Commons Sitting of 20 February 1978

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  ORAL ANSWERS TO QUESTIONS
  Mr. Speaker: I appeal for Celtic restraint today in supplementary questions and in replies.
  ORAL ANSWERS TO QUESTIONS
    WALES

      Cardiff Coal Exchange
      Mr. Gwilym Robertsasked the Secretary of States for Wales if he will make a statement of progress with the conversion of the Cardiff Coal Exchange for the proposed Welsh Assembly.
      The Secretary of State for Wales: (Mr. John Morris): No conversion work has been carried out in the exchange since I informed my hon. Friend the Member for Newport (Mr. Hughes) in a written reply on 7th April 1977 that the main conversion work on the building would not proceed at that time.
      Mr. Roberts: Does my right hon. and learned Friend accept, however, that in view of the progress that has been made on the Scotland Bill and the great likelihood that the Wales Bill will follow a similar path, there is now very little chance that devolution will be acceptable to the Welsh people? Therefore, what alternative arrangements has my right hon. and learned Friend made for this building? I am sure that he will agree with me that we have already spent about £2½ million on the conversion.
      Mr. Speaker: Order. That is an excellent example of Celtic restraint!
      Mr. Morris: In response to your appeal, Mr. Speaker, all I would say is that I do not share my hon. Friend's pessimism.
      Mr. Anderson: Have not we in the Labour Party been wholly against specu-
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      lative building of all sorts? Given the relative success of our energy policy and the conspicuous failure of our devolution policy, would it not be right now to convert the building back?
      Mr. Morris: My hon. Friend must await the situation as it arises.

      Flood Risk (Rhyl and Prestatyn)
      Sir A. Meyerasked the Secretary of State for Wales what representations he has received from Rhuddlan Borough Council regarding the risk of sea flooding in the Rhyl and Prestatyn area; and what reply he has sent.
      The Under-Secretary of State for Wales (Mr. Barry Jones): My right hon. and learned Friend has received representations from Rhuddlan Borough Council about the need for better tidal flood warning arrangements in North Wales. I refer the hon. Member to the reply given to him by my hon. Friend the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food on 16th February.
      Sir A. Meyer: Will the hon. Gentleman tell me whether there is to be any Welsh Office presence at the conference that is shortly to be held at Tewkesbury in order to discuss the extension of the East Coast sophisticated type of scheme for flood warnings to the West Coast? If there is not to be such a presence, will the hon. Gentleman take a very close interest in the proceedings of that conference?
      Mr. Jones: A very close interest is being taken. There will be a Welsh Office presence. The hon. Gentleman will no doubt be able to follow the results of the 22nd February conference.
      Mr. Wigley: In view of the troubles at Prestatyn and on other parts of the Welsh Coast, and in view of the difficulties with snow experienced this weekend in other parts of Wales, will the Secretary of State put pressure on the EEC for Wales to benefit from a similar scheme to the £1 million that has been given recently to alleviate these problems in East Anglia and in Scotland?
      Mr. Jones: The Welsh Office never losses an opportunity where Brussels is concerned to obtain what is our right.

      Housing
      Mr. Nicholas Edwardsasked the Secretary of State for Wales what are the latest available quarterly figures for housing starts, houses under construction and completions and for housing improvements in Wales.
      Mr. John Morris: With permission, Mr. Speaker, I will circulate the detailed information in the Official Report. The provisional figures for the fourth quarter of 1977 show 2,515 starts, 3,826 completions, and 19,054 under construction. 1,777 private sector renovation grants were approved during the quarter.
      Mr. Edwards: Are not the year's housing starts among the worst for a number of years and do not the figures in the recent report "Housing in Wales" suggest that the Government have made a great mistake in reducing the amount of expenditure on housing improvements in Wales and switching the policy on that which was followed by the Conservative Government?
      Mr. Morris: First, I welcome the hon. Member back to our midst, and I wish him well.
      We would have wished that starts had been better, but certainly they are much better than anything achieved by the hon. Gentleman's party, certainly in the Conservative Government's last year of office, when their achievement was disgraceful.
      Mr. Ioan Evans: As my right hon. and learned Friend has succeeded in obtaining additional capital for expenditure on housing in Wales, what further action is being taken to encourage local authorities to avail themselves of the funds that exist for house building?
      Mr. Morris: I am sure that the House will recognise the situation. I am grateful to my hon. Friend. Time after time we have obtained the increased resources that are badly needed in Wales, and regrettably they have not been spent, for a whole host of causes. My hon. Friend the Under-Secretary, the hon. Member for Rhondda (Mr. Jones), who is not able to be present this afternoon—he is in Cardiff, for obvious reasons—has set up machinery to work in very close consultation with local authorities to try to
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      ensure that all the money that is available will be spent and to ensure that those who can spend more are given added encouragement.
      Mr. D. E. Thomas: In view of the disappointing number of starts in both the private sector and the public sector in Wales last year, to meet the urgent need, will the right hon. and learned Gentleman look at the allocation to the Housing Corporation office in Wales to increase its units from the present 1,500 to 2,000?
      Mr. Morris: The Housing Corporation is getting a significant increase in its allocation. It is very much higher, by a number of times, than it was in 1973 and 1974, and the Housing Corporation is getting even more next year because I believe—and I am fairly confident—that it will be able to spend the resources given to it. It is being given every encouragement.
      Following is the information:
      The latest available provisional figures are for the fourth quarter of 1977 and are as follows:

      Starts

      Public sector

      1,078

      Private sector

      1,437

      Completions

      Public sector

      2,169

      Private sector

      1,657

      Under Construction

      Public sector

      8,278

      Private sector

      10,776

      1,777 private sector renovation grants (improvement, conversion, intermediate repairs and special grants) were approved during the quarter.

      Employment
      Mr. Wyn Robertsasked the Secretary of State for Wales what further steps he intends to take to reduce unemployment in Wales.
      Mr. John Morris: The Government will continue to pursue their present policies aimed at increasing economic activity and creating the conditions necessary for growth and additional employment. In this connection I have today approved the Development Board for Rural Wales' plans for erecting 13 advance factories in 1978–79.
      Mr. Roberts: Does the right hon. and learned Gentleman agree that the present

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      unemployment figure of 93,000 in Wales would be about 20,000 higher were it not for the job creation and work experience programmes, that the situation we are now facing is the grimmest that we have faced for many years, and that the best thing that the right hon. and learned Gentleman can do is to advise the Chancellor of the Exchequer to lower taxation to provide an incentive for people to work and to provide work?
      Mr. Morris: I am sure that my right hon. Friend the Chancellor of the Exchequer will take cognisance of the hon. Gentleman's advice in due course, but I cannot anticipate his Budget. With regard to the steps that have been taken, they do not amount to a totality of about 20,000 jobs. In all, 53,000 jobs in Wales have been saved—I know there are various components in this regard—as a direct result of Government measures. Since the hon. Gentleman is speaking for his party, I should have thought that he would have welcomed the announcement for Mid-Wales.
      Mr. Hooson: Does the Secretary of State agree that, while the world economy is so sluggish, the outlook for large industries, both public and private, is bleak? The best chance of stimulating employment opportunities is by encouraging small businesses and small enterprises, and to give them confidence to employ more people. Will the right hon. and learned Gentleman have a word with the Chancellor of the Exchequer to see whether this can be done in the Budget?
      Mr. Morris: Certainly. In the course of the year my right hon. Friend has already responded to suggestions that small businesses should have help. He did so in the course of some of the measures that were taken last year. In addition, in the last year I have deliberately tilted towards small businesses approvals under the advance factory programmes.
      Mr. Anderson: Does my right hon. and learned Friend agree that important as small businesses are to the Principality, and given the unlikelihood of major investment from the private sector, large and small, the biggest possible boost to solving our unemployment problem would be a substantial restoration of the public sector cuts but that if that happened it would be hotly contested by the Conservative Opposition?
      Mr. Morris: We know the attitude of the Conservative Opposition with regard to the public sector in Wales. My hon. Friend is absolutely right to remind the House of it. In Wales the public sector plays a very important part in job provision.
      Sir A. Meyer: Is the right hon. and learned Gentleman aware that the Rhyl area in my constituency, which has one of the highest unemployment rates in the whole of Wales, is excluded from the Welsh development area? Will he do something about making a sensible allocation of aid to Wales as a whole?
      Mr. Morris: The hon. Gentleman knows that the allocation of development area status is a matter for my right hon. Friend the Secretary of State for Industry. The hon. Gentleman has made that point from time to time, and I am fully aware of his representations.
      Mr. Ioan Evans: Will my right hon. and learned Friend consider the suggestion made by the Heads of the Valley local authorities that we should consider a development corporation for the Heads of the Valley to work with the Welsh Development Agency or some similar body? At the same time, will he consider the memorandum submitted by the Wales TUC for positive proposals for dealing with structural unemployment, which may be with us for many years to come?
      Mr. Morris: Structural unemployment is a general matter. With my colleagues I have studied, and shall continue to do so, the general points that have been made.
      I do not think that a Heads of the Valley development corporation would be a right step in itself because the WDA has concentrated a great deal on the problems of the valleys. The amount of energy, enterprise and finance that has gone into the upper parts of the Gwent and Glamorgan valleys is an indication of the view that is taken by the WDA. I give it every encouragement to spend a great deal of its time and money in that part of Wales.
      Mr. Wigley: Will the Secretary of State think again about the possibility of encouraging the WDA to give more aid to the Development Corporation for Wales? It has been increased since the

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      WDA came into existence, but the corporation would like to extend its activities and to seize potential. The right hon. and learned Gentleman should look at this as a possibility.
      Mr. Morris: I am in close contact with the development corporation. The WDA gives it a substantial allocation, which, as the hon. Gentleman has said has been increased. The corporation receives its funds from three sources, including local authorities and industry. All of that is welcome. I hope very much that, instead of having a whole host of people going out to sell Wales, local authorities will concentrate their subventions on the development corporation, because I believe that is the best way of doing it. The main problem is to get industry to Wales. One can fight after-wards about where in Wales it should go.
      Mr. Corbett: Will my right hon. and learned Friend pay particular attention to the needs of small farms in view of the appalling weather conditions in South Wales? Will he assure the House that he will take urgent steps today to see what specific help can be given—using the Armed Forces if necessary—to rescue livestock, and indeed small farms, which are threatened? Will he ensure that some urgent action is taken?
      Mr. Morris: I can assure my hon. Friend and the House that I am in constant touch with the situation. I was getting situation reports late last night. My hon. Friend the Under-Secretary of State, the hon. Member for Rhondda (Mr. Jones), is not present this afternoon because the Prime Minister has asked him to co-ordinate activity in Cardiff. He is giving me regular reports to ensure the necessary co-ordination, so that action with regard to small farmers and individuals who regrettably are detained in their homes, and unable to use hospital services, can be quickly and speedily considered.
      Mr. Nicholas Edwards: I proposed to ask your indulgence, Mr. Speaker, on a later Question to raise this point. May I specifically ask whether the Secretary of State can assure us that, where Service helicopters are used to rescue livestock, farmers will not be landed with prohibitive bills as a consequence but that the Government will look sympathetically at
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      the whole question of the charges involved for the use of helicopters?
      Mr. Morris: I am aware of this problem. All I can say at present is that it will be looked at urgently and speedily. What is important is to get on with the job of using, under most difficult conditions, whatever resources we have to ensure that human beings, and animals where necessary, are given every assistance.
      Mr. Hooson rose—
      Mr. Speaker: As an exceptional measure, and in view of the exceptional conditions, I shall again call the hon. and learned Member for Montgomery (Mr. Hooson).
      Mr. Hooson: Will the Secretary of State make an early announcement about this, otherwise farmers may be tempted, for example, not to call in the helicopter service? I think the right hon. and learned Gentleman will find that in 1947 and 1963 some people did not call in helicopters, which might have helped their livestock, because they were afraid of the charges. It is important that a public announcement be made as early as possible.
      Mr. Morris: I can assure the House that this problem was raised with me this morning by the Under-Secretary of State. It is right that hon. Members should raise it this afternoon. I am not aware of any cases that have arisen of people not availing themselves on financial grounds of whatever resources are available. The problem is to ensure that the resources are deployed to the maximum effect. This is a difficulty, but I can assure hon. Members that I shall look at the matter as speedily as possible.

      School Leavers
      Mr. Gristasked the Secretary of State for Wales when he proposes to introduce measures designed to bring the numbers of pupils in Wales leaving school with O-level GCE and CSE awards to at least the same level as that attained in England.
      Mr. Barry Jones: The improvement of educational standards is a major concern. I have invited our partners in the education service to consider this particular issue at a conference in Mold on 10th

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      March. We have prepared and published a document as a basis for discussion both at the conference and more widely. I have sent a copy to the hon. Member.
      Mr. Grist: Will the Minister agree that, although the question of continuous assessment and the timing of the GCE and CSE examinations should be considered, so possibly should the unconscious motivation of teachers in Wales, whereby perhaps those pupils who are bright, or brighter than average, get special treatment, and those who are not seen in those categories do not get such good treatment? Will he bear this in mind?
      Mr. Jones: All possibilities will be borne in mind, but I do not want in any way to prejudge the conference. The Department is not complacent in this matter but does not want to anticipate what, for example, representatives of the teachers who are present at Mold will say.
      Mr. Wyn Roberts: Will the Minister note that the people of Wales want positive action to be taken on this matter? There is the question of the timing of the CSE examination, which is, I understand, currently held after the Spring Bank Holiday. There is also the question of the curriculum. Will the hon. Gentleman note that the people of Wales want action rather than talk?
      Mr. Jones: Yes. Every notice is taken of what the hon. Member and other hon. Members say. Of course, we want action, and I think that the people of Wales will get it, but there is no point whatsoever in anticipating the conference of 10th March. I hope that after what will be a unique conference for Wales we may have measures proposed or the debate may indicate the way in which we may tackle a subject about which we are not complacent.

      Planning Powers
      Mr. Gwynfor Evansasked the Secretary of State for Wales whether he is satisfied with the way in which local authorities use their planning powers.
      Mr. Barry Jones: My right hon. and learned Friend is satisfied that local planning authorities in general discharge their ditties satisfactorily.
      Mr. Evans: Is the Minister aware that in most, if not the whole, of rural Wales
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      the planning authorities tend to concentrate house building on what they call, in planning jargon, major settlements? Is he further aware that this further depopulates rural Wales and further weakens the rich culture which used to be characteristic of that part of our land? Will his right hon. and learned Friend consider issuing a directive to the local authorities to correct this?
      Mr. Jones: My right hon. and learned Friend, in the main thrust of his policies, has always taken into account depopulation and the cultural factors of Wales, but responsibility for land use planning functions has been vested by Parliament in county and district councils, and it would not be right for my right hon. and learned Friend to intervene, save in exceptional circumstances—for example, where wide strategic decisions in planning are involved.
      Mr. Anderson: My hon. Friend will be aware that my right hon. Friend the Secretary of State for the Environment announced what appeared to be a major change in Government thinking in England at the recent Bristol conference in talking of what he called organic change between the county and district councils, possibly in education, social services and planning. Is this policy of organic change as between county and district authorities and the old county boroughs also the policy in relation to Wales?
      Mr. Jones: I have noted everything that my hon. Friend has said, and it might be that he would need to put down a Question.
      Mr. Hooson: Does the Minister appreciate that there is a tendency among some Welsh planning authorities to follow slavishly a directive sent out years ago against isolated development? Powys tends to do this, whereas Clwyd ignores the directive and takes a much different view. Is it not necessary to have regard to Welsh history in this matter and to the position in rural Wales, where we have a good deal of isolated development? Is it not desirable that it should be properly controlled?
      Mr. Jones: We shall look at that aspect, but isolated development is different from small development. Complaints of maladministration by local authorities—if the hon. and learned

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      Gentleman has any—could be pursued through the local ombudsman, but we shall look very carefully at what the hon. and learned Gentleman has said.

      "Housing in Wales"
      Mr. Ioan Evansasked the Secretary of State for Wales if he has received a copy of "Housing in Wales", a report of the Welsh Housing Association Committee; and if he will make a statement on his policy with regard to its proposals.
      Mr. John Morris: Yes. I note that much of the statistical information which the report uses has been superseded, and that its conclusions are in many respects out of date. I have in fact already allocated a greater amount to housing associations for rehabilitation work in 1978–79 than the report asks for.
      Mr. Evans: Does my right hon. and learned Friend agree that, although Wales gets its fair proportion of public expenditure per head of the population compared with the rest of the United Kingdom, it still has a higher proportion of unfit houses than most other areas in Britain? Will he look at the proposal concerning the need to improve older properties by designating housing action areas in Wales and encouraging local authorities to do likewise?
      Mr. Morris: I have given every encouragement to housing action areas, and local authorities have had their experience of the first round. We look forward to the next stage.
      With regard to the rehabilitation work, the housing associations, for example, asked for enough money to rehabilitate 800 units. We shall give them enough money to rehabilitate 1,000 units. Of their new building, about 1,000 houses will come within their cognisance. When we looked at the resources of the housing associations, we found that they were getting £1·4 million in 1973–74. I expect the outturn in 1978–79 will be about £30 million.
      I accept immediately that there is a great need in Wales. I have on two occasions obtained increases in the money available. But it is of the utmost importance that, when the resoures are made available, the money should be spent. I regret that I am not getting as much
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      response as I would have wished and the House would have wished.
      Mr. Speaker: That answer was even longer than some of mine used to be when I answered at the Dispatch Box.
      Mr. Wyn Roberts: Is it not a fact that the report "Housing in Wales" by the Welsh Housing Association Committee is based on the 1973 household conditions survey? Why is the 1976 household conditions survey so late in appearing? I understand that it is being printed. Does it show any substantial difference?
      Mr. Morris: It is on its way. It has been prepared as speedily as possible and it shows a steady progression of improvement. The percentage of unsatisfactory housing had been falling at the rate of 1·4 per cent. a year. It stood at 25 per cent. in 1973. By 1976 it was down to 18 per cent., having fallen at the rate of 2·3 per cent.—a 50 per cent. improvement. I hope that the survey will be before hon. Member as soon as possible.

      Housing (Fitness)
      Mr. Andersonasked the Secretary of State for Wales what were the total figures for houses in Wales which were unfit, fit but lacking one or more of the basic amenities and fit but out of repair, respectively, in the surveys for 1968, 1973 and 1976; and what proportion these figures represent of the total housing stock at the said dates.
      Mr. John Morris: With permission, I will circulate the detailed figures in the Official Report. The proportion of unsatisfactory housing as defined in the Question fell from 32 per cent. in 1968 to 25 per cent. in 1973, and from 25 per cent. in 1973 to 18 per cent. in 1976.
      Mr. Anderson: Is my right hon. and learned Friend aware that that is a pretty dramatic improvement—a reduction of almost a half in our unfit housing stock within eight years? Nevertheless, the comparative figures with other parts of the United Kingdom are still very worrying indeed. Will he assure the House that, in spite of the very substantial underspend in the last two years, he will continue to make money available?
      Mr. Morris: Yes. For the forth-coming year we have accepted the programmes of local authorities and told them to get on with it, knowing that, regrettably, they will not be able to spend the money for the whole of the programmes they have put before me. I shall do my utmost, but it is up to them to ensure that they spend the money that is made available to them.
      Mr. Grist: Will the Secretary of State please refrain from attacking local authorities all the time for underspending when it is his office which has made money available very often merely by way of loan consent at the last instance, when local authorities have not been able to take up their allocation?

      1968

      1973

      1976

      Unfit houses

      …

      …

      …

      92,000 (10·4%)

      147,000 (15·0%)

      100,000 (9·8%)

      Houses fit but lacking one or more of the amenities

      …

      …

      190,000 (21·5%)

      99,000 (11·8%)

      63,000 (6·2%)

      Houses fit but out of repair (new category in 1976)

      …

      …

      —

      —

      31,000 (3·1%)

      282,000 (32·0%)

      246,000 (25·0%)

      *184,000 (18·0%)

      * Total adjusted to allow for overlap between the last two categories.

      Mr. D. E. Thomasasked the Secretary of State for Wales what percentage of all unfit houses in Great Britain are in Wales.
      Mr. John Morris: No precise answer can be given, since Scotland does not use the classification "unfit". Taking, however, the combined totals of unfit houses in England and Wales and houses below a tolerable standard in Scotland, the answer is about 9·5 per cent.
      Mr. Thomas: Does not the right hon. and learned Gentleman agree that this is an intolerable figure, bearing in mind that Wales's share of the population of Great Britain is only 5 per cent.? Will he confirm that it represents 36 unfit houses per 1,000 population in Wales as compared with only 9 per 1,000 population in South-East England, and that Wales is now getting, in real terms, less than 4 per cent. of the United Kingdom's public expenditure on housing?
      Mr. Morris: I am sure that the hon. Gentleman heard what I said in reply to the last two Questions. I explained how the figure for unfitness has gone down dramatically over the last few years. I am the first to concede that there is still
      Mr. Morris: I am not attacking anyone. There is no mileage in attacking about past failures. What I want to ensure—this is why the machinery has been set up—is that the position is improved for future years. Regrettably and unhappily, reasons have been advanced for an under-spend in 1976–77. There will also be an underspend this year. Some of the reasons no longer exist. I want to be assured that for the next year we shall not again be in the same position. That is why I have approved in substance the authorities' plans, even though in excess of the money I now have available, knowing that they will not meet the programmes which they have put before me.
      Following are the figures:
      a good way to go, but, given the flexibility which we have allowed local authorities in the way they spend their allocations, I want to ensure that no money that they are allocated is left unspent. There has been underspending in the last two years, and I want to ensure that local authorities will not underspend on this work in the next year.
      Mr. Ioan Evans: Does my right hon. and learned Friend agree that, since there is a higher proportion of owner-occupation in Wales than in many other parts of the United Kingdom, in dealing with the question of unfit houses comprehensively we may have to review the question of improvement grants?
      Mr. Morris: My hon. Friend is right. Last August, we increased the totals as regards the ceilings and rateable values. This is one of the problems, but I feel encouraged by the work of the housing associations, which is why I have given them a significantly increased grant for next year.

      Newport
      Mr. Roy Hughesasked the Secretary of State for Wales if he will visit Newport.
      Mr. Barry Jones: My right hon. and learned Friend has no immediate plans to do so.
      Mr. Hughes: Is my hon. Friend aware that, if the Secretary of State were to visit Newport, it would give us an opportunity to express our thanks for the fact that the road structure plan for Gwent seems to be under way? Is he further aware, however, that there is still a missing link, since we urgently need an expressway linking Newport and Cwmbran? If my hon. Friend were to drive along Shaftesbury Street, he would witness the traffic congestion near the Harlequin Hotel.
      Mr. Jones: I am grateful for my hon. Friend's gratitude. I have taken careful note of the points he has made and will look into them, but I am sure that he will agree that his constituency has been one of the main beneficiaries of the M4 programme for Wales.

      Job Creation
      Mr. Wigleyasked the Secretary of State for Wales if he is satisfied that there is adequate communication between the Manpower Services Commission in Wales and local authorities in Wales in relation to the changeover from the job creation scheme to the special temporary employment programme.
      Mr. Barry Jones: Yes. The Manpower Services Commission informs us that it wrote in December 1977 to job creation programme sponsors in Wales, including all local authorities, setting out the arrangements for the changeover and explaining how further information could be obtained.
      Mr. Wigley: Is the hon. Gentleman aware that the last meeting of the job creation team took place last week and as yet local authorities have not had the detailed information necessary for them to put forward proposals under the special temporary employment programme? This has led to a situation in which the budgets of local authorities have been completed with the provision of many of the details for the programme. Unless more money is forthcoming under the locally determined schemes, we shall miss out on job opportunities because of this lack of co-ordination.
      Mr. Jones: Job opportunities in that part of North Wales are very important indeed. I shall draw the hon. Gentleman's views to the attention of my hon. Friend the Under-Secretary of State for Employment, indicating to him how important the hon. Member's constituency believes these applications to be.

    TRADE

      Company Reports
      Mr. William Hamiltonasked the Secretary of State for Trade what progress has been made with the implementation of the proposals to ensure the provision of more information in annual reports of companies.
      The Under-Secretary of State for Trade (Mr. Michael Meacher): The comments received on the proposals in the Green Paper "The Future of Company Reports" (Command 6888) are now being studied.
      Mr. Hamilton: Has consideration been given to the CBI's public opposition to the proposals contained in the Green Paper? What response have the Government made to these proposals? Is my hon. Friend aware that the trade unions and. I believe, the country generally want to have much more information from companies than they are getting now? I should be glad to be assured that legislation will be introduced by the Government as soon as possible to implement their own proposals.
      Mr. Meacher: There is no question but that more disclosure is necessary, and there has been widespread support for most of the proposals in the Green Paper. Though the CBI has expressed concern about certain points, it has given its support to, the work which is now being done on simplified accounts for shareholders and employees. It is our intention to go through the comments we have received in our consultations, and to prepare a Bill as quickly as possible.
      Mr. Costain: Does not the hon. Gentleman appreciate that there is a danger in giving too much information which would be available to competitors, particularly foreign competitors? If disclosure were seen to be likely to affect employment in this country because

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      foreign competitors would be getting too much information, would not action he needed?
      Mr. Meacher: Section 18 of the Employment Protection Act and Part IV of the Industry Act 1975 prevent information which is potentially of interest to competitors from being improperly disclosed, and certainly we would ensure that any such provisions were duplicated in this case.

    ENERGY

      Uranium Costs
      Mr. Hardyasked the Secretary of State for Energy what is the price of uranium used in estimating costs of current operations of thermal nuclear reactors; and what was the price paid or estimated one, three, five and seven years earlier.
      The Minister of State, Department of Energy (Dr. J. Dickson Mabon): In calculating its published figures for generation costs in respect of stations commissioned in the previous 12 years, the CEGB includes the price paid for uranium. This information is, however, a matter of commercial confidence between the Board and its suppliers.
      Mr. Hardy: Given the growing demand, is it not to be expected that, during the next decade, the price of uranium will rise very sharply, if not dramatically? Have the Government taken full account of this possibility in their energy deliberations?
      Dr. Mabon: Yes, Sir. In the departmental forecasts, prices are assumed to double by the end of the century.
      Mr. Rost: As nuclear power is the only source of energy dependent on imported fuel, is the Minister satisfied that enough has been done to build up some more substantial strategic stockpile, particularly in view of potential rises in price?
      Dr. Mabon: Yes, Sir. The price of the uranium currently being used by the Central Electricity Generating Board is much lower than the present world market price because it was purchased under contracts made some time ago. We have had discussions with various Governments about future contracts, and these are
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      developing much more favourably than appeared to be the case before.

    CIVIL SERVICE

      Pay Research Unit Board
      Mr. Tim Rentonasked the Minister for the Civil Service if he is now in a position to announce the names of the Chairman and independent members of the Civil Service Pay Research Unit Board.
      The Minister of State, Civil Service Department (Mr. Charles R. Morris): An announcement will be made as soon as possible.
      Mr. Renton: Will the right hon. Gentleman recommend that an annual report from the Chairman of the Pay Research Unit Board should be prepared and made available to the outside world? Will he further recommend that, as the Government have agreed to bring outsiders on to the Board, it would be sensible if the task of deciding what was a fair deduction for inflation-proofing of public service pensions was shared by the Government Actuary with outside actuaries?
      Mr. Morris: I think that the inference made by the hon. Gentleman in the last part of his supplementary question is a slur on the Government Actuary. The agreement makes it possible for the report from the Board to the Prime Minister to be published.
      Mr. English: I am grateful to the hon. Member for Mid-Sussex (Mr. Renton) for raising a question related to a report of a Sub-Committee, which I chaired and I am grateful to the Government for accepting it in part, but I wonder when they will produce their official reply. I take it that it will be before Easter—and one hopes that it will be fairly well before Easter.
      Mr. Morris: I assure my hon. Friend the Member for Nottingham, West (Mr. English) that the Government recognise the contribution of the General Sub-Committee of the Expenditure Committee under his chairmanship in producing its report. It is hoped that the Government's response will be made available to the House in the next few weeks.
      Mr. Hal Miller: Does the right hon. Gentleman accept the need to get the pay research machinery going at an early date in order to provide an adequate basis for the 1979 settlement, and also to reassure those making their 1978 claim of the Government's good faith?
      Mr. Morris: I think that those making their claims for 1978 recognise the Government's good faith, as the hon. Gentleman put it. I accept the hon. Gentleman's first point, that the Pay Research Unit and the Board should be established as quickly as practicable.

      Dispersal
      Mr. Canavanasked the Minister for the Civil Service when he next expects to meet representatives of the Civil Service employees to discuss job dispersal.
      Mr. Charles R. Morris: I have no current plans to do so. My right hon. and noble Friend the Lord Privy Seal met the National Staff Side on 1st February 1977. Departmental Ministers are in consultation with their individual staff sides and officials of my Department are in regular contact with the Staff Side of the Civil Service National Whitley Council.
      Mr. Canavan: Will my right hon. Friend resist the pressures from a handful of senior civil servants who are trying to block the Government's plans to disperse jobs to Scotland in the hope that a change of Government will mean the complete scrapping of the programme? Will he assure these people that many of their fears about coming to Scotland are completely without foundation because there are many suitable office locations and many attractive working environments in, for example, central Scotland?
      Mr. Morris: I welcome the opportunity of assuring my hon. Friend that the Government are conscious of the attractiveness of many geographical locations in Scotland in the context of Civil Service dispersal.
      I do not accept that any civil servant, senior or otherwise, is determined to block the Government's policy of Civil Service dispersal. The Government remain fully committed to dispersing 30,000 civil servants from London and
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      the South-East to new regional locations in the years ahead.
      Mr. Teddy Taylor: Will the right hon. Gentleman try to remove some of the fears in Scotland that have arisen from the many delays to this programme and say when work will start on the building of the new Ministry of Defence in Glasgow? Until the building is seen, many of these fears will remain.
      On a wider question, can the right hon. Gentleman say something to allay the concern of civil servants in Scotland that many Civil Service jobs there will be lost in the event of the Scottish nationalists having their way and Scotland becoming a separate State?
      Mr. Morris: I hope that the hon. Gentleman will put down a separate Question on that last point because I want to deal with the main burden of his comment, which relates to the timetable for Civil Service dispersal to Scotland.
      On 29th July 1977 the Lord Privy Seal outlined the time phasing for Civil Service dispersal, and the programme is going ahead on the basis of that timetable. There is no justification for anybody in Scotland to be anxious about this matter.
      Dr. M. S. Miller: Is my right hon. Friend aware that what many of the civil servants in Scotland who are in favour of dispersal are looking for is some tangible evidence that a start will be made on the development of this process to Scotland, to Glasgow and to my constituency of East Kilbride? Will he take the opportunity of having a meeting with them to dispel their fears? They are being pushed by other members of the Civil Service to wait in case there is a change of Government.
      Mr. Morris: I know that my hon. Friend has taken a consistent interest in the issue of Civil Service dispersal, and I am delighted to assure him that I stand ready to meet anybody in Scotland who has anxieties about Government policies on Civil Service dispersal.
      Let me take up a point that I forgot to deal with in reply to the hon. Member for Glasgow, Cathcart (Mr. Taylor). He referred to the St. Enoch site in Glasgow. He knows that the site has now been cleared and that the money for the new building has been identified.

      Forestry Commission.
      Mr. Molloyasked the Minister for the Civil Service if he will meet representatives from the Civil Service Union to discuss problems arising from devolution in Scotland with particular reference to the Forestry Commission.
      Mr. Charles R. Morris: I should be ready to meet representatives of the Civil Service Union to discuss these problems. Since they pertain to devolution, I would propose to meet the representatives in company with my hon. Friend the Minister of State, Privy Council Office.
      Mr. Molloy: Is my right hon. Friend aware that that answer will be welcomed by those specialist officers of the Civil Service Union who are concerned about the future career structure of their members employed by the Forestry Commission? They are particularly concerned about establishment negotiations and the future careers of their members.
      Mr. Morris: I am aware of those facts and would be delighted to give consideration to the anxieties of the Civil Service Union in this regard in any discussions that I have with it.
      Mr. Carmichael: Further to the point about job opportunities with the Forestry Commission, will my right hon. Friend take into account that one of the important points in considering the dispersal of jobs to Scotland is that because many young people who pass the Civil Service examination have to leave Scotland to get jobs they are anxious that there should be more Civil Service jobs in Scotland?
      Mr. Morris: My hon. Friend is right. There are many academically well qualified youngsters in Scotland who could make a positive contribution to government administration were they to be recruited to the Civil Service. Basically, that is the whole justification for the Government's programme in dispersing the Civil Service to Scotland.

      Civil Servants (Cardiff)
      Mr. Wigleyasked the Minister for the Civil Service how many civil servants, other than at the, Welsh Office, are employed in the Cardiff area.
      Mr. Charles R. Morris: There are, excluding staff of the Welsh Office, 9,500
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      non-industrial civil servants in the Cardiff area.
      Mr. Wigley: Will the right hon. Gentleman confirm that that figure is well in excess of the average for cities in the regions of England of a comparable size to Cardiff, and to a large extent emanates from the fact that Cardiff is the capital city of Wales? In those circumstances, will he draw to the attention of South Glamorgan County Council the irony of its refusing jobs which are associated with the Welsh Assembly and tell it that many other areas in Wales would be grateful for these jobs if the council would not?
      Mr. Morris: I think the hon. Gentleman has made the point that Wales generally has done remarkably well out of the Government's Civil Service dispersal programme.
      Mr. Anderson: Given that perhaps there is an over-concentration of administrative jobs within the Principality's capital, will my right hon. Friend seek, wherever possible, to further the dispersal of jobs within the totality of Wales?
      Mr. Morris: I understand my hon. Friend's anxieties in this regard. The Civil Service must generally be located in important regional centres which have good travel facilities and communications with London and other major centres.
      Mr. Grist: Is the right hon. Gentleman aware that the move of the Ministry of Defence to Cardiff is welcomed by the overwhelming majority of people in the city? Will he take this opportunity to confirm that this will mean more new jobs in the city, contrary to the various scare stories emanating from Plaid Cymru?
      Mr. Morris: I have noted what the hon. Gentleman rightly refers to as scare stories. Dispersal of the Ministry of Defence to Cardiff will mean more new jobs for the community there.
      Mr. Hal Miller: Will the right hon. Gentleman make plain, in the context of dispersal, whether he is talking about dispersing jobs without the civil servants presently doing those jobs, or dispersing people? If he is not dispersing jobs, what is to happen to those who have been doing the jobs? Will this route lead to an increase in the number of civil servants?
      Mr. Speaker: Order. It seems that the hon. Member is getting in the supplementary question that he failed to get in when we were dealing with dispersal.
      Mr. Miller: On a point of order, Mr. Speaker. With respect, dispersal was referred to in supplementary questions and in the original answer.
      Mr. Speaker: We dealt with dispersal on two Questions, I think.

    HOUSE OF COMMONS

      Questions
      Mr. William Hamiltonasked the Lord President of the Council what was the estimated cost of providing answers to the 212 Written Questions for Monday 6th February; and whether, in view of the need to curb public expenditure, he will propose an upper limit on the number of such Questions which any hon. Member may table per month or per Session.
      The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): The average cost of preparing a reply to a Written Question is currently estimated at £18. On this basis the cost of the answers to the Written Questions on 6th February would be £3,816. These figures are necessarily only approximate, and the cost of preparing individual answers varies widely. Any proposal for an upper limit on the number of Written Questions tabled by an individual Member would, in the first instance, be for consideration by the Select Committee on Procedure.
      Mr. Hamilton: Has my right hon. Friend noticed that today there are 235 Questions for Written Answer? On the basis he has given, the cost will be £4,000-plus. Does my right hon. Friend realise that by this method the taxpayer is providing research facilities for organisations outside the House? Will he refer this matter to the Select Committee on Procedure for an early decision because it is some time since hon. Members were rationed for Oral Questions, to the great benefit of the House as a whole?
      Mr. Foot: As my hon. Friend recognises, it is a matter for the Select Committee on Procedure in the first instance to make recommendations to the House. Any question of altering the procedures
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      that we have accepted over recent years and the number of Questions allocated is a matter of concern to the whole House. The whole House would, therefore, have to hear what was proposed before any change was made.
      Mr. Michael McNair-Wilson: Has the right hon. Gentleman any figures to show how many Questions were being tabled daily before research assistants were provided to Members and how many since such assistants have become available?
      Mr. Foot: I have no figures which show that. Hon. Members must take responsibility, and do take responsibility, for the Questions which they put down. I repeat that the right of Members to put Questions is a matter of great importance. It should not, of course, be interfered with by the Government, and it is a question on which the House itself would have to decide.
      Mr. English: Does my right hon. Friend agree that his answer shows that the real cost of answering a Question has declined since the matter was raised and an answer given in the 1964–70 Parliament? Does he realise that my hon. Friend the Member for Fife, Central (Mr. Hamilton), who asked this Question, is a Member of the European Assembly, the head of whose Civil Service is paid more than three times the sum paid to the head of our Civil Service? Does my right hon. Friend, therefore, accept that the cost of answering British Questions must be considerably lower than the cost of answering European Questions?
      Mr. Foot: I dare say that my hon. Friend is right in the second part of his supplementary question. As for the first part, relating to what has happened in recent years, it is obvious that the quality of answers has greatly improved, whatever may have happened to the quantity.
      Mr. Ridsdale: Does the Lord President realise that one of the reasons why there are so many more Written Questions is that Ministers are slow in answering letters? Has he any estimate of how much it costs to answer a letter?
      Mr. Foot: I shall certainly answer the latter question if the hon. Gentleman will put it down. There has been an increase in the number of Questions, and that takes a longer time. If there are delays in answering Members' letters, I shall do

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      my very best to look into the matter and see whether we can improve the situation.
      Mr. James Lamond: Since the number of Oral Questions is limited, is it not right that the number of Written Questions also should at least be considered? Has my right hon. Friend noted that on today's Order Paper there are the names of Members with up to 15 Written Questions down, some of them to every Department, asking for example, about canteen facilities, the answers to which, I am sure, could be found much more cheaply by other methods?
      Mr. Foot: If there is a general desire in the House that we should look into this matter, I should be prepared to refer the question to the Procedure Committee, but, obviously, the House would want to look with care at any change in the system and the rights of Members to put Questions.

      Scotland Bill
      Mr. Canavanasked the Lord President of the Council what consultations he has had with interested parties concerning amendments made during the Committee stage of the Scotland Bill.
      The Minister of State, Privy Council Office (Mr. John Smith): At their request, meetings have been held with the General Council of the Scottish Trades Union Congress and the Scottish Council of the Labour Party, where the amendments made to the referendum clause of the Scotland Bill were discussed.
      Mr. Canavan: Will my hon. Friend the Minister of State have consultations about the implementation of the 40 per cent. rule in the referendum? Will an estimate be made of the number of people on the register who have died, and will such an estimate be taken into account in an announcement in advance of the referendum being held about the minimum number of votes required to implement the Bill?
      Mr. Smith: My hon. Friend raises an extremely important and relevant point. I undertake that the Government will carefully consider this matter.
      Mr. Grimond: Does the Minister agree that there have been certain unsatisfactory aspects to the handling of the Scotland Bill, and will he consider asking his right
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      hon. Friend to refer the matter to the Select Committee on Procedure, since we seem to be faced with a guillotine whenever we have an important Bill and, as a result, many serious amendments are not debated at all?
      Mr. Smith: There are some unusual features about this Bill and the way in which it has been dealt with by the House, but whether matters are discussed or not is the responsibility of the House as well as of the Government, as I think the right hon. Gentleman will recognise.
      Mr. Wigley: Has the Minister applied his mind to the anomaly which will arise because there will be students in Scotland who are at university in one area and who have their homes in another, being lawfully registered as voters in both areas, who may want to vote "Yes" but, by so doing, will have their wishes cancelled by the assumed "No" vote in the second area, where they cannot lawfully use their vote and are therefore deemed to have abstained?
      Mr. Smith: The hon. Gentleman has raised another point on the same lines as that raised by my hon. Friend the Member for West Stirlingshire (Mr. Canavan). I assure him that we shall consider it carefully.
      Mr. Carmichael: Will my hon. Friend consider also that we have in Scotland, as in other parts of the country—though perhaps more in Scotland—a fairly large number of religious people who refuse to vote at all? Will they be considered?
      Mr. Smith: There would be certain difficulties in establishing who had a conscientious objection to the use of the vote. I think that these difficulties arise, in a sense, in relation to the decision which the House took against the Government's advice.

      Questions
      Mr. Silvesterasked the Lord President of the Council if he will propose to the House a resolution to allow Members to ask two Oral Questions per sitting day.
      Mr. Foot: The consideration of such a change would be a matter for the Select Committee on Procedure. But I doubt whether this proposed reversion to previous practice would be generally welcome.
      Mr. Silvester: Will the Leader of the House accept my apologies in that the Question does not quite say what I intended it to say, which was that two Questions could be asked provided that not more than one was to the same Minister? Will he recognise that the reason for this proposal is that, apparently, the Table Office has to maintain over a fortnight a long and complex administrative arrangement whereas, if it was obliged to check the matter out each day, it would simply need to keep a record for a single day, which would be a useful change?
      Mr. Foot: I shall look at that, although here again I think that it would be a matter for the Procedure Committee to consider before any change in the present practice was contemplated.
      Mr. Ward: So that hon. Members may judge the effect of this proposal on public expenditure, can my right hon. Friend say what is the cost of answering an Oral Question as distinct from the Written Questions on which he replied earlier?
      Mr. Foot: I shall give my hon. Friend a reply on that if he will put down a Question, though I must add that working out the figures for Oral Questions involves some cost as well.

      Broadcasting
      Mr. Whiteheadasked the Lord President of the Council when he now expects sound broadcasting of the proceedings of the House to begin.
      The Parliamentary Secretary to the Privy Council Office (Mr. William Price): The broadcasting authorities hope to begin regular broadcasting of parliamentary proceedings when the House reassembles after the Easter Recess.
      Mr. Whitehead: Does my hon. Friend agree that it would be desirable for the Select Committee to be appointed and to hold several meetings before, not after, the broadcasts begin? When will the names of the members of the Committee appear on the Order Paper?
      Mr. Price: I think that it would be right for the Committee to be appointed before broadcasting starts, but I should argue strongly that it is not necessary to
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      have a series of meetings before it starts. We hope to announce the names shortly.
      Mr. Spearing: Does my hon. Friend agree that it would be desirable that cassette recordings of the whole proceedings should be available at least to Members and that we should ask the broadcasting authorities to remind listeners at the end of a broadcast that they can obtain a record of the whole of our debates in the Official Report?
      Mr. Price: I think that that is a matter which the Joint Committee may well wish to look at in the early stages.
      Mr. English: Why is it a matter for the Joint Committee in this House when, as I understand, peers will be able to obtain the recordings? Does my hon. Friend wish to make his colleagues second class citizens?
      Mr. Price: I should be in immediate difficulty if I tried. My hon. Friend and I have discussed this matter, and we are looking into it.

      Select Committees
      Mr. Tim Rentonasked the Lord President of the Council whether he will take steps to make additional back-up facilities available to members of Select Committees.
      Mr. Foot: I understand that the Select Committee on Procedure is examining a number of aspects of the working of the Select Committee system. I would suggest that the House awaits its report.
      Mr. Renton: Does the Lord President share the general appreciation of the work recently done by, for example, the Select Committee on Nationalised Industries and the Select Committee on Overseas Development, and will he personally support the idea that more backup facilities should be available to Select Committees so that they did not have to rely on the staff of the Serjeant at Arms?
      Mr. Foot: Obviously I follow the work of all right hon. and hon. Members in all quarters and on all Committees with the same impartial eye, and that applies to these Committees. If there is to be a considerable extension of facilities, I believe that that must be a matter for the Procedure Committee itself to look

      1007
      into and to consider what would be involved.
      Mr. John Garrett: Does my right hon. Friend find it odd that the Expenditure Committee, which considers policy, has a support staff of about 30 full-time people, but the Public Accounts Committee, which still considers little more than whether the books balance, has a full-time staff of 600 working in its support? Does my right hon. Friend agree that the House deserves an investigatory committee system with substantial backup staff?
      Mr. Foot: My hon. Friend is an expert on this subject because he is on the Expenditure Committee, but I believe that the proposition that there should be a general extension of investigatory committees is a matter which the House should look at following the report from the Procedure Committee. I do not think that we should take action before the report comes.

      Stanley Baldwin
      Mr. Ridleyasked the Lord President of the Council if he will cause to be erected in the House a statue of the late Stanley Baldwin.
      Mr. Foot: I do not know whether there is a general desire in the House for this proposal. I suppose I should take into account the fiercely critical views which Leaders of the Conservative Party are inclined to take of their predecessors.
      Mr. Ridley: Since the Prime Minister appears to emulate this statesman in every possible way, if he were ever to have a statue erected to himself, would it not be a good idea to have one erected to Stanley Baldwin first?
      Mr. Foot: If the hon. Member wants to attack the Prime Minister, he should discover a less roundabout way of doing it. Any attack from the hon. Member is a compliment. I suggest that he should first see whether he has any support for his idea from his hon. Friends.

NORTHERN IRELAND (Restaurant Bombing)
The Secretary of State for Northern Ireland (Mr. Roy Mason): At 9 p.m. last
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Friday evening, a bomb exploded at the La Mon House restaurant near Gransha in County Down. Some 500 people were in the building, most of them attending two social functions which had no political or sectarian connections whatsoever. The explosion immediately caused an intense fire, which swept through the building and gutted it. Twelve people were killed, their bodies charred almost beyond recognition, and a further 23 people were injured, of whom 11 had to be detained in hospital.
Subsequent investigations showed that an explosive device, with cans of petrol attached to it, had been placed outside the building in an alcove opposite one of the windows of the smaller of the function rooms. The detonation therefore had the effect of hurling burning petrol straight into that room, where most of the casualties occurred.
No effective warning was given. The Provisional IRA has now admitted its guilt for this attack.
I am sure I speak for the whole House in expressing the utmost horror and disgust at this callous and senseless slaughter of innocent people and in extending our heartfelt sympathy to their families and to those who were injured. By its very nature this murderous attack was likely to cause extensive casualties, and those who planned it and carried it out cannot now pretend that they could not foresee the carnage that it would cause. They have been rightly condemned from every quarter.
The Chief Constable and the General Officer Commanding assured me on Saturday morning that the maximum available resources of the security forces were involved in urgent and intensive efforts to track down those responsible for this terrible crime. I am satisfied that there will be no relaxation of this effort.
I shall be having a further discussion with the Chief Constable and the GOC later today. We are unanimous in pursuing a clear policy of dealing with violence by the enforcement of the rule of law by the police supported by the Army. It is fundamental to the maintenance of the rule of law that the whole community should unite behind the security forces.
As a consequence of our policy, very real progress has been made in curtailing violence in Northern Ireland. I have

1009
made it clear, however, in this House and elsewhere, that the Provisional IRA retain the capacity to perpetrate outrages of this kind. It wants to stimulate a violent reaction. I have no intention of playing into its hands. I realise the deep emotions which have been aroused but what is needed is restraint plus the maximum support of the security forces from the whole community.
All responsible political leaders involved in the affairs of the Province have a major interest and a real part to play in facing our common problem of security. I propose to carry further my efforts to involve them in our common cause to eradicate violence and will be seeking talks with them in the near future.
The House will also have heard, with regret, of the death in a helicopter crash of the Commanding Officer of the 2nd Battalion of the Royal Greenjackets. It is not yet possible to say what caused the crash.
Mr. Neave: On this side of the House we join the Secretary of State in expressing deep sympathy with the bereaved and suffering and expressing our total disgust and horror at this most cowardly crime—perhaps the worst of its kind in many years of futile murder and destruction by the IRA in Northern Ireland.
Will he convey to the House, to the people of Northern Ireland, and particularly to the murderers that there will be no kind of amnesty from this Government for any convicted terrorists? Is he also aware that we feel deeply the loss of Colonel Iain Cordon-Lloyd, Commanding Officer of the 2nd Battalion of the Royal Greenjackets, in a helicopter crash in circumstances which seem to have serious implications for the security forces?
The Secretary of State mentioned the enforcement of the rule of law in future by the police, supported by the Army. Would it not be better to revise that policy and increase the activity of the Army, particularly the Special Air Services?
Leaving aside what seems to be at best a miscalculation by the Government of the IRA's capability and weapons, will the Secretary of State seek a meeting with Mr. Lynch to discuss cross-border security, as unfortunately Mr. Lynch appears to have changed his attitude on
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this since he visited London last September?
Mr. Mason: I give an absolute assurance that as far as I am concerned there will be no amnesty whatever for those who are guilty of criminal acts. They will be treated as criminals and processed through the courts of law. They will serve their sentences, and there will be no amnesty.
I was sorry to hear of the death of Colonel Iain Cordon-Lloyd, who was an outstanding officer with a great deal of experience in Northern Ireland. As yet we have not been able to ascertain whether his death was the result of violence. The tests have not shown any signs of bullet wounds in the bodies or any bullet marks on the helicopter.
I hope that the hon. Member for Abington (Mr. Neave) will not talk about miscalculations in policies, because in the security debate in December, which I answered, he hinted at no such criticism. Indeed, he even boasted that because we had adopted some measures that he had suggested we were succeeding. The hon. Member talked about winning, losing and success. I have never talked in these terms. I talk about making progress, and undoubtedly we are making progress.
On cross-border co-operation, I assure the hon. Member that, from a practical point of view, since the return of Mr. Lynch to government in the South there has been no lessening of cross-border active co-operation.
Mr. Kilfedder: I join with other hon. Members in expressing sympathy to the bereaved and those mutilated. This extension of terrorism has shattered the heart of my constituency, but it has not destroyed the spirit of my constituents or that of the Ulster people generally.
Is the Secretary of State aware of the widespread feeling among people in Northern Ireland and among the terrorists themselves that, despite what the Secretary of State has said, and no matter how large the number of innocent people needlessly slaughtered, the terrorists will, one day get an amnesty? This is a feeling to which Mr. Lynch has, unfortunately, given credence. Will the Secretary of State show his determination to end terrorism by introducing the death penalty, because a dead martyr is far preferable to dead innocent people?

1011
On the day of the atrocity the Secretary of State was boasting that the number of terrorist victims in Northern Ireland in the first six weeks of this year was 10 short of the total of 18 for the same period last year. Since he has taken the credit for the alleged success of Government security policy, both he and the Government must now stand condemned as guilty men for stimulating—[HON. MEMBERS: "Shame."] It is all very well for hon. Members to say that, but I represent these people. The Secretary of State and the Government must stand condemned for stimulating the slaughter of innocent people. Will the Secretary of State tell the House how many regular troops were deployed in my constituency on the night of the atrocity or in the previous week, because no one has seen any there in the past few weeks? Would he come clean about the number of regular troops that are actually operational—it is not the 13,500 that he has suddenly mentioned but nearer 6,000? He has miscalculated the situation in the Province.
Mr. Mason: I can understand the hon. Gentleman's emotions in the circumstances because this outrage happened in his constituency. I appreciate his sorrow. However, I repeat that there will be no amnesty. Her Majesty's Government have placed that on record, and it has been backed by the official Opposition and by the Liberal Party.
In regard to the death penalty, that practice was abolished by a free vote of the House. I believe that if we were to go back to the death penalty for terrorists in Northern Ireland, it would not deter those callous fanatics who were responsible for last Friday's carnage. It would give the terrorists the glamour of martyrdom. At this stage they know that the greatest deterrent is for them to be brought to justice in a court of law, for it to be established that they are criminals in the eyes of their friends, that they will go to gaol, and that there will be no amnesty at the end.
Mr. John Mendelson: In view of the general condemnation of this outrageous crime, does my right hon. Friend agree that if the condemnation extended by the Prime Minister of the Irish Republic is to have real meaning, the Foreign Secretary should now make representations in Dublin so that there may be
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a firm agreement on the part of the Irish Government that if the criminals concerned escape to the South they will be returned and brought to full justice?
Mr. Mason: I shall bear in mind the point regarding representations to my right hon. Friend. The House is fully aware that we have rightly complained because the Republic has not yet ratified the suppression of terrorism convention. We wish to bring all pressure to bear on those concerned to recognise that when criminals escape to the South, it is incumbent on the Republic that they should be returned to the North, and to realise that the whole situation in respect of terrorism should be tightened up.
Mr. Molyneaux: Is the right hon. Gentleman aware of the view widely held at varying levels in the security forces that they are being inhibited by political considerations? Will he give an absolute assurance to the general public that in future the security forces will not be restrained or prevented in any way from taking measures which they consider necessary to defeat terrorism?
Mr. Mason: There are no political restraints on members of the security forces in Northern Ireland. But the hon. Gentleman must bear in mind that members of the RUC and Army personnel must act within the law. They are not above it or beyond it. I undertake to watch that aspect carefully.
Mr. Whitehead: Will my right hon. Friend accept that the whole House wants to see those who were responsible for this appalling subhuman outrage brought to book as soon as possible? Does he also agree that if the security measures which he has discussed are to be effective, they must be taken in the context of a continuation of the attempts to find an honourable settlement, aimed at power sharing between the majority and minority communities along the lines laid down by the Conservative Government under the right hon. Member for Penrith and The Border (Mr. Whitelaw) and continued by the present Government?
Mr. Mason: My hon. Friend is right. Apart from the security dimension, I would point out that there is a political dimension, too, in the Province. I had begun a whole series of talks with all

1013
political parties. I had hoped that those talks would resume, but we shall have to wait until this wave of emotion throughout the Province has evaporated.
Rev. Ian Paisley: I wish to associate myself with the expressions of deep sympathy to sufferers and bereaved in this awful tragedy which overshadows our Province and which has left us numb in the past few days. I ask the Protestant people in Northern Ireland to restrain themselves at this time and not to retaliate in any way, because that is exactly what the Irish Republican Army and these diabolical murderers wish to bring about.
Is the Secretary of State aware that those who are responsible for bringing into custody the godfathers of violence have issued a statement to the Belfast Newsletter which has been given great publicity today? They have been put at risk by what they call a whitewashing operation, because in a few days those godfathers of terrorism will be released and let loose on the public. Is the right hon. Gentleman aware that the statement made in this House recently by his right hon. Friend the Foreign Secretary on guerrilla activity in Rhodesia, in which those who are guilty of terrorism have been referred to as "freedom fighters", has been the subject of strong comment in Northern Ireland? Therefore, will the right hon. Gentleman declare that this is a fight to the finish and that there will be no let-up in the war against these fiendish murderers? Furthermore, will he give an undertaking that the UDR will operate in all parts of our Province?
Mr. Mason: I am grateful to the hon. Gentleman for issuing that statement to the people of the Province, irrespective of which side of the sectarian divide, in asking for restraint. It was a highly commendable statement.
In regard to the actions of the so-called godfathers, some senior people in the Provisional Sinn Fein were arrested and picked up on Saturday morning. I assure the hon. Gentleman that it was the intention of the police in that pick-up to try to obtain leads and information as quickly as possible in trying to root out those responsible for this incident. I also assure the hon. Gentleman that there will be no let-up in that respect.
We have within the Province 31,000 people who are officers of law and order.
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That is one officer for every 45 people. If that were translated into the situation in Great Britain—in England, Scotland and Wales—it would mean our having a total of 1,200,000 members of the Armed Forces and police in Great Britain. That is the measure of the intensity of our effort.
Mr. Goodhart: Will the right hon. Gentleman give an assurance that he will continue the pressure on the godfathers who up to this moment in time have been walking free in the streets of Belfast and Londonderry? Even if we do not have enough firm evidence to secure conviction, would it not have a good effect in undermining the morale of the hooligans who plant bombs if they were to see their leaders in court denying membership of the illegal organisation they run?
Mr. Mason: I could not agree with the hon. Gentleman more. But if we are to stick rigidly to our policy of regarding these people as criminals, evidence must be gained before charges are laid, and this must be the case in respect of the godfathers, too. The hon. Gentleman must be aware that a few weeks ago we picked up 17 senior Provisional Sinn Fein members together with records, documents and machines, so that we shall be able to sift the evidence to see to what extent they are involved. I assure the hon. Gentleman that this effort is taking place.
Mr. Molloy: Is my right hon. Friend aware that when he made his original statement on this appalling crime he said that it was rightly condemned in every quarter? However, does he not agree that condemnation by itself on either side of the border in Ireland is not enough, and that the time has now come for Church leaders and political figures on either side of the border—including Church and political leaders in this country—to show an absolutely united front to restore civilised behaviour and to give the impression to ordinary people that such vulgar and appalling behaviour is utterly condemned?
Mr. Mason: My hon. Friend is right. I have been urging Church and political leaders to stand together in common cause with the Government in seeking to eradicate terrorism from the Province. It has taken an act of this dimension to rally everybody together, whether from the North or South. I only hope that we shall now obtain full co-operation from

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Church leaders as well as from other people in the Province.
Mr. Freud: The Liberal Party associates itself with the expressions of sympathy for the bereaved and injured in this abhorrent crime. We also wish to support the remarks of the hon. Member for Penistone (Mr. Mendelson), and we are satisfied with the reply given by the Secretary of State. Has the right hon. Gentleman considered whether enough encouragement has been given to hotel and restaurant managements in the Province to take up the financial assistance that is available for the provision of fire watchers and security men? I feel that if that activity had received more publicity, this kind of crime might well have been avoided.
Mr. Mason: I am obliged to the hon. Member. We have a security staff grant scheme in Northern Ireland whereby the Government are prepared to pay up to £45 per person per week for a fire watcher or security guard. If many more business premises, factories, establishments, hotels and restaurants will avail themselves of this, they can employ fire watchers within their business premises and also manage to have security guards on the outside. On this occasion, although at the La Mon House restaurant they had some border blocks in the car park to keep cars away from the restaurant itself—they were installed in the old days when there used to be car bombers—and there were two people, a man and a woman, carrying out cursory searches as people went in, it is quite evident that people were able to get round the side of the building during the course of the night. Therefore, I am encouraging more people to take up this security staff grant scheme, and we shall pay them accordingly.
Several Hon. Members rose—
Mr. Speaker: Before we conclude this matter, I shall call all four right hon. and hon. Members who have been seeking to catch my eye throughout, and the Opposition Front Bench spokesman if he wishes.
Mr. Craig: I find it very difficult to keep my cool and to show restraint this afternoon. At least three of the dead were constituents of mine. One of them was the son of a valued election worker. I know that it is my duty to try to keep
1016
my cool, but regretfully I have to say that I do not find the statement by the Secretary of State today reassuring or helpful in present circumstances.
There is a new terrorist situation in Northern Ireland. We are now dealing with a cornered rat. The security forces have achieved that much. But we all know that a cornered rat can be a very vicious animal. Anyone who goes in to deal with it should have the proper weapon in his hand.
I should like the Secretary of State to look at the power which the security forces have now and to reconsider the power of detention. I should also like him to reconsider the position of Provisional Sinn Fein, the propaganda and publicity organisation for the IRA. Why is it not banned? Why is the IRA allowed to hide under its cloak? This is the sort of action that we want to see.
Mr. Mason: Again I can understand the right hon. Member's concern if he has lost constituents as a result of this incident. But I must warn him that, although I may still have reserve power for executive detention, if we went back to detention without charge it would set us back many years in the Province. These terrorists are now regarded as criminals, and we have to process them through a court of law and to make sure that in the eyes of everyone in the Province they are regarded as criminals and not as freedom fighters. If we decided to go back to detention, we have to remember that there would be the image of political recognition. We would have said that they had a political cause and that there may have been a political status attached to it. We do not want to give back that benefit.
Mr. McCusker: Is the Secretary of State aware that my right hon. and hon. Friends and I wish to be associated also with the expressions of sympathy to the wife and three young sons of the gallant soldier killed in my constituency last Friday? Will the Secretary of State now take this opportunity to deny the weekend assertion of Mr. Jack Lynch that only 2 per cent. of the violence in Northern Ireland emanates from the Republic? Will the right hon. Gentleman confirm that almost all the rural violence, except that around Belfast, is conceived in and emanates from the Republic of Ireland? Does he accept that the hon. Member for

1017
Banbury (Mr. Marten) and I had pointed out to us by the now dead Commanding Officer of the Greenjackets the locations of a number of active-service units lurking in the Irish Republic? Will the right hon. Gentleman insist that Jack Lynch now takes action against them?
Mr. Mason: I can certainly tell the hon. Member that I disagree absolutely and fundamentally with the statement that only 2 per cent. of incidents affect the border. The border is much more important now than it was some time ago. That becomes apparent when one recognises that in 1977 we charged 1,308 people with terrorist offences and that we also brought down the death level from 296 in 1976 to 112 in 1977. The level of violence had been reduced. The attrition rate had been high, and now, of course, people are using the border both to operate from the Republic of Ireland and to escape to it. There is no doubt that there is increasing use of the border and that 2 per cent. is a paltry figure.
Mr. Bradford: Will the Secretary of State accept that it is of no consequence whether capital punishment is or is not a deterrent but that the concept of punishment is an essential factor in any civilised society? Will he accept, secondly, that this is decision day for the minority community among whom many of these murderers live—indeed, they suffer from them—and that that minority community must use the telephone and then close the door and allow the security forces to apprehend these people uninhibited? Will he accept finally that it is decision day for the Government and that, despite what he says, senior officers of the Ulster Defence Regiment are inhibited in the pursuit of their duty and admit that they are not allowed to operate in areas in Belfast lest somehow there is a reaction from the Republican community?
Mr. Mason: I informed the House only two or three weeks ago that a company of the Ulster Defence Regiment had been called out and had operated in Belfast only recently. Therefore, as the hon. Gentleman knows and as the hon. Member for Antrim, North (Rev. Ian Paisley) knows, although the UDR is not operating yet in every area of the Province, it is not inhibited from operating against the terrorists. However, there are still certain areas in the Province in
1018
which the UDR has not operated. Secondly, because of the shock circular that the RUC distributed throughout the Province following the deed on Friday night, there has been quite a considerable response from the public with information flowing in. We hope that that will prove successful.
Mr. Carson: The tragedy of La Mon House restaurant has also affected my constituency. Four of my constituents are dead and four of them are injured, two very seriously. Is the Secretary of State aware that in a Belfast morning newspaper senior police officers expressed their dissatisfaction with the inadequacy of existing laws to deal with terrorists? Is he also aware that recently the police have been finding it more difficult to get the back-up guaranteed by the security forces and the Army to deal with terrorists, that very often they have called for help and that help has not come?
I want to contradict what the right hon. Gentleman said, since the UDR does not operate in all Belfast. I could take any hon. Member to my constituency and show him areas where the Army is very light on the ground, and yet the UDR is not allowed in. In view of the tragedy and in view of the fear and anger of the people of Northern Ireland, especially of people in Belfast, will the Secretary of State assure the House that no area in Belfast, if not in the whole of Northern Ireland, will be closed to UDR men in carrying out their duties as members of the British Army?
Mr. Mason: The hon. Member knows that there are no "no go" areas in the Province for the Army and, therefore, that the Army can penetrate any part of the Province. As I explained—obviously the hon. Gentleman was not listening to me—the UDR has operated in Belfast but not in every part of Belfast.
Mr. Carson: Not in my constituency.
Mr. Mason: I concede that. I want finally to say that I have been very much aware—I have explained this to the official Unionist Party, I explained it to the Alliance Party last week, and I explained it in answer to Questions in the House last Thursday—there was always the possibility after a long lull, with people feeling relatively secure and safe, that there could be an outbreak of this

1019
kind. I am sorry that it has happenned. Only 33 people were killed in the Province in the last six months of 1977, and only two people in January. Therefore, I was worried that there might be this sort of outrage. I hope, therefore, that the Province will not panic. I hope that we can keep on course. I do not want to see any of the backlash that we feared from this sort of outrage. I hope that all political leaders and Members of Parliament in common cause will help us to keep the Province calm.
Mr. Kilfedder: I beg to ask leave to move the Adjournment of the House under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the terrorist explosion at La Mon House Restaurant on Friday 17th February, as a result of which 12 persons were killed or burned alive and 30 injured, many of them badly mutilated, the need to refute in the interests of the people of Northern Ireland and of their safety and security the allegations persistently made by the Secretary of State for Northern Ireland that the security forces are taking all possible measures against the terrorists, and the urgent need for full and effective measures to bring the Provisional IRA campaign of terrorism to a speedy end."
I am sure that the House, with its customary concern for the inhabitants of Great Britain and places thousands of miles away, would want to discuss the fearful implications of this latest slaughter of innocent people by the IRA, to give the Ulster people the opportunity of expressing their poignant grief over this latest atrocity, of demanding that it should not be forgotten among further outrages, and of expressing their anger at the ineptitude of the Government, who have tried everything to meet the IRA campaign of terror, including parlying with the IRA, but have so far excluded the measures that are necessary—a ruthless all-out war to destroy and eliminate the evil men from Northern Ireland and the introduction of the death penalty.
The debate is vital and urgent because innocent people in the Province are daily and hourly at risk and facing death, such as the tearing apart and burning alive that occurred in the Lamon House Restaurant explosion. I was shown a piece of skull with hair attached to it, one of the remnants of the human remains that were found in the debris of the
1020
explosion. That is an example of what should be shown to people throughout the country to make them aware of how the Ulster people are suffering.
The feeling of anger, revulsion and frustration throughout Northern Ireland must be chanelled through the House so that an effective safety valve is provided at once so as to ensure the continuation of the admirable restraint that has been shown by the Ulster people for so many years in the face of terror.
I briefly urge you, Mr. Speaker, to grant an emergency debate on two other grounds. First, the Ulster people will not find confidence in the statement that has been made this afternoon by the Secretary of State for Northern Ireland. The Ulster people feel that the Government's security policy up to now is a sick joke. The security policy pursued up to the moment has failed. This is the ninth year of the IRA campaign of terrorism. There is no evidence that the IRA is defeated, despite the remark made last Friday by the Secretary of State that only a remnant of the IRA was left. The Government must terrorists.
Finally, what the Government say about the success of their present policies and security measures is not true. They delude the people of Northern Ireland with a smokescreen of the figures of those arrested and the number of soldiers deployed in operations in Northern Ireland.
A debate is vital to enable what happened in the House during the last war—a means for the people of Northern Ireland, who are demanding their right to live and not to be mutiliated, the opportunity through their Members of Parliament to attack and criticise Government policy after such a catastrophic and terrible reversal.
Mr. Speaker: The hon. Member for Down, North (Mr. Kilfedder) gave me notice this morning that he would seek to move the Adjournment, under Standing Order No. 9, for the purpose of discussing a specific and urgent matter of public importance, namely,
"the terrorist explosion at the La Mon House Restaurant on Friday 17th February, as a result of which 12 persons were killed or burned alive and 30 injured, many of them badly mutilated, the need to refute in the interests of the people of Northern Ireland

1021
and of their safety and security the allegations persistently made by the Secretary of State for Northern Ireland that the security forces are taking all possible measures against the terrorists, and the urgent need for full and effective measures to bring the Provisional IRA campaign of terrorism to a speedy end."
I listened carefully to the exchanges this afternoon and to the statement made by the hon. Gentleman. As the House knows, there are many factors that I have to take into account, and the House has specifically advised me that I am not to give my reasons. I cannot agree to the application that the hon. Gentleman has made.
Rev. Ian Paisley: On a point of order, Mr. Speaker. I am sure that you realise, Mr. Speaker, the feelings today of the representatives of the Northern Ireland people in this House. Among the business of the House on Thursday there will come before us an order under the Northern Ireland (Emergency Provisions) Act, which is a consolidation measure. Will you tell us today, Mr. Speaker, whether you will be prepared not to rule to the letter of the law but to give us an opportunity in that debate to deal with this matter, which is upon the minds of the Ulster people? My right hon. and hon. Friends and I feel that we would be failing those whom we represent if we did not express in the House the feelings of the Northern Ireland people.
Mr. Speaker: I am only too deeply aware of the emotion that has been expressed, which the whole House has shared. However, I can make no commitment about Thursday. The House will have before it a consolidation measure. I advise the hon. Gentleman to pursue the matter through the usual channels. It may be that some opportunity will there be created. I have to observe the rules of the House, and it is impossible for me to commit myself in advance.

STATUTORY INSTRUMENTS, &c.
Ordered,
That the Rating of Industry (Scotland) Order 1978 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Foot.]

PAPUA NEW GUINEA (GIFT OF A CLOCK)
Motion made, and Question proposed,
That Mr. Robert Mellish and Mr. Spencer Le Marchant have leave of absence to present on behalf of this House a clock for the Clerk's table to the National Parliament of Papua New Guinea.
Mr. Speaker: The Question is—
4.5 p.m.
The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): I beg to move
That Mr. Robert Mellish and Mr. Spencer Le Marchant have leave of absence to present on behalf of this House a clock for the Clerk's table to the National Parliament of Papua New Guinea.
Mr. Speaker: If the House will forgive me, I think that it would be courtesy if the House allowed me to step back. When we are going abroad, it is customary first to have a statement in the House.
Mr. Foot: I apologise to you, Mr. Speaker, and the House, if I did not rise at the right moment. I apologise if any inconvenience was caused on that account.
The House may recall that on 15th December 1977 it approved the presentation of an independence gift to Papua New Guinea. The motion today, if approved, gives leave of absence to a small delegation to present the gift on our behalf. The House may wish to know that the composition of the delegation has been arranged with you, Mr. Speaker, and that it will be accompanied by Mr. Lankester, a Clerk of the House.
Mr. Michael McNair-Wilson: I ask the Lord President if he has considered why we are sending a Japanese-made clock to Papua New Guinea and whether it is not still possible to send a clock made in this country by British craftsmen.
Mr. Foot: I have considered the matter since it was previously raised. I discovered that the tale that it was a Japanese clock was completely false. It is a British clock. I am sure that the whole House be glad to hear that.
Question put and agreed to
Mr. Speaker: The Clerk will proceed to read the Orders of the Day.
Mr. Freud: On a point of order, Mr. Speaker. I tried to catch your eye at an earlier stage. Would it be in order, Mr. Speaker, for me to make a comment on the clock?
Mr. Speaker: Order. The hon. Member for Isle of Ely (Mr. Freud) was not on his feet.
Mr. Freud rose—
Mr. Speaker: I am not short-sighted. The hon. Gentleman was not on his feet. It would become highly irregular if we went back for a second time. We were becoming irregular when we went back on the first occasion.
Mr. Freud: On a point of order, Mr. Speaker. Surely it is as reasonable, Mr. Speaker, to give permission to a Back Bencher when he seeks it as it is to give permission to the Lord President.
Mr. Speaker: Order. The hon. Gentleman is seeking to argue with me.
The Clerk will now proceed to read the Orders of the Day.

ORDERS OF THE DAY

  HOME PURCHASE ASSISTANCE AND HOUSING CORPORATION GUARANTEE BILL
  Order for Second Reading read.
  4.10 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.
  This Bill has two major objectives. It gives effect to the proposals outlined in the Green Paper to help first-time buyers and it provides for an increase in the financial limits governing the Housing Corporation's power to guarantee loans to housing associations.
  The House will recognise that this measure reflects the Government's commitment to assist both those who wish to become owner-occupiers and those becoming housing associations tenants. I emphasise that this is a measure spanning both owner-occupation and renting.
  I emphasise it because this is, as I have come to recognise, one of the major issues which divides—in my view, wrongly—this House. While the Government and the Opposition are both in favour of widening owner-occupation, the Opposition have an open and extraordinary hostility to social renting. They have somehow persuaded themselves that there is no longer a need for public rented housing and that the first aim of Conservative housing authorities is to cut local authority housebuilding and even to dispose of existing stock. Theirs is an ideological and unbalanced view of housing need and contrary to all the evidence we have of the continued shortage of rented housing at rents which people can afford.
  For our part, we believe that there must be continued provision for both major tenure groups.
  Let me remind the House that one of the major findings in the housing Green Paper of last June was the number of people living in circumstances which are just not acceptable by contemporary standards. There are probably about 1·8 million households in England and Wales forced to live in these poor conditions, and they represent the hard core of housing need. We have indeed made immense improvements in the past

  1025
  25 years in our national housing condition by increasing housing supply with more than 8 million new houses and by modernising about 3½ million more. In the first tour years of this Government, progress has been strongly maintained. More than 1,160,000 homes have been completed in Great Britain in the past four years, more than 200,000 homes demolished or closed under slum clearance and some 700,000 homes have been approved for improvement with the aid of grant. But a substantial problem still remains. We must tackle it, we can tackle it and we shall tackle it.
  Against this background the Government put forward in the housing Green Paper their basic housing objectives: first, to ensure that the most pressing needs of individuals and areas are tackled urgently and effectively and, secondly, to make it easier for more people and their children as they grow up to get the kind of homes that they want. Here we are indeed conscious of the growing numbers who are both able to become and who wish to become home owners. Both these objectives—not just one—will be served by this Bill and by our housing policies generally.
  On the first objective—meeting the most pressing needs—it is, of course, to local authority and housing association provision which we must look for the major contribution. In spite of constraints which the world recession and the continuing economic crisis have imposed, gross public sector housing investment under this Government has consistently remained above the boom year of public expenditure under the last Conservative Government. The latest Government expenditure White Paper—Cmnd 7049—projects a steady growth of housing expenditure into the 1980s. The House will know that allocations have very recently been made to local authorities under the new housing investment programme system and the authorised capital expenditure represents an increase of £100 million in real terms over the last year.
  It is also by using the HIP system that we have been able to concentrate our resources in areas of housing need and to deploy those resources better to reflect local conditions. Equally the Housing Corporation and housing asso-
  1026
  ciations are playing their part, particularly in the stress areas, to supplement the activities of local authorities so that those who are at present living in deplorable conditions have better and earlier prospects of getting the housing they need. The second part of the Bill, which increases the guarantee facilities of the Housing Corporation will, of course, assist housing associations in their valuable role.
  Mr. Michael Latham: Will the Secretary of State confirm that the Green Paper envisages a steadily diminishing number of public sector housing units in the next five years?
  Mr. Shore: I shall not confirm that at all.
  Regarding the Housing Corporation provision, in constant price terms expenditure is running at double the level that it was in 1973–74. In terms of local authority housing, we are maintaining our programmes at a high level. These will inevitably reflect the increasing input of local authority plans which come through the housing investment programme system.
  Mr. Michael Morris: Is not the real truth that not only the financial provision but the units of accommodation in the next five years suggest a cut-back.
  Mr. Shore: If there are cut-backs coming in housing, I fear that the main cause will be not the allocations made by the Government but those which are forced on the public programme by the doctrinal, obsessive and excessive approach by the Opposition and their denial of need for local authority rented accommodation. That is the major concern of the Opposition. I am trying to persuade them to open their minds and to recognise that both major sectors have as important a part to play in future as they are playing now.
  Turning to the second aim—making it easier for more people to get the kind of homes they want—there is a strong trend, and one which we welcome, towards the growth of owner-occupation. Not everybody, of course, wants to be an owner-occupier. There will always be a need for a substantial, well-managed rented sector. But the desire for home

  1027
  ownership, as the past 25 years so clearly reveal, is both strong and growing.
  This Government and their Labour predecessor in 1964–70 have directly assisted in this growth. A major example was the introduction of the option mortgage scheme some 10 years ago which made home ownership possible to so many people with modest incomes.
  Mr. Frank Allaun: Does my right hon. Friend accept the criticism that the Bill, though useful, does not help those in the greatest housing need—those in the poorest areas, the inner city areas, who cannot get loans from building societies and have to go to money lenders and fringe banks and have to pay up to 25 per cent. interest? Will he do something in Committee to help such people?
  Mr. Shore: We can discuss that problem in Committee. I am certain that if people in inner city areas are going to money lenders—indeed, there is evidence that that is so—the best way to help them is to provide a route towards owner-occupation with regular and responsible lending institutions of the kind that the Bill will encourage. We shall not overlook that problem. As my hon. Friend said, it can be discussed further in Committee.
  Those who wish, as we do, to see this trend continue must tackle four connected problems. There must be an adequate supply of mortgage money; the cost of mortgages must be maintained at a reasonable level; house prices must not be allowed to explode and—something quite new for this country, at any rate—there must be some special help for those wishing to buy in getting together the necessary deposit. These problems have not proved easy to surmount, as the record of the last Conservative Government so vividly illustrates.
  The supply of mortgage money during the early years of this decade was notoriously erratic. Enormous sums were lent in 1971 and 1972, but the brakes were jammed on during 1973. When we took office, there was not just a shortage, but a famine of mortgage money. It was left to us to provide major assistance to house purchasers through the building society movement and the local authorities by lending to both on a massive scale. Since then we have made good progress in providing for stability in the flow of funds
  1028
  and in developing an effective support lending scheme to encourage down-market lending. I do not want to claim—if I did, I should be contradicted—that all the problems here are solved, but compared with what went before, a great deal of progress has been made.
  The cost of mortgages cannot be insulated from the general run of interest rates in the economy. When we came to power in March 1974 the mortgage rate stood at 11 per cent. It did go to 12¼ per cent. for six months, but it has now come down step by step to its lowest rate—8½ per cent.—for over four years. I am sure that this is something which the whole House will welcome.
  If the Leader of the Opposition had become Prime Minister in 1974 her rash pledge to maintain mortgages at 9½ per cent. would have cost over £600 million in additional public expenditure. I do not like to think what would have happened to other housing programmes in order to sustain that promise.
  Mr. Michael Shersby: Does the Secretary of State agree that a large part of that money would have been offset by the savings on subsidies to council-owned property which otherwise would have been occupied by owner-occupiers?
  Mr. Shore: There is no one-to-one swop shop between council tenants and owner-occupiers. The plain truth is that there would have been a disproportionate cut in local authority expenditure on housing for rent. We do not believe that that is right in the national interest.
  Mr. Hugh Rossi: Does the Secretary of State agree that the large figure that he mentioned as the cost of keeping mortgages at a 9½ per cent. ceiling would have cost that amount if the Conservatives had followed the absurd economic policies which this Government have followed and which caused mortgage interests to go up to an all-time high of 12½ per cent.? He knows that we would not have allowed that to happen.
  Mr. Shore: The mortgage rate was at 11 per cent. when we took over at the beginning of a period when we, like all the other industrialised countries in the world, began to experience the immense shock and disturbance that the quadrupling of oil prices in 1974 inflicted upon us. It is foolish to say that the economy

  1029
  would have been somewhat better managed by those wise men who led the economy to the condition which it reached at the beginning of 1974.
  I want to talk about house prices. The early 1970s saw unprecedented increases. Prices rose by 13 per cent. in 1971, by 31 per cent. in 1972 and by 35 per cent. in 1973. In the four years between 1970 and 1974, house prices in Britain doubled. In the four years since 1974—that is, the four years of this Labour Government—they have gone up by 29 per cent. The record speaks for itself and every owner-occupier in the land should take due note.
  Mr. Rossi rose—
  Mr. Shore: Surely the hon. Member for Hornsey (Mr. Rossi) is not going to deny the figures. Is he going to explain why house prices rose by 100 per cent. in four years? I want to know what superb management of the economy led to these price rises in four years.
  Mr. Rossi: Does the Secretary of State agree that house prices remained relatively steady in recent years because no one could afford to pay 12½ per cent. mortgage interest? It is only when interest rates are reasonable that demand is created and prices go up. If the Secretary of State read the Royal Institute of Chartered Surveyors' report published yesterday he would realise that house prices are on the way up.
  Mr. Shore: House prices are not a reflection of mortgage interest rates. That was not the reason for increased house prices. The reason was the Conservatives' total failure to impose financial discipline, the ludicrous policy of turning on the monetary tap, the growth of secondary banking and the grievous undermining of the financial institutions. I do not wish to turn this into a major macroeconomic debate. If I did, the hon. Member would have cause to regret it.
  I turn to the heart of this measure. The intention is to help with the accumulation of the deposit—to help the first-time home buyer. In devising the schemes now before the House I have had two main aims—first, to help into home ownership a number of people who are now just on the margin, at present frustrated but who would be able to buy if a
  1030
  little additional help were given to them at the right time; and secondly, to ease the burden in the early years on those who can now just afford to buy, but often with considerable difficulty.
  Many of the beneficiaries of my scheme are likely to be young couples. Most of them will generally have been living with their parents or moving from private rented accommodation. Many would have experienced great difficulties—indeed sometimes hardships—in amassing a sufficient sum to meet the deposit and incidental expenses necessary for buying a home for the first time. My hope is that this Bill will make that struggle less difficult. For some young couples it will make the difference between being able to buy and having to stay in often unsatisfactory private accommodation, or having to remain with their parents, perhaps in difficult domestic circumstances—circumstances which are far from ideal.
  The scheme which is outlined in the Bill has been devised after intensive consultation with the savings and lending institutions. I believe that our proposals—which incorporate simplifications emerging from the discussions—will enable everyone to know precisely the benefits that they will receive and the conditions that they have first to fulfil. They will not impose undue administrative burdens on the institutions who will be carrying them out.
  I should now like to spell out the essence of the scheme which is contained in Clauses 1 and 2 of the Bill. A first-time purchaser must buy a house on mortgage—and below a specified house price limit. The scheme covers not only orthodox house purchase but self-build, equity sharing and co-ownership where there are individual mortgages. Everyone, provided that they are first-time purchasers, will be eligible whether they are private tenants, council tenants, sharing with others or simply living at home.
  Subject to simple conditions, first-time buyers will then be able to qualify for two benefits being—the major benefit being an interest-free loan and the lesser benefit a savings bonus. A couple buying a home jointly would of course qualify for only one loan and one bonus between them.
  A home buyer can qualify for a £600 Government loan if he or she saves for

  1031
  two years and if he keeps at least £300 in the account for the 12 months before he buys and has accumulated £600 at the end of that 12 months.
  This £600 loan is interest-free and without repayments for five years. It will be of major help to savers in building up the necessary deposit that they often have to find for themselves. For those who have already saved the deposit it can free their savings for all the expenses normally associated with purchase—fees, repairs, removals and so on. The freedom from paying interest on the £600 loan means a saving of about £3·50 a month for the five-year period.
  It is an important part of the benefit that the loan is additional to the mortgage which the institution would otherwise have lent. Clause 1(4) uses the phrase
  "being normally additional to that which the institution would otherwise have lent".
  This puts an obligation on institutions not to reduce the amount of the principal loan.
  The obligation will be written into the directions on the operation of the scheme. The usual mortgage form which buyers receive will show the amount that the society are prepared to offer plus the loan.
  Further, risk of default by the individual on account of the scheme need not inhibit lenders because the Bill also gives me power to indemnify them against losses arising from any default in the first five years.
  The institutions have agreed to repay each loan to Government as a lump sum after five years rather than over the rest of the life of the mortgage. This followed a helpful suggestion put by the Building Societies Association. The accounting is simpler and the proposal allows the Government money to be recycled, with great savings in public expenditure from after five years. The home owners is not affected. After five years he will see his payments increase only slightly—when he should normally be able to afford a little more—and will pay off the Government loan over the remaining life of the mortgage.
  The second benefit, designed as a further encouragement to saving, is the associated bonus scheme. If first-time
  1032
  purchasers save for two years, and keep at least £300 in their account for the year before they buy the house, they qualify for the minimum bonus, which we propose will be £40. For every £100 over £300 they can keep for that final year they will get an extra £10, up to a maximum of £110 if they keep £1,000 or more. This bonus is cash, and it does not have to be paid back. It is tax-free. At the bottom of the scale, it is worth an extra 13 per cent. on savings over the final year; at the top it is an extra 11 per cent.
  I want to emphasise that a fundamental element of both the loan and the bonus is the link with a savings requirement. This is designated to ensure that people coming into the scheme have the will and the capacity to set aside a sum regularly for home-ownership. I am sure that the House will agree that there would be no benefit in tempting into the obligations of home ownership those who cannot be expected to keep up their repayments.
  I am anxious that this extra help should be concentrated where it is most needed. This might be done by a test related to income. But I am opposed to avoidable extensions of means testing. A simpler and more acceptable method for concentrating help is to limit it by reference to house prices.
  I have in mind that house price limits should be based on the price paid by first-time purchasers in the year before the limit is set, adjusted for price increases; and that regional price limits should be set so that about two-thirds of all first-time purchasers would be eligible on this score. Last year, for example, and it can only be an example because it does not relate to this year or the future, we estimate that about two-thirds of first-time purchasers bought below £14,700 in London, below £10,100 in Birmingham and below £9,500 in Liverpool. I can see the case for a subregional price limit, but I do not think this is administratively practicable. And the fact is that, as we all know, prices can vary substantially even within the boundaries of a city. I believe that regional price limits offer a simple and effective way of concentrating help where it is needed.

  1033
  The House will note from Clause 2(6)(b) that those provisions which control the level of expenditure under the Bill—those concerning the house price limits and the size of the benefits—can be varied only by order subject to negative resolution of the House. This will give the House the opportunity of debating any changes with important financial implications which might be made from time to time after enactment. I am sure that this is right.
  Mr. Bruce Douglas-Mann: Does my right hon. Friend not agree that an average regional house price is likely to make the assistance provided by the Bill available to a large number in the suburbs of the cities but that it will reduce the help available to those seeking to purchase in the inner cities? The price limits will be much too high so that the sums available under the Bill will be too small to be of significant assistance in such cases. Would it not be better to reduce the price limit to a level that would enable people to buy houses in inner city areas where the average price is much lower than in the suburbs, where that price tends to be rather high?
  Mr. Short: I am slightly confused by the latter part of my hon. Friend's intervention which to some extent contradicted the first part. However, I do not think that we have a sufficiently clear indication as to relative house prices in the inner cities, certainly as defined for partnership purposes, and the fringe areas which might be outside the inner cities. Nor do we know, frankly, whether people in the inner cities would wish to be re-housed in the outer part of the inner city, or whether the people outside would wish to be housed within. I do not believe that there are such marked differences in prices within the general area of our cities. There are certainly differences between the cities, but I am not so conscious of differences within them.
  Mr. Frank Allaun: Perhaps, since I am a simple sort of person, I might be allowed to restate the question by my hon. Friend the Member for Mitcham and Morden (Mr. Douglas-Mann) in simpler terms. He is suggesting that if the upper price limit for houses were
  1034
  reduced, that would make more available for those who were worse off and were seeking cheaper housing.
  Mr. Shore: The more one lowered the limit, the narrower the range of benefit would be and the smaller the number of people who would become eligible for it. I certainly accept that, but by no means am I convinced that that would be particularly advantageous to the inner cities. I think that is the point. The precise coverage is something that will be properly debated in Committee, and we can decide the right proportion that a scheme for first-time purchasers should seek to assist.
  Mr. Stephen Ross: Is the Secretary of State intending to put any age limit on eligibility for the first-time buyer? For example, if someone aged 48 could qualify now for a mortgage under the normal system, given that he would have 15 years' earning time left, would such a person still qualify under the scheme as the Secretary of State sees it?
  Mr. Shore: I am not certain what happens to someone aged 65, but a person who might normally expect to get a mortgage as a first-time purchaser would certainly be eligible.
  The House will see that what the Bill means is that eligible first-time buyers will arrive at the starting gate for house purchase with up to about £700 more in their pockets than would otherwise be the case—a £600 interest-free loan for five years and a bonus of anything up to £100 or so—in addition to the £600 they will have saved. As any first-time buyer will recognise, this combined sum is not to be sneezed at. I think its significance might be better appreciated when I say that whereas the average deposit for all first-time home-buyers with building society mortgages in 1977 was £2,360 or about 22 per cent. of the average purchase price, about 40 per cent. of first-time purchasers bought with a deposit of under £1,000. My scheme is aimed at this latter group and also at those who cannot quite manage to get together a big enough deposit to buy.
  It is difficult to know at this stage just how many first-time buyers coming within the house price limits will choose to enter the scheme. I think a number of

  1035
  better-off buyers who do not want or need to save for as long as two years will not choose to use the scheme.
  Perhaps 40 per cent. of all first-time buyers should benefit from it. This means that if the number of first-time buyers grows from an average of about 375,000 a year over the last four years to approaching 500,000 a year by the mid-1980s, eventually around 200,000 or so might benefit from the scheme each year. This figure includes 30,000 or so who might not otherwise have been able to afford house purchase.
  If the Bill is enacted before or during the summer, and we set an appointed day not later than the autumn, benefits will begin to flow during 1980 on completion of the two-year savings period by the first tranche of savers. It may take a year or two for the scheme to build up to its maximum level. But I estimate that the costs in the first full year of operation might be around £100 million in 1977 survey prices. But after five years or so, the cost should fall substantially because—as I have already indicated—the institutions will begin to pay the first Government loans back. Thereafter the loan element of the scheme will in fact be largely financed by recycling of money—just how much depending upon the level of inflation.
  The public expenditure costs for the first two years are already provided for in the recent White Paper on public expenditure. We have been able to find room for these schemes whilst providing for some increase in all major spending on other housing programmes, except in the housing associations, which tend to fluctuate and which in any event I hope to be able to make good.
  I should like to say a further word about the date of implementation. I think the House would agree that it would be an unhappy thing if the benefits of the scheme were dissipated in higher prices. This is one reason why it is important to have a two-year savings period starting from the Appointed Day. The new assistance will increase demand for new houses directly or indirectly—either by first-time buyers or from the existing owner-occupiers selling their present houses to first-time buyers and moving on to new houses.
  1036
  The two-year savings period will give the industry time to expand its supply. This is important. Furthermore, any proposal to count savings held before the appointed day or to bring payments forward could pose very real problems of administration and fairness.
  Finally, the House will note from Clause 1 and Clause 4 that the conditions and benefits of the Bill will apply equally in all parts of the United Kingdom. For Great Britain this is achieved by specifying the Secretary of State in all parts of the Bill, but for technical reasons it will be applied to Northern Ireland by Order in Council.
  It will be easy for people to join in the scheme. As the House will see from the schedule, all the major institutions concerned with lending for house purchase are included, such as the building societies, the local authorities, the banks, trustee savings banks and the insurance companies. So are savings institutions. The Giro and the National Savings Department will be in. The details of how the scheme is actually to be administered will be settled in directions, following consultations with the institutions.
  I should like to put on record my thanks to the Building Societies Association and other institutions for the help they have given in working out the details, and for the assistance they will give in the future in actually carrying out the schemes.
  I do not expect the home-purchase assistance provisions of the Bill to result in any rapid or large increases in demand. But I do expect, as the provisions become more widely known, significant number of families to join in. New possibilities will be opened up for themselves and their children.
  Mr. Michael Latham: The right hon. Gentleman knows that I am a builder. I declare that interest now. There is one matter that worries me and on which I should be grateful for the Secretary of State's advice. We are moving into a rising market. House prices are beginning to rise and there is plenty of mortgage money available. Is there not a severe danger that not only will the scheme put up prices but the prospective purchaser will be worse off by taking part in it, as

  1037
  compared with going for immediate purchase, because the value of the deposit will be whittled away over two years?
  Mr. Shore: Whatever pressure there may be on prices in the short term—this is a matter that we must watch, and we are watching it very carefully—that will not be affected by the introduction of the scheme, because by the very nature of the scheme we are presupposing a two-year qualifying saving period. Therefore, we are talking about the impact of the scheme on demand in 1980.
  Secondly, I agree—and this is why I am sure it is right to have the power, subject to the approval of the House, to make amendments in terms of actual prices and financial limits for all the major components in the Bill—that we cannot presuppose that inflation comes to a dead end. It does not. If we have to make adjustments we shall have to make them in such a way as to safeguard the interests of people who have already started to save under the previous arrangements.
  I should like to be able to compare this scheme with some of the proposals that the Opposition have made, but those proposals appear to be somewhat tentative. However, we know that the Opposition favour grants rather than loans. I have seen reports that they are considering payments of up to £1,200 per person. I hope that they will think again about these proposals, because the public expenditure implications would be substantial—I would estimate not less than £300 million a year if schemes along those lines were pursued—and the amount involved would be without repayment if it were a grant.
  It is proper to ask where the Conservative Party, already committed to drastic cuts in public expenditure, would find the money for its scheme. Its 1977 Campaign Guide tells us that it would be.
  "by a deliberate switch of resources from the public sector to helping people to buy their own homes".
  Here again we have the Conservative Party blind to the need for a continued supply of public rented housing.
  But there are other equally important considerations which I hope will be borne in mind. One, which has very properly been raised in questions to me, is the effect on house prices of suddenly pumping
  1038
  in hundreds of millions of pounds of extra money each year. There would certainly be a marked rise in prices at the lower end of the housing market.
  I now turn to the second purpose of the Bill, an increase in the Housing Corporation guarantee limit. Clause 5, by increasing from £100 million to £300 million—and beyond, with the approval of the House—the total amount of loans that the Housing Corporation can guarantee, extends the scope for housing associations to finance the provision of new or rehabilitated houses from private funds. Only if guarantees are called upon does the corporation meet the liability. No additional cost falls on the Housing Corporation or on public funds from the increase in the limit itself.
  Decisions on the use of this facility will normally be made as part of the annual housing review, but also at other times when the need arises. They will take into account the overall programme of housing association investment, in the light of discussions with the Housing Corporation, and the total amount of resources to be devoted to housing. But they will also have regard to other circumstances. An example I have in mind is the use we were able to make of these powers to protect the construction industry from some of the consequences of the cuts in public expenditure we had to make in 1976.
  There are many other desirable measures I would like to have included in a major Bill. But my hon. Friends and I have already in the lifetime of this Parliament presented four substantial housing Bills. In 1974 the Rent Act freed many families from the threat of unjust eviction. Our Housing Act of the same year empowered local authorities to declare housing action areas and thus attack some of the worst problems of urban renewal.
  In 1975 our Housing Rent and Subsidies Act gave back to local authorities their freedom to fix rents. In 1976 we ended, by the Rent (Agriculture) Act, the long-standing grievance of agricultural workers living in tied cottages. Last year additionally we gave strong backing to the Housing (Homeless Persons) Bill which the hon. Member for Isle of Wight (Mr. Ross) piloted through the House and which will do much to help those whose housing need is really desperate.

  1039
  In this, the sixth housing Bill since March 1974, we are providing a package of real help at low cost to public expenditure both for those making the difficult jump into home ownership for the first time and for those who look to housing associations. I hope that the Bill, short and sweet as it is, will receive the unanimous support of the House.
  4.49 p.m.
  Mr. Hugh Rossi: The right hon. Gentleman the Secretary of State asked for the unanimous support of the House. It is a pity, therefore, that he should have started by somewhat souring what could have been a friendly debate on a measure that has attractions for the Opposition. The right hon. Gentleman justified his outburst because the Bill relates not only to home ownership but to additional provision for housing associations. Then he went on to say "But, of course, the Conservative Party has no interest at all in social ownership or in housing for renting."
  Perhaps I may remind the right hon. Gentleman that it was my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph), when he was Minister of Housing, who introduced the housing association concept into this country and he made a provision of £3 million in order to get the scheme going. In successive Bills, one after another, introduced either by my right hon. and hon. Friends when they were in office or by the Secretary of State's right hon. and hon. Friends, on every occasion the Conservatives assisted housing associations, and in opposition put down amendment after amendment proposing greater assistance and help to housing associations. The right hon. Gentleman should take care to look at the record. I was concerned in some way in most of those measures.
  Therefore, there is absolutely no justification for the particular way in which the Secretary of State decided to open the debate. I assure the right hon. Gentleman that there is nothing more unedifying than a member of the Government adopting this holier-than-thou attitude that is so favoured by the Labour Party.
  However, perhaps it is not surprising that the right hon. Gentleman should open the debate in that way, and it is
  1040
  perhaps not surprising that now that we are within 12 months of a General Election the Secretary of State has selected assistance for home buyers as the subject for his first and probably the only piece of legislation emanating from the recommendations contained in the Green Paper on housing policy published 10 months ago, after a delay of some two years. But there it is.
  After all, in considering the right hon. Gentleman's motivation, one has only to look at the report itself, at Part II, the technical volume, where in pages 34 and 35 the Madge survey shows that 87 per cent. of young married couples preferred owner-occupation of their homes if given a choice. The same survey shows that only 49 per cent. selected home ownerships as the best tenure in their current circumstances. The disparity between these two figures reflects, as the Green Paper states, the inability of nearly half of the couples to translate their aspirations into reality, thus placing a demand upon expensive public sector provision.
  This is where we begin to part company from the right hon. Gentleman and his hon. Friends in these matters. First of all, our genuine desire is to see the aspirations of these young people fulfilled-87 per cent. of them—and, moreover, to do it in a way that is of general benefit to the taxpayer and ratepayer of this country and to the economy as a whole.
  The Minister for Housing and Construction kindly answered a Written Question for me on Friday. The answer showed that the average capital cost of new council housing is estimated at £13,500, and the corresponding revenue cost—loan charges, repairs, maintenance and supervision—is estimated at £1,555, with rent, offsetting against that, at £345. Therefore, the annual deficit on a newly constructed council house today is about £1,200. Of course, that will decrease over a period, but only to the extent to which the Government are prepared to allow rents to rise and thereby diminish the amount of subsidy.
  The Secretary of State chides me because our proposals indicate a substantial public sector expenditure, but I ask him what is the cheaper—£1,250 once for all, enabling a young couple to achieve their heart's desire, or £1,200 a year for the

  1041
  next 60 years? That is the arithmetic of the situation, and those are the two bases for our particular policy.
  The findings of Madge were consistent with those found in the survey conducted by the British Market Research Bureau on behalf of the Housing Strategy Committee of the Building Economic Development Council, whose report I assisted to see the light of day about this time last year. Thus, given these unfulfilled, and indeed frustrated, aspirations of so many of our young married couples, it is not surprising that the Secretary of State has felt obliged to produce a measure that will make them benevolently disposed towards him and the Government in this General Election year.
  After all, was not the Rent Act 1974 produced in somewhat similar circumstances, to anticipate the October 1974 General Election? Unhappily, as we know, that measure has caused great damage to those whom it pretended to help, as was forewarned. Now we have in hand a review of the Rent Acts, which the Government were forced to commission because of the complaints from all sides as to the operation of this measure.
  By the way, perhaps I may ask the right hon. Gentleman when we shall have that review published and whether we could have amending legislation introduced before an election—or would that leave too much egg on the face of the Government?
  However, reverting to the measure before us, whilst I cannot see that it will do much harm, I cannot see that it will do very much good, at least in the hands of the present Government. My feeling is that the right hon. Gentleman is introducing it without real personal conviction but rather with his tongue in his cheek, hoping that by elaborate window dressing and gaudy packaging he will bedazzle the public and conceal the facts that the carton is three-quarters empty.
  First, as regards the timing of the scheme, the Bill when enacted will not come into force until a day appointed by the Secretary of State. What is the need for that? Most statutes come into effect a month after enactment, and the Rent Act, as we know, came into effect within the indecent period of two
  1042
  weeks from enactment. One wonders whether the Secretary of State really wants to produce his scheme in detail before the General Election so that its paucity can be fully demonstrated.
  This is not an end of the matter, because even when the Act is in force it will not, as the Secretary of State has said, come into effect for another two years after that. A great deal of the gilt will have disappeared from the gingerbread in the shop window even before his Hansels and Gretels will have been enticed to taste it. The levels of help offered by the scheme will then have been totally outstripped by the rise in house prices over the next two or three years. Indeed, as I indicated in an earlier intervention, the Royal Institution of Chartered Surveyors has just warned that house prices have leapt 15 per cent. since Christmas, in some areas, and that house builders expect a £12,000 first-buy house to cost £17,000 within a year. A bonus of £110 will not go very far on that basis.
  The truth is that we should be spending our time to more effect and more realistically if we were taking steps to fend off a house price explosion or tackling the current causes, namely, land famine and planning delays. Only this weekend, a builder in the North of England told me that delays in obtaining planning permission had added £2,000 to the cost of each house that he was intending to build and that he had therefore abandoned the project for the time being. Similarly, a combination of the Community Land Act and the development land tax were denying him land and forcing up the price of land that he was having to buy at highly inflated prices.
  That is really the problem that we should be tackling by dismantling the Community Land Act and reducing development land tax, and by improving the planning system in order to bring forward a supply of house building land. That would be of great help to youngsters in keeping prices within the limits that they can afford.
  With regard to the two-year time lag, I find it difficult to understand why it applies as equally to the loan as it does to the bonus. I can quite understand that a tax-free bonus can be applied only to approved savings over a given period. I do not see why a tax-free loan cannot

  1043
  be brought into operation immediately. Indeed, if it is not, the Secretary of State runs the risk of many potential buyers holding off purchase until they qualify both for the loan and for the bonus. That would be a disaster for the house building industry, which has been suffering the worst recession since the 1930s.
  I am sure that the Minister for Housing and Construction would not wish to cap his 1977 figures for starts and completions, which are the worst in 15 years—40 per cent. and 20 per cent. less starts in both sectors in that year compared with the year before—
  The Minister for Housing and Construction (Mr. Reginald Freeson): The hon. Gentleman has got the figures wrong again.
  Mr. Rossi: I have not got the figures wrong again. If the right hon. Gentleman wants to detain the House by bandying about figures, I shall give him the figures—if I can find my piece of paper. There were approximately 38,000 fewer starts in the public sector in 1977 compared with 1976 and about 20,000 fewer starts in the private sector in 1977 compared with 1976. Those are the worst figures for 15 years. I am sure that the Minister for Housing and Construction does not wish to have even more catastrophic figures in 1978, which he will do if he artificially creates a situation where people will hold back house purchase because they are looking for both the bonus and the loan.
  These unreasonable and unnecessary delays in the implementation of the scheme must make the Government's motivation extremely suspect. Another matter which makes me question the Government's bona fides is the financial provisions for the Bill. We are told in the Explanatory and Financial Memorandum that, so far as can be predicted, the costs might be £100 million in the first year. These costs are to be met within existing expenditure provision for housing. If the £100 million is to come out of existing provision, on what part of the existing provision is the knife to fall?
  I do not think that the Minister for Housing and Construction, or his hon. Friends the Members for Salford, East (Mr. Allaun) and Bolsover (Mr. Skinner), would willingly allow the knife to fall
  1044
  on new council house building. That would be alien to their particular approach to our housing problems. Thus, will it fall on improvement grants or—most likely—on local authority loans for home purchase? The Government's record in that regard has been to slash back from £736 million in 1973–74 to £116 million at present. It is something that the Government have a keenness for doing. If they are looking for economies in the housing sector, will it be local authority home loans or improvement grants?
  If that is the case, one must be astonished at the cynicism of the Secretary of State in proposing as he does—in the language that he did—a measure to help home owners. That cynicism takes some beating, because the very people who suffer most from a cut-back in local authority loans are those at the lowest end of the market who need the greatest help if home ownership is to be made accessible to them.
  This cynicism becomes somewhat evident when one begins to examine this particular scheme in detail. Let us look at the bonus. The first-time buyer must save for two years. At the end of the first year he must have saved a minimum of £300—or almost £6 a week out of taxed income. That will not be very easy for many young married couples, particularly those living in deprived conditions in the inner cities. If they save no more than £300 over the whole of the two-year period they will receive the princely sum of £40. If they save their £6 a week over the whole of the two years they then get £70—about enough to carpet one very small room or to buy a small Frigidaire.
  I turn to the interest-free loan. This is equally illusory in terms of real help to first-time buyers. First, they must have saved all of £600 of their own money over two years before they qualify for the loan, if I am to believe the Press handout issued by the right hon. Gentleman's own Department.
  Mr. Shore: It may well be that a number of would-be first-time purchasers will save the sum of money in two years, but if there are those who require three years in order to accumulate £600, so be it. They will become eligible whenever they have accumulated the sum.
  Mr. Rossi: That is, therefore, postponing assistance to them even more. It

  1045
  says clearly in the explanatory note in the Press statement that a person must have a total of at least £600 in savings before he qualifies for the £600 loan. A first-time buyer might wait five or six years before he saves that amount and before he is entitled to the loan. I am glad that the right hon. Gentleman has made that point, because that is the kind of clarification we need about the scheme.
  In any case, what will the loan be worth when they receive it? Let us assume that mortgage interest rates are 10 per cent.—a convenient figure—and that there is a basic tax rate of 34p in the pound. The net benefit of not paying interest on £600 is a little under £40 a years for five years.
  That would enable a couple to watch the Secretary of State explain in his party political broadcast of 1981 why he has not put a house around their rented television set—black and white, of course. Even with regard to the £600 there is a catch. The Secretary of State said that his proposal will give young couples £700 more in their pockets than they would have without the scheme. That is highly misleading. The £600 is part of the original mortgage loan. In giving a mortgage loan the building society will have to take the £600 into account when calculating how much the buyer can afford to borrow.
  Mr. Shore: No.
  Mr. Rossi: The £600 is repayable and, therefore, must relate to the borrower's ability to keep up the monthly repayments, otherwise the Secretary of State is inducing people to enter into a commitment that they cannot possibly afford. Therefore, the borrower will get nothing extra by way of loan in relation to his financial status.
  It is quite true that the Secretary of State in his Press statement talked about adding on to the loan so that the total mortgage is not more than 100 per cent. of the value of the property. But there are two factors in every mortgage loan. There is the value of the security—how much the building society is prepared to lend on the value of the house—and the financial ability of the borrower to repay. The building society must—but must—take into account—unless there is to be an irresponsible breach of current prac-
  1046
  tice —whether that £600 will go beyond the financial status of the borrower concerned.
  If I am right in that explanation—I hope that in his reply the Minister for Housing and Construction will tell me whether I am right or wrong—then the Secretary of State has misled the House by saying that this will put £700 more into the pocket of the borrower than he otherwise could get out of a building society.
  Mr. Shore: I think the hon. Gentleman is in some ways making Committee points, but I do not wish to deny the House any clarification even at the Second Reading stage. I would remind the hon. Gentleman of what I said earlier. I said:
  "It is an important part of the benefit that the loan is additional to the mortgage which the institution would otherwise have lent."
  Clause 1(4) makes that perfectly plain. Therefore, it is known that the building society will, as it were, add this sum on top of the sum which it would otherwise have made available to the would-be first-time purchaser.
  Mr. Rossi: That is an extremely interesting statement. I took care to check these matters. I understood that the right hon. Gentleman's statement related only to the mortgage that the borrower could get upon the value of the property—the security that that would offer—and, of course, there is the cut-off point mentioned in the Bill in that the loan cannot be taken by the £600 beyond the 100 per cent. mortgage upon the value or the price of that house. However, we can take up this matter again in Committee. The information that I have received from the building societies suggests that they have not understood the Bill in the way in which the right hon. Gentleman has described it.
  But whatever our feelings may be about the inadequacy of the Bill, it would be churlish of me not to recognise the advance that has taken place in Government thinking about the value to our society of helping home buyers. It represents a major change in Labour Party theology—a profound conversion. I am certain that there is more joy in heaven over this repentance than if 99 per cent. of my hon. Friends were to bear witness to their belief in home ownership.

  1047
  As far as it goes, we welcome the Bill. I welcome it as the first tottering step of a newly born Labour Party attitude towards home owners. I welcome it also as creating a vehicle which we shall require in order to introduce a more useful scheme in a few months' time. We have noted with satisfaction that the mortgage bonus may be varied at any time by the Secretary of State with the consent of the Treasury. We note also that the terms and conditions of the payments may be dealt with also by ministerial direction. That is all we require, and as soon as we are in office we shall introduce a scheme that we announced not just today but as long as three and a half years ago.
  Under that scheme, the first-time buyer will receive a tax-free bonus of £1 for every £2 saved. Therefore, if he saves only £300, he will receive a bonus of £150 when he buys his house instead of only £40, and he will not be pushed to save it all in the first 12 months either. He will not have to worry about struggling on to have another £300 to get an extra £40 a year over five years under repayable loan. There will be nothing for him to repay.
  Of course, if, he saves the proposed maximum of £1,000 under the Government scheme, instead of the £310 spread over five years that the Government propose, he will get from us £500 straight away. It is also our hope that we shall be able to extend our scheme to qualify for outright grants of anything between £1,000 and £1,500. After all, if that can be managed in Southern Ireland, with its basically agricultural economy, we can manage it here, particularly when we compare it with the cost of the provision for the deficit annual subsidy on a council house.
  Mr. Stephen Ross: I thought that the Irish scheme was limited to newly built homes. That was done in order to give an incentive to the building industry. Would the Conservative Party's scheme be similar?
  Mr. Rossi: The intention is to help people to buy a home of their own for the first time. Australia is also, most sensibly, running a scheme which we are looking at most closely. Not surprisingly, the Australian scheme was stopped by Mr. Whitlam but has recently been restored.
  1048
  One does not have to look at the ideology to realise why.
  The Secretary of State talked in terms of public expenditure when he criticised our scheme. I hope that I have dealt with that matter. He also asked us where we would find other savings in public expenditure. We find the Community Land Act, with its proposed spending of £500 million a year, quite unnecessary. We would far rather get rid of that Act and give the money to young couples anxious to buy their own homes while ensuring that land becomes more freely available.
  Real and substantial steps towards home ownership are what our young people want above all else. That is the kind of help that we will give. It is the cheapest way of providing houses for them. We must ensure that they realise their dreams. It can be done, and it will be done.
  5.15 p.m.
  Mr. Michael Stewart: I must apologise to the House in advance for the fact that unavoidable other duties as a Member will necessitate my leaving the debate soon after I finish speaking, but I could not resist speaking on this subject, with which I have been familiar and in which I have been interested for many years.
  I recall that I bought my first house many years ago with the help of a mortgage from a Labour local authority under powers given to it by an Act of Parliament passed by a Labour Government. The fact is that most of the legislation which has helped people to own their own homes has been passed by Labour Governments. We have had lots of prospectuses such as that just offered by the hon. Member for Hornsey (Mr. Rossi) on behalf of the Conservative Party, but they have not always turned out quite right.
  I gathered from the hon. Gentleman's speech that he thought the Bill to be a waste of time and a misuse of money but would not oppose it. We can leave that for what it is worth. As far as I see it, the object of Government housing policy should not be specifically to favour either rented or owner-occupation. It should be to give to people who want a new home as much consumer choice between the two methods as possible.

  1049
  The weakness of Tory housing policy is that generally it is so arranged as to make it easier for people who are tolerably housed to become better housed but to push those who are really badly housed further down by lengthening the waiting lists for rented accommodation and by a quite merciless treatment of them on the subject of rent.
  I have already mentioned my personal experience in buying a house. Later, as a Member of Parliament, I had the experience, like other hon. Members, of constituents consulting me on the problem of getting a home. Over and over again one found the situation where a young couple, responsible and thrifty, found it terribly difficult to bridge the gap between the mortgage they could get and the sum of money they would actually have to put down. This not only applied to the price of the house itself but encompassed legal expenses and all the other odds and ends which always seem to crop up when buying a house.
  In the early 1960s we still suffered the effects of that masterpiece of Tory housing problems, the "Rachman's friend" Act of 1957. These young couples found that, while they were desperately trying to save more money in order to bridge the gap, that Act was giving their landlords more and more opportunity to put up the rents against them so that they could not save. Therefore, an approach of the kind now introduced by the present Government in this Bill has been needed for a long time. The need is not quite so acute now as when the Rachmanite legislation was in force, but it is still there among thrifty young couples who still find that they have not got quite enough.
  I welcome the Bill. I do so because, although it is obviously not, and was not meant to be, a major Bill, it will give a limited amount of help at points where it will be genuinely useful. There can and no doubt will be arguments in Committee about such matters as the periods of time, the size and sums of money, and so on, but these are factors that we can sort out. I can easily picture a number of my constituents who will welcome the Bill. It is right so to arrange it, as my right hon. Friend has said, that the Government do not put a sudden flood of
  1050
  money into the market which would merely cause a rise in house prices.
  I wonder whether my right hon. Friend will consider one other thing. I have mentioned the legal expenses of buying a house. We do not want this measure to result after a time in a rise in the incidental expenses of buying a house, because the money is intended to help young couples who are buying their homes for the first time. It is not intended to benefit those whose business is arranging the buying and selling of houses. I do not think it will be possible to get it into the compass of the Bill, but I hope that my right hon. Friend will accept that the Bill underlines the need for some legislation to make the process of buying and selling a house simpler and less expensive than it is at present. I am told that it is both cheaper and simpler to buy and sell a house in Scotland than it is in this country. Perhaps my right hon. Friend will consider whether something could be learned from that source.
  Although the Bill is of very limited scope, none the less I believe that it is very well tailored to meet a particular need. I am quite sure that the House, despite the small attendance at the moment, will also be glad when the Bill is passed into law.
  5.21 p.m.
  Mr. Stephen Ross: I entirely agree with the right hon. Member for Fulham (Mr. Stewart) that the cost of buying and selling houses in this country is far too expensive, and has been for too long a time.
  I declare an interest as a chartered surveyor. I have been ashamed to see commission claims go out to vendors on occasions when one has done very little to effect a sale. On the other hand, where one has worked terribly hard on a deal, often one gets very little out of it. Too often it is someone such as the dustman who offers an additional gift for a service performed when such is not really deserved or necessary.
  It can be argued that a person has no need to go to an estate agent in order to sell his property, and can do it by him-self if he wishes, but he is a brave person who does his own conveyancing. It is long past time that the procedure for buying and selling property was simplified. I am not wishing to see work taken away

  1051
  from lawyers, who are probably the right people to do it, but I suggest that it is time that they put their house in order.
  I should have liked to say, when we were discussing the Estate Agents Bill, that estate agents and lawyers should get together and produce a simplified form of contract which could be broken if some of the facts were found to be incorrect, and which would also stop gazumping and make the whole process much simpler.
  It ought to be possible to transfer a property by means of a registration book, as with the transfer of ownership of a car. The State should help by speeding up the process of registration. If something could be done along those lines, it would be a step in the right direction. I shall of course be told by lawyers that sometimes the most difficult properties to convey are those with a registered title. However, the fact remains that people have to pay very large sums of money when buying and selling property, and apart from this the whole process must be speeded up.
  I welcome the Bill as a positive step to enable first-time purchasers to get a foot on the ladder of home purchase and thus help in the extension of our property-owning democracy. I am certain, however, that there will soon be disappointment expressed in many quarters. It will come very rapidly after this debate, because people have already been in touch with me as to when the Bill will become law. Many people are expecting a cash payment some time this year; therefore there is bound to be disappointment when the conditions of the scheme are understood and the somewhat complicated nature of it. The fact that it will be two years before a person can qualify may well dissuade those who would like to purchase. We have a selling job to do in this respect.
  I accept, on reflection, that it is probably right to link the bonus and the interest-free loan to a positive effort on the part of the borrower to save.
  I am very concerned about the present housing situation. If we are not careful and feed in too much mortgage money too rapidly, there will be a take-off and we shall almost be back to the position in 1971, 1972 and 1973, and that will not help anyone. The Secretary of State gave us the figures for those years.
  1052
  If the Opposition are to put forward a policy for a cash grant of as much as £1,250, as an outright promise in the next General Election campaign, I believe that there will be anotherr price explosion. I say that in all honesty to the hon. Member for Hornsey (Mr. Rossi). I do not disagree with his ideas on extending the bonus for the money invested, but I believe that any promise of the size that he mentioned for an outright cash grant could lead to real trouble.
  Mr. Rossi: The hon. Gentleman will appreciate that the amount of the grant will be related to the amount of saving, therefore it is not as inflationary as he would suggest. Secondly, it is only part of a whole series of proposals that we have concerning the release of land and matters of that kind, which will in their turn help to keep down prices.
  Mr. Ross: I will not go further into that, but I beg the Opposition to be responsible over this question in the forthcoming General Election, because it would be wrong to make promises which could lead to the sort of position that we had three or four years ago. I believe that it was the housing position, not the miners, that lost the Conservative Party the last General Election. A great many people felt very sick and frustrated at seeing house prices double over a period of four years, when they had no opportunity of purchasing houses.
  I am mystified that house prices are taking off at this time. With pay restraint, where has all the money suddenly come from? I suggest that company schemes are possibly responsible for quite a bit of this. People must be getting round some of the pay restrictions. Perhaps the Secretary of State will consider this when he puts forward his regulations. Should banks and other-companies which run their own mortgage schemes at reduced rates of interest qualify under the Bill? I doubt whether they should. It is a mystery to me that people who earn less than a Member of Parliament seem to be buying, in quite large numbers, property up to the £25,000 mark. I should be very interested to be told why this is happening.
  I agree with the hon. Member for Hornsey that a great deal could be done to release more land. I accept that absolutely. I think that the Secretary of State

  1053
  ought to put even more pressure on local authorities and institutions to release land and get it sold. I believe that at the present time their land could actually realise what they gave for it, because the Estates Gazette last week spoke of land changing hands at £80,000 an acre, and that is an extortionate sum. Something must be done about that.
  I do not want to see development land tax reduced all that much. I should prefer to see it done away with altogether and a different form of taxation introduced which would work effectively. If development land tax is brought down to 35 per cent. or 40 per cent., the result will only be to push up land prices still more. It is time that we settled the land problem once and for all. We ought to agree on a policy and stick to it.
  We still need planning restraint. It is very often the supporters of the hon. Member for Hornsey who are the most vociferous about local authorities giving planning consent too easily. I would rather have the local authorities consider big schemes seriously, and take time over this, than release land for developments such as we have seen over the last 10 years and wish we had never created.
  The smaller applications ought to be dealt with in a much speedier fashion, but where there are big developments, in regard to which it is sought to release large acreages of land, we ought to be very careful. I do not want to see vast acreages of good agricultural land released when there is plenty of building land available within our urban areas. In retrospect, although I suggested at one time that a cash grant was preferable, I think that the Government may well be right to be cautious.
  There will be difficulties about the boundaries between the regions of England and the different limits which the Secretary of State will have to apply. There will be occasions where, say, the South-East and the South-West regions meet and someone will ask why he should not be in one area rather than the other. But the very fact that the Secretary of State will keep those ceilings down will have some effect in persuading builders to try to keep within the limits, so that should be an influence in helping the first-time purchaser.
  1054
  I congratulate the building societies on their co-operation and willingness to work the scheme. It should be recognised that, contrary to some of the comments which have been made today, building societies are becoming more flexible in their attitude to the inner urban areas. They are moving slowly in that direction, and I think that the Government have played some part in that. There have been some statements recently from certain building societies saying that they are looking into these matters with a view to being more helpful, and I welcome that. It is a good trend.
  I welcome the increase in the Housing Corporation guarantee. Housing associations can do a great deal more, especially in decaying urban areas. I am not thinking here only of the inner cities. I think, for example, of my own constituency once again where, in the inner urban area of Newport, our market town, there is a huge area formerly occupied by a thriving brewery. For three years now, a housing association linked with the British Legion has been trying to get a scheme off the ground to have that land developed for sheltered accommodation for ex-Service men. The association has failed to get finance through the local authorities, and the Housing Corporation has taken the view that this is not an area which it should regard as of first priority for its money.
  I hope that the Secretary of State will realise that there are many market towns in a decaying condition similar to the inner areas of our big cities and will not be too restrictive in the way that the additional money—£300 million rising to £500 million—is to be spent by the Housing Corporation.
  With those few comments, I welcome the Bill.
  5.32 p.m.
  Mr. Bruce Douglas-Mann: The hon. Member for Hornsey (Mr. Rossi), when talking about the speech which he might have made, said that it would have been churlish not to welcome the Bill, but I think that anyone who listened to the remainder of his speech will think that it was extremely churlish, even by his standards.
  What the hon. Gentleman envisaged as the policy which his party might carry out if, unfortunately, it were to have

  1055
  control of housing would undoubtedly result in an enormous explosion in house prices. He explained in an intervention during the speech of the hon. Member for Isle of Wight (Mr. Ross) that his party would provide cash grants which would be scaled to the amount which purchasers had. Thus, the more money one had, the more one would be able to get by way of grant from the Government, and therefore the more inflationary pressure would be exerted.
  If that is to be one of the ingredients of Conservative housing policy at the next election, we shall look back with nostalgia to the relative modesty of the 9½ per cent. mortgage bribe which was offered at the previous General Election.
  Mr. Rossi: The hon. Gentleman should realise that, as with the Government's scheme, there would be a proposal to limit our scheme to houses below a certain value. Those above that would not qualify under the scheme. The object is to help people who are worse off to secure the maximum benefit possible towards buying their houses. Obviously, a wealthy person who is able to stuff a lot of money suddenly into a building society would not be interested in buying the sort of house to which our scheme would be directed.
  Mr. Douglas-Mann: I welcome that assurance, and I hope that the Government will take it on board, because it is my apprehension that one of the defects of the Bill is that the limit of assistance will be set too high. I shall come back to that later.
  The Conservative Party seldom seems to understand that the more public money is made available in the private housing sector, the more rapidly house prices will rise. We constantly hear references to the effect of the Rent Act on the supply of privately rented houses, but Conservatives do not seem to appreciate the reality. To be fair, I think that the hon. Member for Hornsey does understand this, and he occasionally lets the cat out of the bag in public, but very few of his hon. Friends understand the effect of mortgage interest tax relief on the privately rented sector.
  At present, a man who owns a house which can be sold at, say £10,000, can receive for that house, if interest rates are
  1056
  at 12 per cent., a sum worth £1,200 a year; but it costs a person buying the house, because of tax relief, only £800. On the other hand, if the owner were to let that same house, to get the same return he must receive from the occupier £1,200 a year, that is, 50 per cent. more than it would cost somebody to pay as mortgage interest on buying it.
  That is why there is a constant diminution in the stock of privately rented houses, and that is why house prices are constantly escalating. However, that subject goes wider than the Bill before us, raising the question of mortgage interest tax relief in general, and I shall deal with it on another occasion.
  By pumping too much money into the private purchase sector we make house prices escalate and we create a distortion of the market, such as we have seen over the past two years, which undoubtedly adds to inflationary pressures and makes house purchase infinitely more difficult for millions of people. However, I shall not be diverted too far into that now.
  I accept from the hon. Member for Hornsey the criticism that the Government have not adequately distinguished between two categories of potential buyer. The hon. Gentleman described this as a modest Bill, as did my right hon. Friend the Secretary of State. I accept that. It is a Bill about which my right hon. Friend has good cause to be modest. It is, perhaps, a Bill desirable in itself but, if it is to achieve its objects, it ought to be on a larger scale.
  In my view, the object should be to assist those who could not otherwise make it as first-time owner-occupiers. I feel that my right hon. and hon. Friends have confused two objects, and if we are to spend only £100 million a year we need to concentrate on only one.
  In my view, Ministers have confused the objective of assisting first-time house purchasers generally—people who could have made it as house purchasers anyway without the scheme—with those who would not otherwise make it. My fear is that they have the balance wrong, because there will be far too few who would not otherwise have made it and there will be a little help spread very thinly over a fairly large number of people who would have been able to make it as house purchasers anyway.

  1057
  I gather from the Press statement accompanying the Bill that it is proposed that the limits will be set so that roughly two-thirds of first-time purchasers in Scotland, Wales, Northern Ireland and each of the English regions will be able to qualify. My fear is that, with only £100 million altogether, there will not be many people brought into the category of potential purchasers who would not have made it anyway without the scheme. The limits on the price of eligible property should be set a good deal lower.
  I turn now to the detail of the proposals. I understand that the cash bonus is likely to cost about £15 million a year, once it comes into effect, and presumably that will continue indefinitely. But £15 million spread over the numbers involved will be but a trifling sum. I understand that it is estimated to be £110 as the maximum anyone can obtain.
  One has to set that against the administrative cost of keeping track of the amounts which people have been saving. Even if the building societies absorb a substantial part of this cost and it does not all fall on public funds, in one way or another, there will be an administrative cost to come out of the money likely to be available for house purchase. Even if the building societies increase their overhead expenditure, there will still be a waste of money in keeping track of all the sums which people save for the sake of a total expenditure of £15 million a year.
  If, as is clear from the Financial Memorandum to the Bill, that £15 million is coming out of other housing expenditure, I can think of much better uses for it. Perhaps this is seen as a revenue measure which is a means of encouraging people to save, as is the case with the Chancellor's National Savings schemes. If so, it should have been presented as part of the Chancellor's proposals which do not affect housing expenditure. It may be worth while—I cannot judge. But it is not sufficiently worth while to take £15 million away from other housing objectives.
  On the additional loans scheme, I feel that the Government once again are falling between two stools. They should either give money away to first-time home buyers and not aim particularly at alleviating hardship of those just outside
  1058
  the scheme, or they should concentrate—as I believe they should—on those who would not otherwise be able to come within the scheme.
  The Memorandum envisages limits set at average regional house prices, so that two-thirds of all first-time buyers will be eligible for the loan. In national terms this means people on an average income of up to £4,500 a year. Mostly these are not those families who are struggling to get out of the pressures of housing need—nor those anxious to escape from inner city privately rented accommodation.
  The group at which this Bill primarily is aimed—those in housing need with a bit of savings—are those who are living in privately rented accommodation and who know that they could buy the house from their landlord if they could raise the money. This Bill will not provide enough assistance to break through that difficult barrier of raising the essential deposit and the money for the costs involved.
  Mr. Tim Sainsbury (Hove): I am trying to follow the hon. Member's argument. Is he suggesting that the scheme should be more generous in the help that it gives to first-time buyers in raising the initial deposit?
  Mr. Douglas-Mann: I should like to allocate more money for concentration at the lower end of the scale. We must not put too much public money into any particular sector of the market so that we cause inflation in that market. I do not think that there is much danger of doing this in the privately rented sector where the landlord is prepared to sell. We should offer more money to those trying to buy in that sector. I want to see the Bill go further, provided that as a consequence we do not generate excessive demand which will result merely in prices being pushed up. The two-year delaying period for new houses will achieve that goal, and for existing housing we can introduce it without any delay, without resulting in any particular inflationary pressure being generated.
  Not only are the financial limits of the Bill likely to exclude enough help, but the way in which the Bill is framed will make it very difficult for adequate help to be given. First of all, there is the

  1059
  restriction of the scheme operating only through established lending institutions. We know from studies in inner Birmingham that 20 per cent. of all buyers had loans from clearing banks of less than five years' duration. A high proportion had loans which had not been raised through the established institutions. These people would not be eligible under the Bill.
  Also, a high proportion of building societies operate a red lining system which excludes a great many of the houses that we need to ensure are bought as a consequence of the measure. Unless the Secretary of State can ensure that building societies will drop the red lining system as a consequence of operating within the Bill—and I do not know what incentive he might provide—the Bill will not achieve its principal objective.
  My greatest anxiety is that the expenditure is coming out of other housing expenditure. Although the Bill itself is desirable, I do not regard the money being spent under it as sufficiently worthwhile to justify cutting expenditure in other fields. We shall not have the sort of expenditure that either my right hon. Friend or I would like to see. The projected housing expenditure in the year this Bill begins operation will be at a low level, having regard to the level of need. Therefore it will not do much to help solve the problems in our inner cities.
  The hon. Member for the Isle of Wight and my right hon. Friend the Member for Fulham (Mr. Stewart) referred to the cost of legal expenses in house purchase. Speaking as a solicitor, I agree entirely. The legal charges of solicitors for house purchase transactions frequently are too high. I hope that my right hon. Friend will do his best to reintroduce a maximum scale charge.
  I welcome the provision of power to the Housing Corporation to guarantee loans to housing associations. I hope that my right hon. Friend will expand it more rapidly, because this is a field in which we can increase the most important part of housing activity—the alleviation of housing need by the acquisition in our inner cities and elsewhere of formerly privately rented accommodation. This can be done by housing associations, together with the Housing Corporation, without any increase in public expenditure figures.
  1060
  This is a field that urgently needs exploration.
  I give a cautious welcome to the Bill and I hope that it will be supported in the House and that we shall have the opportunity of improving it in Committee.
  5.50 p.m.
  Mr. Michael Morris: I agree with my hon. Friend the Member for Hornsey (Mr. Rossi) that it would be churlish not to welcome the Bill. It is to be welcomed because we all know that in the background are many young people in the under-35s group, amounting to 80 per cent. of mortgage seekers, who want to own their own homes. Therefore, it is incumbent upon us to do what we can to ensure that their wishes are met.
  However, the Bill throws up certain problems. It is not a very generous Bill. It is complicated and will be rather slow in beginning. There are a number of other schemes throughout the world that are much simpler to operate than the scheme in the Bill. Furthermore, the bonus of £110, after the saving of £1,000, does not provide sufficient incentive for young people to try very hard to save that extra amount of money.
  This scheme should be examined with the save-as-you-earn scheme in mind as well as the scheme for pensioners involving the provision of a sum of £500 as an investment. The hon. Member for Mitcham and Morden (Mr. Douglas-Mann) made a valid point when he said that if there is to be an incentive to save it should be advanced by the Chancellor of the Exchequer and examined in the total context of savings schemes.
  It has already been pointed out that a figure of £600 as a loan figure in present circumstances, when set against the requirement for a deposit, survey and legal costs, will hardly cover the total involved and provide a starting point. Therefore, I wish to make one or two suggestions for consideration in Committee.
  Why cannot the loan element begin earlier than in two years? I do not think the figure of £600 will make a mammoth difference to house prices. It seems strange that one cannot get that element of the scheme going at an earlier date than in two or two-and-a-half years' time.

  1061
  Why can we not examine indexing in this context? Although the Government hope that inflation will fall. I must point out that, even at a rate of 10 per cent. a year, the figure of £110 will depreciate over a couple of years. I believe that if we seek to index a number of the other schemes that I mentioned earlier, we shall be able to index the financial benefit in the scheme in the Bill. It is not good enough for the Secretary of State to suggest that there are administrative difficulties that would stand in the way of bringing forward the matter as a law. That is not a considered point to put forward.
  I am worried about putting on these provisions any price limitation other than a fairly high one. Those of us who experienced the early days of improvement grants know that the great problem then was the cut-off point of rateable value in respect of improvement grants. That was relieved only when properties were upgraded to a high level, and expensive properties could be included in the list for improvement grants. It was only when the scheme got going that one was able to remove some of the distortions in the market.
  The danger with the proposed scheme is that we shall find on the margin people who are holding back awaiting the annual review of prices which I understand is about to occur. We shall then return to a situation in which inflated prices are asked for fixtures and fittings, with other manoeuvres being taken to ensure that people near the margin are brought back under it. That is a danger and we should re-examine the situation.
  Another problem in the inner city areas relates to eligibility. Honourable Members will know that Shelter has carried out an extensive examination into the take-up of owner-occupation in some of the inner city areas. If Shelter's claim is anywhere near right and half of the cases they have examined in inner city areas would not be eligible for this scheme, I believe that it throws up a worrying situation, because it appears that the Bill will not be able to meet the aspirations of the Secretary of State.
  There is now clear evidence that there are people who, for one reason or another, choose to borrow on a short-
  1062
  term basis of up to five years. Some borrow on unsecured loans. A number of so-called fringe banks—I am aware of certain Asian banks which operate in this connection—would not be covered by the Bill. So far as I can discover, they are perfectly reputable banks and provide a viable service in some inner city areas in which nationals seek to use banks from their originating countries. Therefore, the situation in that respect also needs to be examined.
  Is the Minister able to say whether local authority authorities will be able to bring down the interest rate on local authority mortgages and to offset the cost against the ratepayer? The provision of local authority mortgages in inner city and inner town areas is of relevance and great importance when we are considering this Bill.
  I wish to say a few words about the provisions of the Bill relating to the Housing Corporation. I wish to sound a note of caution. I believe that the initial impetus which brought the voluntary housing movement into being is in danger of being lost. It was originally conceived to bring extra money into the house market and also to provide extra resources to enable a slightly different dimension of rent to be offered. Assistance was to be given to teachers and others who wished to help in deprived areas and who were not eligible for council housing or were unable to obtain sufficient points to obtain accommodation. That was the original conception.
  The danger now is that the matter has got somewhat monolithic in proportion. I have factual evidence to suggest that the voluntary element, the charities—very much the backbone in the early days—is now being disregarded and is not consulted when changes are made. The matter is being driven forward with energy, which is a subject for congratulation, but it takes no consideration of the views and aspirations of those who started the movement.
  Speaking for myself, I should like to see the Housing Corporation becoming considerably more democratic in respect of those to whom it reports and about its objectives. I do not welcome the total concentration on inner city areas, as now seems to be happening, because all the

  1063
  money appears to be geared in that direction. That was not the original concept of the voluntary housing movement, and it will be a sad day if that becomes the policy.
  It is at least a good thing that we have a Bill that is geared to helping young people to get on the housing ladder. I welcome the fact that the officials concerned have been converted that far. The Secretary of State has been asked to define the primary objective of the Bill. If its primary objective is to help those who are on the margin who would not otherwise be able to get started, the point made by the hon. Member for Mitcham and Morden is a good one, because obviously the Bill as drafted is not geared to meet that need.
  This is not merely a problem in the inner city areas. If one examines the town of Northampton, one discovers that the biggest problem area in housing terms lies in the terraced houses in the inner part of the town whose value has dropped astronomically. There are 800 or 900 of those properties on the market and they are sticking. If the Secretary of State wishes to get at the people on the margin, the young married couples, he will have to think again and he may have to steer more money in their direction. It may be that he will decide that this Bill is not the right one to do it, because it may be that the answer lies in a more generous approach to housing repair costs and that sort of aspect of work. But, when we deal with the Bill in Committee, it will be useful if we have in mind an explanation from the Minister in simple terms of the objective behind the measure. If we have that, we shall be better able to make a contribution towards the Committee stage.
  I welcome the Bill and look forward to its reaching the statute book.
  6.0 p.m.
  Mr. Michael Shersby: Any Bill which is designed to help first-time home buyers is of special interest to me. My interest in the matter goes back many years to the days when I served as a councillor in two London boroughs and was aware there of the grave difficulties facing young couples wanting to buy their own homes for the first time. It is an interest which goes back especially to the General Election of 1974 when, as
  1064
  a parliamentary candidate, I was a keen supporter of the Conservative home savings grant scheme which I believed would have done a great deal to help young couples in my constituency to buy their own homes.
  Therefore, although I welcome the Bill, I am sorry that it has been so long delayed, and it is to my mind inadequate to deal with the problem which faces young couples in the constituency which I represent.
  I should like to examine one or two aspects of the Bill and to demonstrate why I think it is unrealistic and will make no substantial contribution to assist first-time home buyers in many areas of the country, especially those in Greater London. I shall try to show why it is nowhere near as good as the recommendations put forward by the Conservative Party in its election manifesto in 1974 and in its policy document "The Right Approach" in October 1976.
  There is no doubt from what my hon. Friend the Member for Hornsey (Mr. Rossi) said that the scheme set out in the Bill is far less generous than the Conservative scheme set out in "The Right Approach". Under the Conservative proposals, there would have been a straight forward grant of £1 for every £2 saved, up to a maximum of £1,200 or £1,300 per person, which is far in excess of the maximum available by way of loan under the Bill. Although the loan is to be interest free for a period of five years, I understand that that does not alter the fact that, after the initial period, the loan has to be repaid with interest at a rate which as I understand it has yet to be fixed.
  But let us assume for the sake of this debate that the rate will be about 8½ per cent. I calculate that that will be about £5·29 a month over a period of 20 years. This means an increase in the amount of repayment probably at just about the time, in the case of a young married couple who have started a family, they face increasing expenses in circumstances where the wife has to give up her job, at least temporarily. I think that these are fairly difficult circumstances which most young couples find themselves in, and it seems to me, therefore, that there are some very high hurdles for prospective home buyers to jump if they

  1065
  are to qualify for the cash bonus of £110 or the loan of £600 provided in the Bill.
  When I read the Bill, I thought that the Government must have caught the hurdle disease from the Scotland Bill by including in the loan scheme savings hurdles which I believe will be quite a problem for many youngsters. I say that because, although they are trying to save in order to qualify under the scheme, the price of property is rising and inflation continues. Therefore, it is a difficult hurdle for many young people to jump.
  We know, for example, that to qualify for the £600 loan the prospective purchaser must have a total of £600 in savings, in which case the lending institution will match it with a £600 additional loan from the taxpayer, interest free for five years.
  To qualify for the cash bonus, we have heard the Minister explain that the prospective purchaser will have to have saved for two years with a recognised savings institution and to have kept at least £300 in his account throughout the 12 months before asking for the loan. If the prospective purchaser manages to do this, he will receive a tax-free bonus at the lower end of the scale of a mere £40, and that after two years of pretty hard saving. I do not think that that is very much of an incentive, and if he is to get the maximum bonus of £110 he will have had to save £1,000, assuming that my calculations are correct. This is quite inadequate, and it does not even begin to compare with the scheme put forward by the Conservative Party in "The Right Approach".
  Why is that? I believe that there are several reasons. First, I believe that the Government want quite naturally to give the impression of helping first-time home buyers. However, I fear that in practice very few will really benefit. Secondly—and I shall be charitable—I detect the hand of the Treasury in the framing of the Bill, and I am not surprised, therefore, that it does not begin to understand the problems of first-time home buyers.
  The overriding problem which they all face is that of saving the deposit. It is the deposit and the difficulty of acquiring that deposit which faces young people in my constituency. It was my hope, therefore, that a Bill of this kind would be more generous and that there would not
  1066
  have been the kind of waiting period to which my hon. Friend the Member for Northampton, South (Mr. Morris) referred. During that period, the price of property will continue to rise, inflation will continue, and the problem will get more difficult.
  I should now like to demonstrate why I think a loan of £600 plus a small cash bonus is of very little help to young people who come to my constituency surgery every week. Let us consider the cost of buying a three-bedroom semidetached house in the London Borough of Hillingdon suitable for a young couple planning to have an average size family. In talking of a three-bedroom semi—and Hillingdon is made up of three-bedroom semis—I am thinking of youngsters who have perhaps been living in rented accommodation or with parents, who already have one or perhaps two children and who want to buy a house which will be suitable for family occupation. They will want a house with two or three bedrooms and perhaps a small garden where their children can be brought up in comparatively decent conditions. So I am talking not about an elaborate house but about a typical semi or perhaps a maisonette if they can find one—somewhere to begin married life with a young family.
  According to the council-operated Hillingdon housing advice bureau, the price of the average house today is between £14,000 and £17,000. This is confirmed by a leading building society in Uxbridge. If we are to assume that the young purchaser has achieved the minimum qualification for the cash bonus and have savings of £400, he will get just £40 plus his £600 loan. That means that the purchase price will be reduced by £640 on a house costing, say, £14,000. If he has the maximum of £1,000 saved, the price will be reduced by only £710 compared with £1,200 under the Conservative scheme referred to by my hon. Friend the Member for Hornsey.
  How, then, will this help materially? Let us consider how the £600 loan plus the £40 bonus will help a young couple paying £14,000 for an old house which is probably in need of repair and improvement, bearing in mind that in the London Borough of Hillingdon it is impossible to get an improvement grant because such grants simply are not available.

  1067
  Let us consider also the other expenses which the young purchaser will have to meet. There is, for example, the building society survey, which I estimate will cost £27. If he is wise, there will be a structural survey, costing anything up to £100. There will be solicitors' fees of £150. It may be that removal expenses from rented accommodation or living-with-parents' accommodation will amount to another £100. Insurance for the first year will be about £50. That makes a total of about £465. In addition, the young couple living in that type of house in outer London, especially if they work in central London, will have to face commuter fares of anything up to £350 a year. I know that the cost of travel is not a housing expense, but it is a relevant part of the expenditure of a young family.
  On a mortgage of £13,000 on a £14,000 house taken out over 25 years, the loan of £600 is worth £5 a month, or £1·20 gross a week, or a £60 a year reduction in the initial mortgage repayment. I calculate those figures by taking the repayment of principal and interest on a loan of £600 at 8½ per cent. spread over 25 years. At those rates the young couple would still have to pay £101 a month or £23·32 a week on the remaining £12,400 of the loan, less tax relief. Therefore, the loan provided for in the Bill enables there to be only a small reduction on the mortgage. It is a trivial sum compared with the tax relief on the loan.
  That is not a real incentive for young couples on the margin to buy their home. That is my basic criticism of the Bill. If the Secretary of States and his colleagues wished to provide this sort of incentive but were determined to apply the restrictions that are to be found in the Bill, there must surely be a better and less costly way of achieving the same result.
  It is clear that the proposals contained in the Bill are far from adequate and of little help to a first-time home buyer in many areas such as the one that I represent, where house prices are rising fast.
  What must be done to improve the Bill? First, I believe that it should be amended to make it more generous and to come into operation more quickly so that young couples may benefit without having to wait for two years during a period of rapidly rising house prices, during a period when inflation is continuing at a high rate. That is essential.
  1068
  I should like the Bill to be amended so that it takes on the shape of the scheme proposed in "The Right Approach". It has been said this afternoon that to operate a scheme of grants rather than loans is financially irresponsible. It must be said in reply that if families are not helped by a scheme of that sort they will have no alternative but to go on the council waiting list for a council house. There would be a major saving of public funds.
  The average price of a house in Hillingdon is £14,000. That is the price of a second-hand house. That price must be compared with the cost of building a new council house, which is probably about £20,000. As my hon. Friend the Member for Hornsey has said, there is a subsidy from the taxpayer of £1,200 to £1,300 on a new council house. That is roughly equivalent to a once-for-all maximum grant that prospective purchasers would have received if they had been lucky enough to benefit from the Conservative home purchase scheme instead of the Bill. That compares with about £300, which is roughly the cost to the Exchequer of tax relief on a new mortgage.
  The Bill should tackle one of the greatest problems facing many tenants today who wish to buy their own homes. The Bill does not contain the legal right for tenants to buy their houses on favourable terms. All that it does is provide a comparatively trivial sum to those who are either private tenants or those living in other forms of unsatisfactory accommodation such as caravans.
  I should like the Bill to incorporate modifications to the Community Land Act so that more land would be brought on to the market. That would help to cancel out the rising price of houses. I should also like it to contain some attempt to deal with the problem of shorthold tenancies along the lines proposed by my hon. Friend the Member for Kensington (Sir B. Rhys Williams). If that problem were dealt with, we would bring vacant residential accommodation back into use as homes.
  I have never been able to understand why the Government have been so unwilling to tackle the problem of vacant accommodation throughout Greater London and many other large cities. The Bill is proposing to help young people obtain homes for the first time by giving

  1069
  them a small cash incentive, but nothing is being done to deal with the enormous number of rooms that are available throughout London that could be made available to youngsters to enable them to start their homes.
  Lastly, I should have welcomed some attempt to bring local authority mortgages at least to the level that obtained when the Conservative Government left office.
  Those are some of the plans that I would bring forward for improving what I consider to be an inadequate and rather mean little Bill. I shall look forward to hearing what the Minister has to say in reply. I hope that he will be able to give some examples and some encouragement to my young constituents when explaining how the proposals contained in the Bill will help them, bearing in mind that the figures that I have given are today's figures and that £14,000 to £17,000 is the price of a semi-detached house in the London Borough of Hillingdon. I hope that the Secretary of State will realise that the figures demonstrate all too clearly the way in which house prices are rising and how inadequate and trivial are the sums that it is proposed to provide under the Bill.
  6.17 p.m.
  Mr. Tony Newton: I want to join briefly in the debate to make two fairly specific points.
  First, anyone taking part in the debate and having heard the Secretary of State must comment on what appeared to be nothing much more than a crude electioneering speech. If left me with the feeling that it had been written by the Transport House Press department with an eye on the Ilford, North by-election, whereas it should have been a relatively uncontroversial speech introducing a generally reasonably well liked Bill in the House of Commons.
  I am worried because, apart from the tone of the right hon. Gentleman's speech, it seems that the Secretary of State is living in a different world from the rest of us. Any hon. Member will be conscious that in his own constituency all the signs are that housing problems are getting worse rather than better. It seemed almost unbelievable to have a catalogue at the beginning of the right
  1070
  hon. Gentleman's speech that attempted to suggest that all our problems have been overcome.
  Single people, including a growing number left single, as it were, by the rising rate of marriage breakdowns, are finding it almost impossible to get accommodation. Those who are left without children are facing that difficulty. There is growing difficulty in obtaining bungalows or ground floor accommodation for the elderly and disabled. A growing number of young families come to me to explain that they are unable to get a council house. I do not believe that my experience is untypical. From the tone of the right hon. Gentleman's speech we are given a clue. If he is as complacent as he implied, I am alarmed for the future of some of those who come to talk to me about their housing problems.
  We have heard a good deal of crowing about how the problems of rising house prices and land prices have been avoided during the past few years. It is clear that they are now re-emerging. I suspect that the Government will find that they have in no way solved the fundamental problems that gave rise to the difficulties that we saw before. They will find that they have managed to suppress the whole issue by bringing about a fall in real incomes by their economic policy. In that way demand has been suppressed. If that factor disappears, we shall see all the problems in the housing market reemerging very much as we had them at their earlier stages.
  Meanwhile, the Green Paper has been delayed. We now have this Bill, which is nothing much more than a mouse scratching at the surface of the problem. We have continuing unreality from some Back-Bench Labour Members. For example, does the hon. Member for Mitcham and Morden (Mr. Douglas-Mann) really believe that the drying-up of private rented accommodation is the result of nice financial calculations about the difference between the costs of a mortgage and the income needed from rent? If he does, he is living in a dream world.
  Surely no hon. Member has not come across accommodation which is simply not being let. It is not being sold. It is being kept vacant, because people have been advised by lawyers not to let in a

  1071
  tenant as they will not get him out and that will gravely devalue their property. That is absolute madness. That is at least as large a factor—I would say a larger factor—as the cost calculations given by the hon. Gentleman. Yet he made no reference to it at all.
  Mr. Douglas-Mann: What does the owner contemplate doing with the property in the long term if he is keeping it vacant? Does the hon. Gentleman agree that property that can be sold is sold because the return is likely to be much higher than can be obtained from renting, irrespective of the Rent Acts? That is why property is sold. Property that is kept empty is kept empty as a consequence of the ignorance that the hon. Gentleman is propagating.
  Mr. Newton: I am thinking of property for which the owner has long-term plans and therefore will not want to sell. I could give the hon. Gentleman examples. I do not want to give specific examples, because it might involve identifying people. However, I can quote examples of property being kept empty or of an owner allowing someone who does not particularly need it to use it rent free. The landlord knows that he can get such a tenant to go nicely if asked. He will probably prefer to do that than to let to a young married couple with the uncertainty that they would go when he wanted them to go. This is a crazy situation. The hon. Gentleman is doing himself a disservice if he does not recognise that is happening in a large number of instances.
  Mr. Douglas-Mann: How does the hon. Gentleman account for the fact that the decline in rented property was at its most rapid in the period 1957 to 1964 when there was no control?
  Mr. Newton: I am not suggesting that other factors are not also operating in the private rented sector. In my judgment, the problem has got worse since the passage of the 1974 Act. I can give definite examples of people who have been told by their lawyers that they would be mad to let their property on normal terms. It would appear that they are better off keeping it empty until they want to do something with it than letting it on a short-term basis. That is why it is difficult for many young married couples and single people, perhaps following
  1072
  divorce, to find anywhere to live pending the possibility that the council might be able to offer them accommodation in due course.
  Like the hon. Member for Mitcham and Morden, I do not want to take up time arguing about other difficulties in housing, but some of these points need to be made.
  My real purpose in intervening in the debate is to wonder whether we should spend the money involved in the way indicated in the Bill. I agree with my hon. Friends that it is unlikely to make a significant contribution in helping first-time buyers. We are all in favour of helping first-time buyers, but there is no point in spending a lot of money on a scheme which will not be very effective. If the Bill is not to be effective one must inevitably ask whether it would not be better to spend the money involved in some other way.
  I want to refer especially to a matter that I raised with the Minister at Question Time last Wednesday and which has been touched on by my hon. Friend the Member for Northampton, South (Mr. Morris), namely, local authority loans and mortgage interest rates. My hon. Friend the Member for Hornsey (Mr. Rossi) pressed the Secretary of State on the matter of local authority mortgages. I shall not attempt to add to what he said. However, I share his anxiety about the steep drop in these loans.
  I suggest that if we want to help first-time buyers, including those who have already bought but are in difficulty because of the rise in interest rates, the Bill should have taken the opportunity to do something about the disparity between many local authority mortgage interest rates and those of the building societies.
  I should like to read two of the relevant sentences from the Green Paper on this matter. On page 62, paragraph 7.43, it is stated:
  "The Government consider that it is inequitable that local authority mortgagors—who tend to be first-time buyers with incomes lower than those of building society mortgagors—should have to face higher rates. They therefore propose to introduce legislation to enable local authorities to charge such rates as may be determined by the Secretary of State from time to time."

  1073
  When I asked the Minister about this matter on Wednesday, he defended the decision not to take up this question by saying that he was consulting local authorities. I would make two comments in reply. First, that sounded like a definite commitment rather than a proposal for consultation. Secondly, as the wording is "to enable local authorities", I cannot see why permissive powers should not be introduced into the Bill to allow councils to assist some of the people who have been hardest hit by the rise in interest rates.
  In the Braintree District Council area the rate is now 1½ per cent. above building society rate. Until recently, it was 2 per cent. above the building society rate. I know how much hardship the extra payment has caused to young couples. What is the point of helping them with local authority mortgages and then clobbering them with the present level of interest rates? This matter could have been included in the Bill. I hope that it will be introduced in Committee. I believe that it might be a more worthwhile use of the money than the likely benefit we shall get from what is in the Bill.
  An objection sometimes raised to the idea of keeping local authority mortgage rate in line with the building society rate is that it constitutes a subsidy. When interest rates are falling, a degree of subsidy is involved. However, if that system had been in operation during the last few years, the swings and roundabouts would have cancelled out, because, when interest rates were rising fast it would have involved charging rather more than would otherwise have been the case. Although at the moment it would involve an element of subsidy—and, incidentally, I can see a strong argument for saying that should be borne by the Government, not by the ratepayer—over the years it need not involve a degree of subsidy. I believe that it would produce a fairer and more acceptable situation than what we have now. By helping local authorities with their lending, and local authority mortgagors with their payments, we would be doing as much to help first-time buyers as anything that is likely to be achieved by the Bill.
  6.28 p.m.
  Mr. Ivan Lawrence: The Government, for a Socialist Government, are beginning to do some very interesting things. Taxation is too high? Certainly, we shall cut it. Small businesses are being strangled? Good Lord, we shall ease their plight. Parents frustrated over education? Certainly, we shall give them more say. Public opinion polls showing that more people want home ownership; 69 per cent. of all respondents prefer home ownership; 80 per cent. of all respondents in the 25-to-34 age group prefer owner-occupation; 78 per cent. of all respondents in the 20-to-44 age group prefer owner-occupation? Certainly, we shall introduce the Home Purchase Assistance and Housing Corporation Guarantee Bill.
  Why the conversion? It is not a deathbed conversion, though many Conservative Members earnestly hope that it is. It is not that Labour Members think that they are about to die. So why the conversion? The answer is that a General Election looms, to say nothing of the Ilford, North by-election.
  In the run-up to a General Election we would expect the Labour Government to steal our clothes. They know that our clothes are what the people most want, and they—the Government—badly need to please the people, because they are running 9 per cent. to 11 per cent. behind in the public opinion polls. But on this side of the House we do not fear that theft, because it is not the clothes that the people want; it is the animal underneath. However the Socialist wolf dresses up, it will never fool the British people into thinking that it is other than a very dangerous wolf.
  One well-known attribute of the wolf is that it believes in the public ownership of housing and does not believe in a property-owning democracy. When has the Labour Party ever gone to the country on a slogan of wanting wider home ownership? Now, apparently, the Government are converted to the cause, but where are the Labour Members below the Gangway?
  Mr. Sainsbury: In Ilford.
  Mr. Lawrence: Where is anyone who supports the Government today? Far

  1075
  more prominent in the Labour Party's policy was the policy to nationalise the construction industry—a policy which was determined finally and unanimously by the 1977 Labour Party conference. Why is that not the Bill that we are debating today?
  The Secretary of State shook his head when my hon. Friend the Member for Hornsey (Mr. Rossi) said that this Bill was for General Election purposes. However, those closest to the right hon. Gentleman could detect the glimmering of a grin on his face when he shook his head. The right hon. Member for Fulham (Mr. Stewart), in a brave attempt to defend his party's pitiful housing policy, naturally attacked the Tories and called our policy weakness. But was it weakness to start 48,000 more houses a year in our last four years of office than in the past four years of Labour Government? Was it weakness to start 80,000 more houses for sale in our four years than in the four years of Labour Government? Was it weakness to give 41,000 more improvement grants a year in our last four years than in the Labour Government's four years? If one wants to cure homelessness, that is how one goes about it, not by the policies which have caused Neil McIntosh, the Director of Shelter, to observe in the Daily Telegraph of 7th February:
  "Taking house building and improvement together, these are the most dismal figures for 15 years."
  If Tory weakness is properly called weakness, Shelter would say "Give us an excess of it."
  Of course we support the Bill because, unlike the Labour Party, we do not vote against measures just because they are introduced by the other side. We support it as we would support anything that went in the direction of helping first-time buyers, however feeble, puny and fiddling it was.
  A number of technical defects in the Bill have been pointed out by my hon. Friends, principally by my hon. Friends the Members for Hornsey and Uxbridge (Mr. Shersby), who said that the Bill will not help the young new house buyer. My hon. Friend the Member for Braintree (Mr. Newton) said that we have to bridge the gap between those who cannot afford to buy council houses, unless a significant form of financial assistance is given to
  1076
  them, and those who cannot get on to the council housing lists.
  I do not agree with all of my hon. Friends who have said that the Bill should come into operation before two years have passed. It is clear to me that if it were to come into operation immediately it would put up house prices unless the Government introduced policies to make more land available. If the Bill is not to come into operation for two years, it is nothing more than a cosmetic. It is not a death-bed conversion, nor any other kind of conversion.
  Our main criticism is that it is far less generous than we believe is possible, provided that more land is made available and that grants continue to be proportionate to savings. Savings are counter-inflationary by their nature and help to keep land costs down.
  If the Government really want to boost home ownership, they should do something about restoring the amount of money available for local authority mortgages to the level that obtained when the Tories were in office. I suspect that that would be doing the job too well and that the Government's absent supporters from the Tribune Group would not want to return to the House and find that that had been done because there would be a row and the General Election would have to be put back.
  6.36 p.m.
  Mr. Tim Sainsbury: We have had a short debate on what is, by today's standards, a relatively short Bill. The Secretary of State referred to it as a minor Bill, perhaps in that way recognising the relatively small degree of help that it will give to those seeking to buy and own their own homes.
  Before turning to the central and most important aspect of the Bill, I wish to make two comments. The first concerns the loan guarantee limit for the Housing Corporation which is increased in Clause 5. We enthusiastically support housing associations and, as my hon. Friend the Member for Hornsey (Mr. Rossi) said, it was my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) who introduced the measure to help them. However, there are some doubts about the general cost-effectiveness and method of operation of the Housing Corporation.

  1077
  My hon. Friend the Member for Northampton, South (Mr. Morris) said that there should be a word of caution about the operations of the Housing Corporation. Is it becoming too bureaucratic? Is it, for well-intentioned reasons, strangling the enthusiasm of the voluntary organisations which it is meant to be helping?
  These are subjects which should be debated. I regret that by putting the Housing Corporation aspect into this wider Bill we are deprived of a longer debate on the subject. The Housing Corporation has not been discussed in the House for two years.
  Under the Bill the Secretary of State may specify by order any further increases in the loan guarantee powers. If he produces such an order we may not have an opportunity of discussing it, and yet another opportunity will go by for debating the affairs of the Housing Corporation. I hope that we shall be able to look into these matters in Committee.
  That brings me to my second preliminary point. It concerns the extension of the Secretary of State's powers. The situation is extraordinary. The Secretary of State may by order vary virtually every provision in the Bill except the Long Title and the Citation. It is another example of the tendency of Government to introduce enabling legislation on practically every subject. It is as regrettable in this case as it is in others.
  As my hon. Friends have recognised, it is an ill wind that blows nobody any good. Having given the Secretary of State such wide powers to vary the provisions of the Bill, I am sure that we shall take an early opportunity of using these powers when my hon. Friend is in a position, on the other side of the House, to extend the powers to give substantial help to first-time buyers. We should recall that first-time buyers receive nearly half of all building society loans.
  I may have got the Secretary of State's words slightly wrong, but I believe that he gave as his principal objective helping into home ownership a number of people on the margin, and to ease the burden—I presume that he was referring to the burden of mortgage repayments—on some of those who can only just afford to buy their houses.
  1078
  As my hon. Friend the Member for Braintree (Mr. Newton) said, they are laudable objectives, but by far the most effective way of achieving them is to increase the personal disposable incomes of home buyers. The Government have so markedly failed to do that in their four years of office. Economic mismanagement has held down the spending power of home buyers, and this has choked back the demand for homes. Now, just when that is perhaps beginning to pick up a little, as personal wealth increases a little, the Government have come along with a little extra help for demand.
  Several voices have been raised in the debate about whether that increase in demand will be met by an increase in supply. I hope that with the benefit of four years in office the Minister now recognises that house prices will be determined largely by the interaction of supply and demand. On the supply side, the figures, whether comparing this year with last, or comparing the last four years of Socialist Government with the previous for years of Conservative Government, speak for themselves both for public sector housing and private sector starts. Under this Government the annual average of houses started and intended for sale is 136,400. The Conservative annual average was 216,000. These and the other figures were mentioned by my hon. Friend the Member for Burton (Mr. Lawrence).
  It the Secretary of State is so proud of his achievement, I hope that he will not hesitate in his speeches here and elsewhere to bring out these figures very clearly and to let the public judge on that record.
  Mr. Michael Morris: I believe that it will assist the House if I pursue the point raised by the Secretary of State concerning the increased investment shown fur public sector housing in the Green Paper on housing policy. I have here the Technical Volume, Part I, and on page 144 Table III.29 shows the projection for the number of houses to be completed in Great Britain in the public sector. The number for 1976 is 161,000, dropping in 1981 to 125,000, and in 1986 to between 115,000 and 125,000. But, even on the financial figures, in Table III.30 the figure at 1970 prices drops, from a provisional £909 million for 1976, to £650 million in 1981. On any basis, therefore, the projections show a fall.
  Mr. Sainsbury: I am extremely grateful to my hon. Friend for making that point and for putting the figures into perspective. I wonder why the Secretary of State found reason to deny what my hon. Friend said about the Government's achievement. The figures in the Green Paper and the figures for what has been achieved by the Government after four years speak for themselves, and there is no wonder that there is concern about whether, if there is an upturn in demand and some modest help for demand, the supply of houses will be adequate.
  The most important factor in supply is the supply of land. Will enough land be available to enable the builders to produce the houses for sale? Anybody who is closely involved or concerned with the house building industry must be aware of the concern that the industry feels about the shortage of land and the effects of this Government's legislation upon the supply of land.
  Let us start with that disastrous bureaucratic nonsense, the Community Land Act. If, because of what he has said in the past, the Minister cannot bear to take this unnecessary piece of legislation off the statute book, will he at least look at the limits on accepted development? We are trying to encourage more development in the city areas. Will he look at those limits to see whether even a modest increase could provide some further small supply of land? I must stress, however, that unless we get rid of the Act we shall not have a satisfactory supply of land for house building.
  Certainly the great and widespread application of the development land tax is having an adverse effect. Planning delays are occurring, but the Secretary of State does not seem too enthusiastic to do much about them.
  It is against that background that we are not surprised at the warning from the Royal Institute of Chartered Surveyors about what is happening to house prices. But when we press the Minister about the supply of housing land we get a remarkable degree of reticence combined with complacency. In reply to a Question from me in which I asked what representations he had received about the forward supply of land for housing, he said:
  "The message that I get is that there is no general shortage but that there are some local
  1080
  and individual difficulties."—[Official Report, 11th January 1978; Vol. 941, c. 1647.]
  I was interested in the extent of these "local and individual difficulties", and I asked him whether he would list the local authorities which had experienced them. His reply was "No". I asked him how many local authority areas had been shown by his Department's monitoring to have a shortage of land for housing development, and he simply referred me to his earlier reply, which said that he would not give such a list.
  Why this reticence? The Minister is not normally so shy and reluctant to bring the facts forward. Is there something about his monitoring that he does not want us to know? I suspect that on the evidence coming before him there is a growing awareness in the house building industry of a shortage of land which is already beginning to have extremely adverse effects on house prices.
  Even if the land were available, as a further help to the supply of housing the Labour Party has proposed that the big builders should be threatened with nationalisation. The small builders will continue to be clobbered, like all small businesses, by taxation, and, in particular, the capital transfer tax. On the supply side, I do not think that we can look at the past or the future with any confidence under this Government.
  There are other more minor problems in the Bill that we need to note. My hon. Friend the Member for Northampton, South and the hon. Member for Mitcham and Morden (Mr. Douglas-Mann) referred to the restrictions on the qualifying lending institutions and the minimum length of loan, and the extent to which these might restrict the application of the Bill to those who would particularly benefit from it, those in the inner city areas and the immigrant communities. Can the Minister assure us that he will discuss these aspects with community leaders before we reach that section of the Bill in Committee?
  My hon. Friend the Member for Northampton, South expressed concern about the house price maximum limit. Inevitably if a limit is imposed—although, as with every other part of the Bill, the Secretary of State can vary it by order—the question arises whether the system is sufficiently flexible in an inflationary time, when house prices are rising. The limit

  1081
  is likely to be calculated by his Department by reference to the average price paid by first-time buyers, with a suitable uplift for inflation, but what will that inflation be? If it is to be determined now, the answer must be 15 per cent. for house prices in relation to last year's average purchase price. The Minister for Housing and Construction shakes his head. Perhaps he will say that it should be more, or he may suggest that it may be less.
  Whatever it is, a figure must be put down. We might find six months later that it was totally inadequate and that far too many properties were excluded. There are a number of difficulties, such as the price for fixtures and fittings, the effect on demand for houses just above the limit, and the excessive demand one forces on houses just below the limit, if one has a limit. We shall need to consider the matter carefully in Committee.
  A number of hon. Members referred to what is not in the Bill. What was said about local authority mortgages, sale of council houses and several other matters was all well worth while. To that list I would add only the question of a further incentive for improvements and repairs. Maintaining the quality of our housing stock is a vital part of any cost-effective housing programme.
  The Secretary of State seems to be very proud of his record. We have already talked about what has been built in the private and public sectors. The right hon. Gentleman may have spent a great deal of money, but he has not achieved much. In 1973–74 local authority improvements amounted to £680 million at 1977 prices. In the private sector, improvements were about £285 million, making a total of £965 million. According to the White Paper, Cmnd. 7049, our most up-to-date book of reference on the matter, the expected outturn for the current year is £425 million for the local authorities and a miserly £91 million for the private sector, giving a total of £516 million, compared with the £965 million in 1977. That is not an outstanding performance on improvements and repairs.
  We understand that the Government are now to launch an advertising campaign to make more people aware of what they have done or what can be done in the matter of improvements. As what they
  1082
  have done on improvements has been so limited, if it were left to me I am not sure that I would want to advertise that record. The most glaring omission is the absence of any help to the private sector on energy conservation.
  The main point to come out of the debate is the unanimity on both sides of the House about the small scale of help. I think that the hon. Member for Isle of Wight (Mr. Ross) said that it was small, complicated and delayed. The hon. Member for Mitcham and Mordern said that it was small and costly to administer, and that he would like to see the Bill go further. My hon. Friend the Member for Northampton, South said that it was not very generous, that it was slow in starting and that it was no incentive to saving. He made the good point that we should index the benefits.
  My hon. Friend the Member for Uxbridge (Mr. Shersby), with a most interestting display of figures, showed how inadequate the Bill was to deal with the problem, particularly for young couples starting out, who might be faced with an increase in payments after five years just at the wrong time as regards their income. My hon. Friend the Member for Braintree pointed out that the Bill was unlikely to make a significant contribution to dealing with the problem.
  All of this is said against the background that in the preamble to the Bill we are told:
  "The costs are being met within the existing public expenditure provision for housing."
  Therefore, this is not extra money and help for housing but merely a shuffling around within what the Treasury has allowed for housing. I shall be delighted if the Minister tells us that the Preamble is wrong, but that is what it says and I must believe it, for want of better information.
  Some people have said that the Bill is a step in the right direction. I am not sure that that is not an exaggeration. So small is the movement that I think "step" is too grand a word. Let us describe it merely as a shift of weight by a stationary person from his left foot to his right. It may put him in a position to move ahead, but perhaps that is all that the Secretary of State is allowed to do by his absent friends from below the Gangway.

  1083
  We on this side of the House welcome this move towards moderation. Perhaps it is a lack of experience in moderation that has made the effect so small. We must explain to the Secretary of State that when he is being moderate he does not have to be so restrained. We must tell him "You could be a little more exaggerated in your moderation and give a little more effective help to home buyers."
  6.56 p.m.
  The Minister for Housing and Construction (Mr. Reginald Freeson): I am pleased to note the welcome that many, if not all, hon. Members have given to our proposals in the Bill. I shall try to deal now or in Committee with as many as possible of the points made.
  As my right hon. Friend the Secretary of State said in opening, we must see the Bill as part of an overall housing policy. It is too great a temptation, to which the hon. Member for Hove (Mr. Sainsbury) and others succumbed, to regard one piece of legislation as a vehicle for all solutions. The hon. Gentleman gave us a list of about six Bills that this should be but is not. No doubt I could add another half dozen. If one studied the Green Paper and its implications, one could add vet further to the kind of legislation we should wish to introduce.
  But the Bill is concerned with two particular aspects of housing policy and not the whole range. It is not a panacea. It is put forward not as a panacea but as a very useful measure which sets out to alleviate a problem of which all of us as constituency Members, if on no other count, are aware. Everyone agrees that we should help many prospective first-time buyers over the hump of initial purchase, and assist many who would become home-owners but with great difficulty.
  First, how does the Bill fit in with other policies? As so much stress has been placed upon them, I should like to touch on one or two which are more relevant to the Bill than other aspects of policy.
  Although the Bill is basically about providing help for purchase, it gives a further boost to improvement and repair at the time of purchase or within a year or two, a matter to which the hon. Gentleman and one or two other hon.
  1084
  Members referred. The £600 loan is always part of the main mortgage but many purchasers will want to repair and improve their properties or will be asked to do so by building societies. Many of us have had that experience. I had it some years ago when I bought my own property.
  In many cases the loan assistance will mean that the purchaser will have £600 of his own savings released. He will still be entitled to an improvement grant, so the extra help that we are giving will often allow the carrying out of improvements or repairs which might otherwise have been done later or not at all. I put stress on this potential, particularly in the older areas. I was much concerned to ensure that the cash provisions of the Bill would cover this. The Bill will help those buying older houses as well as new.
  I turn now to the question of new building, to which there has been much reference. About 60,000 new homes are bought by first-time buyers every year. That is about 40 per cent. of all new homes built for owner-occupation. In 1976, 40 per cent. of new houses were sold at prices below the average paid by first-time purchasers in England and Wales. Therefore, many such buyers will qualify for these benefits. Perhaps more important, there will be a chain effect, as increased demand in the lower part of the market for second-hand houses works through the system. Much of the new demand will be met by increasing the supply of new homes. Private house builders have been through a difficult period in the past few years. We want to reintroduce stability, and this Bill, in its own small way in this particular respect, will help.
  We are still suffering from the speculative boom of the early 1970s, which was fed by hot money and unchecked house price inflation, to which my right hon. Friend the Secretary of State referred. The result at that time was inevitable, and there were people warning—not just politicians on the Left but people in the industry and the market—about what would happen: the bubble burst, and starts slumped.
  I intervened in the speech of the hon. Member for Hornsey (Mr. Rossi) and said "The hon. Gentleman has got his figures wrong again." Starts in the private

  1085
  sector slumped from over 200,000 in 1973, as a result of the collapse of the boom, to 106,000 the following year, with a further decline in prospect when I received the situational report on my appointment as Minister in March 1974.
  The present Government have had to build up basic stability against a background of the worst economic crisis that the Western world has faced since the early 1930s. In our particular field, mortgages had to be dealt with. That was our first concern, as hon. Members will recall. As a result—without going over the history of 1974–75—we took our first steps towards the stabilisation arrangements, which are now operating fairly well, and we are now, as a result of these various measures and other factors, in the range of about 135,000 to 155,000 starts and completions each year. That is a marked difference from the prospect when we took office.
  I am not trying to make a particularly strong polemic about this matter—I do not want to indulge myself or the House in it—but the figures are there, and they did not happen by accident. The figures slumped and collapsed, and there was the prospect of even worse to come, with the mortgage famine and other factors at the time.
  I am not complacent about the figures. They are by no means good enough. But we have been operating against a very serious economic background, and the figures are significantly higher now than at the time of the collapse of the boom, and they are likely to rise. With falling interest rates for mortgages and for credit for the building industry, demand for new houses has begun to pick up. Indeed, the builders, who are not natural optimists, now report growing demand from most parts of the country, and they expect starts of about 150,000 this year.
  Mr. Rossi: Of course, I accept what the Minister says. He came to office when there was a world-wide recession, brought about by the oil crisis. Energy costs quadrupled in a matter of months and, of course, that had a profound effect on the economy of every industrialised country. One accepts that during that period there would have been a slump. But what is the explanation for the
  1086
  slump over the last year, some three years later?
  Mr. Freeson: With respect—perhaps I should not say that, because it usually means that one is not showing sufficient respect—the hon. Gentleman has got my words wrong. I was referring to the conduct of the housing market. Much earlier in the debate, my right hon. Friend referred to the management of the economy as a whole. I am concerned about that, but I was referring to something much more specific. There was the bubble, the boom, that occurred well before the oil crisis.
  The economic crisis that ensued as a result of the oil crisis late in 1973 came after the collapse was setting in in the housing market and the property market generally. Halfway through 1973, before the Yom Kippur war which led to the oil crisis, there was all the evidence of a collapse. Decisions were being made by house builders in the latter part of 1973 which led to the 106,000 starts in 1974, compared with 228,000 in 1973. I was confining myself to a particular facet and not concerning myself with the aftermath of the 1973 oil crisis at this stage.
  However, pursuing the point, hon. Members should pay attention to the figures being quoted by builders themselves who, I think we would all agree, are not natural optimists. They are expecting 150,000 housing starts this year.
  Mr. Lawrence: I should like to take up the point the Minister was making about mortgages. I think that he was saying that the Governments' first concern when they took office was to improve the mortgage situation. Is it still Labour Government policy to reduce the tax relief on mortgage interest, and is it Labour policy to reduce the ceiling below which mortgages qualify for tax relief?
  Mr. Freeson: Tax relief on mortgages has already been dealt with in the Green Paper, and I do not follow what the hon. Member is referring to. Perhaps he would quote to me the policy to which he has referred.
  Mr. Lawrence: It is the policy in the Labour Party's programme for 1976, which I understand was to reduce the tax relief available on mortgage interest.
  Mr. Freeson: Perhaps the hon. Gentleman will be more educated if he re-reads that document. However, on the point about the ceiling, we introduced that in 1974, but we have restated in the Green Paper, I think, that this will be subject to review, so the position holds now as it was in 1974. The £25,000 price ceiling holds.
  Mr. Newton: I should like to ask the Minister a question that is genuinely seeking information. Given that the Government have now accepted the fact of the regional differentiation of prices in the Bill, will they follow that through to the other special forms of restriction upon housing assistance, including the £25,000 mortgage limit and, indeed, the stamp duty relief, because there is at least as strong a case for both of those to take account of regional factors as well?
  Mr. Freeson: I think that the sooner I get back to matters relevant to the Bill, the better. The hon. Member should address those remarks to my right hon. Friend the Chancellor of the Exchequer, because they concern a matter that is not for us this evening. I was answering about the Government's policy with regard to the ceiling that we are operating. It was introduced in 1974 and the position remains as it was then, subject to the prospect, as stated in the Green Paper, of further review in the future.
  As reference has been made to the relationship of mortgages, we come back directly to the question of the Bill, because although demand is picking up builders are already finding, as we have known well in the past, that many potential buyers have a problem in getting together a deposit but could afford mortgage repayments. That is the problem that the Bill, in its own limited way, seeks to tackle—apart from the Housing Corporation aspects of the Bill.
  But we want the industry to plan with confidence for continuity of production, not to go back to the boom and bust years of the early 1970s. We are planning for controlled growth of demand. We want a stable level, above that of the past two or three years, but a level reached gradually without that surge of demand which sends prices through the roof, as we have experienced in the past.
  It is difficult to estimate, but I think that the Bill will bring in 30,000 new
  1088
  purchasers each year—that is, 30,000 people who could not otherwise have bought. Much of this extra demand should be met by new homes, either directly for the new purchasers or indirectly for the people who move on.
  Perhaps I may now pursue the aspect of the mortgage rate and prices. Because of the improving economic prospects, the building society mortgage rate has fallen rapidly in recent times and now stands at the lowest level for five years. Hon. Members have referred—not for the first time—to the local authorities. Local authority rates have fallen more slowly, but they are falling. They are falling more slowly because of the effects of pooled borrowing and of having a different financial structure entirely. We are considering the local authority associations' reactions to our proposal to enable them to lend at the Building Societies' Association recommended rate with support from the general rate fund, as outlined in the Green Paper.
  It is as well to make this point, because it is understandable that at times of difficulty, which undoubtedly exist, it is overlooked that if one takes a run of years—and not so many years at that—one finds that for most of that time local authority rates are running below, and sometimes well below, BSA recommended rates. There are certain periods, which can be identified on a graph, during which the position is reversed for short periods, but for most of the time, at least, the position is no worse than one of swings and roundabouts, although that does not mean that we should not look at the question as a serious one which affects individuals.
  The Green Paper stated generally our concern about the inequity of the situation at times such as the present.
  Mr. Rossi: Perhaps the Minister will help me with regard to local authorities. Instead of putting this on the general rate fund, as the proposal appears to be, could not the authorities be allowed to renegotiate these loans? I understand that under present financing they borrow over a 60-year period and that the rate at which they borrow at the time remains the same for the whole of the period. Are there great financial objections to enabling local authorities on repaying that loan to reborrow at lower interest rates?
  Mr. Freeson: I shall have to check that. But I do not think that the hon. Gentleman has the position right. Local authorities operate under the Consolidated Loans Fund basis. They can only charge on current rates. Some have done this in the past. By using the Consolidated Loans Fund rate it means that they are operating on a refinancing basis, because the Consolidated Loans Fund is subject to refinancing. They may borrow for 60 years, for example, on local authority housing. To give a clearer example, the actual cash raised in this period is not the same for the whole of the 60 years. There is constant refinancing. Indeed, there are indications that the consolidated pooled rate is dropping, as it has done in the past, just as at other times it has gone up.
  Mr. Michael Morris: I think the Minister is absolutely right. There is a small percentage of about 5 per cent., which is a fixed figure as opposed to a variable one. Surely this is an area where the Government ought to give considerable assistance to local authorities.
  Mr. Freeson: I think that the hon. Gentleman has put this into perspective. I am not denying that there is not problem. We have stated this in the Green Paper and we are taking the views of the local authority associations on the Green Paper proposal. There may be other ways in which we can look at this technically to see whether there are ways of easing the burden. But at present there is no scope for introducing such a proposal in this Bill.
  Mr. Stephen Ross: Is not one of the real problems that the whole fixed rate of interest—I used to be subject to a local authority rate of 3¾ per cent.—would automatically have to go up, and there would be people who would object strongly to that?
  Mr. Freeson: I do not want to chance my arm, because there may be some people who borrowed at very high fixed rates a few years ago. I have one or two personal friends who have been paying a fixed rate for many years. In fact, I know of a case concerning a very lucky man who was paying a local authority mortgage of 2½ per cent.
  In this context hon. Members have referred to house prices. Some of the
  1090
  language used has not been particularly conducive to the benefit of the market or the customer. We should try to moderate our language. Just because a few property correspondents, estate agents and others keep talking up the market, we should not encourage them so to do.
  Although house prices increased last year at an annual rate of only 8 per cent., this year—one cannot be certain what the underlying trend will be for the whole of the year—the evidence suggests that the increase will be 10 per cent. to 11 per cent. We should not encourage people, even in the local market, let alone the national market, to keep on talking about an average of 15 per cent., or even higher rates of increase which have been talked about in some quarters in recent weeks.
  Mr. Sainsbury: I am grateful to the Minister for giving way. Perhaps that is why he shook his head when I referred to prices being calculated on last year's average plus 15 per cent. The hon. Gentleman quoted 10 per cent. to 11 per cent. Is that a national figure? If so, what is the figure for the London area?
  Mr. Freeson: I cannot give a figure for the London area. Initially it is a national figure. It is very early in the year, but that is the judgment that we are making based on the underlying trends.
  Against that background one must accept that house builders must have a reasonable return, although I must say that I have no sympathy—nor should anyone else—with those agents who are again trying to talk up prices. One or two hon. Members unintentionally gave some endorsement to that. We must not encourage this kind of talk-up of prices. Fortunately, our relations with the building societies—through the joint advisory committee—are very close, and we are monitoring the level of lending to ensure no excessive price increases.
  That will not happen under this Government. We are not going to have a runaway similar to the one that occurred in the early 1970s. This is being done on a co-operative and joint basis with the BSA. We shall watch the situation and act on it very carefully indeed, together with the building societies. Never again, under this Government, will that situation be repeated.

  1091
  The hon. Member for Hornsey (Mr. Rossi), supported by other hon. Members, made much talk about the small level of benefits incorporated in the Bill as at present suggested, compared with various proposals put forward by the Conservative Opposition. He made some general statements about a greater benefit being put forward by the Conservative Opposition—a better buy, as it were—by way of cash grants. I think the hon. Gentleman mentioned a figure of £1,250 compared with local authority and housing association rented provision, which would reduce the demand for highly subsidised council houses.
  In this complicated area, let me try to put shortly the position in view of the figures that have been quoted. To compare the cost to the Exchequer of home ownership and public sector housing one has to look at whole life costs. We are dealing with two different structures entirely. We have to look at whole life costs, not just the initial year, and must make predictions about such things as interest rates, the movement of house prices and rents and taxation policy over at least 60 years.
  That kind of calculation is little more than a demonstration of the power of compound interest. But, in any case, we cannot just stop local authorities from building to meet housing need on the assumption that the market will step in to fill the gap. Local authorities give priority to those in urgent need. What is more, local authorities build in circumstances, physically and cost-wise, in which the private sector would not build to meet need. Such factors are often overlooked.
  These are not necessarily the same sites or the same people year by year who would be brought into home ownership if local authorities or housing associations moved out. Obviously, what we need to do—and what we have constantly tried to get the Conservative Opposition to accept—is to get an appropriate balance between renting and home ownership area by area and in national policy. That is why we have the concept of the housing strategies which we are seeking to develop locally, and in a national context, and which we are taking first steps towards.
  I should like to take up some of the specific points made. First, there is the
  1092
  size of the benefits. We have set bonus and interest-free loans at levels which, in our judgment, are large enough to be effective but not so large as to affect prices adversely. We also have to fit in this expenditure with our other plans for housing and come to a judgment about the overall use of resources.
  I cannot understand what the Conservative Opposition want, except perhaps to make profligate promises about the use of taxpayers' money. Until today we have heard very little and I am not sure whether we are wiser now, but the basic approach seems to be much larger benefits, in particular, a grant of £1 for every £2 saved. But why a grant? Even to convert our reasonable levels of loan could create a continuing public expenditure commitment of £100 million a year at 1977 prices. But if the Conservative Opposition propose a grant at even higher levels—perhaps £1,250 or £1,300, as I have heard mentioned, for each purchase—the cost would be doubled. If the proposal is to allow double benefits for couples—which I have heard hon. Members mention—who knows where this expenditure would end? How many millions of pounds—thousand of millions of pounds—would that entail? No one seems to have done any kind of projection—from the Conservative Benches, from Tory Central Office or anywhere else—about the implications of what they are proposing.
  That is not all that is objectionable in these proposals. That essential piece of reading "The Right Approach" talks about
  "limiting benefits to lower paid first-time purchasers".
  So it matters not what price one pays; it is one's income that counts. I must ask whether that means another kind of means test system.
  Mr. Rossi: I have already made plain that what we were looking at was the way in which the Government have looked at this particular problem. There is no question of means testing. But even if there were—and there is not—I am astounded that the hon. Gentleman should be surprised, because his Government operate more than 16 means tests at present. The hon. Gentleman's Department is doing it at the moment. I do not see why he should hold his hands up in horror.
  Mr. Freeson: I was not waving my hands about—the hon. Gentleman was waving his. But I am glad that we now have a straight answer. It was not what was implied in the original text of the Tory statement on the matter. Now we have it clear. But I have a bigger worry about the sense of the thing. I cannot believe that these proposals have been thought through. I do not believe that the necessary figuring has been done.
  For example, is it right that savage cuts should be made elsewhere in public sector housing in order to achieve this objective? Or should there be an increase in taxation, which seems to have been suggested by the hon. Gentleman at one stage, in order to find the necessary resources? Ought we to cut back on the provision of housing and possibly other facilities in order to achieve £500 million or £1,000 million a year in this uncontrolled expenditure advocated by the Opposition Front Bench and others?
  Again, is it right to pay £2,500 or thereabouts to purchasers who might be paying only £5,000 or £6,000 at the lower end of the market? Is it right that the Government should pay 50 per cent. interest on one year's savings? There would be tremendous incentive to borrow from whatever source in order to qualify for this so-called scheme of the Tory Party. The benefits proposed are so out of proportion that people would be likely to borrow wherever they could in order to benefit from the proposals thrown out in today's debate. The Tory scheme seems likely also to encourage a whole new fringe lending industry by which to swell people's savings accounts and, indeed, to boost false savings. How could the scheme be administered?
  The Government, on the contrary, have produced a balanced scheme. It has been thought out in close consultation with the institutions. There have been very full discussions with them, and the scheme will work. For the first five years our continuing expenditure will be basically for the bonus. The loans, on a present-price basis, will rest on recycled finance. The Opposition may be suggesting accumulated expenditure many times what we are envisaging, but they have not indicated where it is to come from.
  I turn now to the question about the limitation on the lending institutions. We have been criticised for excluding
  1094
  buyers who do not borrow from one of the recognised institutions. Some people pay cash or take a short-term financial loan. Anyone buying for cash is unlikely to need this assistance. Others go to less reputable institutions than those with which we intend to deal.
  I represent an area which has experienced the evils of money lending at extortionate rates for house purchase. We still have some of the consequences, both for the individuals and for the state of the property. I want to encourage people to borrow from bona fide institutions. Our savings conditions are meant to encourage people to save regularly with proper institutions and thus ease the way to a mortgage.
  But as well as safeguarding the borrower, we have a duty to safeguard the investor of the money, to give help where there is a secured loan. Without security of mortgage, how is one to ensure that the Government's money is safe in the first place?
  There is genuine concern which I share, about purchasers in inner city areas, and about schemes that will discriminate against people buying in those areas, perhaps with a lease of two or five years. There should be no problem where there is a secured loan from a recognised institution. We want to help such people to buy their own homes, but we must use our resources wisely and we must not encourage people to take loans that they later regret, both in personal terms and in terms of the condition of the property. We shall look at this aspect further. We are concerned about it. We can discuss it more fully in Committee.
  I have sought to deal with most of the points raised in the debate but there is one that I have left to the last. The hon. Member for Hove laid stress on it. It is the question of the supply of land for housing. I shall put the issue clearly as we understand it. At the last count there was enough land with residential planning permission in England—
  Mr. Rossi: No, no, no.
  Mr. Freeson: —serviced and available for housing development—
  Mr. Rossi: I know that the right hon. Gentleman's Department keeps on feeding him with these figures, but I wish that he would ask his officials who are giving

  1095
  him this advice to descend from the 17th or 18th floor of Marsham Towers to the ground and talk to builders who are trying to build houses. If they do, they will find that the number of planning permissions does not relate to the land that is viable for building purposes. The infrastructure and all other matters have to be taken into account.
  Mr. Freeson: The hon. Gentleman started "No, no, noing" before I had completed my sentence, let alone the paragraph. He should contain himself a little longer. The hon. Gentleman makes these rhetorical points from time to time. We have close contact with the builders, and there is no difficulty about their access to us. We like to deal with the available information and data so far as they can be made available rather than indulge in the generalisations that the hon. Gentleman likes so much.
  The figures I am giving are based on the available data. There is enough land, according to the last count, with residential planning permission in England for about four to five years' building. That is as accurate an assessment as we can make on the available information. Builders nationally continue to have, we estimate, about three years' supply of land with planning permission and mains services. I understand that most of it is likely to be available for development. They also have a considerable amount of land without planning permission.
  There are difficulties locally, but we have yet to have any information from the builders or from other sources suggesting that there is the national land shortage that the hon. Gentleman keeps referring to. That is not the position.
  I want to conclude with a reference to the Government's position on the question of home ownership. Once more we have had constantly trotted out the mythology about the position of Labour Governments on the question of home ownership. I challenge any member of the Opposition to read the history of housing legislation in this country over the last 10 years or a good many years earlier than that and to find when a Tory Government last introduced legislation which would be of assistance to home buyers. I ask them to check also in their reading of history when Labour Governments introduced legislation and ad-
  1096
  ministrative action to assist the home buyer. When they have found out those facts from history, they should put them in a league and compare them. They will find then that nearly all the measures taken during the past generation or more to assist home ownership have been taken by Labour Governments and very few by Tory Governments.
  Despite all the speeches, "Right Approaches" and the rest by the Conservatives, in practice it has been Labour Governments who have acted to assist home buyers, particularly those down market, and not those who make all the grand speeches and issue the glossy documents.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  HOME PURCHASE ASSISTANCE AND HOUSING CORPORATION GUARANTEE [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That for the purposes of any Act of the present Session to authorise the use of public money for assisting first-time purchasers of house property, and for connected purposes, it is expedient to authorise the payment out of money provided by Parliament of sums required by the Secretary of State—
  (a) for making advances to recognised lending institutions enabling them to provide assistance to first-time purchasers of house property, where the purchaser obtains finance by means of a secured loan from the institution, the assistance to be provided as follows—

  (i) the secured loan may be financed to the extent of £600;

  (ii) £600 of the loan may be made free of interest, and of any obligation to repay principal, for up to five years from the date of purchase; and

  (iii) the lending institution may provide the purchaser with a bonus on savings, up to a maximum of £110;

  (but so that any of these money sums may be altered by order with Treasury consent);
  (b) for indemnifying lending institutions in respect of loss suffered in cases where assistance has been given under the Act;
  and that for the purposes of the said Act of the present Session it is expedient also to authorise payments into the Consolidated Fund.—[Mr. Shore.]

  EMPLOYMENT SUBSIDIES BILL
  Order for Second Reading read.
  7.29 p.m.
  The Secretary of State for Employment (Mr. Albert Booth): I beg to move, That the Bill be now read a Second time.
  When the House debated the employment situation two weeks ago, I said that while the Government were looking for faster and more sustained growth and more jobs, we were neverthless pressing ahead with the development of our special employment measures so as to make the maximum impact on the level of unemployment in the short term. I undertook shortly to introduce a Bill which would provide the Government with powers to cover alternative employment schemes and the planned extension of the small firms employment subsidy.
  The Employment Subsidies Bill, which we are debating today, would establish a power to set up schemes to enable employers to retrain or recruit employees, and generally to maintain or enlarge their labour force. We are now running a number of measures which among them are providing assistance for some 320,000 workers who would otherwise be unemployed.
  It has been necessary on two previous occasions to come to the House for additional powers to those contained in the Employment and Training Act 1973 so that we could introduce new schemes. The prime purpose of the Bill is to provide a power to run existing schemes and to introduce new ones needed in the future. There can be no doubt that we shall need the employment measures for some time yet. If we are to operate a programme of manpower measures we shall need the statutory backing for it.
  Specifically, at the moment we need cover for the small firms' employment subsidy, which we have been financing for the last few months under the Appropriation Act 1977. I have already announced our intention of enlarging the scope of the scheme and running it for a further year.
  There is also the fact that the EEC Commission has objected that the temporary employment subsidy, in its present form, conflicts with our legal obligations
  1098
  under the Treaty of Rome, and the Commission has called for modifications of the scheme. We do not accept the Commission's case and we are engaged in discussions with it. We would like the temporary employment subsidy to stay as it is, but we may have to modify the scheme to meet our Community obligations. I have already told the House that we would do that only when we were in a position to introduce a new scheme which would provide equivalent support for employment. It is, therefore, a further purpose of the Bill to give us the necessary power to introduce, if need be, a new scheme to supplement the temporary employment subsidy.
  The Bill, like the powers which it supplants, is an enabling measure which gives us the necessary flexibility to introduce measures to meet particular needs as they arise. At the same time, it incorporates provisions to secure oversight by this House of the exercise of powers by myself and other Ministers in the Department of Employment. Moreover, it would be my intention to provide hon. Members with full details of all schemes and the rules under which they operate, as they are introduced.
  I turn now to the detailed provisions of the Bill. The Bill provides for the repeal of Section 5(1)(b) and (c) of the Employment and Training Act 1973. These were the provisions dealing with schemes to postpone or avoid redundancy, and schemes which encourage the recruitment by employers of groups of workers particularly hard hit by rising unemployment. It is under these powers that the temporary employment subsidy and the youth employment subsidy are at present operated.
  Section 5 of the 1973 Act will, if the Bill is passed, be returned very much to its original form. It will become again a power to operate job creation schemes. The intention is that Section 5 of the Employment and Training Act 1973 should be used to cover particular schemes under which jobs are specially created to help the unemployed, that is to say, jobs outside the normal run of commercial and industrial employment.
  The Bill is intended to cover all the schemes which assist in one way or another normal employment. It not only increases the range of powers which we have in a very necessary way. It makes

  1099
  the legislation tidier and more readily understood. The Bill has no bearing whatsoever on powers under which the Manpower Services Commission will run the new youth opportunities programme and its training programmes. These powers are still provided under Section (2) of the 1973 Act, and that section is not affected by the Bill.
  Clause 1(1) of the Bill effectively substitutes for the narrowly drawn provisions of the 1973 Act a broader power to permit the setting up of schemes for making payment to employers which will enable them to retain persons in their employment who would, or might otherwise, become unemployed, to take on new employees, and generally to maintain or enlarge their labour force. This is a wide power, and deliberately so. We are looking for flexibility.
  The Bill will allow us to go on running the schemes we are already running under the 1973 Act and will cover the small firms employment subsidy, which will, as a result of the Bill, acquire statutory backing for the first time. But its powers go beyond these schemes. The power to set up schemes to enable employers generally to maintain or enlarge their labour forces is an entirely new power. The Bill will enable us to bring in a short-time working scheme of the kind which, as I told the House last month, we are now considering as a means of offsetting any changes that may have to be made in the temporary employment subsidy.
  It might be helpful at this point if I say that there is nothing sinister in the fact that the Bill talks about payments to employers rather than to employees. The purpose of the schemes under the Bill, as the Long Title makes very clear, is to alleviate unemployment. The payment of subsidies to employers immediately improves their cash flow position and makes it easier for them to maintain or expand jobs, which, after all, is the object of the exercise. The employers have an established mechanism for channelling money to employees, and it is easy and efficient to make use of that mechanism.
  The Bill will give us very wide powers. Therefore I think it is important that a very full explanation should be given to the House as to the necessary degree of constraint on their use and the need for
  1100
  a very proper degree of accountability in this respect. There are provisions for that accountability within the Bill. There is a provision for Treasury approval of schemes set up under the Bill.
  There is also the question of parliamentary approval of the use of the powers. The powers in the Bill can be used only in specific circumstances. Schemes under it can be set up only if unemployment continues at a high level. What constitutes a high level of unemployment must be a matter of judgment. The House will recognise the difficulty of specifying a particular level in the Bill. Hon. Members will have an opportunity to consider whether the powers should continue to be used. They will run only until the end of 1979. After that they will lapse, unless renewed by statutory order.
  The Bill provides that any statutory order renewing the powers is subject to the affirmative resolution of the House. If the Government seek to continue to use the powers, Parliament will have the opportunity to discuss them and decide whether they should be continued. Renewals may be for periods of up to 18 months at a time. That is, I think, a reasonable interval in which to ask the House to reassess the need for them. In saying that, I take into account the experience we have had of running a number of schemes.
  I know that an argument can be made for a lesser or longer period, but I think that after 18 months we should have sufficient experience of running a scheme and should have been able to make any early modifications to it to meet any defects which it has shown. We should be able to come to the House with a recommendation based on that experience and to account to the House either for a continuation of the scheme or the abandonment of it in favour of another scheme.
  Mr. John Evans: My right hon. Friend has taken some pains to explain to the House that we shall have ample opportunities to examine the scheme and that there will be various safeguards which will protect the interests of the House of Commons. That is correct and we all accept it. But will he inform the House whether the EEC Commission has looked at the scheme and

  1101
  whether it approves of the scheme and agrees with it? In the context of the temporary employment subsidy, in which all of us are very interested, the EEC Commission, particularly its competition division, has overruled the wishes of the House of Commons. Has the Commission a prior right to the House of Commons in deciding whether this is a viable and acceptable scheme?
  Mr. Booth: The Bill is an enabling measure, and it is possible that many of the schemes which one might propose under it would be such that one would have to refer them to the Commission for approval; but I assure my hon. Friend, who has a special interest in this matter and has played a significant part in the EEC in arguing the case for maintaining the temporary employment subsidy, that we should initially seek to design schemes which would not run into difficulties with the Commission. That would be particularly necessary, of course, if they were to act as a supplement against any modification of the TES.
  Mr. Ivan Lawrence: Will the right hon. Gentleman assist the House in assessing the necessary limits of the Bill by giving his forecast as to the likely level of unemployment until the end of 1979 when the Bill's powers come to an end?
  Mr. Booth: I cannot give the House a precise forecast, since that will depend to a considerable extent on how effective schemes introduced under the Bill are. However, I can say that the number of people coming forward to seek jobs between now and the end of 1979 will increase by about 170,000 a year, so the scope for the schemes is quite considerable, since I cannot believe that we shall be able so to expand employment in industry and commerce as to get rid of 1½ million unemployed and also cope with a 170,000 addition to the labour force each year.
  I was saying that I believe 18 months to be a reasonable period for reassessment, provided that we give all right hon. and hon. Members who are interested an opportunity to study precise details of the schemes and the rules under which they will operate from the moment of their introduction. One of the advent-
  1102
  ages of having this more flexible power is that one can modify schemes in the light of any faults which hon. Members may find in the operation of them.
  Mr. Fred Silvester: For clarification on the question of flexibility, will the Secretary of State tell us whether the Bill gives power to make different arrangements in different regions, or whether they have to apply nationally?
  Mr. Booth: The Bill gives power to operate different provisions for schemes in different regions.
  In spite of what I have said, there might be some criticism of the time limit for operation of the powers in the light of difficulties which might be created for employers. Employers might be unable to plan ahead beyond 18 months with any confidence that schemes would continue in operation for another year or two.
  I should be the first to accept that criticism. But we have a genuine problem here. We have to strike a balance between, on the one hand, the need to let the public know where they stand and what they can expect of our schemes and, on the other, the need to provide an acceptable degree of parliamentary control over these flexible and sweeping powers.
  We have put into the Bill two transitional provisions which should be of considerable assistance in individual cases. First, the Bill provides in Clause 2(1) for the continuation of schemes previously set up under those parts of the 1973 legislation which are to be repealed. This is a necessary provision to ensure the continued smooth operation of schemes, such as TES, already in existence under the old powers. Without it, we should have to cut these schemes off abruptly the day the Bill gained Royal Assent. Of course, we could immediately re-establish them, but that would involve an unnecessary administrative burden on both employers and the Government, so the Bill allows for a smooth transition for existing schemes.
  Second, the Bill makes provision in Clause 2(5) for the continued payment of allowances in individual cases where an application has been approved and a commitent made to pay subsidy for a fixed period while the powers still stand

  1103
  but where the Bill's powers lapse before the fixed period of payment has ended. Under this clause, individual payments may continue for up to 18 months after the powers have lapsed, so that any commitments entered into may still be honoured, even if no further applications under the schemes can be accepted. This will enable us to ensure that all applicants can receive the same treatment.
  The House will note that the Bill extends to Northern Ireland as well as to Great Britain. The Government accepted some time ago the principle of applying Great Britain Bills to Northern Ireland. The Northern Ireland provisions are similar to those for Great Britain; the same powers are established, subject to similar restraints. The repeals of existing Northern Ireland legislation correspond with the repeals for Great Britain. The Northern Ireland provisions have been framed in such a way as to allow their exercise not only during the present period of direct rule but also by any future devolved system of Government in Northern Ireland. The Bill is neutral on the question of devolution. It makes provision for the powers to run whether there is devolved Government or whether direct rule is retained.
  This is a short Bill, but I know that the House will recognise its importance in providing fresh powers to deal with one of the major economic and social problems which we face. I do not claim that it offers a quick and easy remedy. What I do claim is that it is designed to help the Government not only to preserve jobs through temporary periods of slack business demand but to mount schemes which will encourage the expansion of employment.
  We know that schemes of both kinds can be highly effective. The TES has preserved some 389,000 jobs since 1975. The small firms employment subsidy, our first and necessarily small-scale venture into the field of encouraging the creation of new jobs through employer subsidies, has already resulted in the creation of over 5,700 extra jobs in the special development areas. The success of the small firms employment subsidy is extremely encouraging, and the Bill will enable us to develop it further. It will allow us to move rapidly and effectively to introduce alternative schemes if the EEC Commission insists on modifications to the TES.
  1104
  For all those reasons, I regard the Bill as essential, and I am pleased to commend it to the House.
  7.49 p.m.
  Mr. Barney Hayhoe: The Opposition will give the Bill a fair wind, although we are concerned at the wide powers which it gives to the Secretary of State. These may well be matters better dealt with in Committee, but the Secretary of State fairly indicated that these are extremely wide powers and, although the House has to authorise a continuation of the powers after the end of next year, as far as I can judge that is the only way in which the House becomes directly involved under this legislation.
  Although we welcome what the right hon. Gentleman said about giving Members of Parliament all the necessary details of any schemes introduced under the Bill, he did not say that it would normally be a matter for debate in the House before such schemes were implemented or, at least, concurrently with their implementation. I hope that he will think about that, since hon. Members on both sides, I believe, will want an opportunity to debate any major new scheme which is brought in under the Bill. I hope that some indication will he given of the Government's thinking before the end of the debate. If not, this must be dealt with in Committee.
  The Bill in some ways is a legislative monument to the Labour Government's failure to deal with unemployment. The Secretary of State has now been at the Department of Employment—first as a Minister of State and then as Secretary of State—during a period when there has been a more sustained rise in unemployment than at any time in history, apart from another period of Labour Government in 1929–31. It is a remarkable achievement that this Government should have presided over such a high rise. I hope that tomorrow's unemployment figures will show a fall. If one reads the smoke signals put out by the Chancellor of the Exchequer in his weekend speech, the indications are that the figures will come down. I shall welcome that.
  Mr. Booth: Will the hon. Member acknowledge that I have been in office during a period of remarkable achievement—a period when we have seen an

  1105
  increase in the number of people in employment in this country? This has been at a higher level than that sustained by the Conservative Government in 1970–74, and it has been sustained in the teeth of one of the toughest recessions that the world has seen.
  Mr. Hayhoe: Yes, indeed. But in international terms we do not stand up all that well. It is small comfort for someone out of a job to know that someone else down the road has a job. It is also small comfort to know that when one takes acceptable figures for international comparison we are in one of the worst positions of any country in the industrialised world.
  The Secretary of State referred to our earlier debate on unemployment and in that debate he referred to the 1977 OECD Economic Outlook. In arguing that in international terms our position was not too bad he said:
  "They are not my Department's statistics. They are OECD statistics. They examine the comparative position of unemployment on a far wider basis. According to those figures, Britain is seventh in the league of those with high unemployment."—[Official Report, 30th January 1978; Vol. 943, c. 68.]
  On page 28 of the OECD document there are two tables. The Secretary of State quoted from the table at the top of the page which is headed
  "Unemployment Rates in Selected OECD Countries."
  On that table we are seventh in the international league. The Secretary of State said that these were not his Department's statistics, but OECD statistics which examined the comparative position of unemployment on a far wider basis. But at the bottom of the table from which he quoted it is said:
  "These rates are not comparable between countries."
  He quoted from a table where the rates were not comparable between countries and he denied the evidence of the table at the bottom of the same page giving the adjusted unemployment rates in selected OECD countries. The figures in the second table have been adjusted to international definition by the OECD in accordance with schemes worked out over the years to give the best possible way of getting an international comparison. On these figures the position of
  1106
  the United Kingdom is one of the worst—in fact it is worse than any other OECD country save Canada.
  I have debated many matters with the Secretary of State over the years, and I have always respected the way in which he has dealt with the House and with Committees, but he demeans himself by quoting from a table which has a footnote saying that these figures are not comparable between countries.
  Mr. John Evans: Will the hon. Member accept that there are lies, damned lies and statistics? Those of us with experience of working in European institutions have come up against the problem of lack of common statistics, particularly in unemployment. The figures put out by the Community differ somewhat from those that the hon. Member has quoted. If this scheme is a monument to the Labour Government, all the employment protection schemes in the Community are a monument to its inability to solve unemployment problems.
  Mr. Hayhoe: That intervention in no way excuses the Secretary of State for quoting from a table in the OECD Journal in which there is a specific footnote that the figures are not comparable. He has also refused to quote and has denied the factual basis of the other OECD table. I accept that these statistics are not perfect, but surely the hon. Member for Newton (Mr. Evans) is not suggesting that the Secretary of State is going about it the right way by quoting figures to suit his argument, even though they are quite clearly not comparable. I hope that on reflection the Secretary of State will say that he acknowledges that these figures were not the best to quote for international comparison, and I hope that he will not repeat the error.
  Unemployment in this country is extremely serious and is likely to remain so for a considerable time. The measures we are discussing tonight are second best. Surely it is acknowledged on both sides of the House that the preferred solution and the only genuine answer to unemployment is the development of real jobs. Real jobs will come only with economic revival, and the prospects for this look somewhat dimmer today than they did a few weeks ago.
  Real jobs are created by profit, incentive and productivity and all these have

  1107
  been clobbered by this Government over the past four years. Small businesses particularly have suffered. The price in lost jobs as a result of Government measures over four years must be very great. Having said that small businesses have been clobbered, I welcome particularly the provision for the small firms employment subsidy. This will help repair some of the damage. Although it is very modest indeed compared with temporary employment subsidy, nevertheless, it is a helpful measure which I hope will be used more in the future so that a greater number of job opportunities will result from it.
  We facilitated the introduction of TES. An amendment was made to the Employment Protection Act at a very late stage. We thought that TES was to be temporary, but now it seems that it is fast becoming permanent. In particular industries, the importance of TES is very great indeed and in later contributions to the debate that point will no doubt be underlined.
  Some industries, and indeed some towns, are now dependent on the maintenance of the temporary employment subsidy, or at least on a provision that will have a similar effect. In regard to the Secretary of State's reference to the possibility of the TES being ruled out because of a failure to fall in with the competition policy of the EEC, he said that other policies and schemes would be brought forward. We shall examine them in reasonable fashion when they come forward. We have all seen in the Press references to methods by which workers can have their lower earnings, as a result of short-time working, made up to near normal levels, and there are many such schemes in Germany, Holland and Belgium, I believe. They are designed to have a somewhat similar effect to the TES, and in the judgment of some experts they might have fewer damaging side effects.
  I am not arguing that the temporary employment subsidy should be suddenly turned off—except in the circumstances we have indicated where the subsidy might be replaced by some other measures. Of course, that must be so. In view of the unemployment implications, the subsidy cannot just be switched off. But that does not mean that the TES or schemes to replace it should not be kept
  1108
  under critical review. Furthermore, the criticisms levelled at job subsidies should be answered.
  I am thinking particularly of the criticisms that were made in an article in National Westminster Bank Quarterly Review in February last year. John Burton produced a strong argument both for and against employment subsidy. Let me quote that article:
  "Taken on its own, the case for employment subsidies seems impressive. Employment subsidies appear as a major innovation in economic policy which have the wondrous ability to reduce unemployment, the social costs of recession, the budget deficit, and the rate of inflation, all at the same time.
  It is apparent, however, that these arguments are specious. Their supposed benefits are largely illusory. Employment subsidies are likely to increase rather than decrease the PSBR, and thereby also to increase rather than reduce the rate of inflation. The jobs that they are claimed to save or create will be at the cost of labour under-utilization or unemployment elsewhere in the economy."
  He makes out a sustained case of criticism of job subsidy measures of the TES kind. I hope that the Minister, in replying to the debate, will answer some of those arguments in detail—or perhaps they can be dealt with in Committee or in some other way.
  Mr. David Penhaligon: Will the hon. Gentleman say whether he supports that argument and, if so, what action he would take in the present circumstances?
  Mr. Hayhoe: I have already told the, House. I said that schemes should be kept under critical review. I am not totally convinced by the arguments adduced by Mr. Burton, but there are points of detail in that article which I believe should be answered.
  We seek to examine these problems—and this is true across the whole of the EEC spectrum and in the OECD countries—comparing one country with another. The approach contained in the TES is one of the most important elements in the present Government's approach, yet it has not been followed by many other Governments.
  This raises an important question mark. I am calling for a critical review to be made of the scheme and of replacement schemes. We need to know more about displacement effects. One Department of Employment official was reported

  1109
  in the Press as giving evidence on this matter at the end of last week. That official said—and I quote from The Times of 16th February 1976.
  "Although there was no exact information, a survey by the department among the companies concerned suggested that in about 30 per cent. of the cases the subsidy had saved jobs at the expense of making other workers redundant elsewhere."
  There is some evidence from the Department that 30 per cent. of the 389,000 jobs saved have been at the cost of jobs elsewhere. Therefore, there is a displacement effect and we must have more information. I hope that the Manpower Services Commission or some other body will be asked to examine the matter carefully.
  We need also to examine the substitution effect. Sometimes an employer will take on somebody and attract subsidy when he fully intended to take on an additional employee in any case. Recruitment subsidies have a substitution effect, which is not helpful in assisting overall job possibilities.
  I believe that we should also examine other research evidence. I refer to a piece of research carried out by PEP written by Mr. Daniel and Elizabeth Stilgoe. It makes an important contribution to our knowledge on this matter. I only wish that the survey had been carried out more recently because some distortions have entered into the matter as the original survey was conducted at a time when unemployment was much lower. However, that report contains some important information and a case is made out for seeking to direct the subsidies towards giving preferential treatment to those disadvantaged groups in society.
  We all know that many problems beset young people who are unemployed, but there are also considerable problems for older people and their families. We sometimes give insufficient attention to the specific needs and hardship that hit families where the breadwinner is in the late forties or early fifties. If such a man loses his job, the situation for him and his family can be extremely difficult. The plight of such a family is much more severe than that which faces the younger person.
  I believe that we should examine in the critical review to which I have
  1110
  referred those who are particularly put at a disadvantage in our society. My right hon. Friend the Member for Worcester (Mr. Walker) has drawn attention to the problems of young blacks in the big cities among whom unemployment is very much higher compared with their white contemporaries.
  I hope that the Secretary of State will pay attention to the disadvantaged groups when he is examining areas in which schemes can be brought forward. This approach is followed for the scheme aimed at giving help to disabled people.
  It is important in referring to the position of individuals to examine financial incentive. The present interaction of our wage, tax and social security systems is such that there is sometimes no incentive for people to work at all or the incentive is very small. My hon. Friend the Member for Norfolk, North (Mr. Howell) has drawn attention to this in a series of Questions, but I shall not quote him. Instead, I want to quote Professor Donnison who, as Chairman of the Supplementary Benefits Commission, has claims to be heard on this matter. In an important article in The Observer this Sunday he refers to a particular case. He writes:
  "Take a real case—an assistant herdsman with four children who earned £60 a week until he lost his job last year. He might now get a lower-grade job for £55 a week, or go hedging and ditching for the council for £38.50. If he pays his taxes and insurance contributions and draws the means-tested benefits now available to the low-paid family (family income supplement, rent and rates rebates, and free school meals and milk) he would be better off in any of these jobs than he is now on supplementary benefit."
  But here is the catch, because the professor gives the figures of how much better off. For the hedging and ditching job at £38·50, he will be £3·13 better off. If he goes to the job at £55 a week, he will be £3·69 better off. If he goes back to his old job at £60 a week, he will be £3·85 better off. So over a range of an increase in income of £21·50 a week, going from £38·50 to £60 a week, the only end result to him is that he retains in his pocket an additional 72p. There is something mad and crazy about an economic system which has that sort of penalty, that sort of surtax, upon low incomes.
  I believe that it is vital for us to find ways of restoring the incentive to work

  1111
  and to earn more. I must not trespass on our debate tomorrow on taxation, but obviously there is an overlap into that area.
  However, it is not just the incentive to work in financial terms which is important. There is also a need for more training. As a nation, we have to compete in world markets with countries which have a growing industrialised base such as South Korea, Taiwan, Mexico, Brazil, Singapore and Hong Kong. That competition will grow. In order to compete effectively, we must upgrade our work force. We must also improve productivity. If we leave our work force with low skills and if we keep productivity low, in world markets we shall suffer and many more people will be out of work as a result. So training is vital.
  I wonder whether more can be done to persuade small firms to help in the training programme. The Secretary of State knows that I was a toolroom apprentice in a small firm which acted as the toolroom for a number of engineering firms in the locality. It was a training environment which I found agreeable and instructive. It may be that more opportunities could be found for training young people in small firms, and I hope that consideration will be given to this.
  I also hope that there will be a careful look at what my right hon. Friend the Member for Lowestoft (Mr. Prior) suggested in a speech at Harrogate the weekend before last when he talked about the possibilities of an open "tech" of the air. Referring to what has already been done with the Open University and what has flowed from it, he suggested that we could begin to upgrade the skills and knowledge of our work force through such a scheme.
  One is plainly concerned about the increasing use of job subsidies if they harm new capital investment, as they can, and if they keep down productivity. It is vital for the future that we get capital investment flowing again in this country. It comes in phases. In the first phase it provides more jobs and it helps the development of new technology, whether it be in electronics, computers or anything else.
  But, as we are beginning to see in some of our big industries, what happens in the second phase of capital investment is
  1112
  that more is produced by fewer people and there is then a job loss. Unless that capital investment is allowed to bring higher productivity which in turn increases competitiveness and allows for greater earnings which create more wealth which can then be used to meet the growing demand for services of all kinds, we are doomed to slide down a path towards more and more lost job possibilities.
  We are grateful to the Secretary of State for his explanation of the Bill. The powers are very wide, and I hope that we shall be able to examine them in Committee. I hope also that we shall be able to find ways in which hon. Members can become more involved in looking critically at the various schemes which will be brought forward once the Bill becomes law. The Bill gives the Secretary of State wide discretionary powers and leaves the choice of what is done to him. We believe that these powers should be used very flexibly to support schemes which protect jobs at short-term risk.
  If there is a peak in redundancies, and it is possible to cut off that peak by the use of a subsidy, fine. But if difficulties go on at a high level for a very long time, I do not think that the job subsidy approach is appropriate. Certainly it is not a mechanism to provide permanent help for industries which are in decay and decline. The schemes must be tailored to encourage the creation of new jobs and to have a training content for the people involved as much as possible, and I believe that there must be special emphasis on small and medium-sized businesses.
  We want the substitution and displacement effects of these schemes to be monitored carefully and, if they are found to be damaging, to have the schemes phased out in such a way as not to damage abruptly the prospects of the people involved but so as to try to find other ways of helping which will not have those worrying displacement or substitution effects.
  The Opposition will be very reasonable in looking at any replacement scheme which is brought forward if the European Commission and the Government decide that the temporary employment subsidy has to be changed. Massive sums of taxpayers' money anyway are being used to pay people who are out of work. I want to see a growing proportion of

  1113
  such money being used for more constructive purposes than for paid enforced idleness. Even if this Bill helps to do that, as it should, nevertheless it is a second best measure and, if the powers are misused, it could even destroy the extra job opportunities which we all desire.
  8.19 p.m.
  Mr. Dan Jones: Unfortunately, I am as well qualified as anyone in this House to speak about unemployment. I was myself unemployed for a considerable period in the 1930s, so I know about it at first hand. What is more, unfortunately I represent a constituency which has been plagued both by unemployment and by a drift of population for all too many years.
  The hon. Member for Brentford and Isleworth (Mr. Hayhoe) attempted to chide my right hon. Friend the Secretary of State about today's unemployment level. He may be interested to know that in the 1930s, when the Tories were in power, I was one of 3 million unemployed. However, I do not want to go back to that period. I want to get on with the Bill as it has been explained by my right hon. Friend. Unfortunately, it is true—I say this with a contrite heart—that Hitler did more to remedy unemployment in the 1930s than the Tories did at that time when in power. Having said that, I go on briefly to speak about the Bill.
  My right hon. Friend has said that it is a short Bill. It might be short, but it is extremely important. I support my right hon. Friend to the full in bringing the Bill forward. In so doing, I hope that he will give full attention to North-East Lancashire. I hope that I carry the Opposition with me. I do not think that there is another area that could use money more providentially than North-East Lancashire. The argument of the hon. Member for Brentford and Isleworth would not apply. There is no doubt that in North-East Lancashire there is remarkable industrial stability. There is a remarkable ability to work. For those reasons the moneys would not be wasted.
  I probably know more about industrial economy than the hon. Member for Brent-ford and Isleworth. I, too, worked in the tool room. I learned a good deal
  1114
  as a result of consultation with the management. I hope that my right hon. Friend will consider North-East Lancashire with the sympathy that the area deserves. The money that should be spent there would not be a subsidy but a genuine investment. That is extremely important, as the hon. Gentleman said.
  When I went to Burnley some 19 years ago the first thing that I did was to study the background of the place. I was interested to find that it was the birthplace of the textile industry. What has happened? Both the Conservative Party and the Labour Party have probably spent millions of pounds of the country's money installing new plants in other parts of the country and denuding the place that gave textiles to this country and probably to the world.
  The record will show that in the early post-war years Labour Ministers backed the textile industry. They said "Please hold faith with textiles". They coined the corny crack that the nation's bread hung on Lancashire's thread. That was the phrase that was used. Since then the industry has lost about 200,000 jobs.
  I do not accept that the jobs have been killed entirely by cheap imports. It cannot be disputed that they have made a contribution to the loss of jobs, but but at the same time it must be realised that we have paid large concerns millions of pounds to build new factories in other parts of the country. In so doing, they have denuded the area that really and truly played the game with the post-war Government. That was at a time that I remember so well, when we were living substantially off Marshall Aid.
  I do not wish to be too partisan. In so far as I am able, I shall speak the truth. I believe that the truth is as I have stated it.
  In Burnley there are, in particular, three firms in trouble. Two firms are in the textile industry and one is engaged in engineering tool room activity. I shall make little or no reference to the tool room company because as a result of my work with certain Ministers I am now given to understand that Manchester is interested in the company. I think that it would be better if I were not to mention the tool room in detail but were to deal with the textile firms, taking that course in the hope that Manchester

  1115
  regional office will provide a solution for the tool room.
  My hon. Friend the Under-Secretary of State for Employment will know that since October 1977 I have been seeking assistance for a small firm that picked itself up when it was virtually on the floor. It used its own money to develop. However, it has been hit again by a series of snags. I am sorry that the firm has not been assisted before now. In the meantime, I have been to three or four Ministers to seek assistance. I refer to the firm of John Booth. It is a good firm and its employees were desperately sorry to leave. Their sorrow was not merely because they were leaving to join the unemployed but because they were leaving a firm for whom they had a good deal of genuine respect. I hope that even now, and as a result of the Bill now before us, the firm will be industrially revitalised and put into full production once more.
  The other firm is called Staflex. An hour before the debate began the local leaders of the Transport and General Workers Union contacted me to say that they still hoped that the firm would continue to operate. It came from London only recently, with all the assistance that the Government have beneficially provided for it, but it is within a short time about to be shut down again, or if not shut down, used as a distribution centre while production will be centred abroad. I hope that the Government will inquire deeply into the condition of Staflex. I am told by Transport and General Workers Union representatives that there could be a misuse of public money.
  I do not want to continue for very much longer. I have mentioned two firms and what they mean to my area. There can be no doubt that a pattern of industrial morality is practised in North-East Lancashire that is second to none throughout the country. I hope that the hon. Member for Brentford and Isleworth is listening. The hon. Gentleman seemed to suggest that there should be an even distribution of money throughout the country. I am not entirely in agreement. I believe that where money is spent it should be utilised in an economic manner. Evenness must go by the board in preference to that one important factor.
  I hope that when all things are considered I have said enough fully to justify the Bill and to make my right hon. Friend
  1116
  accept that certain areas should be given preference. I wish the Bill well and I shall be happy, if it is so desired, to serve on the Committee that considers the Bill. Of course I shall. Committee work is the hardest job in this place, and it is the ruddy job that most people evade. Let me say to those who laugh that I have been here for nearly 19 years. I have served on Committees for almost all those years and I am prepared to serve in Committee on this Bill. I wish the Bill well, and I shall do all that I can to help its progress.
  8.28 p.m.
  Mr. David Penhaligon: In common with everyone else who has spoken in the debate, I welcome the Bill. I especially welcome the indication that the small firms employment subsidy will be extended. That is the direct honouring of a promise that the Government made some time ago. I am pleased to learn that the necessary legislation is now being introduced.
  My reasons for supporting the Bill are obvious and common to those advanced in most parts of the House. We have an unemployment problem that can be described only as tragic. We have the mass waste of manpower and woman-power that no sensible nation can afford. Although I believe that the Government are fooling themselves with their statements of precisely how many jobs the subsidies have saved, they have no doubt saved a substantial number. That being so, I believe that a continuation of the subsidies is called for.
  I am keen on the extension of the small firms employment subsidy in part because of my personal experience in Cornwall. At the moment Cornwall has a male unemployment rate of 14·2 per cent.—far more, virtually, than any other area in the country. On a county-by-county basis, Cornwall now vies with the Western Isles, which are hardly a county, for the dubious honour of being the county with the highest level of unemployment in the country.
  The small firms employment subsidy could make a genuine and dynamic contribution to Cornwall, because it has a small firm economy. One reason why Cornwall has not attracted the great attention of some of our industrial areas regarding unemployment is that, to put not too fine a point on it, Cornwall

  1117
  has not had what I should describe as glorious bankruptcies—in other words, very large companies closing down. The reason is obvious. Cornwall does not have many large firms. However, it has now reached the stage of 14 per cent. male unemployment. I do not apologise for repeating that figure.
  The scheme enshrined in the Bill is almost unique in that it encourages new jobs, industry and ideas to come to fruition and offers long-term stable employment. We must look for long-term stable self-financing employment. Such employment does not look to any Government of whatever colour for subsidy. It is the kind of employment on which Governments live and on which the nation survives. Without such employment, there is little hope of an economic revival.
  Again, I ask the basic question: why do not such schemes as this apply to agriculture and tourism? I have never appreciated why there should be an enormous difference between the totally honourable professions of making parts for motor cars and growing turnips. I do not see why the House continually differentiates between the two activities. They are both import-saving and value-added type jobs. Surely they should be treated in a similar fashion. Much the same kinds of argument apply to tourism.
  It is not clear to which areas the small firms employment subsidy will apply. I am sure that it will apply to Cornwall, but other areas of substantial unemployment do not fall within the categories of intermediate development, development or special development areas. For example, my hon. Friend the Member for the Isle of Wight (Mr. Ross) has 9 per cent. unemployment in his constituency. By Cornwall's standards, he is lucky to have only 9 per cent. unemployment. But 9 per cent., for all that, is substantial unemployment. Therefore, I ask whether it is possible to consider this kind of subsidy on a local unemployed percentage basis as opposed to whether an area is or is not a development area. Certain areas with unemployment rates nowhere near the level about which we are talking often, for historical reasons, qualify for subsidies because they come within development or special development area status.
  1118
  The temporary employment subsidy has served a useful purpose. I understand and appreciate the difficulties within the EEC on this matter, but no doubt some sensible scheme will be worked out. I reiterate to a certain extent what was said by the hon. Member for Brentford and Isleworth (Mr. Hayhoe) who expressed what to me is the nearly acceptable voice of Conservatism. I noticed that he did not quote those of his right hon. and hon. Friends who are now in control of the Conservative Party. However, the hon. Gentleman made a constructive and useful speech. There was a lot in what he said which will repay consideration.
  Like the last three speakers, I was an engineering apprentice. That is a remarkable coincidence.
  Mr. Hayhoe: Four. The Secretary of State for also an engineering apprentice.
  Mr. John Evans: With respect, five.
  Mr. Penhaligon: It is now 16 years since I went to a company near my constituency and signed indentures as a fitter and turner apprentice. I am extremely worried about what is happening to apprentice training schemes. I was one of 85 apprentices taken on in one year. That same company is this year taking on only 19 apprentices.
  There are exceptions. The China Clay Group is training apprentices. The management has confessed that to a certain extent it does not know precisely what it will give these young lads and girls to do when they finish their training. However, the management regards it as part of its responsibility to society to take a full and active part in training a skilled workforce. Therefore, it is continuing to train apprentices. I only wish that a larger section of industry took the same responsible attitude. It is not good enough for industry to keep telling individual hon. Members that there are not enough skilled workers when that same industry is reducing substantially the number of apprenticeships that it offers.
  Mr. Max Madden: I am not entirely in agreement with the argument. Is there not an urgent need to insist that where public finance is given, whether under this scheme or under the Industry Act, a proportion of it should go to those employers who are prepared to offer training?
  Mr. Penhaligon: That is an interesting idea but it is not one to which I should be prepared to agree off the cuff.
  The Government could be more vigorous in pointing out to the private sector how it is failing in this respect. I say that as a vigorous supporter of the private enterprise economy. The Government cannot take on responsibility for everything. Some industries believe that training is the Government's responsibility. Certainly it is the Government's responsibility to ensure that the fabric of training exists, but it cannot possibly be the total responsibility of Government. Companies that provide their own schemes of training are more likely to provide the skills that are needed because they have the knowledge of what is required. The Government, who are trying to do their best, cannot have the day-to-day intimate knowledge of what is required.
  If we are to get out of this treadmill of unemployment, we must get the economy right. In the 12 months that my party has had real influence over the Government there has been a substantial improvement but not a solution. We must maintain our fight against inflation. Inflation is the root cause of much of the present unemployment. British industry cannot compete overseas. It cannot provide the jobs that we require to keep people sensibly employed if it has to operate within 20 per cent. or 30 per cent. inflation.
  I suspect the euphoria of the last few days. I welcome a figure below 10 per cent. but I hope that this is not regarded as a solution to the unemployment problem. A rate of 10 per cent. is bad enough. To take on a young man of 16 is a long-term investment in training. Inflation rates of this sort make such investment very difficult.
  I welcome the Bill. It is genuine attempt by the Government to alleviate the problems of the unemployed. It will make a useful contribution, but it is not in itself the answer. The answer is to get the British economy alive. The Bill will save several hundred thousand jobs and I therefore welcome it.
  8.40 p.m.
  Mr. Mike Noble: We have heard some interesting speeches this evening, particularly that by the hon.
  1120
  Member for Brentford and Isleworth (Mr. Hayhoe), who raised a number of interesting points and launched into a totally unwarranted attack on my right hon. Friend the Secretary of State. It is true, as my hon. Friend the Member for Newton (Mr. Evans) pointed out, that there are lies, damned lies and statistics. I am sure that each of us in this Chamber could go into the Library to look for statistics on unemployment and that we could each come out with a different answer. The hon. Member for Brentford and Isleworth would have done better to consider the causes of unemployment, particularly in those industries which are being threatened by the EEC's attitude to the temporary employment subsidy.
  The three industries mainly concerned—textiles, clothing and footwear—are victims of the kind of competition that the Conservatives and their friends favour. It surprises me that in the speeches we have heard so far there has been no word of criticism of the EEC in this whole business. Well, that will end now. It is significant that a substantial number of my hon. Friends are attending this debate and that all of them represent North-West constituencies. They are all hoping to catch your eye, Mr. Deputy Speaker, with the exception of my hon. Friend the Member for Bolton, West (Mrs. Taylor), who is unable to do so because of her position. My right hon. Friend the Secretary of State also represents a North-West constituency and he faces the same great difficulties that we face.
  What are the main reasons for introducing this enabling Bill, as my right hon. Friend called it? Of course there are new schemes to be brought in, but the crisis we face has been caused by the attitude of the EEC Commission to TES paid to the three crisis-torn industries of textiles, clothing and footwear.
  This Bill and the measures which will follow it come about not because TES is a failure. TES has succeeded through a world recession in protecting the jobs of 390,000 people in this country. Alternatives will not be introduced because the Government wish to end TES, nor because TES is too expensive. In terms of net cost, TES is probably one of the cheapest measures for preserving employment. To a considerable extent, the alternatives to TES will be introduced

  1121
  because the EEC is demanding the end of the TES as those of us who represent textile, footwear and clothing constituencies understand it. We know that the effect of that will be.
  Let us consider what immediate alternatives there are, other than a general reflation of the economy, in order to create additional demand. There will have to be further protective measures to tighten up on the Multi-Fibre Arrangement, in spite of the success of the initial phase of that agreement. We shall also have to tighten up on the massive flood of footwear imports from low-cost sources produced by slave labour, or virtual slave labour. The footwear industry is suffering a level of import penetration far above that faced by many sectors of the textile industry.
  Until we can deal with these problems I do not believe any of the ameliorative schemes put forward can be a successful alternative to TES. The immediate effect of ending TES would be to create additional unemployment in the textile industry. For almost four years we have argued the case for giving a measure of protection to this industry in the face of the world recession. I recall the words of the hon. Member for Brentford and Isleworth, who said that we must increase productitivity. I should like him to visit some of the mills in the North-East, as many of my hon. Friends have.
  I believe that there has even been an educational tour of some of the mills for Opposition Members. What did they see there? They saw highly capital-intensive industries employing a relatively small labour force of highly skilled people. But, despite their levels of technology, investment and skill, those industries cannot compete against nations where the wage costs may be as low as 18p an hour. That is the difficulty.
  That is what TES has helped to overcome. If it is withdrawn, we shall see a closure of firms and industries where confidence has already been shattered, and the creation of regional and sub-regional industrial slums.
  My constituency employs about 60 per cent. of the total labour force in textiles, clothing and footwear. A substantial number of the workers in those industries have been maintained in employment only because of TES.
  1122
  Although they may have been misled during the referendum campaign about jobs for the boys, about prosperity over the Channel being dragged into this country, about a queue of investors waiting at Calais at leap on the first ferry after the referendum, I am making sure that the workers are not misled about where the guilt for the ending of TES lies. It lies with the European Commission and nowhere else.
  Why does the Commission want to end TES? It says that it distorts competition. I am surprised to see that M. Vouel, the Comissioner in question, is a former general-secretary of the Luxembourg Socialist Party. He has said:
  "In the textile, clothing and footwear industries, the subsidy at present represents between 20 per cent. and 40 per cent. of the wages, and this is seriously distorting competition."
  In the Adjournment debate that I was fortunate enough to initiate on this subject, I said that as a Socialist I was in business, where competition led to unemployment and the creation of regions and sub-regions with no alternative sources of employment, to distort competition. I believe that that is a common strand on the Labour Benches.
  We had a three-year fight with the European Economic Community—and initially we had a big enough fight with our own party—to persuade it that something must be done about the distortion of competition caused by low-cost imports. We have had a substantial victory for some sectors of the textile industry but only a partial victory for the industry as a whole. We still have to deal with the problem of low-cost competition distorting our industrial structure in footwear.
  Therefore, I ask "Where are the brave words of the pro-Marketeers tonight?" The hon. Member for Brentford and Isleworth, who I assume supported his party in the Lobbies and in the country in the referendum campaign, did not once mention that it was the EEC that was bringing an end to TES. When the hon. Gentleman criticised my right hon. Friend the Secretary of State over the level of unemployment, he did not mention that unemployment is a common feature of the whole EEC and that in many EEC countries it is getting worse. He did not mention that the end of TES is simply

  1123
  another example of increasing bureaucratic interference in this country's affairs.
  We recall what the hon. Gentleman and all the other pro-Marketeers had to say during the referendum campaign about the sovereignty of this House. My hon. Friend the Member for Newton asked my right hon. Friend a very important question: "Will you be able to bring forward schemes that you do not have to present to the European Commission?" We know my right hon. Friend's views about the Common Market, and we applaud them. My right hon. Friend had to admit that before any scheme to preserve employment can be introduced in this country, it will not only have to meet the approval of this House but be approved by the bureaucrats in Brussels.
  I do not recollect any of the pro-Marketeers going around my constituency during the referendum campaign saying that any measures that we in this country take to preserve employment would have to be subject to the approval of Brussels, to the approval of non-elected Commissioners in Brussels. This is the nub of the argument. It is significant that, while we are being hammered, there are many employment schemes in other parts of the Community. One must ask why our scheme has been selected as the scheme to be hammered.
  In an article on 2nd February, New Society said:
  "with over 6 million people jobless in Western Europe, the Commission has yet to come up with a programme of action to tackle the crisis, but it finds the time to threaten a member State with the law for helping to save some people from losing their jobs. In fact, every member State now uses employment subsidies as a matter of course to deal with the jobless. Most are no more than cosmetic, but so far none has raised a squeak from Brussels."
  Perhaps it is because they are no more than cosmetic that accounts for the fact that they have not been as yet hammered by the Commission.
  The important question to ask is how many of these other schemes are strictly in accord with the Treaty of Rome. Are the schemes in Belgium, Denmark, Italy, Holland, West Germany and France strictly in accordance with the Treaty of Rome? Is it not time that instead of fiddling about with the harmonisation of mayonnaise and some of the other
  1124
  chunks of pseudo-legislation that appear from the Commission in Brussels the Commission looked to the real issues that affect workers in the Community, including the question of unemployment? If the Commission could not accept this scheme operating in one country, why could it not decide that it could be a suitable scheme to introduce throughout the Community?
  Therefore, we say to my right hon. Friend that he must stand firm in the face of this bureaucratic pressure. In the light of what was said in the referendum campaign by the pro-Marketeers, the people of this country will not understand that the Government can be pushed about. We must stand firm. We are encouraged in that stance by the attitude of the TUC, as indicated in the letter last week from the general secretary of the TUC, Mr. Murray, to the Prime Minister. My right hon. Friend can rest assured that the workers in British industry will support him in a firm stand, but they will not understand if the Government back away.
  There are two other points that I wish to make. I suggest that this attitude to TES may be a signal that there is something more sinister afoot in the EEC. After all, three industries have been selected for treatment. Textiles and clothing can virtually be counted as one industry. Footwear is another. My right hon. Friend will be aware that some considerable time ago the Government produced a scheme for making the footwear industry more efficient and more able to meet the competition that it currently faces from abroad. What has happened to that scheme? Is it somewhere in a civil servant's desk in Whitehall? No, it is in a pigeonhole in a bureaucrat's desk in Brussels. That is where the problem is. That is where that scheme is being held up. It was intended simply to help the industry to become more efficient.
  However, I come to something even more sinister. I have in my possession a letter from a senior official of the Common Market. Last week I sent my right hon. Friend a copy of this letter. The official says:
  "I understand … that you have inquired recently about the Commission's 'liste noire'."

  1125
  Before anyone leaps to his feet when I translate "liste noire" as "black list", let me say that it is not the black list that everyone has been getting excited about recently. It is the Commission's list noire for the textile and clothing sector. The letter continues
  "Enclosed please find a brief note setting out the current position. I should emphasise that the refinement of the black list is an ongoing operation and that this document does not provide a definitive guide."
  What does it say? It should be noted that this is a Commission document, not a document from the Council of Ministers. It states:
  "Where available guidelines are concerned, the Commission directs its departments to keep to the general assessment set out below for the textile products listed:
  (a) synthetic fibres and yarns ……
  any financial intervention by the Community or the States which would merely tend to increase present capacity should be avoided."
  It says with regard to women's pantihose that
  "any financial intervention by the Community or the States whose effect would be to increase production capacity should be avoided."
  It is the same for men's shirts. With regard to men's trousers it states that
  "any financial intervention should be limited to investment concerning articles at the top of the range and with a high added value."
  It is the same for men's briefs. It states in relation to cotton fabrics that
  "all financial intervention in favour of mass product manufacturer (unbleached and standard printed) to be avoided: terry towelling and crepe fabrics to be taken into consideration."
  This is a document which has been with the Commission in Brussels since December 1976. But I can tell my right hon. Friend that it has been working, because when the Textile Industry Training Board made application for training grants for people in these sectors of the industry it was told that these parts of the grants discriminated and would not be allowed. But the Commission refers to all financial intervention, not simply to training grants.
  I should like to know how far the Commission thinks that it can push its luck on issues of this kind, because these are serious constitutional issues. It is not simply a question of an industry; it is a question of an unelected body in Europe interfering in the affairs of this
  1126
  country without the issue coming before the House of Commons.
  I should like to make one other observation. What if the Government finally have to give way in the struggle to maintain temporary employment subsidy as we know it now? What will be the result? In my view, as has already been stated, it will inevitably mean, although I hope not, an increase in unemployment in these industries which are already crisis-ridden.
  The hon. Member for Brentford and Isleworth mentioned that we should perhaps think of retraining. I can assure the hon. Gentleman that if we retrain someone from the footwear industry in my constituency to go into the textile industry, we shall find someone going from the textile industry into the footwear industry, because there is nothing else. That is the economic base of my constituency. I know that many of my hon. Friends in the North-West are in the same situation.
  If it is pointless spending subsidies to maintain jobs, it is far more pointless to train people at the age of 15 or 50 for jobs that do not exist. What situation will that create for the older workers in the textile industry and the indigenous labour force? What about the large number of immigrant workers in the industry? The problems of retraining are enormous.
  As I have mentioned, there is a lack of opportunity. Where will the EEC find the jobs? What will its piddling little Regional Fund do to create new employment in these areas of the North-West? I suggest to my right hon. Friend that if we are unsuccessful in the battle for temporary employment subsidy, he should stand firm in the face of the Commission and demand a redundancy payments system at least equivalent to that being introduced for shipbuilding workers.
  My hon. Friend the Member for Burnley (Mr. Jones) described it as industrial morality. People in the textile industry put on their clogs in the morning, "go down to mill" and do a hard day's work. We have an industrial record second to none. In fact, my view is that had the workers been a little more militant, they would not have been shoved around so

  1127
  much and would not be in their present position.
  I do not begrude the employees in shipbuilding—nor do the textile workers—any additional redundancy payments that they receive, but if the Commission proposes to take away the livelihood of my constituents it must create other alternative work, or the means whereby the workers can be sustained in unemployment.
  I ask my right hon. Friend not to give way on this matter. He said in a letter to me that he would accept an alternative only if it was at least the equivalent of TES. We applaud him for that. But will he tell us what he means by "equivalent"? Who has it to be acceptable to—the workers and employers in the industry, or the Commission? Will he ensure that the equivalent is at least as successful in defending jobs as the TES has proved to be should we be forced to drop the TES?
  9.0 p.m.
  Mr. Fred Silvester: The hon. Member for Rossendale (Mr. Noble) has rightly drawn the attention of the House to the fact that many of those taking part in the debate are from the North-West or from textiles. It is not surprising that he should have devoted most of his speech to the problems of textiles and footwear. He will acknowledge, I am sure, that, to some extent at any rate he has had a good deal of support from hon. Members on both sides of the House, in particular in his earlier battles with the Commission about textiles. But he may find that company parting from him over some of the things he says.
  I fully understand why the hon. Gentleman should take the view he takes when 60 per cent. of his constituents are employed in these industries. Who would not in that position? But it is a wider matter than he suggests. I do not think that it will help the House on this Bill if we confuse the problems of textiles and footwear with the powers of the EEC. Of course those powers come into it, but I wonder whether the hon. Gentleman would take the same view, if, for example, the footwear industry in France were suddenly to receive a subsidy which had a major effect upon the price of footwear
  1128
  within the Community. Of course he would take a different view.
  The Commission merely expresses a view, and the Government have to take a position with regard to negotiations with the Commission. They will have to express that position to the House, and we shall no doubt have an opportunity to discuss it if the Government follow the words they have uttered before about bringing Community decisions before the House.
  It should be borne in mind that some of the problems discussed by the hon. Gentleman arise not from within the Community but from the relationship of the Community with other countries. To get those two factors confused, though it is understandable in the case of these three industries, will lead to difficulty in discussing the Bill.
  The temporary employment subsidy is not merely used for these three industries. They have greatly benefited, but 15,000 or 16,000 jobs in the engineering industry have drawn on the subsidy, while in the distribution industry 4,000 or 5,000 jobs have been affected. The subsidy is widely spread throughout industry, and of the number of jobs saved, about one-third are in the North-West.
  It is important to get the situation of these three industries into proportion. It is right that the hon. Gentleman should raise their situation at every conceivable opportunity, and to the extent to which I agree with him I will support him. But let us for tonight turn attention to the slightly wider matter, because it is not to be decided solely on the problems of Rossendale and the textile industry.
  We are being faced with what is becoming a permanent temporary employment subsidy. The hon. Member for Truro (Mr. Penhaligon) said that he was very pleased about the small firms employment subsidy. So am I. One of the interesting things about it is that it is designed to create new jobs rather than to hold on to old jobs. Perhaps I may take the argument of the hon. Member for Rossendale a little further. He asked what the Community's piddling little Regional Fund would do to get new jobs into Rossendale. That is the real question at issue.
  The question is not whether we can continue to prop up declining jobs year

  1129
  after year but whether we can get new jobs to come in and provide a shelter for the period of time in which we need to bring in those jobs. The temporary employment subsidy is a shelter. If we keep the shelter year after year it becomes a fortress, and the difficulty is to maintain the distinction between the two.
  The Secretary of State has introduced a Bill which, as I understand, will prolong these schemes for roughly 18 months, and in lumps of 18 months thereafter. The temporary employment subsidy was introduced in October 1976 and is now to be prolonged until 1979, so that we are already involved in a three-year stint.
  We are certainly faced with a situation in which a large number of young people are coming on to the labour market. I think the figure given was 170,000 a year. That is a distinct problem. It is another matter to keep people in jobs that are basically unsound. The usefulness of the Bill may be judged by the extent to which it is able to divert the subsidies for which the Secretary of State is seeking permission to those jobs which, as the Bill says, will enlarge the labour force by taking on new employees.
  It is very important for us to assess the effectiveness of the measure. There was a certain amount of ribaldry about the comment that we must assess these things. A number of attempts have been made to look at the relative cost. According to one of the papers in the Library, the temporary employment subsidy seems to be working out at about £1,000 a job. An Answer to a parliamentary Question on 31st January indicated that the estimated total on an accumulative basis at December 1977 was £384 million. I think that the Minister quoted the figure for the people who benefited at 399,000; therefore it is about £1,000 a job.
  The Under-Secretary of State for Employment (Mr. John Golding): I think that what we have to take into account is the difference between the net cost and the gross cost of the scheme. We would certainly not say that the net cost of the temporary employment subsidy was £1,000 per job.
  Mr. Silvester: I shall come to the net and gross cost in a minute, but I am talking at the moment about the gross
  1130
  cost. The job creation scheme seems to have worked out at about £1,500 gross per job.
  Mr. Noble: Does not the hon. Gentleman agree that it is not simply a question of comparing the gross and net costs of the schemes but, as he mentioned a moment ago, the cost of bringing in alternative employment? Presumably alternative employment would have to be in modern capital-intensive industry. Would not the cost, therefore, to create a new job be far greater than to give temporary protection, albeit at £1,000 a job, to an existing job?
  Mr. Silvester: I think it would be better if I were allowed to continue with my speech. They are all related. It may simplify matters if I do not go through the whole list, but the gross cost of the various schemes varies from about £200 to about £1,500 a job. Therefore it is important to make an assessment. I understand that a Select Committee of the House is now looking at this matter and going into that point. It is of great importance, therefore, that we take the opportunity provided by the Bill and by the debate to look at the relative importance and efficiency of these different categories.
  I turn to the point made by the hon. Member for Rossendale in an intervention, using figures from the Secretary of State's speech in the recent employment debate. It seems that selective regional assistance from March 1974 to 1977 had cost £307 million for 204,000 jobs. That is about £1,500 a job. That is the capital-intensive situation.
  Mr. Noble: The hon. Gentleman has misunderstood. That is purely the State's contribution. To replace a job that has disappeared would need an investment contribution. There are examples of £500,000 being spent to provide a job. Courtaulds at Belmont spent £12 million to produce a handful of jobs. One cannot say that the cost is to the Exchequer alone.
  Mr. Silvester: I am not saying that. Perhaps it would be better if the hon. Gentleman would not keep interrupting me. I recognise that this is the State's contribution. I recognise, too, as we all have over many debates, interventions and Questions, that one can quote

  1131
  examples of things being done on a grand scale. In some cases the cost per job is astronomical. In one case in Scotland the cost was far greater than that paid by ICI.
  The difference is that with regional assistance we are talking about jobs created in new growth industries. They are coupled with private investment, which at least provides a prima facie case that somebody else also thinks it is a worthwhile investment. It is important to make that distinction. We are talking about large sums of public money, and the problem with the Bill, with the exception of some of the schemes which I hope will develop such as the small firms employment subsidy is that we are talking about subsidies used to hold on to jobs which are perhaps on a slippery slope, compared with money put into jobs which we hope will be in growth industries.
  Let me quote what the Secretary of State said on 30th January. He will no doubt recall this:
  "We have had a survey of trends in 82 manufacturing industries and this has revealed that the 10 industries with the largest growth rates of productivity increased their total employment by 165,000 during the period when total employment in the 82 industries fell by more than 600,000."—
  The right hon. Gentleman went on to suggest that
  "the great competitiveness caused by productivity growth may be a larger stimulant to employment than the direct short-term contractionary effects of productivity growth on employment."—[Official Report. 30th January 1978; Vol. 943, c. 60–1.]
  The right hon. Gentleman accepts that, we accept it and most people accept it. I think that we are therefore faced with the situation where we are seeking, as far as is humanly possible to use those sums of public money that are available for the assistance of industry to go into those industries that show most potential for growth and are most likely to provide a long-term base for future employment, not only for those who may have to be retrained, not only for those who are coming on to the market, but for those who are a long way down the pipeline and will have to depend on those growth industries for the future.
  One of the most important features of the debate and the way in which the Bill will be used is the balance that the Government achieve between money devoted
  1132
  to the temporary expedient compared with money devoted to long-term growth. That is the test by which we should judge this policy. It is not that we should judge the policy by the document apparently put out every month, for which I thank the Minister, which shows the list of people who would otherwise be unemployed. It is the balance between the amount of money that is spent and produces long-term jobs compared with the amount of money that is to be devoted to the short term.
  Let me now consider the point made by the Minister about net and gross costs. It is true that one can offset some of the costs involved in this kind of expenditure by saying that one gains taxes when people are at work, that one saves having to pay unemployment benefit, social security, and so on, and that in addition goods are produced. I accept that and it is a reasonable conclusion.
  There is a problem about that. I do not quite know how to describe it without my hands, but it is a kind of divergence, because that argument is particularly true during the early stages of unemployment. The Manpower Services Commission published an analysis of the cost of unemployment. It made the point that in the first six months the cost of unemployment might exceed the cost of temporary employment. That is less true as time goes on. Conversely, it is true that the more one has a chap at work in an industry which is growing, the more goods he will produce. The effect is cumulative.
  Therefore, although putting money into the temporary employment sector for immediate purposes looks quite good value, the value grows progressively worse in relation to money which goes into a private concern or a public industry which makes a profit. That is the problem which we face.
  Perhaps I am going on rather too long, but I wish to establish the point that, in assessing the value of the Bill, it is easy to say that sums of money now put into temporary employment subsidy keep people off the streets, cutting down the vandalism and doing all the things which we agree are better than having people on the dole, but it is a short-term expedient because the divergence between that gain and future loss increases as time goes on.

  1133
  My hon. Friend the Member for Brent-ford and Isleworth (Mr. Hayhoe) made the point—we have made it several times from these Opposition Benches—that eventually these sums are paid out of the taxes and wages of other productive industries. Although, as far as I know, there is no direct analysis showing the number of compensating jobs lost against jobs "saved"—I put the word in inverted commas—there is no doubt in my mind and in the minds of many that there is a loss and a weight upon other industry, although one cannot quantify it.
  It is important that that weight should not lie there too long and that its specific purpose should be borne in mind. We lose sight of that purpose the moment we tip over into accepting it, as the hon. Member for Rossendale would wish to do, I think, for a different purpose, to prop up different social or industrial structures apart from the problems which we currently face. These are that there is a recession and a sudden influx of new people coming on to the labour market, the two happening to coincide. We must not lose sight of what should be the true aim. I agree that it is reasonable to seek to cushion the effect of the present problems, but if we seek to go beyond that point and perpetuate the system, we run into danger.
  In my view, the Bill presents that danger of going on 18 months after 18 months after 18 months, and herein lies a developing problem for our country's resources.
  9.17 p.m.
  Mr. Doug Hoyle: I have never heard a better prescription for the death of both the textile and the footwear industries than the proposals just made by the hon. Member for Manchester, Withington (Mr. Silvester). If it had not been for the temporary employment subsidy, both would have been in far more difficulty than they are now.
  I should not see the point of helping those industries with the MFA and the temporary employment subsidy, since we all know that they are suffering not just from low cost imports but from a world recession and a depressed market in this country, if we did not at the same time recognise that the moment the market begins to recover and we can see our economy start to take off again we shall want those industries here. We shall
  1134
  want a base on which to build. We are, therefore, providing that base or platform below which those industries should not fall so that we can take off again, recognising that both industries are essential to our country. If they were both destroyed tomorrow, we should have to recreate our footwear and textile industries.
  The hon. Gentleman completely missed the point in what he said. It was difficult at times to follow what he was getting at, but he plainly missed the point that it is essential that we help these industries. Indeed, I congratulate the Government on the measures which they have taken, and this is one reason why I am glad to endorse what my hon. Friend the Member for Rossendale (Mr. Noble) said about the temporary employment subsidy.
  The TES has worked extremely well. Moreover, the fact that there has to be agreement for both employers and trade unions to make a joint submission has been another merit of the scheme.
  What is more, over 50 per cent. of the jobs preserved by the TES are in the footwear and textile sectors. In addition, it has been effective in preserving the jobs of females not only in these industries but in industry generally. I think that 48 per cent. of those who are benefiting from the temporary employment subsidy at present are women in industry, and we cannot afford to lose their skills.
  What concerns me is that the Secretary of State is looking again at the temporary employment subsidy, and he tells us that we may have to modify the scheme. I am forced to the conclusion, as was my hon. Friend the Member for Rossendale, that we should not have been looking at it again if we were not under pressure from the Common Market Commission, which, as I understand it, has drawn attention to Article 93(1) of the Treaty of Rome, saying that we must give warning in advance of any proposal to continue the scheme after 31st March. It also says that the scheme has distorted competition within the EEC.
  These are matters about which the people of this country have a right to know. They should be told the amount of pressure that is being exerted on the Government by the Commission. Should we just sit down and accept the proposals and modifications put forward by the

  1135
  Commission, which would cost 182,000 jobs at a time of high unemployment? The public has a right to know the pressure being exerted by the faceless bureaucrats behind the desks at Brussels.
  Are they demanding the right to vet each application for TES? No hon. Member who supported the Common Market argued at the time of the referendum that this was a situation in which we would find ourselves. Nobody suggested that we would not have the right to put forward our own employment schemes. I am sure that many people who voted "Yes" in the referendum would not have done so had they known that this could happen.
  If we carry on this scheme after 31st March without the permission of the Commission, do we run the risk of being taken to court by the Commission? If we persist with our policy, might I be visiting my right hon. Friend the Secretary of State, along with leading civil servants, in a prison cell? I hope that that is not the state of affairs we are facing, but I believe that it is a possibility because of the degree of pressure being put on us by the Commission. It is intolerable. This may be General Election year, and I am sure that the electors would be very interested to hear this bizarre state of affairs. I believe that we are being treated as the poor relations of Europe on the question of job preservation.
  I have examined the measures that are being taken in other EEC countries. Belgium has given grants and loans to her clothing and textile industries. Why has there not been an objection there? Ireland also has an employment incentive scheme by which a £20 a week premium is paid for each extra adult worker taken on and £10 for each extra school leaver. There is also a tax incentive scheme whereby firms pay 25 per cent. instead of the 40 per cent. rate of corporation tax. Are these schemes not distorting the market? In Denmark there is a young people's recruitment subsidy by which local authorities pay 90p an hour for up to six months to employers. West Germany also has recruitment subsidies. Why are these countries allowed to continue with their schemes? Why are we being picked on to be punished in this way? Why does not the Commission turn its attention to other member States?
  1136
  No one can say that TES has not been worth while. It has been most beneficial, particularly in areas such as North-East Lancashire, where it has helped the clothing and footwear industries. Without the scheme we would have been in great difficulties. The unemployment rates in textiles and clothing would have been far higher and the situation far more serious. Failing their obtaining employment in their own industry, what would have happened to such workers. There are no other jobs available in the immediate area, and they cannot move to other areas because unemployment exists in those areas, too. We also know that there is unemployment in the EEC countries.
  The hon. Member for Brentford and Isleworth (Mr. Hayhoe) challenged my right hon. Friend the Secretary of State and spoke of the record in other countries in Western Europe. However, he did not mention the fact that West Germany, which is the country with the lowest rate of inflation in Europe, has solved its problems by sending home on short time over 1 million workers. Is that how the Opposition propose to solve this country's problems? Before this debate ends, the Opposition should come clean and say whether they are in favour of the temporary employment subsidy. I believe that the workers in the clothing and textile industry have a right to know the answer.
  Despite the help that has been given to the textile industry in the form of the MFA and other assistance, which we very much welcome, the industry is by no means out of the wood. That argument applies to both textiles and footwear. There is one mill in my constituency which finds itself in difficulty, and unless something drastic is done it will close in March and there will be another 320 people out of work. However, if the position is held for a few months and if, as is expected, we shall have a good Budget, we shall require to employ those workers who may shortly be out of work. It is nothing short of criminal to remove the crutch of TES from the industry. Therefore, we hope that the Opposition will give their clear view on this matter.
  Despite EEC pressure on the United Kingdom Government, I believe that we cannot afford to lose the TES in its present form. We cannot afford to see

  1137
  an increase in the numbers of unemployed. We must do all we can to preserve jobs in the textile and footwear industries. There is a general feeling that the country has now turned the corner, but it would be wrong at this critical time to cause more unemployment in these two basic industries.
  My message to the Government is that they should stand firm against the bureaucrats in Brussels who are answerable to nobody. I hope that my right hon. Friend the Prime Minister will be prepared to stand firm and will not allow unemployment to grow in our basic industries. We must tell the EEC that it is that body that must think again rather than us. We must make clear that we believe that the TES has served our nation very well. When we are considering a scheme, we must consider whether we can give benefit to those concerned that have already had the advantage of TES because there is still a need to give help.
  I hope that we shall do all we can to ensure that there is a future for the footwear and textile industries. They have modernised themselves and we must play our part in ensuring that there is a future for them. To this end we shall not tolerate any interference from the bureaucrats in Brussels.
  9.30 p.m.
  Mr. Ivan Lawrence: There is an atmosphere of depression over the Chamber which I hope I may lift a little. It comes about because we are debating yet another measure of first aid when we know perfectly well that first aid never cures the underlying sickness.
  Just as Government supporters believe that it is a good idea to continue these subsidies—and the Opposition agree with them—we agree only because we know that it is cheaper in financial terms as well as moral terms to have these subsidies than not to subsidise the jobless in this way. On the other hand, we all know that taking away vast sums of money to deal with first-aid measures, in the long run makes worse the underlying problem.
  We know that massive unemployment is here to stay unless extraordinary measures are taken. It is no longer a matter of the old trade cycle. The Secretary of State would not answer me
  1138
  when I asked him to forecast how much unemployment there was likely to be up until the end of 1979. I do not blame him for not giving the answer. The reason is that the answer is too depressing. Our level of unemployment will go on rising. It is not just a matter of our being unable to solve some of the present problems. It is also a matter of the 1 per cent. increase every year added to the employment register, whatever the Government do.
  One of the most worrying aspects is the demoralising effect that it has upon young people. Today, there are six times the number of people under 20 years of age who are unemployed that there was four years ago. What is more, there are 28 times as many school leavers unemployed. We are nearing a situation where we are making work recidivists—people who have never learned what it is like to leave school and go into a job.
  Mr. Dan Jones: Can I persuade the hon. Member to realise that ever since the war years to this very day there has been a shortage of skilled people? Is not he prepared to agree and to offer to the Secretary of State the idea that we train these young people as apprentices so that their future can be consolidated and thus make employment feasible?
  Mr. Lawrence: I agree with the hon. Gentleman and perhaps later in my speech I shall be able to come a little closer to taking up some of his remarks. However, I was making the point that our young people are becoming work recidivists. The Sub-Committee of which I am a member has been touring parts of Britain, and we have discovered that some of the regional problems of unemployment are horrific. We have heard representations from the North-West, but I might also mention parts of Wales.
  It is not just the regions which are affected in this way. It is also certain sectors of industry, including clothing, textiles and footwear. In any event, I want to turn the discussion away from the North-West—the North-West can look after itself—because the point was made and is always made by the Secretary of State that this is part of a general malaise throughout the world.
  The fact is that we as a country were doing better than other countries and that

  1139
  now we are doing worse. Even if there are differences about the methods of calculation, there are also similarities. For example, in all the countries more people register as unemployed than are actually unemployed. But the general position is that we are doing worse now, and we should ask ourselves why, not just to make party points but to see what the Government have done wrong. That might help us to see what the Government ought to do and whether what they are doing now should be extended and improved. I am referring to the temporary unemployment measures, especially the temporary employment subsidy.
  I do not accept that which is always being said by some Labour Members in respect of North-Western textiles, that the fault lies with the Common Market. It is true that the Commission is trying to stop the temporary employment subsidy, and it may well succeed. It is feared by the EEC that the subsidy will be used to export our unemployment into the other member countries. That fear can be understood. I am not sure how much it is an argument about unemployment and how far it is an argument about fisheries. When dealing with the Common Market one never knows what the real argument is about.
  I have no doubt that the Government have waiting an alternative scheme that will be acceptable to the Common Market when the temporary employment subsidy is phased out, which will, I am sure, fulfil the wishes of Labour Members.
  Mr. Madden: As we currently have a trade deficit with the Common Market of about £2 billion and a cumulative deficit since we joined of about £10 billion, does the hon. Gentleman agree that it is a somewhat bogus argument about exporting unemployment to the Common Market through any measures that we may take?
  Mr. Lawrence: Some of our industries that are flourishing are in competition with industries in member States, but that is not the real problem. It is not the Common Market countries that are draining the textile resources but those in the Far East. The Common Market countries are not draining footwear resources. That is being done by the Communist bloc, Portugal or other countries outside the EEC.
  1140
  Labour Members must appreciate that the Common Market Commission is trying to make everything fair among member States within the system. It is trying to do so within the wall of the Common Market. Therefore, it is to some extent irrelevant to continue to rehearse the anti-Common Market argument where issues arise outside the wall, although I understand Labour Members taking that position in their concern with the rejection of the temporary employment subsidy. However, they need not be preoccupied with that. It is a problem that is separate from the root cause of that which is troubling the country.
  I turn to some of the things that I believe the Government have been doing wrong. First, instead of keeping money in industry and in business hands with incentives for investment, they have taken money from those who would invest it and from where it might generate new and more employment. Instead, they have given it to industries to stop unemployment.
  Mr. John Evans rose—
  Mr. Lawrence: I am off the Brussels argument. The hon. Gentleman keeps on getting up and down like a jack-in-the-box. I ask that I might have the opportunity to develop my argument.
  If we take money out of industry's hands, from which it might be invested to generate new and more employment, and we give it to industry only to stop unemployment, we are wasting it. In that way it is going down the drain. It is taken from the creation of new jobs to maintain dying jobs and we are sacrificing the longer term for the shorter term.
  Mr. John Evans: Does the hon. Gentleman recall that during the lifetime of the previous Conservative Government, who took steps to do just what he is arguing, private industry invested largely in property and office blocks, and that a great deal of that investment was not even in this country?
  Mr. Lawrence: The hon. Gentleman is wrong from the standpoint of his own industry. During the period of the previous Conservative Government the amount of capital invested in the textile industry was extremely high. Under the

  1141
  last years of the Conservative Government the non-use of investment by industry had a great deal to do with a low level of productivity.
  Mr. Hoyle: Not in textiles.
  Mr. Lawrence: No, not in textiles. I have made a difference between textiles and other sectors. However, the criticism of the hon. Member for Newton (Mr. Evans) does not apply as textiles was an area of high investment.
  We are talking of putting money into the hands of industry which it will invest, provided there is increased productivity. That proviso is important. A 1½ per cent. return on capital is pitiful. It is proportional to the low level of productivity. Since that is a fault—that is, the taking away of money from the hands of industry—the Government should put their mind to it. I believe that they are putting their mind to that problem, because they have given some hope for thinking that there will be further tax reductions. That would be a good. The Government—any Government—will stimulate employment if they do something about the incredible burden of taxation.
  Secondly, there is the question of the destruction of small businesses. The numbers of liquidations and bankruptcies have doubled since 1974. The figure was between 6,000 and 7,000 in 1976. That was due partly to high taxation and to high interest rates. We do not know how many jobs have been lost through the collapse of small businesses, but a substantial number have been lost. Another reason has been pay restraint. There has been a shift from the employment of people in small engineering firms in my constituency to the National Coal Board just up the road which has been able to offer higher incomes to the same people if they leave their jobs. That depresses small engineering firms because they cannot find skilled workers. It also reduces productivity and eventually the employment potential of such firms.
  To the extent that the Government are proposing to take special measures, are repenting and being converted to an understanding of the importance of small businesses in the employment sector, the introduction of the small firms employ-
  1142
  ment subsidy is good and is to be encouraged. The Government are beginning to take steps to restore the position. The destruction of small companies has meant a large decrease in the numbers in employment.
  The third problem is the crippling effect of legislation and non-legislative sanctions—for example, the threat of the Government black list and the arbitrary procedure that we have debated ad nauseam in the House in the past week. Such action leads to a lack of confidence and eventually to a loss of jobs. The Employment Protection Act has stopped many employers taking on workers at the margin because they feel that they may not be able to hold them in their jobs, yet they will have to pay out large sums of money at the end. Therefore, the Government must stop that kind of nonsense. Industry must be allowed to get on with its job without impediments such as those parts of the Employment Protection Act which are so objectionable.
  We have recently debated the devaluation of the green pound. Labour Members who represent industrial areas do not always appear to appreciate that there is a fair amount of employment in agriculture. If by refusing to devalue the green pound the pig industry, for example, should collapse, that would mean more unemployment. I am pleased that the Government are proposing to take action over that matter.
  Fourthly—this is not so much a criticism of the Government this year, but it may be next year as it has been in the past—there is the Left-wing threat of nationalisation. Hon. Members may laugh. I understand why. The Government's approach is disastrous. When they threaten nationalisation, employers say "Because of the likelihood of nationalisation, we shall not expand our productive industry." That means fewer jobs. The unemployment figures speak for themselves. A figure of 1½ million is disastrous. Would hon. Members below the Gangway have been so silent if the Tories had been in power when there was an unemployment figure of anything approaching that?
  At least the Government are beginning to reverse some of their disastrous policies in accord with Tory demand. Only a complete reversal of their economic

  1143
  policies will result in lower unemployment. For that we shall have to await a Conservative Government.
  Mr. Penhaligon: The hon. Member for Burton (Mr. Lawrence) referred to the relative quietness of Labour Members on the subject of unemployment. Can he comment on his own party? Three Conservative Members out of 280 are in the Chamber. Is that an indication of Conservative interest in unemployment?
  Mr. Lawrence: It is not for the hon. Member for Truro (Mr. Penhaligon) to complain about lack of representation. In debate after debate the Liberals remain absent. But when one of them is good enough to attend, the hon. Member has the nerve to complain that not many hon. Members are here. There is support from both sides of the House for the Bill.
  Mr. Hoyle: The hon. Member for Burton (Mr. Lawrence) is trying to castigate the Government for the unemployment figures. What is the Conservative plan for curing unemployment?
  Mr. Lawrence: I have been outlining some of the disastrous parts of this Government's policy that would not have been pursued by a Conservative Government. The Conservatives would never have got themselves into this state in the first place. When we left office, although there was a world recession, we were doing better in the unemployment table than most of our European competitors. Now we are doing worse.
  Under a Tory Government, perhaps with my right hon. Friend the Member for Sidcup (Mr. Heath) urging matters from within a Conservative Cabinet—the recycling of OPEC cash flow and the investment of North Sea oil revenues in British industry together with a massive retraining programme—a contribution might yet be made towards solving the underlying unemployment problem.
  In setting up the temporary schemes the Government have misjudged the situation. They were thought to be temporary unemployment schemes but they have become permanent schemes. Had the information that their policies would result in more permanent unemployment penetrated at the beginning, perhaps better schemes would have been devised.
  It is all very well to say that 790,000 people have been helped by the various
  1144
  schemes at a cost of £900 million, but many of those who have been helped are not really unemployed. For example, most of the people in the skill centres, which the Select Committee has been visiting, are not from the ranks of the unemployed but are people who had other jobs. There seems to be a question mark over the TOPS scheme where money has gone to the wives of professional or business people, recipients who would be perfectly happy to learn a job without being paid for doing so, provided it did not cost them a substantial amount of money. Good work is being done in the skillcentres, but we should not forget that they are no substitute for genuine apprenticeships and that there are too few genuine apprenticeships in British industry.
  The job release scheme is a good thing, but a lot of the money that could be spent on it is being paid out in unecessary redundancy payments. I know of a garage which went bankrupt. The employees received substantial redundancy payments one day, but were reemployed the next by the oil company that took over the garage. They were paid the same wages, and their redundany pay was therefore a complete waste of money. Something must be done to prevent that sort of thing.
  The youth employment subsidy is no doubt a good idea, but I am not satisfied that it would not be better for some of that money to be used to stop the education system from churning out illiterates.
  Take the professional and executive employment register. It does not command the support of nationalised industries, local government or the Civil Service, for reasons I know. Those sectors find it suitable to advertise in the newspapers, and one wonders, therefore, what use that register is. The Manpower Services Commission operates a number of other schemes which are of some benefit, but I wonder whether it is necessary for it to spend a substantial sum—a figure of £15 million has been denied—on setting up a new bureaucratic centre in Sheffield.
  The Government are seeking to do a number of things which have the support of my right hon. and hon. Friends. I think particularly of this Bill and the schemes to which it gives effect. But we should not be blinded to the fact, because the Government are taking measures such

  1145
  as this, that the problem of unemployment goes far deeper, that it is both cyclical and structural, and that the reduction of unemployment depends upon tar-getting the remedies accordingly.
  The main problem is the overall inertness of the economy, and the prime target should be training for skills. I see that my hon. Friends are indicating that I should not go on for too long, and I therefore conclude by saying that we need more urgent and extensive action than this Bill provides, and that the Government and its successor Conservative Government should make a more determined effirt to cure the real sickness caused by the underlying problems. They must ensure that they do not go on for ever returning to the House and applying for first aid.
  9.54 p.m.
  Mr. Max Madden: The hon. Member for Burton (Mr. Lawrence) clearly cut short his speech, but he did nothing to lift the depression that has pervaded this debate, nor was I impressed by the remedies he proposed to deal with the enormous toll of unemployment which overshadows the debate.
  The hon. Member for Brentford and Isleworth (Mr. Hayhoe), speaking for the official Opposition at the beginning of the debate, made a carping arid speech, which did nothing to impress the hon. Member for Truro (Mr. Penhaligon)—
  Mr. Penhaligon: Is the hon. Gentleman trying to cause trouble?
  Mr. Madden: I never cause trouble. The hon. Member for Truro made an interesting and worthwhile contribution which was the exception to the contributions from the Opposition Benches.
  We need to be very clear that there is no complacency about unemployment, certainly on the Labour Benches or within the Labour movement; nor is there any acceptance of the present appalling rate of unemployment. We regard it as a scandalous waste of human and economic resources. It always has been and always will be. Therefore, we on the Labour Benches are pledged to try to ensure a return to full employment.
  Tonight we have heard something of the difficulties in achieving full employment. The only part of the speech by the hon. Member for Burton with which
  1146
  I had any agreement was the statement in his concluding remarks that this country faced deep-seated industrial employment problems, that they were structural, endemic and very long term. We must all recognise that, and that recognition must remove from the debate the cheap partisan points made by some hon. Members tonight.
  We have heard a great deal from the Conservatives, in no great detail but in generalisations, about the future the Conservatives believe we could secure if only we entered into the incentive society that they have been talking about. Evidence recently produced by the working parties reporting on the 40 sectors of British industry is as depressing as this debate has been. Only four of the working parties believe that their industries can increase output and at the same time offer an increase in employment. The others talk about increases in production given optimistic forecasts as to their economic and industrial prospects. But they all forecast a reduction in employment requirements.
  That is the latest evidence, produced by working parties made up of Government, management and trade unionists—an objective, clear analysis of the industrial forecasts and prospects. It must be readily appreciated by all who take part in debates about employment.
  The prospects are extremely bleak and serious. I am certain that, whatever the attitudes of the present Government Front Bench, the seriousness of the problems will lead Government into adopting extremely radical solutions. It is time for the Government to indicate their determination and courage to adopt and implement some of those radical solutions.
  For example, the Government should be spearheading a major national campaign to bring about an early reduction in the official retirement age. That would be welcomed by many working men and women as an important social advance. At the same time, it would offer important economic and employment gains.
  We should also be seeking, with the co-operation of the trade union movement, the achievement of shorter hours. The 35-hour week is now a major demand and objective of the trade union movement in this country and internationally.
  The subject of training and retraining has been mentioned. This Government

  1147
  have made an important contribution to that, but far more still needs to be done. In this regard I refer particularly to the needs of the long-term unemployed. We have traditionally thought of them as older men and women in their late 50s, who have often found difficulty in securing employment. That is no longer the position. Four out of 10 of the long-term unemployed are now men who have reached the age of 40, with dependent children. The humiliation, desperation and futility of their lives is apparent to all of us. To help them, I believe that we should be undertaking—
  It being Ten o'clock, the debate stood adjourned.
  Ordered,
  That the Employment Subsidies Bill may be proceeded with at this day's sitting, though opposed, until any hour.—[Mr. Coleman.]
  Question again proposed, That the Bill be now read a Second time.
  Mr. Madden: I was saying that we should be undertaking a massive effort in increasing the training and retraining opportunities available, particularly for those workers who find themselves in long-term unemployment. I remind the House that that is unemployment in excess of 12 months.
  We should also be thinking of further education opportunities for younger people, those between the ages of 16 and 19, so that these people have the opportunity to undertake further training and to acquire skills better than those with which they left school at the age of 16. Again, it would be taking them out of the employment pool and offering them useful alternatives to employment.
  We should also be looking at other innovations. Why is it that sabbaticals are fashionable only in the newspaper industry, for newspaper columnists to refresh themselves every 10 years or so? This could be a very useful way of encouraging new leisure opportunities and bringing some excitement into the lives of working men and women in industry, and at the same time it would also help with employment.
  Therefore, I believe that we need a new drive and effort in economic, industrial and social policies which are useful in themselves but, at the same time, offer employment gains. I particularly asso-
  1148
  ciate myself with the remarks made by my hon. Friend the Member for Rossendale (Mr. Noble) about the temporary employment subsidy. It is clear that this is the latest example of Common Market intervention in the affairs of the British Government. We have seen the Common Market's effort concerning the green pound, and driving hours, the tachograph, and even the price of whisky. But I believe that the Common Market's intervention to stop TES being paid in Britain, so long as the British Government believe it to be an effective way of combating unemployment, is quite disgraceful.
  We should certainly tell the Government tonight that for our constituents and the hard-pressed industries in our constituencies the TEC is an extremely useful weapon against unemployment and, counter to some of the arguments that have been proffered from the Opposition Benches, it is also offering an extremely useful breathing space to a number of firms throughout the country in which to innovate, to bring in new technology and to bring themselves back to a situation of viability, in which they can increase employment rather than be on the brink of redundancies.
  Secondly, I believe that the Government should be looking with more zeal at all sorts of alternatives that are being worked on by workers themselves. We are surrounded tonight in the debate with engineers. I am extremely glad about that. Engineers in this place will know that engineers in industry are bubbling over with ideas. They are not depressed. They are not downhearted about the prospects for their skills. They are falling over themselves trying to bring forward new ideas, new technology and new ways of providing employment.
  I strongly urge Ministers to look seriously at the sort of work being done by Lucas Aerospace shop stewards, Vickers shop stewards and others, who are not merely talking but are working on ways of bringing about new energy sources and new ways of providing medical equipment, and many other exciting ideas that are useful socially in themselves and, at the same time, offer job opportunities. I believe that they merit far more serious attention, consideration and money than they are receiving at present.

  1149
  It is a scandal that this important work is being founded by minimal amounts of private money from national charities and that the Government are not officially involved in funding these projects which, I believe, offer important and interesting opportunities for increasing employment, particularly in those defence industries where—whether or not we spend more—there is clearly the opportunity for redundancy in the near future.
  I have found this debate depressing because of the way in which the Conservative Opposition have sought to leave the impression that unemployment is a problem solely within the United Kingdom. It is not. It is an international problem. It is a problem which grips the industrialised Western world.
  We in this House are buried in paper from the Common Market. I read it eagerly. The latest communique from the European Economic Commission, dated 17th February, is headlined "The Week in Europe". That usually makes most depressing reading as well. It states under the heading "Unemployment":
  "The Commission approved a working document setting up new guidelines for work sharing in the Community in order to struggle against prolonged underemployment. This document will be tabled at the next meeting of the Permanent Committee on Employment which will take place during March. The vice-president of the Commission responsible for employment policy, Mr. Frank Vredeling, pointed out that it would be necessary before 1985 to create 9 million extra jobs. This was partly because of prolonged recession and partly because of a growth in the population entering the labour market and a diminishing of the number of people retiring from the market. He hoped that work sharing would be made the object of close co-operation among employers, workers and governments, Co-operation which ought to lead to solidarity on both sides of industry."
  That then is the situation in Europe. The hon. Member for Brentford and Isle-worth made great play about unemployment statistics. I believe that some of my hon. Friends have demolished much of his argument. It was interesting that the hon. Gentleman did not refer to the two countries with the best unemployment statistics. They are Sweden and Norway, with unemployment of less than 1 per cent. The characteristics of those countries are that they both had Social Democratic Governments for very long periods and both happen to be outside the Com-
  1150
  mon Market. I think the lessons from that could usefully be deployed in this debate.
  I should like to ask some detailed questions of the Government Front Bench. I hope that when winding up my hon. Friend the Under-Secretary of State will be able to deal with them. First, the disabled have been mentioned by some hon. Members. I am sure that my hon. Friend would agree that progress in providing reasonable employment opportunities for disabled people is far from satisfactory. Some recently produced figures have been very disappointing. I should like to know what the present position is and what extra efforts are being made to provide proper job opportunities for disabled people.
  Secondly, I should like to know about the future of the job release scheme. I understand that it is being extended for a year. I should like to know whether the flexibility which the Secretary of State stressed in his opening remarks extends to this scheme. It has attractions to many men and women who would like to retire early, but it would be even more attractive if the upper age limit were reduced below 64. What prospects are there under this Bill of the age limit in this scheme being steadily reduced, because I believe it will become an attractive and useful scheme for the reasons that I stressed previously
  There have been some critical remarks about public ownership. I believe that they are ill-advised. Anyone who looks fairly at the record of the National Enterprise Board—employing as it does about 250,000 workers not only in British Leyland, but in the subsidiaries of the NEB—would come to the view that it has played an important role.
  More resources are necessary for the National Enterprise Board to be able to continue to play its role, particularly in backing winners and high risk technology where conventional sources of finance and investment are most reluctant to go. That could be very important indeed, not only in providing employment but also in channelling investment into those regions of the country where conventional investment is most unwilling to go.
  It is all very well for hon. Members opposite to talk about problems created by the temporary employment subsidy.

  1151
  It is all very well for them to talk about "real jobs" and to say that money going into this scheme creates problems elsewhere. But the clear fact is that, in the post-war years, investment has been most reluctant to go into the regions, the depressed areas. It has been happy to go into the South-East or into the golden triangle of the Common Market or anywhere else overseas, but, by and large, British investment has been most reluctant to go into our regions.
  It is not enough to say glibly that if these jobs go, other jobs will flourish and bloom as a consequence. If these jobs go in the textile, clothing and footwear industries, they go for ever. The firms will never reopen, and it is difficult to secure investment to bring new employment into the regions. Such glib remarks by Conservative Members will be noted by our constituents, who do not see in the reality of their own localities the dynamic, thrusting private enterprise investment that the Conservatives talk about so much.
  I found the opening remarks of the hon. Member for Brentford and Isle-worth extremely depressing. The hon. Member for Truro asked what alternative the Conservatives were offering. His question met with a barren response. We merely had the visionary remark that the hon. Member for Brentford and Isleworth was looking for "real jobs". He talked at some length about productivity agreements, again neatly overlooking the fact that the consequence of most such agreements is declining employment requirement.
  The hon. Member called for a revival of the economy. We all want that. But it is taking a hell of a time to come, and we must recognise that we live in an international recession which may be far more deep and serious than many people now conceive—including many people in this country, although some are beginning to recognise that the problem may be much vaster than they originally conceived.
  Today I had the privilege of attending a unique occasion. It was organised by the Transport and General Workers Union, my own union, to honour Jack Jones on his retirement. It also marked the 2-million-plus membership of the union and gave welcome to the general
  1152
  secretary-elect. The union produced a brochure for the occasion which I found extremely interesting. It contained an election address by Jack Jones when he was candidate in a Liverpool council election in the 1930s.
  In that address, Jack Jones highlighted the remarks of the Tory candidate, a Miss Whittingham-Jones, who apparently was describing unemployed people as professional scroungers. She had said:
  "One remedy would be to require all public assistance recipients to sign a register twice daily."
  That was the view of Tories in the 1930s. They might not all be called "Miss Whittingham-Jones", but the solutions and the remedies proposed today by Conservative Members sounded very much like those of Miss Whittingham-Jones. They spoke about incentives to work but in fact were making veiled suggestions that they might reduce unemployment benefit, thus providing incentive to work in that way.
  Surely the true indictment in tonight's debate are the very low wages on which millions of working men and women are expected to survive and to bring up their families. We know that between 4 million and 5 million workers earn less than £35 a week for a 40-hour week. That is where the indictment lies, and not in the level of benefit paid to men and women who have the misfortune of not being in employment.
  The debate has cast some light on present thinking. I think that we have all found it most depressing. But in tackling the problem we must come back to the conclusions that we come to in each of these debates—that the solution lies only in interventionist policies. Left alone, private enterprise is incapable of doing and unwilling to do the very complex and complicated tasks which are necessary if we are to return to full employment.
  We live now in a different age. The traditional economic relationships between this country and the rest of the world, and between the powerful countries in the world and the poorer and developing countries, are changing. The conventional relationships are no longer what they were. It is hard any longer to say what will happen, and it is extremely

  1153
  difficult to demand predictions or forecasts from management.
  In my view, only this Government are capable of dealing with the complexities that we face. In the knowledge that the problems are extremely deep-seated and serious, we shall give the Bill a fair wind, knowing that it is just one small way of tackling them. The major task lies in the broader sweep of policies,
  1154
  which in my view have to be radicalised and changed and fashioned to deal with the immense problems that we face.
  I thank my right hon. Friend the Secretary of State for the way in which he considers these matters. I hope that he will be urging on his Cabinet colleagues the radical policies which we have been suggesting and urging on him for many months. I believe that they become more relevant with every day.
  10.17 p.m
  Mr. John Evans: I am privileged to follow my hon. Friend the Member for Sowerby (Mr. Madden), who has made a tremendously powerful speech tonight. He has put forward some of the points that I intended to make, saving me the necessity of going down that path. I simply ask my right hon. Friend the Secretary of State to take note that I think that the solutions that my hon. Friend was putting forward are the true answers to some of the employment problems that we face today.
  I am bound to point out to my hon. Friend that the Conservative Benches were hardly angered or annoyed by the powerful indictment he made of them. Indeed, apart from the two hon. Members on the Opposition Front Bench, there is no one else present for the Opposition. They have all gone. But we expect that whenever we discuss unemployment in this House.
  I understand the necessity for the Bill and I understand the Secretary of State's reasons for putting it forward, but I do not welcome it. The Opposition have been in a very difficult position. On the one hand, they wanted to beat the Government over the head about unemployment. On the other hand, most of them are such fanatics for the Common Market that it has been very difficult for them to deal with the real issue, which is the opposition of Commissioner Vouel and the competition department of the EEC, and Article 93.
  We have been given to understand that the reason for this opposition is that the United Kingdom is said to be exporting unemployment to other member countries of the EEC. I do not think that there is a great deal of truth in that. Indeed, there is very little truth in it. The impact of the temporary employment subsidy has meant that we have been able to shelter certain industries during a recognisably difficult period. But when we examine the position of Commissioner Vouel and the competition department, we are struck by many anomalies in the Commission's position.
  In regard to the clothing and textile industries, the strange thing with which we have to come to terms is that for about 18 months to two years many
  1156
  Members of this House and of other national Parliaments were arguing strongly for protection of the textile and clothing industries. I am sure that my hon. Friend the Member for Rossendale (Mr. Noble) appreciates that it is not only the United Kingdom textile and clothing industries which have been threatened but also the Community industries. But at the very moment when we hoped finally to persuade the Commission to adopt measures which will give some protection to those two industries, Commissioner Vouel says that we cannot carry on with the temporary employment subsidy in relation to them. In other words, when we have won the game Commissioner Vouel wants to take the cup from us. That is illogical.
  There is no logic in Commissioner Vouel's stance in relation to the stance taken by other Commissioners. In his inaugural address to the European Assembly on his appointment last year, President Roy Jenkins dealt mainly with unemployment within the EEC. That was the central theme of his speech, and this year he returned to that theme when, on Tuesday last, he introduced the Commission's general report for 1977 and the programme of the Commission for 1978.
  Mr. Jenkins said:
  "The present reality is of 6½ million unemployed. The future, reality, between now and 1985, is of a further 9 million young people added to the Community labour force and looking for jobs."
  He went on:
  "This is not merely an economic problem: it is tragic for individuals and it could threaten the foundations of our society and its institutions."
  Those were the words of President Jenkins last Tuesday in the European Assembly.
  Again, the speeches of the last three incoming presidents of the Council of Ministers made to the European Assembly have had as their central theme the same problem and all their argument has been about the tragic unemployment within the EEC.
  Thus, it is not just a matter of unemployment in Britain. One can bandy figures about in relation to Great Britain, with ½ per cent. here or 1 per cent. there

  1157
  but no one can escape the fact that the frightening level of unemployment is today endemic in the whole Community.
  Every member of the Community subsidises employment in one way or another. We recognise that we subsidise 200,000 jobs through the temporary employment subsidy, and it is not only the textile, clothing and footwear industries which benefit. Nor is it only the North-West of England which benefits from temporary employment subsidy, though one would hardly realise that from the speeches made in this debate. The temporary employment subsidy is available on a national basis, and it is available for far more industries than textiles, clothing and footwear.
  The truth is that it is a remarkably cheap subsidy. Again, I have no wish to bandy figures about, but to give a subsidy of £20 a week so as to keep a man in employment is a remarkably cheap way of protecting that man, who would otherwise be able to claim £30 or £40 if uneemployed, with wage-related benefits, as well as social security payments, free school meals and a host of other benefits. I submit, therefore, that the TES represents a net gain to the Government rather than the net loss which the hon. Member for Manchester, Withington (Mr. Silvester) suggested.
  It is important that we look at one or two aspects of what other Community countries do, because one could be forgiven for believing, after listening to so many speeches from the Opposition, that the United Kingdom was the only country which used employment subsidies. As the House knows, we have three subsidies—TES, the youth employment subsidy and the small firms employment subsidy.
  What is done in the EEC? In Belgium there is the small firms recruitment subsidy and the temporary reduction of employers' social security contributions. There are compulsory employment and training schemes. There are subsidies to help special groups which are, in effect, an employment and training subsidy. There is a subsidy to maintain employment, and there are grants and loans to the clothing and textile industries.
  1158
  One wonders why the Commission has not taken notice of what is done in Belgium, where in 1977 the Government agreed to make an interest-free loan of £117 per employee to firms in the clothing industry. That was a fairly substantial subsidy.
  In the Netherlands, there are subsidies to help special groups. There is a subsidy for the employment of long-term unemployed as well as a subsidy for the employment of young people in part-time education. There is a subsidy to promote the training of school leavers and a subsidy to provide jobs for unemployed apprentices. There is a 30 per cent. wage subsidy scheme for employers engaging hard-core unemployed workers, that is, those difficult to place because of their age or prolonged unemployment. There is a subsidy for handicapped people, and other schemes to help minority groups in Holland. There are also subsidies to maintain employment—temporary financial support of vocational training for young workers in the clothing industry. There is also a subsidy for workers lacking skills or those facing redundancy because their skills are outdated.
  In Ireland there is a subsidy for an employment incentive scheme which is exactly the same as TES. There is a tax incentive scheme which is flagrantly in defiance of EEC rules and competition.
  In France there are a number of schemes too numerous to mention. Even in Luxembourg, where the rate of unemployment has been reduced to a level of 7 per cent., there is a scheme whereby the first eight hours of short time in a month are paid by the employer and the rest by the State, at the rate of 80 per cent of gross hourly earnings.
  In Germany there are recruitment subsidies and in Italy subsidies to recruit young people, as well as employment and training subsidies for young people. There are emergency and short-term working schemes. In Denmark there are subsidies for the recruitment of young people and incentives to small firms.
  In other words every Community country has a wide-ranging list of schemes to protect and promote employment. I do not argue with any of those schemes. I recognise that, given the level of unemployment within the EEC, it is right that

  1159
  Government should take steps to protect jobs.
  Surely in these circumstances it is not for the Community at this juncture, with so many unemployed, to consider putting another 200,000 people out of work in Britain. It is time that the Commission examined every single scheme within the Community—and some may be better than others—and came forward with proposals based on the best of the schemes available in each country. This is the best approach in the short term which we have such heavy unemployment.
  Is there any suggestion that Commissioner Vouel has had any discussions with Commissioner Vredeling, who is dealing with employment within the Community? One of the considerations that I would support is the reduction of the working week to 35 hours or four days. Has there been any discussion on this? Has Commissioner Vouel had any discussions with Commissioner Giolitti, who is in charge of the overall employment policy in the regions? As far as we know there is no evidence of any such discussion.
  The pitiful Social and Regional Funds cannot solve any of the Community's problems. We have to recognise how essential it is that any measures that the Community takes do not threaten us with further unemployment. We have the case of one Commissioner introducing a scheme out of the blue that threatens further unemployment.
  I understand that TES was introduced in 1976 and has been extended five or six times. Each further extension was agreed by the Commission. Even now it does not object to TES as long as it does not apply to the footwear, clothing and textile industries. In other words, they are saying not that TES is wrong but that it must not apply to those sectors and therefore it must be stopped. I suggest that that can only be described as the logic of the mad house.
  I put it to the Commissioner last Thursday, and I put it to the House tonight, that if an examination were made of all the schemes that are in operation, TES would figure high on the list as a worthwhile scheme to be adopted throughout the Community. The Commission always claims to be a corporate body. There is a lot that it can do to take decisions based upon discussions among the 13 Commissoners. My view, and the
  1160
  evidence that I have, is that there has been no Commission debate in this context. It is Commissioner Vouel who has taken this action unto himself.
  I recognise that employment subsidy schemes are no solution to the longer term problems of unemployment. What we need is a reflation of the world economy. For that we need Germany and Japan to start reflating their economies so that we can solve some of the problems in the Western world.
  I endorse the comments of my hon. Friend the Member for Sowerby about some of the schemes. I suggest that firms that do not accept planning agreements should be blacklisted, because after four years of argument in favour of planning agreement we are no further forward than we were at the last General Election. If we are to plan our economy on the basis of full employment, it can be done only on the basis that firms put schemes to the Government showing their future projections.
  Firms are never shy about coming forward with the begging bowl for substantial subsidies from the Government. It is strange how major firms always seem to tell two stories. They tell one to the public about Government interference, but we hear little about the other story, which is of their back-door approach with the begging bowl for financial support from the Government.
  This Bill and this debate are about problems related to TES. I hope that the Minister will be prepared to go back to the Commission and argue the case for a Community-wide study of all the employment subsidies in existence in the Community and to say to the Commission—I am sure that he will receive the support of the House if he does so—that we shall not alter any scheme until such time as the Commission comes forward with proposals that meet the wishes of the majority of the Community countries.
  10.34 p.m.
  Mr. Michael McGuire: I have heard the speeches of most of my colleagues, but I did not hear that of the hon. Member for Burton (Mr. Lawrence). My hon. Friends welcomed the Bill, and I am sure that the hon. Gentleman did, too.

  1161
  This is a short Bill in terms of the number of clauses in it—one clause is really only a sentence—but it is an important measure. I hope that it will allow my right hon. Friend to have a flexible and refined instrument at his disposal to help pockets of unemployment. Clause 1 says:
  "The Secretary of State may, if in his opinion unemployment in Great Britain continues at a high level."
  do certain things. I cannot see any sense in taking the national level of unemployment as the barometer. Account must be taken of local situations. The unemployment figure for Great Britain as a whole may be down to 3 per cent. or 4 per cent., which would be an improvement on the present 6 per cent., but there could still be a high percentage of unemployment in areas with substantial populations. No doubt we shall take up these matters in Committee, but that must be the sense. I think that it will require a flexible approach and that my right hon. Friend will need to have this more refined instrument at his disposal.
  I wish now to take one or two constituency points. The Common Market argument has been somewhat flogged to death. Some of my hon. Friends have criticised the attitude of the EEC Commissioners, and my hon. Friend the Member for Newton (Mr. Evans) mentioned a host of schemes adopted by various countries to alleviate unemployment and to encourage and create further employment. There is obviously no lack of ingenuity in putting forward schemes on the lines of our temporary employment subsidy. It is merely a matter of adjusting the system to fit in with the pattern that applies throughout the Community.
  I shall rely on the common sense of my governmental colleagues to sort out these matters when eventually they get round the table with their EEC colleagues. Therefore, I am sure that some scheme—if it is not TES it will be called something else—will be found and that it will be just as effective.
  The argument that it is only since we have joined the EEC that our sovereignty has been challenged is poppycock. When we were in EFTA there was a scheme to introduce an aluminium smelter, and the people in that organisation were soon telling us what we could and could not
  1162
  do. Similarly, we had to modify our proposals for import controls in 1964. Therefore, it is nonsense to say that it is only since we joined the EEC that such intervention has occurred.
  I am sure that when our Ministers get round the negotiating table, they will do their best to try to achieve the purpose we all want to see.
  Mr. Noble: My hon. Friend referred to schemes designed to reduce imports or to bring about import substitution. Can he give an example in which a foreign Government have intervened to stop us taking action before we joined the EEC?
  Mr. McGuire: When we tried to prevent imports, we were subjected to severe criticism. I do not know whether my hon. Friend wants to intervene again on that matter?
  Mr. Noble rose—
  Mr. Deputy Speaker (Sir Myer Galpern): Order. We cannot have a dialogue between two Members.
  Mr. McGuire: My hon. Friend was making sotto voce comments. I thought he wanted to intervene. I could not hear what he said and I wanted, if possible, to answer him.
  The point I was making was that this interference did not begin when we joined the EEC. I was suggesting that we were subject to investigation and criticism even on import surcharge, and that in many cases we have had to modify our proposals. At the same time I believe that we shall have some scheme to protect employment. The refined instrument which my right hon. Friend has at his disposal will help my constituency cope with its high rate of unemployment. In Skelmersdale New Town we have a figure of male unemployment of 17 per cent.
  Whatever duties the Government owe to towns which have high unemployment rates, they owe a special duty to new towns. After all, it was Government advertising which lured people away from bad housing and poor employment prospects to new towns and promised them a new Jerusalem, and many of those promises have turned to ashes. This Government have said "We have done all that we could to help you", but I do not believe that they have, and I suggest that they owe a duty and debt to the people of

  1163
  Skelmersdale to reduce substantially that 17 per cent. unemployment rate.
  We have heard today that engineers are brimful of ideas, and I have no doubt that they are. Members of the business association in Skelmersdale, worried about how they could help to reduce unemployment there, gave me a list of suggestions and ideas, which I discussed with them. We met a Minister at the Department of Trade and left with him some of those ideas, which I thought were very practical since they came from the managers of factories. They have not been acted upon, but I hope that they have filtered through to my right hon. Friend the Secretary of State for Employment and that he will be able to implement them. Some of them involve getting more help to take on unemployed youngsters and train them into skilled workers. We are always being told from both Dispatch Boxes that we shall face, as we have in the past, a lack of skilled labour when we get out of this dreadful international recession.
  I am glad that that has been mentioned. I know that Opposition speakers have to pad things out a bit, although there is nothing substantial in this Bill which they can criticise. But they will do their whack in Committee. However, one Opposition Member gave the impression that this was a problem that we had in Great Britain. It is an international problem, and one which has come about since the oil crisis of 1973. No Western democracy has found a way to deal with it. They are all suffering comparable rates of unemployment, and it was wrong of the hon. Member to suggest that it was happening solely in Britain.
  But, to return to what I was saying, we are always told that when we get out of the present recession we shall face a lack of skilled manpower. As I say, we have 17 per cent. male unemployment in Skelmersdale and the prospect facing youngsters is years on the dole, even after these job creation schemes which, after all, are only cosmetic. I agree with them, because they provide job experience, but they are no substitute for a proper career. If we are likely to face a lack of skilled manpower, the Government are in duty bound to encourage companies, especially in towns such as Skelmersdale, to take on these young lads. The managers there
  1164
  have put forward ideas, and I hope that they have filtered through to my right hon. Friend.
  The other part of my constituency is in Wigan. I do not know how this refined instrument will help us in Wigan. Wigan seems to get the dirty end of the stick on every Government measure. We have had the inner urban renewal aid programme. Wigan missed out on that. We have the rate support grant. Wigan missed out on that. One of the consequences is that the rate increase in Wigan is terrifying. It is one of 10 towns in Greater Manchester which do not get any help. It has the highest rate of industrial dereliction, and now it has one of the highest rates of human dereliction, with a 10 per cent. unemployment rate. The rate support grant, from which Wigan did not benefit, means that the rates will go up by between 20 per cent. and 25 per cent. That will mean higher rates on factories and premises where people are employed. It will mean one hell of a job competing with other areas that already receive development area status or special development area status. In that way the problem will worsen.
  I do not know precisely how my right hon. Friend can help in that direction. However, Wigan has an unemployment rate of about 10 per cent. and it does not enjoy any of the benefits enjoyed by its competitors. I hope that my right hon. Friend will find an opportunity and a means of helping towns such as Wigan with the refined instrument that he will have at his disposal. Wigan certainly needs that help.
  I give the Bill my approval. There is no doubt that it will be on the statute book fairly quickly. I have no doubt that in Committee, if I am a member of the Committee, we shall be able to probe more deeply the powers that my right hon. Friend will have at his disposal. I am bound to say, as one who represents a constituency suffering probably more than any other from the cruel lash of unemployment, with male unemployment in Skelmersdale of 17 per cent. and 10 per cent. in Wigan, that I shall be looking for help in a special way. That is because the constituency is a special case. I shall be looking for substantial benefit. On those grounds I wish the Bill well.
  10.47 p.m.
  Mr. Esmond Bulmer: Most of the contributors to this debate have drawn attention to the depressing nature of the unemployment figures. We have the highest January figures since 1940. We have 1½ million unemployed and 25 per cent. of them have been out of work for a year or more. The figures published by the Manpower Services Commission offer little comfort. It would require 1,140,000 new jobs to reduce unemployment to 1 million by 1981, and 1·6 million new jobs to reduce unemployment to the level that obtained when the Conservatives left office.
  The hon. Member for Sowerby (Mr. Madden) referred to the sector working parties. Those who have examined them have found little from which we can draw comfort when measured against the scale of the figures that I have quoted.
  We can agree on both sides of the House that there is a problem that will not go away. The Opposition may not be able to persuade everyone on the Government Front Bench of the wisdom of everything that we propose, but we take a certain satisfaction from the fact that the Government appear now to recognise that it is the control of inflation that is the first step to reducing unemployment, and that inflation is the great destroyer of jobs. We also derive satisfaction from the Secretary of State's acceptance of the need for industry to be competitive.
  The Opposition are prepared to consider proposals from the Government, the CBI, the TUC and the universities, or from any informed source. We are prepared to consider any methods they suggest to reduce the level of unemployment or mitigate its consequences.
  Tonight we have three measures to consider. First, I turn to the temporary employment subsidy. The Lord President, when Secretary of State, introduced a discussion on 5th August 1975. He described it as a
  "short-term subsidy to be offered to firms which are prepared to defer planned redundancies".—[Official Report, 5th August 1975; Vol. 897, c. 386.]
  Since then the scheme has been expanded and extended, but at that time reservations were expressed from both sides of the House that the measure would be cosmetic. I do not believe that it is cosmetic. In my constituency I have seen an
  1166
  example of where the subsidy was wholly justified. I pay tribute to the courteous response that I have had from the Under-Secretry of State when making representations and the speed with which his officers have acted. I refer to a family business that has been operating for about 50 years. It has had good management and excellent labour relations. It has modern plant and a range of products that people will buy. The temporary employment subsidy allows it to carry stocks until demand picks up. It also prevents the suicidal discounting policy into which such a firm might be tempted. At present, in the carpet industry, the retail end is stronger than manufacturing. Therefore, for that company, it is a proper use of the scheme.
  The second criticism is the lack of consultation. That is still valid. Employers feel that there has not been adequate consultation. They accept that the scheme has certain advantages—the low cost in terms of the public sector borrowing requirement and the help that it provides—and they wish it to continue. But they have worries in the longer term to which I hope the Government will address themselves. Although the scheme was described as temporary or short term, we are visualising it operating for at least four years. Employers' fears centre round the effect on productivity, competition, industrial relations and employment. They fear that in labour-intensive industries productivity will fall, that efficient firms will be denied their proper market share, that wage bargaining will take place in an increasingly artificial climate and that short-term considerations will lead to an increase in unemployment in the longer term. There is also the fear that the longer the arrangements run, the more difficult will be the transitional arrangements to end the scheme.
  I hope that the Government will extend their consultations with employers because, if the scheme is not temporary there will be a whole host of further questions to be asked. I think that there would be concern whether officials were competent to assess the accuracy of cash flows and to determine whether the long term interests of particular industries lay in one firm staying afloat or not.
  We feel that there is a danger inherent in subsidising companies, except in the most exceptional circumstances. The

  1167
  concentration must be on improving the competitiveness of British industry and encouraging high productivity and high wages from which the creation of a whole range of new service jobs can develop. We should like special help to be concentrated on people, on skilled training, on areas of particular deprivation and even the new towns, to which the hon. Member for Ince (Mr. McGuire) referred.
  I turn now to the question of the job release scheme. This is a small step towards structural change. I think that there would be agreement on both sides of the House that structural change must be developed. Of course, it is extremely expensive. We feel that it would be developed best within the context of EEC solutions. Fewer hours, a shorter working week and longer holidays affect the competitive edge of companies. If there can be agreement on a European scale, it is more likely that we can make progress without losing more jobs.
  Many Labour Members take every opportunity to attack the EEC. I shall not develop a whole lot of arguments in its defence. Suffice to say that I believe there are two important contributions that it can make in the context of the debate. The first is that the protection for which hon. Members on the Government Benches are looking can, I think, be developed in a European, not a United Kingdom context. The second is that the recycling of the OPEC moneys is again much more easily handled within the context of the Community than the United Kingdom.
  We recognise the need for special measures to boost small businesses in the inner cities. Not all are in special development areas. I am sure that in Committee we shall wish to explore that matter further. Subsidies of this kind, in effect, can back potential winners, whereas the temporary employment subsidy may preserve jobs for which there is no future. To that extent, perhaps such schemes are more attractive.
  I think that there is now increasing awareness among Government supporters of the need to encourage small businesses. But it is difficult, unless one has run a small business, to understand the difficulties which have been experienced in recent years and how hard it will be to restore confidence. It is indeed difficult to believe that they are fully understood
  1168
  by the Chancellor of the Duchy of Lancaster. His virtues and benevolent image are paraded around the political football ground whenever small business is mentioned. I do not believe that small businesses are understood by the Tribune Group, the members of which have been kept from the first team pitch in recent months, except on Fridays, when they have been particularly active and have enjoyed the backing of the Government Supporters' Club. If the Government were to recover a majority in the House their attitude to small businesses would change.
  Has the Minister analysed the reasons for the application by firms for TES? He would find such an analysis productive. He would be surprised how many have been brought to their knees by Government action. He would find businesses which have not been able to stand the wage norms set by the Government and which have had no alternative but to pay up or face a strike that would bring bankruptcy in its wake. He would find companies crucified by the inflation unleashed by the Government's policies to win the October 1974 General Election because they were taxed on paper profits that took no account of that inflation and were deprived of the reserves on which their survival depended.
  The Minister would find companies that could not compete with the Government for money in the market, or for which interest rates at 17 per cent. or 20 per cent. were the last straw. He would find companies for which 25 per cent. VAT started the rot which could not be reversed. He would even find small cider companies for whom the increase by the Chancellor of 28 per cent. on their wholesale prices destroyed the balance of their businesses. I declare an interest not in a small cider company but in a large one. It is not surprising that since this Government took office bankruptcies have been at an all-time record. For many companies TES is a belated compensation for damage done to them by Government.
  There are indications that the Government have learned some of the lessons. I accept that the scheme has a useful role but I urge the Government to encourage research into the impact and consequences of subsidies, and also to

  1169
  consult employers. Employers have a right to be consulted. The £1 billion-plus that the Government have placed on the employers' stamp represents a larger sum than has been spent by the Government in the measures that they have introduced to reduce unemployment. We shall consider every scheme on its merits. We shall not deny Ministers their Bill tonight.
  11.58 p.m.
  The Under-Secretary of State for Employment (Mr. John Golding): We have had some excellent contributions from my hon. Friends the Members for Burnley (Mr. Jones), Rossendale (Mr. Noble), Nelson and Colne (Mr. Hoyle), Sowerby (Mr. Madden) and Ince (Mr. McGuire).
  To my hon. Friend the Member for Sowerby I say that we intend to extend the job release scheme and we are prepared to listen to the views of all hon. Members.
  For the disabled, a job introduction scheme has been introduced involving a £30 grant for six weeks. To date, only six applications have been made. The money has been made available but industry has not responded. We have also introduced capital grants for the adaptation of equipment and premises. Again, response from industry has been inadequate.
  Other interesting contributions have been made by Opposition Members. I noted with particular pleasure the welcome afforded to the Bill by the hon. Member for Truro (Mr. Penhaligon). I do not think that it will be possible for us to deal with the problem of the Isle of Wight in the way that he asked, but we shall certainly look at it. It would be difficult for us to deal with very small geographical areas in this way and to compare one with another.
  Let me now turn to the contribution by the hon. Member for Brentford and Isleworth (Mr. Hayhoe), who promised the Bill a fair wind but said that, because it provided such wide powers it would be given close scrutiny in Committee. The Bill is important for us to continue the small firms employment subsidy which is paid at present through the Appropriation Act. The Bill is not, therefore, simply to deal with the problem created by the intervention of the EEC. If we are to continue the small firms employment subsidy, we must have the Bill.
  1170
  I must point out to the Opposition that we already have very wide powers. We operate the TES under their Employment and Training Act 1973. The same goes for the youth opportunities programme and, following an amendment, the special temporary employment programme. I thank the Conservatives for having given us those wide powers. No doubt I shall deploy in Committee the arguments that they advanced at one time in favour of taking such powers. No doubt, too, they will be putting forward the arguments that on that occasion we used against them.
  The problem is that all these schemes have to be fitted into existing legislation, or new legislation, such as that concerning the job release scheme, has to be introduced. It is easier to provide temporary employment than regular employment at present. The hon. Member for Truro was right to emphasise the need to turn our attention to providing regular lobs wherever we can. We need the Bill for that purpose.
  The hon. Member for Brentford and Isleworth challenged job subsidies, although he did it in someone else's words. He put a question mark over them. I believe that they are better than paying unemployment benefit. I noticed that he did not attack the small firms subsidy. He questioned the validity of the subsidies and then, in almost the same breath, asked for help for small firms. We prefer not to be paying subsidies, but we prefer paying subsidies to seeing unemployment rise, and more bankruptcies. We believe that job subsidies have prevented both. They have been beneficial to employers and trade unionists, and it is interesting that approaches for subsidies have been made jointly by the two. Trade unionists and employers have often come to us, accompanied by their respective Member of Parliament—often a Conservative—to ask for the subsidy. The job subsidies should be supported, because they have done a good job.
  There is some displacement with TES. If a factory is kept open in one town, it is bound to compete with factories in other towns. There are difficulties, and the problem of displacement is one that we must face with many of our schemes. But if more jobs are saved than are displaced, the scheme is worth while in employment terms.

  1171
  Why have employers and trade unions given support to the temporary employment subsidy? It is because it has given the companies a valuable breathing space, because it has saved firms. They have been able to keep skilled workers when the slightest threat of redundancy would have dispersed groups of key skilled workers. One thing that I have learnt in the past two years is that the jobs of semi-skilled workers depend upon there being skilled workers in our factories, which is why I think that hon. Members are right to keep stressing the need for skill training.
  I have also learnt over the past year or so that TES has improved the cash flow of many firms. It has enabled many firms to seek new orders. More important, it has given firms the chance to sort themselves out in consultation with the trade unions. The hon. Member for Kidderminster (Mr. Bulmer) himself replied very strongly in answer to the question mark put above TES by his hon. Friend the Member for Brentford and Isleworth.
  Of course, all schemes should be kept under review, and they are. I say in the presence of my right hon. Friend the Secretary of State that that is what Treasury Ministers are for. We must keep the payment of taxpayers' money under constant review, and that we do.
  We do precisely what the hon. Member for Brentford and Isleworth asked: we pay attention to the problems of the disadvantaged. I have already referred to the subsidies for the disabled and industry's failure to respond so far.
  I could also talk about the special temporary employment programme and the special provision for the long-term unemployed, of the outreach posts for the young blacks—and young non-blacks, because they, too, are hard hit in the inner city areas—and of the special provision that we are making here. But there is a contradiction on both sides of the Chamber in this matter. One cannot say that there must be concentration on skill training and at the same time that we must concentrate heavily on those in the disadvantaged groups. To be blunt, the skilled craftsmen will not be drawn from those disadvantaged groups in general. We must make separate provision for them.
  1172
  I shall not deal with the poverty trap, although it is an important question, but I remind all hon. Members that our pre-occupation still is not with having more vacant jobs than we have unemployed but having more people wanting work at any wage than we have jobs to give them. That is the problem.
  The hon. Member for Brentford and Isleworth raised the question of persuading small firms to be more involved in training. I agree that there should be more involvement, but I wonder whether he supports the Government's payment of subsidies to support apprentice training in all firms. We have given massive support to maintain apprentice training in the form of apprentice subsidies which we intend to continue, because we believe them to be very important.
  These are matters for the usual channels, but I cannot visualise a major debate before each scheme is introduced. Information, yes; my hon. Friend and I have done our best to ensure that Parliament has had the details. But full debate, perhaps, no. Two things are usually in short supply to Governments—cash and parliamentary time. To have to jump one hurdle to introduce a new scheme is difficult enough. To have to jump two would make our job much more difficult. We can promise full information, but I cannot promise anything else.
  I have been advised that the figure for job introduction that I gave was wrong. Perhaps I can give the correct figure before I conclude.
  I turn to the remarks of my hon. Friend the Member for Burnley. I am aware of the problems of North-East Lancashire. I have visited that area on several occasions in recent months. We shall certainly continue to pay a great deal of attention to those problems, and particularly to the firms in trouble, because we are all concerned with the growing level of unemployment in that area and particularly the transfer that has occurred between industrial employment and service employment.
  I have already referred to the contribution made by the hon. Member for Truro. As I have said, we shall look at the question of the extension of the small firms employment subsidy and at the question of using local unemployment figures, though I am not hopeful about

  1173
  that. I emphasise again that I take the hon. Member's point that we need to encourage training in small firms. One of the problems has stemmed from the Employment and Training Act 1973. I see day by day that one of the reasons why there is not at present sufficient training in small firms is that they are exempted from the payment of levy. They are exempted because it is often too difficult to cope with a small firm through the industrial training board. This is one area that we must look at very carefully indeed.
  I shall not reply in detail to the points made by my hon. Friends about the position of the EEC.
  Mr. Lawrence: Why not?
  Mr. Golding: Because I think that I would be repeating much of what my hon. Friends had to say. That is, that we would have continued TES in this country had it not been for EEC intervention. However, I repeat the assurance given by my right hon. Friend the Secretary of State that he will negotiate as hard as he can in order to minimise any damage that would otherwise be caused to industry as a result not of the ending of TES, because that is not at issue, but of any modification to the textile, clothing and footwear sector.
  The most interesting part of the speech of the hon. Member for Burton (Mr. Lawrence) was the part during which the Opposition Whip was trying to get the hon. Member to conclude. One thing that the hon. Member said that is incorrect was that we were making work recidivists—youngsters who will never learn to do a job. The important development in the last year has been the introduction of the youth opportunities programme, under which there will be a certainty of an offer of a chance to every youngster who is leaving school from this April, before Easter 1979.
  I agree with my hon. Friend the Member for Sowerby that there should be no complacency. We appreciate the problem of the long-term unemployed. We share with my hon. Friend an appreciation of the need to concentrate on those who are finding it most difficult to get jobs.
  I should like now to correct the number that I gave earlier for job introduction.
  1174
  I said that only six applications had been received. I should have said that 218 had been received for Great Britain as a whole. The six applications relate to Northern Ireland, with which I am also dealing tonight. Even so, the response so far has been disappointing. This is the general point that I make now. We in Government can make available facilities and money, but I spend much of my time going around the country trying to persuade local authorities, trade unionists and employers in the localities to pick up the cash that the Government have put on the table to deal with the problem of unemployment.
  I hope that this debate and the subsequent Committee stage will give the public a much greater awareness of the schemes that the Government are running at present.
  I want to make one further point about the temporary employment subsidy. For each firm it is temporary. There is no way in which a firm can continue to shelter under the subsidy. Its extensions have been in time and geographical, but for each company it is still a temporary subsidy.
  One of the unfairnesses of ending TES is that firms will be hit which would have been eligible for help had they experienced financial difficulties earlier. That point needs to be drummed home.
  We realise the problems existing in Skelmersdale and Wigan. We are determined to come to grips with the problems that redundancies in those areas have created.
  We have not analysed in detail why firms have asked for TES, but in talking to deputations I have discovered that the reasons are legion. One cannot say that the reason is this, that or the other. Each company seems to face separate problems. Of course, the virtue of TES has been to give a firm a breathing space to deal with its problems.
  I am sure that we shall be speaking on this subject at length in Committee. I do not want to detain the House any longer tonight. I commend the Bill to the House.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  EMPLOYMENT SUBSIDIES [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That it is expedient that there should be paid out of money provided by Parliament and sums required by the Secretary of State for the purposes of schemes set up or continued under any Act of the present Session to authorise payments to employers as a means of contributing to the alleviation of unemployment—[Mr. Golding.]

  MEDICINES (UNORTHODOX PRACTITIONERS)
  Motion made, and Question proposed, That this House do now adjourn—[Mr. Tinn.]
  11.17 p.m.
  Mrs. Joyce Butler: Almost exactly 10 years ago, from 12th March until 30th May 1968, I took part in the Committee stage of the Medicines Bill. As the Member who had been responsible for raising the subject of the thalidomide tragedy for the very first time in this House, I was wholeheartedly in favour of the purpose of the Bill.
  I supported the comment of the then Minister of Health, Kenneth Robinson, when he said in Committee:
  "it is relevant to say that there was no thalidomide tragedy in the United States of America, where the Food and Drugs Administration exercises broadly the sort of control that we are seeking to exercise under the Bill."—[Official Report, Standing Committee D, 12th March 1968, c. 50–1.]
  Nevertheless, it is important to note that it was accepted from the very beginning that substances used by unorthodox practitioners, including herbal and homoeopathic substances, were in a very special category.
  In recognition of this, in the 10 years that have elapsed since the first stages of the Bill in Parliament and the making of current regulations, the Department's expert advisers and representatives of unorthodox practitioners have had discussions to ensure that these traditional remedies are protected as, indeed, that Act provides that they should be.
  However, there are inevitably a number of difficulties, and the problem about which I am concerned arises from what
  1176
  is fast becoming the notorious Order 2127—other aspects of which have been debated in the House on several occasions recently. The paragraph of this order which concerns unorthodox practitioners is paragraph 3(1)(d), which prohibits them from giving injections of all but a very limited list of medicinal products. This cuts right across their common law right to give medicines by injection, provided that those medicines are not on the list of scheduled drugs.
  One difficulty about this appears to be that the Department has not been able to find any obvious way of distinguishing between untrained lay persons and trained and qualified natural therapeutics practitioners who have the knowledge, training and experience which the lay person does not have.
  As I understand it, the particular injections which these qualified natural practitioners have hitherto given, and which Order 2127, after a specified period of six months, will prevent them from administering, fall into five different categories.
  The first of these categories is the injection of homeopathic substances that are basically no more than a saline solution and which have been found to work with a high measure of success, especially in cases requiring prompt treatment.
  The second is the injection of herbal substances such as echinacea preparations, which are principally concerned with achieving therapeutic effects by bringing about a healing reaction on the part of the patient. These are particularly valuable to the acute rheumatoid patient.
  The third is injections of the herbal preparation viscum album, used to combat fibrotic conditions. It is helpful in early osteoarthritis of the hip and in cases of degenerative inter-vertebral discs.
  The fourth is local anaesthetics in the vicinity of a lumbar nerve route affected by a compressed disc, by which the remission of pain can bring about relaxation and improvement of the muscle spasm which is longer lasting even than the analgesic effect of the injection itself.
  The fifth is injections of vitamins of the B group or of iron. Vitamin B12 is particularly important, since many patients seem to have a particular requirement for

  1177
  it and benefit greatly from its administration by injection, whereas if it is taken orally it seems to have little value.
  This list of categories may sound somewhat obstruse, but the fact is that homeopathic, naturopathic and osteopathic practitioners have been able to produce, with these substances and others, quite remarkable improvements in a wide range of arthritic conditions which orthodox methods have been unable to cure.
  I have had a considerable number of letters testifying to the beneficial effects of such treatment in apparently hopeless cases. Some have also been passed on to me by my hon. Friend the Member for Watford (Mr. Tuck), who is unfortunately not able to be in the House tonight but is very concerned about this matter, as the Minister knows. Many other hon. Members share the concern that I am expressing because they themselves have benefited in this way, and I think that all of us have constituents who had previously been regarded as incurable but are now able to live normal lives and to continue in employment as a result of such treatment.
  It so happens that there was an interesting sidelight on this debate at my advice session last Saturday, when I had a visit from a young man suffering from tennis elbow—not a condition we hear very much of these days. He was in great pain. He had been to the doctor for treatment before Christmas and was furious with me, as his Member of Parliament, because the earliest appointment that the local hospital consultant could give him was 16th May.
  With hospital waiting lists like this, one would have thought that the Ministry would be more concerned to increase and not restrict the effective help available for such conditions, particularly as every visit to an unorthodox practitioner saves the hard-pressed Health Service money, and also, of course, saves sickness and unemployment benefit by getting people fit again and enabling them to return to work.
  The fact remains, that, despite its undoubted value to the community, this side of unorthodox practitioner work will come to an end at the end of the six-month suspension period of the order unless some way can be found of enabling it to con-
  1178
  tinue. Because I hope to have some constructive results from this debate, I hope that my hon. Friend has been able to consider the possibility, about which I recently wrote to him, of trying to devise a system of licensing of unorthodox practitioners to use the substances required on the same lines as the licensing of unorthodox practitioners for the making, manufacture or assembling of various medical substances which already operates.
  That was one suggestion. Another, which is less satisfactory, would be to add the substances about which I have been speaking, and which unorthodox practitioners wish to continue to use, to paragraph 4(4) of the order, which already lists various substances which can be used for injection by anyone and which are not "prescription only" medicines. Yet another suggestion might be a possible addition to Schedule 4 to the order, to include recognised unorthdox practitioners as a group of those exempted in the parental administration of certain substances.
  A further suggestion is that my hon. Friend the Minister might look at Section 60 of the Medicines Act 1968, which provides for the restricted sale, supply and administration of certain medical products in such a way that any regulation made under the section may specify the qualifications and experience which an applicant for a certificate must have. The Minister might care to look at this to see whether it could be useful in enabling unorthodox practitioners to continue to use non-dangerous substances in a way that the present order forbids.
  As far as I understand, no evidence has been forthcoming of any harmful results of such injections by unorthodox practitioners. On the contrary, all the evidence of which I am aware is of benefit and help. If the Minister has evidence of harm, he has not so far produced it, except to talk of possible allergic reactions. Will he make quite clear tonight? If he has none, I hope that he will say so.
  I should like to refer to a point that my hon. Friend the Member for Warley, East (Mr. Faulds) put to me. He has asked me to express his regret at not being able to take part in the debate. The point about which he is particularly

  1179
  concerned is that homeopathic practitioners are now restricted in the sending of medical packages through the post. That is a great restriction on their practice. I hope that my hon. Friend the Minister will comment on that as well when he replies to the debate.
  I find it very difficult to understand the restrictions which the Ministry is now imposing on safe unorthodox medicine. There seems to have been a hardening of its attitude recently, a cursory dismissal of the needs of those who choose to seek the help of homeopathic and naturopathic practitioners, and a disregard of accepted common law rights. I hope that my hon. Friend will reverse this regrettable new trend and that he will now find a way to take appropriate action to restore to those suffering pain and disability the full service from the unorthodox practitioners which they were able tee receive before the order was made.
  11.29 p.m.
  Mr. David Mitchell: I am most grateful to the hon. Lady for allowing me to intervene very briefly in the debate to reinforce the points that she has made.
  The hon. Lady referred to the common law rights of the individual. If people wish to treat themselves or to be treated in an unorthodox way, is not that their individual right? If it is asserted that only the State may decide in what way we shall be treated, surely we have crossed that perilous line to the point where it is assumed that the State possesses the citizen body and soul. I do not believe that the Minister intends to do that, but there is an awful danger that he will be doing it with the order—which he has temporarily withdrawn—if he does not meet the points so ably put by the hon. Lady.
  I give a practical example to reinforce what the hon. Lady has said. The last town mayor of Basingstoke suffered from an arthritic hip condition—a fact that was not generally known to the public. The orthodox medical treatment for the condition is cortisone—a drug that has a number of side effects, which are unacceptable to the citizen concerned.
  The mayor would have been laid up and unable to perform his duties but for the work of an osteopath and acupuncturist who has an "unorthodox" practice in
  1180
  Basingstoke. I am not sure whether I am permitted to give his name, because of the ethic of the profession. He treated the mayor with injections of tincture of mistletoe. These were most effective and enable him to carry on his duties as town mayor throughout the year, and no one even knew that he would have otherwise have been crippled by this unhappy condition.
  The case of the first citizen of Basingstoke is an example which catches the eye more than that of an ordinary citizen, but the fact remains that countless thousands of people throughout the country owe their ability to carry on a reasonable working life to "unorthodox" practitioners.
  I beg the Minister to ensure by one means or another that they may carry on doing what they have traditionally done, giving the treatment that they have traditionally given, because this has been for many people the difference between living life reasonably and being crippled or in pain.
  11.32 p.m.
  The Minister of State, Department of Health and Social Security (Mr. Roland Moyle): My hon. Friend the Member for Wood Green (Mrs. Butler) has throughout her parliamentary career been a staunch supporter of the rights of the individual, and in particular the rights of individuals to seek treatment from the practitioner of their choice.
  Certainly she has always championed the cause of the minority in areas such as herbal remedies, health foods and dietary supplements. It is therefore most appropriate that she should be the one to initiate this debate on medicines for parenteral administration of the more heterodox sort.
  Tonight she has, in the words of the Order Paper, drawn attention to "the difficulties of osteopaths"—difficulties consequent upon the introduction of measures to implement various sections of Part III of the Medicines Act on the first day of this month. In the course of her speech she has made it clear that her concern is not solely with people who practise osteopathy alone but also, perhaps primarily, with those who practise osteopathy in conjunction with other forms of treatment. The common thread is that none of the practitioners in mind

  1181
  is statutorily registered. That fact alone creates difficulties, but I should like first of all to say a little about the multiplicity or organisations representing the practitioners involved and the relationships between them and their views as I understand them.
  Taking osteopathy on its own first, there is the General Council and Register of Osteopaths, which has its own training school, the British School of Osteopathy. The four-year course run by the school is entirely concerned with osteopathy and no training is given in the use of medicines. Perhaps for that reason and possibly for other reasons the General Council and Register has made it clear to the Medicines Commission and my Department that it has no objection to the restriction on medicines for parenteral administration introduced in the Medicines (Prescription Only) Order 1977. Similarly, the Chiropractors' Association has indicated that the restriction gives rise to no concern. I would not wish to make too much of the point, but the attitude of these two bodies obviously suggests that the use of medicines is not universally regarded as a necessary adjunct to the practice of osteopathy.
  There are other bodies which I understand represent osteopathy alone that I should also mention. These are the College of Osteopathy, the Society of Osteopaths and the Osteopathic Association of Great Britain. I understand that none of these bodies favours the restriction in the prescription-only medicines order. Then there are the organizations representing mixed disciplines—the British Naturopathic and Osteopathic Association, of whose training college at Hampstead, the British College of Naturopathy and Osteopathy, my hon. Friend is patron. These bodies, and the British Committee for Natural Therapeutics, representing a variety of organisations, are greatly concerned about the effect of the prescription-only order on the practices of their members. The cause of this anxiety has already been mentioned, but I should like to state the problem as I see it.
  First, there is the Medicines (Prescription Only) Order 1977 which came into operation on 1st February. The main purpose of this order is to specify the
  1182
  descriptions and classes of medicinal products which may be sold by retail—or supplied in equivalent circumstances—only in accordance with the prescription of a doctor, dentist or veterinarian. Included in this group are medicines that are injected as opposed to being administered orally by topical application or by insertion. The effect of this provision is to place a number of injectables currently used by what I suspect is a relatively small group of non-statutorily registered practitioners into the prescription-only category for the first time. This provision in itself is not, perhaps, all that onerous, but it has to be read in conjunction with Section 58(2)(b) of the Medicines Act, which prohibits the administration of prescription-only medicines by anyone who is not a doctor, dentist or veterinarian or a person acting in accordance with the directions of such a practititioner.
  A further provision in the prescription-only order exempts certain prescription-only medicines from the restriction on administration, but this general exemption does not extend to medicines for parenteral administration.
  Finally, by virtue of the restrictions in a related instrument—the Medicines (Sale or Supply) (Miscellaneous Provisions) Regulations 1977—the non-statutorily recognised practitioner is prevented from obtaining the medicines concerned. This leads to substantial restrictions on the persons to whom my hon. Friend has referred.
  The purpose of applying these controls was not, as has been suggested, to sweep away the rights of these non-orthodox practitioners to use medicines of this kind: nor was it to put them out of business nor to deny their patients the liberty of seeking treatment from practitioners of their choice. It is not a question, as the hon. Member for Basingstoke (Mr. Mitchell) said, of individuals deciding how to treat themselves. It is a question of what treatment individuals should give to other individuals. It is general practice, not only in medicine and related fields but throughout professional life, to place restrictions on the way in which one person can treat another.
  The Medicines Act is designed to control medicinal products, and the provisions of the prescription-only order and

  1183
  of the other instruments implementing sections of Part III of the Act were drawn up on the basis of recommendations made by the Medicines Commission, the independent body set up to advise the Health and Agriculture Ministers on the execution of the Act and the exercise of powers under it. The Commission's advice was given in relation to medicines and with considerations of public safety in mind.
  The Commission took the view that for reasons of safety provision should be made to restrict to prescription only the sale and supply as a class of all preparations intended for parental administration. It did so because it is not a subject for question that medicines administered parenterally are more hazardous than those administered in other ways. They are usually more potent than those in other pharmaceutical forms; their effects are more rapid because they usually go straight into the bloodstream; and, generally speaking, their potential for adverse reactions is greater.
  There are other dangers. For example, the danger of contamination or infection is greater. The possibility of accidental injection into the vein or artery arises, and the ability of non-medically trained personnel to cope with such a situation is in doubt. Furthermore, the resuscitation equipment needed to cope with an incident of this kind is unlikely to be available except under medical supervision.
  Those factors were taken into account in bringing the legislation into operation. Nevertheless, as the House knows, we received last-minute representations to make an amendment order, which came into operation on 11th February. This has the effect of providing temporary exemption for medicines which became prescription-only medicines for the first time on 1st February. It also has the effect of allowing non-statutorily recognised practitioners to continue for a period of six months to administer parenterally those medicines which became prescription-only for the first time by virtue of the order that we are discussing tonight.
  There is an interim period during which the views of the various non-statutorily registered practitioners can be considered. The message that I want to give the House tonight is that we shall take the opportunity of the next six
  1184
  months to look again at this problem in the light of what has been said this evening in particular, and also in the light of representations that have been made.
  I appreciate that the practitioners with whom we are concerned are not seeking a permanent exemption which would allow them to administer parenterally any medicine. Their claim, as I understand it, is that they wish to be allowed to continue using the medicines which prior to 1st February they could lawfully use in the course of their practice. They may, therefore, be able to show that the number of medicines involved is quite small and that the hazards associated with these medicines is not as great as with the bulk of medicines in this category. If so, those are factors which I should want to take into account.
  However, as my hon. Friend said, the difficulty caused by the absence of recognition will remain. Statutory recognition has wide implications and consequences, and there is, clearly, an objection to such recognition in subordinate legislation under the Medicines Act. There will, of course, of necessity be considerable difficulty in defining the group of persons who have acquired the skill in the technique of administering medicines parenterally. I think that my hon. Friend alluded to that.
  My hon. Friend made a suggestion about the way in which this difficulty might be overcome, and we shall certainly consider it very carefully, but the establishment of a link with the special arrangements that exist for the grant of manufacturers' licences to non-orthodox practitioners clearly presents problems. These arrangements relate to the assembling and mixing of relatively harmless products and to products prepared or packed on the supplier's premises, and it is by no means clear that it would be right to extend such arrangements to cover the medicines in question.
  There are various other factors to consider. I am conscious of the contribution made by osteopaths and others to the welfare of patients, and I am concerned that the interests of these practitioners should be properly observed. On the other hand, I have to try to balance them against the safety considerations to which I have referred. I am most anxious

  1185
  to avoid anything that might increase or even maintain the risk to which patients taking medicines are exposed. I think that medicines are hazardous products. More and more as we consider this problem we realise that, and the prescription-only medicines are obviously the most hazardous group.
  I promise my hon. Friend and the hon. Member for Basingstoke that in the next six months I shall strive to obtain the right balance between these conflicting factors. We shall have the advice of the Medicines Commission which, as my hon. Friend the Under-Secretary of State, made clear in his speech to the Sixth Standing Committee on Statutory Instruments, has expressed its readiness to reconsider the question of the use of prescription-only medicines by non-statutorily recognised practitioners.
  This development, in conjunction with the temporary exemption, means that the practitioners concerned can continue practising as previously for the time being and that in the meantime the Medicines Commission will be reviewing its earlier recommendations. I promise to draw the Commission's attention to the representa-
  1186
  tions made to me tonight with a view to ensuring that my hon. Friend's comments are taken fully into consideration by the Commission. It means that we shall have another opportunity to examine the problem, and I hope that we shall be able to produce an answer that is more acceptable to my hon. Friend, although at present I am not in a position to counsel optimism in that respect.
  Mrs. Joyce Butler: I thank my hon. Friend for his reply and for that assurance. He referred to some of the possible dangers of unorthodox practitioners using injections and to their having used injections for a long time. Is there any evidence to suggest that adverse reactions have occurred?
  Mr. Moyle: I have received that present representation from my hon. Friend, and I shall examine the evidence. There is also the question of anticipation of potential dangers. That is a principle to which we must have regard in producing new regulations.
  Question put and agreed to.
  Adjourned accordingly at thirteen minutes to Twelve o'clock.