Commons Sitting of 16 January 1978

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

    Hill Farms
    Mr. Geraint Howellsasked the Secretary of State for Wales if he has any plans to visit a marginal hill farm in Wales; and if he will make a statement.
    The Under-Secretary of State for Wales (Mr. Alec Jones): It is my intention to visit a number of farms in the coming months. As the hon. Member knows, my right hon. and learned Friend and his agricultural colleagues are currently considering a report by officials on the position of farmers on poor land outside the less-favoured areas.
    Mr. Howells: I am grateful to the hon. Gentleman for his reply, but, in view of the present crisis, what specific plans
    2
    has he to help the marginal farmer? Does he agree that one way to help the marginal farmers would be to devalue the green pound by 10 per cent.?
    Mr. Alec Jones: I understand that in the coming few days the House is likely to have a fairly lengthy discussion on the question of the green pound, and I should not like to prejudge what may be said then. The potential for the use of marginal land is being actively considered in the current review of "Food from Our Own Resources".
    Mr. Gwynfor Evans: Is the hon. Gentleman aware that if he visits the marginal farms he will find that they are heavily discriminated against, especially in comparison with the upland farms and the prosperous lowland farms? The beef subsidy has been done away with and the other subsidies are to be reduced. In particular, we are badly in need of more lime on the marginal land, which uses five times more lime than land in the eastern part of the country. This cannot he done through a projected plan. Will the Minister note this?
    Mr. Speaker: Order. I hope that all hon. Members will make an effort to be as brief as they can be today.
    Mr. Alec Jones: I am aware of the problems of marginal land. That is why the Agriculture Departments produced a report on the issue.
    Mr. Roderick: What action does my hon. Friend propose to take to mitigate

    3
    the circumstances in which the French are putting a levy on our lamb exports, which has a detrimental effect on our hill farmers? Has my hon. Friend any ideas about assistance for our beef producers in addition to some devaluation of the green pound?
    Mr. Alec Jones: I have already mentioned the matter of the green pound. There is a specific Question later on the Order Paper dealing with the French-Irish consideration.
    Mr. Nicholas Edwards: I welcome what the hon. Gentleman has said about a re-examination. Does he agree that there is nothing final about the present definition of "less favoured areas," and that some of our marginal areas are less well treated than comparable land in Europe? There is a need to re-examine this question to see whether we can have a better definition than we have now.
    Mr. Alec Jones: There is certainly room to look at this matter again. I have indicated that we are considering it. The Government will announce their intentions and views on the report as soon as possible.

    Welsh Tourist Board
    Mr. Hollandasked the Secretary of State for Wales whether, in view of the similarity in terms of reference and activities between the British Tourist Authority and the Wales Tourist Board, economies in public expenditure could be effected by eliminating the Wales Tourist Board as a separate organisation.
    The Under-Secretary of State for Wales (Mr. Barry Jones): No. The Wales Tourist Board's responsibilities are different from those of the British Tourist Authority. We have certainly no intention of winding up the Board.
    Mr. Holland: In view of the proliferation of QUANGOs in recent years, does not the hon. Gentleman think that the time has come to examine all such bodies to see whether they can be reduced in numbers where duplication occurs? In view of what the hon. Gentleman has just said, will he say what function the Wales Tourist Board carries out that would be impossible for the British Tourist Authority within its terms of reference?
    Mr. Barry Jones: It would be putting back the clock if the hon. Gentleman had his way. What he proposes would not be acceptable to the people of Wales. In 1976 Wales earned about £300 million from tourism, including about £50 million from overseas visitors. The money invested in the Wales Tourist Board is well invested.
    Mr. Wyn Roberts: Does the Under-Secretary agree that tourism is a very important industry to us in Wales and that on the whole the Board is doing and has done a very good job in promoting it?
    Mr. Barry Jones: The Board is doing an excellent job, and I commend its work to every hon. Member It is often instrumental in creating jobs in rural areas which would otherwise have no hope.
    Mr. Wigley: Is the Under-Secretary aware of the British Tourist Authority office that is reported to have a map of Wales upside down in its window? In those circumstances, does he think that any change should be in the direction of giving the Board more responsibility for promoting Wales overseas?
    Mr. Barry Jones: I certainly believe that the Board has put Wales on the world tourist map. It is a thundering success.

    Advance Factories
    Sir A. Meyerasked the Secretary of State for Wales how many completed advance factories in Wales remain unlet; and what is the average number of employees working in advance factories completed since February 1974.
    The Secretary of State for Wales (Mr. John Morris): Of the 91 advance factories, including nursery units, completed since February 1974, 45 have been let; a further 22 have been provisionally allocated or are subject to current applications; 24 factories remain unlet with tenants being actively sought.
    The average number of employees in each of the occupied factories is 37.
    Sir A. Meyer: In view of those unsatisfactory figures, and as any major increase in new jobs is likely to come not in manufacturing industry but elsewhere, does not the right hon. and learned

    5
    Gentleman consider that he has placed too much emphasis on the building of advance factories as a means of reducing unemployment?
    Mr. Morris: I accept that if we are to make a substantial indent in unemployment it will come from the general improvement in the economy of this country, and that is what we are beginning to see. If the hon. Gentleman is suggesting that I should withdraw the increased programme of advance factories that we have launched upon, I believe that he is in a minority in the House and certainly in a minority in Wales.
    Mr. Kinnock: Does my right hon. and learned Friend accept that, while we recognise the need for different durations of free rent for factories built in Wales in the special development areas and development areas, there is a certain amount of disquiet about the way this system is operated in some areas? Can he tell us the criteria that he is prepared to use in providing extensive free-rent facilities to factories in areas of high unemployment which may not necessarily be quite within special development areas?
    Mr. Morris: My hon. Friend has written to me on this, and I sent him a very detailed reply which I thought went a great deal of the way to satisfying him on the criteria.
    There are always problems with boundaries. What we seek to do is to try to ensure maximum flexibility to give that kind of encouragement to industry to bring it to the areas needing it. Generally this has been satisfactory, but if my hon. Friend has any particular case in mind I shall give it my attention.
    Mr. D. E. Thomas: Has the Secretary of State had any recent discussions with the Welsh Development Agency and the Development Board for Rural Wales about the setting up of wholly-owned direct subsidiaries of the Welsh Development Agency in areas of advance factory development? Is he aware that a factory at Blaenau Ffestiniog of 50,000 sq. ft. is still lying vacant? Will he seek more imaginative ways of public enterprise to bring industry into that type of situation?
    Mr. Morris: I am always happy that more imaginative types of public enterprise should be instituted, either on my
    6
    suggestion or on that of either of the boards. I realise that the problem of this factory has defied solution for many years. The hon. Gentleman will be encouraged by the recent success of the Development Board for Rural Wales in the Penrhyndeudraeth area. After a great deal of effort, it has succeeded in getting a tenant there. We are seeking to ensure that we try, using every possible means, to bring tenants to advance factories.

    Energy Conservation
    Sir Raymond Gowerasked the Secretary of State for Wales what proportion of the sum of £320 million intended to be used to conserve energy will be allocated to Wales; and if he will make a statement.
    Mr. Alec Jones: The hon. Member will know that my right hon. Friend the Secretary of State for Energy is primarily responsible for this programme. About £11 million will be spent in Wales on programmes falling within my right hon. and learned Friend's responsibility; but the total expenditure will be somewhat higher as other Departments will also be responsible for expenditure in Wales.
    Sir R. Gower: Can the Minister say in what part of Wales this will predominantly be deployed?
    Mr. Alec Jones: Yes. The money that is being allocated will mean that over the next four years we shall be spending, on average, £1 million on housing, £1·2 million on education and £0·55 million per annum on health. The actual amounts will vary year by year.

    Rating (Capital Valuation)
    Mr. Andersonasked the Secretary of State for Wales what steps he proposes to take to protect Welsh ratepayers in any changeover to a capital value basis of revaluation.
    Mr. Alec Jones: It is our intention that when capital valuation is introduced provision should be made for the phasing-in of any changes in rate bills resulting from the capital value basis. Should extreme cases arise, permanent arrangements to mitigate the effects may be made.
    Mr. Anderson: Is my hon. Friend aware that most informed observers in

    7
    Wales believe that the new basis of valuation could have disastrous effects in the Principality unless there was not just a phasing-in but a permanent protection for Welsh ratepayers? What permanent proposals does the Minister have to protect the totality of Welsh ratepayers?
    Mr. Alec Jones: We are aware of the feelings that exist in Wales on this matter. It does not appear that it will be possible to introduce the necessary legislation to give effect to capital valuation during the lifetime of this Parliament. For that reason, and because of representations being made, the Government are to consider the position in the light of the parliamentary situation and in the light of comments which my hon. Friend and others have made on this proposal.
    Mr. Nicholas Edwards: Since in the last part of his answer the Minister is seeking to give the impression that he is re-examining the whole question, may I say that we in the Opposition regard the proposal as retrograde. particularly for Wales? Will not the Minister look at the whole scheme again and consider whether it would not be more sensible to drop it?
    Mr. Alec Jones: I have clearly indicated that the Government are considering the proposal in the light of all the developments.
    Mr. Wigley: Will the Minister take on board that areas in which people have second homes—and tourist areas—will be hit very badly by this sort of proposal?
    Mr. Alec Jones: Naturally, all those factors will be taken into account.
    Mr. Kinnock: Since the rate support grant is the greatest single source of income for the people of Wales from governmental sources, has the Minister made any calculation of what a change in the system might mean in terms of devolution?
    Mr. Alec Jones: No, because the question of devolution is not intimately linked to a change in the level of rate support grant. The allocation of a block grant would be at the discretion of the Assembly.
    Sir Raymond Gower: In the reconsideration which the Minister says is now taking place, will he and his right hon.
    8
    and learned Friend take account of the fact that this proposal would appear almost certainly to impinge more harshly upon many ratepayers? Is he aware that what is needed is something that will hurt them less in some circumstances, as the present system is grotesquely unfair in its incidence?
    Mr. Alec Jones: I do not think that the domestic ratepayer in Wales would consider that the present system is grotesquely unfair, as the domestic ratepayer in Wales—thanks to this Government—benefits from the domestic element to the extent of 36·5p in the pound as opposed to 18p in England.

    Rent Arrears
    Mr. Wigleyasked the Secretary of State for Wales whether his Department will undertake a survey into the extent and causes of rent arrears amongst the district council housing authorities of Wales.
    Mr. Alec Jones: It has already been arranged that such a survey shall be carried out in England and Wales this year by the Institute of Housing. I am grateful to the Institute for offering to undertake this survey.
    Mr. Wigley: Will the Minister confirm or deny that in the first place the Welsh Office refused to undertake such a survey as is being undertaken by the Department of the Environment because of staffing problems? If so, is this a general problem? What does he intend to do about it?
    Mr. Alec Jones: We have had lengthy discussions, naturally, on the question of the survey and what it should contain, when it should take place and who should finance it. I am delighted that the decision has been made to go ahead with a survey to give us the sort of information which will be of help.

    Cleddau Bridge
    Mr. Gwynfor Evansasked the Secretary of State for Wales what representations he has received concerning responsibility for the Cleddau Bridge; and if he will make a statement.
    Mr. Barry Jones: Over a period of time a number of suggestions have been made

    9
    aimed at reducing the debt charges falling on the highway authority, but we have been unable to agree to any of them.
    Mr. Evans: Is the Minister aware that by next year Dyfed will have spent no less than £6½ million on interest alone, for which the Government should have accepted responsibility, on the cost of the Cleddau Bridge? Is he aware that there would be a great outcry if this money had been spent on creating jobs in Dyfed, for instance, in making available bilingual signs?
    Mr. Barry Jones: The hon. Gentleman might recollect that three deputations from Dyfed have been seen by Ministers. Taking into account the payment of the needs and the resources elements to local authorities in Dyfed, already nearly 3p in every 4p of the net loss on the bridge is met by the Government.
    Mr. Nicholas Edwards: Does the Minister agree that a very heavy burden is falling on both the users and the ratepayers? Is it not a good principle that if an unforeseen disaster occurs the burden should be spread as widely as possible? Will not the Minister again reconsider the recommendation of his own inspector, after a full public inquiry, to transfer the additional cost to the general taxpayer instead of the ratepayer? In the long run, something will have to be done. Why does the Minister put off the decision?
    Mr. Barry Jones: I reiterate that this Department has seen three deputations from Dyfed in the lifetime of this Administration. If the hon. Gentleman can bring forward new facts, we shall consider the matter again.

    Devolution
    Mr. Wyn Robertsasked the Secretary of State for Wales how many letters he has received in favour of and against the proposals for devolution as set out in the Wales Bill.
    Mr. John Morris: Among the letters I have received seeking clarification or making general comments on the provisions of the Wales Bill, two have been broadly in favour and two broadly against.
    Mr. Roberts: Do those figures suggest to the right hon. and learned Gentleman
    10
    that there is an overwhelming majority in Wales in favour of the Bill?
    Mr. Morris: We must wait for the referendum to discover that.
    Mr. Ioan Evans: Does my right hon. and learned Friend agree that, although there may be an articulate minority demanding a Welsh Assembly—although it does not appear to be writing letters—there is also a large, silent majority opposed to the establishment of an Assembly? Will he consider putting the issue to the test by holding a consultative referendum before we discuss the Wales Bill? Would it not be possible in that way to test the wishes of the Welsh people and then decide what to do in the House?
    Mr. Morris: My hon. Friend has argued in that way before. I thought that he was one of the protagonists of a referendum on the Bill. He is getting a referendum. He ought to be satisfied.
    Mr. Grist: Will the right hon. and learned Gentleman take this opportunity to say whether a special arrangement has been reached with the Heron Corporation for additional office space to be taken in Cardiff for the Welsh Assembly?
    Mr. Morris: I am not aware of any such development. That would be a question for my right hon. Friend the Secretary of State for the Environment, who is responsible for the Property Services Agency.
    Mr. Anderson: Is my right hon. and learned Friend aware that of all the Questions tabled today perhaps only one—that concerning energy conservation—would be allowable if the Assembly were in being? In the light of that, will my right hon. and learned Friend comment on the role of Members of Parliament representing Welsh constituencies if the Assembly were to come into being?
    Mr. Morris: I invite my hon. Friend to look at the Questions that have been tabled today and suggest that he does his homework a little better. There are six or seven dealing with agriculture alone.

    British Leyland
    Mr. Gristasked the Secretary of State for Wales what consideration he has given to the effect on employment in Wales of the continuing crisis in British Leyland.
    Mr. John Morris: There are four British Leyland plants in Wales. Many other firms supply components to the vehicle industry. The future level of employment in these plants, as elsewhere in the United Kingdom, will depend on the efforts being made to put the company on a long-term viable commercial footing.
    Mr. Grist: Does the Secretary of State agree that the problem is that, even if British Leyland is to survive, it will be only on the grounds of massively increased productivity which will in turn lead to certain redundancies?
    Mr. Morris: That is a question primarily for my right hon. Friend the Secretary of State for Industry. I am sure that the hon. Member will find it encouraging to know that the Rover works at Cardiff has increased both its capacity and the work force and will, I understand, be taking on further employees shortly.

    Sheepmeat
    Mr. D. E. Thomasasked the Secretary of State for Wales what estimate he has made of the effect on Welsh sheep farming of the agreement between the French and Irish Governments on the export of Irish sheepmeat.
    Mr. Alec Jones: It is too early to estimate the precise effect of heightened discrimination against United Kingdom lamb exports to France.
    Mr. Thomas: Is the Minister not aware that already this week there has been a severe decline in the price of lamb in some markets, including those in my constituency? Will he give an assurance that the Government will now move positively to discuss a European Community régime for sheepmeat? Will he ensure that discrimination against Welsh lamb producers is no longer tolerated by the Government?
    Mr. Alec Jones: The Government are certainly aware of the problem. Since I spent last Friday evening in Anglesey, the hon. Gentleman can be assured that the farmers there reminded me of this point, if I needed reminding. Similarly, we are aware of the importance attached to liberalising intra-Community trade by those wishing to export sheepmeat to France. The Government have already
    12
    said that they are ready to reach agreement on proposals for a sheepmeat régime as long as this pays due regard to the interests of United Kingdom consumers and producers and takes into account our need for imported supplies.
    Mr. Geraint Howells: Is the Minister in a position to give an assurance to Welsh sheep farmers that if ever we have a sheepmeat régime in Europe the Government will do their utmost to safeguard the interests of farmers by making sure that the guaranteed deficiency payments scheme will be retained, because it has served this country well in the past 20 years?
    Mr. Alec Jones: In an earlier reply I said that it was the intention of the Government, in any sheepmeat régime, to safeguard the interests of Welsh farmers—indeed, the interests of all farmers in the United Kingdom. We shall ensure that they are adequately protected.
    Mr. Roderick: Does not my hon. Friend agree that we should emulate the boldness of those good Europeans, the French, and break the rules selectively?
    Mr. Alec Jones: I am not so sure that it is wise to advocate playing a game and then to break every rule that exists. I remind my hon. Friend that the United Kingdom acted pretty speedily and sent a memorandum to the EEC Commission asking it to take action to bring to an end this discrimination against United Kingdom lamb exports.
    Mr. Gwynfor Evans: Is the Minister aware that when I was in Brussels the official who is the head of the agriculture department there told me that the British Government had made no effort whatever to secure any kind of regulation for sheepmeat in the EEC? Does the Minister realise that this official told me that it was Ireland that had made all the running? Ireland is lucky to have its own Government.
    Mr. Alec Jones: Of course I do not know what any individual might have told the hon. Gentleman in Brussels on any occasion. What I have said is that the Government are clearly prepared to come to an agreement on sheepmeat provided that the essential conditions concerning the protection of consumers, producers and imports are met.

    House Building
    Mr. Michael Robertsasked the Secretary of State for Wales if he is satisfied with house building starts in Wales in 1977.
    Mr. Alec Jones: No. Total house building starts in Wales to the end of November 1977, which is the latest date for which figures are so far available, were 11,220. This compares with 14,765 in the corresponding 11 months of 1976. I am disappointed at the reduction, but I am gratified to note that as far as the public sector is concerned the 1977 level is still far higher than the 1973 level.
    Mr. Roberts: Does the Minister accept the forecast that the housing figures for 1977 will be the lowest for two decades? If he does, may I ask whether he considers it to be a true reflection of housing demand in the Principality?
    Mr. Alec Jones: There are differences between housing demand in the Principality and our capacity to meet the demand. I recently met representatives of every housing authority in Wales and urged them to do more to meet the housing needs of the people of Wales than they seem to have done in the earlier part of the year. It is a little early to know anything about the extent of the increase, but there is some evidence of increased necessary expenditure on housing in the current year.
    Mr. D. E. Thomas: Can the Minister tell us what he believes would be an annual target figure for house building in Wales to meet the need?
    Mr. Alec Jones: I do not think that it is possible to do that because I do not believe that there is at the moment an effective and accurate estimate of the housing need. That is why we have said to housing authorities in Wales that as from April 1979 we shall wish to move towards housing investment programmes, using the coming year as an interim step during which we can better ascertain and begin to meet the housing needs of the people of Wales.
    Mr. Wyn Roberts: Does the Minister agree that one of the reasons for the deplorable housing figures in 1977 was the sharp decline in the private house building sector?
    Mr. Alec Jones: There has certainly been a decline in the private sector. The hon. Gentleman will no doubt agree that, as a result of the Government's economic policies, mortgage interest rates have fallen. I believe that house building, even in the private sector, will soon pick up.

    Employment
    Mr. Ioan Evansasked the Secretary of State for Wales what further action is proposed to encourage the Welsh Development Agency and other Government bodies to create employment opportunities in Wales, particularly the valleys of South Wales; and if he will make a statement.
    Mr. John Morris: I am in regular touch with the Welsh Development Agency, the Manpower Services Commission and other bodies concerned with the whole range of measures designed to create employment opportunities in Wales. In addition, I shall use to the full my powers under Section 7 of the Industry Act to stimulate further employment. The enhanced Section 7 incentives now available for special development areas will be of particular value to the valleys of South Wales.
    Mr. Evans: Does my right hon. and learned Friend agree that unemployment remains the perennial problem in Wales, as well as in the rest of Britain? While supporting the excellent work done by the Welsh Development Agency during the first 12 months of its existence, will my right hon. and learned Friend support the call by the Mid-Glamorgan authority in the Principality to have a conference on unemployment to see how the problem can be dealt with? Will he look at the proposals put forward by the TUC in Wales regarding positive employment creation?
    Mr. Morris: Certainly the WDA, coupled with my own powers under Section 7 of the Industry Act, is a major weapon that we have in order to meet what I would agree with my hon. Friend are unemployment figures that are far too high.
    Mr. Wigley: Is the Secretary of State aware that the WDA has been in existence for two years, and not for 12 months, and that in this time we might have expected it to use many of the powers in

    15
    the Act? In particular, does not the right hon. and learned Gentleman feel that it should have used its powers to set up public sector ventures and joint ventures very much more than has been done?
    Mr. Morris: I certainly agree with regard to the period for which the WDA has been in existence. In that time it has increased substantially its factory building. That was not welcomed by some hon. Members in one part of the House. In 1977 the WDA announced 173 new factories, and a number in the constituency of my hon. Friend the Member for Aberdare (Mr. Evans). I think that the number there, in the Cynon Valley, is about nine that have been announced in the course of last year, including a very large one in Hirwaun. But, as regards particular projects, what the WDA has been doing more and more is taking up joint ventures or giving significant loans to companies right across Wales. This has been increasing significantly as the months have gone by. I welcome it very much and give it every encouragement.

    Agriculture
    Mr. Nicholas Edwardsasked the Secretary of State for Wales if he is satisfied with the present condition of Welsh agriculture.
    Mr. John Morris: Last week's Annual Review White Paper shows that the industry generally made a dramatic recovery from the setbacks caused by the adverse weather conditions of 1975 and 1976 and that it is overall in good health.
    Milk, sheep and arable crop production did well in Wales in 1977, but I recognise there is some concern about the weakness of the beef market.
    Mr. Edwards: Is the right hon. and learned Gentleman aware that there will be astonishment among Welsh farmers at the complacency shown in his reply? Is he also aware of the grave damage done to Welsh farmers by the green pound distortion? Surely it cannot be in the long-term interests of consumers that our agriculture industry should have to labour under this unique handicap, and that what was intended to be a temporary protection against exchange rate fluctuation should be used as a long-term means
    16
    of subsidising both consumers and foreign food imports at the expense of Welsh—and British—farmers.
    Mr. Morris: The hon. Gentleman used the word "astonishment". I presume that he couples himself with that expression regarding Welsh farmers. On that basis, it is obvious that he has not done his homework. He must do it a little better. He will find in the increases in the average weighted net income for Wales, published for last year, that the figures for Wales are significantly and substantially higher than they are for England. When one adds up the totality of increase for England, one finds that it is plus 4 per cent. net income, but for Wales it is plus 28 per cent. I invite the hon. Gentleman to read the document published last year.
    Of course, there is concern about the green pound. We have always said that we have no objection in principle to a change in the value of the green pound. If I recall aright, we have changed it on five previous occasions, and there has been at least a 21 per cent. change over the last four years. It is a question of when and to what amount, and of bearing in mind the interests of the whole British public.
    Mr. Hooson: Is the Secretary of State aware that it is a widespread view among farmers in Wales that the Conservatives are always much more concerned about agriculture when they are in Opposition than when they are in Government? Having said that, however, is not the right hon. and learned Gentleman aware that there is an equally widely held view among Welsh farmers at present that the devaluation of the green pound is now long overdue? May we take it that the right hon. and learned Gentleman is exercising all the influence that he can in the Cabinet to bring that about?
    Mr. Morris: The hon. and learned Gentleman has put his finger on the attitude of Conservative spokesmen. I recall fairly fierce contests when the Conservatives announced some of their miserable Price Review determinations. However, what I have said is that it should be right and proper for the hon. Member for Pembroke (Mr. Edwards), if he sets himself up as Opposition spokesman on Welsh agriculture, to have regard to what has been happening. I invite

    17
    him to look at the White Paper published last year and each sector—specialist dairy, mainly dairy, and, dare I mention the word, sheep. I invite him to look at the totality to see how the general agriculture situation stands.
    As regards the green pound, I am fully aware of the concern and so is my right hon. Friend the Minister of Agriculture.
    Sir A. Meyer: Can the Secretary of State give any estimate of the number of independent producer-retailers of milk who are likely to be forced out of business in 1980 by the ban on the sale of untreated milk, the treatment of which they will not be able to afford?
    Mr. Morris: I do not have such an estimate. We are looking at this point. I am aware of the concern. Only last Friday I met a delegation from the Farmers' Union of Wales which also expressed concern about that.

    Housing Finance
    Roderickasked the Secretary of State for Wales on what basis housing finance allocations for 1978–79 have been made.
    Mr. Alec Jones: For work on new house building, improvements and acquisitions, my right hon. and learned Friend has agreed to authorities proceeding with the whole of the programmes which they have notified to me.
    Allocations for the expenditure block covering improvement grants and lending are based on authorities' estimates of what is likely to be spent on improvement grants plus an amount for lending calculated by reference to expected performance in 1977–78.
    With permission, I shall publish details of allocations to individual authorities in the Official Report.
    Mr. Roderick: Can my hon. Friend assure me that he has adequate machinery for monitoring on a month-to-month basis the expenditure of the allocations made to ensure that the full amount is spent during the course of this year? Further, will he consider the possibility of setting up special allocations to local authorities to deal with the homelessness question, which is a new venture for the district councils?
    Mr. Alec Jones: Certainly monitoring is a very important issue. It is one of the factors drawn to our attention in the report of the working party last year. It is because of the improvement in our monitoring service that I was able to urge local authorities to increase their expenditure on housing need in Wales in this coming year.
    Concerning homelessness, we have made the provision and it is now really a matter for each local authority to decide its own priorities. As I said earlier, we have allowed them to proceed with all the programmes, the whole of the programmes of which they told me.
    Mr. D. E. Thomas: Will not the Minister now accept that the cuts in housing expenditure in Wales centrally imposed on housing authorities by the Welsh Office played havoc last year and the year before in meeting housing need? Will he now repudiate the whitewash job by his Department and the Welsh Council last year in the so-called consultative document on housing finance in Wales?
    Mr. Alec Jones: I certainly do not repudiate the report. It was drawn up by a committee, half the members of which were elected members and officers of local authorities, who probably know a great deal more about housing in Wales and the practical day-to-day problems than either the hon. Gentleman or myself. Concerning cuts in the allocation, it seems to me that in this current year no reduction in public expenditure has been a factor in reducing house building. It is our inability to use the resources that the Government have made available.
    Following are the details:

    HOUSING ALLOCATIONS 1978–79

    Local Authority

    Lending/Improvement Grant Block in £000's

    Main Block in £000's

    Aberconwy BC

    250

    1,290

    Afan BC

    510

    1,645

    Alyn and Deeside DC

    340

    1,060

    Arfon DC

    650

    1,165

    Blaenau Gwent DC

    580

    4,310

    Brecknock BC

    190

    925

    Cardiff CC

    1,370

    7,605

    Carmarthen DC

    350

    1,755

    Ceredigion DC

    350

    1,265

    Colwyn BC

    130

    810

    Cynon Valley BC

    880

    1,960

    Delyn DC

    170

    1,195

    Dinefwr BC

    250

    895

    Dwyfor DC

    240

    500

    Local Authority

    Lending/Improvement Grant Block in £000's

    Main Block in £000's

    Glyndwr DC

    200

    1,105

    Islwyn DC

    660

    1,895

    Llanelli BC

    1,160

    1,450

    Lliw Valley BC

    890

    1,970

    Meirionydd DC

    240

    975

    Merthyr Tydfil BC

    560

    2,735

    Monmouth DC

    310

    1,575

    Montgomery DC

    120

    970

    Neath BC

    750

    1,530

    Newport BC

    1,370

    4,165

    Ogwr BC

    1,110

    4,600

    Preseli DC

    300

    1,550

    Radnor DC

    150

    505

    Rhondda BC

    2,140

    2,665

    Rhuddlan DC

    60

    720

    Rhymney Valley DC

    630

    2,815

    South Pembrokeshire DC

    540

    1,190

    Swansea CC

    2,040

    3,825

    Taff-Ely BC

    1,250

    3,235

    Torfaen DC

    520

    3,395

    Vale of Glamorgan BC

    740

    3,895

    Wrexham Maelor BC

    410

    2,875

    Ynys Mon BC

    390

    1,470

    22,800

    77,490

  INDUSTRY

    Shipbuilding (Government Aid)
    Mr. Adleyasked the Secretary of States for Industry if terms are available to British shipowners, as good as those offered to Polish shipowners, regarding Government assistance.
    The Under-Secretary of State for Industry (Mr. Les Huckfield): Yes, Sir. A similar scale of Government-supported credit and assistance from the Intervention Fund would be available for an order from a British owner in appropriate circumstances.
    Mr. Adley: Is the Minister aware that a group of people who contacted me were put in touch by me, through his right hon. Friend the Secretary of State for Industry, with British Shipbuilders and have had a discussion on this question, but they have described the meeting to me as amiable but vague? Will the Minister invite British Shipbuilders to lay down clearly, or do so himself, for all customers or potential customers, what terms are available under the Intervention Fund so that potential customers may know whether they can give serious consideration to having ships built by British Shipbuilders?
    Mr. Huckfield: I am sure that the hon. Member will appreciate that the Intervention Fund is essentially a flexible instrument, but, if he would care to let me or British Shipbuilders have further details of the particular case that he has raised, it would be looked into.

  TRADE

    English Tourist Boards
    Mr. Hollandasked the Secretary of State for Trade whether, in view of the similarity in terms of reference and activities between the British Tourist Authority and the English Tourist Board, economies in public expenditure could be affected by eliminating the English Tourist Board as a separate organisation.
    The Under-Secretary of State for Trade (Mr. Michael Meacher): The premise in the Question is incorrect. The British Tourist Authority is mainly concerned with overseas promotion in respect of the whole of Britain whereas the English Tourist Board directs its different and specialised expertise towards encouraging tourism in England, both in promotion and the provision and improvement of tourist amenities and facilities.
    Mr. Holland: Does the Minister consider that the United Kingdom is so unprepossessing that it requires no fewer than four national bodies, with four separate secretariats and four budgets, to promote tourism both in and to the United Kingdom?
    Mr. Meacher: Yes. The functions of each of the bodies are quite different. The three national tourist boards have very different functions from that of the BTA. As to the size of the budget, the total tourism budget is under £20 million, and our earnings from overseas tourism are £2,000 million, so it is a very good buy.
    Mr. Adley: Is the Minister aware that the proposals in the Scotland Bill radically change the constitution and will therefore radically change the role of the BTA? Many people in the industry are very concerned about this, particularly the possibility of this matter going through the House without there being any debate whatsoever. Will the Minister use what influence he has to ensure that the matter is debated in the House at the earliest opportunity?
    Mr. Meacher: I am sure that my right hon. Friend the Leader of the House will do all that he can to ensure that the matter is debated, although I think that that will partly depend on the Opposition. The role of the BTA is not changed by the Bill. We are talking now about the structure of the board, and that is a matter for discussion within the House.

  CIVIL SERVICE

    Pay Research Unit
    Mr. Tim Rentonasked the Minister for the Civil Service how many independent members, apart from the chairman, will now be appointed to the Pay Research Unit drawn from outside the Civil Service.
    The Minister of State, Civil Service Department (Mr. Charles R. Morris): The chairman and four out of 10 members of the Pay Research Unit Board will be appointed from outside the Civil Service. Only the outside members will have voting rights. A proportion of the staff within the unit will also be recruited from outside the Civil Service.
    Mr. Renton: I thank the Minister for that reply. Is there not a danger of creating a smokescreen over this exercise by setting up a new supervisory board, to which independent members will be appointed, while leaving all the executive powers with the PRU itself, which will still have a civil servant as director? Is it not necessary that it should be seen that, say, 50 per cent. of the members of the PRU should be other than civil servants and that the director of the unit himself should not be a civil servant?
    Mr. Morris: I cannot accept the hon. Gentleman's argument. This is not an exercise in creating a smokescreen. The Government and the Civil Service unions have agreed on a comprehensive system for demonstrating the independence and impartiality of the Pay Research Unit procedure. The board of the PRU will itself have an independent element. The unit will report to the PRU Board, which will have a formidable independent element.
    Mr. Wrigglesworth: Will my right hon. Friend tell us whether there is any possibility, despite the setting up of the new
    22
    unit, of getting an updating of the previous figures produced by the PRU? Does he not agree with me that it would be unfair on civil servants this year if they did not get pay settlements which bore at least some resemblance to settlements outside the public service?
    Mr. Morris: I appreciate my hon. Friend's concern and the concern of civil servants generally. As I have explained previously, however, the PRU procedure takes over 12 months to carry out a full pay research exercise. The updating of current figures would not be practicable in that context.
    Mr. Hayhoe: Is the right hon. Gentleman aware that we attach very high importance to the question of the independence of the PRU? Can he give some indication of what proportion of the PRU staff he expects to be recruited from outside the Civil Service?
    Mr. Morris: At present we are hoping to recruit initially four of the 23 survey officers of the PRU itself. We are also hoping to recruit almost immediately an additional four technical advisers to the unit. Here again, even for the staffing of the unit we are concerned to introduce the independent element. The PRU Board, to which the unit will report, will comprise an independent chairman, four independent members, two official members, two members sponsored by the Civil Service unions and the director of the unit, who will be ex officio.

    Civil Servants (Political Activities)
    Mr. Canavanasked the Minister for the Civil Service when he expects to receive the report of the Armitage Committee on the political activities of civil servants.
    Mr. Charles R. Morris: As my right hon. Friend the Prime Minister said in reply to a Question from my hon. Friend the Member for Woolwich, East (Mr. Cartwright) on 16th December, he has received the Armitage Report. The report was published as Cmnd. 7057 on Wednesday 11th January.
    Mr. Canavan: Does not my right hon. Friend agree that what is much more dangerous and undemocratic than open policical activity by civil servants is the behind-the-scenes way in which certain

    23
    high-ranking civil servants try to dictate Government policy? For example, is it not deplorable that the economic strategy of a Labour Government should be largely influenced by the political prejudices of the mandarins of the Treasury, most of whom appear to be Right-wing Tories?
    Mr. Morris: I suggest to my hon. Friend that his supplementary question bears no relation to the Question which he tabled. If he says that senior civil servants exercise an influence in the determination of policy, that is as much a comment on the Ministers who decide the policy as it is on the civil servants themselves.

    Recruitment
    Mr. Spearingasked the Minister for the Civil Service if he is making any arrangements for recruitment into the administrative trainee grades of persons with experience outside the ranks of the Civil Service who are between 30 and 35 years of age.
    Mr. Charles R. Morris: No, Sir. The upper age limit for external recruitment to the administration trainee grade is 28. This is a training grade, and the entry is designed to bring into the Service young graduates of high quality who are expected to achieve the principal grade by their late 20s or early 30s. In so doing, the Civil Service practice is in line with that of most other major recruiters of graduates. There have been annual opportunities in recent years for those in their thirties to join the Administration Group as principals.
    Mr. Spearing: I am grateful to my right hon. Friend for his reply, but will he tell us what are the numerical opportunities for persons joining as principals after the age of 30? When senior civil servants are having to deal with firms and bodies outside, is it not prima facie an advantage for a certain proportion of them to have had active experience in such firms and bodies before they take responsibility in Ministries?
    Mr. Morris: I accept my hon. Friend's argument entirely. It is advantageous for civil servants to have experience of industry and the private sector generally. My
    24
    hon. Friend referred to the promotion prospects of late entrants. Those who come in at principal level will have the same opportunities as other principals. I referred in my answer to the administrative training grade. That is only one way of entry. People above the age of 28 can come in at executive level, progress to HEO level and then seek entry to the internal administrative training grades.
    Mrs. Bain: In an age in which we have tried to legislate against sex and race discrimination, is it not unacceptable that the Civil Service should still practise this form of age discrimination? At a time of high unemployment, is not this closure of another avenue of employment totally unacceptable?
    Mr. Morris: I do not accept that there has been any closure of this opportunity. If the hon. Lady is pointing, from her knowledge, to the Civil Service discriminating against women in terms of age—I recall the case to which she is referring—I remind her that we are changing the regulations in order to take account of that situation.

    Pay Claims
    Mr. Wrigglesworthasked the Minister for the Civil Service what pay claims he has received from Civil Service unions for 1977–78.
    Mr. Charles R. Morris: No general pay claims relating to the current pay round have yet been submitted by the unions concerned.
    Mr. Wrigglesworth: As there is no Pay Research Unit in operation, on what principles will the Government base their response to the pay claims of the Civil Service unions this time, and what timetable does my right hon. Friend envisage for the negotiations taking place?
    Mr. Morris: As my hon. Friend will be aware, the operative date for any new pay awards will be 1st April 1978. I assure my hon. Friend that it is not the Government's intention to single out civil servants for more restrictive treatment than is required elsewhere. The guidance on earnings increases which will be applied to the Civil Service in the current pay round is that set out in Command Paper 6882.

  SCOTLAND BILL
  Mr. Tim Rentonasked the Lord President of the Council what recent representations he has received on extending the referendum on the Scotland Bill to native-born Scots now working outside Scotland.
  The Minister of State, Privy Council Office (Mr. John Smith): Two, Sir.
  Mr. Renton: Would it not be fair to extend the vote in the referendum, which will involve the issue of the future independence of Scotland, to all those who were born in Scotland and who can show that they still have a family home there? If the Minister of State says "No" to that, is not that simply because he is fearful that on the basis I have suggested the Government would lose the referendum?
  Mr. Smith: With great respect, the hon. Gentleman ought to read the Bill again. It does not propose independence for Scotland, and in our submission it will strengthen the unity of the United Kingdom. The hon. Gentleman should appreciate that the principle which we are trying to bring into effect by the use of the referendum is that the people who are most directly affected by devolution should have the opportunity to say "Yes" or "No" to the implementation of the Act. However much sympathy one might have for the desires of expatriate Scots or Welsh people to vote in the referendum, it would be extremely difficult to identify them and make arrangements for them to vote. The principle that we are following is that the people most directly affected—that is, those on the electoral rolls in Scotland and Wales—should be consulted.
  Mr. James Lamond: Is my hon. Friend aware that in the House of Commons there are approximately 20 men and women who were born in Scotland and who now represent English constituencies—which is a very great tribute to the racial harmony in England—and that on this basis there will be 2 million Scots working among the general population of England alone? Is it not evident that the total number of Scots throughout the world must be so large as to swamp completely the number taking part in any referendum held in Scotland?
  Mr. Smith: It would be very hard to estimate the number of Scots throughout the world. I appreciate the advantages which some constituents, such as those of my hon. Friend the Member for Oldham, East (Mr. Lamond), have in their representation and that, similariy, many Scottish constituencies have benefited by being represented by Members not born and brought up in Scotland. But the question we have to decide is a practical one. It is whether we should follow the principle of applying the referendum to those most directly affected. We believe that that is a good principle, and that is the one to which we shall adhere.
  Mr. Canavanasked the Lord President of the Council what representations he has received about the issues raised by amendments made to the Scotland Bill.
  The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): Other than representations I have received in this House, none, Sir.
  Mr. Canavan: In view of the defeat of the clause trying to tie the Scottish Assembly to Westminster pay policy and the fact that neither the Trades Union Congress nor the Scottish Trades Union Congress has voted to accept the present Government pay policy, will my right hon. Friend give us an assurance that he will not try to reintroduce that obnoxious clause at a later stage of the Bill?
  Mr. Foot: I would not necessarily accept what my hon. Friend has said about the interpretation of the meaning of the clause, but the Government are considering what we should do about the vote that the Committee took on that matter and will consider all aspects of it carefully.
  Mr. Gow: What proposals does the Lord President have to stop the farce of whole clauses and whole schedules of the Scotland Bill passing through the elective Chamber without any debate at all? Will he please reconsider the timetable motion and allocate further time to the Scotland Bill?
  Mr. Foot: I have already given my view about the timetable motion and said that if there were to be any alterations

  27
  they would have to be within the general framework of that timetable motion. There might be alterations as to the way in which the Bill should proceed within the same time limit. But the time allowed under the timetable is, on the whole, a good deal more generous than has been arranged for almost any other previous constitutional Bill. I think that must be taken into account by everyone, including Opposition speakers, in the debate.
  Mr. Dalyell: Does my right hon. Friend know that at 11 p.m. last Wednesday we were discussing an amendment, which will be continued on Tuesday, concerning the possibility of having one abortion law in England and one abortion law in Scotland? Will he have a word with the Under-Secretary who is meeting a delegation from the Scottish office of the British Medical Association tomorrow morning at Dover House and consider its very strong objections, and those of many other people in Scotland, to the whole proposal that there should be one abortion law in Scotland and one abortion law in England, with the possibility that we might have something of an abortion haven here?
  Mr. Foot: The debate on that clause is not yet concluded, and it would be most unwise if the House were to initiate a procedure of discussing a particular clause when it is already before the Committee of the House.
  Mrs. Bain: When considering the representations made on amendments discussed during the passage of the Scotland Bill, will the Lord President note the widespread disappointment that there is in Scotland concerning the rejection by the Committee of a very sensible amendment, which would have given Scotland its right to raise its own finance for the Assembly? Will the Government be bringing forward any constructive plans on Third Reading?
  Mr. Foot: These are all basic questions which are being fully debated during the passage of the Bill through the House. I do not believe that it would be a good innovation in the procedures of the House if we were to have frequent questions on matters which are being debated according to the normal procedures.
  Mr. Pym: Is the Lord President aware that we are not satisfied with the total
  28
  amount of time available for debating the Bill? I appreciate what the Lord President said about reallocating the time within the number of days allotted, but the point that we have been making—it has been made from both sides of the House—is that in relation to the importance of the issues being raised it is unacceptable and unsatisfactory for the House to pass a Bill, or to appear to pass a Bill or go through that process, without there being adequate discussion of all the constitutional issues which are raised. Will the Lord President please reconsider the total amount of time and consider the possibility of adding extra days to those already allotted?
  Mr. Foot: As I have said before, and I emphasise in the light of what the right hon. Gentleman said, more time was allocated for the discussion of this Bill than for almost any constitutional Bill which has been through the House for many decades. The time allowed is not a short time. I fully accept that the subject is of great importance and that any form of timetable gives rise to grievances, which hon. Members naturally raise when a Bill is going through the House, but I cannot promise any more time for the Bill. The House took into account all the factors about the major constitutional nature of the Bill when it passed the timetable motion.
  Mr. Pym: Will the Lord President at least keep an open mind on the point at this stage, so that he does not close the door to the possibility of extending the time available if, on reflection in the next week or two, he feels it to be desirable?
  Mr. Foot: My mind is always open in regard to representations which come from responsible or even from irresponsible quarters, and, therefore, I assure the right hon. Gentleman that I shall listen to any representations that are made. But it is only fair to the House and to the right hon. Gentleman, in replying to his questions, to indicate to him that I do not see any reason for changing the decision that the House reached some weeks ago.

  DEVOLUTION
  Mr. Wigleyasked the Lord President of the Council what proposals he

  29
  has to ensure equity between the two sides in the referendums on devolution in respect of expenditure and broadcasting time.
  Mr. John Smith: The Government have no proposals for controlling expenditure by campaigning organisations during the referendum campaigns. It is the responsibility of the broadcasting authorities to maintain balance and impartiality in their treatment of this subject.
  Mr. Wigley: Does not the Minister realise that this is a very contentious issue and that there are people in Wales who are extremely worried that the result of the referendum will be bought by Confederation of British Industry money from England? Does he not realise that the control of both the broadcasting media and the vast majority of the Press in Wales emanates from London, which has a vested interest in the result which will be obtained? In those circumstances, will the Government think seriously about having a fair referendum?
  Mr. Smith: I am not fearful about the influence that money provided by the CBI or anybody else from any part of the United Kingdom will have on the referendum, because I think that good ideas always triumph over money.
  Mr. Jay: Do the Government intend to intervene in the referendum campaign, or will they leave it to the Scottish and Welsh people to decide?
  Mr. Smith: I think my right hon. Friend understands that the Government are fully committed to the devolution proposals which are in the manifesto, and which are being carried through the House with the full support of the Government. The Government will support their own proposals.
  Mr. Anderson: My hon. Friend will recall that during the Common Market referendum there was criticism that there was a pamphlet by the pros and a pamphlet by the antis and that the Government published a third pamphlet. Will he indicate what is the proposal on this occasion and whether the Government will publish a pamphlet in addition to any pamphlets which are circulated on behalf of the two front organisations?
  Mr. Smith: The Government have not reached conclusions on these matters and will prefer to see how the Bill develops and how the proposals progress in the House. I re-emphasise the point I made in replying to my right hon. Friend the Member for Battersea, North (Mr. Jay) that the Government will actively campaign for the proposals which they put to the House.

HOUSE OF COMMONS

  Business Motions
  Mr. Spearingasked the Lord President of the Council if he will now make arrangements for motions relating to business announced on a Thursday to be placed on the Remaining Orders of the Day at the earliest subsequent opportunity.
  Mr. Foot: No, Sir.
  Mr. Spearing: Does not the Lord President agree that this should be done in respect of European Economic Community matters? Is he aware—I refer to his answer to me on 14th December last—that on at least five occasions recently EEC motions relating to documents have appeared only on the day on which they were debated although they were announced for business up to a week previously? Does he not think that he can do better than that?
  Mr. Foot: My hon. Friend's original Question referred to all motions. Now he has asked that I should adopt the procedure he suggests in dealing with EEC motions. If that were to be done, as I have said to him before, there would then be a special arrangement about EEC motions. That would also in turn inhibit to some extent the way in which Business Statements might be made on Thursdays. I believe that it is better for us to proceed as we are doing at the present stage. If my hon. Friend and others think that this is extremely inconvenient for the House or that there should be an improvement or a change, he is entitled to say so, and so are others. Maybe the best way, therefore, would be to refer the Matter to the Procedure Committee. I am quite prepared to do that, although I think that the present procedure is satisfactory.

SELECT COMMITTEE (MR. SPEAKER'S RULING)
Mr. Speaker: On Thursday last, the hon. Member for Islington, South and Finsbury (Mr. Cunningham) asked me to rule on a matter of contempt involved failure to provide documents when a Select Committee asked for them.
I have given careful consideration to the matter raised by the hon. Member. It is not for the Speaker to define the limits of contempt nor to say in a particular case whether a contempt has been committed. My predecessors in this Chair were always particularly careful to avoid giving an opinion one way or another on such matters. It is for the House itself both to pass general resolutions on the matter of contempt and to decide whether in a particular case a contempt has been committed.
The function of the Speaker is strictly defined to decide whether complaints raised as matters of privilege should have precedence over the Orders of the Day. I am quite certain that he should go no further than that. It is, therefore, not for me to express a general view on the matters raised by the hon. Member.
In his point of order the hon. Member referred correctly to pages 644 and 645 of the current edition of "Erskine May". Cases where disobedience to orders of a Committee have been found to be contempt are also cited on pages 139 and 140 of "Erskine May". I think, however, it might be helpful if I reminded the hon. Member of the passage on page 647 under the heading
"Limitations on the power of select committees to send for papers."
This refers back to the powers of the House itself, which are described on pages 255 and 256.
I understand that the Select Committee on Procedure proposes to examine this whole question and in the circumstances it would be wiser for me to go no further than to draw the hon. Member's attention to those passages. When the Select Committee has advised the House, it will be for the House itself to come to a conclusion.
The hon. Member for Worthing (Mr. Higgins) raised the question whether there was a limitation on the persons and papers that may be required by a
32
Select Committee. The reply that I have given deals also with his point.
Mr. George Cunningham: I am most grateful for your ruling, Mr. Speaker. You will remember that the reason why I asked for such a ruling was that the Lord President of the Council, in the course of the exchanges, had made an ex cathedra statement that the non-production of documents, when required by Select Committee, was not a contempt unless the House itself had so ordered—
The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): No.
Mr. Cunningham: I am glad to hear the Lord President indicate that that was not his assertion. It was certainly what I understood his assertion to be.
Mr. Foot: No.
Mr. Cunningham: If that was not his assertion, I think that the House will be satisfied with matters as they stand.
Mr. Higgins: I am grateful for your ruling, Mr. Speaker. It is a matter of some concern that the words used by the Lord President the other day seemed to impose a further limitation on the exact extent to which specific papers and persons could be sent for. Given that that is so, may I ask whether it will be possible for the proceedings to be debated? I think that it is important, because otherwise we shall not know which papers may and may not be sent for by Select Committees.
Mr. Speaker: I advise the hon. Member for Worthing (Mr. Higgins) to study what I have said. Of course, the whole House knows that the Lord President expressed his own opinion. The House has not passed any opinion on the matter.
Mr. Kenneth Lewis: On a point of order, Mr. Speaker. May we have clarification from the Lord President of what his statement the other day did mean, since he has been saying no all the time?
Mr. Speaker: Not now—if ever.

BRITISH STEEL CORPORATION
Mr. Russell Kerr(by Private Notice) asked the Secretary of State for Industry if he will make a statement on the latest estimate of the projected financial loss by the British Steel Corporation for the current financial year.
The Secretary of State for Industry (Mr. Eric G. Varley): The latest estimate is a loss of about £520 million. This includes a remaining contingency provision of £50 million. I would emphasise that even at this stage in the financial year the estimate is subject to considerable uncertainties as regards, for example, sales, realised prices and industrial relations in the steel industry and elsewhere.
Mr. Kerr: In view of the recent disclosures in the Press, does not my right hon. Friend think that it is more than ever important that the Select Committee, which is charged by this House with responsibility for examining these matters, should have access to all the information which is necessary for the proper fulfilment of its functions?
Mr. Varley: I have seen the Press reports, of course. I must tell the House that the procedures adopted by the British Steel Corporation and the Government have been observed fully on every occasion. What is more, they have been tightened over the past four years.
At no stage have I or my officials been discourteous to the Select Committee. In fact, the contrary is the case. We have adopted the normal procedure. On 27th April, I was summoned to appear before the Select Committee. After being left outside the door for about 25 minutes, I was informed that the Committee had failed to raise a quorum. Subsequently, I was asked to submit written answers to questions which it had been the Committee's intention to put to me. None of those questions referred to the financial position of the British Steel Corporation. However, my hon. Friend the Member for Feltham and Heston (Mr. Kerr) is a signatory to a report calling for closures and redundancies and a departure from the Beswick Review to which he and I and all other hon. Members on the Government Benches, whether or not they be members of the Select Committee, were committed at the last General Election.
If I had come to the House in July or August, on the basis of financial results and forecasts only three and a half months into this financial year, to make the sort of suggestions contained in the Select Committee's report, reported only a week ago, I would have been criticised, and my hon. Friend and
34
many others would have been the first to criticise me.
Mr. Kerr: On a point of order, Mr. Speaker. Simply on a question of fact, may I point this out to the House? We have been informed by my right hon. Friend on a rather smeary basis that he came along to give evidence to the Committee only to find that there was no quorum. For this we apologised. May I say to the House that we have met on 208 occasions since the beginning of this Parliament and that there have been only three occasions on which there has not been a quorum for any sitting of a Sub-Committee or of the whole Committee?
Sir K. Joseph: Is the Secretary of State aware that it is a fact that the Select Committee is dissatisfied with the treatment it received and that that dissatisfaction is, as I said last week, a House of Commons matter? Is the Secretary of State not willing, in the light of all the material which has been released to the Press, now to conform to the request of the Select Committee and let it have the papers for which it asked? Surely this House can rely upon the prudence of the Select Committee to treat the papers with discretion, in the light of possible confidentiality.
Finally, are the Secretary of State and the Lord President aware of the request for a debate made by the Select Committee, and will they ensure that there is a debate before the Secretary of State makes a statement, so that the views of the Select Committee may be considered by the House?
Mr. Varley: The question of a debate is for the Leader of the House. He made the position clear at business questions last Thursday. As to my appearance before the Select Committee and the nondisclosure of papers, I must point out that when I appeared on 1st December I was not asked for the financial forecast of the British Steel Corporation, nor was I asked to deliver any papers to the Select Committee. I am perfectly willing to go back to the Committee if it requires any further evidence.
Mr. Kinnock: At least one hon. Member—myself—is grateful to the Secretary of State for his previously stated offer to go back to the Select Committee for further discussion. However, is my right

35
hon. Friend aware that innumerable opportunities are found by Members of the Government to relate any information that they wish to give? They do not have to wait until they attend Select Committees, nor do they have to wait until Select Committees ask them for information. The fact is that had it been the practice of Government in this country openly to communicate matters of interest to specialist Select Committees, we would not have this situation. The information would have been conveyed to the Select Committee and its findings would have been much more accurate when they were published.
Mr. Varley: I must reject some of the charges that have just been made by my hon. Friend. On no occasion have I been asked to deliver papers to the Select Committee referring to the financial returns of the British Steel Corporation. These questions were not put to me, either in April in the written questions that I received from the Committee, or in December, when I appeared before it. In the four years that I have been a member of the Government I have appeared before many Select Committees, and I have always maintained maximum cooperation and observed the normal customs of the House.
Mr. Biffen: Is the right hon. Gentleman aware that the loss to which he referred in his answer indicates the imperative need for a reassessment of a more appropriate investment programme for the BSC? Will he tell the House when the Chairman of the BSC and himself were first told that losses of this magnitude were a likely probability?
Mr. Varley: There is a system of reporting between the Corporation and the Department. There are monthly reports that are tentative in some respects, and quarterly financial reports. The figure of £446 million, which appeared in the Press over the weekend, was reported in the normal course of events to the Department last August. But the conclusion that I must ask the House to consider is, what should the Government have done at that stage? We were then four months into the financial year. Had we jumped to the conclusion that was contained in the Select Committee report published a week ago that there should
36
be closure of a number of older plants, particularly those maintained in production as a result of Lord Beswick's review—[HON. MEMBERS: "Read the rest of the report."] I am sorry, but the conclusion at that time was that if we had come to the House and acted upon the financial results of four months, we would have been criticised not just by hon. Members on this side of the House but by Conservatives as well.
Mr. William Ross: Will the Secretary of State tell us the reactions of the unions to his producing this kind of conclusion which the Select Committee has reported? Can he tell me the implications, in terms of unemployment, for Scotland of the Select Committee's findings?
Mr. Varley: I cannot give the precise implications for Scotland. There is no doubt there would be some. My right hon. Friend asks about the reactions of the trade unions. I do not expect Conservatives to take account of this, but in 1973 we actually said that immediately on taking office we would freeze and reconsider all the plans for closures and redundancies. We did that, and the Beswick review reported to the House. We are the custodians of the Beswick Report and we are fulfilling that duty.
Mr. Baker: Does the Secretary of State realise that his answers this afternoon have been most unconvincing? The British Steel Corporation has known very well since before August that there would be substantial losses this year. The only change that took place in August was that the gigantic size of the losses became apparent. Is it not time that the Secretary of State brought proposals to the House of the Government's intentions for the steel investment programme?
Mr. Varley: The British Steel Corporation is facing most adverse market conditions. In fact, all steel companies throughout the world are facing these conditions, not just the BSC. The Germans and the French are as well, and the steel companies of the United States are actuactually losing more per ton than are the British. In consultation with the Chairman of the BSC and the trade unions, we are looking at ways of arresting this situation and putting it right. However, we are not going to be panicked or forced into taking any arbitrary action.
Dr. Bray: Is my right hon. Friend aware that I discussed the report with the Chairman of the Scottish TUC and the Scottish division of the British Steel Corporation after they had a chance to read it? They do not consider that it is damaging to the interests of steel workers in Scotland.
The revelation in the minutes submitted by the chief executive of the Corporation at the Corporation's board meeting on 28th July brings out the fact that the biggest single cause of the losses is the fall in prices as a result of imports and dumping. Had that information been publicly available to this House, we would have been concerned to see far more urgent action taken promptly to stop this dumping in Europe.
Mr. Varley: I said to the Select Committee that action on dumping would be taken wherever it was justified. The Secretary of State for Trade has taken some action. However, as I said before, at a time when we were four months into this financial year, with all the uncertainties for the British industry and for every major steel industry throughout the world, what action were we supposed to take? Were we supposed to go back arbitrarily on the decisions taken by Lord Beswick?
My hon. Friend says that he does not regard this as damaging. I attended a private meeting which he attended a few months ago at which he pressed on me that the investment programme of the Corporation should go ahead. One of the recommendations of the Select Committee is that it is imperative that there should be a reduction in the planned capital expenditure.
Mr. Michael Marshall: The Secretary of State has just referred to the question of the level of investment. The Select Committee Report underlines and reinforces the case for continuing investment on a substantial scale. It is important that the whole of the report should be looked at in context. In view of this, will he consider the question of an early debate so that all hon. Members, not only those who sat on the Select Committee, but those representing steel constituencies as well, can play a part in the national steel debate?
Mr. Varley: I have already answered the question about a debate. My right hon. Friend the Leader of the House is sitting here and he will have heard the requests for a debate. The normal procedure is that when any Government of any political complexion receive a report from a Select Committee, they report to the House in the normal way. I take the hon. Member's point that, apart from hon. Members who served on the Select Committee—and many aspects of this report are valuable—there are other hon. Members who did not have an opportunity to serve on the Committee who have very strong views about the steel industry and the way in which it should develop.
Mr. John Ellis: Will the Secretary of State now address himself to the point that the Select Committee, having produced a report, then finds that a lot of it is immediately out of date because of lack of information at its disposal? When asked what he was going to do, the Chairman of the BSC made the memorable remark that short of going to the Tower he was not going to tell. What alternative does the Select Committee have but to report back to the House on this position? What else can it do in the face of a negative reaction like that? Will my right hon. Friend consider going back, with the Chairman of the BSC, to the Select Committee in order to get over these difficulties?
Mr. Varley: I have already made that offer. I am prepared to go back to the Select Committee and talk to its members about the problems of the industry, and I am prepared to do that with anybody whom my hon. Friend cares to produce on that basis. But the facts are that the Government have for months been considering with the Corporation and the trade unions how to bring about a more orderly and rational situation. That is the approach I took when I went before the Committee on 1st December. That is the course which I shall maintain.
Mr. Tim Renton: I for one will be pleased to welcome the Secretary of State back again before the Select Committee. But there is one point which the right hon. Gentleman misses. The last official financial forecast given by the Government for the BSC was contained in the

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FSBR published at the end of March showing a loss or deficiency of generated funds of £50 million, and yet, within four weeks of that figure being printed, the Government knew from the Corporation that it would be operating this year with an expected loss of £350 million. Surely the Secretary of State knew that the Select Committee was investigating the Corporation at that time and therefore he had a duty to make those figures of deficiency known to us, even if we did not put the specific question to him. Even if the right hon. Gentleman did not give that information to the Select Committee, was it not the duty of the Minister of State to make that known to Parliament when we debated the Iron and Steel (Borrowing Powers) Order on 22nd July? However, in that debate the Minister of State said nothing about the increased loss in financial terms—
Mr. Speaker: Order. It is not fair for hon. Members to make speeches now. There are many other hon. Members who hope to be called on the statement, but it will be impossible to call them all if we are to get on with our other business.
Mr. Varley: We have all known for a long time that steel is in a deteriorating position in market terms in a financial sense. This applies not only to our industry but to the world situation—[HON. MEMBERS: "No."] Yes, it has been a devastating situation world-wide.
On the subject of my co-operating with the Select Committee, I was prepared to co-operate, I turned up on 27th April, but the Select Committee was not there to ask me any questions. I submitted full answers to all the questions which it put to me at the time. If I am correct, after issuing its first report, Select Committee members criticised the Government at that stage for not letting some of the investment take place such as that at Port Ta bot and all the rest of it.
Miss Maynard: Will my right hon. Friend confirm that, despite the serious financial position that faces the steel industry, matters of finance and balance sheets will not be the first consideration in trying to solve these problems? Will he confirm that redundancies will be kept to an absolute minimum, and will he also confirm that alternative jobs will be provided? Will he tell the House that the
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investment programme will not be slashed in panic action in an attempt to stem the present difficult situation, thereby making matters more difficult for the future? Does my right hon. Friend agree that we are unable to stop imports of steel into this country because of our membership of the EEC?
Mr. Varley: We have been taking action against some imports. My hon. Friend is right to say that the steel industry is in a serious position. We are addressing ourselves urgently to that situation and we want to deal with the matter rationally and humanely.
Mrs. Bain: Does the right hon. Gentleman agree that all the introspective arguments that are being indulged in by the House will not allay the fears end suspicions of those who are involved in the steel industry? Is he aware that on Radio Clyde yesterday, in a programme in which the hon. Member for Motherwell and Wishaw (Dr. Bray) participated, the Scottish BSC representative refused to give a categorical "Yes" or "No" answer on recent development plans for Hunterston? Will the right hon. Gentleman give an assurance today that Hunterston will be in no way affected by the £520 million deficit?
Mr. Varley: The whole of the BSCs financial requirements, development plans and future expenditure are under consideration by the Government, the Corporation and the TUC steel committee.
Mr. John Mendelson: In view of the point made by the hon. Member for Oswestry (Mr. Biffen) about investment and long-term plans, will my right hon. Friend accept that those whose livelihoods depend on the industry are most concerned that he should not take any panic measures as envisaged in certain circles? Will he maintain the steady nerve which he has shown so far and not let the procedural matters take precedence? Will he not allow the Government to be hounded, or treat this report in any way differently from the treatment accorded to other reports? Does he not agree that the Government should have proper time to consider the contents of the report and also take proper time to reply to it so that the procedural matters can be considered by those who are concerned with procedure rather than that we should be concerned with hostile

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propaganda about a publicly owned steel industry?
Mr. Varley: My hon. Friend shows an understanding of the situation which I regret other hon. Members in some parts of the House do not display. I agree entirely with my hon. Friend.
Mr. Tebbit: Is the right hon. Gentleman aware that he is not adding very much to his reputation as a moderate? Is he also aware that he is being a little petulant towards the Select Committee, which has produced an agreed bi-partisan policy document that should be welcome to the Secretary of State? Is he saying that nothing shall deviate from the Beswick recommendations, or is he petulantly taking the view that it will happen when he wants it to happen and not when the House through its Select Committee wants such a thing to take place?
Mr. Varley: I am not being petulant. I am pointing out the facts. I am prepared, if necessary, and if the Select Committee wishes me to do so, to appear before that Committee and to give as much information as I can—as I have always done in the past when I have appeared before other Select Committees. This is a matter not only for the House—although I appreciate that it is important for the House to consider—but for the Government to consider in consultation with the BSC and those who represent the workers in the industry. Those discussions are taking place.
Mr. Hardy: Although one welcomes any move to develop more harmonious relationships with Select Committees, does my right hon. Friend agree that, in view of recent developments, it is imperative that there should be a debate on this subject so that we may see an endorsement of the Government's view that a vigorous and successful steel industry should be sustained to meet need when world demand is a great deal higher than it is at present?
Mr. Varley: The matter of a debate is for my right hon. Friend the Leader of the House. I agree that there are other Members in this House who are not Members of the Select Committee and whose views should be expressed.
Mr. Hordern: Is it not clear that the real issue is whether the Select Committee
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received information for which it asked during the course of its proceedings, and is it not clear that it did not receive that information to which it was entitled, and therefore could not have drawn up a report based on such information? Is the Secretary of State saying that no action should be taken on the steel industry if it deviates in any way from the Beswick recommendations?
Mr. Varley: I do not agree with the hon. Gentleman if he is saying that I refused to give the Select Committee financial results or interim figures relating to the BSC. I did not refuse to give the Select Committee information on that basis, nor was it asked for.
Several Hon. Members rose—
Mr. Speaker: I shall allow two more questions from each side of the House.
Mr. Mike Thomas: Is my right hon. Friend aware that, as a member of the Select Committee, I have no complaint against him as to the way in which he has behaved or the information which he has provided? However, the Select Committee has a major complaint against the Chairman of the BSC. He was asked to provide up-to-date statistics on a number of occasions, the last of which was 14th November, and signally failed to do so. Is my right hon. Friend aware when he refers to the Labour programme of 1973 and our manifesto that my colleagues and I were concerned that the reduction of £2 billion since October 1976 in the BSC's contribution to its investment programme for internally-generated funds would inhibit the fulfilment of that programme?
Mr. Varley: We can argue about the effect of the report, and the Government will study the implications of the remedies contained therein. I do not entirely accept what my hon. Friend says, but on the question of the Corporation I have full confidence in Sir Charles Villiers in the way he has reported to the Department and given us information. A great deal of damage is being done by some hon. Members getting hysterical about the behaviour of the Chairman of the BSC.
Mr. Neubert: Will the Secretary of State stop regarding the projected loss of £520 million as a private matter between himself and the Parliamentary

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Labour Party? Does he not recognise that the taxpayer, whose nerve may not be as steady as that of the hon. Member for Penistone (Mr. Mendelson), also has an interest—to the tune of £10 million every week that goes by?
Mr. Varley: Of course we are extremely concerned. That has been expressed by the Chairman of the BSC right through the summer, in July and August and in every public statement that he has made about the Corporation. We have also expressed our concern at every opportunity, including Question Time in the House, and I have not seen the hon. Gentleman here very often when we have discussed Department of Industry Questions and the steel industry. We have to take action to achieve a long-term, substantial and viable steel industry, but this will not be done on the basis of taking panic decisions as a result of reports by Select Committees or anyone else.
Mr. Anderson: Does my right hon. Friend agree that, however vital may be questions of courtesy to the Select Committee, disclosure of documents and so on, the key issue is jobs in our steel-making areas and the health of the industry? The other procedural matters can be dealt with in general. If we accept from him that it would have been unwise to make decisions in the autumn on the basis of incomplete forecasts, can be give us his view, since the figures are now available, about how we should proceed in the House and when he expects to be able to make a full statement to us on the decisions reached by the industry, the Government and the unions?
Mr. Varley: I shall make a statement as soon as the discussions have been concluded. They have been going on for some weeks and it will be some weeks more before they are completed. I shall make a statement as soon as possible, but it will not be for some time.
Mr. Eldon Griffiths: Leaving aside the procedural point, which I hope will be debated by the House, may I thank the Secretary of State for confirming to the House for the first time the quite appalling, fact that the BSC is losing £½ billion of the taxpayers' money? He has at least done that. As the responsible Minister, will he now say why he has
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allowed this to happen, what he is doing about it and how soon he will be coming clean with the House and telling us what his policies are to be?
Mr. Varley: The hon. Gentleman forgets the world situation in the steel industry, which has suffered the most adverse market conditions. This applies not only to our industry but to every other steel industry in Europe and throughout the world. We are trying to take action to deal with this through cooperation and consultation and also trying to deal in a humane way with the immense social problems which will arise.

PRIME MINISTER (SOUTH ASIA VISIT)
The Prime Minister (Mr. James Callaghan): As the House knows, I paid official visits to Bangladesh, India and Pakistan from 3rd to 13th January, at the invitation of the Governments concerned. I also paid a short visit to Egypt, at President Sadat's invitation, for talks at Aswan on the Middle East situation.
I was most warmly received in the countries we visited, not only by their political leaders, but by their peoples. I should like to place on record my gratitude for the great kindness and hospitality shown to me throughout our journey. All the British party were moved by the constant demonstration of the warmth, and even affection, which seemed to us to symbolise the relationship that the countries of the sub-continent wish to have with the people of Britain.
This latest visit confirmed once again that the attainment of independence can release an energy and vitality which show themselves in the progress and self-confidence of the three countries I visited.
At the same time, the rapid growth of population and the depth of poverty constitute an immense challenge to their Governments. They are doing much themselves, but they need help—for example, the indirect help that would result from a steady expansion of the world economy and an upturn in world trade. But, more than that, there must be direct aid to relieve poverty, to help provide a proper economic infrastructure to support rural development and to prime the pump for industrial development. India is making rural development

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sa top priority in an attempt to lessen migration from the countryside to the swollen populations of its cities. In all three countries there are many opportunities for the development of our bilateral trade. There are favourable prospects for British firms because of the good will that we enjoy in the sub-continent.
The question of immigration did not figure prominently in the discussions which I had in South Asia. When it was raised with me, I made it clear that it was for the United Kingdom to take her own decisions in this matter. I also emphasised in all the countries I visited the Government's determination to assure for all our citizens, irrespective of race, colour or creed, full equality before the law and to eliminate the evils of discrimination and racism.
In Bangladesh, President Zia emphasised the importance he attaches to good relations with the United Kingdom and his wish to work with us closely on all matters. We discussed a number of specific questions of commercial and aid interest. One of them was an important project in which British companies might join for the development of natural gas resources.
Like the leaders of India and Pakistan, he gave me his impressions of the state of relations between the three countries, and all of them agreed that relations between them are improving.
I discussed with President Zia and later with Mr. Desai in Delhi the massive benefits that would ensue from bringing the water resources of the Rivers Ganges and Brahmaputra under control. In much of the région a controlled water régime would enable three crops a year to be grown where only one grows now. This is an area where tens of millions of people live, where poverty is great and where the population is growing rapidly. This is an idea to catch the imagination and challenge the resources of the world.
I assured both Governments that, if agreement could be reached among the countries directly concerned, Britain would be glad to lend experts and to contribute financially towards a study on the feasibility of such a project. To carry it out would require international collaboration on a gigantic scale to overcome the physical, financial and political
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problems. It might take 20 years to complete, but in view of the benefits it could bring I hope the Governments concerned can agree on an early study.
In India I was able to see at first hand the achievements of that great country since independence. In addition to formal talks and extensive private discussions with the Indian Prime Minister, Mr. Morarji Desai, and his Cabinet, I met Opposition leaders and many others. Indian society experienced great strains during the state of emergency, but this vast country of over 600 million people is fortunate to have an outstanding leader of the wisdom and experience of Mr. Desai to guide her back to democracy.
India is proud of the way in which she accomplished her return to full democracy and that in itself has strengthened her links with Britain. She is conscious that both our countries have a shared history, a shared language, that our legal systems are intertwined and that our historic ties can be accepted at their true value without exaggeration and without bitterness as a firm basis on which to build for the future. As Mr. Desai himself put it:
"Britain and India can never be parted".
I was honoured to address the Indian Parliament and said that I would be happy if my visit could be the beginning of an attempt to build a new framework of co-operation between India and Britain. We have much in common with this great nation, now the tenth largest industrial nation in the world. The Indian Prime Minister and his Cabinet value the Commonwealth connection and there is much we can do together to use our combined influence in our own different spheres of influence and in world groupings.
I had a very full discussion with Mr. Desai on nuclear problems, in particular how to reconcile the need of all countries to benefit from the peaceful development of nuclear energy with the avoidance of the spread of fissile material that could be used for nuclear weapons. India has objections to acceding to the non-proliferation treaty but has decided not to conduct further peaceful nuclear explosions. Mr. Desai's view is that progress can be made if the present negotiations for a comprehensive test ban

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treaty now going on between the United States, the Soviet Union and the United Kingdom, can be brought to a successful conclusion. The effect of such a treaty, by banning all nuclear tests, would be to hamper the development of new nuclear weapons and to curb what is now called vertical proliferation.
Mr. Desai also told me that India would expect the nuclear weapon States to make determined efforts, which could be by way of another round of strategic arms limitation talks following the completion of SALT 2, to agree on the progressive reduction of their stocks of nuclear weapons, with the ultimate aim of eliminating them. Given such a policy, my understanding was that India would be able to accept a system of international safeguards for all its nuclear installations, some of which are, of course, safeguarded at present.
We also discussed at length the problems of Southern Africa and the Middle East. Mr. Desai assured me of his continued support for the joint American-United Kingdom initiative aimed at achieving a peaceful settlement in Rhodesia on the principle of "one man, one vote" in free elections resulting in a democratically constituted Government.
I raised the problem of our bilateral trade imbalance with India and of certain trade restrictions both with Mr. Desai and with his Ministers. They handed me a list of specific items of capital equipment which India would be interested in purchasing from Britain. We also discussed possible defence sales. At my request, Mr. Desai undertook to consider the possibility of Concorde being given permission to overfly India on the route to Singapore.
In Pakistan, I had a full talk with General Zia and had several opportunities to meet the leaders of the main political parties. General Zia assured me of his firm intention to restore democratic government in Pakistan at the earliest possible date and described to me how he proposed to do this. During my visit, General Zia and his advisers reached a firm decision to set up a tractor assembly plant in conjunction with Massey Ferguson. We also discussed a number of other commercial projects that could interest British firms in investing in Pakistan, and we were
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able to clear some outstanding commercial difficulties out of the way. Our talks covered the main international issues of mutual concern, including the Middle East and nuclear proliferation.
On my way home I was glad to be able to accept President Sadat's invitation to hold talks with him at Aswan. It was clear that a crucial stage had been reached in the historic negotiations between Egypt and Israel and that discussions were not going well. Our talks complemented the discussions I had held last month with Prime Minister Begin.
Following my talks with President Sadat, I was in touch by telephone and telegram with President Carter in anticipation of Mr. Cyrus Vance's attendance at the Political Committee negotiations which opened today in Jerusalem. I also sent a full letter to Mr. Begin setting out my views. British and American policy is very close on these matters, and we shall continue to work with the United States and with the Nine in the difficult negotiations that are taking place.
For the first time in many years peace in the Middle East is a possibility and none of the parties must let the opportunity slip. I told President Sadat that the United Kingdom's role would be to continue to support the negotiators, to maintain contact with them to the extent that they find it welcome and to ease the path of negotiations wherever we can. President Sadat made it clear that he, like Prime Minister Begin, very much welcomed this.
To sum up, Mr. Speaker, while Britain in the 1970s rightly threw in her lot with the European Community, such a relationship should not be exclusive, and we should foster bilateral relations with other countries, especially those with whom we have historic and other ties. Everywhere I went there was a general recognition that the improvement in Britain's position during the past 12 months was of benefit not only to the British people but to the world in enabling us to exert a stronger influence in international and economic affairs and there was a general welcome that Britain is now able to take her proper place in the world once again.
Mrs. Thatcher: We are grateful to the Prime Minister for making a statement.

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As it is rather detailed, I shall confine myself to my customary three points.
First, relating to the Middle East, which I raise because of its immediacy, the right hon. Gentleman made a rather general statement—namely, that it is the policy of the United Kingdom to support the negotiators. May I press him a little further? The right hon. Gentleman will be aware that at the last but one Summit of Heads of State in Europe the statement that was issued went far beyond Resolutions 242 and 338, and he will probably know that while he was away the Secretary of State for Defence was reported as having said that the peace proposals put forward by Israel are not completely sufficient. Is that the Government's view? If not, will the right hon. Gentleman tell us exactly the Government's view, although I am aware that it might be a little difficult to be too forthcoming at the present moment? However, as the statement has been made, I think that it would help if the right hon. Gentleman made his view clear.
Secondly, is the right hon. Gentleman aware that we welcome very much the statements that the Indian Prime Minister is, as I understand it, to agree to the rules of the nuclear non-proliferation club without joining it? I think that that is a fair shorthand summing up of what has been said. Mention has been made of peaceful nuclear testing, which I rather thought had been the stumbling block at Geneva. Does it mean that at Geneva we have overcome the previous difficulty about agreement on peaceful nuclear tests?
Thirdly, the Prime Minister was very short in speaking about Pakistan and the prospects for a return to democracy. Will he be a little bit forthcoming on his views on that very important subject in that troubled country?
The Prime Minister: I am obliged to the right hon. Lady. It is probably true to say that both sides are taking up negotiating positions on the Middle East negotiations. Each side may well have to move from the initial position that it has taken up. My right hon. Friend the Secretary of State for Defence referred to one negotiating position, but there is more than one that is concerned. If we are to get agreements both on withdrawal in Sinai and on the future of the
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West Bank, both sides will have to move from the positions that they have so far taken. I have put this approach clearly both to President Sadat and Prime Minister Begin. I ask not to be pressed unduly on this matter, because, as the right hon. Lady recognises, very delicate negotiations are now taking place.
If I am to crystallise my own view in a sentence, it is that it is possible to meet Israel's proper, natural and vital needs for its security while at the same time meeting the requirements of the Palestinians on the West Bank to be able to conduct their own affairs. I believe that it is not impossible to achieve that, but it will take a great deal of careful negotiation.
As for Mr. Desai's view about agreeing to the nuclear rules without joining the club, if the right hon. Lady is kind enough to read the statement again she will find that I did not say that. Mr. Desai believes that a number of qualifications must be fulfilled before he can carry his country along that road. It is a country where there is quite a lot of feeling about the matter. One of the qualifications would be the completion of a comprehensive test ban treaty. The second condition would be that, because of that, vertical proliferation would be ruled out. The third condition would be another round of SALT talks once agreement has been reached on SALT 2.
If those things were done, I understand that Mr. Desai's position would be a readiness to agree to the full international safeguards that in my view are imperative if the world is to survive, without actually signing a non-proliferation treaty. I should much prefer that other countries did so, but if we cannot get that, let us see what we can get with just the same purpose.
Progress is being made in Geneva on peaceful nuclear explosions as a result of Mr. Brezhnev's statement last October. However, there are still a number of problems to be solved. I cannot say that agreement has yet been reached.
As for Pakistan, I had the opportunity of talking to a number of political leaders of that country—I was brought in contact with them by General Zia—and they are anxious that democracy should be restored there. They recognise that Clue are difficulties in doing it at present, but

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I have hopes, in the light of what I was told, that we shall see a full return to democracy during the course of 1978.
Mr. Alexander W. Lyon: Did President Zia of Bangladesh explain why 50 per cent. of the women and children who are applying to come to this country from Bangladesh are deemed to be making false claims whereas the percentage in Pakistan is 14 per cent. and in Delhi is 11 per cent? Are there more liars in Bangladesh, or is it that our officials there may be making a wrong assessment of the situation?
The Prime Minister: I do not think that either is true.
Mr. Amery: The Prime Minister has told us that he discussed Rhodesia with Prime Minister Desai. The right hon. Gentleman also expressed confidence that Pakistan will return to democracy in the present year. Will the Prime Minister extend the same generous interpretation to the negotiations now going on at Salisbury, which show much more concrete evidence of progress towards majority rule than anything that has happened in Pakistan as yet?
The Prime Minister: I did not discuss in detail the position in Rhodesia with General Zia but I did with Mr. Desai. I can only report that it is his strong view that the forces that are now outside Rhodesia and fighting the guerrilla war, or the patriotic war, whichever phrase the right hon. Gentleman prefers, must be brought into the negotiations. I am reporting that view and it is, let me add, a view that I share. We were in complete agreement that the forces now outside Rhodesia must be brought into the peace negotiations if there is to be a final and lasting settlement.
Mr. Faulds: Will my right hon. Friend, as an honest broker, take an early opportunity of impressing upon Mr. Begin that a quid pro quo from him is long overdue to President Sadat's courageous initiative? When he discusses the Palestinians, will he accept that the requirement is not for them to run their own affairs but for them to nm their own State?
The Prime Minister: My hon. Friend is touching on matters that are at the heart of this dispute. I have set out my view
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on this matter to Prime Minister Begin. I think that we must have regard not only to the demand of the Palestinians to run their own State but to the necessity to provide security for the State of Israel. These are very difficult things to reconcile, but I believe that, given the courageous initiative that was taken by President Sadat and responded to by Prime Minister Begin, they can be achieved.
Mr. Thorpe: May I congratulate the Prime Minister on the obvious personal success of his trip and hope that he will not subsequently catch mumps from a member of his Press corps? We shall watch for signs of inflation.
First, did the Prime Minister discuss with Prime Minister Desai the United Nations proposal that the Indian Ocean should be a zone of peace? If so, did he say whether the United Kingdom would be prepared to take part in ad hoc committee discussions in the United Nations?
Secondly, did he have any discussions with Pakistan about the possibility of her rejoining the Commonwealth? If so, was he able to indicate that there would probably be a warm welcome from her previous partners were she so to do?
Thirdly, and finally, since the last public declaration on the Middle East was from President Sadat, can the right hon. Gentleman say whether the pessimism that President Sadat indicated in his statement is justified, in his view, by the talks that he was able to have at Aswan?
The Prime Minister: I did not have discussions with Prime Minister Desai about the zone of peace. Our position was made clear at the United Nations, and I do not think that I need spell it out again. We are very concerned to see that the countries that maintain fleets in the Indian Ocean should negotiate for a reduction of those fleets.
There was a discussion between General Zia and myself on the question of Pakistan's membership of the Commonwealth. What I said to him—and I was interested to find it confirmed—was that I thought that, as one member of the Commonwealth—and we are only one member of it; this is a matter for all 36 members—we would want to feel that all political parties in Pakistan wanted to return to the Commonwealth, so that

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it did not become a matter of party dispute. One cannot have countries going in and coming out of the Commonwealth on the basis of the party in power. Of course, parliamentary democracy would be a welcome addition in these circumstances.
I found that all the party leaders to whom I spoke—and I believe that I spoke to all the major ones—were favourably disposed to seeking membership. That does not mean that they have reached a conclusion. I advised General Zia that if he thought that that was the general view, he should discuss it with the Secretary-General of the Commonwealth, Sir Shridath Ramphal, and invite him to Rawalpindi so that he can carry the matter further.
As far as Britain is concerned, I want to hear the views of the House of Commons, but I agree with the right hon. Gentleman that there would be a strong case for readmission if Pakistan showed clearly that she wished to return. It is a reflection of the value of the Commonwealth that a country such as Pakistan should wish to and believe that there is value in returning to the Commonwealth in this way.
On the question whether President Sadat's pessimism is justified, there is no doubt that things were very sticky last Saturday. I believe that the intervention of President Carter helped to remedy the situation. There are very hard decisions for Israel to take here, but I believe that she will have to take them. I believe, too, that it will be far more important to her to have a universally accepted peace treaty than it will be to retain some elements of territory or, indeed, to have control over areas that need not be within her control.
Mr. David Watkins: During my right hon. Friend's discussions on the Middle East, was the subject raised of the tragic murder of Mr. Said Hammami, the internationally respected London representative of the PLO? In the efforts towards a permanent peace, may I press upon my right hon. Friend again the need to realise, and ask whether there was any discussion of, the fact that a genuinely independent homeland for the Palestinian people is an essential element in such a permanent settlement?
The Prime Minister: No, I did not discuss the tragic death of Mr. Said Hammami, but I should like to take this opportunity of saying how much I deplore this further act of international terrorism.
I take note of the view expressed by my hon. Friend about the position of the Palestinians.
Sir J. Langford-Holt: On his way out to the Indian sub-continent the Prime Minister stopped off at Bahrein as one of about 40 long-distance trips routed through that area. Is he aware that the whole of that servicing is done by one officer and two sergeants, who have to do all the inspections, engine changes, catering and everything to do with the aircraft? Sooner or later, if the situation is not rectified, the result may well be an accident on that route.
The Prime Minister: I am not aware of that. Perhaps the hon. Gentleman will put this to the appropriate Minister, and I shall see that it is conveyed to him.
Mr. Bidwell: I congratulate my right hon. Friend on the evident success of his visit to the Indian sub-continent. With regard to the vexed question of immigration from that part of the world, bearing in mind that the truth of the matter is, as he said, that our control system is a matter for our Parliament, was he able while he was in India to assure inquiries that the policy of both major parties in this country for many years has been based on the concept of family unity around the breadwinner, and that, in spite of the bleatings from some Conservative Back Benchers, that policy is not likely to change?
The Prime Minister: I did not have detailed discussions on this matter with the leaders I met, but in the countries that I visited I was able to see the way in which applications are dealt with. In India, for example, the wives and children under 10 group are dealt with straight away, as are compassionate cases. For wives and children over 10 there is a delay of five to six months in dealing with these cases. For husbands and male fiancés the time involved is about eight months or 12 months. I do not want to make too much of the question of possible forgeries, but if we were able to rely upon the documents being produced being

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accurate, those times could be reduced substantially. But alas we are not able to do so, and I saw evidence to that effect in the office that I visited.
Mr. Ronald Bell: Does the right hon. Gentleman remember the emphatic opinion of Pandit Nehru and Ayub Khan that all measures would be unavailing and that their populations would live the lives of animals unless the growth of the population could be checked, and their appeal to Western technology for this purpose? In view of the importance of this matter, which overshadows everything else, what conversations did the right hon. Gentleman have about the population problem in those countries?
The Prime Minister: I had explained to me very fully, both in Bangladesh and in India, the steps that are being taken by the Governments there to make more widely known the possibilities of family planning. Unfortunately, what happened under the previous régime has set back the cause of family planning in India in particular. That is one reason why I believe strongly and deeply that, if only we could harness the resources of the West to such an imaginative scheme as linking the waters of the Ganges and the Brahmaputra, we could do a good deal to meet what is going to be an increasing tragedy unless we can act together on this matter. I found a constructive response both in India and Bangladesh, but there are quite a number of political difficulties.
Mr. Dalyell: The Prime Minister mentioned possible co-operation in the winning of natural gas. As more expertise resides in this country than possibly anywhere else in the world in the winning of natural gas under difficult conditions, will he carefully consider any plan by which this expertise can be made available to the Indians on reasonable terms?
The Prime Minister: I was not slow to point out in both Bangladesh and Pakistan, where this question was basically discussed, the advantages that could arise from British technology. There are already two British firms which have been approached—one of them approached me and the other I am in
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touch with—which would be able to help Bangladesh in this matter.
As regards Pakistan, the matter is not so advanced, but General Zia was very keen that Britain should be associated with this development. I hope that British firms take it up. I am asking the Secretary of State for Industry to raise this matter in the appropriate quarters here.
Sir Frederic Bennett: The Prime Minister obviously had extensive talks in India on the nuclear question, but he spoke much more shortly in that regard about his visit to Pakistan. He is aware of the difficulties that there have been about Pakistan and a certain European country in concluding a deal. Was he able to say anything to resolve the problem, which has caused some hard feelings? If he could say something to the House, it would be helpful.
The Prime Minister: I believe that General Zia would in certain circumstances be able to subscribe to the nonproliferation treaty. Further discussions will go on between British officials and some of his officials to see in what circumstances that could be secured. If we could do that, it would remove a source of suspicion between India and Pakistan and would be a gain to the world generally.
Mr. Watkinson: My right hon. Friend stressed the importance of trade benefits which accrue between this country and the sub-continent. Does he accept that there is a general overriding problem for the Third World at present of massive indebtedness on its balance of payments? Will he, as a result of his visit, and with a view to encouraging the growth of these economies, oppose any restrictionist policies which might emanate from banking sectors in the United States and the developed world? Does he expect any significant development of trade between Britain and the subcontinent as a result of his visit? Will he be a little more explicit about his discussions on Concorde? Does he expect a fruitful outcome from those discussions?
The Prime Minister: My hon. Friend is taking me too far too soon. The Indian Government had not considered the matter of Concorde. I set out the

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position to them and informed them of what had happened in New York and of the landings now going on there with the consequential noise being not nearly as bad as people had expected. I also indicated, after consultations back here in the United Kingdom, that the Government would be willing to stand behind British Airways if substantial damage arose as a result of over-flying during an experimental period. I was told that this was a reasonable offer to make, and I made the offer. All I can say now is that Mr. Desai said, presumably because they do not think they will have to pay out, that they would be willing to consider all these matters and give me a reply in due course.
I agree with my hon. Friend that the developing countries are suffering very seriously from the increased indebtedness that has taken place as a result of the oil price increases, but I would not be in favour of generalised relief. Having been into this matter with some care, I believe that it should be done on a case-by-case basis. For example, India is now running, unusually and gratifyingly, a balance of payments surplus. Therefore, if we were to offer debt relief, clearly it should go to some countries which are in very serious balance of payments deficit among the developing countries.
As to the question of appreciable gains, I can only say that the business men I met, especially in Bombay, were of the opinion that this political visit would undoubtedly have a favourable impact upon trade and I was given a whole list of capital equipment—such as crawler tractors, fishing trawlers, specialised machine tools, diesel alternators, and refrigerated vans, and offshore drilling safety equipment—which I have sent to the Department of Trade and the Department of Industry. These were items that the Indian Government would be prepared to purchase from British firms, subject, of course, to the conditions being right.
Mr. Forman: Reverting once again to the vital matter for the need to curb nuclear proliferation, will the Prime Minister share with the House his view as to what might be the chances of persuading the Indian and Pakistan Governments to ratify the necessary agreements? Can he say, for example, who is to decide when
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the three Powers in the comprehensive test ban negotiations have gone far enough to meet the point that would satisfy the Indian and Pakistan Governments, and according to which criteria?
The Prime Minister: It would be a matter for further discussion. I believe that the least that could satisfy the Indian Government is that the United States, the United Kingdom and the Soviet Union should reach an agreement for a comprehensive test ban treaty. I believe that there is a much better than evens chance of doing that. In those circumstances it would be right to go back to Mr. Desai to say "Here is one leg of the stool that we have now fixed in place."
The second leg would be that after SALT 2—again on which I think agreement can be reached—the United States and the Soviet Union should then begin to enter into further discussions on how to reduce the number of nuclear warheads, having put a cap on them, as SALT 2 would. I have already expressed that view strongly to President Brezhnev and President Carter. I think this is the third stage. When we reached there we would then be in a position to say to Mr. Desai "These conditions have been fulfilled. Is it not now the case that you could accept the full international safeguards and inspections even though you have a rooted objection to signing the treaty itself?"
Mr. Ioan Evans: In view of the abject poverty my right hon. Friend has seen at first hand in Bangladesh and India, will he take an international initiative at this stage to support such schemes as the Ganges scheme that he outlined to divert the expenditure which is now being devoted to arms by both the East and the West to help reduce the poverty he has seen on the sub-continent?
The Prime Minister: I should be happy to take any initiative on this subject, because I believe it to be a most imaginative project. However, in the first place the Governments of India and Bangladesh must agree that they are willing to work together—the involvement of both of them would be required, and probably that of the kingdom of Nepal—to make such a grand scheme work. It is probably a little early for further discussions. However, they are aware of my keen interest, which I hope to continue and I shall

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be inquiring from time to time—in a diplomatic way—as to how we can help.
Mr. Onslow: Apart from the interesting question of why the Prime Minister finds it necessary to keep a Foreign Secretary and to bark himself, will he be kind enough to tell the House exactly how much additional expenditure he has loaded on to the British taxpayer in overseas aid to pay for the various grandiose schemes he has mentioned over and above the large sums of overseas aid which are already being paid for by the British taxpayer in South-East Asia and which he failed to mention in his statement?
The Prime Minister: I am grateful to the hon. Gentleman for his usual shabby approach to these matters. The question of overseas aid is not only of humanitarian benefit to the peoples of the world but is also of great value to Britain. It builds an economic infrastructure for Britain—[Interruption.] In India the agreement has been signed. The hon. Gentleman should know because the figures have been published.
Mr. Onslow: No.
The Prime Minister: The figure was £144 million.
Mr. Onslow: No.
The Prime Minister: I do not know why the hon. Gentleman keeps on interrupting from a sedentary position. I am trying to answer his question. I am confident—I am sorry that the hon. Gentleman does not see this—that this aid has a very profound and beneficial impact upon Britain's commercial relations with India in a number of directions and is also a way in which to reach countries in which we sell now. By so doing we are enabled to give assistance in relieving some of the direst poverty I have seen in my life.
Mr. Newens: Was the issue of the return to civilian rule in Bangladesh raised in any of my right hon. Friend's discussions, or the executions and Draconian treatment meted out to some of the political opponents of that régime during recent months? Is my right hon. Friend able to say anything about any attitudes he was able to convey to the Governments on the Indian sub-continent on this matter?
The Prime Minister: Yes, Sir. I did have some discussion with President Zia of Bangladesh about this—my hon. Friend will recall that he had a substantial majority in the presidental election—but I cannot say that I see an early prospect of a return to democracy there. Bangladesh is without the administrative structure which has been built up in India and in Pakistan. It is in a much more difficult situation, and I do not see an early return there to democratic practices. President Zia told me that he would like to do so, but I do not believe that his optimism is likely to be borne out in the result.
Mr. Crouch: If I may take that matter further, is the Prime Minister aware that many of us watched the birth of Bangladesh with great interest and excitement, seeing it created in a mood of democracy and embracing democracy. By his reply just now, however, the Prime Minister seemed to suggest that Bangladesh did not have the administrative ability to continue to sustain democracy. Does he mean that? Does he mean that Bangladesh can sustain itself only under a military authoritarian rule? It was very dismaying to hear that answer.
The Prime Minister: I did not say what the hon. Gentleman attributed to me. I said that the Government of Bangladesh did not have the administrative structure which enables Pakistan, for example, to carry on as it does at present. I met permanent secretaries there who are doing the job in a quite remarkable way. In Bangladesh a great deal falls on President Zia himself. He is a man of considerable conviction and earnestness, who is trying to carry a very heavy burden. He spends most of his time out in the country because of the lack of administrative structure, trying to build up self-help among the people there. I think that he faces an almost inhuman job, and we ought certainly to give what aid we can in that area. I was asked for technical aid and for the loan of administrators in more than one direction, and I shall certainly talk to my right hon. Friend about this and see what assistance we can give. I believe that if the administrative structure were created, it would enable an easier return to democracy to be made.
Mr. Spearing: My right hon. Friend correctly referred in his statement to the

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relationship between trade and aid. Will he, therefore, look closely at the report on that topic by the Select Committee on Overseas Aid, which will be laid this week? On the question of the Ganges-Brahmaputra control, can my right hon. Friend confirm that this is a scheme for overall regularisation, and will he say whether the political problems which he mentioned relating to international control have been tackled?
The Prime Minister: I shall certainly look at that report when it comes out. As regards the scheme for the rivers, the political difficulties are obvious, in that the water starts in one country and is used in another, so the question of who is to control the waters and how they are to be regulated is a matter of great sensitivity. I am glad to say that—thanks, I believe, to Mr. Morarji Desai personally and the large-minded approach which he adopted—a new agreement has been made with President Zia of Bangladesh about the Farraka Dam. The agreement will regulate the waters of that dam for the next five years and ensure that Bangladesh, at least in part, will be able to grow the three crops a year necessary to sustain its population.
Mr. Jessel: Reverting to the question whether Concorde will be allowed to over-fly India, why should we ask or expect the Indians to agree to be overflown by Concorde at supersonic speeds when we ourselves absolutely insist that Concorde shall be allowed to overfly the United Kingdom only at subsonic speeds?
The Prime Minister: I did not go into any details on this matter, because they are, I think, best left to negotiation. Therefore, we did not discuss whether Concorde should overfly at subsonic or supersonic speeds. The question at the moment is that Concorde is not allowed to overfly India at all. Perhaps the hon. Gentleman will leave this to the negotiators, who will, I am sure, be just as capable of raising difficulties to prevent it from flying as he is.
Dr. Bray: Will my right hon. Friend take it that, despite reservations held by isolated hon. Members on the Opposition Benches, the House was impressed by the extent to which, plainly, he was moved by the degree of human need and the opportunities for constructive development in
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the South Asian continent? In seeking to prepare people in this country for an increase in the aid budget, will my right hon. Friend bear in mind that, while we can make a substantially greater contribution, the contribution which can be made by Germany and the United States is perhaps even greater than our own, so will he seek to involve them in projects in South Asia and elsewhere which can be of benefit to the developing world?
The Prime Minister: I am grateful to my hon. Friend for what he says. Of course, projects of the kind which we are examining in the sub-continent, where there are over 700 million people, cannot be carried out by Britain alone. They need full international co-operation. I was deeply touched by what I saw, and felt ashamed on seeing some of the poverty in which people live when I remembered some of the arguments which have gone on in the Cabinet about how we should cut overseas aid. Not only did I feel that but—I add this most sincerely—I was deeply moved by the affection which is felt for this country, especially in India. This is something which we should take fully into account in our overseas policy. Here is a great country, a great democracy, with which we have historic ties, and I believe that with its relations with the developing world and our relations with the developed world both of us, with our knowledge of each other, could play a great part together in helping to solve some of the problems of the world.
Mr. Michael Morris: Is the Prime Minister aware that there is concern in the Indian sub-continent that he chose not to visit the fourth country, Sri Lanka, which is in fact the only democracy in that part of the world? Will he assure the House that if there is to be special consideration of the problems of the sub-continent, the problems of Sri Lanka also will be considered on their merits just as much as those of the other three countries which he visited will be?
The Prime Minister: Yes, of course. I regret that I did not visit Sri Lanka. I did not have an invitation to go there, but I am sure that if I had asked I should have received an invitation, and I should have been happy to go. However, there was the problem of limited time.

PRIME MINISTER (SOUTH ASIA VISIT)

  STATUTORY INSTRUMENTS, &c.
  Ordered,
  That the Sea Fishing (Specified Foreign Boats) Licensing (No. 3) (Variation) (No. 3) Order 1977 (SI., 1977, No. 2086) be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Foot.]

ORDERS OF THE DAY

  CIVIL AVIATION BILL
  Order for Second Reading read.
  4.47 p.m.
  The Secretary of State for Trade (Mr. Edmund Dell): I beg to move, That the Bill be now read a Second time.
  Mr. Julian Amery: On a point of order, Mr. Speaker. In my submission, there are two aspects of the Bill which involve a derogation from our existing procedures and therefore, in a sense, amendments to our unwritten constitution, of which you are, par excellence, the guardian. I wish to seek your guidance.
  The Bill gives the Secretary of State discretionary powers, among other things, to control noise levels at airports. There is no obligation on any Government to present a White Paper setting out the principles by which a Minister's discretionary powers should be operated, but we have been informed that it is the Government's intention to produce such a White Paper. At page 484, under the heading "Other Bills", "Erskine May" Explains—I shall not weary the House by reading the whole passage—that it used to be the procedure on a Bill of this kind for the Government to move resolutions so that the principles could be discussed in general terms but more recently this has been superseded by the habit of producing a White Paper.
  This is the first occasion I can find on which a White Paper is to be presented but the Bill is presented to the House first so that we are to discuss the discretionary powers which should be conferred on the Minister without first knowing the principles on which they will be operated. There is a little here of the Red Queen in "Alice"—sentence first and verdict afterwards.
  I submit, Mr. Speaker, that this represents an important change in our procedure and a departure from the procedure laid down in "Erskine May" at page 484.
  The second matter is this. By Schedule 1, paragraph 6(4), the Bill amends Section 29 of the Civil Aviation Act 1971. There will be no objection to the Government

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  proposing that; but under the Scotland Bill, to which we shall be returning tomorrow, the powers to be devolved to the Scottish Executive and therefore to the Scottish legislature are to be the same, so that the amendments we propose to make to the 1971 Act today would read across to the Scotland Bill.
  I can find no precedent for a Bill's being brought forward to amend another Bill which is before the House at the same time without express provision being made. There are plenty of examples of a Bill to amend an Act, but to have a Bill to amend another Bill without express provision seems to me a completely new departure.
  The issue is not unimportant, as is to be seen from Clause 8(4), under which the Scottish Executive and Assembly could be involved in the determination of the United Kingdom's international obligations, something which is wholly contrary to the spirit of the Scotland Bill as it stands and has been explained to us by Ministers.
  I raise this matter as a point of order, Mr. Speaker, because you have, as you have accepted in other exchanges in the House, a responsibility as the guardian of our unwritten constitution. It seems to me that we are faced with two amendments to that constitution—the practice of producing a White Paper after the Bill instead of before it, and the dangerous procedure, the consequences of which could be chaotic, of producing a Bill to amend existing legislation which would read across to another Bill on which the House has not yet pronounced.
  Therefore, Mr. Speaker, I seek your guidance. Is it appropriate to go on with this Bill this afternoon? Would not it be better to invite the Government, first, to produce the White Paper on civil aviation before we discuss the Bill, and, secondly, to resolve the powers that are to be devolved to the Scottish Executive and Assembly before we say what should be the powers that might be devolved if the other Bill were passed?
  Mr. Tam Dalyell: Further to the point of order, Mr. Speaker. It may be for the convenience of the House if I draw to your attention, in relation to Clause 66 of the Scotland Bill, the remarks of Mr. Norman Ashton
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  Hill, chairman of the Air Transport Committee of the Association of British Chambers of Commerce, who said in his public letter to my right hon. Friend the Secretary of State for Trade:
  "It would be intolerable for licensing arrangements for civil aviation to be treated in the cavalier fashion Clause 66 lays down.
  As the Scotland Bill stands at present, a Minister may, by order, make provisions for the apportionment of any assets or liabilities of the British Airports Authority and may alter the financial limits under which the BAA operate.
  The Bill thus proposes to enable the breakup of the BAA in any manner which this or any successor Government may determine. Parliament is being invited to sign a blank cheque.
  The association do not believe that the future of the South East airports and the Scottish airports should, in effect, be removed from the supervision of Parliament.
  This is surely a matter which should be retained by the United Kingdom Government, as it could be used to prevent certain aircraft landing at airports. In any dispute between the Scottish Executive and the Department of Trade this devolution would be a highly effective method of reducing civil aviation to a shambles."
  There are wide concerns about the issue raised by the right hon. Member for Brighton, Pavilion (Mr. Amery). It is not simply a question of those of us who take any axe to grind to try to do something about the Scotland Bill. In fact, these reservations come from nonpolitical people—
  Mr. Speaker: Order. The hon. Gentleman is making out a case, not submitting a point of order.
  As the House will understand, I am grateful to the right hon. Member for Brighton, Pavilion (Mr. Amery) for having given me warning of his point of order and indicating what its content would be. I have therefore had an opportunity to consider it. I do not think that either of the right hon. Gentleman's two major points raises issues upon which I need to rule now or that they should stop our proceeding with consideration of the Bill.
  With regard to the matter of the White Paper, there is no formal obligation upon Ministers to produce any White Paper in relation to a Bill. The right hon. Gentleman correctly described the change that has taken place in "Erskine May" in this regard, but whether circumstances require that a White Paper should be

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  presented, and, if so, when, is a matter that it is quite in order to discuss in the debate that we are about to begin.
  As regards the possible reciprocal effect of the provisions of this Bill and those of the Scotland Bill, it is stated quite clearly in "Erskine May", at page 491:
  "There is no rule or custom which restrains the presentation of two or more bills relating to the same subject".
  In this case, although there is some interaction, I can see no direct conflict between the provisions of the two Bills. Nevertheless, the problems which could be raised by devolving a matter which concerns international obligations would seem to me to be open to discussion at the appropriate stage in debate on either Bill.
  Mr. Amery: Further to the point of order, Mr. Speaker. You said first that you did not feel that you should rule on this matter today. I do not know whether you implied by that that you might like time in which to reflect further on the matter. You did not indicate that, but if that was in your mind I should have thought it inappropriate for the Government to go forward with the Bill as it stands.
  It is true that there is no obligation on the Government to produce a White Paper at any time, but what "Erskine May" appears to indicate in the passage to which I referred is that when, in the Government's judgment, a matter was of sufficient importance in the old days to require the introduction of resolutions, and nowadays to require the introduction of a White Paper, it seems that we are breaking new ground—and rather questionable ground—if we are now to be told that we debate the Bill first and have the White Paper afterwards. If we went back to the old concept of resolutions, would not it be rather curious if we had the legislation first and then the resolutions, discussing the principles, in a subsequent debate?
  Mr. Dalyell: In your reply just now, Mr. Speaker, you said that it would be in order to discuss such matters on either Bill. But part of the trouble is that you and I and the rest of the House know very well that the chances of discussing civil aviation and a host of other matters on the Scotland Bill are virtually nil in prac
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  tice—18 clauses on finance will not be discussed. It looks as if we shall debate for a long time yet the question of the Scotland Bill and abortion on what was thought to be a comparatively minor amendment. Acres of Schedule 10 will not be discussed. Does not this alter the situation slightly?
  Mr. Speaker: I have given much thought to this matter. I should not have used the word "today" in replying to the right hon. Gentleman's point of order. I do not think that I am called upon to rule on the question any further than I have already. Right hon. and hon. Members may seek their opportunity in debate to make their contributions, if they catch the eye of the Chair.
  Mr. Amery: I apologise for returning to the subject, Mr. Speaker, but this is not really a matter for discussion on Second Reading. It does not affect the merits of the Bill, but it affects the propriety of introducing a White Paper after the Bill to which that White Paper relates has been discussed. It is a question whether that is appropriate. I may have to concede that the interaction of the two Bills is not overwhelming, but on the first point it still seems to me that we are departing from the procedure laid down in "Erskine May". The matter is not for me or my right hon. and hon. Friends and the Government Front Bench but for you, Mr. Speaker, as the guardian of our unwritten constitution.
  Mr. Speaker: I accept that it is a matter for me if we are moving away from "Erskine May", but, as I understand it, there is nothing in "Erskine May" to say when a White Paper shall be produced. The timing is up to the Minister, if, indeed, he produces a White Paper at all.
  I cannot stop the discussion of a Bill because there is talk of a White Paper. That is the substance of what I am telling the right hon. Gentleman. Like him, I shall reconsider the matter, but I am not promising to make any further statement to the House.
  Mr. Dell: It is seven years since a Civil Aviation Bill has been debated in Parliament. That might suggest that in the world of civil aviation we have been passing through a period of stability. In fact,

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  this has been a period of rapid change and development. It is the period of the oil price increase in the autumn of 1973, which has changed so many things and which, in particular, had dramatic effects on civil aviation. It is the period in which the Civil Aviation Authority, created as part of the new policies stemming from the Edwards Report, has been establishing itself.
  One of the purposes of the Bill is to increase the borrowing powers of the CAA. The CAA now requires grant in aid only for those parts of its business where it is not able to make charges which cover its costs, whether for reasons of social policy, as with the Highlands and Islands aerodromes, or because international agreement has not yet been reached to cover the full cost, as in Euro-control. But stability in real terms in its charges should now have been reached in all the charges schemes or regulations.
  However, the CAA needs an increase in its borrowing powers. Most of its investment programme is in the provision of air traffic services, and it has recently started work on a project for replacement of the primary and secondary radar installations in the East and the South-East of England, using new equipment at a reduced number of sites, which will make possible savings in future expenditure on repairs and maintenance.
  Moreover, in the current year there has been considerable development at Sum-burgh Airport, Shetland, to accommodate the rapid growth of oil-related traffic. The Authority has had to borrow £11 million in the present financial year and seems likely to reach its borrowing limit of £75 million before the end of next year. So continuing and developing the work of the CAA created by the 1971 Act is one of the purposes of the 1978 Bill.
  Mr. Dalyell: Will my right hon. Friend be returning later in his speech to the question of Sumburgh? Those of us who have recently been there and those of us who have received the CAA's own brief on Sumburgh are extremely concerned about whether more facilities will be built either at Wilsness or on another part of Shetland. Can my right hon. Friend say anything about those matters?
  Mr. Dell: I do not intend to return to the question of Sumburgh. I have referred to the developments currently going
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  on there, and these are of very great importance. If my hon. Friend wants to make specific points about that matter, he will no doubt seek to catch your eye, Mr. Deputy Speaker, and my hon. Friend the Under-Secretary will deal with them in his reply to the debate.
  It would not be possible even within the scope of a Second Reading debate on a Bill as miscellaneous as this one to discuss all the changes of recent years in the civil aviation panorama, but the Bill justifies a reference to many such changes.
  One of the notable events of 1977 was the signature of the new United Kingdom-United States Air Services Agreement—Bermuda 2—last July. Within this agreement, Laker started last September the Skytrain service to New York. In October, following the agreement, a new service was opened by British Caledonian to Houston. Later this year British Airways plans a new service to San Francisco. United States airlines will start new services from Atlanta and Dallas, both of them operating to Gatwick and not to Heathrow.
  Bermuda 2 provides for single designation with the exception of two routes on which two carriers may be designated. In this new situation the uncertainy surrounding paragraph 7 of the policy guidance is much less significant than it was since the United States was the only country where the designation of more than one airline for a long haul route was a real possibility. In view of this, I have decided not to introduce in the Bill an amendment to Section 3 of the Civil Aviation Act 1971.
  This is becoming an era of lower fares, notably on the North Atlantic—a welcome fact of great interest to consumers. The introduction of Skytrain on the New York route has of course been a most significant element in that process. I welcome Mr. Laker's success with Sky-train and I am grateful to him for what is, in the circumstances, his generous acknowledgement of the assistance given by the Department of Trade in establishing the service following the Court of Appeal's judgment. Other types of low-cost scheduled fares are being offered to the public by other airlines and we shall all be watching the effects of these new fares on both the quantity of traffic and the profitability of airlines.

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  British Airways also took an initiative in reducing freight charges to the United States, an initiative which was unfortunately brought to a temporary stop by the United States Authorities. I am glad that that impediment has now been removed and that British Airways is able once more to provide this cheap freight service.
  Everyone is going to be looking for lower air fares. Of course, they have to be consistent with safety and with airline economics. But airlines will have to face a mounting demand from travellers for lower fares. This will require from all British airlines the maximum efficiency, and I am glad to see that Mr. Ross Stain-ton, the new chief executive of British Airways, to whom I am sure we all extend our good wishes, referred to this recently. I am sure that civil aviation is going to be a more competitive business and airlines must equip themselves to compete effectively.
  There is also the question of charter services. I shall want to look carefully at the balance of scheduled and charter services. We are in negotiation with the United States for a charter air services agreement. I hope that we shall reach agreement with them this year on a new charter regime. The new charter regime will need to maintain a balance with an adequate level of scheduled services. I hope that these developments will bring further benefits to the air traveller and freight shipper in 1978.
  It has also been during this period that Concorde has begun to operate scheduled passenger services. I am delighted that the Concorde service to New York has made a good start. There can be no doubt of the market appeal of the aircraft. British Airways is increasing the service to New York to six flights a week from 15th January and its service to Washington will return to three a week from 16th February. The service to Singapore is temporarily halted. But we are in close touch with the Malaysian Government and I am confident we can soon satisfy them about their environmental concerns. British Airways is actively looking at a number of new routes for Concorde after it has built up its present services.
  It is in the context of all these developments and challenges that we have taken
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  the opportunity in Clause 5 of the Bill to extend British Airways' borrowing powers. The intention is to provide for the needs of the next five years or so. The existing limit of £700 million should in fact last for another two or three years when the proposed increase to £850 million should be available by order subject to the approval of this House.
  A less happy development of recent years has been the growth of terrorism against civil air services. The Government decided in December 1976 as part of the public expenditure cuts that the burden of aviation security expenditure should be transferred from the taxpayer to the industry from 1st April 1978. I did not, of course, expect the decision to be popular with the industry, but I believe that it is right for the aviation industry to bear its own costs without being subsidised by the general taxpayer.
  Mr. Nick Budgen: I wonder whether the Minister would deal with one point that has concerned many persons who are intimately connected with this problem—namely, in the consideration of Clause 2(8)(b), the question that there may be a possibility of retrospective contributions being enforced on airport authorities. I wonder whether the Minister would confirm that there is no intention to use that subsection in any retrospective way.
  Mr. Dell: There may be the possibility of retrospection, as the hon. Member suggests. That, obviously depends on whether the Bill passes through Parliament in time for 1st April 1978. It is the intention to levy these charges from that date, but this will be a matter which obviously the House will have to consider.
  Mr. Eldon Griffiths: Will the right hon. Gentleman explain in a little more detail now whether the transfer of expenditure for airport and aircraft protection to the fund will relieve, for example, the Metropolitan Police of that portion of their expenditure now used to provide officers and other support services to protect the airports?
  Mr. Dell: I think that the answer to that is "No", it will not have the effect that the hon. Member suggests, but if I am wrong in that, my hon. Friend the Under-Secretary will comment further.
  Sir Stephen McAdden: Am I to understand that these charges can be levied before the Bill is passed. Is this not another example of unconstitutional behaviour, as is the failure to produce a White Paper?
  Mr. Dell: This is a matter which the House will undoubtedly want to consider.
  It has been suggested that in taking this action the Government are in breach of their international obligations. This is not the case. The United States, Australia, Canada and Japan are among the nations where the airlines already have to bear the whole or part of the costs of security measures.
  The cost of aviation security has risen from about £5 million in 1972–73 to an estimated £15 million in 1977–78. Next year we estimate that the likely cost will approach £19 million. The increase in costs has been due to the gradual improvement of security measures over the years as well as to inflation. The security measures are costly but are necessary to meet the current threat, which is as high as it ever was.
  We have announced that if the legislation before the House is enacted, the rate of the levy during the next financial year will be 80p per arriving passenger. We have taken full account of the industry's views on methods of administering this charge. But, of course, changes can be made in the light of experience.
  I should emphasise that the Government will continue to monitor security standards and to see that the degree of security provided is sufficient to ensure the safety of passengers.
  Mr. Tim Renton: Before we leave the question of the size of the Aviation Security Fund, will the Secretary of State tell the House whether it is the Government's intention to build up financial resources within the fund, and, if so, to what extent? To the degree that sums are being built up within the fund it will be a question of passengers paying now, will it not, to cover possible future bills incurred by other passengers?
  Mr. Dell: The general intention would be that if there were any surplus in the coming year—perhaps because of the fact that we have overestimated the rate of expenditure—that could be used in relief
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  of the levy in future years. I am certainly not looking for the building up of a very great surplus in this fund, although we have to have current money available to continue the financing of security.
  I was saying that the Government will continue to monitor security standards and to see that the degree of security provided is sufficient to ensure the safety of passengers. That is why it has been decided to set up a special fund for security out of which those who incur expense on security measures will be reimbursed.
  There is increasing concern about aircraft noise, to which any Secretary of State must be sensitive.
  Mr. Paul Channon: Will the Secretary of State undertake to have another look at the question of retrospection should the Bill not pass into law by 1st April?
  Many local authorities are very worried that their ratepayers will have to pay the costs if the authorities tail, because of bad debts, to recover some of the moneys from airlines. Will the Secretary of State give an undertaking that local authorities will be permitted to have their own costs of collecting this levy allowed, so that their ratepayers will not be put under an unfair burden?
  Mr. Dell: I have already dealt with the hon. Gentleman's first point. As to his second point, frankly, I do not think that it is a substantial one. Bad debts are a very small factor in this question. But again, this is a matter which the House can consider during the course of discussion of the Bill.
  There is increasing concern about aircraft noise, to which any Secretary of State for Trade must be sensitive. The main powers dealing with aircraft noise in the Bill are designed to enhance aerodrome authorities' powers to act to mitigate aircraft noise. The Bill also extends powers enjoyed by certain airports to all licensed aerodromes.
  Certain local authorities already have powers similar to those specified in Clause 8 under private legislation, and this provision is intended to ensure that all aerodrome authorities have the same powers.
  Mr. Dalyell: I understand, on the question of aircraft noise—a subject of

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  concern to those who live around Edinburgh airport—that this is a matter which would be devolved to a Scottish Assembly.
  Mr. Dell: As my hon. Friend knows, it is proposed under the Scotland Bill that aerodromes should be a devolved subject. It therefore follows that powers given to aerodromes under the Bill would, if the Scotland Bill passes in its existing form, be devolved. That is, I take it, the matter to which my hon. Friend was referring. It is one which will, no doubt, be considered, if time is available, during the proceedings on the Scotland Bill.
  Clause 9 is intended to remove any possible doubt about the powers of airport authorities to structure their charges to take account of aircraft noise. The Government have been participating in discussions on noise-related airport charges in the Organisation for Economic Co-operation and Development and in the European Civil Aviation Conference. Noise-related charges can take a number of forms and can be designed to achieve various objectives.
  Schemes of charges related to noise need not raise additional revenue; indeed, like the experimental scheme that Manchester International Airport has been operating since 1975, they can take the form of rebates for quieter aircraft. We believe that noise-related charges can be structured so as to provide an incentive for manufacturers to design, and airlines to buy, quieter aircraft. We envisage that they would be introduced gradually and would be a supplement to regulations on aircraft noise, providing an incentive for airlines and manufacturers to do better than the regulations. The clause also enables the Secretary of State to direct an airport authority to relate its charges to aircraft noise and to say how they shall do so
  Mr. Eldon Griffiths: May I ask a question as one who, in the last Government, was responsible for noise legislation? It is an immensely complex subject. Will the Secretary of State say very simply whether his measures here are designed to achieve "retro-fit" in engines, so that operators will be required to spend a lot of money in putting in new engines retrospectively, or rather to achieve with existing engines certain types
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  of insulation and so on, which are less expensive but also less satisfactory? Above all, will he undertake that whatever he does in this country will be worked out internationally? There is no more international industry than aircraft and aircraft travel, and it is important to get an agreement with those countries which manufacture and those which use airports and airlines.
  Mr. Dell: There are, of course, wide international implications in any process of this kind which is implementable under Clause 9, and obviously one would therefore consult with other countries. France is already operating a power of this kind. I think it is right to have this sort of power available in this country and generally, rather than just the scheme currently being operated by Manchester airport.
  As to the first part of the hon. Gentleman's question, I think that he is requiring me to define the specific impact of a power which can only have a general and long-term effect. This power is to encourage the development and use of quieter aircraft, and I do not think that I should attempt to define here the specific means by which that should be achieved. But it clearly must be achieved, because there is an increasing demand for reduction in noise disturbance. It is to help in that process that these clauses are in the Bill.
  There are other provisions in the Bill dealing with national security and air transport licensing, and Clause 12 aims to meet the criticism of Section 18 of the British Airways Board Act 1977 by the Joint Committee on Consolidation Bills. It aims to simplify the law without changing its effect.
  I have not attempted to cover all the very different matters which are covered in the Bill, and the discussion of which is more appropriate to the Committee Stage. It is a small Bill but with quite significant effect. I hope the House will give it a Second Reading.
  5.19 p.m.
  Mr. Cecil Parkinson: Before I start on my main remarks, may I say to the Secretary of State that I think his answer on retrospection was not satisfactory. I feel that he must accept—and the Bill recognises this—that unless the Bill becomes law

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  and unless the regulations are produced in reasonable time, it would be most unfair to exact a levy on airports which have not had time to make the arrangements to collect that levy from the people concerned. When the Secretary of State considers what he said, I think that he will regret it. I am sure that lie will agree that neither the Bill nor the regulations should come into effect until people have had a satisfactory length of time in which to make arrangements to collect the money that they are to hand over from their own customers. The alternative is that ratepayers at local authority airports could find themselves landed with a large bill.
  This is a small but wide-ranging Bill. I intend to concentrate on four major aspects of it—the Aviation Security Fund; the borrowing powers of British Airways; the borrowing powers of the Civil Aviation Authority; and the clauses dealing with the control of noise and pollution, including those which give airport authorities the power to place financial penalties on aircraft, operators and ban aircraft movements in specified periods.
  It is a matter of some regret that although the Tokyo, The Hague and Montreal conventions have now been available for ratification for a considerable time, they have still been ratified by barely 60 per cent. of the members of the International Civil Aviation Organisation. There are welcome signs of a stiffening attitude over hijackings among those countries that have not ratified the conventions. The kidnapping of the OPEC Ministers caused a changed attitude in parts of the Middle East, and this was evidenced by the fact that no fewer than seven Arab States refused to accept the Lufthansa jet that was hijacked last October. There are signs, as in Mogadishu, of real international co-operation in dealing with hijacking, for which we should be grateful.
  There is growing pressure among those who fly aeroplanes and those who work in aviation for sanctions against those countries that refuse to ratify the conventions, and which harbour hijackers. We all have sympathy with those who are in the business and whose lives are at stake, when we see some countries still refusing to ratify sensible conventions. It is beyond dispute that tighter
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  security measures practised in many countries, including our own, have contributed dramatically to a fall both in the numbers of hijacking attempts and in the successes of hijackers.
  Clauses 1 to 4 of the Bill deal with the aviation security fund. We all accept that, like income tax, the security measures which were introduced as a short-term expedient, are here to stay. Therefore the financing of them must be put on a more permanent and sensible basis.
  It will come as no surprise to the Secretary of State if I tell him that there are very strong feelings among airline operators, airport authorities and the Association of British Chambers of Commerce, to name just a few bodies, who quite naturally prefer the cost to be borne by the general body of taxpayers. They do not look forward to assuming the administrative burden of collecting the levy or imposing the additional cost on their customers.
  Most of us will have sympathy with those hard-pressed local authorities which operate qualifying airports and which find themselves asked to assume an additional administrative burden of collecting security charges. These objections have been put very forcefully by the Joint Airports Committee of Local Authorities, whose members have strong views on this matter.
  One also must have some sympathy for the point of view that the proposed system of collection and administration is very cumbersome and could, in certain circumstances, place not only administrative but financial burdens on local authorities. If the Secretary of State maintains his attitude to retrospection this will guarantee that it does place burdens on local authorities.
  Many people argue that it is the responsibility of the State to protect its citizens, and therefore the cost of providing that protection should fall on the general body of taxpayers. It is argued that hijackers are seeking to pressure not individual airlines or airports but Governments, and therefore Governments should assume responsibility for meeting the cost of protection. Such views are very strongly and sincerely held.
  It is our considered view that there are even stronger arguments in favour of

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  transferring the cost—some £19 million—from the taxpayers generally to those who benefit from the service provided, namely, those who travel by air. Such a proposal recognises something that many Labour Members are often reluctant to recognise—there no such thing as a free lunch. The truth of the matter is that this service, while being provided free to the airports, has been paid for by the British taxpayer. In future the cost instead of being borne by the British taxpayer, will be borne by those who travel, and 50 per cent. of those who land in this country are not British citizens or taxpayers. Therefore half the cost would be borne by non-British people.
  There are many precedents for making the charge on those who use the service. The docks finance their own policing and security activities. British Rail, indirectly by charges to its customers, finances its own security activities. Even football hooligans contribute to the cost of hiring police to protect them from themselves. There is a fairly substantial number of precedents for such a proposal.
  Mr. Ivor Clemitson: The hon. Member has used the analogy of the football hooligan. But who pays for the situation between the railway station and the football ground? British Rail provides the police for the station and on the trains. The football club pays part of the cost of hiring police for the ground. What happens between the station and the ground, where most of the damage is done?
  Mr. Parkinson: The analogy is perfectly appropriate. On the way to the airport the passenger is protected by the police who are paid by the general body of taxpayers. Once he reaches the airport and takes his seat on the plane, he assumes the cost of protecting himself.
  Mr. Channon: I do not wholly agree with my hon. Friend. Would he at least say that if it is right to remove this cost from the general body of taxpayers, it would be wholly wrong for any cost to fall on the ratepayers? There is the question of bad debts—something that the Minister appeared to write off—which could be very substantial, and which could be very large costs in the administration of this scheme.
  Mr. Parkinson: If my hon. Friend will only wait, he will see that I shall be dealing with the points that he has raised. The final reason why this cost should be transferred to the traveller is, perhaps, a simplistic one. Nevertheless, I believe it is convincing. Why should the vast majority, who never set foot aboard an aeroplane, contribute to the cost which arises directly and identifiably from those who do? Why should pensioners, who have never travelled by plane in their lives and who never will, pay the costs of people who go on holiday to Majorca and the Caribbean?
  Mr. Eldon Griffiths: The reason why pensioners should contribute to the security of airports is exactly the same as the reason why they are required to contribute to the education of children. They are members of the generality of the British public. However, I welcome the fact that my hon. Friend has attempted to weigh the dilemma which lies at the centre of this Bill and which the Secretary of State totally ignored. What he is saying is, in effect, that the maintenance of law and public order shall be the responsibility of the general public in certain areas but not in others. Airports and aerodromes are to be segregated from large areas of the rest of the country and made a special case. They are to have special responsibility for law and order and the police which, in other areas, would be paid for by the general public.
  Mr. Parkinson: My hon. Friend and I must agree to disagree. I have already pointed out that there are precedents for making a direct charge to the person who causes that special charge to be incurred. But I accept that there is another point of view that is sincerely and strongly held. I outlined that point of view because I recognise that it is seriously held.
  Mr. Eldon Griffiths: My hon. Friend is speaking on behalf of the Conservative Party and not for himself. I simply want to record the fact that this is the first time that I have heard, in this House or anywhere else, that the Conservative Party has gone away from the proposition that the general peace and the general responsibilities for law and order are matters of general law and not of particular bits and pieces here and there, whatever the precedents.
  Mr. Parkinson: I am sorry to have to repeat myself to my hon. Friend, but he has just repeated himself to me. The point I am making is that this is not the first time. I have mentioned a number of precedents, of which my hon. Friend, judging by what he has just said, seems not to have been aware.
  I am in favour of the principle of the Bill, but I have substantial reservations about the scheme as proposed, and we must wait to see the regulations before we know exactly how the scheme will work. However, if I may assume the general outline of the scheme, I say at once that I regard the scheme as proposed as cumbersome and administratively expensive.
  First, it is proposed that the charge should be levied on the airports and not on the airlines using them. The main argument of the Government for that proposal is that only 28 airports will be affected and that therefore the Department of Trade will have only 28 accounting bodies answerable to it. There is a considerable number of airlines, and the Department argues that if he were to assess the airlines and not the airports, extra administrative expenses would be incurred and extra administration would be involved.
  The truth, of course, is that the scheme as proposed will increase the administrative costs, although not for the central Government. If there are 28 qualifying airports, and they are the accounting bodies, each airline which uses each airport will have to account for each one. For example, British Airways must use a substantial number of the 28. Thus, it will be accountable to most of the 28 bodies, which in turn will be accountable to the Department of Trade.
  About 140 airlines are involved, although I recognise that some of them only use one airport. Wherever they use more than one airport, one can foresee a huge administrative burden—140 airlines answering to 28 accounting bodies. This scheme may require only two additional people in the Department of Trade, but I think that probably the most optimistic statement about the Bill is that in the Explanatory and Financial Memorandum under the heading
  "Manpower Effects of the Bill."
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  It says:
  "The establishment of an Aviation Security Fund will increase the staff of the Department of Trade by 2. No increase in manpower is expected as a result of any other provision in the Bill."
  I suggest that the person who wrote it has a highly developed sense of humour and should get in touch with Morecambe and Wise and apply to contribute to their next Christmas show, because it is patently obvious that there will be a substantial increase in administration. The difference is that it will be incurred not by the central Government but by the qualifying airports. That includes many of the local authority airports.
  Secondly, the fixed levy per passenger arriving deprives the airports of any incentive to provide services as inexpensively and as efficiently as they can. The charge of an arrival at a cost-conscious airport is to be 80p; at a less careful airport, it will be the same.
  I give an example. I understand that at present Luton Airport is able to supply the security services which the Government demand at a cost of about 28p per arrival, or £250,000 a year. The Department is satisfied with Luton's arrangements. Operating the 80p charge means that Luton will contribute £800,000. That will be the amount that Luton will have to find from its customers. Yet Luton knows that it can and does supply the services to the satisfaction of the Department for £250,000. Therefore Luton, an efficient airport which takes pride in giving good service, will be taking a very much more substantial sum and will have no incentive at all not to spend that £800,000. It might be encouraged to waste money because there is no benefit to it from not doing so. I have, therefore, a number of questions to put.
  Why cannot the Department of Trade set, as it does at present, standards of security, monitor them and allow local authorities or the operating authorities to recover the costs they incur from their own passengers? Why is not that possible? I appreciate that there are special problems in places like Northern Ireland, but they are special problems and should be recognised as such. There seems to me to be no reason for departing from the present arrangements simply in order

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  to accommodate the fact that in Northern Ireland in particular security arrangements are very substantial and expensive. We all know of the special problems of that Province.
  Will the local authorities' administrative costs be deductible from the levy before it is handed over? The Secretary of State referred to this sort of thing as detailed, but such matters are very important. These local authorities, as I have demonstrated, will incur very substantial additional costs. Will value added tax be charged on the levy? Are airport administrators likely to be subject to the full ramifications of the dreaded VAT inspectors? Another important point concerns bad debts. While the Secretary of State was saying that bad debts were a minor problem, the hon. Member for Luton, East (Mr. Clemitson) mouthed "Court Line?". The Court Line was not a minor problem for Luton when it went bust.
  There are serious questions which need to be thought about. Are the airports to be the agents of the Department in collecting these fees and accounting for them? Will certain types of passenger be excluded from the charge as they are now under the passenger loading supplement—children, for instance? These are all questions to which the local authorities concerned must have answers in making their plans.
  Finally—a very important point—how will the Secretary of State ensure that those who operate the fund account to their customers—namely, the airports, the airlines and the travellers? In the Bill, arrangements are made for an account to be given to Parliament, which in this case is not supplying the funds.
  One of the most extraordinary features of the present arrangement is that we have bodies which are answerable to Parliament, such as British Steel Corporation, which are very reluctant to hand over the information. Here we have a fund which is to be operated entirely with moneys raised not from Parliament—not a penny of it—but from local authorities and qualifying airports. There are no arrangements made to account to them.
  Why not? Surely, there is a case for the local authorities to have a say in the operation of this fund. Somebody
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  once said "No taxation without representation". This Bill proposes just that. We shall have local authorities and qualifying airports being assessed and having absolutely no right to comment on the expenditure or to have any say on how the fund is administered. This does not seem to be correct.
  I turn now to Clause 5 which provides for an increase in the borrowing powers of British airports and the Civil Aviation Authority. I would like to discuss the affairs of those two corporations. First of all, one must congratulate the staff and the board of British Airways on the substantially improved results achieved in the year to March 1977 compared with those of the previous year. A loss of £16 million after tax, currency losses and interest was turned into a profit of £35 million. The return on net assets increased from 1·7 per cent. to 16·4 per cent. That is a considerable and very welcome achievement. Sir Frank McFadzean and his colleagues deserve the thanks and the congratulations of the House on that result. May I also take this opportunity of wishing Sir Frank a very speedy recovery from his recent illness? He has been a most excellent chairman of British Airways, and the sooner he is back in the saddle, the better.
  It is, therefore, disappointing to find that, because in the main of unofficial industrial action, the results of the first half of the current year show a decline and that British Airways made a shortfall against its projected profits for the six months of £37 million. One welcomes the determination of British Airways to define the size of and deal with its problems of overmanning and low productivity and its recognition of its need to become a higher wage-higher productivity organisation. One also urges the staff to recognise that unless British Airways achieves its target of profits, the programme for re-equiping the fleet may be threatened. This re-equipment is not only desirable if British Airways is to remain competitive, but will be essential as all over the world regulations penalising the operation of the older generation of aeroplanes come into effect, as come into effect they will.
  I hope that in following through its re-equipment programme of £2 billion, British Airways will be allowed to take commercial decisions. Naturally, we hope

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  that the British aerospace industry will come forward with aeroplanes which meet British Airways' requirements for the future. My hon. Friend the Member for Chertsey and Walton (Mr. Pattie) has pushed this case strongly. It is most important, however, that the commercial considerations are the principal factor in arriving at the very difficult decisions which shall be taken.
  I declare my interest as a chartered accountant, and I shall quote from the report of British Airways. In this report there was a clause of a kind which is likely to excite chartered accountants but cause very little interest anywhere else:
  "The amount of Public Dividend Capital that British Railways may receive from the Government is controlled by the debt/equity ratio. This is the ratio of capital borrowings to the total of Public Dividend Capital and reserves. At the time the agreement was given to a substantial increase in Public Dividend Capital this ratio was agreed as lying between 35/65 and 50/50."
  As I said, this is not a statement to excite the imagination of many people, nor one to set the Thames on fire, but it is very interesting. The Corporation is very anxious to be treated as a commercial corporation. It wants to have a debt/equity ratio which compares with that of other organisations. It is common ground between both sides of the House that no satisfactory relationship has been evolved between Government, Parliament and the managements of nationalised industries.
  One shining example of where Government have control but do not interfere, where they allow management to take commercial decisions, have representatives on the board and receive dividends but let the management get on with it, is British, Petroleum.
  Perhaps the time is coming for the Government to examine the possibility of giving the British public a chance to have a real stake in the shareholding of British Airways. Instead of giving British Airways the right to borrow from the Commission of the EEC or the European Investment Bank, perhaps we should be giving British Airways the structure which will enable it to issue shares to the British public, including its employees. Perhaps we should talk in terms of giving British Airways the power to make rights issues and bond issues and not the power to borrow money from the European Investment Bank.
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  Creating an equity capital for British Airways, giving the public the right to buy a stake in our national airline, would strengthen the position of the board in its dealings with Ministers. It would reintroduce a more vigorous commercial approach for the corporation and would give the workers in this very important industry a chance to have a real financial stake in the business to which they are devoting their working lives.
  May I turn briefly to the Civil Aviation Authority? When the Civil Aviation Authority was set up in 1972 it was charged with the duty of becoming financially independent within five years. It was set up by a Conservative Government which said that it must obey commercial criteria and must become self-financing. Its mandate was to cover its costs from the user rather than the taxpayer. That, incidentally, is the principle which is embodied in the aviation security fund proposals which I talked about earlier.
  The Civil Aviation Authority has made major strides towards this objective in the areas controlled by it. It deserves congratulations. The accounts of the Civil Aviation Authority show that its losses arise from operations for which it is responsible but for which it does not control charges, where rates are fixed by international agreement. I would like to ask the Minister two question. What prospects are there for revising the internationally agreed charges so that they are chargeable at a rate which gives the Civil Aviation Authority a chance to break even financially? At present, as the Minister knows, a loss of over £30 million has been incurred on those particular operations.
  Secondly—this returns to a theme on which I touched earlier—what plans has the Minister for making the CAA more accountable to its customers? We have a great deal of dissatisfaction expressed to us by the customers of the CAA. Those customers say that it is in a monopoly position and can simply pass on whatever charges it has incurred regardless of whether it should have incurred them. I know that the officials of CAA are doing a very good job of cost cutting. They are cutting back on the labour force wherever they can, and there has been a reduction of nearly 800 in the labour force in recent years.

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  In the field of company law we are discussing whether an audit committee should be set up to advise shareholders, in consultation with the auditor, on the operation of companies to make sure that shareholders and those who use its services are given more information.
  I believe that the customers of the Authority who hold these views again have a right to inspect its books and to satisfy themselves that they are not just being charged what it costs the Authority and that the Authority is not being wasteful. I make this point very seriously. There is a case for more information to be provided to those who have no choice but to use the services of the CAA.
  My hon. Friend for Chingford (Mr. Tebbit) intends to deal with the remaining clauses, including the very important clauses on noise, on pollution, on controlling noisy aircraft and on restricting the number of flights of noisy aircraft which can take place. If I may say so, there is no hon. Member more qualified to talk about aviation matters than my hon. Friend. Indeed, there are very few hon. Members better qualified to talk about noise. Every time that my hon. Friend rises to his feet, he seems to generate a great deal of noise from Government supporters. I intend to leave the remainder of the Bill to him.
  We accept the argument that the Secretary of State made about the need for these powers under Clauses 8 and 9 and Schedule 1(6). However, they are very wide powers. I hope that they are only enabling clauses and that they will be applied with discretion. Certainly they could result in financial chaos if they were enforced in a Draconian way at an early date. I am sure from what the right hon. Gentleman said that that is not his intention. I hope that the Under-Secretary will assure the House that these enabling powers will be used in consultation with the airlines and airport authorities and that they will not be used in an arbitrary way.
  Mr. Toby Jessel: My hon. Friend said that he thought that the powers should not be used in a Draconian way at an early date. However, I hope that he does not suggest going too far to the opposite extreme. The Secre
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  tary of State used the word "gradually" in this connection. I hope that they will not be brought in so gradually that they are of very little benefit reasonably soon to people who suffer acutely from aircraft noise.
  Mr. Parkinson: I accept fully what my hon. Friend said. I am sorry if I caused him any alarm. I meant to put the emphasis of my last remarks on Clause 9, which gives the power to make charges, and on Schedule 1(6). I accept the need to control noise. We all accept it. In a very moving statement on 7th November last year, which I am sure encouraged my hon. Friend, the Under-Secretary said:
  "I have commissioned a three-year research programme on the relationship between aircraft noise and sleep disturbance, to provide a scientific basis for deciding whether quieter aircraft movements at night should also be phased out ".—[Official Report, 7th November 1977; Vol. 938, c. 33.]
  Three years seems rather a long time to discover whether aircraft noise disturbs people when they are trying to sleep. But I am sure that the hon. Gentleman had his reasons for putting a time limit of three years on that.
  This is an important Bill. It creates a new fund with the very substantial sum of £90 million involved. It changes the borrowing powers of two of our major Government corporations. It also gives the Secretary of State very wide powers to control noise and to penalise the airline operators who create it. The Opposition do not intend to oppose the Bill. However, we intend to give it a very good going over in Committee.
  5.55 p.m.
  Mr. Ivor Clemitson: I wish to make it clear from the start that, critical as my comments will be from now on, I am not attacking the Bill as a whole. I am attacking only its first four clauses.
  I ought to say also that this is a matter about which Luton Borough Council feels very strongly and that it is right that I should voice the council's feelings and reservations about the Bill. The Secretary of State said that the cost per arriving passenger of security measures would be of the order of 80p. In the case of Luton Airport, as the hon. Member for Hertfordshire, South (Mr. Parkinson) said, we are therefore talking about

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  an annual sum of £800,000 based on the current passenger flows through the airport.
  The Government will say that this sum will be paid by the passengers. But will it? For a start, there is nothing specifically in the Bill to that effect. Clause 2(1) says that the aerodrome authorities will be required to pay a sum of money into the fund. It does not even say that they may, let alone that they must, pass on the cost to the passengers. It is probable that airports controlled by the British Airports Authority will pass on the cost to the passengers. However, as I see it, it is possible that they may not. If they do not, where does that leave an airport such as Luton?
  Luton is a successful example of municipal enterprise. Even in the aftermath of the Court Line collapse, the airport is again running into profit. However, that profit would be wiped out if the cost were not passed on to the passengers.
  If the intention is that the cost should be passed on, why is it not made clear in the Bill? Alternatively, why not have a provision that the airlines should be levied directly, and not the aerodrome authorities themselves? Why make the airport authorities not only the unpaid collectors of this levy but also the guarantors of the amount? What happens if we have another Court Line collapse? The aerodrome authority will be left holding the baby, and it will still have to pay the bill because there is no provision for the recovery of bad debts in this measure.
  I want also to return to the matter raised by the hon. Member for Southend, West (Mr. Channon) about retrospection. There is no doubt that retrospection is possible, given the Bill as it is drafted in Clause 2(8)(b) which provides
  "the first of the periods prescribed for the purposes of subsection (2) above may begin on or after the 1st April 1978, but not before that date."
  I have just received a letter from the chief executive of Luton Borough Council which puts the case very well. It reads:
  "The Bill, as at present drawn, makes it possible for the Secretary of State to demand payments from airport authorities back-dated to the 1st April 1978. Thus, there could be a retrospective effect if and when the Bill becomes law, and the airport authorities will have had no chance to pass on the cost to
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  the passengers as the Government claimed they could. At the very least, therefore, the Bill should be amended to provide that no payment should fall due before the expiration of a reasonable time (say six months) after the Bill becomes law. This reasonable period would be required in any event, because the Bill enables the Secretary of State to make Regulations, and those Regulations will prescribe the payment due. In addition, after the Regulations are made, the airport authorities will have to notify the Airline Operators of any increased charge."
  I am sorry to quote at such length but that seems to be a reasonable statement of the position and a constructive criticism of the clause. I hope that my right hon. Friend will reconsider what he said about retrospection earlier this afternoon and will give us an assurance that the regulations will not be drawn in a retrospective fashion, or that some amendments will be made to the Bill before it becomes an Act.
  I return to the figure of 80p. Luton has proved to the Government's satisfaction—and I am assured on this point by the chief executive of the borough—that perfectly satisfactory security can be provided at a cost of 28p per passenger. There is, incidentally, a further 14p in respect of the purely internal security of the airport which would continue to be paid over and above the 80p. The figure at Luton is 28p for the external security that we are talking about in the Bill.
  The question being asked in Luton is where will the other 52p go? Will it pay for the extra administrative burdens which the scheme will impose? If so, it is a strange way of reducing public expenditure, which we are told is one of the purposes of the Bill. Again, being rather cynical and suspicious characters in Luton, we suspect that we may be subsidising security at other airports such as Heathrow. We are a little annoyed about this because we suspect that the problem is centred upon Heathrow much more than upon Luton. If this is primarily an exercise in cutting public expenditure by transferring the cost of security from the national Exchequer to the users of airports and airlines, I make the point that conditions have changed a little since the scheme was first mooted. The climate, we are told, has changed a little and is now more favourable. There might be some case for reconsidering this matter, purely from a financial point of view.

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  I turn now to the philosophy behind the Bill, that passengers should pay the cost of security. It is not often that I agree with the hon. Member for Bury St. Edmunds (Mr. Griffiths) but I found myself in agreement with him this afternoon. The point he made seemed perfectly reasonable. If we say that only the users of airports should pay for security, where does the argument end? Should childless parents or single people pay anything into a common education fund? Should those of us who are fit all of the time pay anything into the common kitty for the National Health Service which, thank God, we never use? The argument can be pushed to rather absurd lengths.
  Mr. James Lamond: Has my hon. Friend noticed that the intention seems to be to levy this on the basis of passengers arriving in a country whereas, from my experience, the cost of searching passengers and checking on security is incurred at the point of departure? Those who arrive have incurred the expense at Bahrein or Paris or wherever else they started their journey.
  Mr. Clemitson: I am sure that there is a perfectly simple answer to my hon. Friend's question, but I must confess that it has not yet occurred to me. What we are talking about here is the threat from terrorism. That is a national, if not international, problem. It seems logical that the financial burdens of dealing with terrorism should be met nationally or internationally. If we say that only those who use the services of the airports should pay, where will the argument end?
  The target for the terrorist is not even the passenger, although the consequences for the passenger may be tragic. Were those who were recently rescued from Mogadishu presented with the bill for rescuing them when they arrived at Frankfurt Airport? Clearly, they were not. The philosophy of the Bill is somewhat questionable. The necessity to save public expenditure by whatever means is no longer quite as pressing at is was. The effects of this Bill as drafted may well be unfair in their impact upon different airports, especially upon municipally-owned airports such as that at Luton. I hope that the Government will re-think
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  their position on this matter, certainly on the points of detail which I have tried to raise briefly.
  6.6 p.m.
  Mr. Geoffrey Pattie: It is a pity that in a Bill which is essentially lightweight in nature the Government seem to have been unable to think through the many problems which arise from such a measure. They are guilty of some rather slipshod thinking and preparation. I intend to deal briefly with two topics which have been included in the Bill and one which has not been included. I refer first to what the Bill describes as aviation security. The Government claim that public expenditure is to be reduced by £19 million by the establishment of this fund and the consequential levies on the various airport authorities.
  As several hon. Members have mentioned, the wording is no doubt strictly true and therefore the statement is not literally inaccurate. What it means in practice is that sizeable numbers of personnel who are at present employed by security firms will become State employees on vesting day. They will then enjoy such benefits as index-linked pensions and all the other things that go with being a State employee. That will mean a consequent increase in the number of State employees and a rise in that sub-heading of public expenditure.
  Hon. Members have referred to the possibility of the retrospective effect of Clause 2(8). I am concerned about the way in which the Secretary of State dealt with this point when it was raised today. It was plainly a matter of little consequence to him. It is a commentary on the way in which Governments, this one in particular, seem to look at questions of potential retrospection. It is not many years since any possibility of such retrospection would have been thought to be totally out of the question. Nowadays it seems to be all too lightly agreed that there may be a case for a certain degree of retrospection. I add my voice to those who have raised this point, asking the Government to look at it again.
  The Under-Secretary of State for Trade (Mr. Clinton Davis): It may be convenient if I deal with this point now. Is the hon. Gentleman aware that my right hon. Friend and I announced long

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  ago that there would be a security levy? We said that it would apply as from 1st April 1978, subject to the will of the House. Is he further aware that it we had not done that there would be no possibility of ensuring that the cost would be passed to the passengers, as is the underlying philosophy of the Bill, in time to catch the heavy holiday season, with the result that we would be forgoing a substantial part of the benefit which the scheme could offer if it ultimately commended itself to the House?
  Mr. Clemitson: Before the hon. Gentleman answers that point, does he not agree that the Minister's comment makes the situation much worse? Is the Minister not saying, in effect, that there is every intention that the regulations will be effective as from April 1978? Therefore, has he not confirmed our worst suspicions?
  Mr. Pattie: I am grateful to the Minister for intervening, because he has enabled us to probe him still further on this point. He said that he is giving notice of retrospective intentions, and that in that sense the matter will not be strictly retrospective. But I should have thought that when Royal Assent has been granted and vesting day arrives it is only from that date that the new power arises. I do not see how the point made by the Minister meets the concern that is felt in the House on this matter.
  The point made by the hon. Member for Luton, East (Mr. Clemitson) about cash analysis was telling, and we shall look forward to the Minister's reply to it. We should like to know from him where the extra money in respect of Luton Airport will come from. It sounds like another bonanza for the bureaucracy which will be rapidly established.
  Sir S. McAdden: I think that my hon. Friend meant to ask the Minister where the money was going to, not where it was coming from.
  Mr. Pattie: I am grateful to my hon. Friend for that correction.
  The matter of airline security is extremely relevant to me personally since I am a fairly frequent traveller on flights to Belfast—although not as frequent a traveller on that route as the hon. Member for Antrim, South (Mr. Molyneaux), the Leader of the United Ulster Unionist
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  Party. I wish to make a few brief comments on security of that route.
  Nobody denies that on that route or on others there should be an effective security system, but on most other routes there are body checks and searches of hand baggage. If one flies on E1 A1, understandably top of the list in security terms, the authorities are most conscientious. The traveller is asked whether he has packed his own case—the case which goes in the hold. He is also asked whether he has maintained that piece of luggage in his own possession since that time, the package is checked, it goes into the hold, and the traveller collects it at the other end. On the Belfast route the traveller is given no such inquisition because the baggage that eventually goes into the hold is searched.
  I can see no reason for that system—or, if there is a reason, I cannot see why that process is not carried out on all the other routes. It is either totally superfluous on one route, or a number of other routes are indulging in inadequate security clearance. The presumption is that the would-be terrorist will put an explosive device in a suitcase which is to go into the hold on the aircraft in which he is travelling—a pretty unlikely proposition.
  Mr. John Pardoe: I think the hon. Gentleman is wrong. I have worried about this problem at various airports throughout the world, and I believe that the authorities at Belfast are right and the rest wrong. It is always possible for a passenger to duck out of travelling on the aircraft after he has put his luggage through the machinery and it has gone to the hold. It is simple for that to happen.
  Mr. Pattie: I appreciate that, but it would be difficult for anybody on the Belfast route to duck out once he had got that far. I do not know how often the hon. Gentleman travels to Belfast.
  Mr. James Molyneaux: Perhaps I may help by making the point that only two weeks ago a passenger on the Belfast route checked in a package but decided not to fly on that aircraft at that time. What happened was that the person's package was taken off the aircraft and we had to identify our baggage, which added 50 minutes to our

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  journey. Therefore, the hon. Gentleman is correct to say that it is impossible for a passenger to duck out.
  Mr. Pardoe: It is not impossible at all.
  Mr. Pattie: This is perhaps something of a sub-issue and I do not want to spend too much time on it. It may be a matter for further argument, but it amounts to the view that security procedures at Heathrow on international flights are inadequate.
  Mr. Pardoe: That is right.
  Mr. Pattie: If that is so, it will be of some concern to the Minister.
  I feel disappointed that the Government have not gone further in dealing with aircraft noise. Clearly it is axiomatic that the monitoring of aircraft noise is an international problem. My hon. Friend the Member for Twickenham (Mr. Jessel) hopes to intervene in the debate, because he and I are always discussing the aircraft routes over his constituency and mine and we both agree that that is a key question. There should be some regulation by Government, which is a combination of carrot and stick, to encourage airlines and to set a date in the future by which they will be able to operate suitable equipment. I am disappointed that the Government have not taken this opportunity to act on Part 36 of the United States Federal Aviation Authority regulations as a minimum, and indeed to go beyond that and lay down that by the year, say, 1985 aircraft must reach a required standard. I know that my hon. Friend the Member for Chingford (Mr. Tebbit) wishes to mention this matter, and we shall look forward to hearing his contribution from the Front Bench.
  There is one matter that is not touched on in the Bill. I refer to the fact that the Government have not taken this opportunity to take action about Section 36 of the Civil Aviation Act 1971. They could have repealed that provision or made it very much clearer.
  Before I become too critical of the Civil Aviation Authority, I wish to point out that it has made a considerable achievement recently because it has turned in a small surplus after previously making a loss. That shows how able
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  the CAA can be in trimming the size of its workforce.
  Section 36 of the 1971 Act deals with the subject of disclosure of information and enables the CAA to produce economic statistics and data and to assess the efficiency of airlines. It is an important provision. However, the sad fact is that the CAA statistics and data produced as a result of the so-called working of the provision in the Act are late, stale and inadequate. What is happening is that the industry and often the airlines shelter behind Section 36 and say that they cannot disclose information which the public should know.
  Furthermore, Section 36 is being used as some kind of mini-Official Secrets Act because information legitimately required by the public is being denied by the CAA which invokes Section 36. The CAA takes the view, "No, we cannot tell you these things". But this matter affects airline safety, and there is nothing more important than that aspect.
  Let me give an example. On 14th May 1977 there was a crash involving the Dan-Air airline in which a Boeing aircraft crashed in Africa, the tail plane having become separated from the aircraft. Following that accident, the CAA was asked to mount an investigation to find out how many more aircraft of that type had defective or cracked tail planes. The CAA carried out a survey and found out that some aircraft had such defects. It refused to reveal which operators had been found to have aircraft with cracked tail planes. It said that it was precluded by Section 36 from giving that information to the travelling public. It is a pity that the Government have not taken the opportunity of the Bill to tackle this unsatisfactory situation.
  6.20 p.m.
  Mr. George Park: My local authority in Coventry, like that of my hon. Friend the Member for Luton, East (Mr. Clemitson), is greatly concerned about the proposals in regard to airport security. It is a difficult problem and the difficulties have been transmitted into the question of payment for security. The Government seem to have chosen the most difficult way of approaching the problem.
  Interesting possibilities are raised by the suggestion that we should charge

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  passengers on airlines as distinct from passengers on other forms of transport or ratepayers who use other local authority services. Further consideration should be given to this problem. We are making rods for our backs if we depart from the principle that people are entitled to have their security looked after by State provision, whether they are travelling on planes, trains or buses.
  I am not sure about the principle behind the security charge of 80p. I do not believe that there has been consultation with, for example, the Department of the Environment, whose Secretary of State assured local authorities that no further burdens would be placed on them unless he provided the money.
  There is general agreement in the House that the operation of the scheme will involve heavy administrative charges. There is no mention of how these are to be recouped. I am particularly concerned about local authority airports because it seems that these administrative costs will fall on the ratepayers of the towns concerned.
  There has been no indication of how the figure of 80p was arrived at; no reasons have been given for it. One airport already operates a satisfactory security service for considerably less than half that amount. If an 80p charge is to be levied at Coventry Airport, there must be an element of cross-subsidisation involved. The Minister should tell us how the charge was arrived at. Apparently it will be levied whether one is crossing the Channel or crossing the world.
  There is doubt and worry about the level of the charge and how it is to be recouped. There is also concern about the possibility of debt charges. Any local authority which runs an airport knows that in and around airports companies are constantly going into liquidation, being revived under different names, and so on. All sorts of problems could arise and there is insufficient explanation of, or reasons for, the scheme. The Government must indicate clearly, if not tonight then subsequently, why they have arrived at the conclusions embodied in the Bill.
  No one has yet mentioned the fact that there are people other than passengers at airports. Are we to assume that the 80p charge covers the security of those work
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  ing at airports, or is their security a function of the police, as was suggested in reply to the hon. Member for Bury St Edmunds (Mr. Griffiths)? How has this split function been worked out?
  This is a sloppy Bill which has been brought before us with inadequate thought and preparation. It should be taken away and gone through again.
  6.25 p.m.
  Mr. John Pardoe: I shall deal with Clauses 1 to 4 in a moment, but the Bill has virtues of omission as well as commission and the remarks about it might be different if it contained some of the proposals that were originally intended.
  As the Secretary of State half indicated, the Government intended originally to amend Section 3 of the Civil Aviation Act 1971 in the light of the judgments of the courts in the case of Laker Airways—not, of course, to change the effects of those decisions in respect of Laker Airways, but to change them for anyone else who wanted to do a Laker.
  The decision of the courts meant that a second British airline should be able to compete on any individual route. The Government did not think that this was the intention of their policy or of the 1971 Act. The Government accepted the decision of the courts in the case of Laker, but decided to amend the 1971 Act in order to ensure that it did not happen again on other routes. As the Secretary of State indicated, it is unlikely to happen again because no country other than the United States would allow a second British carrier on any individual route.
  When the suggestion was put to me and I was asked whether it would be acceptable to my colleagues, we took the view that it amounted to a limitation of competition and that it would mean that no new British Laker would be able to innovate or break through the establishment. We told the Government that we would not be able to support it, and on 31st October the Under-Secretary told me that the Bill would not include such an amendment.
  The second omission was not referred to by the Secretary of State. There was a proposal to make it an offence to offer airline tickets for sale at less than the approved price. It was a bucket-shop

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  clause. Of course, "bucket-shop" is a derogatory term and one tends to think that they are not a very good idea, but the bucket-shops that advertise on the back page of The Times and other places afford people the facility of low-cost air travel, and I am all for them in this respect. At least they nibble away at the monstrous international monopoly which airlines have managed to establish. In this case, they perform a useful function and my colleagues and I said that we would not support the Government's proposal.
  Turning to the provisions in the Bill, I like the suggestion of the hon. Member for Hertfordshire, South (Mr. Parkinson) that the public should be allowed to buy shares in the various air authorities. That would be one way of funding any necessary expansion of the borrowing powers.
  Plainly money has decreased in value since 1971. I am not sure whether £125 million is the revalorised amount for £75 million—it may just be. I am more concerned about the possibility that some of this money may find its way into paying the air traffic control assistants more than the 10 per cent. guideline for wage increases.
  I hope that tonight the Minister will give the House the unequivocal guarantee that he has given me that it will not be so used and that additional public funds will not be necessary for that purpose. When the settlement was reached—the air travelling public had to put up with a great deal of inconvenience in withstanding the strike—it appeared to some of us that the whole matter had been solved. However, at the end of the day the air traffic control assistants will almost certainly end up with more than 10 per cent.
  Mr. Pattie: And everybody does.
  Mr. Pardoe: Not in the public sector. It is amazing how many will not end up with more than 10 per cent in that sector. In the private sector one gets away with murder.
  I was interested in the arguments put forward by the hon. Member for Luton, East (Mr. Clemitson) and by that curiously named body JACOLA—the Joint Airports Committee of Local Authorities—but I do not accept them.
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  Who causes the cost to arise? It may well be said that the responsibility lies with the hijackers, the terrorists and the guerrillas. However, the fact is that airline passengers, by choosing to fly in a form of transport that is peculiarly susceptible to such action, incur a cost for the rest of society. Airline passengers are not among the poorest transport passengers in society.
  Mr. Park: Is the hon. Gentleman saying that those who have children incur a cost for the rest of the community and that they alone should pay for their education, and that those who do not have children should not have to pay?
  Mr. Pardoe: No, because the whole of society benefits enormously from having an educated population, as does the whole of British industry. If the hon. Gentleman is asking me who should bear the cost of policing football crowds, for example, clearly those who pay to go to football matches should bear the cost.
  Mr. James Lamond: Is that responsibility for crime the same sort of responsibility that lies with those who go about with full wallets and get mugged, or those who buy expensive jewellery and keep it at home? Is the hon. Gentleman talking about the responsibility that they bring upon themselves? Is he saying that they should be asked to pay the extra cost that is involved in police officers investigating the burglary or the mugging?
  Mr. Pardoe: When the responsibility can be identified, clearly the cost should fall on the person who causes the problem. The insurance business largely ensures that additional cost falls upon those who bear the responsibility. In some cases it is not possible to make that identification, but in the context of the Bill it is possible because it can be said that if there were no airline passengers no cost would arise.
  I find it extraordinary that poor people on supplementary benefit should, through VAT, be asked to subsidise my airline fare and the security cost that I incur by taking an airline ride. I see no logic in that, and no justice of any port. It is surely right in principle that the charge should fall on the airline passenger.
  These are details that may be discussed in Committee; no doubt that will happen. I am concerned, as are many other hon.

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  Members, about the retrospective effect if, indeed, it is retrospective. However, if we get the Bill through by 1st April, there will be no problem. I hope that the Government will see their way to take account of the various points that have been made on that score.
  I return briefly to the question of security. At present the protection of airline passengers from hijacking and other forms of terrorism costs the taxpayer about £19 million per year. It seems entirely just that passengers rather than taxpayers should bear the cost as passengers are, in the main, those who benefit from the present security arrangements.
  The hon. Member for Coventry, North-East (Mr. Park) indicated that the sum of 80p was in the Bill. I cannot find it mentioned and I do not think that it is there. I cannot remember having read it. It is an estimate. No doubt we shall hear from the Minister a little more about how the sum has been calculated. However, 80p per passenger does not seem to be an unreasonable amount to pay for security arrangements at our airports. It is extremely unlikely that the whole of the difference between the amount that the hon. Member for Luton, East mentioned at Luton and the 80p would be incurred in administrative charges.
  One of the more remarkable features of the Bill appears in the last section of the Explanatory and Financial Memorandum, which states:
  "The establishment of an Aviation Security Fund … will increase the staff of the Department of Trade by two."
  That is not bad. If two persons administer £19 million, that, for once, is fairly efficient.
  Mr. Pattie: If one believes it.
  Mr. Pardoe: That is perfectly true.
  Mr. Clemitson: The only other conclusion to which we can come is that the passengers who use Luton Airport will be heavily cross-subsidising passengers who use other airports. If we accept the hon. Gentleman's argument that we should identify where a cost arises and then impose the cost upon the person concerned, is it not rather unfair that passengers who use Luton Airport—in the main they are short-haul flights—should cross-subsidise passengers who
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  use Heathrow and the long-haul flights? That was the point made by my hon. Friend the Member for Coventry, North-East (Mr. Park).
  Mr. Pardoe: The hon. Gentleman makes a fair point. It is not a point of principle but one of detail which I am sure he will raise in Committee. I suspect that he will get some support.
  However, I do not follow the hon. Gentleman's argument. Is he saying that a distinction could easily be made between the security costs of different airports? I think that he will realise that if we said that the cost of making Luton secure per passenger was substantially less than the cost of making Heathrow secure per passenger, we would want to ask some far- reaching questions about security measures at Luton. It would not necessarily be in the public interest to publicise the substantial differences, if, indeed, there were such differences.
  There is a second subsidy that the airline passenger receives from the rest of us that is not quite so easy to recognise. People who live near airports suffer from aircraft noise and are not compensated sufficiently for the inconvenience. Airlines can fly noisy aircraft and they are not now penalised for so doing. In other words, residents are paying the environmental cost. In effect, they are subsidising the airlines.
  Clause 9 deals with the hidden subsidy. The clause can be described as providing a noise tax whereby the polluter pays for the pollution. I welcome the attempt to reduce the noise nuisance that is suffered by residents near airports. The aim of the clause is twofold: to diminish inconvenience caused by aircraft either by using quieter aircraft and encouraging their use by charging them the full cost of the noise that they make, or to insulate dwellings that are affected by noise. The ideal solution would be to tackle the noise at its source, but that is a pretty unrealistic suggestion in the medium term.
  Surely we must consider the second way of diminishing the inconvenience caused by aircraft—to extend the noise insulation grant scheme, which at present applies to houses completed before 31st January 1966. Since that time the noise at Heathrow has become very much worse, as it has at other airports. It seems only fair that part of the surcharge raised under

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  Clause 9 should go to provide sound insulation. The sound insulation regulations should be extended to make them more effective.
  The method of calculating the surcharge could be simple. It could be related to the noise footprint of the type of aircraft. One hopes that the critical noise level would be lower than the maximum night time limit at Heathrow, and any house where the peak noise level exceeded the critical noise would benefit from the surcharge.
  The cost to the airlines would not be very high. The total cost of the noise insulation grant scheme has been about £3 million to date, so the money could be raised in one year if the surcharge were applied to noisy aircraft at £25 for each landing, which is only about 5 per cent. of the normal average landing charge. This would be a satisfactory and suitable extention to the regulations, and I hope that the Minister will take up this suggestion when he replies to the debate.
  6.40 p.m.
  Mr. Tam Dalyell: If I raise the question of Sumburgh Airport, it is not simply that it is a little local difficulty in the Shetland Islands. My hon. Friend the Minister knows that this airport is crucial to the whole future of the rate at which we extract oil in the North Sea. The Civil Aviation Authority is proposing to build a completely new terminal for oil-related traffic at Sumburgh Airport, the cost of which is likely to be £10 million. The CAA is also to spend another £500,000 in 1978 on providing more aircraft parking space, additional to the £13 million already spent on airport development over the past three years.
  As anyone who has been there knows—and I was there only a month ago—the major problem is that the airport is built on a narrow promontory, with one runway built out into the North Sea at one end, and into the Atlantic at the other, with surrounding inlets and hills, and the consequence is a lack of space to extend the existing terminal area. The CAA takes the view that it is necessary to open up the Wilsness area of the airport for a completely new and additional terminal facility to cater solely for oil-related traffic. Are the Government in favour of such a proposal at Wilsness?
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  Sumburgh is Britain's fastest growing airport. Figures for both passengers and aircraft movement have quadrupled between 1973 and 1977. In 1973, total aircraft movements amounted to 9,114. In 1977 the figure was 38,753, and this tiny airport in the Shetlands had 404,370 passengers. Mr. Donald Kirk, the CAA's Scottish controller says:
  "In 1978 we are likely to be called upon to handle a total of more than 500,000 passengers and 57,000 aircraft movements—29,000 fixed-wing and 28,000 helicopters."
  The CAA is proposing to increase the landing charge for helicopters at Sum-burgh from 1st April. The additional revenue is to meet additional operating costs and to cover the 1978 £500 million development programme. Do the Government see this as a matter of priority? If so, when do they propose to make an announcement about it?
  My second question arises from a document that we have received in discussions with the central staff authority of the CAA. It concerns the future ownership of the whole of the islands' aerodromes. It is the CSA's contention that the ownership of these aerodromes should remain with the CAA, and it seeks the support of the Government to this end. It seems to it that, whoever controls the Highlands and Islands group of airfields, it will be necessary for Government subsidies to be made available, since all parties accept the role of these aerodromes as part of an essential social service, and it asks why there is a need for change. I should be interested to cut things fairly short, because other hon. Members wish to speak, but how do the Government see the future of the ownership of the airfields?
  I now turn to deal with another matter. Those of us who use the new Edinburgh Airport are united in agreeing on the excellent service that is provided by the staff. The last thing that I wish to do is to complain about the staff of British Airports Authority, of British Airways, or of British Caledonian. They are extremely helpful people, but I wish to make a complaint, which is rather a generalised one.
  My complaint relates to the design of modern expensive airport facilities. To give just one example, we have here an expensive new airport, and yet the shuttle services, which take 70 per cent. or more

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  of the passengers, are squeezed into one part of the airport. Incidentally, they are away from the shops, which is bad for trade. We all must have the usual security checks. We go through and up into a waiting room. I make no complaint about that, but there is often fog, and there are often delays for various operating reasons, which we all understand, and on occasions one is confined to that waiting room for a long time.
  In this brand new airport one would have supposed that the designers would have had some idea of what was needed, and some experience of the facilities that were necessary, yet there is no toilet provision. That might be all right for you, Mr. Deputy Speaker, and for me, but it is not right that hour after hour mothers with young children should have to wait in such conditions.
  It is a fair question, in a debate such as this, to inquire what the Government intend to do to ask those responsible for spending millions of pounds of public money to use a little more practical common sense, and, instead of giving us luxury facilities, to cater for the real needs of the travelling public. Among those real needs are such things as elementary toilet facilities when people have to wait for a fairly long time.
  I do not want to turn the debate into a kind of personal complaint, but I voice the complaint of many of my constituents who wonder why it is necessary to have expensive shops built into airports and yet have an open car park with no cover. It is that kind of priority that causes the gravest doubt about the practical good sense of those making the decisions.
  When the airport was being built, some of us asked our friends who worked there "Have you been across to see the new buildings that are going up? Have you spoken to the designer?" They replied "We have been forbidden by the contractors and the architects to have any discussion with those responsible for building the new airport." A little common sense and a little communication between those who work in the buildings and those who are responsible for building them would have saved a great deal of the chronic inefficiencies of the new Edinburgh Airport. Will my hon. Friend
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  ask the authorities to show a bit more nous in the future?
  I turn finally to the matter of the Bill and the doubts that many people have in relation to Scotland. My hon. Friend the Member for Bebington and Ellesmere Port (Mr. Bates) looked at me wide eyed and said that this was not the day for a devolution debate. I agree, but one cannot get away from devolution, because I have here a letter from the Edinburgh Chamber of Commerce and Manufacturers which says:
  "Dear Member of Parliament,
  Scotland Bill—Civil Aviation Bill
  I am writing on behalf of the Edinburgh Chamber of Commerce and Manufacturers, and its affiliates, to express our views in relation to Aviation matters. Some of these points will also be the subject of representations by the Association of British Chambers of Commerce. We strongly support the excellent case made in the House by the hon. Member for Edinburgh, West for the retention in CAA control of the Highlands and Islands Airports.…
  In connection with devolution, the Chamber confirms its support for the CAA to remain a unified national body in all its aspects."
  That was the point made by the right hon. Member for Brighton, Pavilion (Mr. Amery) and, indeed, it was the matter that I raised on a point of order at the beginning of our debate. The Chamber of Commerce says:
  "As regards the BAA, we find that it has been to the benefit of Aviation in Scotland that it has taken over and developed the four major airports. We find fault as representing the South-East of Scotland and the capital city with the unreasonable discrimination caused by the policy decision that Inter-Continental charters must land at Prestwick. This has already led to the total cancellation of a number of flights which would have benefited tourism in Scotland, including some proposed for this year.
  The future rôle of the BAA in Scotland under devolution is causing us considerable concern, in that we do not consider the proposals to be in the best interests of Scotland. We consider that decentralisation would be adequate and would retain the ability to transfer management and technical expertise in a two-way exchange across the Border. The creation of a Scottish Board by itself will not offset the apparent disadvantages. It is understood that this is also the viewpoint of the consultative committee of the BAA operated airports."
  This is the view of the Edinburgh Chamber of Commerce and Manufacture. It is also the view of the Association of British Chambers of Commerce which

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  has sent a message to Members of Parliament opposing the Scotland Bill saying that it reaffirms
  "its determined opposition to the Scottish Bill presently before Parliament as damaging to the needs of the British people as a whole. We are particularly concerned at Schedule 10 which is being debated tonight and provides classic examples of the confusion which will be created if the Bill is enacted. The powers proposed for the Scottish Assembly would disrupt industrial and commercial life causing delay and indecision. The proposals further provide many opportunities for dispute between the United Kingdom Parliament and a devolved assembly and constitute a continuing challenge to the unity of the United Kingdom."
  In case any of my hon. Friends think that I am grinding axes or using chambers of commerce for my own benefit, I should like to say that I know the ex-Lord Provost of Aberdeen—my hon. Friend the Member for Oldham, East (Mr. Lamond), who is as steadfast as I am in these matters—
  Mr. James Lamond: Not quite.
  Mr. Dalyell:—almost as steadfast as I am—will agree that it is a matter not just of the chambers of commerce but of very considerable sections of the Labour Party. Over the weekend an organisation was established under the chairmanship of my hon. Friend the Member for Edinburgh, Central (Mr. Cook), including many of the trade unions which are concerned with this Bill and so much of the other industrial legislation that we discuss and including some of their full-time officers, with a view to mounting a Labour "Vote No" campaign in a referendum, if it comes to that.
  You, Mr. Deputy Speaker, will be the first to call me to order if I stray beyond the rules—
  Mr. Deputy Speaker (Sir Myer Galpern): Order. I am glad that the hon. Gentleman anticipated what I was about to say. He is mixing up two days of the week. Today is Monday. Tomorrow is Tuesday, when we shall be discussing the Scotland Bill. What he has just been saying would have been more strictly relevant to the Scotland Bill, not to the Civil Aviation Bill.
  Mr. Dalyell: If we have a chance of reaching it, but, as you know in another
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  guise, Mr. Deputy Speaker, we are lucky if we get half a clause out of 19 clauses.
  Mr. Deputy Speaker: Order. That is not the fault of the Chair. I appeal to the hon. Gentleman to stick to what we are considering this evening.
  Mr. Dalyell: I return immediately to what the chairman of the air transport committee of the Association of British Chambers of Commerce said in his letter to my right hon. Friend the Seceretary of State for Trade:
  "It would be intolerable for licensing arrangements for civil aviation to be treated in the cavalier fashion that Clause 66 lays down.
  As the Scotland Bill stands at present, a Minister may, by order, make provisions for the apportionment of any assets or liabilities of the British Airports Authority and may alter the financial limits under which the BAA operate.
  The Bill thus proposes to enable the breakup of the BAA in any manner in which this or any successor Government may determine. Parliament is being invited to sign a blank cheque."
  My question is this—In the opinion of my hon. Friend the Minister, is there any danger under current Government legislation of a break-up of the British Airports Authority—a move that some of us think would be very inefficient? To use Mr. Hill's own words,
  "This is surely a matter which should be retained by the United Kingdom Government as it could be used to prevent certain aircraft landing at airports. In any dispute between the Scottish Executive and the Department of Trade this devolution could be a highly effective method of reducing civil aviation to a shambles."
  I want to be persuaded—perhaps I am being a little devious in saying that. Let me be persuaded by my hon. Friend the Under-Secretary that under the proposals currently before Parliament in the Scotland Bill as it affects this Bill civil aviation in the United Kingdom will not end up in a shambles. The idea that it will end up in a shambles is not my idea. It is the idea of the experts speaking on behalf of those who know.
  As so often is the case in these matters, the more that people learn about a set of proposals in the Scotland Bill as it affects them, and the closer they come to the reality of having to operate those proposals, the less they like it. That is the way of the Scotland Bill. I just stick to it in relation to civil aviation. In

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  every field—forestry, the dockers, the Law Society—
  Mr. Deputy Speaker: Order. We have had any amount of that. Has the hon. Gentleman finished?
  Mr. Dalyell: No, not quite. Because I am concerned about your position, Mr. Deputy Speaker, and mine in relation to civil aviation, I wish to ask my hon. Friend whether he will carry out a study of the difficulties that would be caused for civil aviation if there were to be a system of passports as between Scotland and England. This is no hypothetical matter. Hon. Members who ordinarily sit on the third Bench below the Gangway and who are Members of the Scottish National Party are not present. There are Members who are absolutely committed to a separate State. A separate State means passports. This means passport facilities—
  Mr. Deputy Speaker: Order. We cannot have that. We are not dealing with passports. If the hon. Gentleman is not aware of what is under discussion, I must ask him to resume his seat.
  Mr. Dalyell: We are concerned with the borrowing powers. The borrowing powers provide the wherewithal for facilities at airports. As you know, Mr. Deputy Speaker, facilities include passport control—
  Mr. Deputy Speaker: Order. We are not talking about passports. Let us get on to the business under consideration.
  Mr. Dalyell: This is exactly the business, and it is of very considerable importance.
  Many people do not realise that the whole fanciful juggernaut apparatus of a nationalist case means passports. Passports mean queuing for the shuttle that you, Mr. Deputy Speaker, take to come here. It is the task of politicians to foresee what may happen before it happens. Under this Bill it is legitimate to point out that the Government should produce the costing of the facilities for providing passports for you, Mr. Deputy Speaker, and me and the other 999,000 passengers who left Edinburgh last year—those are the actual figures—for passport control. If we are to have passport control there must be facilities. This is not fanciful—
  Mr. Deputy Speaker: But it is irrelevant. I must ask the hon. Gentleman not to pursue that line of argument.
  Mr. Dalyell: I am very obedient to the Chair, so I put it as a question: has consideration been given in the Department to the question of providing passport facilities at Heathrow and Gatwick and to the Scottish airports?
  Mr. Clinton Davis: No.
  6.58 p.m.
  Sir Stephen McAdden: You will be glad to know, Mr. Deputy Speaker, that I have no intention of going down the disorderly path down which the hon. Member for West Lothian (Mr. Dalyell) has been seeking to lead us. I want to go straight away to the Bill which we are supposed to be discussing. I shall not keep the House for long. I never do.
  I am sure that the debate has prompted in the minds of many hon. Members some thoughts which may not have occurred to them before. The Minister has made it clear that he has no intention of producing a White Paper before we have finished our discussions on the Bill. He also gave an assurance that he proposes to make these payments available from April 1978 under regulations which he will then issue but which he cannot issue till the Bill has been passed. It seems an extraordinary way of going about it. What is more, it seems to me to be a contempt of Parliament to have it said that regulations will be made—regulations whose contents we know not, save that they will lay down a charge of about 80p per passenger who lands in this country.
  I am all in favour—I am sure that all hon. Members are—of an Aviation Security Fund. However, some interesting and important points should be made about how it is to be levied. I understand that it is proposed to be levied on passengers arriving in this country. I should not have imagined that they created any security risk; they are here. On the other hand—this was argued by my hon. Friend the Member for Hertfordshire, South (Mr. Parkinson)—there is a good case for saying that it should be levied on those who are leaving this country. If we levy it on those arriving here we levy it on people who, probably, have

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  come from foreign countries, so that we shall have foreigners meeting the bill, not ourselves. That sounds a very good argument. The foreigners who come here will not stay. They will go back and become outgoing passengers—
  Mr. Jessel: Some of them do.
  Sir S. McAdden: Some of them—perhaps too many—but, on average, most of those who come here go back. Therefore, it does not seem to me to be logical to place the levy upon those who are arriving instead of upon those departing from these shores.
  There are other considerations to be borne in mind. We have it from the Government Front Bench that there are only 28 airports that can collect this charge, and it will be a very convenient method of collection to do it in that way, as opposed to using the airlines for collection. I think that the number of airlines was given as 148, which would give 148 collecting points. This, we are told, would be administratively inconvenient, and the Government propose a small number of collecting points irrespective of whether the method of collection is fair and just. It may be administratively inconvenient to levy directly through the airlines, but at least it would be fairer than doing it through the airport authorities and giving them responsibility in the matter, especially when they cannot see any justification for the 80p so far mentioned and, moreover, they can see no reason why the administrative expenses to which they are being subjected should not be met by the Government instead of by themselves.
  I gather also that it will be a flat-rate levy whether a passenger is going to Le Touquet or to Hong Kong. As I see it, there cannot be much security risk presented by people going by short-haul aircraft from Southend—if I may mention it—to Le Touquet, to Rotterdam or even to Dusseldorf. I cannot believe that any responsible hijacker would dream of hijacking one of those aircraft. It would be entirely unsuitable for his purpose. Nevertheless, we are being called upon to pay for meeting a great security risk although it is a security risk which does not apply in our case.
  Although I can see that, in the interests of uniformity, there should be a charge
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  for all passengers at airports, I cannot see why the charge should not be related to the distance to be travelled and the security risks attached to longer journeys—to say, Hong Kong, Brisbane and such places—as opposed to the short hauls to various parts of Europe.
  I hope that the Minister will consider these matters and bear in mind also that any suggestion of retroactive payments under legislation not yet authorised by Parliament will be strenuously resisted by the House, and rightly so.
  I could say more, but I realise that many other hon. Members wish to speak and I have no wish to stand between them and the House or to incur the displeasure of the Chair. I give qualified support to the Bill, and I hope that in Committee—on which, may I say, I hope not to serve—other hon. Members will have a view to express.
  7.4 p.m.
  Mr. Hugh Jenkins: I apologise to my right hon. Friend the Secretary of State for not being present to hear him introduce the Bill. At various times in my life I have been concerned to make some small effort to defend the people of this country against the consequences of aircraft attack in one form or another, and most recently that effort has taken the form of seeking to defend my constituents against the consequences of incidental and unintended attack, that is, attack from aircraft noise rather than the earlier forms of attacks perpetrated by the enemy many years ago.
  The aircraft is seen as something hostile by many people in my constituency, and the reason is that, although the aircraft is a very convenient thing to fly in, it is not so convenient to be constantly flown over by aircraft, and this is the fate of my constituents and those of many other hon. Members. I see some familiar faces in the Chamber today, and I know that feelings on this subject un high. It is no fanciful objection that we make when we come here to talk about the consequences of aircraft noise for our constituents.
  I therefore welcome Clauses 8 and 9 which, I think—I am not quite sure whether they do—are designed to extend the powers of the Secretary of State in relation to protecting the population

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  against the consequences of noise, vibration or atmospheric pollution, as it is called. I do not believe that those clauses in their present form are fully effective, however, and I think it likely that in Committee—I suspect that those of us who speak on the Bill stand in grave danger of serving on it—endeavours will be made, in which I shall take part, to strengthen those clauses which are designed to do something to protect the citizen on the ground against the consequences of the citizen in the air.
  I believe that the whole history of civil aviation in this country has been geared towards looking after the interests of the aircraft operator. The operator is concerned with both passenger aircraft and cargo aircraft, and it is his interest, quite properly, to get his aircraft into the air, on its journey and back again as soon as possible. He therefore goes for the best, easiest and quickest way, and the best, easiest and quickest way from his point of view is not necessarily the best from the point of view of the community as a whole.
  I am sure that it is generally agreed that if we were now to be deciding where to put our London airport, Heathrow would be the last point which we should select. By the very nature of its geographical situation and the prevailing winds, for most of the time three-quarters of all aircraft seeking to land in London must fly over most of London's residential population. It would be utter madness if, were the decision before us in 1978, we sought to place the main London airport where it now is. I am certain that we should not have decided on that location if, when those decisions were taken many years ago, we had realised the consequences of placing the airport on the spot which it now occupies.
  Mr. Jessel: I wonder whether the hon. Gentleman is aware that that decision taken all those years ago was taken in the late 1940s when the Attlee Government, whom, presumably, he supported, were in office.
  Mr. Jenkins: Indeed, I am aware of that, and my right hon. Friend the Member for Battersea, North (Mr. Jay) has confessed to me that he was personally responsible for that action at the time. He does not seek to escape responsibility for it. But what is equally true, as in
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  the lamentable story of Concorde, is that Government after Government and party after party, faced with a decision taken earlier, has continued to endorse that decision and add to it. The intention, the will or the courage to reverse decisions, to take fresh chances and to alter things has always been lacking in our civil aviation. As a result, each Member and each Minister has carried on from the decisions of his predecessor, endorsing those decisions, with the result that matters have got worse and worse.
  The number of aircraft has grown, there has been the invention of the jet aircraft, and still Heathrow has grown, with more and more flights and more facilities. We now have Underground Railway facilities, cargo and passenger facilities and all the rest, until in the end we have built at Heathrow the largest airport in the world!
  One of the things which we should not do here is by this little Bill create a state of affairs in which airport authorities may themselves make byelaws to control the operation of aircraft within their boundaries. The balance should be altered. I have said many times that I greatly doubt that the Department of Trade, which by its very nature must be concerned to maximise aircraft movements, can properly fulfil the duty to minimise the consequent noise.
  There should be a healthy division of Government responsibility here. Another Minister should have the responsibility for protecting the citizens, not the Minister concerned with making it worse for the citizen on the ground by maximising, if he can, the number of aircraft arriving here at the best possible time and place. However, as the powers are vested in the Secretary of State for Trade, we should try in Committee to see that the responsibility for making those charges and providing those protections in relation to aircraft noise, is firmly vested in him, rather than the airport authorities.
  If we are to make more distant airports more attractive to aircraft operators, airports which are inherently because of their geographical position, less attractive, there must be a variation of charge between one airport and another. In clearer words, Heathrow must be made more expensive and Stansted less expensive if aircraft are to be encouraged to land at

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  Stansted rather than at Heathrow. Otherwise, we shall not be able to encourage the growth of Stansted, which is ideally situated from the point of view of the citizen on the ground, if not so attractive from the point of view of the citizen in the air.
  Over the whole history of civil aviation there has been a neglect of the interests of citizens on the ground, starting way back with the 1949 Act, under which the citizen is precluded from suing in the courts an aircraft operator who exceeds permitted noise levels. That is an almost unique position. We might explore in Committee an amendment to restore to the citizen his right to sue an aircraft operator who creates an unreasonable amount of noise and thus disturbs the citizen's peace and quiet.
  Mr. Norman Tebbit: Did the hon. Gentleman let his hon. Friend the Member for Harlow (Mr. Newens) know that he would make this renewed plea for Stansted to be London's airport? I am not sure that his hon. Friend would feel that it was the ideal site.
  Mr. Jenkins: If my hon. Friend sees tomorrow that I have been encouraging the growth of Stansted, he may take a different view from mine. But there are people concerned with Stansted who would argue, I think rightly, that that airport is insufficiently used. We should compare the number suffering nuisance as a result of aircraft flying over the whole of Western London, with its huge residential population with the relatively tiny number who would be incommoded by an increase in the number of aircraft flying into Stansted. That is a matter that I should be happy to argue in any gathering with my hon. Friend. I believe that a tiny increase in inconvenience elsewhere in order to mitigate a little the great deal of inconvenience suffered by my constituents and those of some other Members would not be unreasonable. I shall later hope to suggest some alterations of that sort in the Bill.
  The whole history of aircraft legislation has been soft on noise, soft on aircraft, and insufficiently protective of the ordinary population. One example is the special regulations which permit Concorde to make excessive noise, more than other aircraft on landing at Heathrow.
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  In answering Questions on the matter, my hon. Friend the Under-Secretary fiddled the figures to try to pretend that Concorde was not as noisy as it is. It is a very noisy aircraft, but all supersonic aircraft are exempted from the normal noise regulations applying at Heathrow. We should make an amendment saving that aircraft must conform to the normal, regulations and that there should be no special dispensation for any aircraft to make an unreasonable noise simply because it happens to be the favourite aircraft son of the Government of the day.
  Those are some of the amendments that I and perhaps other hon. Members will hope to suggest in Committee should be made for the improvement of the Bill, seeking for the first time perhaps in a Civil Aviation Bill to do something not only for civil aviation but for the people who, in the end, pay for it.
  7.15 p.m.
  Mr. James Molyneaux: I fully support what the hon. Member for Southend, East (Sir S. McAdden) and others have said about retrospective payment, and I add to the pleas already made to the Government to think again on this point. Despite what has been said, the idea that certain categories of citizens should pay for their own security is fairly revolutionary. I am not convinced that the proposal is air or just, because it is surely the responsibility of Governments, first, to protect their own citizens against violence and, secondly, to prevent their own citizens from attacking citizens of other States. It is not the responsibility of selected groups of citizens to pay for such measures. It must be accepted that payment for that job should be made by the State as a whole.
  We face this proposal simply because—here I return to a point made by the hon. Member for Cornwall, North (Mr. Pardoe)—an aircraft is particularly vulnerable; in fact, the most vulnerable form of transport. After all, security measures are not taken at the request of the travelling public. It is the aircraft crews who insist that we should have stringent security measures. I am a channel for conveying the continual requests from people in Northern Ireland to various Ministers that security measures be

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  relaxed. I find blockage and resistance from representatives of the aircrews.
  It is for that very reason that the taxpayers now, and presumably the new fund in the future, face a bill of £500,000 a year to provide a Trident taxi from Belfast to Glasgow and back the next morning simply so that the crew of the Trident may not be asked to share the risks faced by the citizens of Northern Ireland every day of the week. That is ridiculous and intolerable. As one who has had the experience of travelling on an aircraft in which a bomb had been placed, I can say that, given the choice, I would opt for a relaxation in the present security measures, many of which are plainly ridiculous.
  The first four clauses of the Bill provide the machinery, probably very cumbrous machinery, for the collection, reimbursement and distribution of moneys required to pay for airline security, but there is no mention of any mechanism to ensure that there will be a degree of uniformity in the level of effectiveness of the measures taken to provide such security and protection. The lack of any such common approach compels me to ask whether there is any guarantee that the very expensive scheme outlined in the Bill will provide for even a limited step towards uniformity.
  Perhaps I may here briefly describe the variations which are so obvious at the two airports used most frequently by travellers to and from Northern Ireland. I refer to Gatwick and Heathrow.
  I pay tribute to the Under-Secretary and the Minister of State, Northern Ireland Office, for their co-operation in dealing with many of the problems at Heathrow relating to Northern Ireland. Both Ministers have discussed with my right hon. Friend the Member for Down, South (Mr. Powell) and myself many intricate details which it would not be in the public interest to mention in this debate. The Under-Secretary has made it possible for us to secure at Heathrow improvements which have removed the necessity for passengers to be herded on to a bus and driven to an obscure point on the airfield, under guard, to be loaded on to the aircraft.
  At Gatwick, unfortunately, the authorities seem to have gone in the opposite direction and have taken that course in
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  the very recent past. This puzzles me. Inbound and outbound passengers from Northern Ireland are now herded on to a bus under the eye of policemen and security officers and transported a distance not much greater than from your Chair, Mr. Deputy Speaker, to the Central Lobby of this building. It does not make sense. If the intention is to imitate a sequence from "Animal Farm" it must be a success, because, in my humble opinion, it provides clear insight into the thought processes of contaminated cattle during an outbreak of foot-and-mouth disease. Do the security forces fear that passengers who have been through a stringent search at Gatwick Airport, if they were permitted to walk that short distance to the aircraft, might possibly run amok and with their bare hands tear to pieces a Jumbo jet? We have to use a bit of common sense. The search at Gatwick, which is presently paid for by the taxpayer, under this legislation would be paid for out of the fund. We are entitled to question this.
  We have to ask whether the taxpayer is getting value for money and, what is more, whether he is getting what he is paying for.
  I give the example of two recent flights from Gatwick. They were delayed because passengers had to queue for 25 minutes to be searched. Only one male searcher and one female searcher were on duty at the gate. When I raised the question and asked whether the process could be speeded up I was told "We have put in a telephone call requesting additional searchers." I pointed out that this flight on both those days had been on the timetable of British Midland Airways for about nine months. I said that it was not something which had sneaked up on one by surprise like a charter flight. I asked "Why have you got to get people out of the drinking lounge, or wherever they may be, to come and do the job for which they are being paid'?" I would like to know—I do not expect the Minister to answer me tonight—whether the security contractors on that occasion claimed and were paid for the full quota of searchers or whether they reduced it to the two who actually carried out the duty.
  I do not suppose that the whole charge for security at the other airport concerned in the United Kingdom, namely, Belfast,

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  would come entirely within the scope of the Bill. Some of it would. The state of affairs at Belfast Airport is a clear example of a waste of manpower and financial resources.
  Only this morning on my way to the House, because the vehicle control point was being conducted in an inefficient manner, there was a delay of half an hour. The traffic built up beyond the intersection which carries the North-South traffic in Northern Ireland. The NCO in charge of the checkpoint decided that it had got beyond him and gave the signal to wave through 67 vehicles, the numbers of which were not checked and the drivers of which were not asked to produce any identification. The result was chaos at the setting-down point inside the airport complex.
  In the presence of the Minister of State could not accept the usual excuse given by the security authorities. I admit that he is more realistic, but the security authorities often say "We cannot accept your suggestions because we do not have the manpower". At that checkpoint I counted 11 members of the security forces wandering about and doing nothing in particular.
  My greatest fear is that by the Bill we shall create what one might call a security industry which will be self-perpetuating and will engage in empire building. It is not possible for the Minister or any successor of his to give assurances that the scope and size of that empire can be limited, because Ministers in the Government, airline operators and airport authorities know perfectly well that the security expert will always in the end have his own way. Because of his training he will always be tempted to go for maximum security, knowing that it takes a very tough layman to defy expert advice, in case the layman is proved wrong.
  The steps proposed in the Bill would open up the opportunity to upgrade the entire security industry and all those with vested interests in the industry. They would not be slow to get in on the act. Once the operation acquired a momentum of its own it would be difficult to control, let alone curtail, the growth not just of one body but the extension of the powers and scope of the whole motley collection of bodies who take it upon
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  themselves to decide the scale of their own activities. For those reasons my colleagues and I have great reservations about the Bill as it stands at present.
  7.28 p.m.
  Mr. James Lamond: I am sorry that the Under-Secretary of State for Trade will have to wait in the Chamber for a few moments. No doubt he will read with great interest what I have to say and when he does so he will not be surprised to know that I am taking up the cudgels on behalf of Manchester International Airport Authority. He will recall a number of occasions on which he and I have clashed on matters of this kind, normally in Committees examining Statutory Instruments.
  I have pleasant memories of an occasion on which we took a vote at the end of such a discussion when the Government were defeated by 12 votes to two. The two Government votes consisted of the Under-Secretary of State and his faithful Whip, such was the ridiculous nature of the proposals. The Statutory Instrument concerned a flat-rate imposition on passengers arriving at airports—roughly the same idea as this, but it concerned landing fees. We were then concerned with the effect that it would have on the diversion of aircraft, as we were hopping from London Heathrow to the provincial airports.
  I believe that if this Bill were to become law it would have the same effect. It would destroy all the activities of the Government in their regional development programmes by which they are trying to encourage much greater use of regional airports. If we impose flat-rate charges—80p is not very much, I admit—these things build up and at the end of the day they destroy any differential that we have tried to correct in the landing costs of these different airports. That is detrimental to the Government's overall regional strategy.
  You and I, Mr. Deputy Speaker, have had considerable experience of local government in Scotland. We know that when we charge rates, for example, they are the same per pound for all ratepayers. There are many ratepayers who do not benefit from certain services. My hon. Friend the Member for Luton, East (Mr. Clemitson) mentioned one or two of them. One obvious example which used to be

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  quoted to me in Aberdeen was that of the blind man who is required to pay for lighting the streets. If ever there was an obvious example of somebody who does not benefit, that was it. We say to him "You benefit overall." Therefore, we say that the simplest method is to put this charge on the central authority.
  We were told by the hon. Member for Cornwall, North (Mr. Pardoe) that the people who brought about the need for these security services, and as a result were responsible for the cost, were the passengers. I doubt that very much. I do not think for a moment that the passengers create the need for this service. I appreciate that there are different forms of attack upon aircraft, but, in the main, when we think of aircraft security, we think of attempts to hijack aircraft, to board aircraft with arms and to hold up the passengers.
  The object of those who carry out a hijack is not to put pressure on the passengers. They do not have a list of passengers giving them the name of, say, Albert Bloggs of Manchester, whom they want to shoot. They want to bring pressure on the Government. It is, therefore, a Government responsibility to see that the opportunity for placing that pressure upon them is removed.
  If we examine this proposition and take it to its basic principles, the Government and the taxpayers as a whole should bear the cost of making sure that the Government are not put under any external pressure when determining policy. That argument destroys the philosophy which says that the consumer must pay at the point of consumption: the consumer is not responsible for this situation. Most travellers would be happy if there were no need for the searches.
  I have an interesting document containing the minutes of a meeting between the Joint Airports Committee of Local Authorities and the Secretary of State for Trade and one of his advisers, Mr. Gildea. I apologise if Mr. Gildea's name is pronounced differently, but I have a lot of difficulties with the pronunciation of my name in this House. Some of the points which interest me and other hon. Members were raised by the local authorities who are, in some instances, responsible for running local airports. There was, for example, this question which has exercised our minds: why charge those who
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  are arriving when the cost of their security has already been met overseas? Why not charge it on those leaving?
  That point was raised at this meeting and in reply Mr. Gildea is reported as having said that
  "strictly speaking, it might be argued that the departing passengers should pay, but this would seem to cause an awful lot of administrative work and therefore the decision had been taken to deal with arriving passengers."
  Certainly this proposal would cause a lot of administrative work, but so would the present proposal. I cannot see much difference between the amount of administrative work which would be involved under either proposal. If the quest is for fairness, with the intention of charging those who, it is believed, cause the expense it would be much more sensible to charge those who are departing, because they are the people who have to be searched.
  A question was also raised at this meeting about the figure of 80p. It was asked who would make sure that once the figure was agreed the cost would be kept at a reasonable level. It was asked whether the service would be efficient. The answer to that, I thought, was a good one. The Secretary of State said that
  "the 'eagle eyes' of airport authorities, Parliament and others would be upon the Department."
  We have had some examples recently of the "eagle eyes" of Parliament playing upon the expenses and efficiency of various Government bodies. As a member of the Public Accounts Committee I can say that if this fund is administered as inefficiently as many of the matters that come before the PAC—too late for anything to be done about the expenditure incurred—I have grave doubts about the efficiency of the whole operation.
  The local authorities asked what would happen to the fund if there were a lot more money in it than would be needed. Would the amount be reduced to the kind of reasonable sum which Luton manages to charge? Mr. Gildea was reported as saying that
  "the Department did not think that the charge was at all on the high side, but if it proved to be, then consideration could be given to its reduction."
  That was all very reasonable and we cannot take any exception to it. The report went on:
  "The Department would take steps to ensure that this fund was kept separate."

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  I do not know whether those present have had the same experience as I have but I find that my constituents have very long memories. They keep raising with me matters such as the Road Fund, for example, which they claim was set up initially to provide new roads and to maintain the existing ones. They say that this aim has long been lost sight of and that there is now no question of the vast amounts of money paid for the Road Fund licence being used to improve roads or to create new ones. This proposed system could turn out in the same way, despite the reassurances given by Mr. Gildea, with the best of intentions, and, I am sure, without his tongue in his cheek. However, my constituents would take that with a pinch of salt.
  We hear that this is a matter which affects only the wealthy. I would refer hon. Members to the example of Manchester Airport, which has been run by the local authority for a long time. It operates efficiently, with the result that the airport has been extended. There has been created one of the fastest growing international airports in the world. A great deal of the heavy traffic turnover consists of package holidays. Those who visit Manchester Airport will find it thronged at all hours of the day or night with people leaving for such places as Spain, Italy, and elsewhere. There are incoming flights bringing returning holidaymakers. These are not rich people. I do not suggest that 80p will make them cancel their holidays. However, this is a further imposition—unnecessary and unfair, in my view—on those who go on holiday in this way. They are ordinary working-class people who are now able to enjoy a holiday abroad.
  Mr. Jessel: Does the hon. Member believe that those travelling by air should make some contribution to the cost of noise abatement so that those who have the misfortune to live underneath the flight paths may install double glazing or enjoy some other form of compensation for the nuisance created by those travelling by air?
  Mr. Lamond: I would certainly support the pleas I have heard made on a number of occasions on both sides of the House to assist householders who suffer as a result of noise pollution created by
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  aircraft. As to who should bear the cost, I would use the same argument as I have used earlier: the cost should be met from central funds.
  I sincerely hope that I do not land as a member of the Standing Committee. like a number of my colleagues. No one seems very anxious to serve on it. If it will help me to keep off it, I assure my hon. Friend the Under-Secretary that I should do my utmost to make his life unbearable.
  7.40 p.m.
  Sir George Sinclair: I am concerned with two clauses in the Bill, Clauses 8 and 9, which deal with aircraft noise, as the House would expect from a Member still representing Gatwick.
  The Secretary of State referred to new routes arising from the Bermuda 2 agreement, including the Laker Skytrain. I should like here to offer warmest congratulations to Freddie Laker and all who work with him on their initiative in showing what private enterprise can do, with, initially at any rate, maximum discouragement from the authorities.
  Several of the new routes that arose from Bermuda 2 pass through Gatwick. The build-up of Gatwick will be increased by the transfer of airline operations from Heathrow to Gatwick. Indeed, it is the Minister's policy to persuade some of the airlines now using Heathrow to transfer their services partly or wholly to Gatwick. This would result in an overall increase of noise and in growing pressure against the current limitations of night jet flights.
  The projected growth of Gatwick is quite astounding. It has been fast enough already, but it now has over 6 million passenger movements. It is expected by the early 1980s to have 16 million and by the 1990s possibly 25 million, equal to the passenger turnround at Heathrow today—a very daunting prospect for any residents living in that area. Now, just for bad measure, the Minister is authorising a new helicopter link between Gatwick and Heathrow. Therefore, the constituents whom I represent have, in aircraft noise, a bleak future to face.
  It is this dynamic growth of Gatwick over recent years and the projected growth for the next few years that shows

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  why my constituents have such an intense interest in the control of aircraft noise and, therefore, in the Bill. They have been greatly concerned by the Minister's statement on 7th November of his policy for phasing out nosier aircraft over 10 years. They believe that this is far too slow a process. I should like to quote from what they have represented to me. They say that what the Government propose
  "amounts to little more than accepting the withdrawal from service of the noisier planes only when they are no longer commercially viable."
  They have attacked this policy strongly through the agency of the Gatwick Airport consultative committee, a body set up to advise the airport authority and the Government.
  My constituents have a special interest in the incentive scheme set out in Clause 9 to persuade airlines to phase out their noisier planes and, to quote the Minister's words,
  "so beat any regulations that might constrain them to do so by a certain date."
  The levying of noise-related charges has consistently over recent months been pressed on the Minister by the Gatwick area conservation committee, an excellent, independent, hard-working and grass-roots organisation which helps to protect the residents and the environment around Gatwick. This additional measure to reduce aircraft noise will be welcomed by this organisation and all the people it represents. I believe it to be a move in the right direction.
  However, what matters is the action that will flow from the new regulations, made possible by Clause 8, and the proposed rights to levy these new charges set out in Clause 9. My constituents have real grounds for unease over the Minister's will—I hope that the Minister is listening to me—to use his powers robustly and promptly to protect them against aircraft noise around Gatwick. Under pressure from residents, the Minister has brought to an end night jet flights taking off from Heathrow. At Gatwick, the number of night jet flight take-offs is still far too high. The forecasts of reductions in the number of such flights are not reassuring. In fact, they are disturbing because of the build-up of air traffic at Gatwick.
  Mr. Clinton Davis: There are two side to most coins, and there are particularly to this one. Does the hon. Member agree that, although it is perfectly true that residents have complained consistently about noise, the other side of the coin is that the aviation interests are very much opposed to the stance that I have taken on this matter, but I have felt that, as a matter of justice, the steps that I have taken are absolutely right?
  Sir G. Sinclair: The Minister has no doubt at all of the favourable response in my constituency, through the various organisations that I have brought to his Department, to his handling of complaints and the care that he has shown in listening to representations. Nevertheless, in the face of this juggernaut of Gatwick expansion, they really are asking for a more robust limitation on night jet flights and aircraft noise. That is why they are pressing the Minister to produce a strategy for the control of aircraft noise now. We cannot wait for the three years allowed by him for his research project into
  "aircraft noise in relation to the disturbance of sleep".
  It is with the Minister's own encouragement that the rapid further development of Gatwick is taking place. In my view, it is for that reason that he owes a special duty to take steps now to curb aircraft noise more sharply than he has done.
  What strategy has the Minister in mind for the combined use for existing and new regulations under Clause 8 and the levy of noise-related charges under Clause 9 to bring long-term relief to the Gatwick area? Is the levy to be left entirely to the local airport authority, or will the Minister, in relation to the two great London international airports, Heathrow and Gatwick, decide the level of noise-related charges and, what is more important, the timing of their imposition?
  It is important also for the airline operators to know this. They have to make their calculations some time ahead when they are planning what aircraft to buy. Therefore, we ask for the earliest possible announcement of a strategy for the control of aircraft noise.
  Is there to be any harmonisation of these new levies throughout the United Kingdom? Is that harmonisation to spread to international airports in other

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  countries? Will the Minister indicate what his strategy is and when he will announce it?
  I hope that the Minister will not take refuge behind his projected research into the relationship between aircraft noise and sleep disturbance. We regard this research programme as entirely unsatisfactory. The proposal is that the survey should be carried out by his Department in conjunction with the Civil Aviation Authority's directorate of operational research and analysis. But both have major interests in the development of air transport. Such a one-sided survey cannot be expected by those worst affected by aircraft noise to protect their interests. There is a clear case for an independent survey, or an independent element within that survey.
  I hope that the levies which are permitted by Clause 9 will lead to the gathering of resources that will, in the end, be available for helping people by compensating them for the effects of aircraft noise. I am thinking of two groups in particular. The first group is those whose houses need greater compensation for double glazing. The other group is those whose houses, in the flight path or greatly affected by the worst contours of noise, have become intolerable for normal residential habitation. These people are at the moment in a wilderness, but many of them cannot leave their houses because those houses are their only capital. Yet they find it difficult to endure the aircraft noise in the worst affected areas.
  Therefore, I hope that, in building up these levies, on airlines and air traffic, the Minister will be considering the creation of sums for compensating residents in these areas, both for double glazing and for buying out houses which should no longer be used for residential purposes.
  7.53 p.m.
  Mr. Paul Channon: I agree with a great deal of what my hon. Friend the Member for Dorking (Sir G. Sinclair) has said, but I wish to concentrate on Part I of the Bill, dealing with the Aviation Security Fund. I shall not go into the reasons of principle, although I have some doubts about the fund itself, because that has been done by others,
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  notably by my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths). Rather than engage in detailed discussion about the reasons for the principle adopted, I wish to consider various points of detail which are important.
  The hon. Member for Oldham, East (Mr. Lamond) said that attacks on aircraft are not made by people trying to attack the pasengers themselves, or the owners of the aircraft, or the airports from which those passengers have to leave. They are made probably on the policy of the State, or of some other State. The people making these attacks are not trying to bring pressure on, for example, Southend Borough Council, but rather on the Government.
  The principle whether there should be this transfer of payments is doubtful in the first place, but I am particularly worried that it will hurt the small municipal airports. New duties are to be imposed on the local authorities responsible. Will they have the resources to carry out those duties? It will be unreasonable if the ratepayers locally are expected to pay a proportion of this burden.
  Mr. Clinton Davis indicated dissent.
  Mr. Channon: I am glad to see the hon. Gentleman shaking his head. There are genuine fears, which perhaps he will be able to allay, that in certain circumstances such a situation might be the result for the ratepayers.
  The Secretary of State said that it was proposed to operate the scheme from 1st April. I have no wish to delay the passage of the Bill, but it is anyone's guess whether it will have received the Royal Assent by then. It would be most objectionable if airport authorities were asked to operate this scheme retrospectively from 1st April if the Bill had not received Royal Assent by then. If they were asked to do so, I am not sure what statutory power they would have to get the money from those supposed to pay. There is genuine concern about this matter among the local authorities affected. I hope that the Secretary of State will allow some small delay if Royal Assent is not achieved by 1st April. I do not understand the force of the argument that the operational date must be 1st April in order to catch the build-up of summer traffic. Surely the summer

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  traffic starts to build up some time after that.
  The Secretary of State rather brushed aside the question of bad debts. But those who run the airports are worried that there could be bad debts if an airline or a tour operator were to go bankrupt. In such circumstances, whose responsibility would it be to get this money? Would it still rest on the local authorities? The hon. Member for Luton, East (Mr. Clemitson) referred to the Court Line. That collapse must have cost Luton Corporation several hundred thousand pounds. In such a situation, if a local authority were unable to recoup the levy due to the security fund, on whom would the burden fall but the ratepayers of that authority?
  Could there not also be some exemption for at least the first 25,000 passengers or so a year in order that the local authorities running this scheme could get some revenue to pay administration costs? The case of Manchester Airport has been mentioned. I cannot remember how many passengers use it, but it must be a million or more a year. Manchester will incur an enormous cost. There should be some way whereby the local authority will not be out of pocket.
  Again, what is the basis of the sum of 80p? We are told that Luton did it for 28p. I thought that the figure at Luton was 42p and that Luton Corporation was reimbursed for two-thirds of the amount. But I may be wrong. In any case, the cost at Luton was very much less than 80p.
  Mr. Clemitson: My understanding is that the cost at Luton of the security we are talking about in this Bill is 28p. The other 14p is the cost, which will continue to be paid by the local authority, purely for security in the airport itself and its perimeter. If the Bill goes through, we are talking about a cost of 80p plus 14p, making 94p. The 14p would continue to be paid for the internal airport security.
  Mr. Channon: I am grateful to the hon. Gentleman. That clears up the point. However, I still think that it leaves open the major question why it is necessary to have so large a passenger level if the security at Luton and other airports is as good as it can be—although, of course, it is impossible to be totally secure.
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  Furthermore, how will the numbers of arriving passengers be determined—by airline manifests? For some journeys there are no airline manifests. I do not know how the number of arriving passengers will be determined. I agree very much with what was said about the unfairness of the proposal. It is to apply not only to people arriving from abroad but also to those who have travelled only a very short distance in this country. They are to be required to pay the same fee as passengers who may have come from as far as Tokyo or Adelaide.
  If the idea is based on equity—which surely it must be—and on the principle that those who are causing the problem should pay for the cost of security, surely the cost for someone who flies a very short distance indeed within this country—or from, say, Ostend to Southend—is infinitely less than for someone who flies from Rio de Janeiro to London. Yet they are both to be asked to pay the same amount, and the disincentive on the short haul is very much greater than on some enormous distance where the fare is very much greater.
  What we shall have will not be the passenger paying for his security but some sort of cross-subsidisation. One lot of passengers in other words will be paying for the security of another lot, and I do not see that that will be any more equitable than the present arrangement.
  Then there is the argument why it should be applied to arriving passengers. The crowning irony would be that someone might well have to pay when returning to this country, having been hijacked after leaving some aerodrome abroad. That would be a ludicrous and farcical situation. It is surely somewhat anomalous that one should have to pay the security tax on arrival, after the security risk has passed. The people who get the benefit of the security measures are those leaving airports in this country.
  There are very great worries among those local authorities which have their own small airports. The Under-Secretary will have heard enough from Members on both sides from various parts of the country to know that there are very genuine worries in this respect. I am very reluctant indeed to accept this principle of the Bill, but if it has to be accepted I hope that the Government

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  will try to find ways to make it much more palatable in detail.
  I have drawn attention to the sorts of arguments which have been put to me, and I shall be grateful if the Minister will consider them. I feel that if the Bill is to receive the Royal Assent it could be made a great deal more palatable than it is at the present time.
  8.3 p.m.
  Mr. Toby Jessel: I apologise to you, Mr. Speaker, for addressing the House while incorrectly dressed, and with a hand sticking out from my chest. I had a quarrel with a mountain a week ago and the mountain won. I hope tonight, however, to win one or two arguments in debating the Bill now before the House.
  I welcome the fact that the Bill pays some attention to the scourge of aircraft noise which does such terrible damage to the quality of life and communities near to airports. We have heard about this from many hon. Members on both sides of the House. There is no constituency which suffers greater damage to the environment than that which I have the honour to represent, because Twickenham is very close to Heathrow, which now has about 600 flights every day. It must be acknowledged that some people do not much mind aircraft noise, but to many other people it is a major nuisance. To some it causes acute distress, and to some it causes even mental illness. It ruins people's quiet enjoyment of their houses and gardens. It interrupts the work of schools, hospitals, churches and offices, and it amounts to a major evil in the communities which are affected by it.
  I am very glad that the Bill seeks for the first time to introduce some financial incentives to airlines to bring in quieter aircraft. However, I agree with my hon. Friend the Member for Chertsey (Mr. Pattie) and others that the Bill is rather too vague. The hon. Member for Putney (Mr. Jenkins) said that he thought it would not very very effective. It is a step in the right direction. It is all right as far as it goes, but in my view it does not go far enough.
  In particular, I was very disappointed when the Secretary of State said that the measure would be brought in gradually.
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  When the word "gradually" is used in the context of the implementation of legislation, it is likely to mean many years rather than a matter of months. The Secretary of State has had the courage to bring in the Bill against pressure from aviation interests, and I hope that when the Under-Secretary replies he will be able to reassure Members who, like myself, are concerned about the time factor.
  I am particularly concerned in this respect with Clause 9(1), which says that
  "an aerodrome authority may, for the purpose of encouraging the use of quieter aircraft and diminishing inconvenience from aircraft noise, fix its charges by reference … to—(a) the amount of noise caused by the aircraft",
  and so on. I feel that the weakness there is in the use of the word "may". I cannot envisage the various aerodrome authorities and the British Airports Authority getting on with the fixing of the charges and the other matters set out in Clause 9. I do not think that this wording will make them do it. Indeed, I do not see why they should do it.
  Bodies such as the British Airports Authority are very much part of the aviation world. They are friendly with people in airlines and with the Civil Aviation Authority, and with other people who have related interests. The business of the Authority is to provide for the requirements of air travellers. It does that part of its work very well, on the whole, but it has comparatively little motivation to do anything at all about aircraft noise, and would easily find some excuse to defer action in that respect.
  Clause 9(1) is unlikely to have any effect, and it is Clause 9(2) that matters. This gives the Minister power to make the authorities do what is required. I cannot see any point at all in having subsection (1). I think that the Minister will have to use his power if anything is to be done to implement this legislation.
  Then there is the question how the revenue should be used. The Secretary of State said that he was not certain that any extra revenue would be raised through the differential noise landing charge, but I very much hope that some extra revenue will be raised and applied to the reduction of the nuisance to people living under the flight paths. I do not

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  see any reason why that should not be done. There should be a noise tax. It is a traditional British practice, embodied in our laws over the centuries, to regard money as a means of compensating and making good the infliction of civil damage of one kind or another. I regard aircraft noise as a form of civil damage, even though it cannot be sued for in the civil courts under the Civil Aviation Act 1949. Money is not a complete answer but it is better than nothing.
  The proceeds from a noise tax could be applied to reducing the rates of households in the areas badly affected by aircraft noise, or it could be used for the provision of double glazing for sound insulation. I favour the first of these alternatives, partly because we are hoping for the extension of the existing double glazing scheme when the White Paper on airport policy is published. In any case, I do not believe that double glazing is the complete answer to aircraft noise, because it is not possible to double-glaze a garden, and people do not want their windows to be shut on summer evenings. People tend to be more disturbed by aircraft noise in the summer than in the winter.
  I therefore favour the use of a noise tax to reduce the rates, and the arithmetic of this need not be very frightening. According to the annual report of the British Airports Authority, Heathrow handled 24 million passengers last year. The figure is rising by about 10 per cent, each year, so that in 10 years' time we can expect that about 50 million passengers a year will be going through Heathrow, although the number of flights would not increase in proportion because larger aircraft are being introduced.
  Let us suppose that there are 50,000 houses around Heathrow badly affected by aircraft noise. If every one of those 50 million passengers were to be charged 50p, which would not be very onerous, it would in 10 years' time produce about £25 million a year. If that were divided amongst 50,000 householders, each would receive a £50 reduction in rates, which would seem to me to be very fair. It would not be onerous. The market could stand it easily and, as I implied in an intervention during the speech of the hon. Member for Oldham, East, (Mr. Lamond) it would be equitable that people who travel by air and cause the nuisance of noise should pay some form of compen
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  sation to people living under flight paths who had to suffer from the noise that is created. Over the years, as aircraft became quieter in greater proportion, so the revenue from the noise tax could diminish, as could the rate subsidy.
  If we try the other way—that of double glazing and sound proofing—the costs are easier still. Let us again suppose that we have 50,000 households which are affected. Let us suppose that the cost of double glazing is £600. Let us suppose, further, a grant to householders of £500 and a take-up rate of about 50 per cent. I do not think that it would be much higher than that. The cost would be 25,000 times £500, which is £12.5 million. That could be put on capital account and, with the repayment of capital and the costs of interest, that £12.5 million would cost about £1.5 million a year spread over 10 years. By the time that we reached 40 million or 50 million passengers a year, £1.5 million a year would be only three pence per head for each journey, which air travellers would hardly notice.
  I hope that we shall hear from the Minister that he intends to do something like that. Failing that, I hope that we shall be able to amend the Bill in Committee in order to compel the introduction of provisions of this kind.
  8.14 p.m.
  Mr. Michael Neubert: As a travel consultant and someone who has been involved in the travel industry since 1960, I must at the outset declare my interest.
  The miscellaneous character of the Bill makes it difficult to deliver anything but a disjointed speech. However, I am especially interested in four aspects of the Bill, which I shall deal with in the sequence in which they occur in this measure.
  The first aspect is aviation security. Like other hon. Members, I find the principle embodied in the first four clauses of the Bill to be highly questionable. As the debate proceeds, the principle becomes less and less easy to defend, not that the hon. Member for Cornwall, North (Mr. Pardoe) did not do his best. According to him, the reason why all are expected to contribute to education is that children are an obvious advantage to the community. Even about that I have

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  some reservations. Was not it W. S. Gilbert who wrote that, for every baby born, one was either a little Liberal or a little Conservative? Although times have changed, I still feel that some children are more advantage to the community than others.
  Trying to bolster up what I thought was a very weak argument, the hon. Member for Cornwall, North went on to contend that people who travelled by air brought no benefit to mankind. He mentioned his own concern at airports the world over. Are we to conclude that his journeys were not necessary and that his long-distance travels were solely for his own delectation, or would not he warm to the argument that some people who travel by air bring some benefits to humanity? Certainly that is my view, and I do not think that air passengers should be singled out as an anti-social class of person. That is far from the case.
  It is true that hijacking is currently the most cogent form of terrorism. Actively to promote political ends by violent means is very closely akin to guerrilla warfare. Today's terrorist is very sophisticated. It is no longer necessary for two lines of red-coated dragoons on opposing hilltops to have someone shout "Charge!" for violence to ensue. Today's terrorist knows no bounds to his ingenuity in trying to inflict his views on others. He is much more sophisticated than the deviser of the application form for an American visa who included amongst the questions to intending visitors to the United States,
  "Do you intend to overthrow the Government by force?"
  Certainly he has that in his mind very often. Therefore, it is reasonable to put forward the principle that the cost of defending the country against such a threat should fall solely on those who by chance happen to be the most vulnerable to terrorist attack?
  Like the hon. Member for Antrim, South (Mr. Molyneaux), I believe that it is in the nature of air travel that we have to contend with terrorism. But it does not necessarily follow that that is exclusively the source from which we may expect terrorism to come. Would it be reasonable to ask those who were born and who reside in the bomb-scarred areas of Belfast to pay for their own defence when
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  the threat is to the integrity of the United Kingdom? Should we penalise the operators of lost luggage offices for the risk that there may be explosives deposited with them—or even those who receive correspondence and who may be likely to receive letter bombs? All are forms of terrorism, and they are symptoms of attacks on our society which it would be more reasonable to meet out of the defence budget. It is not too exaggerated a claim to suggest that it might be looked at in that light. However, realising the difficulties that the Government might have in increasing defence expenditure, I imagine that, even, if the thought occurred to them, it was dismissed immediately for reasons to be found in their own political back yard.
  So I find the principle not altogether acceptable. I think that it is born of expediency. It is convenient. As more than one hon. Member has said already, air passengers can be identified as a possible source of risk. However, I think that they are not too clearly identified. Where I part company with a number of other hon. Members is in thinking that the risk is divisible in this way.
  An air traveller is just as much at risk on a package flight to Palma as he is on a round-the-world tour by Pan American. Terrorists having no compunction in these matters. As they are not moved by human considerations, it is my fear that it will not be long now before we have captured by terrorists a flight full of women and children, complete with sand buckets, and that they will be the victims of the very nasty wave of terrorism that we are experiencing at present. I do not think that we can quantify the costs, and I do not think that the risk can be related to them. But certainly that risk is one and indivisible.
  If we have this question of principle, we are entitled to say that it may be rough justice, but that it is necessary for someone to pay the cost. However, when we have an irrational explanation, we have only to look a little deeper to find the reason for it. It is that this proposal came forward at a time when the Government were under an obligation to reduce severely their own profligate expenditure. It is of the same origin and of the same lineage as the proposal to impose a 10 per cent. increase on the captive consumers of gas, which was no

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  more than a tax imposed at the behest of the IMF in order to reduce expenditure. It is not defensible in any other terms than those.
  But, having accepted that there is an element of rough justice, ought not we to examine certain details of how that justice is to work out? Is it within our international obligations? The Secretary of State asserted that we were not in breach of any obligations that we might have to the ICAO or the European Civil Aviation Conference. Can he do more than assert that? Can he give any grounds for his belief?
  Can the Minister also say whether it is a growing practice for countries to impose the cost of aviation security on air passengers? We had cited to us an impressive list including Japan, Canada and the United States. In reply to a Question last February, the Minister also included South Africa. Is that politically taboo now, or have the South Africans abandoned the practice? Is there a growing number of such countries which are imposing these charges? We have a real commercial interest. British Airways is one of the better airlines, and it stands to gain from the free development of aviation. We would not wish to put any obstacle in the way of that.
  Secondly, there is the question of the charge of 80p which has been mentioned. Will it be directly charged to the passenger? I have seen reports of £1 being charged. How will this be applied and will it be standard in every case?
  Also, what guarantee does the consumer have, having paid his charge for aviation security, that he will be secure? Some of us have seen the somewhat shabby principle of the air travel reserve fund, requiring that passengers should make good the loss of previous passengers whose travel companies collapsed, and ensuring future passengers. At least in that case there was a guarantee that passengers were insured against the risk. But, in this case, to what extent does the air passenger have the guarantee against risk—the failure to observe the security that is inherent in the charge that is made upon him? These questions are relevant.
  I am interested in borrowing powers, particularly those of British Airways. As recently as 1976, its borrowing limit
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  was £560 million. Last year it was increased to £700 million, and now it is being increased again to £850 million. That is a very substantial increase. Although the Secretary of State indicated that the new limit would be applied by order, perhaps not immediately but in a few years' time, it would be very interesting to know what British Airways has in mind in the way of expansion that will require the substantial increase in its borrowing powers.
  Presumably this money will be put towards the purchase of new equipment, and that may well increase the capacity of the airline. If there is one thing that has bedevilled the world's airlines recently it has been the fact that most have massively excess capacity. I hope that the increase in borrowing powers will not give further impetus to that trend because it has been disastrous. It has led to much higher fares being paid by passengers.
  To give an illustration of the problem and its gravity, in 1960 capacity exceeded demand by half, in terms of passengers actually carried. By 1965 capacity was double demand and has remained so until 1976. In the meantime, capacity since 1965 has increased ninefold. It is easy to imagine the number of empty seats available on all the world's airlines. This is sheer waste. Supposing that there are such things are unidentified flying objects—I know that the Bill does not deal with them—it is worth considering what the Martians would think as they entered the earth's outer atmosphere and saw all these metallic capsules orbiting the earth only half full. It has been estimated that there are each day the equivalent of 23 jumbo jets flying empty across the North Atlantic.
  Mr. Tebbit: I hope that my hon. Friend understands that British Airways is currently short on capacity to such an extent that it has had to charter from other operators. Now it is faced with the necessity, if it has to combat the problem of noise, of phasing out all its short-haul Tridents and BAC111s over the next few years. This means that it will need 100 aeroplanes in 10 years which, in turn, means a considerable amount of borrowing.
  Mr. Neubert: I did not speak of not taking on new equipment. I spoke of

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  increasing capacity to such an extent that it was excessive. The profitability of an airline depends on good load factors. British Airways, often through no fault of its own, but through bad decisions forced upon it by Governments, has often over-committed itself and has had more space than it would wish. To guard against that, I raise this issue of the borrowing powers because they are directed towards equipment.
  Faced with this excess capacity, which is of staggering proportions among the world's airlines, a large number of seats are off-loaded on to the market. The hon. Member for Cornwall, North thought that this would thwart the monopoly of the IATA airlines where this monopoly exists. Far from it. This practice undermines the profitability of those operators who have kept their ambitions within reasonable limits and operate high load factors. This is the problem of backstreet bucket-shops. Another problem is the offering of holidays at prices that conceal subsidy. Business men are becoming increasingly resentful of the fact that many package holidaymakers are being offered seats on the same flights at much lower rates.
  Take, for example, Sovereign and Enterprise, the two package operations of British Airways. They made a profit last year of £400,000 on a turnover in excess of £34 million. In other words, they showed just over 1 per cent. of profit on turnover. At least this was better than less than a quarter of 1 per cent., which was the result the previous year.
  Figures made available to me indicate that Enterprise is not so great as British Airways claims. It claims that it is the second largest operator of package holidays. My figures show that it is a poor third behind Thomson and Cosmos and that it is only just ahead of Laker and Horizon-Midland. Too many empty seats are bad for business, and we must guard against that.
  On the question of air navigation charges, it is possible for me to welcome the principle of the CAA recovering the full cost from the user of the service. Unfortunately, in this case this has not proved possible because of the agency of Euro-control. Last April, in discussions in Committee upstairs, the Under-
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  Secretary assured me that the Government were doing their utmost to persuade Europe to come round to our point of view. Can he report more progress? The forecast loss on services by the CAA this year was £26 million. Perhaps he could say what the actual figure is. It seems that the CAA should be fully supported in its efforts to recover the full costs on all the services, and this should be translated into a bill to the passenger.
  I wish to deal with the subject of aircraft noise and the restriction of movements. I give general support to the proposition that Government policy should be used in this way to implement the desirable objective of quieter aircraft. There must be such an inducement to manufacturers if there is to be any chance of quieter aircraft coming into operation. If we are to regard excessive noise as expended energy, that must be inefficient and something in conservation terms should be done to improve the new jet aircraft.
  I also favour reasonable restriction of flights, particularly at night, and this relates to the capacity problem. Often the frequency of the service is extended beyond what the traffic can bear, and there may be unnecessary flights. Therefore, certain restrictions will provide a healthy discipline for airlines operating into this country. However, I hope that the Minister will not go so far as to support any of the members of the anti-aircraft lobby, who go so far as to suggest that it is anti-social to travel by air. I regard air travel as only one form of transport and something that is not reprehensible in itself. I would ask those who advocate taxes on noise whether they also wish to ask those who thunder along the M4 to compensate people past whose houses they travel. That would not be possible, but all these are adverse side effects of modern life and should not be seen in isolation as applied to air travel. Passengers who travel by air should not be subject to such a vicious distinction.
  Therefore, although I have offered these criticisms, I welcome the major provisions in the Bill and hope that civil aviation will continue to be allowed to develop and flourish.
  8.30 p.m.
  Mr. R. A. McCrindle: I begin by declaring an interest

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  as parliamentary consultant to the Guild of Business Travel Agents. The members of the guild have as their principal customers business men who travel across the world, often in pursuit of export orders. If those business men who come into the airports of this country on many occasions in the year are to face the prospect of paying 80p on each occasion when they arrive here, I hope that I shall be allowed to concentrate my brief remarks on the part of the Bill relating to airport security.
  Many people are concerned about the major principle embodied in this legislation. I was more inclined to agree with the intervention of my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) than I was to support the otherwise excellent speech of my hon. Friend the Member for Hertfordshire, South (Mr. Parkinson) who spoke from the Opposition Front Bench.
  I take the view that an airline's first responsibility is the security of its passengers. The provisions of this Bill seem to take that responsibility out of the hands of individual airlines and to give it to the British airport authorities or to local authority airports. Airlines are concerned with the loss of control over their own security and believe that these provisions are a retrograde step. It has been suggested in the past that many airlines, particularly those operating from London Heathrow, have sub-contracted their security arrangements to companies such as Securicor and that the changes envisaged in the Bill are not major changes. I question whether that is a fair point to make. The issue the House must consider is that of control by the airlines over the security provided for their passengers. It is impossible to escape the feeling that that responsibility is being taken away. There is a fear in the airlines that this is only one among several attempts to remove from those airlines responsibility for other areas of their management control.
  Mr. Clinton Davis: The hon. Gentleman is aware that in many parts of the world an airline does not assume direct responsibility of that kind and search duties are undertaken by the police, the military or airport authorities. Therefore, that is not an unusual situation.
  Mr. McCrindle: I am not suggesting that it is unusual. The Secretary of State
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  underlined areas in which the provisions of the Bill have been operating, presumably for some time. I shall mention later one or two areas, which the Secretary of State passed over, where that has not been the case.
  Even if we accepted that the removal of the control of these functions from the airlines was valid, there is still a fear that, having conceded that much, there will be further areas, at present within the control of the airlines, that will he removed from their control.
  Airlines have always accepted that the whole passenger handling process should be within their orbit of responsibility and they have been concerned about the direction in which the Bill will take them. Airlines are judged by their ground handling of passengers as well as by the comfort and safety that they provide in the air. The Bill moves away from the airline's contention that from the time a passenger enters the terminal building, all responsibility for him rests with the individual airline—with the exception, of course, of such matters as customs and immigration. The airlines do not believe that passing that function to the BAA is a happy omen for the possible removal of other aspects of management control.
  Let me turn to practical reasons for questioning the basis of the Bill. One is immediately inclined to ask for how long the security charge will remain at 80p per passenger. However, there is a more cogent point. Apart from the fact that local authority airports have provided security for substantially less than 80p per passenger, airlines themselves have provided security—so far with reasonable success—for substantially less than the proposed charge. I am told that the average cost of providing security by airlines using Heathrow will be increased by 300 per cent. if the 80p charge applies and that one leading airline has provided its security at Heathrow for an amount that will have to be increased by more than 500 per cent. to reach the level of 80p per passenger.
  The employment of private security firms such as Securicor by airlines has allowed a degree of flexibility in the provision of security. In busy times of the year, more people can be employed on airport security and the number falls at the less busy times. This has contributed to the relatively low cost of security while

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  it has been provided by the airlines. It is clear that the staff employed by the BAA to provide security for passengers will effectively be full time and one is bound to question whether that is the reason that the charge has to be as high as 80p.
  Without putting too fine a point on it, the relationship between the airlines and the British Airports Authority has not always been good in the recent past. The comparative failure of the Authority to get on with the alteration and improvement of the terminals has not always meant that the airlines and the Authority have been on the best terms. It seems that the airlines are questioning whether the Authority will undertake the task being placed upon it through this measure as efficiently and cost-effectively as has been done until now.
  I raise two other factors, one of which was touched upon by the Minister during his intervention. It is true that countries such as Japan, Canada and the United States have for some long time approached airport security in the way outlined in the Bill. However, it was not mentioned that no other EEC member country deals with its security in such a way. All the airlines in the EEC countries are given responsibility for carrying out security, as has been done in this country until now. As a member of the EEC I think that the Minister will concede that, to say the least, there have been some raised eyebrows at the provisions embodied in the Bill on airport security.
  I stress an argument which has been made already but which I do not believe can be stressed often enough as it covers the principle underlying the Bill. It is a principle that I started by questioning, and I end by questioning it again. Terrorism is aimed at Governments and not at airlines or individuals. Surely there is a case for saying that Governments should accept responsibility for providing passenger security out of taxation. The departure from that principle in the Bill is a retrograde step.
  It is clear that the Bill was the candidate put forward by the Department of Trade at the time when the International Monetary Fund required Her Majesty's Government, to curb their profligate expenditure. Although I feel that it is a Bill unworthy of opposing, I doubt
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  whether no better candidate could have been found in order to save some money.
  8.43 p.m.
  Mr. Hector Monro: I agree with all hon. Members that security is extremely important, but, like others, I am becoming more and more disturbed about that which is becoming a grey area of principle.
  I shall talk quickly about Scotland and touch on the argument brought out by my hon. Friend the Member for Southend, West (Mr. Channon) on the 80p charge on short-haul flights. It is all very well to talk about an 80p charge on a £100 or £500 ticket, but it is a substantial portion of the fare if one is paying, for example, £5 to Campbeltown or £10 to Barra, Oban or Skye. I hope that the Minister will try to justify charging 80p irrespective of where the flight is to or from.
  There must be further argument about whether the charge should be placed on the arriving passengers or the departing passengers. We must examine carefully the designated airports issue. If the 80p charge were to be charged only on flights between one designated airport and another, or between a designated airport and an overseas airport, I should see some sense in the proposal, but it is a nonsense to be charging 80p for all short-haul flights when we bear in mind that Loganair, with its Islanders, is operating between Glasgow and the Island of Barra or between Sumburgh and Orkney and Shetland airstrips. That type of operation has to be contrasted with the major overseas jumbo jet flights around the world. Is it not possible to say that flights from a designated airport to an ordinary airstrip that is non-designated might be exempted, and similarly a flight leaving a non-designated airstrip and arriving at a designated airport?
  This is important because it will have an impact on the cost of travel in Scotland where air travel is becoming more and more essential. In the same way, if the thought of flexibility does not appeal to the Minister, has he given careful thought to a minimum seat capacity, so that aircraft with fewer than 20 seats might be exempt from the charge if they are using undesignated airports.
  Under the financial borrowing powers the CAA is in a significant position. For

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  30 years the Authority and its predecessors have done a good job in Scotland, and those who fly—and I do—very much appreciate the navigational aids and the arrangements for licensing that have always been first class. Indeed, I think that in the main the operations have been carried out economically. But if that is so, why is there so much talk of transferring the Highlands and Islands airports and others in Scotland to the BAA and away from the CAA? I hope that the Minister can say why that is so, or why it might happen as a matter of policy in the future.
  I hope, too, that the Minister will look carefully at the charges for general aviation in the United Kingdom, and particularly for Scotland. I am glad that pressure from AOPA has recently brought the BAA charges down significantly, particularly in relation to training flights and of light aircraft operation. We must continue to watch this closely.
  The Government should give much more encouragement to executive flying and light aviation, and I hope that they will not persecute light aviation under the clauses covering aircraft noise. If the Minister has in mind any aircraft in relation to light aviation that are considered to be particularly noisy, it would be a good idea if he were to say so tonight.
  Over many years, there have been fuel subsidies for ships, trains and buses but there has always been a high duty on aviation fuel. This does nothing to help communications in areas such as Scotland where light aviation is now making such an impact, particularly through the third force airlines, of which Loganair has been a great example.
  In The Scotsman of 11th January, only last week, there was this significant comment, that some of the Shetland air strips would have to close on account of the CAA fire regulation. This must be looked at again with flexibility because Scotland, and particularly the Islands, must have these third force airlines. The arrangements and facilities at airports must be of a reasonable calibre, but not of the high standard that seems to be required by the CAA. I hope that the Minister will consider that with a view to Scotland's development in the future.
  8.49 p.m.
  Mr. Eddie Loyden: I want to raise a matter that has been raised by almost every speaker in the debate and that is the charges that will be made for security. I think the House will agree that sub-regional or local authority airports have been living in a world of uncertainty for far too long. In that sense, I think that there will be a welcome for the steps taken by the Government to end uncertainty. I am not sure, however, that some of the provisions of the Bill will be as acceptable as the idea that someone is at last moving on the question of the present and future position of sub-regional or local authority airports.
  I do not totally disagree with the argument of the hon. Member for Cornwall. North (Mr. Pardoe), that if the cause of a cost is identified, a charge to cover that cost should be applied at that point. Many hon. Members could give examples of where the application of such a principle would be correct, but I do not believe that it would be correct if applied to air travel.
  Hon. Members will know that many of the passengers who disembark at Liverpool Airport have a close connection with Northern Ireland. For that reason, the security at the airport at Liverpool has been intensified over recent years. The tremendous financial burdens borne by the ratepayers prior to the metropolitan county taking over the airport was one of the reasons for the lack of forward development at the airport.
  We are justified in arguing that there should be a clear statement about what the future of these airports will be. It would be the height of the ridiculous to argue that aircraft passengers who have to go through security for the special reason that the flights are from Northern Ireland should bear an extra financial burden. The fact is that people may enter Great Britain at Liverpool and then travel down to London to commit acts of terrorism. It is therefore in the national interest that a high degree of security is enforced at Liverpool Airport. That is why it is obvious that the imposition of any financial burden on this ground in the future would further endanger airports such as Speke.

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  Liverpool is worried about the recovery of debts which have been incurred. There is no provision for the airport to recover any of the costs incurred in collecting the charges or claiming compensation for the payment of those charges which, due to had debts, are not recovered by airport operators. Liverpool airport committee is concerned about the matter, as are other local authority airports committees.
  8.53 p.m.
  Mr. Victor Goodhew: The House is a frustrating place. There must be a good deal of masochism about all of us who come to serve here. There is nothing more frustrating about a Member's duties than trying to battle with aircraft noise on behalf of his constituent. The Minister knows this, as he knows that we are butting our heads against a brick wall. More and more people want to fly and, even with larger and larger aircraft, still more will want to fly.
  I am delighted that the Bill contains some provisions concerning noise. My constituents, particularly those in Red-bourn and Harpenden, suffer mainly from flights from Luton Airport. I believe that in the main the charter companies will get quieter aircraft engines after the main airline companies. Thus we shall suffer from noisy engines longer than many other areas will.
  I hope that now that the Bill has been introduced the Minister will ensure that the monitoring of aircraft noise is taken seriously. I have sent him reams of figures from unfortunate constituents who have suffered in this regard. Unfortunately, their monitoring does not agree with the monitoring of those who run the airport. I hope, therefore, that he will be able to assure the House that there will be tough monitoring now that the fines are being raised.
  I notice that Clause 8 provides that the fine for contravention of byelaws shall now be £500 instead of £100. Is £500 a heavy enough penalty on a large airline which is raking in hundreds of thousands of pounds daily? I hope that when the Bill reaches Committee hon. Members will look again at whether £500 is a sufficiently large fine.
  I agree with those who have said that the benefit of whatever charges are made
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  where quieter aircraft are not used should be passed on to those who suffer to enable them to sound-proof their homes. I suggest also that the word "may" in line 28—
  "an aerodrome authority may, for the purpose of encouraging the use of quieter aircraft"—
  should be "shall". I put that thought into the Minister's mind in the hope that he will feel able to change the word in Committee.
  8.56 p.m.
  Mr. Giles Shaw: In my constituency I have Leeds-Bradford Airport, and the Under-Secretary of State will know that this is one of the airports operated by a local authority. My first point—no doubt, it has been made by others—is to express disappointment that the committee which runs local airports has had no success in its negotiations so far. Those concerned have, I understand, taken strong exception to Clauses 1 to 4, but their representations to the Ministry have been without success. I hope that they will be encouraged still to try, although the Bill is now before us for Second Reading.
  I address myself primarily to Clauses 8 and 9. It is incumbent upon a small local airport, as Leeds-Bradford is, to develop sensibly in order to make it a sensible investment giving an adequate return. The Minister will know that proposals for extending the runway at Leeds-Bradford Airport have been submitted by the joint airport management committee to his right hon. Friend the Secretary of State for the Environment. Much of the airport lies within a densely populated area, and therefore the proposals in Clauses 8 and 9 are of particular importance.
  Under the byelaw powers now to be granted, is it possible for airports to start to influence planning regulations so that where, for example, extension of a runway is offered that extension may be conditional upon certain noise factors or other elements written into the planning consent? As the law now stands, an existing runway subject to planning consents at the time of original construction will be deemed to carry those consents throughout its life, and mere extension of the runway will not allow reconsideration of the consents initially applied.

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  If the Goverment are really intent upon reducing noise levels, it is incumbent upon them, in my view, to look at the question of planning consents as well as byelaws for the control of noise within an airport and immediately above it.
  Plainly, any Bill which involves retrospective payments will not be readily supported by any hon. Member, but we understand the particular problem which security presents to airport controllers today. No doubt, as is the case with British Transport police or other services of that kind, the cost has generally been debited to the users of the service. However, I think it particularly harsh that airport controllers should be asked to recover the cost retrospectively and that the time within which they will be allowed to enforce it is so short.
  I understand that representations have been made to the Minister that a longer period should be allowed to run for the new charges if the Bill becomes law. I hope that he recognises that many of those who operate small airports on behalf of local authorities will require some consideration in the way the Bill is implemented if it receives the approval of the House. Those who run airports, certainly the Leeds-Bradford Airport, will express anxiety that we are discussing the Bill while still awaiting the Department's report on the Civil Aviation Authority's recommendations about the pattern of regional airports. That above all must be disclosed quickly so that longterm planning can be carried out and sensible arrangements made.
  9.0 p.m.
  Dr. Alan Glyn: I speak as Member for a constituency that is probably more affected than anywhere else by Heathrow. The Minister must agree that I probably have the largest number of constituents under the flight path.
  I welcome the Bill, because it means that there is now some sanction against the noisier aircraft. Clause 9 and Schedule 1 reinforce the Minister's power to mitigate noise disturbance and ban aircraft movements. He has my support for the way in which he has restricted night flights. The Bill gives him more powers to do that, and sets them out clearly.
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  It is not clear what the noise levy will be used for, but, if it does nothing else, the Bill will give a clear indication to operators of very noisy aircraft that not only will they have financial sanctions imposed on them but the Minister has power even to ban them or restrict their movements, particularly at night.
  I turn to the security charges. It seems to me grossly unfair that long-haul passengers should pay exactly the same as those on short domestic flights. Might not it be better to exempt the ordinary domestic flights and try to arrive at a more equitable charge for the long-distance and short-distance flights? I appreciate that there may be difficult administrative factors, but I believe that the Bill should be amended in Committee to exclude domestic flights.
  I hope that the Bill will reduce the severe burden that very noisy aircraft impose on people. I welcome it because it makes the Minister's powers clearer and much stronger.
  9.3 p.m.
  Mr. Norman Tebbit: It is customary to say that we have had an interesting and wide-ranging debate. It is certainly true that we have had a wide-ranging debate today.
  The debate started somewhat unexpectedly—I was certainly not opposed to this—with the Secretary of State's wide-ranging survey of civil aviation. May I say in passing that we understand the engagements that have taken the right hon. Gentleman away at this stage of the debate? I thought for a moment that the Secretary of State would claim that Sky-train was the Government's creation and that they put Freddie Laker up to it to give the nationalised industries a bit of a runaround. The right hon. Gentleman did not go quite that far, but we are glad that the Government now wish Skytrain well. We are sorry that it took them a little time to get round to that point of view.
  I was interested in what the Secretary of State said about the negotiations with Malaysia for the furtherance of the Concorde route to Singapore. We certainly wish the Government well in those negotiations, although we wonder at times whether there was an element of clumsiness in their earlier negotiations with

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  Malaysia over the traffic rights of the Malaysia airline into London. It would seem, to me at any rate, that when we were coming to the agreement under which the Malaysians must pay about £800,000 a year to the British Government for the right to bring their DC10 aircraft into London, which I think hurt them a little, that might have been the right time to conclude the arrangement with the Malaysian authorities to make sure that they would not object to Concorde.
  Mr. Clinton Davis: 1 cannot accept that charge. It was impossible in the circumstances to arrive at different timing. I wish that it had been possible, but no doubt we shall be able to explore this. I thought that I ought to have the refutation on record.
  Mr. Tebbit: I am sure that the Minister would not accept it. He has never accepted any criticism or blame in the past, and I do not see why he should start doing so now.
  As the Secretary of State made a wide-ranging speech, I would briefly ask the Minister, now that he is a Laker Skytrain fan, whether the Laker application for the Los Angeles Skytrain route is to be allowed to go forward to the CAA. Have the Government any particular view about the correctness of launching Skytrain on that route? Does the Minister accept that the British Caledonian licence is still valid, and that therefore B/Cal has the prime right to come in as the second British carrier?
  There were other speeches which covered a lot of ground. The hon. Member for Putney (Mr. Jenkins) thought that this was the debate on the airports White Paper, which has not yet been published. The hon. Member for West Lothian (Mr. Dalyell) rightly detected Scottish passports lurking somewhere in the schedule to this Bill. He was probably right in the points that he made. To have the same matters being discussed in two Bills at the same time in the House is an extraordinary way of running business. Even if there were any merit in the Scotland Bill, it would still be extraordinary to have the Bills running in parallel.
  My hon. Friends the Members for Windsor and Maidenhead (Dr. Glyn) and
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  Twickenham (Mr. Jessel), who are never absent when they can raise the problems of their constituents at Heathrow, were interesting on the subject of aircraft noise.
  My hon. Friend the Member for St. Albans (Mr. Goodhew) was as assiduous as always—I know that he will be back in a moment—in looking after the interests of his constituents at Redbourn and Harpenden. What a pity that we did not hear anything from the hon. Member for Hemel Hempstead (Mr. Corbett) about these problems. He is a big noise on aircraft noise except that he can never be bothered to come to the House when we are debating the matter, which is regrettable.
  Mr. Dalyell: This is a problem on the Scotland Bill. If the noise regulations dictated by the Edinburgh Assembly are different from those dictated by the British Government, there will be problems for the operators about the use of types of aircraft.
  Mr. Tebbit: I completely accept what the hon. Gentleman says. This is part of the reason why the Scotland Bill is nonsense. We have got on much better today than we might have done because there has not been a Scottish nationalist present to express a view on behalf of his constituents, about aircraft noise or anything else.
  We heard from my hon. Friend the Member for Dorking (Sir G. Sinclair). Again, as always, he was on the side of his constituents who are affected by noise. But he was wise to follow the remarks of my hon. Friend the Member for Hertfordshire, South (Mr. Parkinson) in pointing out that the industry must know well in advance what the Minister will propose under the noise deterrent parts of the Bill. My hon. Friends the Members for Southend, East (Sir S. McAdden) and Southend, West (Mr. Channon), both characteristically to the point, made their speeches on behalf of their municipal airports, as did the hon. Member for Luton, East (Mr. Clemitson). They were protecting their excellent examples of municipal enterprise. It is no disrespect to any of them if I say that their speeches, and that of the hon. Member for Oldham, East (Mr. Lamond), were almost interchangeable. None of them was very keen on what the Minister was doing about these charges.

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  In an interesting speech, my hon. Friend the Member for Romford (Mr. Neubert) put his finger on the origins of the Bill, as did my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle). This Bill is a hangover from the visit of the IMF. The Department of Trade was asked to make some savings or, alternatively, to raise some new charges to reduce the PSBR. Unable to come up with any economies in the operating of the Department, this was how it chose to find £19 million.
  The hon. Member for Antrim, South (Mr. Molyneaux) made a courageous speech in which he expressed his fear of the growth of a security industry. That was a courageous speech from an Ulsterman, understanding the situation in Ulster. We appreciate the reservations of any Ulsterman about a special charge for security being made upon those who have the misfortune to be the victims of the attention of terrorists. Many people share those views.
  My hon. Friend the Member for Chertsey and Walton (Mr. Pattie) made some interesting points, as did others, on the possibility of the retrospection which might come into this Bill. I hope that the Minister has taken them on board. I do not see us unduly prolonging the Committee stage, but knowing the ability of the Government Chief Whip and the Leader of the House to snarl up any legislative programme, I believe that the Minister will have to watch it if he is to get Royal Assent to the Bill before 1st April.
  My hon. Friend the Member for Chertsey and Walton also commented on Section 36 of the Civil Aviation Act dealing with secrecy. He is right to say that secrecy is no friend of safety in aviation matters, not indeed of free competition. It may be that my hon. Friend will want to bring forward some amendments, which I think he could do under this Bill, to improve the right of the public to information.
  It was interesting to hear the day-dreamy account of the hon. Member for Cornwall, North (Mr. Pardoe) of the operation of the Lib-Lab pact and his vigorous defence of bucket shop operators. The bucket shop operators' friend will no doubt dash down to North Cornwall and tell them all about it. I do not
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  think that I would agree that bucket shops are the best friends of the air traveller. It would be much better to have a proper fare structure than to have bucket shops.
  Mr. Pardoe: Is the hon. Gentleman saying on behalf of the Conservative Party that a Conservative Government would intervene, as the Government wish to do in this Bill, to limit the sale of airline tickets by those who are approved by the proper authority in this country rather than leaving it to the law of supply and demand and free market forces?
  Mr. Tebbit: If the hon. Member seriously thinks that the airline industry is an example of free competition and market forces, when most of the airlines in the world are subsidised creatures of their Governments, he is living in a particularly day-dreamy world. What I am telling him is that my hon. Friends and I believe that it is right to get a proper fare structure and that institutions such as Laker Skytrain are an important part of that, as are the major IATA airlines, whatever other defects they may have.
  In the nicest possible terms, the Bill is a bit of a dog's dinner. It is all bits and pieces, with meaty morsels to delight the hon. Member for Isle of Ely (Mr. Freud) and grisly bits that nobody found it easy to swallow. I particularly liked paragraph 7 of the Schedule. Here we are legislating on the Airports Authority Act 1970, saying that the byelaws shall be amended as follows:

  "(a) paragraph 2(a) (intention to apply for confirmation to be published in London Gazette or Edinburgh Gazette), shall be omitted;

  (b) in paragraph 4, for the words "2½p" (being the maximum price per one hundred words of a copy supplied before confirmation), there shall be substituted the words "5p"; and"

  So it goes on—the very stuff of constitutional government. A loss of £550 million by British Steel is nothing to do with Parliament. What a cheeky lot, says the Secretary of State for Industry at lunchtime. But twopence-halfpenny here and there—that is the stuff that we have to debate here. What an extraordinary contrast!
  I come to the meat of the dog's dinner. This Bill is the latest application of the

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  principle that the user should pay. It passes into some new areas by moving into the realms of the security of the citizen. The principle was more easily understood when it related to museum charges. None the less, here we are, and the air traveller is regarded by the Government as a soft touch. He has to be rich, the Government think, to pay prices of the sort charged in this country, as opposed to the United States, for internal and European flghts—30-odd to go to Belfast by an uncomfortable shuttle, for a start. I would like to hear a much clearer case than has been put by the Secretary of State for charging air travellers a special fee for protection against the Queen's enemies. After all, the Under-Secretary's constituents in Hackney are more likely to be mugged than are nine in Chingford. I mean mugged in the modern sense of robbery with violence. They have been mugged already at election time. I hope that the Under-Secretary does not want differential police charges, too.
  The Opposition accept the "user pays" concept. We accept this as part of reducing public expenditure. Of course, we know that it does not really reduce public expenditure in quite the way we would like, because this money is still being spent. But it reduces the PSBR, so long as the £19 million is not spent on anything else.
  Mr. Ron Thomas: Subsidising private enterprise.
  Mr. Tebbit: The hon. Gentleman says "Subsidising private enterprise." He has a terrible hang-up about this. I only wish that he would get around to the idea that the burden of taxation that is paid by private industry on the wealth that it creates is what keeps the Government in funds in any case.
  Mr. Ron Thomas: Will the hon. Gentleman give way.
  Mr. Tebbit: No. The hon. Member has not been here, except to make silly remarks from a sedentary position.
  The question is how the Bill will affect the Government's sense of social justice. Of course, the word "social" qualifying ally noun is dubious only when it is not outrageous. Social justice is usually injustice. Social science is usually any
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  thing but science. It is usually prejudice and blind assertion.
  One of the difficulties in the operation of the Bill will be the search for a fair system of charging. Fares will rise on short-haul routes, as my hon. Friend the Member for Dumfries (Mr. Monro) mentioned, where the fare charged is small in relation to the per capita charge of 80p or £1. Indeed, Loganair is seeking an increase of about 5 per cent. and other operators are seeking an increase of £1 on all such fares.
  That will not worry the typical wealthy long-haul traveller, on business abroad, going to Cuba, for instance, or somewhere like that. Hon. Members will know the sort of person I mean. He is a rich fellow, earning about £7,500 a year basic, with three or four part-time board appointments and directorships which bring in another £3,000 or £4,000. He is a sort of wealthy, powerful establishment-type chap, who is recognised as a Companion of Honour, and things of that sort. I do not have anyone in particular in mind, though for convenience we could use a common enough name, such as Jones. Jack may be well up the ladder, but poor Mrs. Smith on her package tour at a much smaller fare, or the sort of people mentioned by my hon. Friend the Member for Dumfries, will have to pay just as much, though they are not nearly either as rich or as much at risk.
  It will be very difficult to find a fair system. In Committee we shall try to help the Minister.
  It seems curious that this should be a charge on arriving passengers rather than on departing passengers. Once again, it may be better to travel hopefully than to arrive if one has to pay an extra quid when one gets there. It seems curious that one's safe arrival is due to some other airport agency's security procedures, perhaps abroad, and one arrives here and promptly pays £1.
  I think that I appreciate the problem better than do some hon. Members. Virtually all charges on air traffic are levied on arrival, and it is more convenient, I fancy, to levy them in that way.
  On whom will the costs of collection fall? The Joint Airport Committee on Local Authority Airports, under its chairman, Councillor Baum, has raised very serious doubts about this matter, as have

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  many hon. Members today. There is a loophole in Clause 2(2)(a) which I hope the Minister will tell us he intends to take. That appears at the top of page 3. Honourable Members will see that it is up to the Secretary of State when he makes the regulations not to ask for the charge on the first hundred or thousand, or whatever, of passengers arriving. I think that that would probably be the right way to reimburse airports for the cost of collection. Perhaps the Minister will say whether that is in his mind.
  I come to some specific questions. Will air taxi passengers be charged? Most of the companies concerned are small. The number of passengers is small. The number of times they come into these airports is small. It would seem to be administratively burdensome for a very small return.
  What about aircraft which land—again, typically, an air taxi—on the way from an airfield such as Stapleford Tawney or Biggin Hill, at Southend, for instance, for customs clearance? Will that incur a charge on its landings for the passengers on board? These questions on the subject of air taxis generally underline some of the difficulties of being fair. Who has hijacked an air taxi? Are air taxis really at risk? Should their passengers be made to pay?
  At which airports will the charge be levied? We have been talking about "the 28 airports" as though everyone knew which they were, but Clause 2 leaves it to the Secretary of State. Perhaps the Under-Secretary of State will make clear what is the Government's intention. My hon. Friend the Member for Dumfries raised several points on this matter which require answer.
  On Clause 5, my hon. Friend the Member for Hertfordshire, South questioned whether British Airways always has to borrow under its borrowing requirement authority in the Bill when it wants more money. Why should it not have more equity capital? Would it not be of benefit if British Airways were to go to the market and raise risk capital? Would there be any harm in that? What great principle would be breached? Would it not be in conformity with ideas of both limiting public expenditure and securing a more mixed economy? I think that the injection of private capital would be healthy for
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  British Airways, and, certainly, if some of it were subscribed by employees, it would be an excellent thing.
  As I understand it, Clause 6, which looks as though it is a further restriction on the freedom of action of the Civil Aviation Authority, is only a tidying up of the Civil Aviation Act 1971 and brings the CAA into line with other similar public boards. I would like the hon. Gentleman to confirm that interpretation, and also to tell us exactly what Clause 7 does. I think I understand what it does. I think I understand that it makes it easier for the CAA to make a package charge to airports such as Manchester for the provision of air navigation services, together with other charges, and that at the moment it is precluded from making such a package charge. Presumably, this again is only a tidying-up provision.
  Clauses 8 and 9 and part of Schedule 1 relate to aircraft noise. A lot has been said about that. The hon. Member for West Lothian has rightly questioned whether the control of noise will be a function of the Scottish Assembly. I can think of a noise of two that it might have controlled already, but that is too much to hope for that Assembly. Is the Assembly really going to be allowed to have different noise regulations based on different standards from those in England? Is that the Government's policy? It is not exactly in this Bill, but the Bill gives the Minister powers which, I understand, he will hand over to the Scottish Assembly. It is essential that we should know one way or the other what is going to be done.
  Mr. Dalyell: Someone speaking on behalf of the commercial interests described the situation as a shambles.
  Mr. Tebbit: I do not think that in a week's search I could find a beter word than "shambles". What is the Government's policy towards the question of noise charges anywhere in England, Wales and Ulster? Are these noise charges going to be effective? Can they possibly be large enough to change people's minds about the type of aircraft they operate? Why do the Government not move towards fleet and aerodrome noise limits, or is that the sort of thing they are moving towards in the powers taken under the schedule in relation to

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  aircraft noise? Will the Minister tell us what extra powers he thinks need to be taken under Clause 10, to give general directions to the CAA in the interests of national security, which he does not now have?
  I understand that Clause 11—which refers in that intriguing phrase to the mental element of the offence of contravening a term of an air transport licence—is again a case of bunging up a loophole which has been exploited in relation to the contravention of licences, and has nothing to do with the mental state of those concerned but rather whether they were fully aware of breaches or just chose not to notice those breaches in their conduct of operations under the licences which they hold.
  Will the Minister also confirm my understanding that Clause 12, relating to British Airways Board pensions, is a very minor one and only provides certain changes in the pensions of members of the staff who subsequently join the board? Under that heading, I offer my congratulations to Ross Stainton on his appointment as chief executive of British Airway, and wish him well.
  What is the purpose of paragraph 1 of Schedule 1? What are these powers over the water that the Secretary of State seeks to take? It is presumably neither to walk upon them nor to divide them, but it seems that suddenly he requires powers, in the interests of national security, over the water which at the moment he has only over the land.
  I am sorry to raise so many detailed questions, but all these matters relate to separate and different specific provisions of the Bill. I hope that the Under-Secretary, as he has brought forward this great rag-bag, has had time to find out what is in it, and that none of this is coming as a surprise to him, because he has been looking mildly distressed from time to time about being asked these questions on his own Bill.
  I do not think that the Minister will find the House dividing against him on the Bill. For all its defects, as we see them, we would not oppose it. We think that the overriding consideration of controlling public expenditure is right, despite the doubts that many of us have
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  about the principle involved in Clauses 1 to 4.
  We have considerable concern about exactly how the Minister is to implement his regulations. I notice that many of them are subject to the positive procedure in the House, and for that we are extremely grateful. We usually have to have a little fight about this. We are glad that we do not have to fight on this occasion, but we want to know, before we give our assent to the Bill, what sort of regulations the Minister has in mind. Particularly we want to know how the airports are to be covered for the cost of raising the levy for this fund, and how they are to be compensated for potential bad debts.
  These are points which have affected every municipal airport, and I know that the British Airports Authority is also considerably exercised about them. Subject to these caveats, we wish the Bill reasonably well.
  9.30 p.m.
  The Under-Secretary of State for Trade (Mr. Clinton Davis): When the hon. Member for Chingford (Mr. Tebbit) wishes a proposal well, I begin to doubt it, but I noted that he could not resist the temptation, to a lesser extent than is usual, of behaving like the stage villain that he really is not. He alluded to my constituency, but, unlike his own constituents, the constituents of Hackney, Central have never been conned.
  As to his remarks about Mr. Laker, the courts, of course, played their part, as one knows. The Government accepted the position and did everything possible thereafter to assist Mr. Laker, and we are glad that his venture is succeeding.
  It is a very difficult task to sum up a debate of this character, because it has ranged over a great many different topics. I do not know whether I shall have quite so difficult a task as a former Member of this House who in 1731 presented a Bill
  "for searching drugs and compositions for medicines, for the better encouraging of the making of sail cloth in Great Britain, for the better securing of the lawful trade of His Majesty's subjects to and from the East Indies, for obliging the possessors of lands adjacent to the highways to cut and keep low such hedges as are adjoining to the highways, and for the appointing of scavengers and the repairing of streets."

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  The hon. Member for Chingford alluded to a number of specific matters which, with respect, are more appropriate to a Committee stage, although I cannot say that he caught me by surprise. I have to read the Bill as well. Some of the reading is difficult, and I have no doubt that this will become apparent when I respond to the matters raised in Committee by hon. Members. I shall have to do my best.
  As for the specific question about air taxi passengers, as with so many other matters, the regulations have not yet been drafted to deal with the security charges. I hope to follow the same sort of pattern as that which exists for landing charges in other areas. The levy will probably be chargeable on passengers in air taxis but not, I think, on landings for Customs clearance. But, in any event, we shall be able to go into those matters in Committee.
  In the half hour available to me, I shall try to deal with the various questions raised by hon. Members. The first matter of substance, about retrospection, was raised by the hon. Member for Hertfordshire, South (Mr. Parkinson). It is not novel in this House to have retrospective legislation, especially in financial matters. It is done every year. The provision to pass on this levy to passengers, if the airport authorities wish to do that—and it is a matter for them—made it necessary, because we had this in mind, too, that the announcement should be made well in advance. This was the specific request of the industry in the consultations that we undertook with its representatives. They wanted an early indication of the probable rate and they wanted it to be given in April of the preceding year. We undertook to meet that request. Again, it is not a new situation. It is not a surprising one to the industry. We made this decision. We announced it a year before. Provision has already been made by the industry to take this into account.
  I do not seek to prejudice the right of the House to reject this provision if it wishes. Nevertheless, in the light of what was likely to occur, the industry has made its plans accordingly and, if the levy is not introduced, a certain degree of administrative chaos will erupt, with the result that airports, airlines and tour operators who will have already made this provision before 1st April will make an
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  uncovenanted profit of about £1 million a month. So clearly a difficulty will arise in that regard.
  Mr. Tebbit: I appreciate that the House can authorise the Government to make a charge to the airport authorities retrospectively, but can we authorise the airport authorities to make a charge retrospectively to their customers—the airlines? I hope that the Minister, as a lawyer, can clarify this matter for me.
  Mr. Davis: Presumably we shall explore this matter in greater depth in Committee. It is an interesting point. In my view, it is permissible, otherwise I would not have sanctioned it. The Committee may wish to disagree and, of course, it will have an opportunity to do so.
  We now come to the whole principle of how one can gather security costs. I totally agree with the hon. Member for Hertfordshire, South that hijacking and crimes of terrorism at airports are forms of gangsterism against which we must operate as firmly as we can. It is a matter for regret that not every nation has ratified the relevant international conventions. Whenever I go abroad and meet colleagues in those Government that have not ratified the conventions I make this point very strenuously.
  We must have effective security at the point of departure and ensure that there is a denial of refuge to those who carry out these ghastly crimes. We must ensure that there is apprehension and proper punishment of such offences. The certainty of punishment would have a deterrent effect but sometimes that certainty is not present. This is a matter of common ground among all hon. Members.
  The contentious area is who should pay for this. I would never pretend that these things would not have arisen had we not been obliged to make financial savings. But, having come to that point, the question is posed whether this was an illogical step to take. Obviously, it was not, in our opinion, and it is consistent with practice in other areas. Although the hon. Member for Hertfordshire, South does not agree with the principle, he at least agrees on the point of consistency. The docks are susceptible to some form of terrorism as is the Underground system. Indeed, there has already been terrorism on the Underground. Both

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  these bodies are responsible financially for the protection of people within their areas. Also, it is consistent with the law of property in private hands, for example, at football stadiums. It is not a novel proposition, either domestically or internationally. In various other countries a similar situation has applied for some time. Therefore, I cannot accept that our proposal is a breach of international law, as has been argued by certain people inside and outside the House.
  When considering the way in which we deal with this matter and the question of arriving passengers, it does seem to be a bit daft. But as the hon. Member for Chingford pointed out, it has always been the practice, in levying charges in this field, to impose them on arrivals rather than departures. I do not want to be inflexible, and this is an issue that can be examined in Committee.
  The Bill makes provision for other ways of levying the charges. While I do not wish to assert that this must be the last word, on the basis of precedents, it is not an unreasonable way of proceeding. We did some calculations in April 1977. It seemed then that the likely outturn for this year would be about £15 million and the estimate for 1978–79 is as high as £19 million. Therefore, we divided £19 million by 24 million passengers, which gave us a figure of about 80p. That was how the figure was calculated.
  I was asked why we did not go for the alternative which was put forward by the local authorities involving non-reimbursement. My right hon. Friend and I had to consider carefully whether the transport and security costs in the industry could be achieved through this method—which, I accept, is less cumbersome.
  There are two main arguments in favour of a levy system. One is an equity argument, and the other relates to security. It is our aim to find a single standard of security against terrorism throughout the country. The security measures which we have recommended are commensurate with the threat and local conditions and are much more expensive at some airports than at others. The traffic at each airport does not necessarily bear any relation to the expense of
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  the measures. It is reasonable that there should be a flat rate of levy per passenger throughout the country regardless of the arbitrary variations in costs per head at different airports.
  Under a non-reimbursement method the costs at some airports would be higher than at others. The security argument is more important than that. Our formal advice on security measures is backed by the promise to undertake the cost to pay the bills. Our advice is normally accepted without difficulty. We have seldom had to resort to a formal direction under the present method.
  Under the non-reimbursement scheme it is true that airports would have an incentive to economise, but there would also be an incentive to a possible lowering of standards. I feel that there is a risk that standards could gradually be eroded over a period of years, although natural inertia would prevent that becoming apparent in the first year. Claims for reimbursement which have been carefully examined in the Department provide clues to inadequate security and thus provide a method of inspection to supplement routine visits by our advisers. Where we are not satisfied with the situation, we can—and sometimes do—withhold payment.
  Under the non-reimbursement scheme our sole method of enforcement would be by visiting inspectors. We should have to recruit several more security officers, which would more than offset any savings in junior staff not needed to reimburse costs or collect levy. We shall have to issue more directions. This may sometime have the effect of stopping flights at short notice and we should probably have to undertake some prosecutions.
  I should mention one other matter. The committee connected with the local authorities and various other people have not examined this problem, but we have a body known as the National Aviation Security Committee which is concerned not only with the technique of security, but with the financial aspects. Therefore, there is a way, apart from the Department itself, through that committee which represents the airlines, the Authority and the trades unions, to invigilate the situation. That is a useful safeguard.
  Mr. Neubert: The Minister's argument would also apply to safety matters. Does

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  he not regard safety and security as matters which are close in concept?
  Mr. Davis: Different criteria affect both subjects. I do not want to become too involved in that argument, but I regard the situation as different. It is for that reason that we have set up the National Aviation Security Committee. I have addressed that committee from time to time, and I have also taken careful heed of what it said.
  Mr. Clemitson: Did I understand my hon. Friend to say that the difference in security costs between different airports is due solely to arbitrary reasons? Could it not be that the difference in security costs at different airports is due to other than arbitrary reasons—that is to say, reasons to do with efficiency?
  Mr. Davis: I heard my hon. Friend make that point earlier. There may be some marginal advantage, but it is not the whole story. I believe that my general conclusion, which my hon. Friend will no doubt want to test at a later stage, is right.
  I wish to deal with specific points raised by hon. Members. A number of speakers referred to the flat rate 80p charge as discriminating against short-haul flights. To some extent this is true, but the industry's view during the consultations with us was that a flat rate was preferable to variable rates. If the industry feels subsequently that this is a problem which offends it, it will be able to charge a smaller levy on short-haul flights and compensate with a larger levy on international flights. I know that this will be difficult for some authorities because they do not have the necessary spread of traffic. The Department is ready to consider the matter in the light of experience. Flexibility is the keynote and we shall look again at this matter.
  As to administrative costs and bad debts, the levy is a mechanism for financing the fund—no more and no less. We have selected this mechanism. It may not be the best. We expect airport authorities to pass on the charge to airlines through their landing charges. They do not have to do it at the rate that we have announced and are at liberty to choose another pattern if they wish.
  Apart from a significant case at Luton Airport with which I had to deal—it was
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  almost a nightmare—there is not a serious incidence of bad debts in civil aviation. Plainly we should have to give careful consideration to dealing with a situation such as the Court Line collapse. I do not wish to give undertakings now, but that is something that we would look at.
  The suggestion by the hon. Member for Hertfordshire, South that shares in British Airways should be sold to the public was virtually the only sinister remark that he made. The Government would be wholly opposed to that policy. It is not our objective to seek to denationalise British Airways by stealth. That is the beginning of what the Conservative Party wishes to see.
  We have had a fairly non-contentious debate in political terms, but I thought that I should enter that repudiation on behalf of the Government.
  Mr. Ron Thomas: Will my hon. Friend give way on that point?
  Mr. Davis: I really cannot. I have made the point and I have a lot of ground to cover.
  Mr. Parkinson: Will the Minister give way?
  Mr. Davis: I do not want to give way to the hon. Gentleman on this particular matter. He made his point and I have repudiated it. Let us leave it there for the time being. We can pursue it later.
  On the question of Eurocontrol and the prospects for raising the recovery rate, I have taken every opportunity, as did my predecessor, to try to ensure a 100 per cent. recovery rate. We have not succeeded, but the agreed recovery rate is to go up to 75 per cent. from 1st April 1978 and the permanent commission will decide in June what the rate will be from 1st April 1979.
  I was asked about consultation between the CAA and customers. Consultation goes on all the time not only between the CAA and its customers, but with the airline users' committee, with which the Authority is closely involved.
  Mr. Neville Trotter: Will the hon. Gentleman give way?
  Mr. Davis: The hon. Gentleman has not been here for most of the debate. I must move on.

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  My hon. Friend the Member for Luton, East (Mr. Clemitson) made a forceful and eloquent speech, in which he asked why there was a levy of 28p at Luton and a higher levy elsewhere. I have touched on that issue in general terms. I promise that I shall return to it later, but not in this speech.
  The hon. Member for Chertsey and Walton (Mr. Pattie) took issue with me about the phasing out of private security firms. I make no apology for that. There should not be such a diffusion of responsibility. A number of private security firms are acting for airlines at Heathrow. I do not believe that that is the right way to ensure the best possible security cover. For a long time before I became a Minister I campaigned for that change. I believe that I was right in persuading the BAA to follow Manchester's example. I look forward to the conclusion of the negotiations—they are difficult and complex—that will make the change a reality. I make no apology for having undertaken that policy.
  The Section 36 argument is complicated and abstruse. If I went into it now, it would take up too much time. In any event, I think that it is the wrong section. However, I do not wish to take up that issue now.
  Before turning to the issue of noise, I shall take up some of the points made by the hon. Member for Cornwall, North (Mr. Pardoe). The hon. Gentleman knows very well that the air traffic control assistants' dispute was settled within the 10 per cent. Government guidelines and within the 12-month rule. There is no question about that. There is a forward commitment for 1st April, which I need not rehearse again because the House is well aware of it. I stress again that the settlement came within the Government pay code. Although the strike was damaging, we insisted that any settlement should come within the code.
  The Sumburgh issue was raised by my hon. Friend the Member for West Lothian (Mr. Dalyell). The Special terminal will require approval under Section 6 of the 1971 Act. The application has not yet been submitted to the Department for approval, so I cannot comment on that proposition at this stage.
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  The Highlands and Islands aerodromes were extensively debated in the House shortly before Christmas, and I refer hon. Members to that debate.
  As for the design of modern, expensive and luxurious airport facilities—I wish there were more in some instances—I take note of criticisms that have been made. It is an issue that comes within the role of the airport consultative committee, and I hope that it will take it up with the BAA. That is the right approach for the committee to take.
  My hon. Friend the Member for Putney (Mr. Jenkins) will undoubtedly have a field day when the White Paper on airport strategy is published. That will be done within a matter of days. We hope that it will be published before the end of the month.
  Mr. Dalyell rose—
  Mr. Davis: No, I cannot give way again.
  The hon. Member for Windsor and Maidenhead (Dr. Glyn) raised matters that are relative to a debate on the White Paper. I hope that we shall have a debate on the national airport strategy as soon as possible after the White Paper has been published.
  The hon. Member for Antrim, South (Mr. Molyneaux) asked about the relaxation of some of the security methods that are found by Ulster to be burdensome. I have met the hon. Gentleman on a number of occasions to discuss the matter and I have encouraged him to meet the authorities that are involved. I have put his points to the National Aviation Security Council, and I must take its advice seriously. I am advised that there can be no basic change in security measures along the lines that the hon. Gentleman has suggested. I ask him to put himself in the position of a Minister. In that circumstance, and having been advised by experts, would he be able to take a different course?
  I come to the question of noise. We have taken these powers. It is right that these are enabling powers, and they must be permissive because a whole variety of considerations has to be taken into account. Not all airports are affected by the same situations. They must be enabled to take their decision at the right

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  time, but nobody can ignore the aviation interests. There has to be preparation for the byelaws to take proper effect. We could gravely damage our own aviation industry, but I wonder what good that would do for our economy in overall terms.
  I wonder, too, whether, putting constituency interests aside, that is what lion. Members on both sides of the House who are rightly and genuinely concerned about pollution would want. I believe that we should always pay the closest scrutiny to complaints made by people who are bearing what is sometimes an intolerable burden. I am grateful for the tribute that has been paid to me for the way in which I have tried to deal with what is sometimes an intractable problem.
  The hon. Member for Dorking (Sir G. Sinclair) knows that I have never shielded from him the fact that there will be increased use of Gatwick. This is bound to be the case, otherwise there will be coagulation at Heathrow. We have to make the best use of the London airports that we have, but the hon. Gentleman will have an opportunity, as I shall, of deploying this argument later in the debate on the White Paper.
  I take issue with the hon. Gentleman over his criticism of the CAA Directorate of operational research and analysis and the Medical Research Council which are carrying out the important inquiries to which he referred. I do not believe that they will lack scientific objectivity. There is no reason in the world to believe that they will take other than an independent line in this aspect of research. It is necessary to investigate these matters fully for three years, because there is a need for major medical inputs to the study which can be far wider ranging than the particular issues of aircraft noise. It might affect other matters, too. It is not a matter for me to dissuade those who feel that they need this sort of time to carry out effective research. I do not think that we should ask them to truncate that research and get a less worthwhile job done.
  I have tried also to ensure that there will be a gradual use by airports of quieter aircraft, particularly at night, but it is not an easy judgment to make, and I have been advised by some environ
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  mental interests—and there are many—that they are not in favour of closing Heathrow and Gatwick at night.
  The hon. Member for Romford (Mr. Neubert) asked how a consumer gets redress, and I refer again to the security charge. The question is appropriate to the taxpayer now. It is not so much a question of redress. There is invigilation of what is necessary, of what has to be done, of what is desirable. That is done largely through the National Aviation Security Council.
  If I have not covered all the points that have been raised by hon. Members—I never expected that I should—no doubt many of them will have the privilege and pleasure of serving on the Standing Committee, to which we all look forward immensely. But if not, no doubt they will seize the opportunity of writing to me. I think that this has been a valuable debate, and I hope that the Bill will be given reasonable support by 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).

  BUSINESS OF THE HOUSE
  Ordered,
  That the Motion relating to Ways and Means and the Shipbuilding (Redundancy Payments) Bill may be proceeded with at this day's sitting, though opposed, until any hour.—[Mrs. Ann Taylor.]

  CIVIL AVIATION [MONEY]
  Queen's Recommendation having been signified.
  Resolved,
  That, for the purposes of any Act of the present Session to establish a fund from which payments may be made in respect of expenses incurred for the purpose of protecting aircraft, aerodromes or air navigation installations against acts of violence or in connection with the policing of airports, it is expedient to authorise—

  (1) the payment out of moneys provided by Parliament of any increase attributable to that Act in the sums payable out of such moneys under section 7(1) of the British Airways Board Act 1977;

  (2) the payment out of the Consolidated Fund of the following sums—

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  (a) any sums required by the Treasury for fulfilling guarantees given under the said Act of the present Session in respect of sums borrowed by the Secretary of State for the purposes of the fund established by the said Act of the present Session; and

  (b) any increase attributable to the said Act of the present Session in the sums required by the Treasury for fulfilling guarantees given in respect of money borrowed by the Civil Aviation Authority under the Civil Aviation Act 1971 or by the British Airways Board under the said Act of 1977; and

  (3) the payment out of the National Loans Fund of any increase attributable to the said Act of the present Session in the sums necessary to enable the Secretary of State to make loans in pursuance of section 10(2) of the said Act of 1971 or section 6(1) of the said Act of 1977.—[Mrs. Ann Taylor.]

  CIVIL AVIATION
  That any Act of the present Session to establish a fund from which payments may be made in respect of expenses incurred for the purpose of protecting aircraft, aerodromes or air navigation installations against acts of violence or in connection with the policing of airports may make provision—
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  (1) for requiring contributions from aerodrome authorities for the purposes of the fund established by that Act;

  (2) for the payment into the Consolidated Fund of the following sums—

  (a) sums equal to the amount of any expense incurred by the Secretary of State in the management and control of the fund so established;

  (b) any sums received by the Treasury in consequence of any guarantee given in respect of money borrowed by the Secretary of State under that Act;

  (c) any increase attributable to that Act in the sums received by the Treasury in consequence of any guarantee given in respect of money borrowed by the Civil Aviation Authority under the Civil Aviation Act 1971 or by the British Airways Board under the British Airways Board Act 1977; and

  (d) any increase attributable to the said Act of the present Session in the sums received by the Secretary of State in pursuance of section 7(2) of the said Act of 1977; and

  (3) for the payment into the National Loans Fund of any increase attributable to the said Act of the present Session in the sums received by the Secretary of State in pursuance of section 10(3) of the said Act of 1971 or section 6(2) of the said Act of 1977.—[Mrs. Ann Taylor.]

  SHIPBUILDING (REDUNDANCY PAYMENTS) BILL
  Order for Second Reading read.
  10.0 p.m.
  The Minister of State, Department of Industry (Mr. Gerald Kaufman): I beg to move, That the Bill be now read a Second time.
  The House will remember that when announcing the introduction of the Shipbuilding Intervention Fund on 24th February last year, I said that my right hon. Friend would be bringing forward proposals to Parliament for redundancy schemes to assist British Shipbuilders and Harland and Wolff to alleviate the human problems caused by any contraction of the industry.
  The Bill now before the House provides the means through which my right hon. Friend proposes to accomplish that objective. The House will have noticed that the Bill is a simple enabling measure. Fundamentally, it does nothing more than empower my right hon. Friend to make schemes to provide financial assistance to employees of British Shipbuilders or Harland and Wolff, or their subsidiaries, who lose their jobs, or who are transferred to less well-paid employment, either because a yard is closed, or because its activities, or the numbers employed there, are reduced.
  Everyone knows the extent of the collapse of the world shipbuilding market, which has resulted almost entirely from the massive world tanker surplus, but also from unjustifiable expansion of shipbuilding capacity—again almost wholly for tankers—in Japan and other countries. The effect of the oil crisis has been to reduce worldwide demand for new merchant ships to about 13 million gross registered tons annually, and virtually to eliminate demand for new tankers altogether. World output in the past, by contrast, has averaged about 34 million gross registered tons and theoretical capacity is even greater. Although a straight comparison of these two figures exaggerates the extent of the crisis—because of the relatively low Labour content in tankers—it still reflects an excess world capacity in employment terms of about 40 per cent. Everyone is agreed
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  that the level of demand is unlikely to begin to increase significantly until the early 1980s, and then only relatively slowly.
  It has been said before, and I take this opportunity of saying it again, that the United Kingdom has made no contribution to this tragic situation. Employment in shipbuilding in this country has been declining steadily for very many years. In 1972, we and our European partners warned the world, and the Japanese in particular, that serious overcapacity was being threatened because of the rapid and unjustified expansion of shipbuilding facilities in Japan and elsewhere. So, even without the oil crisis, there would have been over-capacity today, although perhaps not as serious as it now is.
  Having made no contribution to excess capacity and having tried to persuade others to act sensibly, we do not see why the very small percentage share of the world market that we have had in recent years should be further reduced. That is what threatened us in 1975 and 1976. That is why, as the House knows. we introduced the Intervention Fund last year and why similar assistance is available to Harland and Wolff, to help it meet the fierce and often unfair price competition which arises out of the desperate struggle to capture as many as possible of the few orders available.
  The fund has been used very successfully by British shipbuilders. Last year, with its help, they won orders amounting to over 540,000 gross registered tons, worth nearly £400 million. Given the higher labour content of these orders as compared with previous production, which included many tankers, this is a substantial achievement, although still falling short of a full year's work. If we take into account the total orders won by Harland and Wolff and the private sector—again with Government assistance in most cases—the total for the country as a whole is over 730,000 compensated gross registered tons. It is a performance which, in relative terms, is not likely to be bettered by any of our major competitors, including Japan, which managed to secure only about 45 per cent. of a year's full output last year.
  This performance is not merely a tribute to the Intervention Fund. It is also

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  a tribute to aggressive and centralised marketing b British Shipbuilders and by the board of Harland and Wolff, which has been made possible by nationalisation. I am also happy to pay tribute to the patriotism of many British ship owners, who had placed a very large proportion of their orders in United Kingdom yards up to the end of last September. I do not yet have the figures for the whole of 1977, but I am less happy to note that an excellent nine months' record is likely to have been blemished when the figures for the final quarter are published. I hope very much that British ship owners will De able to restore that record this year. It is as much in their interests as in anyone else's that there should be a sound and viable United Kingdom shipbuilding industry, as I know most of them recognise.
  But, despite the relative success in winning new orders last year, the figures I have given—especially about the performance of Japan—illustrate just how impossible it is, even given the lowest prices, to secure enough orders to continue full output. As I said when introducing the Intervention Fund, shipbuilding industries all over the world are facing the inevitability of contraction, and this country cannot isolate itself from that trend. In 1978, competition is likely to be even more fierce than it was in 1977. Many countries now have subsidy schemes, and it is not impossible that there could be even fewer orders to share out this year. It is also likely that many yards in many countries will run out of work and that countries everwhere will be feeling the same social pressures which threaten this country and which it is the purpose of this Bill to alleviate.
  I want to make plain that neither the Bill nor the schemes that we shall put forward will propose any "target" reduction in capacity for British Shipbuilders, on Harland and Wolff. It is for British Shipbuilders, in consultation with the trade unions, to decide the shipbuilding industry's operational and corporate strategy, and it will be some time before British Shipbuilders can complete a corporate plan. We have, therefore, tried to provide for the maximum flexibility for
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  any special redundancy scheme in order to meet every kind of option.
  We envisage, for example, that, given the uncertain future for shipbuilding in the light of world market conditions, there may be some workers—perhaps those nearing retirement—who would prefer to leave now, at a time of their own choosing, if given a suitable cash inducement to do so. There may be others who would like to take up employment in another industry in another part of the country and who need the help to move their households which a special redundancy payment would provide. If a need arises to reduce the numbers employed in a particular company, the intention is to call for volunteers in the first instance. The scheme will not, therefore, be limited simply to payment in the event of closure.
  The next important point I wish to make is that the Bill envisages that the schemes will operate only for a limited time—two years in the first instance, which may start from 1st July last year, that is, vesting day for British Shipbuilders, and which may be extended to four years by an order by my right hon. Friend, subject to affirmative resolution of both Houses. There is a very good reason for this limitation. We are seeking to deal with a special situation which has arisen as a result of a sudden, once-for-all structural change in the balance of supply and demand for ocean-going merchant ships, with a world industry—not just a United Kingdom industry—which has gone from wild boom to unprecedented slump. That slump has been slow to be felt because of the huge order books built up during the boom, but its effects are now beginning to be acutely felt in every merchant shipyard here and elsewhere, and they will press down harder as 1978 goes by.
  Against this background it is our expectation that the large disparity between supply and demand which now exists could disappear within the time scale envisaged. Shipyards throughout the world which have no ships, or fewer ships, to build will cut back. The purpose of the Bill is to alleviate the social effects of that part of this worldwide process which this country is unable to avoid. It is not to put shipyard workers in a privileged position in the ups and downs that are part of ordinary industrial life.

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  The scheme will be implemented by means of orders laid before Parliament and subject to affirmative resolutions of both houses. Parliament will accordingly have adequate control over the terms of the scheme. The other reason for proceeding in this way is that the schemes will inevitably be very detailed indeed, especially if we are to ensure that they operate fairly between different individuals.
  In the first instance, payments will be made by British Shipbuilders and Harland and Wolff directly to the workers who benefit, and the Government will reimburse the two undertakings both their expenses in operating the schemes and the payments made under them. At my request, a basic scheme has been worked out in consultation between British Shipbuilders, Harland and Wolff and the Confederation of Shipbuilding and Engineering Unions. It is now being studied by the Government. Only the broad structure has so far been proposed and a great deal of work still needs to be done on the detailed provisions. When consideration within the Government has been completed, I shall need to have further consultations with British Shipbuilders and the CSEU to arrive at a scheme that I can recommend to the House.
  Until these consultations have been completed, I obviously cannot say very much about the proposals. What I can say, however, is that they envisage a combination of a lump sum payment based on age and length of service plus an income support payment based on length of service only and payable during the subsequent period of unemployment for up to two years. However, as I have indicated, the full details of the schemes will be laid before the House as soon as agreement is complete and draft orders can be prepared.
  As to the cost of the schemes, everything will obviously depend on how many men qualify for benefit during their currency and, as I have already said, we do not intend to fix any target for across-the-board contraction. For any arbitrary figure for the number of beneficiaries there are still many variables which can affect the total cost. In general, for example, payments will tend to increase with age and length of service. If the take-up is predominantly among the higher age groups, as might happen in a general
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  slimming-down process, the average payment and the total cost will be higher than would be the case if take-up were to be spread across the full age range, as in the event of a closure.
  Once the full details of the schemes are prepared, it will be possible to offer some illustrative examples based on age and length of service data, as has been done for past schemes in the Explanatory and Financial Memorandum to the bill. In another debate in the House last month the hon. Member for St. Ives (Mr. Nott) suggested on behalf of the Opposition that higher levels of payment than those mentioned in the memorandum would be justified. I share that view. Indeed, I would expect the cost of the scheme which I bring forward to the House to be higher than the illustrative example for previous schemes given in the Explanatory and Financial Memorandum.
  This is a measure which everyone can agree is needed to meet the consequences of a unique world problem faced by the shipbuilding industry and to mitigate its effects on workers in this country. I therefore hope that it will be accorded a speedy passage, both in this House and in another place.
  I commend the Bill to the House.
  10.12 p.m.
  Mr. Norman Lamont: On behalf of the Opposition I give the Bill a welcome, albeit a cautious one. It must be a cautious welcome for the reason that the Minister gave—that this is really enabling legislation and what is important is the details of the schemes, which we do not have.
  It must also be a cautious welcome because some people are becoming a little worried about the effect of redundancy payments schemes. We on the Opposition Benches accept the general principle that the victims of industrial change should be compensated. The only way to be able to move to competitive manning, the only way to be able to get people to move from our old industries into new opportunities, is for the process to be made less painful, for it not to be accompanied by all the misery of having to throw workers, particularly older workers, out of work with no hope of a job.
  For those on the Conservative Benches who believe in a market economy it is important that change should be humanely

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  handled. Only in that way will a free economy be able to work to the advantage of all.
  But, while we accept the general principles of buying out jobs, there are dangers of which we should be aware. The late Richard Crossman rather late in life discovered a fundamental principle of conservatism derived from David Hume—that Acts of Parliament often have the opposite effect to that which is intended. Some people would consider that the redundancy payments legislation of recent years has had unexpected effects. I can think of few pieces of legislation more in need of re-examination and of a comparison of their intended effects and their results than the original Redundancy Payments Act. I refer to that because it was the original Act upon which many layers have been built since, in both the public and private sectors.
  The thinking about that Act and the thinking which has accompanied many others since was that buying out jobs with large, tax-free sums of money was a way of easing the rigidities of the labour market, a way of reducing resistance to change. But it has met increasingly in recent years with complaints from employers that it is extremely difficult for them to make redundancies. Employers find themselves having to make substantial payments above the minimum, and they cannot afford to do so without coming near to bankruptcy. Companies are in danger of becoming bankrupt with all the workers losing their jobs rather than the company being able to save some.
  When we are talking about this sort of legislation we must remember that once a scheme is established in one industry, it has repercussions in others. Therefore, the effects of these measures, one on top of the other, may not be as we originally intended, which was to encourage labour mobility, it may not be encouraging people to take the risk of looking for new jobs. It may be having the effect of making people less mobile and spreading arthritis throughout the whole economic system.
  The other point that I would make, particularly following what the Minister said when he talked about a once-and-for-all situation, is that achieving competitive levels of manning is something
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  that we have to go on doing all the time. We tend to look at Japanese steelworks or German shipbuilding firms and think about making an adjustment to get down to their level of manning, but this is a process that ought to go on all the time.
  It is not just a question of making an adjustment once. It is not just a matter of making an adjustment where there happens to be a lot of cash floating around, particularly from the Government. It is a development that management ought and must be able to negotiate freely with the unions all the time if we are to have any hope of being competitive.
  It is important, if we are not just to increase the rigidities in our economic system, for these benefits to be pitched at exactly the right level. They must be high enough to encourage some people to leave voluntarily and not too high to discourage natural wastage or the departure of those whom firms or industries cannot afford to lose.
  The results of some redundancy schemes have been unexpected, even perverse. In the Chrysler scheme at Linwood we saw how the seduction of tax-free money has taken the sting out of the cold, even in a black area for unemployment, for many more than anticipated. At the docks we saw how a system introduced to correct wage imbalance in the age profile of the labour force ended up creating another imbalance in the age composition of the labour force.
  BOAC is reputed to have spent £2 million on buying out over-manning. Such was the success of the scheme that, immediately after it had been implemented. BOAC had to go back and recruit people again. This shows the element of the unpredictable in voluntary schemes. The Minister emphasised that this was a voluntary scheme. That brings me to a question which I would be grateful if the Under-Secretary would answer when replying. Will there be any restriction on people who have taken these large sums going back into the industry? That has been a feature of some schemes in the private and public sectors.
  There are ways in which the effects of voluntary redundancy schemes can be very quixotic. One can see the attractions of a voluntary scheme. The Minister has referred to many of them. There are no recriminations. There is no need to

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  choose between employees. There can be no complaint that one person has been treated less fairly than another.
  What can happen with these voluntary schemes is that it may be the younger, more able, staff who will leave. They will take the risk and the opportunity to get new jobs with their cash bonus. There is a strong chance that organisations will be left with a large proportion of labour less able and less adventurous. In addition, the skill mix could be all wrong. We may find that the skilled men will have a better chance of getting employment and opt for the scheme in disproportionate numbers; or it may be the unskilled men who have a wider range of opportunities available to them.
  The result of many redundancy schemes has been that some firms have been left with a labour force which is unbalanced because it comprises predominantly the semi-skilled and those aged around 40. It is extremely important to get the precise terms of the scheme right. That will affect the take-up by different skills and age groups.
  Referring to these details concerning the profile of the labour force leads naturally to the cost of the scheme. The Explanatory Memorandum gives various figures for the cost based on the assumption that the profile of those taking up the scheme will be the same as the profile for the industry as a whole. The figure quoted is £900,000 for each 1,000 workers. It would be an extraordinary coincidence if the take-up of the scheme, the possible profile of the age and skills of those taking up the benefits, turned out to be exactly the same as the profile of skills and age for the industry as a whole.
  The only guide that I have as to the mix of skills and age in British Shipbuilders is what I saw Mr. Chalmers quoted as saying—namely, that 39 per cent. of craft workers are over 45 years of age and 56 per cent. of non-craft workers are over the age of 45. It would be entirely a matter of coincidence if the take-up were a mirror image of the distribution of age and skill in British Shipbuilders.
  I should be extremely surprised if the costs quoted in the Explanatory Memorandum were not handsomely exceeded. Perhaps tonight we saw the Minister of State moving a little in that direction
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  when he prayed in aid the remarks of my hon. Friend the Member for St. Ives (Mr. Nott). The Minister did not quote those remarks strictly accurately. I took the precaution of looking up what my hon. Friend said. He did not say that we should definitely give better benefits than these. He said that it might be that the benefits ought to be higher. In praying in aid the remarks of my hon. Friend the Minister of State was possibly coming to the conclusion that the sums of money mentioned in the Explanatory Memorandum were likely to be exceeded.
  One reason for this, and this brings me back to an earlier point about what happens in one industry affecting what happens in another, is that the workers in British Shipbuilders and the unions there must have read the newspaper stories about the sorts of sums being paid to buy out redundant jobs in the British Steel Corporation. I do not accept that those stories are accurate. They may or may not be. The sort of figures quoted—£8,000, £9,000,£10,000—must make people compare those figures with the sums quoted in the Bill.
  The Bill speaks of a maximum of £3,650 and an average figure of £900. Bearing in mind all the publicity and the terms in which people are alleged to have been bought out by the BSC, I should have thought it would be surprising if the unions in British Shipbuilders settled on the sort of terms described in the Explanatory Memorandum. That seems to be a game that was finished long ago. The cost will very much depend on the total number who become redundant.
  I intended to ask the Minister what he envisaged would be the eventual number of redundancies in British Shipbuilders. Predictably, he said that the Government had no views on that at the moment. I can only assume that that will cause considerable worry in the shipyards. People there must have read the sort of figures that have been quoted. Newspapers have talked about 10 per cent. of a labour force of 80,000 being expected to take up this scheme. They must have read of other opinions voiced in newspapers to the effect that it might be necessary eventually to get rid of 20 per cent. or more of the labour force if we in this country are to become competitive.

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  I do not know the answers to these questions, but I know that I do not think that it is a very persuasive argument to say "We shall have a labour force of a particular size now because we have borne a fair amount of adjustment and contraction in the past. Alas, the world is not like that. What has happened is not very relevant. It is not the size of labour force that one would like to have that matters. One cannot complain that other people have suddenly appeared in the shipbuilding industry. All that will determine the size of the labour force is whether our industry can be competitive.
  All that has happened in the past is history. Alas, we cannot maintain a labour force of a given size simply because we have had a contraction in the past. We can maintain a labour force of a given size only if we are competitive.
  I should like to ask the Under-Secretary about a number of detailed points. I shall go over them quickly. I am slightly surprised by the reference in the Explanatory and Financial Memorandum to the computer staff being increased by 40 in order to cope with this scheme. That struck me as a surprisingly large number. I do not know the total size of the Computer Agency. I shall be interested in the Under-Secretary's comment.
  I was also interested in what the Minister of State said about the length of time for this scheme. It is envisaged that it will last two years, but there are powers to make it last for four years. It seems curious to write into a Bill that a scheme will last for two years but to include also power to double the time for which it will exist. It is very important that a scheme of this kind should be brought to an end at some time and that it does not just drag on year after year. It would have been better if the Government had settled for the shorter period.
  There is reference in the Bill to earnings being made up. How is it intended that this should work? To whom will it apply? Does it apply merely to the movement of people within British Shipbuilders and making up earnings there, or does it equally apply to people who leave British Shipbuilders and take up jobs outside the industry? Will there be an option there of making up earnings? If it applies outside the industry, presum
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  ably people will have the choice of either a lump sum or the make-up of earnings. I should be grateful for some indication of the Government's thinking on that matter.
  Will the lump sum benefits be related to earnings? I have heard that there is some concern among both skilled workers and middle managers in British Shipbuilders that it is not intended that the lump sum benefits shall be related to earnings. If it is not so, that could be quite hard on some of the managers and some skilled workers.
  Those are the detailed points. I return now to the general points in the Bill. There is one unusual feature of the Bill. It is a point that one cannot refrain from making. I am slightly surprised that the Bill itself was not included in the original nationalisation proposals. After all, there was a bit in the legislation on the nationalisation of the steel industry providing for redundancy payments. Why was this scheme not included originally in the nationalisation Bill?
  Perhaps it would not have encouraged some Labour Members—not all—who claimed that greater job security would come from nationalisation. Their rhapsodies would have had to be a little modified if there had been a schedule tacked on dealing with redundancy payments.
  In another sense, it is curious that we have to have a separate Bill providing Government money to deal with the buying out of jobs in what, after all, is meant to be a commercial undertaking, albeit State owned, operating at arm's length and not interfered with for political reasons, we are told. Why does British Shipbuilders not negotiate its own redundancy scheme, as the British Steel Corporation does today, without any payment direct from the Exchequer? The corporation does its own negotiations and pays out of its own capital. Although, of course, the cost is indirectly paid these days by the Exchequer, it is not a direct subsidy.
  I make this point because there is some concern in the small private sector—the small number of private ship repairers left—that the terms of the Bill will have an adverse effect on them because they, too, need to slim their work forces and might need to negotiate with the unions and buy out their members. Such firms

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  will be faced with a situation in which the unions in the public sector will have got a particular level of benefit, and the small ship repairers, and even the few privately owned shipbuilders, might find those terms very onerous.
  I quote one example. If a man aged 41 has worked for 20 years in the shipbuilding industry, under the statutory scheme he would have to get, if made redundant, £1,700 from his employer and, under the arithmetic of the Bill, £3,000 on top of that, making a total of £4,700. If a firm had 100 men for redundancy, the amount would be nearly £500,000, which would be very large for some of the small private firms left.
  I hope that mentioning this aspect will not leave me open to one of the Minister of State's farragos about how we fought to have private ship repairers excluded from nationalisation. Of course we did, but we were assured constantly that they would be faced only with fair competition, that British Shipbuilders would not be subsidised except to the extent that the private sector would be subsidised. Indeed, the Intervention Fund has been made available to both the public and the private sectors.
  If that is the case, is it not worth considering whether the scheme proposed in the Bill should not have been an industry-wide scheme rather than confined to British Shipbuilders? There is a precedent in the way in which the redundancy scheme for steel workers in the EEC is available for both the public and the private sectors. I do not want to make that a definite proposal, but the Government should consider it.
  We welcome the Bill. I have expressed some caution because lump-sum payments are rather a crude method of dealing with redundancy. It has been remarked on many occasions how crude it is that a man who is redundant on Friday and gets another job on Monday should be treated in the same way as another who will have the ill luck to be on the dole queue for a year.
  There are many other matters which need to be discussed in considering the problems of demanning and making people redundant. Many other things have to be done for these problems to be handled humanely—for example, through job counselling and training.
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  Many redundancy schemes insist that people should undertake training and will not simply go out into a sort of casino or lottery for getting another job, but will thereby have some assurance for the future. If we are ever to have a labour-market policy anything like those in West Germany and Scandinavia, we have to do all these additional things and not just use the crude weapon of the lump sum, tax-free benefit.
  These are matters for British Shipbuilders. I am sure that its practice is the best and that it knows better than I how the problem should be handled. I only comment because there is something curious about this scheme being the subject of separate legislation. But, thereby, Parliament is involved and one comes to express an opinion.
  We support the Bill, with those qualifications. We intend to address ourselves to these points in Committee, but otherwise I have great pleasure in commending the measure to my right hon. and hon. Friends.
  10.35 p.m.
  Mr. E. Fernyhough: There were many points raised by the hon. Member for Kingston upon Thames (Mr. Lamont) to which I should like to reply, but it is getting rather late and I know that other hon. Members wish to get into the debate. I hope to meet the hon. Gentleman in another place when we are dealing with the Bill, and we could then perhaps debate the issue effectively.
  I have mixed feelings about the Bill. There is some gladness in the sense that we are to give to men, many of whom have given their lifetime to the industry, a joyful farewell. There is sadness in that it means that men who have acquired great skills, and who have given devoted service in their various yards will no longer be able to use those skills. It is, therefore, with both gladness and sadness that I welcome the Bill.
  Sitting here, I wondered, Mr. Deputy Speaker, whether the story of Jarrow would not have been different if we could have had something such as this in the 1930s. I thought of the bitterness that is still felt in Jarrow about how Palmers was closed down and about the activities of Shipbuilding Securities, which was able to close down yard after yard throughout the country. Men were

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  thrown on the scrapheap and driven into a life of poverty and almost degradation. If we had then had a Bill of this kind, with the compassion and understanding that it shows, I wonder whether we would not have had as a consequence a more united nation than we have today.
  I want all hon. Members to remember one thing that I say now if they remember nothing else. Let those who are critical of the Welfare State remember that this is part of the Welfare State. Let them remember that the Welfare State has bought off revolution. If anyone believes that in the post-war years we could have gone through the same experiences that tens of thousands of decent people went through in the 1930s and kept this nation in the state that it is today, that person is living in fairyland.
  I believe that it is because we have tried to understand what happens to a man when he is thrown on the scrapheap and when this is accompanied by poverty, that we are able to give every support to a Bill of this kind. It removes much of the bitterness and much of the hatred which would have accompanied these dismissals if they were brought about in the manner of the 1930s.
  The shipbuilding industry has always known its lean years and its fat years. It has always been a feast or a famine. The men in the shipyards and in the ship repairing industry have been very used to being given the sack and not knowing whether it would be a month or a year before they got another job.
  I am glad that the Minister has made one thing perfectly clear—that because we did not build up our shipbuilding industry as rapidly as did most of our competitors, we are not going to reduce it as much as some of them would like.
  It would be a disaster if a maritime nation such as ours, with the experience of two world wars behind it, were ever to say that it did not intend any longer to have a viable shipbuilding industry. No nation can less afford to disregard its shipbuilding and ship repairing industries than can this country. Therefore, we must always think in terms of making them viable, because no other nation so depends upon its maritime workers.
  As a result of improved yard conditions and better investment in the yards,
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  I hope that we may be able to get bigger order books and so reduce the number of redundancies that are necessary. I know that we shall have to fight for that bigger share. But the men whom I know are determined that, as far as it lies within their power, they will have that share. But they understand the changing world in which we live. I wonder how many ships 35 million tons of oil from the North Sea has displaced this year. I wonder to what extent the bringing of our food from the Continent of Europe, as distinct from bringing a lot of it from New Zealand, has altered the pattern of shipbuilding and reduced the number of ships required. Each of us has to think these facts through and spell them out to those who will be affected by them.
  I am certain that the men in the yards will not only be very grateful for this measure but will also accept it as being due to them. Private industry has done much the same, despite what the hon. Member for Kingston upon Thames said. On another occasion I shall give him the names of the firms concerned. But in a constituency such as mine, where large private employers have considerably enlarged the redundancy payments scheme, it would be wrong that private employers should have done it and that British Shipbuilders should not have done it.
  I think that the men are due it. I believe that they will respond to it, and I hope that we shall have a viable industry and be able to take an ever bigger share of a diminishing market.
  10.43 p.m.
  Mr. Neville Trotter: At last the Government appear to be acting realistically, bearing in mind the very serious future facing this industry. My hon. Friend the Member for Kingston upon Thames (Mr. Lamont) said that we had heard precious little about redundancy from the Minister of State and his colleagues during the long sessions that we had on the shipbuilding nationalisation Bill, for obvious reasons. But at last we have some recognition of the real facts of life.
  Thank heavens this industry did not expand in the way that many were seeking some years ago. If we had followed the example of the Japanese, as many people urged, where should we have been today? We should have needed not

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  10,000 or 20,000 redundancies but 100,000 or 200,000. The position is serious enough, but it could have been a great deal worse.
  It is extraordinary that, after four years in office, the party that believes in planing still has no plan for the shipbuilding industry. The Government realise at last that there are serious problems, but still we cannot be told what the plans are. We are told that they are being considered, and still being considered day after day, unlike other countries where our competitors are facing hard facts of over-capacity which are known to all hon. Members.
  The Minister of State visited Japan shortly after I was there some 18 months ago. He heard, as I did, that one-third of the jobs in Japanese yards were to be lost, and similar figures apply among our main competitors in Western Europe. These are terrible figures in all those countries, and we face perhaps as great a threat here. But there are no plans. The Government's attitude is "Let us wait and see what happens."
  The Minister of State referred to centralised marketing, and he mentioned Harland and Wolff in this connection. Is Harland and Wolff now engaged in a centralised marketing exercise with British Shipbuilders? If so, it is the first I have heard of it and the first the House has heard of it. Otherwise, how is it engaged in centralised marketing? Is it centralised with itself? That does not make sense.
  Which yards will get the orders and which will get the redundancies? Will the orders go to the efficient yards or those with the most political clout? Will they go to the yards that have had the most capital spent on them, or those with the best labour force? Will the redundancies be on the Tyne, Wear or the Clyde? Will these decisions be decided by British Shipbuilders alone, or will the Government bring influence to bear? Wherever it is to be, I am quite sure that it is the aim of the Government that the redundancies should not fall before the next election.
  On the question of cost, I agree with my hon. Friend the Member for Kingston upon Thames. I cannot for one moment see people in Tyneside accepting £900 to join the dole queues in an area where one
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  person out of 10 is already unemployed. I cannot believe that for such a sum people will voluntarily leave work to join the dole queues. The figure will have to be much greater than that. The figures mentioned in the Bill are patently nonsense.
  I agree with what my hon. Friend said about unfair treatment of private yards. Most of these yards were not even suggested for nationalisation. There are 70 to 80 private yards left, and the vast majority of these were never even considered for nationalisation. Some 50 per cent. of ship repairing is carried out in these yards. Most of them are quite small and all are facing serious problems. Although we heard nothing about redundancies during the Committee stage of the Aircraft and Shipbuilding Bill, we heard a great deal about fair competition between the private and public sectors. I ask the Government to think again about this moral point. As has been said, the Intervention Fund applies industry wide.
  The Bill will apply to shipbuilding subsidiaries of British Shipbuilders and other companies. If we look at the list of subsidiaries of British Shipbuilders, we see that there are some 140 companies. Some interesting ones included are R. Harris and Son (Builders) Ltd., R. Harris and Son (Concrete) Ltd; and R. Harris and Son (Plant Hire) Ltd. I remember from discussions in Committee that these firms are building in the Devon area and came into the public net through Appledore and Court Line.
  Other companies include William Squires Merchants Ltd.—what do they sell, I wonder, what do they merchant? Then there are, for example, Warethorn Properties Ltd., Bluescroll Ltd., Mast-lake Ltd., Moonchase Ltd., Oakspine Ltd., and Basingstoke Buildings Ltd. What do they do?
  Another is the Mid-Tyne Ferries Ltd. This operates the ferry boats across the Tyne in the middle of the yard area. Suppose that another Tyne tunnel were built and the ferries were not needed any more. Will the ferrymen benefit from the redundancy scheme even though it does not apply to the other ferrymen on the river who are not within British Shipbuilders?
  Then there is the Sunderland Forge and Engineering Co. Ltd., and the Wolsingham Steel Co. Ltd. They do not build

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  or repair ships, but they spend part of their time making equipment for ships. Here we are moving into a different industry—marine equipment. That carries the scope of the Bill very far indeed.
  I point out to the Under-Secretary that we are discussing a scheme for wholly-owned subsidiaries of British Shipbuilders. But a number of the dry-dock companies are not wholly-owned, including nearly all the repair yards on the Tyne. These companies include Brigham and Cowan Ltd., Brigham and Cowan (Hull) Ltd., the Middle Docks and Engineering Co. Ltd. and North-East Coast Contractors Ltd.
  These are major repair yards on the Tyne, employing thousands, which are not wholly owned by British Shipbuilders, because their preference shares are owned by outsiders. I have checked this matter with a lawyer who confirms my opinion as an accountant that these companies are not wholly owned by British Shipbuilders. Is the Minister saying that there will be no redundancy scheme for those men who are employed in the ship-repairing yards? If that is the case, will he say why? Could it be that the Government, in changing their draftsmen on shipbuilding matters have had no more success than in the past?
  I believe that the future of this industry depends on its efficiency, productivity and competitiveness. It is an industry that is more competitive in the international sphere than any other—and, I would add, an industry that is less suitable for nationalisation than any other. This scheme must be seen as part of an overall plan to achieve efficiency and competitiveness in the industry. The scheme is essential and must be accepted by all hon. Members if we are to improve the prospects for the industry. A great deal more needs to be done, however, than simply providing for redundancy. I wait with interest to hear the Government's detailed plans for the successful future of this industry rather than just their ideas for laying off those who cannot be employed in the industry.
  10.52 p.m.
  Mr. W. E. Garrett: I am surprised that after four recent attempts to catch the eye of the Chair, I have succeeded in doing so on this occasion.
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  I thought that the hon. Member for Kingston upon Thames (Mr. Lamont), from the Opposition Front Bench, spoke very well, considering that he has never worked in a shipyard. He made a first-class job of it.
  I think I am coming to understand the workings of the Chair on these occasions. It believes that it is necessary to call a Member of the Privy Council to speak first on shipbuilding matters when it knows full well that fellows such as me have expertise on the subject. Indeed, there are certain Members of the SNP who can speak with equal eloquence on the topic. I know that on this occasion I have been called to speak for one reason only, namely, that the Bill has merit.
  The Ministers who prepared the Bill have courage. They have worked hard to create a situation which will provide money—and that is what it as about, money—to those who will get their cards, leave the shipyard gate, and receive a guaranteed payment. That never happened when I was a young man. I never dreamt that it would happen in my lifetime, but it has. Whether it had been done by a Tory Government or the present Government, I would still have regarded it as an indication of how far we have moved in our understanding of the situation that faces anybody who, as a result of economic forces, finds himself with his cards—sacked.
  There are not many Members in the House who, in common with me, have been given the sack—not because of my inability, I presume, but because the company could not carry on paying my wages in the then situation. This Bill is on similar lines to the miners' Bill. It is a landmark, and yet few of us recognise it as such. We have to convince those who will benefit from the Bill, which I think will be passed by Parliament, that it is a tremendous achievement. There will be a lot of mutterings about it, but it is a good Bill and I hope that we give it 100 per cent. support as it progresses through the House.
  10.55 p.m.
  Mr. James Molyneaux: As Northern Ireland and Harland and Wolff appear throughout the Bill as a sort of balancing factor in every other line, I thought it right that, on behalf of

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  the Ulster Unionist Parliamentary Party, I should give the Bill a general welcome.
  I trust that Ministers will not be reluctant to repeat assurances that Harland and Wolff will not suffer by reason of its exclusion from British Shipbuilders. I am glad to see the Minister of State responsible for commerce in Northen Ireland is on the Government Front Bench. I do not wish to embarrass him by asking questions on sensitive matters, but I trust that the Minister who is to reply will be able to assure us that Harland and Wolff, which has not been involved in, for example, the Polish ships order, will not be neglected and will be to the fore when contracts for which the yard is well fitted are being considered.
  My impression is that the Minister of State acts as an effective salesman for Harland and Wolff, and I hope that he will have the support and co-operation of his colleagues in the Government.
  Mr. Kaufman: I should like to give the hon. Gentleman the assurance that he seeks. My right hon. Friend and I work closely together in seeking orders for Harland and Wolff and recently we have had considerable success as a result of our joint efforts.
  Mr. Molyneaux: I am happy to accept that assurance and to pay tribute to both Ministers for the efforts they have made to assist Harland and Wolff in its special difficulties. One does not like to plead special difficulties in Northern Ireland, but it is accepted by the House that Harland and Wolff has been through a particularly difficult time. The Minister's assurance will be warmly welcomed not only by my party but by the work force in the yard and all right-thinking people in Northern Ireland.
  10.58 p.m.
  Mr. Frederick Willey: Like everyone in the shipbuilding industry, I welcome the Bill. On balance, it is better to make provision by legislation than otherwise, though this is an enabling Bill, which means that we shall have to look to the orders for implementation of the legislation. They will be affirmative orders, but the House is still at a great disadvantage.
  There are major issues to be settled, including the question of comparability with other industries. In Sunderland we
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  shall be particularly concerned about the relationship to earnings. Unfortunately, we shall not be able to move amendments to the orders, and obviously the House will not want to reject such measures.
  Mr. W. E. Garrett: On a point of order, Mr. Deputy Speaker. My right hon. Friend has said that this is an enabling Bill, but what is to be decided tonight is the main issue. The other matters can be dealt with in Committee. I understood that this was a Second Reading. Is that not so?
  Mr. Deputy Speaker (Sir Myer Galpern): Yes. This is a Second Reading.
  Mr. Willey: I am obliged to my hon. Friend the Member for Wallsend (Mr. Garrett). We shall discuss the clauses in Committee, but we shall still be confronted with the difficulty that the provisions with which we are concerned will be contained in the orders, which are not subject to amendment.
  Mr. Garrett: This is not a Bill giving us orders; this is a measure that will, I hope, go to Committee. It will then be decided whether it is in order.
  Mr. Willey: I shall not take the matter further, save to say that there is a real difficulty. I do not dispute that there will be full discussions with both sides of industry. However because the Bill is recognised to be a matter concerning Parliament we shall be put in a difficulty. We should consider whether the powers to make the order should be circumscribed by writing in provisions that should be made obligatory in any such orders. It is difficult to proceed without having consultations with both sides of industry, and there is a difficulty that I hope my hon. Friend the Minister of State will consider.
  I share some of the mixed feelings about the Bill. Obviously it depends upon two assumptions. One assumption is that whatever steps are taken and whatever success we have, there will be a serious contraction of the shipbuilding industry. The second assumption is that that contraction will take place in areas of serious unemployment. Both assumptions are disturbing.
  I accept what the hon. Member for Kingston upon Thames (Mr. Lamont) says

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  about the need for a general re-examination of redundancy. I should like to see a greater emphasis on the provision of alternative employment in the areas where the unemployment is caused. On the Wear we are concerned about providing alternative employment. I shall not pursue again the argument about Greenwells and South Docks, but we are now concerned about getting repair work for offshore vessels and coastal vessels, where we think there is a market. I should like to see a greater obligation on the employers, who, perhaps inevitably, are causing redundancy, to feel a direct responsibility to their employees in the sense that they have art obligation to do what they can to provide work.
  Redundancy in shipbuilding is not new. There has been a serious run-down year after year. On the Wear there are always hundreds fewer employed in the industry as each year passes. I impress upon my hon. Friend that while we fully accept the provisions contained in the Bill we hope that those who have to take advantage of them will be kept to the minimum.
  As for orders, I agree that the intervention fund has been a tremendous asset. Nationalisation has also been a tremendous asset. It has fortuitously provided a formula whereby we can get orders more easily than competing countries. Incidentally, I remind my hon. Friend that we are looking forward to the Indian orders. Again, they will reduce the number of men who are made redundant.
  I repeat the illustration that I gave the other night, of Doxfords. If only a greater initiative can be allowed to Doxfords and its investment programme, that again will reduce the number who are made redundant.
  Mr. W. E. Garrett: On a point of order, Mr Deputy Speaker. It is now five minutes past eleven. My right hon. Friend represents, as I do, a constituency in the Northern Region. If he wants to use his position to explain the problems in the North-East, especially in his constituency is it not possible that Opposition Members will take advantage of that, which could mean that we go on all night? I know that my hon. Friend the Member for Easington (Mr Dormand)
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  has a definite point to put, as have others of my hon. Friends. I think that with the consent of the Minister and Opposition Members we should try to confine ourselves to the Bill. Unless we do, we shall be here all night.
  Mr. Deputy Speaker: I hope that the hon. Gentleman will pardon me if I say that, because of the lateness of the hour, it would be helpful if we could get on with the speeches of hon. Members. I assure the hon. Gentleman that nothing will be allowed that is out of order.
  Mr. Willey: I do not expect my hon. Friends the Members for Easington (Mr. Dor nd), and Coventry, South-East (Mr. Wilson) to intervene. After allowing for injury time, I hope to speak for a shorter time than did my hon. Friend.
  Mr. W. E. Garrett: I spoke for only five minutes, because I watched the clock. I wish that my right hon. Friend would do the same.
  Mr. Willey: I have no wish to detain the House. I am content to emphasise that if one is dealing with redundancy, one has to exert all one's efforts to reduce the extent of it. I hope that that observation will commend itself to my hon. Friend.
  11.6 p.m.
  Mrs. Margaret Bain: As the right hon. Member for Sunderland, North (Mr. Willey) said, this legislation has great implications for those areas now suffering from high levels of unemployment, and nowhere is that more true than in West Central Scotland. Only today I received an invitation from the district council of Clydebank to attend a meeting which is to look at industrial development on Clydeside, obviously bearing in mind what is happening to the shipbuilding industry in West Scotland.
  It is distressing that the House appears to be discussing, with apparent equanimity and, to judge from the empty Benches, apparent disinterest, the whole problem of redundancy within the shipbuilding industry. I share the slight cynicism of the hon. Member for Kingston upon Thames (Mr. Lamont), inasmuch as I believe that the establishment of British Shipbuilders was very much a preparation for the mental process of

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  accepting redundancy within the shipbuilding industry.
  One of the sad features that we as Members have to encounter as we visit our constituencies and face redundancies in all industries is that for many people the concept of a large lump sum is in many ways so enticing that they are prepared to give up their jobs, not recognising that the lump sum, which often reaches four figures, and which for many people is the largest sum that they have seen in their lives, is not a guarantee of security; nor, indeed, that there is any opportunity of alternative employment.
  Within the shipbuilding industry at Barclay Curle, on the Clyde, we have a situation in which 94 redundancies were declared out of a work force of 400, but the men told the shop stewards that they would settle for good severance pay rather than fight the implications of unemployment.
  In Clyde Action, in November and December 1977, an argument was put forward that far too many people were accepting without question the concept of redundancy. The convener of the Scotstoun yard said that it was not accepted that rundown in the shipbuilding industry was inevitable, and a four-point plan was put forward. It was that there should be investment for modernisation of the industry; that British ships should be built in British yards; that there should be import licensing and flag discrimination; and that there should be integration of the shipbuilding and ship-owning industries. One of the main leaders of the shop stewards in that area, Jimmy Airlie, said at a meeting of Labour Members of Parliament—I hope that the House will excuse the language—
  "If this Government intends to pursue such a policy, then they're in for a helluva fight."
  The shipbuilding industry in West Central Scotland has suggested that there should be an international trade union conference on the problems of the shipbuilding industry. This was suggested by John Chalmers, of the Boilermakers Society. I wonder whether the Minister is prepared to say that the Government would be prepared to back such a move by the trade unions.
  I turn now to the matters raised by the Minister in his opening remarks. He said that one of the great problems that we
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  are facing is over-capacity in the shipbuilding industry, and that this was a direct result of expansion in the Far East shipbuilding industry. I contend that it was not so much the expansion of the Far East industry as the policies operated by the Governments of countries such as Korea and Japan that have an unequal footing to those shipbuilding industries in terms of competitiveness compared with the British industry. Had the British Government seen fit to implement policies sooner or later which would have helped our shipbuilding industry we would not be in the present situation.
  When the Intervention Fund was introduced I said, as I am sure the Minister of State will recall, that it was too little and too late. He accused me of the usual Scottish nationalist cynicism. How much of the Intervention Fund is left? I am sure that the figures have changed since the exchanges that we had in the debate on the Polish contract as it affected British shipbuilding. Will the Under-Secretary indicate whether he envisages any extension of the fund during the two-to-four years in which it is envisaged that the redundancy payment scheme will run?
  The Minister of State also said that any reduction in the labour force would be a direct result of consultation between British Shipbuilders and the trade unions involved. In this context, what will the role of SAIMA be? SAIMA has still not been recognised as a negotiating union, yet it represents 70 per cent. of middle management within the British shipbuilding industry. Are we to assume that the redundancies envisaged by the Government will not affect middle management and, therefore, that there is not a case for saying that SAIMA must be represented? Or are we to assume that the organisation is just to be totally ignored? Last year it was the unanimous recommendation of British Shipbuilders and ACAS that full recognition be given to SAIMA along the lines accorded to the confederation. I should appreciate clarification on this point.
  Mr. W. E. Garrett: On a point of order, Mr. Deputy Speaker. It would help the whole House if hon. Members were told what SAIMA meant. The Minister might know, but Back Benchers such as myself do not know what it

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  means. I ask the hon. Lady to give the full name.
  Mrs. Bain: SAIMA is the union which represents management within the British shipbuilding industry. As both the Minister of State and the Under-Secretary are nodding their heads, and as the Under-Secretary is to reply to the debate—
  Mr. W. E. Garrett: Will the hon. Lady give the full name?
  Mrs. Bain: They are the ones who will reply to the debate.
  Mr. W. E. Garrett: The hon. Lady does not know.
  Mrs. Bain: The Minister of State also said that this was a sudden, once-and-for-all situation which British shipbuilding was confronting. During the inter-war period similar problems were faced by the British shipbuilding industry. As one who studied that period—not with first hand experience, but in depth—I know that the policies enacted later helped the industry.
  The Minister of State said also that only the broad structure of this plan had been drawn up. There is a drastic need for details of the plan to be given. There are implications for all sections of the shipbuilding industry. Do we have to accept that £3,650 will be the maximum redundancy payment level, or are we to accept confederation claims that a much higher level will eventually be recognised by the Government? In the Shipbuilding News for November 1977 the CSEU indicated that it was seeking a far better scheme than that indicated by the Minister when he first referred to this scheme in February of last year. May we have more details of the level of payment which will be given to men made redundant? Will the Minister also indicate what funds, if any, will be made available for extra retraining which will be necessary for the men who will lose their employment? Can we have further information as to the extent of the closures and redundancies the Government envisage?
  The Government are prepared to accept a great deal of the blackmailing attitude being adopted by the Common Market. I refer to an article which appeared in
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  The Scotsman in December 1977 in which reference is made to a warning given to EEC members that
  "unless they agreed to reduce their shipbuilding production capacity to 45 per cent. by the early 1980s, to take account of declining world demand, the European Commission would under the Rome Treaty use the powers they have to curb national subsidisation."
  What are the implications of that threat for the intervention scheme as envisaged by the Government, and what are the Government doing to withstand the pressures of the EEC and the OECD in these matters?
  Finally, I ask whether British Shipbuilders and the Government have consulted many of the smaller yards involved in these schemes such as Ailsa Shipbuilding in Troon, which has already had to make 200 people redundant in 1977. It had hoped to receive the temporary employment subsidy and to gain from the Polish contract, but this did not happen. What are the implications for small yards such as Ailsa Shipbuilding?
  In terms of ship repairing, will the Government look closely at the areas of Scotland and round the coasts of England and Wales, where our fishing fleets are serviced and repaired? Will any help he given to these areas, and will there be scope for that aspect of the Bill to be examined further in Committee?
  In company with most hon. Members, we are forced to give the Bill a muted welcome, since we must accept the reality of the situation, but I believe that there is still a challenge open to British shipbuilding. I know from personal experience in the Clyde yards area that we have the skills, the expertise and the engineers, and we have the ability to go out, given proper assistance, to compete with anyone in the world. We should be restoring our pride, and I find such a situation as that which confronts us here very distressful, because it seems that we are accepting that we do not have the skills and expertise, which I, for one, will fight to preserve.
  11.16 p.m.
  Mr. David Hunt: This is a sad night for British shipbuilding, but I believe that, provided that we take the right decisions now, it will be possible to preserve our reputation for building the best ships in the world in British shipyards.

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  In welcoming this important Bill, I wish to raise one crucial question. Where does the Bill fit into a long-term policy for British shipbuilding? We have not yet had an answer in this debate, and it seems that no long-term or even medium-term policy exists. We were told by the Minister of State that it will be some time before one is devised, before the corporate plan is finalised.
  The Minister described the most depressing situation in which we find our shipbuilding industry, at a time when unemployment is at an unacceptable level. The world over-capacity which he sought to describe will probably become even more serious in the immediate future. World shipbuilding capacity is double that which is required to meet the expected demand for new ships over the next few years. Yet new shipbuilding nations outside the OECD, such as South Korea, Taiwan, Brazil and Yugoslavia, are all competing aggressively for new orders, and the rest of the world is being forced into a desperate rethinking of its future capacity. Only a few countries are yet seeking to rationalise and streamline their shipbuilding industries. The vast majority still seem to be attempting to sail away from reality on a sea of subsidies.
  The Minister mentioned with pride the Intervention Fund. We have already had a lengthy debate about the Polish shipbuilding order, and, no doubt, we shall soon have an announcement about an order to build ships for India. It is becoming clear that all these orders are being bought at great cost to the British taxpayer, and our country, instead of leading the European Community—
  Mr. W. E. Garrett: On a point of order, Mr. Deputy Speaker.
  Mr. Hunt:—towards a viable longterm policy—
  Mr. Deputy Speaker: Order. There is no point of order at this stage.
  Mr. Hunt:—is heading the rush towards support schemes—
  Mr. W. E. Garrett: Yes, there is, MR. Deputy Speaker. My point of order relates to fact.
  Mr. Deputy Speaker: What is the point of order?
  Mr. W. E. Garrett: Is it in order to challenge on fact when an hon. Member makes a statement? If it is not in order to challenge the facts that he states, I am wrong, but if I am right, I challenge a certain point which the hon. Gentle-man has made.
  Mr. Deputy Speaker: It is a matter of debate.
  Mr. W. E. Garrett: No, Mr. Deputy Speaker. If you were listening to the hon. Gentleman, it is relevant to his knowledge of—
  Mr. Deputy Speaker: Order. We are having a debate on Second Reading of the Bill.
  Mr. Hunt: I was saying that if our country, instead of simply rushing towards support schemes, were to lead the European Community towards a viable long-term policy, we should see some progress towards an EEC-wide scheme. But what is the result of this Bill? Without a corporate plan, the introduction of a wide-ranging redundancy payments scheme may well attract out of the industry some of its most valuable labour. What we surely need at the same time as the introduction of the Bill is clear rationalisation, so that we can preserve and improve our expertise in readiness for the even more bitter competition in the 1980s.
  In summary, I should like to hear from the Under-Secretary how he believes a long-term strategy will be evolved over the coming months. We need urgently to work out a plan for a slimmed-down industry with a capacity much more in line with our share of a greatly reduced world market. In that way we can ensure that our best yards are kept competitive and our skills preserved as we move into an even more difficult era for our industry.
  11.20 p.m.
  Mr. Michael Marshall: I shall be brief, because many of us are anxious to hear the Minister's winding-up speech and his answers to a number of important questions, and also because I join in the welcome given to the Bill, in the terms used by my hon. Friend the Member for Kingston upon Thames (Mr. Lamont). I agree with much that my hon. Friend the Member for Wirral (Mr. Hunt) said.

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  The right hon. Member for Sunderland, North (Mr. Willey) put his finger on one aspect about which we have not heard enough from the Government Front Bench—the question whether the Bill will be needed. We are all united in hoping that it will not be needed, if the order book should improve, and we should like the Under-Secretary to address his mind to the state of orders. If he cannot give us the detailed picture tonight perhaps he will answer in writing those of us who raised this matter.
  The measure is related to a fluid marketing situation. We know all about the Polish order and we hear much discussion about orders from India. The Minister of State made a cryptic reference to the fact, which we welcome, that in the first nine months of last year British shipowners had been patriotic in placing orders extensively in this country. But I think that he then said that in the last three months the position might become blemished. I wonder what that means. In the time scale of shipbuilding contracts three months seems a short period. It is hard to see how the figures could be altered for the whole year. A long lead time must be involved. More information on that matter would be helpful.
  The Minister of State referred to European attempts to get together and cited the 1972 discussions on over-capacity. In doing so he reinforced the feeling of many of us that the crucial issue here, as on many other industrial matters, is how to realise the value of Community membership in trying to achieve a common stance. We should like up-to-date information on the matter. I trust that British Shipbuilders, along with other European shipbuilders, is trying to see a way ahead in these matters. The attempts to move towards the specialisation of shipbuilding within Europe, tied in with the funding within Europe, are in direct parallel with the steel situation, which many of us are anxious to explore.
  The answer to the question how redundancies will operate must presumably depend on where the orders are being placed. They are being placed in various yards up and down the country dependent not only on their expertise but on their industrial relations. I noted with care some of the Minister of State's comments in the Adjournment debate initiated
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  last Friday by his right hon. Friend the Member for Sunderland, North.
  Steel has recently been much in the news. In a sense tonight we are seeing a direct parallel. This great industry must face many big challenges, including not only the question of redundancies but the very shape and nature of British Shipbuilders. I am worried because once more we have seen lumped together a rather disparate group. My hon. Friend the Member for Tynemouth (Mr. Trotter) spoke of some yards which may feel it difficult to fit within the framework of the Bill.
  This is a Bill of great importance. It does not just relate to British Shipbuilders, because it establishes certain norms. We are all worried about the decline of certain traditional manufacturing industries. We are all anxious to avoid redundancies. It would be marvellous if we could see these industries sustained at their present level but, being realists. We have to recognise that that is unlikely. We have to see what pattern we can work for the future.
  The Minister may also appreciate that those of us on the Select Committee on Nationalised Industries who have been looking at the steel industry are now looking at British Shipbuilders. We shall look forward to an increasing dialogue on these matters. This measure may present a useful opportunity for many of us who want to hear more about the industry. Having given the measure a cautious welcome I look forward to the Minister's comments.
  11.26 p.m.
  The Under-Secretary of State for Industry (Mr. Les Huckfield): I welcome the constructive spirit in which the debate has taken place and I shall endeavour to answer most of the points that have been raised in the same spirit. I hope that right hon. and hon. Members will forgive me if I have to gloss over some points since I wish to cover as much ground as possible.
  The hon. Member for Kingston upon Thames (Mr. Lamont) made a point about delay in introducing the Bill. It was my hon. Friend the Minister of State who anounced the Government's intentions to propose such a Bill when he announced the introduction of the Intervention Fund on 24th February last year. Since then

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  the Confederation of Shipbuilding and Engineering Unions and, first, the Organising Committee and then British Shipbuilders, have been in pretty well continuous consultation. The hon. Member will realise that a detailed scheme such as this takes time to work out. With that in mind I say that we have introduced the Bill at the earliest opportunity and have made provision to ensure that no one shall suffer hardship as a result of any delay by making it possible to apply the scheme retrospectively.
  I hope that the hon. Member will realise that there has not been any undue delay on the part of those involved in the negotiations or on the part of the Government. My hon. Friend has been into a great deal of detail about the worldwide crisis facing the shipbuilding industry. Orders placed in the United Kingdom fell from a peak of 4·4 million gross registered tons in 1973 to only 75,000 gross registered tons in 1975. I am pleased to report some success in that in 1977, between them, British Shipbuilders and Harland and Wolff won orders amounting to 710,000 gross registered tons—55 per cent. of that representing foreign orders won in the face of severe competition.
  In 1975 only 10 per cent. of the orders for United Kingdom registration were placed in British yards but the figures for last year will probably show that more than three-quarters of the orders for United Kingdom registration were placed in the United Kingdom. I am sure that all hon. Members recognise that the Intervention Fund has played a considerable part in this success.
  The hon. Member for Dunbartonshire, East (Mrs. Bain) referred to the Intervention Fund. It was to deal with the competition from the Far East, particularly Japan and Korea, that the scheme was introduced. The hon. Lady asked for details of how much remained unallocated in the fund. I can only refer her to the statement made by my right hon. Friend when we debated the Polish order on 12th December, in which he said that £15 million of the fund remained uncommitted.
  Despite the success of the Intervention Fund—and I include in that the great success of the Polish order—we still won only sufficient orders to provide the
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  equivalent of nine months' work in our yards. I take fully into account the points made by my right hon. Friend the Member for Sunderland, North (Mr. Willey), who described the difficulties he has experienced in his constituency. I have been in the North-East several times recently and I know of the severe unemployment problems that my right hon. Friend has in Sunderland. I am sure that we all admire the way in which he has been persistent in pressing in this House the claims of his constituents.
  Mr. W. E. Garrett: Will my hon. Friend also recognise that there are other Members of Parliament in the Northern Region who have emphasised consistently to the trade unions concerned the situation that faces British Shipbuilders? Will he take this opportunity to emphasise to them once again the competitive situation in a world market that British Shipbuilders must face? They, too, must recognise their responsibilities.
  Mr. Huckfield: I shall take on board what my hon. Friend has said. If he had waited for one further minute, he would have heard me paying him an equally glowing tribute.
  Despite the success that we have had with the Intervention Fund in getting orders for British yards, it is a fact that shipbuilding all over the world still faces excess capacity. Concerning the more detailed numbers of the possible redundancies, both the hon. Member for Arundel (Mr. Marshall) and the hon. Member for Dunbartonshire, East referred to a forecast from the European Commission that total Community output would fall by 45 per cent. in real terms over the next five years. The Commission does not say what it expects the contribution of individual member States to be.
  I doubt whether this is necessarily the best way to approach the Community's shipbuilding problems and our own problems. While we recognise that world demand has fallen to 40 per cent. of output in real terms, and could well rise at least a little in the next five years and, perhaps. more rapidly after that, the fact is that no one really knows what the situation will be in five years' time. I believe that it would be foolish and shortsighted to embark upon a massive programme of contraction which would

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  simply make the Commission's prophecy self-fulfilling.
  We do not accept that we should have to bear a capacity reduction in excess of the likely world average, in view of the fact that the United Kingdom can hardly be held to account for contributing to that excess capacity.
  Mrs. Bain: With reference to the European context, will the hon. Gentleman explain the implications that lie behind the threat of movements towards national subsidisation schemes, to which I also referred? In order to protect the British shipbuilding industry as a whole will the Intervention Fund be extended over the five-year period to which he refers?
  Mr. Huckfield: That matter will have to be considered. However, I take on board the concern that the hon. Lady has quite properly shown.
  The main policy of the Government and of British Shipbuilders is to keep the maximum number of yards going, to provide the maximum number of jobs and to provide the maximum number of ships. The hon. Member for Wirral (Mr. Hunt) asks where and when this is to happen. I hope that he will appreciate that as vesting date was only on 1st July last year it will take some time for British Shipbuilders to draw up its corporate plan, and it is for that plan that we shall have to wait to gain more precise details of how British Shipbuilders sees its strategy going forward.
  Mr. David Hunt: Will the Minister give way?
  Mr. Huckfield: I am trying to be as helpful as possible to the House, and as brief as possible.
  Mr. David Hunt: When does the Minister expect the corporate plan to be published?
  Mr. Huckfield: The simple answer to this will be considered when it is received from British Shipbuilders. I cannot give the hon. Member any more details than that, except to say that the plan will be prepared from each profit centre's outline and will be worked out in consultation with the relevant trade unions at local levels. The corporation's overall
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  corporate plan will be framed so as to reflect the agreed priorities for the allocation of available resources throughout British Shipbuilders, and the House will be kept informed.
  The hon. Member for Kingston upon Thames asked for more details of the outline of the scheme. I have to say to him again that negotiations are still taking place, but I can tell him that the payments proposed consist of a lump sum to be determined in accordance with age and length of service, and income support payments based solely on length of service which would be payable for a period of unemployment of up to two years.
  Within this broad framework there are obviously still a large number of matters to be considered. The House will have an opportunity of considering those matters when the appropriate draft orders are laid for affirmative resolution.
  I assure the hon. Gentleman that there will be the fullest consultation with the trade unions involved, based on the principle of the maximum decentralisation possible, which was enshrined into the original nationalisation Act and which British Shipbuilders has been pursuing as its philosophy hitherto. But the hon. Gentleman seemed slightly to misunderstand the way in which some redundancy schemes in some industrial installations work.
  As far as both British Shipbuilders and I are concerned, the hallmark of this scheme will be flexibility as applied to individual yards. Based upon the experience which is applied in most industrial situations, most arrangements of this type are usually negotiated between the unions and management to suit the purpose envisaged. It is not a scheme whereby the money is held up and anybody who wants it can take it. The agreed numbers of redundancies, the age structure and where the redundancies will be taking place are usually agreed on the appropriate basis between the unions and management.
  The question of workers wanting to come back into the industry can be examined later. I cannot agree that this scheme will produce arthritis in the industry. The hon. Member for Kingston upon Thames wants the shorter period for which he was asking, but that could provide too much of a straitjacket. I

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  believe that the proposed scheme can be administered on a decentralised and flexible basis. Although it will be administered in consultation with the trade unions on a flexible and decentralised basis, it will take into account all the human problems to which my right hon. Friend the Member for Jarrow (Mr. Fernyhough) and my hon. Friend the Member for Wallsend (Mr. Garrett) so ably referred.
  The final cost of the scheme cannot be forecast at this stage with any useful accuracy, because it is not possible to anticipate how many people will qualify for payments or what their personal circumstances will be. It might be possible to give some kind of range of payments per thousand workers, but even that will necessarily be a bit vague, because we do not know the age structure of the yards involved. For example, if a yard were to close, the age and length-of-service structure would presumably reflect the average for the industry as a whole. If the yard were able to avoid closure, and it was necessarily a slimming operation, the average age of those taking the benefit would be relatively high, thus resulting in higher than average payments.
  Having said that, the hon. Gentleman will realise that the factors that will influence the overall cost of the scheme will be, first, that benefits are almost certain to be linked in some way to earnings—that will obviously be an influencing factor, especially as earnings rise over time—and, secondly, that, if he makes a comparison with the iron and steel scheme, which some of his hon. Friends have done, he must bear in mind that that scheme provides for a cut-off below age 55 which may not necessarily apply to this scheme. I repeat, it is difficult to go beyond that in giving more details of the overall cost of the scheme.
  I think that a true comparison is difficult, because of the age structure and length-of-service comparisons, and so on. It has to be remembered that this scheme is not open-ended. It is limited in its duration, and this will obviously serve to place an ultimate limit on the cost. As my hon. Friend has already assured the House, once the full details of the schemes are prepared, it will be possible to offer some illustrative examples based on age and length of service data.
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  The hon. Member for Tynemouth (Mr. Trotter) and the hon. Member for Kingston upon Thames made some comparisons with shipbuilding in the private sector. They asked why the scheme could not have been applied to the private sector. I shall not dodge that question. I shall meet it head on. I am sure that the House will appreciate that this scheme is primarily designed and primarily aimed to meet a special situation—that of the gross world over-capacity which has arisen as a result of the collapse of the world tanker market, and from the building of large facilities for the construction of such vessels and similar large vessels, such as bulk carriers, cargo liners and container ships. The crisis yards in these circumstances are, in the main, publicly owned. That is why the scheme has been introduced with these demarcation lines.
  Mr. Trotter: But is it not true that our foreign competitors in shipbuilding are moving their labour forces ever more over to repairing and that repair yards abroad are competing with the privately owned repair yards in this country? This may be three or four stages removed from the collapse of the tanker market, but it is having an effect on our privately owned ship repairing yards.
  Mr. Huckfield: I appreciate what the hon. Gentleman said. I know he is concerned that there is some kind of shifting of resources in some of these yards. But I hope that he will bear in mind that what I have stated is the main aim of the scheme as envisaged.
  Mr. W. E. Garrett: The hon. Member for Tynemouth (Mr. Trotter) has missed the point of the argument. The bigger the ship, the less the amount of repairs. The greatest amount of repairs required is on naval construction. A tanker has only one engine, and there is less repair on a bigger ship than on many of the smaller ships which have more than one engine. Will my hon. Friend explain this fact to the hon. Member?
  Mr. Huckfield: I thank my hon. Friend for his intervention. He has explained the point adequately to the hon. Member for Tyne. I do not think there is any need for me to add to what he said.
  I was simply trying to explain the main aim of the scheme as envisaged, and why

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  the boundary lines have been construed as they have been.
  I recognise the constructive spirit in which the Bill has been debated. We have had some very sincere contributions from all parts of the House, including from the hon. Member for Antrim, South (Mr. Molyneaux), who expressed his concern on behalf of the employees of Harland and Wolff.
  This Bill will enable us to bring before the House a redundancy scheme which will be the result of the closest consultation between British Shipbuilders, Harland and Wolff and the Confederation of Shipbuilding and Engineering Unions, and which will allow us to alleviate some of the social and human effects, to which may hon. Friend the Minister of State referred, of the worldwide shortage of orders. We are going to do our best to get the orders. I am sure that, in that spirit, the House will do no other than welcome such a measure and give it a Second Reading.
  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).

  SHIPBUILDING (REDUNDANCY PAYMENTS) [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act of the present Session to provide for the making of supplementary payments to or in respect of employees of certain shipbuilding and other companies in respect of redundancy or transfer to less well-paid employment, it is expedient to authorise the payment out of money provided by Parliament of—

  (1) any sums payable by the Secretary of State to British Shipbuilders under the said Act of the present Session in respect of—

  (a) payments made or to be made by British Shipbuilders under any scheme for Great Britain made by the Secretary of State under that Act for the purpose of providing financial assistance to or in respect of employees of British Shipbuilders or any wholly owned subsidiary (within the meaning of section 150 of the Companies Act
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  1948) of British Shipbuilders who are—

  (i) made redundant or transferred to less well-paid employment; or

  (ii) about to be made redundant or so transferred; and

  (b) expenses incurred or to be incurred by British Shipbuilders in connection with the administration of any such scheme for Great Britain;

  (2) any administrative expenses incurred by the Secretary of State or a government department for the purposes of the said Act of the present Session.—[Mr. Tinn]

  HOUSE OF COMMONS (VISUAL DISPLAY EQUIPMENT)
  Queen's Recommendation having been signified—
  Resolved,
  That provision be made, as from the beginning of the present Session, to enable visual display equipment to be operated and maintained for use within this House by the present Member for Stoke on Trent, South.—[Mr. Tinn.]

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

  MOZAMBIQUE (AID)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Tinn.]
  11.45 p.m.
  Mr. Ian Gow: On 14th November the Minister of State for Overseas Development gave the House details of the amount of financial assistance being given by the United Kingdom to Mozambique. There are three elements in that assistance: first, interest-free loans totalling £10 million in order to buy British goods; second, £10 million of aid to finance three electric power projects and for rural roads; third, 5,000 tons of food aid.
  Following the Minister's statement, my hon. Friend the Member for Shoreham (Mr. Luce) wrote to her to express the deep concern of the Conservative Party about the Government's decision to give

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  aid to Mozambique. My hon. Friend's letter dated 18th November and the Minister's reply of 1st December have both been published. Since then, on Monday of last week, the Parliamentary Secretary told the House that the Minister would be making a further statement about the additional financial assistance to Mozambique "very soon".
  The debate is therefore timely. I believe that the Government's existing aid programme is entirely misconceived. Any decision to give still more financial assistance to Mozambique will, I believe, be greatly resented in the country. This is so for three main reasons. The Government believe, as I believe, that there is a substantial and growing military threat to the United Kingdom from the Soviet bloc. Indeed, in last week's White Paper on Public Expenditure the Government, having reduced defence expenditure dangerously in previous years, announced their proposal to increase defence spending in real terms in each of the next three financial years. That is being done primarily because the Government themselves recognise the increasing threat from the Soviet bloc. But Mozambique is now firmly in the Soviet bloc. It has become Russia's principal foothold in Africa.
  Mr. Bruce George: And Somalia.
  Mr. Gow: At the third conference of Frelimo at Maputo last February, representatives from the Communist Parties of the Soviet Union, East Germany, Bulgaria, Rumania and Cuba pledged their support for President Machel in the armed struggle to liberate what it described as imperialism in Southern Africa.
  Frelimo is, as the Minister well knows, a Marxist-Leninist revolutionary party dedicated to achieving its aims by totalitarian methods, and by armed force. There can be no justification for giving financial assistance to a country whose policies are deeply hostile to the interests of the United Kingdom, closely allied to those of the Soviet Union, which is the principal military threat to the NATO Alliance of which this country is a member, and which in all international matters may be relied upon to take the side of our enemies rather than that of our friends.
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  Second, Mozambique is not only providing a springbroad for Russian penetration of Southern Africa; it is also a base and training ground for terrorists who are maiming and murdering the Queen's subjects, mainly black, in Rhodesia.
  The Foreign Secretary has condemned violence in Rhodesia. The Minister herself told the House that she hoped that there would be
  "a peaceful solution to the Rhodesia problem."—[Official Report, 14th November 1977; Vol. 938, c. 29.]
  But that is not the view of President Machel of Mozambique. He is an enthusiastic supporter of Mr. Mugabe, who has said repeatedly that he intends to take Rhodesia through the barrel of a gun.
  Why could not the Government have said to the Mozambique Government "Unless you repudiate violence in Rhodesia and put a stop to the use of Mozambique as a training ground for terrorists, there can be no more aid"?
  Lastly, the regime in Maputo is emphatically not one which merits financial assistance from the British taxpayer. In my view, the Government rightly discontinued their aid programmes to Uganda and to Bolivia on the ground that basic human rights were being abused in both those countries. When the right hon. Lady went to Maputo, was she impressed by the numbers in prison without trial, by the activities of the secret police, by the total Press censorship and by all the hideous apparatus of the totalitarian State?
  Of course, there is sickening poverty in Mozambique. But every pound of aid that we give bolsters up the Communist regime there, means that Russia and Cuba have to give less, and prevents our giving to people who are even poorer than the people of Mozambique, whose need is greater, whose rulers are not engaged on a systematic and deliberate denial of human rights, and who are not supporting a terrorist war against British subjects.
  I believe that the Government have their priorities wrong about financial aid to Mozambique. As my hon. Friend the Member for Shoreham said in his letter to the right hon. Lady,
  "There are plenty of Commonwealth countries suffering from equally serious poverty and whose need is equally great."

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  The Minister made an astonishing statement in her reply to my hon. Friend. She praised the co-operation of President Machel in the British Government's efforts to achieve a peaceful settlement in Rhodesia. The Minister cannot really believe that. Everyone knows that of all the so-called front-line Presidents Mr. Machel has the strongest commitment to violence and to the virtues of the one-party State. He is the most enthusiastic supporter of revolutionary terror as the precondition for a Marxist takeover in Rhodesia.
  In the same letter, the Minister said that she had no evidence to suggest that there was any fundamental abuse of human rights in Mozambique. Will the Parliamentary Secretary really be saying, in his reply to this debate, that our ambassador in Maputo has not told the Foreign Secretary of arbitrary arrests, imprisonment without trial, the total absence of political freedom, no free Press, no free speech, and no right to public criticism of the Government?
  The Minister went on to say in that same letter that she had introduced
  "a number of safeguards in our aid procedures to ensure that goods supplied are used for the civil purposes cited when orders are accepted."
  What are these procedures? The British people will be most interested to know what guarantees the Government have that aid will not benefit the terrorists, either directly or indirectly. I believe that there can be no guarantees. The Minister said in her letter to my hon. Friend that the roads and power projects we had agreed to finance were all well away from the areas affected by terrorist activities. Even if that were true, it still enables the Mozambique Government to divert their own resources into building roads along the western border with Rhodesia to facilitate the movement of troops.
  It is not impossible that even after the British Government have granted legal independence to Zimbabwe an attack on that country will be mounted from Mozambique. That is not a fanciful idea. It was hinted at by the Foreign Secretary himself in a broadcast on BBC radio and television on 16th April. He said:
  "Now that the advantages of having a proper electoral process and transfer of power
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  to a new Government on the sort of structure I have been suggesting, is that the West would support that"—
  these words I emphasise—
  "and if some people then wanted to go on fighting in the bush, maybe because they were disappointed with the election result, then that Government being democratically elected would have the right to expect the support of the West to be sustained by the West."
  In September the Government published their proposals for a settlement in Rhodesia. Among the fundamental rights referred to in the draft independence constitution were: a right to life; a right to liberty of the person; protection from inhuman treatment; protection from deprivation of property; right to privacy of home and other property; the right to fair trial in civil and criminal proceedings; freedom of conscience and expression; the right of individuals, groups and communities to establish and maintain schools at their own expense provided they are not operated on a discriminatory basis; freedom of association; freedom of movement; and freedom from discrimination.
  If one tests the Government of Mozambique against these criteria, which constitute the very proposals of the Government for the new independence constitution of Zimbabwe, one sees how far removed the Government of Mozambique are from them. How many of these principles would the Mozambique Government accept, and, if they did accept them, how many are actually in existence in Mozambique?
  When the Government decided to end their financial aid to Bolivia and Uganda, they accepted the proposition that there are certain circumstances in which the Government should discontinue an aid programme previously thought to be right. I believe that these criteria should be applied with impartiality to Mozambique. For that reason I have raised this issue tonight, in the hope that the Minister will reconsider not only the existing aid programme but what he said on Monday about plans to increase financial assistance to Mozambique. Such an increase would be unjustified and unjustifiable.
  11.58 p.m.
  The Parliamentary Secretary to the Ministry of Overseas Development (Mr. John Tomlinson): I have listened with interest, but not surprise, to the points

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  raised by the hon. Member for Eastbourne (Mr. Gow).
  First of all, on the answer the hon. Member received to his question on Monday—it was not exactly as he has stated in the House. He asked a specific question and I said that my right hon. Friend was making a statement shortly. I have made no statement about increased aid to Mozambique, and he knows that quite well.
  Tonight we are discussing British financial assistance to Mozambique and not the Southern African situation as a whole, or the latest stage in the search for a settlement in Rhodesia, so I shall not proceed on either of those two points. I shall therefore confine my remarks to British development assistance for Mozambique which I imagine is what the hon. Member had in mind when he raised the subject of financial assistance.
  The overall programme of British development assistance is supported by many hon. Members on both sides of the House, and I hope we all agree that the main and continuing emphasis in our programme should be on the poorest countries, and on the poorest groups within those countries. Mozambique, because of the events leading up to its independence in 1975 and that Government's decision to impose United Nations sanctions against Rhodesia, is without doubt among the group of the poorest countries. The United Nations Secretariat, in a report in the spring of 1976, concluded that on the evidence available Mozambique's gross domestic product was about US $180 per head. The United Nations has recently repeated this estimate. The United Nations has suggested that even before independence, Mozambique's income per head was over-stated owing to, for example, under-enumeration of the population and the shaky basis used for computing national income. Even before independence, Mozambique's economy was seriously affected by the war of liberation and the general dislocation associated with it, and the downturn in the prospects for some of its cash crops, the departure of the vast majority of the Portuguese on independence, the delayed impact of higher energy prices, and the consequence of the imposition of United Nations sanctions. All these combined to make the
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  position cumulatively and, rapidly, very serious indeed.
  The imposition of sanctions was very important because the economy of Mozambique has always historically gained much from the transit of goods from, and the provision of services for, Rhodesia, South Africa, Malawi and Swaziland. The United Nation's first estimate was that the imposition of sanctions cost Mozambique US $135 million—US $155 million per year, of which a substantial share was due to the loss of provision of services. Since March 1976, the position has become substantially worse, because of crop failures, severe flooding and other natural disasters, and also the impact of the growing numbers of Rhodesian refugees, the devastation caused by Rhodesian armed attacks, and the diminution of migrant worker remittances from South Africa.
  The latest United Nations report, which appeared before the further damage caused by Rhodesian raids in November, suggested that Mozambique needed US $87 million, plus substantial food aid, very urgently. We are now considering the follow-up to this report. However, I believe the British aid programme has already been well-tailored to Mozambique's needs. Programme support is called for—we signed a £5 million programme loan in 1976 and another one in 1977. Technical co-operation is clearly called for—and the United Kingdom is a substantial contributor to the special multilateral Commonwealth Fund for Mozambique.
  I might mention that a very large share of this fund's projects will use British firms and personnel. Food assistance is called for, and under the European Community programme, the United Kingdom has provided a bilateral action of 5,000 tonnes of soft wheat for Northern Mozambique. A continuing contribution to Mozambique's economic development and infrastructure plans is called for and the United Kingdom is financing power and roads projects under its £10 million project loan. Support for refugees is called for and we provided £100,000 in 1976–77 to the United Nations High Commissioner for Refugees for this purpose. The House will know, from the repeated Questions on the subject, that the Government of Mozambique agree that British assistance

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  should be used for peaceful purposes only. There is no question of its being used for military purposes.
  The hon. Gentleman asked me about safeguards. I wish to say quite clearly that the Government of Mozambique have accepted British development assistance for peaceful and developmental purposes only, and we have an arrangement for monitoring development assistance which has been agreed with the Government of Mozambique. The Government of Mozambique certify the end use of the goods ordered under the programme loan agreements before the ordering of goods and the disbursement of funds.
  In the case of both the programme and the project loans, British Embassy officials in Maputo are able to inspect goods and documents. Slightly different arrangements apply to the project loans and the programme loans. The project loans have no separate procedure for certification and use of goods. This is not always necessary. The location of projects being supported is well known and they are well away from the battle fields.
  The hon. Gentleman raised the question of human rights and the political complexion of the Government of Mozambique. Despite what he said, we have no evidence that would justify an approach to the United Nations Commission for Human Rights. I wish that, along with his proper concern for human rights in Mozambique, the hon. Gentleman would demonstrate a less selective myopia and turn his attention to some of the Right-wing dictatorships throughout the world. He seems to have an obsession about one country. It is right that he should be concerned if he feels that human rights are being denied in Mozambique, but we would be more impressed if he had more general concern about the application of some of the principles that he has recited.
  The political character of governments in the Third world is not the primary factor when considering British support. British development assistance is for people—and above all the poorest people, where possible. But whatever the views about the Government of Mozambique, I ask the House to take into account not only the fact that Mozambique has a part to play in reaching a settlement in Rho
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  desia but that there is a need to help the Government of Mozambique in demonstrating their non-alignment. It is precisely the attitude of the hon. Member for Eastbourne and those who support him—whom I do not believe to be representative of public opinion—that will drive Governments such as that in Mozambique into the hands of those of whom he is so frightened.
  There is increasing evidence of Mozambique's desire to co-operate with Western Europe and elsewhere. In the European Community, Germany, France, Italy and Denmark are providing support. The Community has done so and I hope that Mozambique will soon decide to accede to the Lomé Convention. The Scandinavian countries as a whole are assisting, as have the United States and Canada.
  From Questions in the House last week, the hon. Gentlemen will know that 50 countries and United Nations specialised agencies are involved in providing assistance to Mozambique.
  Many Commonwealth countries have provided direct or indirect help. If Britain were to turn its back on Mozambique's needs, ignoring the appeals of the Commonwealth Heads of Government and the repeated reports and resolutions of the United Nations, Mozambique's development assistance and political options would be needlessly narrowed, perhaps only to the benefit of countries in Eastern Europe about which the hon. Gentleman is allegedly so concerned.
  Nor should we neglect the importance of British development assistance in the trade context. There is still substantial British investment in Mozambique—I have particularly in mind the Sena sugar company. The Government of Mozambique do not appear to be hostile to external private investments as a matter of principle. There are problems over compensation for previous British investment in property in Mozambique, but this is a special case, and negotiations with the Government there are being pursued separately. Mozambique's shortages of skill provide great potential opportunities for British expertise; the expansion of the British bilateral technical co-operation programme in the future should help here, and I have already mentioned the success that British firms

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  have achieved in the context of the Commonwealth Fund for Mozambique. Mozambique is a vast country, with important potentially exploitable resources. When it overcomes the enormous problems that it faces, in the long run it will be a useful trading partner for the United Kingdom.
  I suggest that the British aid programme for Mozambique may have received exaggerated attention in the House. In disbursement terms, it has not, and will not for a long while, bulk large in the aid programme as a whole. Implementation of the pledges made to date will take place over a number of years—one simply cannot put up a power station overnight. Indeed, I am beginning to feel that the programme for Mozambique, which is much in line with the Ministry's normal pattern of operations elsewhere in the Third world, has suffered from over-exposure. There have been some 70 parliamentary Questions in both Houses since 1975.
  Those Members of this House who have heard repeated ministerial statements about the programme but who still
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  seek additional information would do well to go to Mozambique to see for themselves, especially those who find it so easy to get to Rhodesia. They would find it advantageous to take the short on-journey from there to visit Mozambique. If they did they might realise that the needs of that country are enormous, that British support is trying constructively to meet its normal development needs, and that the British development programme is not, as suggested, some form of direct or indirect assitance for military or other purposes but a positive development response to the needs of a country with an important role in Southern Africa.
  As I have said, we have a later report from the United Nations secretariat, which is being studied. It is on the basis of the conclusion of the study of the report that my hon. Friend will, as I said in response to Questions last week, be making a further statement very shortly.
  Question put and agreed to.
  Adjourned accordingly at eleven minutes past Twelve o'clock.