes, Roy (Newport)

  Radice, Giles

  Carson, John

  Jeger, Mrs Lena

  Roderick, Caerwyn

  Cartwright, John

  Jenkins, Hugh (Putney)

  Rooker, J. W.

  Cocks, Rt Hon Michael (Bristol S)

  John, Brynmor

  Ross Stephen (Isle of Wight)

  Cohen, Stanley

  Johnson Walter (Derby S)

  Ross, Rt Hon. (kilmarnock)

  Coleman, Donald

  Jones, Alec (Rhondda)

  Sandelson Neville

  Conlan, Bernard

  Jones, Dan (Burnley)

  Sedgemore Brian

  Cowans, Harry

  Kilroy-Silk Robert

  Shore, Rt Hon Peter

  Crawshaw, Richard

  Lamborn, Harry

  Skinner Dennis

  Crowther, Stan (Rotherham)

  Lamond, James

  Smith, Cyril (Rochdale)

  Davidson, Arthur

  Lee, John

  Spearing, Nigel

  Davies, Denzil (Llanelli)

  Lewis, Arthur (Newham N)

  Davies, Ifor (Gower)

  Lewis, Ron (Carlisle)

  Spriggs, Leslie

  Deakins, Eric

  Loyden, Eddle

  Stallard, A.W.

  Dempsey, James

  Lyons, Edward (Bradford W)

  Steel, Rt Hon David

  Doig, Peter

  McCartney, Hugh

  Stoddart, David

  Dormand, J. D.

  McDonald, Dr Oonagh

  Summerskill, Hon Dr Shirley

  Douglas-Mann, Bruce

  MacKenzle, Rt Hon Gregor

  Taylor, Mrs Ann (Bolton W)

  Duffy, A. E. P.

  Maclennan, Robert

  Thomas, Ron (Bristol NW)

  Edge, Geoff

  McMillan, Tom (Glasgow C)

  Walker, Terry (Kingswood)

  English, Michael

  Madden, Max

  Watkins, David

  Evans, Fred (Caerphilly)

  Magee, Bryan

  Weetch, Ken

  Evans, loan (Aberdare)

  Marshall, Dr Edmund (Goole)

  White, Frank R. (Bury)

  Fernyhough, Rt Hon E.

  Meacher, Michael

  White, James (Pollok)

  Fitch, Alan (Wigan

  Mendelson, John

  Whitehead, Phillip

  Wigley, Dafydd

  Woof, Robert

  TELLERS FOR THE AYES

  Wise, Mrs Audrey

  Wrigglesworth, Ian

  Mr. James Hamilton and

  Woodall, Alec

  Young, David (Bolton E)

  Mr. Peter Snape.

  NOES

  Adley, Robert

  Harvie Anderson, Rt Hon Miss

  Rees, Peter (Dover & Deal)

  Arnold, Tom

  Hodgson, Robin

  Renton, Tim (Mid-Sussex)

  Bennett, Dr Reginald (Fareham)

  Holland, Philip

  Rhodes James, R.

  Biffen, John

  Hordern, Peter

  Roberts, Michael (Cardiff NW)

  Body, Richard

  Howell, David (Guildford)

  Rossi, Hugh (Hornsey)

  Boscawen, Hon Robert

  Hunt, David (Wirral)

  Rost, Peter (SE Derbyshire)

  Brooke, Peter

  Hurd, Douglas

  Sainsbury, Tim

  Brotherton, Michael

  Hutchison, Michael Clark

  Shaw, Giles (Pudsey)

  Buck, Antony

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

  Shelton, William (Streatham)

  Budgen, Nick

  Jones, Arthur (Daventry)

  Shepherd, Colin

  Bulmer, Esmond

  Kimball, Marcus

  Silvester, Fred

  Clark, Alan (Plymouth, Sutton)

  King, Evelyn (South Dorset)

  Sims, Roger

  Clark, William (Croydon S)

  Langford-Holt, Sir John

  Skeet, T. H. H.

  Cope, John

  Lawrence, Ivan

  Smith, Timothy John (Ashfleld)

  Costain, A. P.

  Lawson, Nigel

  Speed, Keith

  Dean, Paul (N Somerset)

  Le Marchant, Spencer

  Spicer, Michael (S Worcester)

  Dodsworth, Geoffrey

  Loyden, Eddie

  Stainton, Keith

  Douglas-Hamilton, Lord James

  McCrindle, Robert

  Stanbrook, Ivor

  Eden, Rt Hon Sir John

  MacKay, Andrew James

  Stradling Thomas, J.

  Elliott, Sir William

  Maxwell-Hyslop, Robin

  Taylor, Teddy (Cathcart)

  Eyre, Reginald

  Mills, Peter

  Tebbit, Norman

  Finsberg, Geoffrey

  Miscampbell, Norman

  Viggers, Peter

  Fookes, Miss Janet

  Moate, Roger

  Wakeham, John

  Forman, Nigel

  Moore, John (Croydon C)

  Walder, David (Clitheroe)

  Gardiner, George (Reigate)

  Nelson, Anthony

  Warren, Kenneth

  Goodhew, Victor

  Neubert, Michael

  Weatherill, Bernard

  Gow, Ian (Eastbourne)

  Newion, Tony

  Wood, Rt Hon Richard

  Gower, Sir Raymond (Barry)

  Page, Rt Hon R. Graham (Crosby)

  Young, Sir G. (Ealing, Acton)

  Grant, Anthony (Harrow C)

  Page, Richard (Workington)

  Grieve, Percy

  Percival, Ian

  TELLERS FOR THE NOES:

  Hall, Sir John

  Price, David (Eastleigh)

  Mr. Peter Morrison and

  Hampson, Dr Keith

  Raison, Timothy

  Mr. Carol Mather.

  Hannam, John

  Rathbone, Tim

  Question accordingly agreed to.
  Order for Third Reading read— [Queen's Consent, on behalf of the Crown, and Prince of Wales's Consent, on behalf of the Duchy of Cornwall, signified.]
  7.44 p.m.
  Mr. Guy Barnett: I beg to move, That the Bill be now read the Third time.
  If any points are raised, I should like to have the opportunity to reply to them after the debate.
  7.45 p.m.
  Mr. Rossi: I do not wish to detain the House, because we have already rehearsed the arguments for and against the Bill very fully on Second Reading and again in Committee. Although I am sure that the House would be fascinated to hear me rehearse the arguments once more, I would be bored having to listen to myself say the same thing for the third time of asking.
  The old canard was raised that these ODPs are necessary in order to help the development areas, and that this is the need for office control. We have adduced the evidence on Second Reading and again in Committee that not one office of 10,000 sq. ft. or more for which ODPs were refused found its way out of the
  476
  South-East. They stayed where they were, suffering the inconvenience of cramped conditions, or the firms concerned persuaded the Department to grant them the ODP eventually, or they moved to some other place within the South-East.
  No benefit of the kind that is the justification for the Bill in the eyes of the Minister exists on the evidence that we have seen and argued about and which he has accepted. All I can say to him is that none is so deaf as he who will not hear, and none is so blind as he who will not see.
  The arguments are on the record in Hansard for Tuesday 17th May 1977, commencing at column 320. Having read that into the record, I beg the House to reject the Bill.
  7.47 p.m.
  Mrs. Lena Jeger: I express my total regret concerning this Bill. I well remember the time when the system of office permits came into being. It was because the whole House—I say advisedly "the whole House", including the right hon. Member for Worcester (Mr. Walker), who had ministerial responsibility for the period—was completely outraged at the

  477
  continuing emptiness of blocks of offices in the centre of London—blocks such as Centre Point and the acres of nearby offices which were unoccupied. These continuing vacancies were an outrage to us all. They seemed to me to symbolise a measure of speculative cupidity and bad planning which has hardly been equalled this century.
  I am amazed that my right hon. and hon. Friends are bringing forward this Bill at a time when Centre Point is still empty and when there are still thousands of square feet of empty office buildings in the centre of London. It is no help for the Minister to say, as he did on Second Reading, that he was only changing the limit from 30,000 sq. ft. to 15,000 sq. ft. because several small blocks, particularly if they are built close together, have the same deadening effect on a neighbourhood as one large block.
  My right hon. Friend said on Second Reading:
  "The fact that the office sector continues to expand makes it an obvious contributor to the regeneration of urban areas".—[Official Report, 17th May, 1977; Vol. 932, c. 315.]
  What regeneration has been brought to Camden by the continuing emptiness of Centre Point, which is merely a provocation to the people who lost their homes in order that that site could be cleared for office building?
  There are many more office blocks in the pipeline. There are many more that have not yet been built and for which permits have been granted. It is not as though most of the time these offices are to be built on virgin land; they are being built on land which in central London is precious indeed. I cannot tell the House—no one has kept the figures with sufficient care—of the number of people who have lost their homes in order that great blocks such as Euston Tower could be built.
  I know that one of the arguments for this change of policy is that there are fewer jobs in central London, but it is a pity that sometimes Ministers do not have to try to catch a bus down Tottenham Court Road in the rush hour. If they did they might not feel that central London was becoming an empty desert during working hours. I know all about the difficulties of this situation, but office building has practically nothing to do with
  478
  regeneration. Regeneration can be brought about only by people, and without people there is no community.
  The crying need in central London is for places in which people can live. There are very many special needs which can best be met in that way. I am thinking particularly of students and young single people, for whom there is an alarming lack of provision. Anything that this House does to tilt the balance away from meeting the needs of people in terms of their homes, with the shops that will serve them, and with the pubs in which I hope they will enjoy themselves, cannot be for the social good of our inner cities.
  We have an example of this in Covent Garden, where local people, largely through the work of the Covent Garden Community Association, have been fighting for years to preserve something of the community life of that area, and not without some success. But the shame is— and this is one of the things that puzzles me about this Bill and makes it impossible to vote for the Third Reading—that there are acres of derelict land in Covent Garden which my constituents have to look at and for which office permits have already been given, so that the land cannot be used for any other purpose such as recreation for the community, for shops, or, above all, for homes.
  Developers are leaving the sites unused even though they have their permits. They do this for their own commercial reasons. That is their business, and I do not blame them for that. But I do not know what a Labour Government are doing adopting similar yardsticks when introducing legislation. I am not convinced that there is any need to relax the rules when so many permits are not being acted upon.
  The hon. Member for Hornsey (Mr. Rossi) said on Second Reading that at the moment there is a surplus of office accommodation in the London area. I have read all the debates, including the Committee stage, carefully and I can find not a single Member who has denied that this surplus exists in central London. What are we getting, therefore? People are having to leave their homes and communities are being destroyed. My right hon. Friend the Secretary of State talks of regeneration. I do not know what regeneration there is in areas that die at 6 o'clock in the evening and are dead at weekends.

  479
  We used to say that the only inhabitants of this area at the weekend were a cat and a caretaker. Times have changed, and it is now more likely to be a fierce dog and a security guard populating the concrete deserts in the heart of London. We have too many offices already, and until those that are already built and those that are in the course of planning are occupied I cannot accept this easing of control.
  I still believe, as the whole House believed a few years ago, that Centre Point and the fact that it continues to be unoccupied is offensive. I am sorry if I tend to talk often about Centre Point, but for me it has become a symbol of the kind of speculative building that no one supports but which the Bill will make easier for future developers to perpetrate. No one else in this House may share that view, but representing as I do a constituency that has suffered grievously in its community life from an excess of office building, I know that most of my constituents, supporters of all parties, would say that there has been enough and that they want no more.
  I end on a lighter note. All of our constituencies have been the scenes of street parties recently. We had a splendid party —I am sure it was the best of all—in Charlotte Street, in an area that we call Fitzrovia. Many people who came from other areas were amazed at the number of children present. They had not realised that all of these families lived in the area between Tottenham Court Road and Charlotte Street. The only pity about all these families—and bonny splendid children they were, living happily in the centre of our city—is that most of them are under threat of losing their homes and of having to move away, breaking off with their schools and losing touch with their neighbourhood, because of the number of applications, some of which have already been accepted, in this, one of the last living lungs of neighbourhood life in that part of my constituency.
  There seems to be some idea among many people that offices are more regenerative than a lot of families having a party in Charlotte Street. Surely nothing can be further from the truth.
  This is a subject which I am not glad to say I know a lot about but on which,
  480
  because of my constituency, a great deal of information has come my way. I am very sorry about the Bill. There are places where it will be useful, but I do not see why it should apply to central London, and we do not want it in Camden.
  7.56 p.m.
  Mr. Tim Sainsbury: I do not want to detain the House for long, if for no other reason than that I want to find the source of the strong smoked-fish smell that permeates the Chamber. I hope that it has nothing to do with the Bill.
  I understand that among the constituents of the hon. Member for Holborn and St. Pancras, South (Mrs. Jeger) who do not follow her view about the Bill are the councillors of the London borough of Camden who are opposed, I understand, to the retention of office development permits. So perhaps the borough is not as united in its view as the hon. Lady seems to think.
  We have put into Clause 2 a certain amount of information about areas. I appreciate that the Minister has been intensely busy with drafting the Government's amendment and with his lengthy peroration on the Bill. Perhaps I may remind him, however, that he undertook to write to me about a matter and I still await his letter. Now that he has finished his arduous work on behalf of the Government, he might find time to put pen to paper.
  7.59 p.m.
  Mr. Guy Barnett: I can inform the hon. Member for Hove (Mr. Sainsbury) that I have written to him and I have signed a letter concerned with the issues he raised in Committee. I am sure he will receive that letter very shortly.
  A number of us have covered the arguments on the Bill on a number of occasions and we do not want to go over them yet again. Perhaps I may refer, however, to the point raised by the hon. Member for Hornsey (Mr. Rossi) concerning the evidence contained in the office location review. That review indicates that, in the particular period examined, large firms that were refused ODPs did not move to the assisted areas. The period concerned ended in 1972. In the following year the Government introduced a system of incentives to the service

  481
  industries in order to attract mobile non-manufacturing employment to the assisted areas.
  I underline that point, and I also underline the point that the incentives were increased in October last year, in order to repeat and emphasise to the House that in my view office development control is unlikely to be fully successful unless accompanied by grants of assistance to firms prepared to move to the regions and also accompanied by the Location of Offices Bureau with its new terms of reference. That is the policy that the Government are putting before the House, and that is the policy that the Government wish the House to support this evening.
  I admit that to some degree ODP control in the previous period before that aspect of policy was not pursued may not have been as successful as many of us would have hoped. That is my answer to the point made by the hon. Member for Hornsey.
  Mr. Rossi: All that the hon. Gentleman is arguing is that the carrot is more effective than the stick and that people obviously refused to move when there was an element of compulsion in the attitude of the Government. But at the moment when the Government introduced incentives of a positive nature they took them up. That is a very human reaction. What we are arguing is that there is no need to have the stick because what has succeeded is the carrot. We are not arguing about the carrot today. Now, the Minister is to give the carrot to certain firms to come back to central London to help regeneration there. Is not that a bit of nonsense?
  Mr. Barnett: Not at all. One aspect is that where a firm is refused an ODP, or where it asks for one and is told that it is unlikely to get it, it comes in contact with my officials, who discuss the possibility of perhaps being moved to an area where office employment is badly needed. The firm is put in touch with the Location of Offices Bureau. The opinion of the Government is that the best forms of dispersal policy are those in which both a little bit of the carrot
  482
  and a little bit of the stick are involved, as well as a little bit of information. I hope that the hon. Gentleman will give the policy a chance to work, because I have a strong feeling that on the basis on which it was designed it will work.
  I listened with close interest to the speech made by my hon. Friend the Member for Holborn and St. Pancras, South (Mrs. Jeger). Representing a London constituency, although not one facing the sort of problems that my hon. Friend has described, I know of the appalling problems created in her constituency by office development of one kind or another. I remember that Centre Point was planned and built largely—indeeed, wholly— before office development control was introduced. The kinds of problems that my hon. Friend described and the effects which office development may have on certain sorts of communities are surely issues related to planning control rather than to ODP control. I see ODP control as a regional control to try to disperse office development to areas where it is needed.
  In my hon. Friend's constituency there is too much office development, but there are other parts of London—indeed, other parts of the country—where there is too little and where the balance of employment for youngsters does not exist. The sense in which my right hon. Friend the Secretary of State speaks of offices being able to regenerate communities is the sense in which they are able to offer to young people in certain districts opportunities for employment which they might not have and for which they might be well suited and qualified.
  My hon. Friend said that she cannot support the Bill because it will raise the exemption limits. In fact, the Bill itself will not do that. All that the Bill will do is continue to control, and I am sure that my hon. Friend agrees with that. She criticised my right hon. Friend's decision to raise the exemption limits, and she is entitled to do that in view of what she has told the House. But that is done under an order-making power and not as a consequence of the extension of legislation. In view of that, I hope that my hon. Friend will feel able to support us in the Lobby.
  Question put, That the Bill be now read the Third time: —
  Question accordingly agreed to.
  The House divided: Ayes 119; Noes 93.

  Division No. 1531

  AYES

  [8.5 p.m.

  Abse, Leo

  Garrelt, W. E. (Wallsend)

  Parker, John

  Anderson, Donald

  George, Bruce

  Parry, Robert

  Ashton, Joe

  Ginsburg, David

  Pavitt, Laurie

  Atkins, Ronald (Preston N)

  Gould, Bryan

  Penhaligon, David

  Atkinson, Norman

  Grant, George (Morpeth)

  Phipps, Dr Colin

  Bagier, Gordon A. T.

  Grocott, Bruce

  Price, William (Rugby)

  Barnett, Guy (Greenwich)

  Hamilton, James (Bothwell)

  Radice, Giles

  Beith, A. J.

  Harrison, Rt Hon Walter

  Roderick, Caerwyn

  Bennett, Andrew (Stockport N)

  Hatton, Frank

  Rooker, J. W.

  Blenkinsop, Arthur

  Heffer, Eric S.

  Ross, Stephen (Isle of Wight)

  Brown, Hugh D. (Provan)

  Hoyle, Doug (Nelson)

  Ross, Rt Hon W. (Kilmarnock)

  Brown, Robert C. (Newcastle W)

  Hughes, Roy (Newport)

  Sandelson, Neville

  Campbell, Ian

  Jenkins, Hugh (Putney)

  Sedgemore, Brian

  Canavan, Dennis

  John, Brynmor

  Shore, Rt Hon Peter

  Cant, R. B.

  Johnson, Waller (Derby S)

  Skinner, Dennis

  Carson, John

  Jones, Alec (Rhondda)

  Smith, Cyril (Rochdale)

  Cartwright, John

  Jones, Dan (Burnley)

  Snape, Peter

  Cocks, Rt Hon Michael (Bristol S)

  Kilroy-Silk, Robert

  Spearing, Nigel

  Cohen, Stanley

  Lamborn, Harry

  Spriggs, Leslie

  Coleman, Donald

  Lamond, James

  Stallard, A. W.

  Conlan, Bernard

  Lewis, Arthur (Newham N)

  Stoddart, David

  Cowans, Harry

  Lewis, Ron (Carlisle)

  Summerskill, Hon Dr Shirley

  Crawshaw, Richard

  Lyons, Edward (Bradford W)

  Taylor, Mrs Ann (Bolton W)

  Crowther, Stan (Rotherham)

  Mabon, Rt Hon Dr J. Dickson

  Thomas, Ron (Bristol NW)

  Davidson, Arthur

  McDonald, Dr Oonagh

  Thorpe, Rt Hon Jeremy (N Devon)

  Davies, Denzil (Llanelli)

  MacKenzie, Rt Hon Gregor

  Walker, Terry (Kingswood)

  Deakins, Eric

  Maclennan, Robert

  Watkins, David

  Dempsey, James

  McMillan, Tom (Glasgow C)

  Weetch, Ken

  Doig, Peter

  Madden, Max

  White, Frank R. (Bury)

  Dormand, J. D.

  Magee, Bryan

  White, James (Pollok)

  Douglas-Mann, Bruce

  Marshall, Dr Edmund (Goole)

  Whitehead, Phillip

  Duffy, A. E. P.

  Meacher, Michael

  Wigley, Dafydd

  Dunnett, Jack

  Mendelson, John

  Wise, Mrs Audrey

  Edge, Geoff

  Miller, Mrs Millie (llford N)

  Woodall, Alec

  English, Michael

  Molloy, William

  Woof, Robert

  Evans, Fred (Caerphilly)

  Moonman, Eric

  Wrigglesworth, Ian

  Evans, Ioan (Aberdare)

  Moyle, Roland

  Young, David (Bolton E)

  Fernyhough, Rt Hon E.

  O'Halloran, Michael

  Fitch, Alan (Wigan)

  Ovenden, John

  TELLERS FOR THE AYES

  Fletcher, Ted (Darlington)

  Padley, Walter

  Mr. Joseph Harper and

  Forrester, John

  Pardoe, John

  Mr. Alf Bates.

  NOES

  Adley, Robert

  Hodgson, Robin

  Rees, Peter (Dover & Deal)

  Arnold, Tom

  Holland, Philip

  Renton, Tim (Mid-Sussex)

  Bennett, Dr Reginald (Fareham)

  Hordern, Peter

  Rhodes James, R.

  Biffen, John

  Howe, Rt Hon Sir Geoffrey

  Roberts, Michael (Cardiff NW)

  Body, Richard

  Hunt, David (Wirral)

  Rossi, Hugh (Hornsey)

  Boscawen, Hon Robert

  Hurd, Douglas

  Rost, Peter (SE Derbyshire)

  Brooke. Peter

  Hutchison, Michael Clark

  Sainsbury, Tim

  Brotherton, Michael

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

  Shaw, Giles (Pudsey)

  Buck, Antony

  Jones, Arthur (Daventry)

  Shelton, William (Streatham)

  Bulmer, Esmond

  Kimball, Marcus

  Shepherd, Colin

  Clark, Alan (Plymouth, Sutton)

  King, Evelyn (South Dorset)

  Silvester, Fred

  Clark, William (Croydon S)

  Langford-Holt, Sir John

  Sims, Roger

  Cope, John

  Lawrence, Ivan

  Skeet, T. H. H.

  Costain, A. P.

  Lawson, Nigel

  Smith, Timothy John (Ashfield)

  Dean, Paul (N Somerset)

  McCrindle, Robert

  Speed, Keith

  Dodsworth, Geoffrey

  MacKay, Andrew James

  Spicer, Michael (S Worcester)

  Douglas-Hamilton, Lord James

  Mather, Carol

  Stainton, Keith

  Drayson, Burnaby

  Maxwell-Hyslop, Robin

  Stanbrook, Ivor

  Eden, Rt Hon Sir John

  Mills, Peter

  Stradling Thomas, J.

  Elliott, Sir William

  Miscampbell, Norman

  Taylor, Teddy (Cathcart)

  Eyre. Reginald

  Moate, Roger

  Tebbit, Norman

  Finsberg, Geoffrey

  Moore, John (Croydon C)

  Thomas, Rt Hon P. (Hendon S)

  Fookes, Miss Janet

  Morrison, Hon Peter (Chester)

  Viggers, Peter

  Gardiner, George (Reigate)

  Nelson, Anthony

  Wakeham, John

  Goodhew, Victor

  Neubert, Michael

  Walder, David (Clitheroe)

  Gow, Ian (Eastbourne)

  Newton, Tony

  Warren,Kenneth

  Gower, Sir Raymond (Barry)

  Page, Rt Hon R. Graham (Crosby)

  Wealherill, Bernard

  Grant, Anthony (Harrow C)

  Page, Richard (Workington)

  Wood, Rt Hon Richard

  Grieve, Percy

  Percival, Ian

  Hall, Sir John

  Price, David (Eastleigh)

  TELLERS FOR THE NOES

  Hampson, Dr Keith

  Raison, Timothy

  Sir George Young and

  Hannam, John

  Rathbone, Tim

  Mr. Spencer Le Marchant

  Harvie Anderson, Rt Hon Miss

  Bill read the Third time and passed

OFFSHORE OIL AND GAS PROJECTS (GRANTS)
8.16 p.m.

The Minister of State, Department of Energy (Dr. J. Dickson Mabon): I beg to move,

That this House authorises the Secretary of State to pay, or undertake to pay, by way of financial assistance under section 8 of the Industry Act 1972, as amended by section 22 of, and Part I of Schedule 4 to, the Industry Act 1975 and section 1 of the Industry (Amendment) Act 1976, as grants in respect of interest on money borrowed for obtaining in the United Kingdom goods and services for each of the projects specified in column 1 of the Table below carried on by persons specified in respect thereof in column 2 of the Table sums which, together with the sums already paid or undertaken to be paid by way of such financial assistance, exceed the sum of £5 million but do not exceed the sum specified in respect of the project in column 3 of the Table.

TABLE

(1)

(2)

(3)

Project

Persons carrying on Project

Maximum amount of financial assistance

Establishment offshore of production platforms and other installations with their equipment for the development of the Ninian oilfield

Chevron Petroleum Ltd. BNOC (Ninian) Ltd. Imperial Chemical Industries Ltd. Murphy Petroleum Ltd. Ocean Exploration Co. Ltd. BP Petroleum Development Ltd. Ranger Oil (UK) Ltd. Scottish Canadian Oil and Transportation Co. Ltd. London & Scottish Marine Oil Co. Ltd.

£43 million

Establishment offshore of a production platform and other installations with their equipment for the development of the Thistle oilfield

BODL Ltd. Burmah Oil (Exploration) Ltd. BNOC (Thistle) Ltd. Deminex UK Exploration and Production Ltd. Deminex Oil and Gas (UK) Ltd. Santa Fe (UK) Ltd. Tricentrol Thistle Development Ltd. Charterhouse Petroleum Development Ltd. Conoco Ltd. Gulf Oil (Great Britain) Ltd. BNOC (Exploration) Ltd.

£18 million

Establishment offshore of a production platform and other installations with their equipment for the development of the Forties oilfield

BP Oil Development Ltd.

£10 million

Establishment offshore of a production platform and other installations with their equipment for the development of the Brent oilfield

Shell (UK) Ltd. Esso Petroleum Co. Ltd.

£9 million

Establishment offshore of a production platform and other installations with their equipment for the development of the Frigg (UK) gas-field

Total Oil Marine Ltd. Aquitaine Oil (UK) Ltd. Elf Oil Exploration and Production (UK) Ltd. Total Marine Norsk El Norge A/S Aquitaine Norge A/S Norsk Hydro Produksjon A/S

£9 million

The offshore supplies interest relief grant scheme was introduced in October 1973. I say that to remind the hon. Member for Glasgow, Cathcart (Mr. Taylor), in case he wants to be pejorative about that order and to recall its history.
The grant scheme was introduced under Section 8 of the Industry Act 1972. As the House knows, affirmative resolutions
486
arise under this section of the 1972 Act when the amount of financial assistance to be provided for a single project is likely to exceed £5 million. For the purposes of this resolution, the United Kingdom offshire oil and gas fields named in it have been considered as a separate project. That is the reason for the detail on the Order Paper.
The amounts shown in column 3 of the table in the resolution are maxima. The grants are payable in instalments, either six-monthly or annually, over a period of up to eight years to the participants in the development of the fields named in column 2 or the successors of those so named.
Let me remind the House of the origins of this scheme. As the extent of the North Sea's potential became apparent in the early 1970s, there was concern that British and particularly Scottish industry would not get its fair share of orders for offshore supplies for equipment and for services in markets where other powerful suppliers were long established overseas and quite entrenched. This was at a time when precisely those British industries which seemed best placed to cater for North Sea requirements were suffering from the shortest order books.
Against this background, the previous Government commissioned a firm of independent consultants. IMEG, the International Management and Engineering Group, was commissioned in 1972 to study the developing offshore market and British industry's place in it. Its report early in 1973 confirmed that British industry was indeed missing out. I might say that this was a very good report in my estimation and that of many of my colleagues.
The report estimated that only between 25 per cent, and 30 per cent, of money spent up to that time by oil companies in developing the offshore fields had been spent on orders to British companies, and it recommended more positive policies on the part of the Government.
Among its findings, IMEG noted that the availability of medium-term credit at officially supported preferential rates was a significant element in the competitiveness of the tenders submitted to offshore operators, and it went on to state that in this respect British companies were at a disadvantage compared with overseas suppliers. This situation arose from the fact that the powers available to the Export Credits Guarantee Department are designed to encourage trade with other countries. Sales by United Kingdom firms to the United Kingdom Continental Shelf are outside the ECGD's remit. Many overseas suppliers, on the other hand, are
488
able to secure the advantage of export credits supported by their national credit institutions since their sales to the UKCS are straightforward exports. As a result, the ability of United Kingdom firms to compete in this challenging new market was increasingly being adversely affected by an inability to offer competitive credit terms.
It was accordingly decided in October 1973 to introduce a scheme which would operate directly on the cost of credit obtained to finance contracts for the supply of goods and services for fixed offshore installations for our Continental Shelf. This Government share the view of the previous Government that the scheme is necessary to counter subsidised competition from suppliers in other countries and believe that it should be maintained.
It is a key objective of Government policy that British industry should have a full and fair, opportunity to succeed in the difficult UKCS market which, despite its currently depressed state, is still worth around £1,000 million a year and is likely to remain at about that level into the 1980s.
Nobody could be more delighted than I to see that the hon. Member for Ross and Cromarty (Mr. Gray) has come into the Chamber to speak for the Opposition on this matter.
Mr. Teddy Taylor: I hope that the Minister is not in any way suggesting that I, also on the Opposition Front Bench, could not give a very full and devastating condemnation of Government policy on oil rigs.
Dr. Mabon: No, I am not suggesting that. The hon. Member for Cathcart (Mr. Taylor) would definitely give an adequate reply. Whether it would be a friendly one is quite another matter. I would prefer the hon. Member for Ross and Cromarty, who is a much nicer man, but that is a matter of personal preference.
The industrial capability that is being built up in the United Kingdom to meet the particularly stringent requirements of the UKCS should enable our industry to exploit the vast potential of the world wide offshore market. British industry has substantially increased its share of orders for the UKCS market from 35 per cent, in 1973, when the study was commissioned, to rather more than 50 per cent.

489
in 1975 and 1976. Later we shall be discussing orders for the current period.
It would be unrealistic to attribute all this improvement to the interest relief grants scheme; other factors include our proximity to the market and the considerable United Kingdom offshore industrial capacity that has been built up. But the oil companies share the Government's view that the scheme does reasonably counterbalance the availability of foreign preferential credit rates and have confirmed that it is taken into account in their contract decisions.
As for the operation of the scheme, an oil or gas field operator ordering or installing a production platform or pipeline may apply to register with the Offshore Supplies Office of my Department a contract he places with a United Kingdom supplier which meets certain basic requirements. Broadly, these are that the contract value must be £100,000 or more —although grant may be paid only on up to a maximum of 80 per cent, of the contract value—and the contract must be for the provision of, a fixed offshore installation on the United Kingdom shelf outside territorial waters, or plant, machinery or other goods for fitting out such an installation, or services directly connected with the provision of such installations.
Mr. Peter Rost: I wonder whether the Minister would tell us what assistance this will provide for the United Kingdom steel industry, which we understand is still not in a position to supply the offshore underwater piping. What have the Government done since 1973 to put the industry in a better position to compete for this huge market?
Dr. Mabon: That is a very fair point. In July 1976 I discussed this personally with Sir Monty Finniston, that excellent former Chairman of the British Steel Corporation, and he said that he was investigating the possibility of opening one of BSC's installations to see whether it could produce that size of pipe which, incidentally, the Americans are not able to produce for their installations in Alaska and other parts of North America. The information from Sir Charles Villiers, Sir Monty's successor, is that investments are going on in Hartlepool to such an extent that the Corporation will be able to put forward competitive tenders.
490
The BSC has looked very seriously at its capacity in RDL, not just for steel platforms, but for steel modules as well, in order to see how it can compete in this market. I hope that there will be a vigorous effort. The hon. Member for Ross and Cromarty has questioned me because he thought that the remarks of Sir George Sharp were prejudiced, but Sir George has been misreported, as they say in these political days. It is not quite like that.
The BSC is making an earnest attempt to get into the market for pipelines and modules, which is considerable and expanding. [Interruption.] Yes, it is expanding. There are still seven more fields to commission and a lot more afterwards, if we are lucky. I say to anybody in the business that the bonanza is not over and there is a lot to be done. I am sorry that the BSC, up to now, has been unable to rival Japanese and other efforts in this regard.
Mr. Hamish Gray: Does the Minister agree that the BSC is not only not able to rival foreign competitors but is not able to rival the yards at Ardersier and Nigg Bay in my constituency? Both these yards have obtained contracts, so the BSC is not only unable to rival foreign competition.
Dr. Mabon: I find it difficult to decide whether the hon. Member is acting as shadow spokesman or as the hon. Member for Ross and Cromarty. It is difficult to ride two horses at the same time, especially when they are travelling in opposite directions. The two yards in question are doing well, but they have a substantial American interest. I do not begrudge them that; I am merely saying that it contributes to their success. On the other hand, RDL has had a hard time, but it has put up a good performance. It has delivered on time, but there have been many difficulties. I have reservations about one or two thing that have happened in the past in connection with RDL. However, it is a fair competitor.
We in Britain—and I mean "Britain" since we have three yards in Scotland and one in England—should not quarrel among ourselves about the orders. Our main dedication lies in obtaining orders for Britain. It is true that others, in

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Holland or Norway or elsewhere, may challenge us, but we must beat them fairly at their own business and obtain the orders for ourselves. I believe that the Nigg installation is admirable, Arder-sier is splendid, and RDL first-class. I also believe that Laings is one of the best yards in the United Kingdom. All four deserve to be widely considered. The foreign yards are not very good, and we should concentrate on obtaining orders for our own yards.
We are talking about a whole range of contracts for steel and concrete production platforms and deck structures and module fabrications. I received a deputation this very evening from a Clydeside firm in that connection. This embraces a wide variety of products: process plant and equipment, well casings, well-head communications and safety equipment as well as pipework. There are many associated engineering and supporting services connected, for example, with design work, project management and installation. All these matters are covered by this affirmative resolution. The total number of contracts so far registered under the scheme approaches a figure of 500, with total expenditure in the United Kingdom in excess of £800 million.
Having registered a contract under the scheme, the consortium financing the field development of which the contract forms part may claim interest relief grants on borrowing undertaken specifically to finance that field. Individual consortium members must satisfy the Offshore Supplies Office that, for example, the borrowing they undertake is of a genuine arm's length nature. Grant has been fixed since the start of the scheme at 3 per cent, per annum, payable on the outstanding balance of the qualifying loan. The maximum period for which grant may be claimed is eight years for any particular project, with provision for progressive reduction of the outstanding qualifying amount over the last five years.
To revert to the resolution now before the House, the amounts of assistance for which I am asking the House for approval are my Department's estimates of the likely maximum grants payable under contracts associated with the probable development of each of the five fields named. These estimates depend, I quite
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agree, on many uncertain factors, including the nature, scale and timing of development programmes, the proportion of contracts likely to be won by United Kingdom suppliers, the extent to which applicants make qualifying borrowings to finance such contracts, and the timing of the repayments of such borrowings. The estimates have been prepared after consultations with the operators, but they are our estimates.
The maximum amounts of grant for which approval is sought are admittedly large. To put the grant in perspective, I can say that broadly, each pound of grant represents between £8 and £10 of business for the United Kingdom. For the five fields in question—making allowances for contracts still to come— we are looking to over £800 million worth of work for United Kingdom companies. I should also add that the total amounts of grant envisaged will not be realised —if they ever are—until 1982–83.
Mr. Rost: Will the Minister fill in the details by explaining how much has already been granted under the scheme and whether, in his view, this is a satisfactory reflection of the contribution that British industry has been able to make to North Sea oil development?
Dr. Mabon: I suspect the latter, but I shall not deal in generalities. If I have an opportunity to reply to the debate I may be able to give the figure, which I hope will be supplied to me in the course of our proceedings.
The present resolution concerns only five fields. There are 14 other fields currently under development on the United Kingdom Continental Shelf, but in none of these cases is it yet clear whether assistance under the scheme will exceed £5 million. These cases are being kept under review, and we shall return to the House to seek approval for any more affirmative resolutions that may prove to be required, if and when the need is established.
In line with the provisions of Section 8 of the 1972 Act, it has been made clear to the oil companies in the published "Guide to Industry" on the scheme, and repeated in every letter accepting a contract for registration under that scheme, that the Secretary of State cannot pay or undertake to pay sums exceeding 5 million by way of grant unless and until the House has approved a higher sum.

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It would be appropriate for me to say a few words about the EEC Commission's inquiry into the scheme. Although the Commission raised no objection when the scheme was introduced in 1973 it has since expressed to the Government its concern that the scheme may be distorting competition within the Community. It has suggested that the scheme might be modified. We have told the Commission that we consider it necessary to maintain an effective scheme to counter subsidised competition from suppliers in other countries—not necessarily EEC countries—and that while we doubt that the scheme causes problems in intra-Community trade, we are prepared to discuss any proposals that the Commission might wish to elaborate. The Secretary of State for Energy met Commissioner Vouel on 16th May when the subject came into the discussion. It was agreed that officials on both sides would get together on the matter. In the meantime, the Commission has been notified of our intention to put the resolution before the House.
Mr. Anthony Nelson: Will the Minister elaborate on this, because it is an important matter? My understanding is that action is to be taken by the Commission under Article 93(2) to modify the system and that this follows the representation that has already been made by the Government to the Commission. Will the Minister say exactly what action is envisaged and whether, following these discussions, a stop or hold has been put on any action under that article?
Dr. Mabon: The response from the Commission has been extremely friendly. Many of the misconceptions about the scheme that have been in the minds of many people in Europe have been dispelled and I do not imagine that the Commission will proceed much further than it has done. I believe that it recognises that our scheme is perfectly fair and reasonable and that it is not ready to proceed further in the matter.
That may not be the outcome, but the Government take the view that in any process that may follow this we should be willing to defend our position. Even though the original scheme was introduced by our predecessors, who were ardent pro-Marketeers, we believe that the scheme quite justifies itself in the best
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pro-Marketeer sense and is in no way antipathetic to the interests of the Community. On the contrary, if the scheme were dispensed with it would work against the Nine rather than for them. We shall maintain that argument if any challenge is made. I am open to correction, but I think that we have reached the end of that road of contention and misunderstanding and that we are now able to see the light on this scheme.
Mr. Teddy Taylor: Since this is one of the few opportunities that we shall have for discussing this matter, we are entitled to more information. Is the Minister saying that the Commission is satisfied on the basis of the discussions it has had about the scheme and that the Commission believes that it is not inconsistent?
Dr. Mabon: If the Commission is wise it will be satisfied. I know that the hon. Member for Cathcart is not the most ardent pro-Marketeer in the House—I can think of other hon. Members who are more intensely pro-Market than he—but I believe that on reflection the Commission will realise that in the changed conditions of today that is not an unreasonable position for us to take in relation to the development of the North Sea. On this matter I hope that we shall receive as much support from those in favour of the Market as from those who are against it, that it will be realised that this is the situation and that it will not be challenged. Therefore, the views of the Commission apart—and I am surprised that the hon. Member for Cathcart should be bedazzled by the Commission, because he should be more concerned with the position of the House —I ask the House to agree to the resolution, with or without the approval of the Commission. I hope that the House will thereby demonstrate its support for the continuation of this policy, which has been pursued by both Conservative and Labour Administrations.
The House will be well aware—many Members whose constituencies are directly affected will be keenly aware—of the concern that exists among unions, managements and work forces about the difficult time that the offshore supplies industry has been facing during the last 18 months or so and is still facing because of the hiatus in ordering. This has been brought about by the escalating costs of

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developing our oil and natural gas resources offshore and the need seen by the oil companies, in view of this experience and developing technology, to reassess their investment plans.
Without the resolution, the scheme would collapse. It would effectively be at an end. The continued availability of preferential credits for overseas supplies means that we must continue to help to ensure the competitiveness of our hard-pressed supply industry and thereby reduce the risks to the heavy investments that the industry has made in this business in terms of capital, management and engineering skills and, above all, to reduce the risks to the jobs involved.
I appeal to members of the Opposition and other parties to join the Government in supporting the resolution.
8.41 p.m.
Mr. Hamish Gray: I apologise to the Minister for not being in my place for his opening few sentences.
Mr. Teddy Taylor: My hon. Friend did not miss much.
Mr. Gray: I shall not comment on that intervention. I shall read what the Minister said and judge whether I was deprived of any great pearls of wisdom.
I am glad that the Minister acknowledges that the initial scheme was introduced by my party when in Government. On 6th November 1973, my hon. Friend the Member for Bosworth (Mr. Butler) asked the Secretary of State for Trade and Industry what progress he had made in preparing a scheme to improve the credit terms available for sales of British equipment and services for the development of United Kingdom offshore oil and gas resources. Mr. Christopher Chata-way, who has now sought remuneration elsewhere, replied:
"Accordingly my Department is now ready to provide, under Section 8 of the Industry Act, interest relief grants at 3 per cent. per annum on credit obtained to finance contracts for the provision of British goods and services for the construction of fixed offshore installations used in the development of hydrocarbon resources on the United Kingdom Continental Shelf. To qualify, orders for goods and services must have been placed on or after 1st October 1973. These grants will help to create fair competition in this market."—[Official Report, 6th November 1973; Vol. 863, c. 119.]
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That shows that as long ago as 1973 my party was fully alerted to the necessity for a scheme such as this and took the initial steps to ensure that the investment of British companies in the North Sea was wholly safeguarded. Those facts are at variance with what we have been told by the Government about the inadequate measures taken by the last Conservative Administration. I am glad that the Minister confirmed that he inherited the scheme, and I am pleased that the Government have not cast it aside.
The motion, which authorises the Secretary of State to make payments under the Industry Act 1972, is relatively narrow and we are grateful to the Minister for broadening the debate. The order is narrow because its provisions deal mainly with Section 8 of the 1972 Act. About £90 million is involved, and it is essential that the House should examine carefully the way in which the money is being used. This is the first time that we have been able to debate this specific subject.
The annual reports by the Secretary of State for Industry have included references to assistance to offshore projects. The 1974 report, for example, said at paragraph 51:
"Other projects may be considered under Section 8. Three large projects in that category were under consideration at 31st March 1974."
That again highlights the fact that, because the Conservative Party when in Government introduced the measure, aid was at that time being considered although, because these measures were in their infancy, it was not necessary actually to pass money at that stage.
Paragraph 52 of the same report goes on to explain that the Offshore Supplies Office administers the special offshore supplies interest relief grant scheme designed to help United Kingdom firms to compete with overseas suppliers. We are grateful to the Minister for going into such detail on how the scheme operates at present. United Kingdom suppliers, as we know, are not eligible for ECGD facilities, while overseas suppliers have access to loan finance at preferential rates from their national export credit institutions.
In the report of 1975, this is clearly spelt out at paragraph 52. I shall not

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repeat it because it is virtually what the Minister has explained to us already. But my hon. Friend the Member for Chichester (Mr. Nelson) raised the important question of the effect of our EEC obligations on the administration of what is proposed in the motion. My hon. Friend the Member for Glasgow, Cathcart (Mr. Taylor)—to whom I am indebted for taking my place for a few minutes while I was detained elsewhere —also raised the same question.
I should refer also to my hon. Friend the Member for Bedford (Mr. Skeet), who, with his usual ingenuity—
Dr. J. Dickson Mabon: Where is he?
Mr. Gray: My hon. Friend has given me his apologies tonight because he has an important group of constituents visiting him in the building, and this has prevented his being in the Chamber.
I was about to say that my hon. Friend received a Written Answer on 8th June 1976 in which the Minister of State said that he had not received any complaints from our European partners at that time. I am glad that he has elaborated on that tonight. May I put it to him, however, that on 31st March 1974 it was known that contracts valued at about £100 million were in final stages of preparation. One comes, therefore, to the question of the EEC attitude towards those contracts and the fact that what is here proposed would be applicable to them. Was its attitude cleared during the renegotiations which the Minister's Government undertook before the referendum? If it was, there is no question of the EEC taking exception to what we are doing now. But it would be interesting to know from the Minister whether this specific point was raised with our partners in the Community at that time.
The report of 1975, paragraph 50, states that by that time 193 contracts were registered under the scheme and that these involved maximum qualifying borrowing amounting to £128 million, on which assistance to a maximum of 3 per cent. for up to eight years would be provided. However, at that time the amount which had been paid out was only £44,000. By March 1976, however, contracts registered under the interest relief grant scheme numbered 130, and
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by then £1·1 million had been paid out. This is recorded at paragraph 56 of the 1976 report.
The motion reveals the interest that has been shown in the development of the North Sea. Despite what the Government may say and what the hon. Member for Dundee, East (Mr. Wilson) may say on behalf of the Scottish National Party, this interest was undoubtedly built upon the firm foundation of the terms of the licences issued by the Conservative Government when they were in power.
Each round of licences must be considered in the light of the current situation. I shall always defend the Conservative Government for the licences which they issued when in power. There is little doubt in my mind and in the minds of many people that, had the attractive terms offered by the Conservative Government at that time not been offered, the prosperity which is about to be appreciated in this country from North Sea oil would not exist.
Mr. Gordon Wilson: Is the hon. Member saying that the discovery of oil in the Forties Field did not represent a change of circumstances which should have led to the automatic tightening of licensing conditions? I accept that the conditions before the discovery of oil in the Forties Field justified the then Government's action, but not afterwards.
Mr. Gray: I do not agree with the hon. Member although I take his point. I am glad that he concedes my point about the licences issued prior to the discovery of oil in the Forties Field.
The Forties Field was the first major discovery. It was to the advantage of this country that the terms which applied to that field should have encouraged British Petroleum to exploit the oil to its full extent. It was because of the confidence which the Conservative Party gave to this project that we are all now about to reap the benefit.
Mr. Gordon Wilson: Is the hon. Member aware that the Forties Field was discovered in 1969? The Conservatives therefore took office in 1970 with the knowledge that Forties had been discovered, and that would have affected their judgment about the terms.
Mr. Gray: I do not accept that. The hon. Member is unintentionally misleading the House. Although oil in the Forties Field was discovered in 1969, its full potential was not known until many years later. Only last year British Petroleum announced that the potential of the Forties Field was even greater than had been originally believed. It would have been foolhardy for the Government to change the rules before they knew the full extent of the development. I defend my party without any fear.
Situations change and, as they change, so do the awarding of grants and the determining of the criteria upon which grants should be extended. I am satisfied that the steps taken by my party when in Government were justifiable in the light of the circumstances that prevailed at that time.
The motion deals principally with the application of grant aid to those involved in the platform and module industry. I declare an active interest in platform yards since I represent a constituency in the North of Scotland which has within its boundaries two of the largest oil platform building yards in Britain.
The Nigg Bay yard produces steel platforms and the Kishorn yard builds concrete platforms. I am proud to say that they have achieved worldwide success through private enterprise. They were helped because private industry in the two places was welcomed by the local community. They use local labour, and where local labour is not sufficient it is imported. They have produced platforms and won orders in competition with such organisations as the British Steel Corporation, Methil, Graythorpe and yards on the Continent. The Nigg Bay yard has a very proud record. The enormous central platform that is being built at the Kishorn yard for Chevron will undoubtedly attract further orders.
Mr. Neville Sandelson: Will the hon. Gentleman give way?
Mr. Gray: The hon. Gentleman has only just come into the Chamber. He does not come in very often, so he can sit and listen.
Mr. Sandelson: I come in all the time.
Mr. Gray: In that case we do not see the hon. Gentleman.
Mr. Sandelson: Perhaps that is because the hon. Gentleman is not here very often.
Mr. Gray: When the hon. Gentleman has sat it out for a little while I may give way, but he cannot walk in and interrupt my speech like this. I have great sympathy with the hon. Gentleman, who has problems—
Mr. Sandelson: I have no problems.
Mr. Gray: I shall not give way, whether or not the hon. Gentleman has problems. We shall take care of our problems; he can look after his.
We must also say that the question of diversification is very important indeed. For these yards the oil platform industry is very important indeed, and it will not last for ever. We all appreciate and realise that. The Minister of State himself has from time to time raised the question of diversification. Indeed, in an article which appeared in the Financial Times as long ago as 7th December 1976, the Minister of State is reported as saying that the necessity for diversification was absolutely essential and that
"companies are being urged to diversify and to look outwards to potential exporting markets."
He went on to name the opportunities available in the Middle East, South-East Asia, Brazil, the Soviet Union. Australasia and the Far East. We know that many of our platform yards have followed this up and have tried to attract attention from those areas, and not without considerable success.
The Government's policy concerning the oil platform yards was wrong. I am sure that the right hon. Gentleman would not try to deny the fact that about £20 million to £25 million was spent unnecessarily in yards at Portavadie and Hunterston which have not attracted a solitary order to date.
Mr. Gordon Wilson: We told them so.
Mr. Gray: Yes, indeed. They were told repeatedly. However, they went ahead with this and, while I do not wish to be too carping about it, it was an unfortunate misjudgment at the time, but it is a misjudgment for which the Government must accept responsibility.
Concerning the question of the grants that are now available, perhaps this is a suitable time for us to revise the criteria

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for which those grants are offered. Indeed, it is for the Government seriously to consider whether it is any longer practical to offer the grants on the scale on which they have been offered in the past if they are convinced that companies will develop in any event. That is something that each Government in turn must consider very carefully.
I know that the right hon. Gentleman has taken this on board and will no doubt be considering it in the future. However, it might even be the case that, where highly profitable and potentially highly profitable exercises are to be entered into by major companies, there might be a case for at least some of the grants being given in the form of loans, so that it can be repayable at a future time. I shall not go further than that, but I think it is a point that the Minister will wish to consider carefully.
I have one or two questions about the relationship of the motion to the rest of the administration of the Act under which the grants are given. May we have some idea of what percentage of the total grants made under the 1972 Act goes to the oil-related purposes for which the motion refers? I realise that that is a broad question. Perhaps the right hon. Gentleman will touch upon it when he replies. In these days of devolution, or separation, as the hon. Member for Dundee, East might describe them, what proportion of the £90 million has gone to yards in Scotland or yards working for basic companies in Scotland? I realise that in the context of the United Kingdom it is difficult to make such a sub-division because sub-contractors do not necessarily locate themselves within the narrow confines of the home countries. However, it would be useful to be given some indication.
I should like to know what estimate the Government have made of the use that may be made of Section 8 of the 1972 Act over the next few years. For example, the Minister mentioned the number of fields that are likely to be developed over the next few years. It would be useful to know what forward prediction the Government have made over the next three years, for example, of the amount that is likely to be payable under Section 8 to companies developing the North Sea potential.
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I hope that the right hon. Gentleman will mention briefly the British National Oil Corporation, which is mentioned in the motion from time to time. There is a slight difficulty because the BNOC will presumably be receiving grant aid although it does not operate on the same basis as the other organisations with which it is in partnership. For example, it does not pay petroleum revenue tax. It is in a number of fairly privileged positions when compared with its partners. In what way is grant being paid to it?
In the Corporation's report it is pointed out that in its early stages most of its liability was due to the interests that it had taken over elsewhere. Perhaps the right hon. Gentleman will say a word about that. The House will be interested to know in what category it has received grant under the Act.
I do not wish to detain the House very much longer. I am sorry that the hon. Member for Hayes and Harlington (Mr. Sandelson) has found it necessary to leave the Chamber. I was anxious to give way to him. I am sure that he had a valuable contribution to make. However, with these few remarks I wish the motion well. I hope that the various peripheral parts of the United Kingdom, especially the peripheral parts of Scotland, and not least the constituency of Ross and Cromarty, may benefit in due course from anything it has to offer.
9.8 p.m.
Mr. James Dempsey: I was interested in the remarks of my right hon. Friend the Minister of State, who in his usual lucid fashion explained the operation of the grants. I was attracted to his contribution when he referred to the benefits to industry in general, especially in Scotland. I was sorry that he did not develop that approach a little further. Some of us would like to know to what extent the grants will benefit the spin-off jobs throughout the whole of Scotland.
There seems to be some misunderstanding about the contribution that British Steel Corporation has made towards the development of the capacity for piping in the North Sea. It is clear that it has done remarkably well. I can recall questioning why the very wide dimension of pipelining could be done

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only by Japan. At that time it was the only country that specialised in this dimension. I thought that we in this part of the world should be doing something about it.
It has been pointed out to me that if we had to provide such piping we should have to equip a special mill. What would happen to the mill at the turn of the century when the demand for North Sea piping had been met? What would it then be used for? If it were to be made redundant, the Opposition would be the first to criticise the BSC for the lack of marketing knowledge and failure to anticipate trade trends.
That is why the BSC concentrates on supplying other types of piping. For example, my contituency has done jolly well out of the North Sea development. We opened a works that had been closed so as to deal with North Sea piping. We have modernised an old hand repairing mill which might by now have been closed—the Imperial Tube Works at Airdrie—and are in the process of spending £18 million expanding it, increasing the number of jobs from 200 to 720.
These are some of the benefits that we have gained from the BSC's imaginative entry into North Sea piping supply. If my hon. Friend says it has now found some means of competing with the Japanese for the specialised piping they manufacture, I wish the BSC well.
Mr. Michael Marshall: One can understand the hon. Member's valid point about his constituency sharing in these benefits, but, on the BSC argument which he advanced, would he not consider that it is sad that the BSC did not foresee and take advantage of this demand? Otherwise, why were the Japanese able to take advantage of it? The hon. Gentleman talks about what will happen at the turn of the century, but surely there was a time scale here which we in this country could have enjoyed. Would he not agree on reflection that a major problem was the total uncertainty about investment intentions due to constantly changing Government intervention in the BSC's affairs?
Mr. Dempsey: No, I do not think that Government intervention had anything to do with it. In accordance with the per-
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formance of publicly-owned industries, this was a commercial decision, based on the fact that this type of product was strictly limited and that the Corporation could see no further use for a mill beyond that time. That was the reason given at the time, a few years ago.
Times may have changed and there may be other markets abroad. It is well known that the Japanese were specialising in that type of piping, not merely for North Sea oil but for developments in many other parts of the world.
Therefore, I can only convey to the hon. Gentleman the advice that I received from the management of the BSC at that time when we pressed this demand. I can only relay to the House the replies given to me.
But we can still do much better. I want to draw the Minister's attention to the section of the Industry Act which is operating. I am never too sure what elements are implemented by the Secretary of State for Industry, the Secretary of State for Scotland and the Scottish Development Agency respectively.
I hope that I shall be forgiven for mixing my metaphors, but in Scotland there is an inordinate demand for small factory space for oil-related developments. But I am dashed if we have such facilities. I have done all I can to induce the powers that be to provide them. I even invited Sir William Gray, the Chairman of the Scottish Development Agency, to meet me. He courteously did so. I took him over a few sites which are tailor-made for the construction of small factories to take advantage of oil-related developments in the North Sea. That was 18 months ago, but there has still been no decision by the SDA, which, I understand, operates Section 7 of the Industry Act to provide industrial grants for building factory developments and equipping factories. As far as I know, not one small factory has been built over that period in the whole of my area and outwith my constituency.
I appeal to my right hon. Friend to use his good offices with whichever agency is responsible to get cracking and let us have the small units which are in so much demand by up-and-coming business men. We need new skills and young management. We need not only

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to encourage working people and provide jobs but to encourage the development of skilful management and stimulate young people to think of making a go of it themselves—for example, setting out on the path to having their own little concern and thus making a contribution to oil-related jobs and providing more employment, especially in areas of very high unemployment, and at the same time retaining and expanding the skills of which we can be very proud in our part of the country.
All those opportunities are being lost because we have no small factory units. I appeal to my right hon. Friend to discuss the matter with his ministerial colleagues and try to bring about a decision to develop such small units, to encourage such jobs and to make the maximum of the oil-related developments taking place off the North Coast of Scotland.
9.12 p.m.
Mr. Gordon Wilson: I suppose that this is yet another chapter in the great North Sea oil bungle by both Governments. I had an exchange with the hon. Member for Ross and Cromarty (Mr. Gray), and I was disappointed that, with his usual ability to slip round difficult fences, he did not accept my point that the Conservative Government from 1970 onwards were well aware of what the Forties oilfield meant. If the data about the field had not been supplied to the Government, or if they did not take it in, that was another bungle by them. I am not blaming the hon. Gentleman personally, because he did not then occupy his present position. The mess in which the last Conservative Government left the economy generally is well known, so it is only to be expected that they were not immune from making the wrong decisions in other matters.
We are discussing an interest subsidy. The Minister put quite a good gloss on it when he talked about the export credits guarantee incentives and said that they did not apply to the home market. That was a strong argument, about the only one that can be applied to this scheme. If the scheme has produced employment and contracts, as I am sure it has done, it is to be welcomed, but we must examine it to see whether in other circumstances, with other approaches, public money might have been saved.
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We must accept—this is part of he procedures that we sometimes look upon with a degree of doubt—that at this late date there is nothing much we can do because the scheme has been in existence and we are now putting a rubber stamp on the expenditure which has been promised as part of two Governments' proposals for expanding the amount of United Kingdom involvement in the offshore industry.
I question much of the financing. The hon. Member for Ross and Cromarty referred to the two yards at Hunterston and Portavadie, where there was substantial previous expenditure by the Government on the provision of facilities which have never been used. It would not surprise me if at some time the Public Accounts Committee turned its attention to those two yards. I know that the Government have often said that at some time in the future those yards may be used, but we must realise that, with the paucity of orders facing the industry, if an order goes to those two new yards it will be to the detriment of the existing yards and those now employed in them.
As to whether these grants were necessary, the oil companies already get a massive allowance from the Government for the purpose of petroleum revenue tax. If I recall the figure correctly from the Committee dealing with oil taxation two years ago, about 75 per cent. of the capital cost was provided in an uplift allowance. That allowance was to apply not only to the capital expended, which presumably was 100 per cent., but also to the interest on the capital before any return accrued to the company. If that 75 per cent. was an interest allowance, we have here yet another subsidy being made available to the companies, which will get a rebate of interest on platforms which is not deductible from the PRT uplift allowance, as it is called.
Will the Minister comment on the extent of the financial incentive being made available to the Government? We have two separate things. The companies are getting a rebate on the petroleum revenue tax because they are allowed to set off an allowance for interest. Under the position here, we find that they are also being given a cash subsidy for placing their orders with certain yards located in Scotland.

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As the hon. Member for Ross and Cromarty said, as and when the bonanza is made known the conditions of the licensing should be made progressively tougher. I hope that there will not be much disagreement on either side in relation to that. One must obviously strike the best possible bargain in the national interest, particularly if one is disposing of a national asset.
The argument which develops—I shall not make too much of it tonight—concerns the point of time at which the toughening-up process should have been started and whether we have gone far enough at present. My party feels that successive Governments have been far too slack and that the oil companies have virtually been laughing at the Government for being so soft for so long.
Mr. Gray: I put to the hon. Gentleman the converse argument that as the oil is depleted the time will come when it might be suitable to make the terms of the licences that much easier where there is a need to develop marginal fields.
Mr. Wilson: There are two separate aspects to that. I would not disagree at all on that with the hon. Gentleman. As and when the negotiating position changes we should not take cognisance of that, but while the negotiating position is strong I think that we should. We should also separate the fact that smaller or marginal fields should be dealt with in a different way from the major fields. Here, in relation to the motion, we are certainly dealing with the major fields. Ninian must be very high up in the league. Thistle is no mean development. There may be some argument over Forties, which was one of the first developments and, therefore, might possibly have been dealt with in a different way from some of the others. Brent is hardly the smallest —it is in fact the biggest—and Frigg is the biggest gasfield in the North Sea.
From all these aspects, I think that we should relate our discussion to the major fields. I concede that there is an interest in developing the marginal fields. I have said so frequently, and particularly in relation to the oil taxation measure, and the Petroleum and Submarine Pipe-lines Bill.
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What could the Government have done? Once they had appreciated that oil was present in large quantities and could be developed, and that because of this the oil companies themselves would have a continuing interest in taking out new licences, it should have been made clear to the companies that, if they transgressed blatantly in buying equipment for the North Sea which was not produced from Scotland, they would not be given any further licences, or, at least, their opportunities for getting licences in the plummier areas would be rendered much more difficult.
I think that the Government are perhaps considering some of the proposals I have been making, but they would never dare admit this because most of the fighting is done out of sight. Nevertheless, what is being done is being done far too late. The production licences could have been made dependent upon the purchase of suitable quantities of equipment from Scotland.
The Minister of State referred to the somewhat greater than 50 per cent. share of the offshore market which is now enjoyed by the United Kingdom. I think that the figure is about 52 per cent., but unfortunately he has never told us what the Scottish figure is. There have been many requests for him to estimate that figure. It is a very important market. With the OSO located in Glasgow, I should have thought that it would be easy for it to calculate the Scottish share, or at least to make a fairly intelligent guess. Is the figure 20 per cent., 25 per cent. or 32 per cent.? The Minister is unwilling to say, and even Professor Donald Mackay has commented on the difficulty of extracting information from the Government.
If the Minister of State is about to repent and give that information, we shall cry "Hallalujah!" and be glad that he is prepared to tell us what it is. Whether we believe him is another matter. If hon. Members want me to give an estimate. I would put it at between 25 and 32 per cent. I am not sure that I would believe the Minister's figure, and given a choice between the two I would probably prefer my own.
I do not want to annoy the Minister, because he has been taking a suitably anti-European line. Only yesterday he

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was pulling at the beards of his European comrades, telling them to take their hands off British oil. I only wish that he would tell his English colleagues to take their hands off Scottish oil. Since he is beginning to learn, we hope that in a few years he will see reason on this score, particularly as the oilfields will be under totally Scottish control at that time.
The European Commission may take the view that this scheme, faulty as it is in many ways, should be discontinued for the benefit of the Commission. I accept the Minister's argument that the implementation of the scheme might be for the benefit of the nine members of the Community as well as specifically for the benefit of the United Kingdom and Scotland. But he should tell his comrades in the EEC that they are not going about their activities in such a way as to gain public popularity. The reputation of the Common Market has been falling sadly in the last two years.
The EEC is quite prepared to grab our fish. It is trying to grab our oil, and even now it is trying to grab the oil jobs. It is trying to grab the jobs from Ross and Cromarty, and even the hon. Member for Ross and Cromarty, who has been a loyal supporter of Brussels, appears to be coming round to the opinion that Ross and Cromarty must come before Brussels. [Interruption.] Apparently the hon. Gentleman does not believe that. So be it. We should tell the Common Market in no uncertain terms that if it wants to retain any popularity in Scotland it should cease this impertinent interference in our affairs.
I was interested in the remark by the hon. Member for Ross and Cromarty that instead of giving grants we should consider loans. In an earlier debate—I believe it was on the Cromarty oil refinery—the point was made that we should consider large advances or loans to petrochemical institutions on the basis that these should be separately negotiated. As the hon. Member said, many of these organisations would want to come here anyway and there is no point in subsidising an industry which is only too desperate to set up camp in a given area. That idea should be followed through. It might even be applied to the Cromarty refinery itself.
The Government should perhaps now look at the question of giving more atten-
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tion to the revision of the technology in the yards concerned to develop tension-leg platforms which have export potential. That is where a large part of the market will develop.
Only last week I was in the United States. Although the Americans are very anxious about the environment and about pollution which might be caused to their sea-going areas, it seems only a matter of time before their shortage of oil and gas will drive them to developing their Continental Shelf in a more active fashion than they have been doing lately. If that is so, and if other countries follow suit, exportable platforms will undoubtedly be a far better bet than the present ones, which are large and cumbersome and not easily transportable from one part of the world to another, particularly if there is the danger of foul weather in the process.
I welcome the motion. It has undoubtedly produced some employment in these difficult days. That is welcome, but I still share many reservations about whether it is necessary. A lot of push and pull will still have to take place before we get the benefits for which we have had to pay so expensively to the tune of £89 million.
9.27 p.m.
Mr. Anthony Nelson: The comments of the hon. Member for Dundee, East (Mr. Wilson) on the need for research and development in this important industry will meet with agreement on both sides of the House. However I am bound to say that some of his remarks on the handling of North Sea development by successive Conservative and Labour Governments appeared slightly less than objective. One cannot help wondering how even an independent Scotland would have been able to raise sufficient finance to offer a scheme similar to that which we are debating this evening.
I start by paying tribute to the outstanding performance of the many companies involved in the offshore supply industry. There is no doubt that many United Kingdom companies have responded successfully and profitably to the immense challenges presented by the discovery of North Sea oil within the last decade. The fact that United Kingdom offshore supply companies account for

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half the contracts in the North, Celtic and Irish Seas is a great tribute to the flexibility of the North Sea oil supply industry and its ability to see opportunities and profit from them.
This has been a £1 billion-a-year market, which the managing director of Esso has projected as doubling to a £2 billion-a-year market until 1980. Therefore, there are still tremendous and growing opportunities for the British offshore supply industry. I have no doubt that it will be quick to seize the opportunities that that presents.
Mr. Michael Marshall: Would not my hon. Friend take his argument wider and agree that the hon. Member for Dundee, East (Mr. Wilson) is in a way urging the case for further State intervention at an early stage?
Is it not the case that had it not been for private enterprise the whole of this exercise would never have got off the ground? We ought to be mindful of the fact that the Scottish National Party is pushing more State interventionism in the whole of this argument.
Mr. Nelson: I am sure that my hon. Friend is right in his comments. Indeed, despite the SNP's criticism it patently would not have been able to raise sufficient finance to offer anything like the scheme that we are debating tonight at the beginning of the development period. We have been told by the Offshore Supplies Office at the Department of Energy that the proportion of the market that United Kingdom companies supply could be increased to about 60 per cent. It is quite clear that even if the proportion increased only by about 10 per cent. the amount of money that we are talking about would be very considerable indeed. Equally, it is true that it will be much more difficult to increase the size of our share of the market over the 50 per cent. level and that it will become more costly as time goes on.
It is also clear that although many of the companies operating in the North Sea have given undertakings that they will provide full and fair opportunity for all suppliers to compete for orders, there is to some extent an indication of a bending of the rules, in that national pre-
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ferences are creeping in. The perhaps poor performance of the Norwegian supply industry in supplying only about 15 per cent. of the Norwegian Shelf has been followed by clear action by Statoil, the Norwegian agency, to increase its percentage of orders for its own country. The fact that many nationalised oil operators are now acting in joint partnership with public and independent oil companies is perhaps the first sign that there will be much greater pressure for orders to be placed in the countries concerned and that the operators will not be able to offer the full and fair opportunities for tendering that they have been able to in the past.
I want now to say a little about the EEC Commision's report on the operation of this scheme, not only because of its relevance to this motion but because it is very important for future Government intervention and any form of assistance to industry provided under successive Industry Acts.
The Minister indicated earlier that the Commission had informally withdrawn its threat to take action under Article 93(2) of the Treaty of Rome, but it is clear and in writing, in paragraph 221 of the Sixth Report on Competition Policy, that
"The Commission therefore decided to initiate the procedure under Article 93(2) of the EEC Treaty in respect of the scheme."
That followed representations that the Government had made. If the Minister is now saying that the Commission has withdrawn the intention of any action under this article he should be quite unequivocal about it, because this is very important for all the companies operating in the offshore supply industry.
Some of the observations in the EEC Commission's report are interesting in considering the basis of interest relief schemes. In its report, the Commission differentiates between the interest relief that is given to suppliers and that which is given to operators. It feels that although there was a case for such selective financial assistance being given to potential supply companies at the beginning of the development period this has ceased to be the case and should be discontinued. There is no doubt that the recipients of the funds that we are now discussing will exclusively be operators in the North Sea, rather than supplying companies.

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However, on the question of operators, the EEC Commission also feels that competition within the Community will be seriously disturbed by an escalation of the funds made available through this and similar schemes.
It is true that it was a Conservative Government who introduced the 1972 Industry Act, but it is equally true that this Government have, through amendments in the Industry Act 1975 and by orders which have vastly increased the funding made available through these Acts, radically transformed both the intention of and the criteria for providing selective financial assistance to industry. The level at which it is being provided now is very different from that envisaged during the passage of the 1972 Act.
Equally, it is clear that the intention at that time of assisting and providing Government encouragement for the development of an offshore supply industry has been acted upon by the private sector and has been successful. But it is proper, when we are considering further expenditure of public and taxpayers' money on these schemes, to question whether, now that the industry has developed, this is really the best use of taxpayers' money.
I believe that there are serious questions—I would not put them as strongly as criticisms—which the House should debate and consider on the efficacy of interest relief grants. After all, if a case for providing interest relief grants can be made for the offshore supply industry, there may be a case for other areas of industry as well where potential markets exist both at home and abroad. I have no doubt that this Government would be the first to seize on this possibility, if it offered a means of overcoming serious political difficulties on employment.
I believe that the extension of interest relief to other areas is something that the British Government cannot afford at present. There may be less of a case for the provision of such schemes at a time when inflation is falling, not rapidly but to some extent and, as a reflection of that, interest rates are falling more sharply.
If the Government offer a grant to a major offshore supply company aimed at meeting some of the cost of interest on
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capital in setting up plants when interest rates are 14 per cent., they must be satisfied that without such assistance the company would fail to set up productive machinery. If, in the course of another six months or a year, interest rates fall to 11 per cent., the 3 per cent. benefit that the Government gave to that company would become redundant.
In that situation, when interest rates have fallen, as they have done in recent months, is it still appropriate for the Government to provide extra support and subsidy, when that support was supplied originally to encourage the setting up of productive capacity and to make the tendering of supplies from that company more competitive internationally. When interest rates fall, so do the production costs of the offshore company concerned, and therefore it should be more competitive or cheaper than for companies of other countries. This is an important area, because the figure that we are discussing tonight—potentially £89 million —appears firmly fixed. I would welcome an indication whether this figure is a maximum or whether, with a further fall in interest rates, our liability could be substantially smaller.
On the question of the effect of extending the scheme to other areas of industry—
Dr. J. Dickson Mabon: We are not talking about that.
Mr. Nelson: The Minister says that we are not talking about that, but we are talking about support for the offshore supply industry and money that has gone into Hunterston, Marathon and other sectors through selective industrial assistance. This matter should be discussed in a motion of this nature, because it is an alternative means of spending public money, and public money, by its very nature, is limited. Therefore it is proper and responsible to look at the best possible way of spending public money.
I question whether interest relief grants are the best way of doing this. I feel that many of the projects enunciated in this motion are immensely important, but I underline the query made by one of my hon. Friends whether this investment would have been undertaken by the companies involved without public finance being made available.

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I come to the very important question of the British Steel Corporation. It is clear that the potential market provided by the North Sea gas development could provide a potential pipe market for the BSC. I would welcome an indication of the extent to which those requirements are compatible with the needs of the North Sea oil industry in wanting a large diameter trunk line pipe. I do not know the size of the pipe required in the gas industry, but this is an important matter. If we are talking of setting up and funding, through public finance, massive investment in plant in the British Steel Corporation to provide high-quality pipe for the North Sea oil industry, we shall lessen the risk if there is also a market in the gas production industry.
The Minister said that he hoped the British Steel Corporation would be able to respond to the demands of operators in the North Sea to a greater extent than in the past. If we were given some indication that the Corporation was able to supply these requirements it would underline the importance and viability of this manufacturing plant within the BSC.
This has been an important debate. It has given us a rare opportunity to examine in depth the reasoning and methods of the Government's selective finance for industry at a time when the amount of money provided in various forms to various companies has escalated substantially.
I am increasingly concerned at the level of finance that is being made available through the Government's selective approach to many companies, whether it is an interest relief scheme, an accelerated project scheme, or a grant that is being made available under Section 7 or 8 of the Industry Act. As with the National Enterprise Board under the 1975 Act, I suspect that the Government are taking out funds from productive industry and placing them where they will be less efficiently used.
I welcome the fact that we are now discussing the placing of public money in an industry in respect of a product that is of immense importance to the British consumer and our economy. To that extent I welcome the provision of this finance. The debate has given us an opportunity to lay down some markers on the extent to which the Government
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are using on an increasing scale taxpayers' money in a questionable way to finance speculative public sector projects for political rather than commercial considerations.
9.43 p.m.
Dr. J. Dickson Mabon: The hon. Member for Chichester (Mr. Nelson) made an interesting speech. I cannot help reflecting that when I first came to the House the late Iain Macleod told me "The trouble is that you talk well, but you talk for so long". The hon. Member for Chichester made a good case at the beginning on a number of points but went on to talk with 20: 20 hindsight, as the Americans say, about schemes which had been developed in the past.
I should like to tell the hon. Member for Ross and Cromarty (Mr. Gray) that the scheme envisaged in 1973 was a sensible one even from a Conservative Bow Group point of view. I do not think that anything we have added has made it any less sensible.
What is at the end of the road? The hon. Member for Dundee, East (Mr. Wilson) came to the House when we were in the middle of discussions and decisions on this subject. Indeed, it was a Conservative scheme financed by our money. We had to defend the raising of the taxation to pay for the scheme. In other words, it is a Labour scheme although conceived by a Tory principle. At the end of the day we have captured 52 per cent. of the offshore Continental market— indeed, I believe that the figure is even higher since we have achieved from our own capability about two-thirds of the capital goods market. We are under no illusion that not all of that is due to our enterprise. Our competitors are not free enterprise agents.
We have only to look at the Dutch, French and German systems and the various other support systems that exist either overtly or covertly. I do not have to go into that. The Commission originally accepted in 1973 the scheme that I am now defending in the sense that it raised no objection when it was introduced. It is true that the Commission has since expressed concern about the scheme's effect on intra-Community trade. We are having discussions, but it is difficult for a Minister, even in this House,

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to reveal everything that goes on in discussions. We hope that we shall be able to obtain an acceptable solution to persuade our eight colleagues in the Common Market that our scheme is a sensible one from both our point of view and from theirs.
Mr. Nelson: The Minister will be aware that in the Sixth Report the specific recomendation of the Commission was that if the United Kingdom scheme was to continue it should also be made available to supply companies in European member States. Can he tell us what is the Government's attitude to that?
Dr. Mabon: As the hon. Member might know—and as I believe he suggested, although if it was not him it must have been the hon. Member for Dundee, East—we are hoping that the House will look at this, investigate it and make comments. However, I take the point, but if we are to borrow from each other in the Common Market and if the scheme is to be introduced in the other eight countries I should like us to borrow from a few of their schemes. Some of those schemes are enormously inventive and very able. I commend the French ones particularly. I am sorry only that the Japanese are not in the Common Market, because they have even better schemes than anyone else. I am all in favour of fair competition with the aid of these schemes, and I am willing for us to look at them in the light of circumstances at the time.
As for this scheme, it was conceived by the last Government and implemented by this Government. It is a sensible scheme and, with hindsight—although it has its defects—has on the whole been successful. I make no apology to the House for defending it.
As for the future, we must look at new developments in the light of circumstances. The hon. Member for Dundee, East talked about the future. I take the view that long after the oil industry has gone we shall still be building oil platforms for the rest of the world, whether for the United States, Mexico, Venezuela, Brazil, Indonesia or any other country, in the same way as we built the railways for other countries long after we had developed our own. We could be in the business, whether it is building tension-leg platforms or other platforms.
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That is what the motion is about—creating a capability for Great Britain that other countries would like to have and that the Americans certainly do have. We must be able to compete with them, not only in our own market—in which we have captured two-thirds of the capital goods business—but in the markets of the world.
Mr. Gordon Wilson: Will the Minister bear in mind that it is not sufficient to rely simply upon the platform industry? If platforms are like the railways, the sub-sea wellhead units may be the aircraft of the future. We should try to balance the two. At the moment there is a definite lack of wellhead and sub-sea wellhead installation development within the United Kingdom. Perhaps the Government could give equal attention to that as to the maintenance of capacity in the yards.
Dr. Mabon: I am not sure that that is entirely fair, but we are concerned about it and I take the hon. Gentleman's point that we ought to try to develop as much as we can of what he calls the toughening-up process. However, being a member of an Opposition party—not so much the official Opposition, but a minority party—it is terribly easy for him to have 20:20 hindsight, to complain, to switch policies every 10 minutes and to be wise.
I have exposed the hon. Member for Dundee, East I do not know how many times for his foolishness in the past and for saying things that he much regretted later. However, I take his point that we should be looking at these problems on what he described as a fairly intelligent basis. Scotland has about half the offshore business. It may be more: it depends on when the estimate is made. That is not bad for a country that has only one-tenth of the employment in the United Kingdom. Considering our capability in Scotland, it is good that we should have half the business and I do not resent the fact that England and Wales, which have nine-tenths of the people, have the other half of the business.
Mr. Gordon Wilson: Is the right hon. Gentleman saying that Scotland has 25 per cent. of the total business? My estimate was that we had between 25 per cent. and

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32 per cent. compared with the total United Kingdom figure of 52 per cent. Is the right hon. Gentleman going for the lower end of my estimate?
Dr. Mabon: These are rough figures. I think that it may be rather more than the lower end of the hon. Gentleman's estimate, but I do not think that we should be arguing in these terms.
The hon. Gentleman referred to Portavadie and Hunterston. I am ashamed that he should go along with the Rightwing criticism of the Conservative Party that we should not have made a bet on Portavadie and Hunterston. We think that there is one concrete order on the way. It could go to the Dutch or the Norwegians. The style of the order is such that in the United Kingdom it could go only to Portavadie, Hunterston, Ardyne or even possibly Kishorn, although I do not think so. If we shut Portavadie and Hunterston, we shall make sure that the order does not go there. That would be a mistake.
If we get the order at Hunterston, the hon. Member for Dundee, East will have to apologise. If we get it at Portavadie he will have to apologise miserably, and if we get it at Ardyne he will be embarrassed because the yard is supposed to be closing down and all the rest of it. We cannot make predictions in this business.
Laing's is officially shut down but is actively canvassing the possibility of a steel order on Teesside. It may get 1,000 jobs from it, and I say good luck to the venture. The job of a Minister is to get orders, whether concrete or steel, for Britain. Wherever the orders may be and
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whatever yards are involved, the basic concern of Ministers is to get the orders for Britain. I make no apology for that to the Common Market, the Scottish National Party or anyone else.
My hon. Friend the Member for Coat-bridge and Airdrie (Mr. Dempsey) made a very good speech about the interests of the British Steel Corporation and distribution in Scotland. He asked what proportion of the grants payable benefited Scotland. It is clear that the scheme is of substantial benefit to Scottish-based industry. I cannot give the exact figures now. As the hon. Member for Dundee, East said, there are difficulties because of the amount of sub-contracting on both sides of the border, but we believe that about half of the expenditure which qualifies for grant is incurred in Scotland, and that is a very large sum of money.
My last comment is this. It is often thought that the Grampian Region of Scotland is the main beneficiary of Scottish offshore activity. In fact, that is not so. It is marginally so, perhaps, if one takes various areas into account, but what is true also is that Strathclyde, miles away from the North Sea, is a one-third beneficiary in terms of jobs in offshore oil production. Moreover, many areas of England, in the North-East, as well as Wales, are beneficiaries of North Sea oil production.
Therefore, the motion before the House, which I am happy to know has been well received by hon. Members on both sides, is a British matter concerned with the welfare of the offshore oil industry of the United Kingdom.
Question put and agreed to.

Resolved,

That this House authorises the Secretary of State to pay, or undertake to pay, by way of financial assistance under section 8 of the Industry Act 1972, as amended by section 22 of, and Part I of Schedule 4 to, the Industry Act 1975 and section 1 of the Industry (Amendment) Act 1976, as grants in respect of interest on money borrowed for obtaining in the United Kingdom goods and services for each of the projects specified in column 1 of the Table below carried on by persons specified in respect thereof in column 2 of the Table sums which, together with the sums already paid or undertaken to be paid by way of such financial assistance, exceed the sum of £5 million but do not exceed the sum specified in respect of the project in column 3 of the Table.

TABLE

(1)

(2)

(3)

Project

Persons carrying on Project

Maximum amount of financial assistance

Establishment offshore of production platforms and other installations with their equipment for the development of the Ninian oilfield

Chevron Petroleum Ltd. BNOC (Ninian) Ltd. Imperial Chemical Industries Ltd. Murphy Petroleum Ltd. Ocean Exploration Co. Ltd. BP Petroleum Development Ltd. Ranger Oil (UK) Ltd. Scottish Canadian Oil and Transportation Co. Ltd. London & Scottish Marine Oil Co. Ltd.

£43 million

Establishment offshore of a production platform and other installations with their equipment for the development of the Thistle oilfield

BODL Ltd. Burmah Oil (Exploration) Ltd. BNOC (Thistle) Ltd. Deminex UK Exploration and Production Ltd. Deminex Oil and Gas (UK) Ltd. Santa Fe (UK) Ltd. Tricentrol Thistle Development Ltd. Charterhouse Petroleum Development Ltd. Conoco Ltd. Gulf Oil (Great Britain) Ltd. BNOC (Exploration) Ltd.

£18 million

Establishment offshore of production platforms and other installations with their equipment for the development of the Forties oilfield

BP Oil Development Ltd.

£10 million

Establishment offshore of production platforms and other installations with their equipment for the development of the Brent oilfield

Shell (UK) Ltd. Esso Petroleum Co. Ltd.

£9 million

Establishment offshore of production platforms and other installations with their equipment for the development of the Frigg (UK) gasfield

Total Oil Marine Ltd. Aquitaine Oil (UK) Ltd. Elf Oil Exploration and Production (UK) Ltd. Total Marine Norsk El Norge A/S Aquitaine Norge A/S Norsk Hydro Produksjon A/S

£9 million

TRANSPORT (COMMUTING COSTS)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Snape.]
9.56 p.m.
Mr. Geoffrey Dodsworth: I am grateful for this early opportunity to raise a matter of pressing urgency for those of my constituents in South-West Hertfordshire who use the London Transport Metropolitan line outside the Greater London area.
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In a Press statement on 13th May, London Transport announced special penalty fare increases outside the GLC area in addition to the increases already announced for the rest of the Underground and for London buses. Travellers in my constituency using Moor Park, Rickmansworth, Chorleywood and Croxley Green will be severely affected by these increases.
London Transport says that on these sections the services run at heavy losses, and the county councils have been unwilling to make any financial contribution. London Transport describes the increased

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fares as premium rates. I describe them as penalty rates, and, indeed, there is a threat that this is only stage 1 of the fare increase programme. If the county council does not pay up, says London Transport, there is to be a further increase in fares.
In face of the present level of inflation and the huge increases in the cost of living now experienced by members of the public, it is outrageous that they should be told that the total increase, that is, the general increase and the so-called premium increase together, would not exceed 40 per cent. What a promise—that it would not exceed 40 per cent. It is fair to add, moreover, that there would in special cases be increases of over 50 per cent.
In the same statement London Transport said that the season ticket increases will be kept down to a maximum of 40 per cent. It is increases of that sort that people are being asked to bear out of taxed income.
The effect of these charges is to produce £300,000 a year for London Transport. I understand that the overall losses are at the rate of £600,000 a year, and I gather that the bulk of these losses in Hertfordshire lie on the section of line between Moor Park and Watford Junction, where the fare income is only 10 per cent. of operating costs.
I had the opportunity to meet the Chairman of London Transport to discuss the situation, which I regarded as one of great urgency and concern to people travelling on these lines. He was extremely sympathetic, but I cannot say that I gleaned any possibility of a change of heart, despite the fact that it is a historical accident that the Metropolitan line is part of London Transport in this part of Hertfordshire and as a result is responsible to the GLC.
If one examines the traffic on the line one finds that it is long-distance rather than local. The average length of journey in 1975 from the five stations in Hertfordshire was 13 miles, compared with five miles on average for all Underground trips. Only one-fifth of journeys are local to Hertfordshire and Buckinghamshire, whereas two-thirds are to London. Therefore, the lines mainly serve commuters to London rather than just local travel needs. On that basis, I believe that the
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Hertfordshire commuter should be treated in the same way as are travellers on other commuter services.
By an unfortunate historical accident, the track for the Amersham line is shared with British Rail, and this complicates the track shared costs. However, this arrangement pre-dates the present financing systems, and I understand that it would be impossible for the entire operation to be transferred wholly to either British Rail or London Transport. That appears to be a logical suggestion and a logical way in which to deal with the situation, but I understand that it is not possible to do that.
The Hertfordship County Council does not feel that it should contribute to the situation.
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Snape.]
Mr. Dodsworth: The county council believes that the loss on the lines should be covered by a central Government grant, as are all the British rail commuter services around London, which involve grants of over £290 million this year.
The demand of travellers from the county authority places an unfair burden on the county ratepayers as a whole, because of the anomalous financial structure of London Transport. On numerous occasions I have pointed out the unfair and partial redistribution of the rate support grant, which is already costing the Hertfordshire County Council £30 million. That is equivalent to more than 18p in the pound on the rates.
These two factors lead me to believe that the GLC thinks that it can treat the people of Hertfordshire indiscriminately and allow the county to be sucked dry. It is not true that Hertfordshire is a rich county. In fact the reverse is true. Hertfordshire represents the heartland of those who are penalised by the results of Government policy. The Government's policy has diminished income through inflation and oppressive taxation. That in turn has eroded the ability of people to pay fare increases of the size and nature contemplated.

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My constituents believe that there is a failure of natural justice in the proposals. It is remarkable, to say the least, that the announcement about the fare increases, with a commencing date, was made prior to approval being given by the Price Commission.
I shall not detain the House with extracts from the many letters that I have received from my constituents, which describe in detail the different aspects of the issue. One such letter refers to the lack of proper facilities at the Rickmansworth station, which are caused by other services that use that line.
The situation is summed up by a resolution passed by the Three Rivers District Council at a recent meeting. The council is intimately involved in the situation and it deplored
"the discriminatory fare increases proposed by London Transport for all the Metropolitan Line stations in the district".
It asked the Price Commission to give consideration to its views on that matter.
I have written to the Chairman of the Price Commission supporting the views of that authority, but I have not yet received anything more than a formal acknowledgment. I can understand that these matters take time.
If we find that the Price Commission is powerless to prevent the inequitable and penalty increases I believe that it is time that this useless body was disbanded. We know that it has failed dismally in other cases. For instance, it was overruled by the Secretary of State for Energy on gas prices.
In those circumstances I ask the Minister for assurances to cover two different eventualities. If the Price Commission vetoes the price increase I want an assurance that the Minister will ensure that the price increase does not proceed. If the Price Commission inadvertently accepts the increase, I want the Minister to ensure that the whole question is investigated through the machinery that is contemplated in the Price Commission Bill. That would be a suitable and appropriate remedy.
10.4 p.m.
The Under-Secretary of State for Transport (Mr. John Horam): The hon. Member for Hertfordshire, South-West (Mr. Dodsworth) has tonight raised an import-
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ant and fundamental question. It is, simply: who pays for local transport services? At the heart of the matter is a dispute between the London Transport Executive and the county councils of Hertfordshire, Buckinghamshire and Essex over the deficits incurred on those sections of the Executive's Underground services. I mention the three counties although I know that the hon. Member is concerned principally with his own county.
The London Transport Executive estimates that during this year its Underground services will incur a total operating deficit of a little over £11 million, of which no less than £3½ million will result from its services in the three counties I have just mentioned. Hitherto, losses of this order on these out-county services have been borne by the Greater London Council.
Hon. Members will be aware of the restraints that have had to be imposed on public expenditure and in particular concerning public transport in the past two years. Faced with the need to reduce its own expenditure on public transport, the Greater London Council considered it should no longer have to bear the whole burden of the losses incurred on LTE's out-county Underground services. In all reasonableness—the hon. Gentleman mentioned natural justice—I think he would agree that that is a very reasonable point of view.
The LTE therefore approached the three counties concerned last year and asked them to make provision in their 1977–78 transport policies and programme submissions to the Secretary of State for Transport for the finance necessary to meet the continuing deficits on these services. The counties declined to do this, although it is worth mentioning that last year Essex County Council contributed £88,000 towards the losses incurred on the Epping-Ongar section of the Central Line.
The sum sought by the LTE from Hertfordshire County Council to meet the losses expected to be incurred this year on that part of the Executive's Metropolitan Line services operating within the county—that is, between Moor Park and Chorleywood and including the spur line to Croxley and Watford—is a total of £900,000.

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The main line service between Moor Park and Chorleywood is served, as I think the hon. Gentleman explained, by parallel services operated by both LTE and British Rail, and because of this the county counter-claimed that at the very least losses made on the BR service should be met by the central Government. It further counter-claimed that in practice the LT Underground service in Hertfordshire is indistinguishable from other services operated by BR on its South-East commuter network and, therefore, the whole of the deficit on the Hertfordshire Underground service should also be met by the central Government. I think that this is the point with which the hon. Gentleman is concerned tonight, and I think it is generally agreed that it is the nub of the matter.
Let me deal first with the joint operation of services by BR and LT on the Metropolitan main line between Moor Park and Chorleywood. This results from an agreement between the two undertakings under which responsibility for providing the services rests with London Transport, and in contributing to them British Rail is essentially acting as London Transport's agent. All receipts that accrue from passengers using the BR trains over this section are taken by London Transport, which then pays British Rail for the train mileage provided and bears any deficit. In practice the BR trains are therefore, in all except livery, part of London Transport's operations serving this area, and it is perfectly appropriate for the LTE to seek a contribution from the county towards the overall cost of these services.
To dispel any lingering doubts there may be that the agreement between the LTE and British Rail is a one-sided business, I should explain that there are other similar agreements in and around London, in other parts of the peripheral area, for the use of shared facilities of this kind on local rail services where the same sort of arrangements apply. In the case of Hertfordshire, particularly relevant is the peak hour London Transport Bakerloo Line service to Watford Junction, where London Transport trains run on British Rail track, and it is British Rail which pays for the overall costs of the service in this case. Thus the Hert-
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fordshire ratepayer receives a substantial benefit to compensate for the cost that he is being asked to incur on these other lines.
I turn now to the second of the county's propositions—that the whole of the deficit should be borne by the central Government because, in the county's view, the Underground services in Hertfordshire are essentially the same as the South-East commuter services operated by British Rail which are wholly supported by the central Government. It has been suggested that the Railways Act 1974, which specifically limits grant aid to British Rail, should be amended to encompass these operations of the LTE. There would, I am afraid, be very little justification for such action. After all, they are local services and an integral part of the London Transport rail network.
Local transport is a matter for local decision, and this philosophy is at the heart of the present transport policies and programme system. Central Government subsidy for losses incurred on the London Transport network, bus and rail, is, and will continue to be, provided through the transport supplementary grant. That subsidy can reach the London Transport Executive only through discretionary payments, agreed with it by each of the respective counties served by the system. It is, therefore, for Hertfordshire to decide whether and to what extent financial support for London Transport services in the county may in future be justified. If it is decided that there is a case for contributing to the costs of these services, that should be taken into account in the preparation of the county's next transport policy and programme submission, which is due in my Department at the end of next month. That will cover the next financial year—namely, 1978–79.
I understand that the county council is extremely reluctant to consider subsidising the London Transport Executive's rail services in the county because under the transport supplementary grant system at least 30 per cent. of the subsidy will need to be found from the rates and only limited numbers of people in one part of the county benefit from them. Given that up to 70 per cent. of the county's contribution would in any case be eligible for transport supplementary grant, one might reasonably ask what would be the value to the country if the council is so

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doubtful of the value to the county of these lines.
Be that as it may, this is what local autonomy is all about. It is for the county to decide what its priorities should be and which services should have first call on its available resources. It cannot be expected to shift the burden on to the central Government because the choices are difficult and unpalatable ones.
The hon. Gentleman finally referred to the additional increases that the London Transport Executive proposes to charge on its out-county services over and above the general increase, averaging about 15 per cent., that will take place from 17th July. As the hon. Gentleman rightly said, outside London it is intended that increases for some shorter-distance singlefare journeys should be as much as 50 per cent., although at other distances the total increase would not exceed 40 per cent. Increases in season ticket prices are not intended to exceed a maximum of 40 per cent. In many instances the proposed increases will be much less, dependent upon the proportion of travel outside the London area.
Obviously, we regret that such large increases are considered necessary. However, faced with the decision of the three counties concerned not to contribute towards the losses on the Underground services in their areas, it is reasonable that the London Transport Executive should, subject as it is to the approval of the Price Commission, take action of this sort to reduce the deficit on these lines. As it is, even these increases could not be expected to contribute more than an additional £300,000 towards the losses. That would still leave a deficit of over £3 million to be funded by the Greater London Council. In equity, the responsibility of Hertfordshire, Buckinghamshire, and Essex County Councils in this matter must be recognised.
The hon. Gentleman asked me to give an assurance that, if the Price Commission took an unfavourable view of these large increases, I or my right hon. Friend would not seek to overturn its verdict.
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Obviously, I cannot give him such an assurance in the name of my right hon. Friend. Probably he did not expect me to do so. None the less, the Commission will have clear views on the matter and we shall pay serious regard to what it says. I can give the hon. Gentleman that assurance. We expect a decision fairly shortly, and I shall be interested to see the conclusion at which the Commission arrives. Obviously it is a tricky matter.
Fare increases are of concern to everyone, particularly those in London, given the history of the past three years of cumulative increases of over 100 per cent. facing many commuters. We are very concerned about that. However, this is a situation in which the three counties should seek to look at their own responsibilities, given that the GLC has footed the bill, which is a large one, for many years. In the interests of his constituents, I urge the hon. Gentleman to approach them to ascertain what solution can be found.
It is right that the county councils should seek to obtain the maximum information about the costing of these services and the deficits incurred on them, to satisfy themselves on the figures, before making any judgments.
In the final analysis, however, we are talking about a local transport service taking commuters over short distances in some cases and longer distances in other cases, for which they have season tickets and are travelling regularly into London. These are local services, part of the London Transport system, and this is fundamentally something in which the central Government has not intervened and should not intervene with using taxpayers' money. It is a matter of local judgment. I hope that the counties will get together with the GLC and come up with some solution acceptable both to the hon. Gentleman's constituents and to the councils' wider responsibilities.
Question put and agreed to.
Adjourned accordingly at fifteen minutes past Ten o'clock.