Commons Sitting of 13 June 1978

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
ABINGDON MARKET PLACE BILL [Lords]
MILE END GARDENS (PORTSMOUTH) BILL [Lords]
Read the Third time and passed, with amendments.

GREATER LONDON COUNCIL (GENERAL POWERS) (No. 2) BILL
LONDON TRANSPORT BILL
Read the Third time and passed.

BRITISH RAILWAYS (SELBY) BILL (By Order)
As amended, considered; to be read the Third time.

SHEFFIELD GENERAL CEMETERY BILL (By Order)
Order for consideration, as amended, read.
To be considered upon Tuesday next.

ORAL ANSWERS TO QUESTIONS
  SOCIAL SERVICES

    Dental Services
    Mr. Atkinsonasked the Secretary of State for Social Services what progress he has made towards ensuring that dentists provide treatment under the National Health Service for all patients.
    The Secretary of State for Social Services (Mr. David Ennals): A settlement reached with representatives of the British Dental Association on 17th May ended the dispute over expenses. The way is now open to a return to normal working with dentists offering the full range of treatment under the National Health Service.
    Mr. Atkinson: Is my right hon. Friend aware that much of that agreement is still unacceptable for a large area within the profession? Does he recognise that there are now whole areas of the country where dentists no longer accept National Health Service patients and intend to keep it that way? Is he also aware that many of his hon. Friends, including myself, accuse him and the Chancellor of the Exchequer of deliberately starving the National Health Service dental service of funds so that private patients will continue to contribute a far larger share of the cost of upkeep of the National Health Service? Therefore, will he now institute immediate steps to make good this deficit?
    Mr. Ennals: On the first part of the question, the British Dental Association has reached agreement with me as Secretary of State. I very much hope that all dentists will co-operate. I am very hopeful that, as a result of this decision and the new agreement which provides additional resources for the dentists, the troubles will be ended. However, even during this period there has been a steady increase, month by month, in the number of treatments which have been provided under the National Health Service by dentists. As for the suggestion that the service has been starved, that is not so. There is a steady increase in the number of dentists as well as in resources made available for the service generally.
    Mr. Jessel: Would it not be easier to provide dental treatment for all patients who need it if water were fluoridated, since this would drastically reduce the incidence of dental decay?
    Mr. Ennals: I am in favour of fluoridation and I and my ministerial colleagues are doing our best to find ways to encourage it all over the country. Bit by bit, this is happening, and the majority of area health authorities have taken a decision in favour of fluoridation.
    Mr. Pavitt: Does the agreement which my right hon. Friend has made get rid of the gross injustice to patients that it is not obligatory on the dentist to let them know whether he is treating them privately or on the NHS? Since he has concluded this agreement, will he now implement the working party report which I submitted to his Department two years ago, which would save much of the £223 million that we are now spending on dental services?
    Mr. Ennals: Some of the proposals made by my hon. Friend have been implemented and I am ready to look at some of the others. On the first part of the question, it has been very wrong and irritating for patients when dentists have not explained the situation exactly. We have drawn this to the attention of dentists. They are asked, as are other practitioners, to make the situation clear to patients so that they may know whether they are having treatment under the NHS or are expected to enter into a private agreement.
    Dr. Vaughan: Will the Secretary of State now explain why, for the first time in this country, so many dentists who work in the NHS are going bankrupt?
    Mr. Ennals: I have no statistics of dentists going bankrupt. The hon. Gentleman will know that one of the difficulties which led to the rift between myself and the British Dental Association was the refusal of the Association to cooperate in the work of the dental rates study group and in the production of an up-to-date scale of NHS fees. This was partly because there was an objection to the system whereby they were expected to repay expenses which had been paid to them over and above what was required. That dispute has now ended.
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    Dentists will be receiving an increase of 12 per cent. on authorised fees. That is partly an advance for expenses, and it is being made available during the course of this year. This will greatly improve the position of dentists.

    Birth Rates
    Mr. Powellasked the Secretary of State for Social Services what estimate he has made of the proportion which births to mothers born in the New Commonwealth and Pakistan bore to total births during the last 10 years in Birmingham, Bradford, Huddersfield, Leicester, Wolverhampton and the boroughs comprised in the Inner London education area.
    Mr. Ennals: Information on births by birthplace of mother, which first became available in 1969, is published annually by the Registrar-General. As the answer involves a number of figures, I will, with permission, circulate a table in the Official Report.
    Mr. Powell: Do not these proportions, already covering nearly 10 years, give a very good indication, at any rate as a minimum, of the eventual proportion of the total population in these areas which will be of New Commonwealth ethnic origin?
    Mr. Ennals: What they show is something very different from what I think the right hon. Gentleman has been suggesting. He picked his own years and his own areas. The figures show an average figure for New Commonwealth and Pakistan births of 22 per cent., which is far less than the figure of 33 per cent. to which the right hon. Gentleman has frequently referred. He should not assume that fertility rates in these ethnic communities will continue at a high level, nor that there will not be a movement of minority groups from one city to another, as is already happening. I point out to him that in many of the areas which he specified the proportion of births to New Commonwealth and Pakistan mothers went down during the period concerned. That includes the constituency that the right hon. Gentleman originally represented.
    Mr. Flannery: Will my right hon. Friend accept from me that the obsession which the right hon. Member for Down, South (Mr. Powell) has about the

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    births of coloured people is not shared by human beings in general throughout the entire universe, and that women will go on having babies as long as there are men with them? Is it not about time that we thought about improving the lot of all human beings instead of being obsessed with this particular aspect, as the right hon. Gentleman is?
    Mr. Ennals: I agree with much that my hon. Friend said. It has, I believe,

    BIRTHS TO MOTHERS BORN IN THE NEW COMMONWEALTH AND PAKISTAN AS A PERCENTAGE OF ALL BIRTHS FOR SELECTED AREAS*. 1969 TO 1976

    Area of usual residence of mother

    1969†

    1970

    1971

    1972

    1973

    1974

    1975

    1976

    Birmingham

    19

    20

    20

    20

    22

    22

    23

    24

    Bradford

    17

    17

    17

    18

    18

    19

    19

    21

    Kirklees

    15

    15

    15

    15

    14

    15

    17

    18

    Leicester

    18

    19

    20

    23

    25

    26

    28

    30

    Wolverhampton

    26

    25

    24

    25

    25

    24

    27

    25

    Inner London Education Authority: Total

    22

    22

    22

    22

    22

    22

    23

    24

    Camden

    16

    17

    15

    14

    16

    15

    15

    17

    Greenwich

    9

    9

    9

    9

    10

    11

    12

    12

    Hackney

    32

    32

    30

    34

    32

    33

    34

    35

    Hammersmith

    22

    23

    21

    21

    21

    21

    20

    21

    Islington

    28

    28

    29

    26

    26

    25

    26

    25

    Kensinston and Chelsea

    14

    13

    12

    10

    12

    12

    12

    12

    Lambeth

    32

    31

    30

    30

    29

    30

    29

    30

    Lewisham

    20

    19

    20

    19

    18

    20

    20

    19

    Southwark

    18

    18

    19

    20

    20

    20

    21

    21

    Tower Hamlets

    17

    17

    18

    21

    25

    27

    27

    31

    Wandsworth

    27

    27

    27

    28

    26

    26

    29

    29

    City of Westminster and City of London

    16

    16

    15

    15

    15

    16

    15

    18

    Total of above areas

    21

    21

    20

    21

    21

    22

    23

    23

    * As constituted at 1st April 1974.

    † April 1969 to March 1970.

    Hospital Waiting Lists
    Mr. Crouchasked the Secretary of State for Social Services what is the average waiting period for a National Health Service patient requiring orthopaedic treatment.
    Mr. Boscawenasked the Secretary of State for Social Services what is the average waiting period for a National Health Service patient requiring general surgery.
    Mr. Ennals: I regret that the information is not available. Obtaining such statistics would involve considerable extra manpower. With each specialty, patients with very different conditions and of differing degrees of urgency would be averaged together. The results would not be sufficiently meaningful to justify the cost.
    been an obsession of the right hon. Gentleman now for 10 or 12 years. I think that this obsession has done great damage to race relations in this country and to community relations. I believe that my hon. Friend is right and that the majority of people do not look at the colour of other people; they take them as citizens.
    Following is the table:
    I am much concerned with this problem, and my Department and the health authorities are energetically seeking to bring about an improvement.
    Mr. Crouch: Does the Secretary of State agree that the problem is not so much a shortage of surgeons as a shortage of facilities—beds, nurses, theatre time and physiotherapy—and that it is this which is causing these long waiting lists? Will he consider the possibility of using the facilities which are available in the private sector, for a fee, in order to overcome this present difficulty?
    Mr. Ennals: That is no answer. The reasons for the problem vary in different parts of the country. Sometimes there are staffing problems. There is also the fact that there is a constant increase in the demand by patients for treatment. There are more accidents. There is also a wider range of surgical techniques. There are

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    more elderly people requiring additional support. There are more cases of cancer, and so on.
    If I had produced the statistic that the hon. Gentleman wanted, it would have shown a tremendous variation. There are consultants in some parts of the country with quite short lists. Others, elsewhere, have very long lists. It is essential that the necessary information should be readily available to general practitioners, and that consultants should co-operate together. We should try to improve the management of waiting lists. It is not just a question of money and resources, important though that is.
    Mr. Boscawen: Had the Secretary of State produced the statistics, there is no doubt that they would have shown a very unsatisfactory and deteriorating situation in many specialties. Bearing in mind that figures often conceal individuals in pain and misery for a very long period of time, what possible ground has the Secretary of State for telling the Royal College of Nursing that pessimism about the future could not be justified?
    Mr. Ennals: What I said to the Royal College of Nursing was that we have to get the problems of the National Health Service into perspective. I spelt out, as I have done several times to the House, some of the major pressures which bear upon the National Health Service. I made it perfectly clear that neither this Government, nor any other, would be able to provide adequate facilities to meet all the needs, because the demands are never ending. I said that we need to get into proportion the problems faced by those who work in the National Health Service, and at the same time note its great successes.
    We have roughly the same sort of percentage of patients-10 per cent.—on waiting lists, and the number of inpatients treated in the National Health Service is steadily increasing year by year.
    Mr. Speaker: I appeal to the House for shorter questions and shorter answers.
    Mr. Ovenden: Will my right hon. Friend accept that the delay in obtaining orthopaedic appointments is one of the biggest single causes of unnecessary suffering, among young people particularly? Why has my right hon. Friend's
    812
    Department placed a bar on the appointment of further registrars in orthopaedics?
    Mr. Ennals: Where there is a shortage of consultants in particular specialties, we have to do some sort of rationing to ensure that they are available in all parts of the country, and therefore to approve a post, if it would automatically then mean that another area would be deprived, would be unfair to that area.
    Mr. Beith: Is the Secretary of State aware that nearly 1,000 people are awaiting orthopaedic surgery at the Newcastle hospitals, and that they include many who could be back in productive work if they could get hip operations?
    Will the Secretary of State indicate whether he thinks that the opening of the Freeman Road hospital will make a difference, or can he think of further measures which could be taken?
    Mr. Ennals: I am sure that it will make a difference. That is why, when the Chancellor of the Exchequer announced that additional funds were to be made available, we gave a high priority to ensuring that new hospitals would be fully commissioned as soon as possible, and we put additional money into the acute services for equipment and urgent maintenance, in addition to the special £2 million which was entirely linked with easing some of the problems of waiting lists.
    Mr. Clemitson: Is it not true, contrary to what the hon. Member for Canterbury (Mr. Crouch) said, that National Health Service facilities are sometimes used for the treatment of private patients because of the higher standards, for example, of asepsis in the National Health Service theatres?
    Mr. Ennals: There is truth in what my hon. Friend says.
    Mr. Patrick Jenkin: Returning to the right hon. Gentleman's speech at Harrogate, since he has now been forced to concede that he ought never to have made that speech at all—and has gone so far as to say that in future he ought not to make any speeches at all to the nurses—will he confirm that he is not proposing altogether to cut out meetings of that sort? Such meetings give him the opportunity of a glance at reality, and at what it is like to work at the coalface in the

    813
    National Health Service today, in contrast to his own blatant complacency, which aroused such fury on the occasion of that speech.
    Mr. Ennals: The right hon. Gentleman has totally misrepresented what I said. I said that the arrangement which had been reached, long weeks in advance of the conference, whereby those concerned wished me to send a script of what I was to say, does not lead to the best sort of exchange and the best sort of debate. I have made it clear that I am very anxious to see them and to have a talk around the table about some of their problems, but that I would much rather have a conference without any prepared speeches, at which we could deal directly with the issues which most worry the nurses.
    The right hon. Gentleman knows that I spend a great deal of my time in travelling round the country, visiting hospitals, meeting doctors and nurses, and facing their problems.

    Wyatt v. Hillingdon London Borough Council
    Mr. Carter-Jonesasked the Secretary of State for Social Services what action he intends to take in the light of the ruling of the Court of Appeal on 9th May in the case Wyatt v. Hillingdon London Borough Council; and if he will make a statement.
    The Under-Secretary of State for Health and Social Security (Mr. Alfred Morris): Mrs. Wyatt has now been invited by my Department to specify her complaints against the London Borough of Hillingdon. When these have been received, and we have comments from the local authority, I will consider what further action it may be necessary to take.
    Mr. Carter-Jones: Is my hon. Friend aware that the court of appeal decision will cause great anxiety to hon. Members on both sides of the House and to the disabled, including disabled children and their parents? Is he further aware that the geographical gamble with regard to the care of the disabled will widen? Will he please spell out the default powers of the Government for bringing action against defaulting local authorities.
    Mr. Morris: I appreciate my hon. Friend's concern. He will know that I
    814
    am anxious to do all that I possibly can to improve services for disabled people. Briefly, our default powers provide that a local authority may be declared in default by my right hon. Friend who may then direct the authority to remedy the default. If the authority fails to comply with that direction, my right hon. Friend may transfer the relevant functions of the authority to himself and recover expenses from the authority. I know that he will not hesitate to use his default powers should that be necessary.
    Mr. Hannam: Does not the Minister accept that he, previous Secretaries of State and the parliamentary Ombudsman have all indicated, and made statements to the effect, that the 1970 Act was legally enforceable? Does not this court ruling now mean that he will have to bring forward new legislation to enable the courts to deal with, and enforce, the law?
    Mr. Morris: The ruling of the court of appeal, as I understand it, does not mean that the Act is not legally enforceable. The question is "enforceable by whom?" Most disabled people want an effective remedy for their problems. How that is obtained is a secondary matter. I can assure the hon. Gentleman that I shall do everything I possibly can to resolve present difficulties at the earliest possible date.

    Mobility Allowance
    Mr. Rifkindasked the Secretary of State for Social Services what estimate he has made of the cost of extending entitlement to mobility allowance to those whose immobility is as a result of medical factors other than physical disability.
    Mr. Alfred Morris: If we were to extend the scope of mobility allowance to cover people who can walk but who have other mobility problems, we could not limit the extension to particular disabilities or diagnostic groups. While I cannot give any precise estimate, the cost of such an extension would be very considerable indeed.
    Mr. Rifkind: Does the Minister accept that many thousands of people suffer from a severe lack of mobility caused by mental illness or mental handicap rather than physical inability to walk? Does he not accept that under the regulations there is

    815
    an unfair and arbitrary distinction and that it would be much more appropriate if a mobility allowance were available to anyone who could show that his lack of mobility was due to medical factors?
    Mr. Morris: I am aware of this problem. I shall consider the claims of the people referred to by the hon. Gentleman together with all other claims. I must emphasise that we should not be placed in a position of being unable to put right anything which has gone wrong. I would ask Opposition parties not constantly to be campaigning for a reduction in public expenditure while simultaneously asking us to increase all the parts of that expenditure.
    Mrs. Castle: Does not my hon. Friend agree that mobility allowance should be payable in all cases where mental condition has resulted in a physical inability to walk? When will he introduce his new regulations, which he promised at the time I raised my constituency case of Mr. Trent Brown, in order to establish this principle quite clearly?
    Mr. Morris: We shall shortly be making regulations to put it beyond doubt that a person unable, or virtually unable, to walk for at least 12 months because of physical disablement is eligible for mobility allowance regardless of the nature of his incapacity. I am most grateful to my right hon. Friend for the important part which she has played in this matter.
    Mr. Haselhurst: Does not the term "mobility allowance" continue to be a misnomer when, in fact, there are so many people with physical disadvantages who are not entitled to benefit because of the very tightly drawn terms on which the allowance is presently available'?
    Mr. Morris: It is not a misnomer. The allowance is intended to help people who cannot walk or who virtually cannot walk. It is in the process of helping 100,000 new beneficiaries. We are in the process of increasing five-fold our expenditure on outdoor mobility for the disabled. There are many more claims, and we shall do whatever we can to make further progress.
    Mr. Ioan Evans: Will my hon. Friend state how many now benefit from the mobility allowance? What is the total cost of this scheme? Does he realise that the
    816
    scheme which has been introduced by this Government is deeply appreciated by those disabled people who benefit from it?
    Mr. Morris: At the latest date for which figures are available—5th June 1978–71,142 people were in receipt of mobility allowance. I expect that by the end of 1979 our total expenditure on this new benefit will be £65 million a year. I am most grateful to my hon. Friend for the comment that he made about the importance of this new benefit.

    Mental Health Act (White Paper)
    Mr. Ronald Atkinsasked the Secretary of State for Social Services when he expects the White Paper on the Mental Health Act to be published.
    Sir Bernard Braineasked the Secretary of State for Social Services when he expects the White Paper on the Mental Health Act to be published.
    Mr. Moonmanasked the Secretary of State for Social Services when he expects the White Paper on the Mental Health Act to be published.
    Mr. Newensasked the Secretary of State for Social Services when he expects the White Paper on the Mental Health Act to be published.
    Mr. Ennals: Preparation of the White Paper is at an advanced stage. While I cannot today give a precise date for publication, I hope that it will be published before the Summer recess.
    Mr. Atkins: I am grateful to my right hon. Friend for that answer. Does this mean that it is still the Government's policy to raise mental health patients from their status of Cinderella to a higher priority? Will he soon introduce a policy on medium security units?
    Mr. Ennals: The status of mental health cases has already been determined without any amendments to the Mental Health Act. Within our present priorities we have been channelling an increasing proportion of available resources towards helping the mentally ill and the mentally handicapped. This is part of Government policy. In the answer to a number of other questions we can see the

    817
    result of this at local authority level. This is being done without any need to amend the Act.
    Sir B. Braine: Will the Secretary of State explain why the White Paper has taken so long to produce? Surely he is aware of the deep concern which has been felt for some years about the lack of adequate provision for the mentally ill, particularly mentally handicapped children? Will the White Paper, when it is produced, indicate when we shall have positive proposals for dealing with the disgraceful situation under which magistrates are recommending for treatment mentally ill young people brought before them, yet there are no facilities for such treatment to be given?
    Mr. Ennals: The main problems that are dealt with in the White Paper are concerned with the law. The White Paper is not so much concerned with the actual provision of services, which continues anyway, although I am not saying the White Paper will not also deal with that. The main reason why this has taken a long time is that this is very complicated legislation. The consultative document was sent out in August 1976. There have been 300 representations, most of them from organisations, although some from individuals. They deal with very complicated matters. That is why it has taken a good deal of time to bring the White Paper to fruition.
    Mr. Moonman: Will my right hon. Friend indicate whether the White Paper, which has been a long time coming, will give some regard—despite its complexity—to problems such as the personalised clothing systems in psychiatric hospitals and whether it will take into account the fact that on the latest data about one family in three in this country will require some help for their mental problems in the course of their lives?
    Mr. Ennals: The White Paper deals with the rights of patients. That includes questions of property, correspondence and so on. The White Paper does not deal with the resources to be made available for mental health, be it mental handicap or mental illness, because it deals with the 1959 Act. Resources raise a quite different issue.
    Mr. Patrick Jenkin: It is nine months since the Secretary of State outlined his
    818
    thinking on this subject to the Mental Health Foundation at Oxford. While I entirely accept that these are very complex matters, will he also accept that there needs to be a very full, public and open discussion in the newspapers and elsewhere of what are extremely difficult matters? Will he now bring forward this White Paper so that this discussion can take place publicly at the earliest opportunity?
    Mr. Ennals: I absolutely agree. There is no doubt that we need to have a very wide debate in this House and among the organisations concerned. That is why, if we are to have a responsible debate, we must have a responsible White Paper which deals very carefully with the difficult issues involved. That was why I decided that we should proceed first on the basis of a consultative document, which has led to very wide consultation, and then with a set of proposals from the Government, again with adequate time, so that they can be explored.
    Mr. Madden: Is my right hon. Friend concerned about the arbitrary procedures of the Mental Health Act 1959 under which people can be committed? Will his White Paper make any recommendations for amending these procedures?
    Mr. Ennals: These are central issues which are to be covered in the White Paper.
    Mr. Farr: Can the right hon. Gentleman say whether the White Paper will deal with the position in which people who are perhaps marginally of unsound mind, and who might a few years ago have been kept in detention but who have now been released, as a result of a more enlightened attitude, to live in communities, which may be small or large, to live as far as possible a normal life, can sometimes, as the Minister knows, cause great havoc to those who live in what otherwise is a peaceable community?
    Mr. Ennals: It certainly does not deal with those who are no longer the subject of legislation, namely, people who may have had a mental illness and who have now settled back in the community. I am sure it would be quite wrong for legislation to deal with that. However, it deals with the definition of mental disorder, which undoubtedly needs to be

    819
    brought up to date following the 1959 Act.

    Doctors' Ancillary Staff (National Insurance)
    Mr. Whiteheadasked the Secretary of State for Social Services how many representations he has received about the advancement from 31st to 6th March 1978 of the deadline for application to the new scheme for direct reimbursement of employers' national insurance contributions for doctors ancillary staff; how many such staff have been in consequence refused access to the scheme; and if he will make a statement.
    The Minister of State, Department of Health and Social Security (Mr. Roland Moyle): The arrangements for general practitioners to be directly reimbursed the employer's national insurance contributions that they pay for their ancillary staff came into effect as intended on 1st April last. It was the date for occupational pensions schemes that was brought forward. I have received only a few letters about the change from individual doctors, though representations on behalf of the general practitioners as a whole have been made by the profession's representatives. Following consultations with the profession, detailed guidance on the acceptability of claims should shortly reach family practitioner committees.
    Mr. Whitehead: Is my right hon. Friend aware that I have doctors in my constituency who were told about this pension scheme on the very day that they were also told that the closure date had been brought forward? Cannot he see that that looks like sharp practice to ancillary staff in the National Health Service? Can he tell the House whether the Department calculated the additional amount that would be needed to include everyone who applied by the original closing date of 31st March?
    Mr. Moyle: I reject allegations of sharp practice, since all that was done was done by joint agreement between the Department and the profession after discussions on the principle. No calculations have been made about any increased costs which would arise if all the claims were met.

    Elizabeth Garrett Anderson Hospital
    Dr. Vaughanasked the Secretary of State for Social Services if he will make
    820
    a further statement about the Elizabeth Garrett Anderson Hospital.
    Mr. Geoffrey Finsbergasked the Secretary of State for Social Services whether he will make a further statement on the closure of the Elizabeth Garrett Anderson Hospital.
    Mr. Ennals: Having considered all the available evidence I announced on 16th May that the Elizabeth Garrett Anderson Hospital, on Euston Road, should close and I asked staff urgently to consider proposals to move to alternative accommodation at the Whittington Hospital. The staff at the EGA have now confirmed that they are prepared to consider any offer of alternative accommodation, but without commitment. I have therefore invited the health authorities, representatives of the staff of the EGA and other interested parties to come together under the chairmanship of a senior official of my Department to consider detailed proposals for alternative accommodation In these circumstances I have agreed to postpone the closure of the Euston Road hospital.
    Dr. Vaughan: Will the right hon. Gentleman explain why he keeps dithering over the future of this hospital? Does he not realise the immense amount of damage it does when he cannot make up his mind what should happen? Will he now give a clear promise that the hospital will be kept open?
    Mr. Ennals: There is no question of dithering. My right hon. Friend the Member for Blackburn (Mrs. Castle) entered into a commitment rather more than two years ago in which she said that the hospital on the Euston Road site would close and that it was her view that we should seek an alternative where that facility could be provided within a district general hospital. There has been a great deal of consultation about this. It was my conclusion, after discussion with the staff of the EGA, that since they were now prepared to consider an alternative I should not be tough and insist that the closure had to be on a specific day. Certainly if I had stuck to that when negotiations about an alternative were being considered, I would have been accused in this House of being obdurate.
    Mrs. Jeger: May I say, first, how much my right hon. Friend's decision in

    821
    favour of postponement has been welcomed by the staff and patients of the Elizabeth Garrett Anderson Hospital? However, can my right hon. Friend say what sort of time scale he has in mind? How long will all these consultations take? Pending the consultations, cannot he agree to do the urgent repairs which are necessary—for instance, to get the lifts working again, because these broken lifts are putting half the hospital out of commission?
    Mr. Ennals: I have made it clear that I hope that the discussions about an alternative will not take long. I have also made it clear that the hospital on the Euston Road site will close. In view of that, it would be quite unjustified to authorise substantial expenditure, or for the area health authority to do so, for the replacement or substitution of the lifts. But certainly essential repair work to enable the hospital to continue during such period as remains to it is the responsibility of the area health authority.

    Retirement Age
    Mr. McCrindleasked the Secretary of State for Social Services what representations he has received from the Equal Opportunities Commission and the National Association of Pension Funds on the subject of the retiring age for men and women; and if he will make a statement.
    The Minister for Social Security (Mr. Stanley Orme): My right hon. Friend and I have received copies of the National Association of Pension Funds' publication "Towards Equality in Retirement Ages" and of the Equal Opportunities Commission's consultative document "Equalising the Pension Age".
    We shall shortly be publishing a discussion document on the elderly which takes account of the views expressed in these publications. We look forward with interest to the response to our document.
    Mr. McCrindle: Are not all shades of opinion, including that of the TUC, now reflecting the need to move towards flexible retirement, with the ultimate objective of a common retirement date for both men and women? In these circumstances, is the Minister satisfied that the document to which he refers is all that is needed? Should he not now be under-
    822
    taking a detailed financial assessment of the true cost of moving towards a common retirement date? Most of the statistics produced by the Government so far appear to some of us to have been somewhat bogus.
    Mr. Orme: The figures that we have produced are not bogus. A great deal of information has been given of the cost of moving towards equalisation. Flexibility will be a central issue in the document. We deal with this in great detail, as well as equalisation. But we feel that there is a need for a national debate on this issue.
    Mr. George Rodgers: Does my right hon. Friend agree that it is very difficult to reconcile the principle behind the current legislation on equal opportunities and sex equality with the startling difference in the retirement ages for men and women? Does he agree, further, that this applies also to widows and widowers who when in employment often have equal wages and equal responsibilities, bearing in mind that the widower does not receive a pension? Will my right hon. Friend take these factors into consideration?
    Mr. Orme: Yes, and they will be discussed in the document. I accept that the present differential is illogical, but, as I have explained already, equalisation creates many problems and difficulties, and these will have to be discussed fully.
    Mr. Paul Dean: Does the right hon. Gentleman agree that what really matters is not a blanket reduction in age but flexibility, so that each individual can retire at the age which suits him or her best and which suits his or her job? Does he recognise that we shall make little progress with flexibility until he persuades his Treasury colleagues to reduce the penal rates of tax on personal savings?
    Mr. Orme: I accept fully the first part of what the hon. Gentleman says, but I cannot accept the second part.

    Emergency Services (Bromsgrove and Redditch)
    Mr. Hal Millerasked the Secretary of State for Social Services in the light of the continuing refusal of general practitioners in Redditch to Operate a 24-hour casualty service and in view of the

    823
    lack of facilities at Bromsgrove General Hospital, if he will make a statement on the future of accident and emergency services in that area.
    Mr. Moyle: The area health authority will be reviewing these casualty services in the light of the survey it is making of existing facilities and the use made of them. A major accident and emergency unit will be included in the plans for the new district general hospital at Red-ditch.
    Mr. Miller: This survey has now been going on for more than a year. Cannot the Minister give some indication when a casualty service will be resumed in this very important manufacturing area? How does he view other areas where general practitioners are responsible for the provision of these services?
    Mr. Moyle: On that last point, if the hon. Member will table a Question about it and give me notice, I shall answer it. As for the first part of his supplementary question, the survey will be laid before the area health authority on 16th June.

    Kidney Machines
    Mr. Shepherdasked the Secretary of State for Social Services whether he will make a further statement about the withdrawal of the attendance allowance from patients using kidney machines.
    Mr. Montgomeryasked the Secretary of State for Social Services whether he will make a further statement about the withdrawal of the attendance allowance from patients using kidney machines.
    Mr. Alfred Morris: An application for leave to appeal has now been made to the National Insurance Commissioner and I am awaiting the outcome.
    Mr. Shepherd: Does the Minister agree that the loss of attendance allowance leads to a generally less effective use of dialysis units? Would it not be better to cut across the nonsensical situation whereby everything is stored pending the results of the appeal to the National Insurance Commissioner, and go for both shorter dialysis periods and the attendance allowance?
    Mr. Morris: I cannot add to my original reply, except to say that whatever
    824
    the National Insurance Commissioner's decision may be, we shall need to consider the implications most carefully. I readily undertake to do this. It would be quite wrong for me to reach any conclusion now, in anticipation of the Commissioner's decision. It is not an easy matter, since dialysis patients are only one of the groups to whom the conditions for attendance allowance must be applied.
    Mr. Montgomery: Does the Minister admit that it is unacceptable if dialysis patients lose the attendance allowance without any improvement in their condition? What is he doing to try to speed up the decision of the National Insurance Commissioner?
    Mr. Morris: I am sure that the National Insurance Commissioner is well aware of the interest in the case which has now been referred to him, and that there will be no undue delay in reaching a decision. However, as I have said, I cannot at this time anticipate the decision, and it would be quite wrong of me to start speculating about what should be done in future on any decision or on whether further action might be necessary.
    Mr. Whitehead: I understand that the oral hearing before the Commissioner, involving my constituent, is to take place in a few weeks' time. Will the Minister give an undertaking that the representations made by the Department at that hearing will be of benevolent neutrality?
    Mr. Morris: I am aware of my hon. Friend's considerable interest in this matter, as it is his constituent who has appealed. However, I cannot speak today on the matter of evidence. As to speeding up proceedings, I must emphasise the independence of the adjudicating authorities, including the National Insurance Commissioner.
    Mr. Patrick Jenkin: Since we understand that this decision is unlikely to be announced until the autumn, could the Minister not persuade the Government to accept the Bill brought forward by my hon. Friend the Member for Ealing, Acton (Sir G. Young), which would deal with this expeditiously and make the payment of the attendance allowance to these people?
    Mr. Morris: It would be wrong to attempt to change the law before we are

    825
    told by the National Insurance Commissioner what the law, in his view, means. I have no knowledge that there is likely to be a delay until November. My right hon. Friend has said that he expects the case to be heard in a few weeks' time.

    Emergency Services (North-West London)
    Mr. Dykesasked the Secretary of State for Social Services if he is satisfied with the scope and provision of emergency medical services and casualty departments in North West London.
    Mr. Moyle: The number of general practitioners in North-West London is generally adequate. Many of them rely for out-of-hours emergency cover on deputising services, which are now subject to the code of practice issued by my Department in April. Responsibility for the provision of accident and emergency departments rests with the health authorities concerned, subject to broad guidelines issued by my Department, and I have no reason to believe that the service for this in North-West London is inadequate. If the hon. Member has a particular case in mind I will investigate it if he will write to me.
    Mr. Dykes: I thank the Minister for his reply. I shall send him details of some cases. In view of the continuing staff shortage on the casualty side in the whole area, is the Minister satisfied that there will be no further partial or complete closures of casualty departments for the rest of this year?
    Mr. Moyle: Partial or complete closures of casualty services take place from time to time throughout the Health Service. When a hospital's beds become full, casualties are directed to another hospital. This is part of the normal process, subject to arrangements made between hospitals for the transfer of cases. Therefore, I cannot give the undertaking that the hon. Member seeks.
    Mr. Christopher Price: Is my right hon. Friend aware that there are severe problems throughout London in this respect? Did he see the recent television programme about King's College Hospital and the problems there? If so, what does he intend to do about the problems in his and my area?
    Mr. Moyle: There are, of course, occasional shortages of theatre staff, particularly theatre nurses. I did see the television programme and I am due to visit King's College Hospital in the not-too-distant future, so I shall look at the problem.
    Mr. Pavitt: Will my right hon. Friend look again at the North-West London area's casualty departments—especially those in Willesden? Is he aware that there has been a rationalisation, which has gone much too far? Will he check what has been done in that area?
    Mr. Moyle: I take note of my hon. Friend's remarks on that matter. I know that he has a very deep concern for hospital services in his area, and I shall certainly check what has been done.

    Pensions (Over-80s)
    Mr. Tim Smithasked the Secretady of State for Social Services by how much the 25p addition to the retirement pension payable to pensioners aged 80 years and over would have to be increased to restore it to its real value when introduced.
    Mr. Orme: To restore the value which the national insurance age addition had when it was introduced in 1971, on the basis of the movement of the general index of retail prices, it would be necestary to increase it from 25p to 60p.
    Mr. Smith: Was this not a very valuable and widely welcomed supplement when it was introduced? Why have the Government effectively devalued it in this way?
    Mr. Orme: This is one of many benefits that must be considered in the light of public expenditure costs. This Government have done a great deal for pensioners in this country. We do not need to apologise about it.

    PRIME MINISTER (ENGAGEMENTS)
    Mr. Temple-Morrisasked the Prime Minister if he will list his official engagements for 13th June.
    The Prime Minister (Mr. James Callaghan): Earlier today I greeted President Ceausescu of Romania on his

    827
    arrival for a State visit to this country. In addition to my duties in this House, I shall be holding meetings with Ministerial colleagues and others. This evening I shall be the guest of Her Majesty The Queen at the State dinner in honour of President Ceausescu.
    Mr. Temple-Morris: No doubt the Prime Minister has had time today to consider the effects of his policies of higher spending, more borrowing and higher interest rates. When this is coupled with stagnant production and a questionable wages policy, how can it be a fact, as pronounced recently by one of his Ministers—this is a vitally important point—that single-figure wage inflation will continue for the indefinite future? Surely this is no more and no less than election window dressing.
    The Prime Minister: I realise the anxiety with which the hon. Member's thoughts are concentrated on possible forthcoming events. I beg him to contain his impatience. In terms of inflation, it is important that he should not, by slipshod words, convey an impression that is incorrect. I do not suppose that he intended to do so. Nobody has said that inflation will continue indefinitely into the future at single-figure rates. What my right hon. Friend the Secretary of State for Prices and Consumer Protection said was that it would continue at single-figure rates for the remainder of this year. What happens next year will depend to a large extent on the level of wage settlements, which begin again in the autumn. What is much more important than examining the statistical entrails every day is that the Government should have the will—as they have—to carry through their policy to keep down inflation.
    Mr. Joseph Dean: With due deference to the debate that will take place tomorrow, will my right hon. Friend take time today to remind the general public of the substantial benefits which the Government's existing economic and financial policies have brought to the workers and the under-privileged sections of our society?
    The Prime Minister: I do not wish to anticipate tomorow's debate. It is true that the family budget was distorted by the Opposition and that the measures that
    828
    we propose to take will remedy the situation. Nothing can alter the fact that pensions will increase, that child benefit will improve, and that there will be a tax rebate in July. All these are valuable benefits, but we must not be complacent, because there is a great deal to do. I constantly remind the country of this. I did so again at the Nottingham miners' gala last Saturday.
    Mrs. Thatcher: As one of the Prime Minister's duties today is to answer Questions in the House, will he tell us why, in his package of economic measures, he deliberately chose to put a tax on exports and on all home production, thereby making us more vulnerable to imports?
    The Prime Minister: There were many means by which we could have put right the recklessness of the Opposition in adding £500 million to the Budget by reducing taxation. We considered them, and no doubt the House will debate them tomorrow. Having looked at them carefully, it seemed to me that because the whole House agrees that inflation is the vital issue, it would not have been appropriate to take action through value-added tax, which might have been sensible in other directions but would have had the effect of pushing up inflation. Therefore, we chose the national insurance surcharge. I dare say that if we had chosen VAT there would have been complaints from the Opposition that we had not chosen something else.
    Mrs. Thatcher: If the Prime Minister has no confidence in the decisions of the House of Commons about cutting income tax, he knows exactly what he can do about it, because it lies in his power to make arrangements to elect a new one. In the meantime, does he not recall that his Chancellor of the Exchequer, during his Budget speech, dismissed the claim of the Liberals when they wanted to increase the national insurance contribution by saying that it would be wrong to threaten jobs at a time of unemployment, wrong to put up industrial costs when we had a problem of competitiveness, and wrong to introduce a tax which would be passed on in prices at a time of higher inflation? Why has he changed his mind?
    The Prime Minister: With respect to the right hon. Lady, I must inform her that it is not I who changed my mind. It

    829
    is the Opposition who have added £500 million to the Budget. As I have said on earlier occasions at this Dispatch Box, I would much have preferred it if those reductions in tax had not taken place. We would then not have had to bring forward a proposal for national insurance surcharge. Both matters should have been left on one side. I very much regret that the House of Commons took this decision, but, as it did so, we intend, as we said at the time, to put the matter right. We intend to follow a sound financial policy on all these matters.
    Mr. Fernyhough: Does my right hon. Friend agree that what happens about inflation next year will depend largely on whether we have a Government who are prepared to co-operate with the unions or a Government who are determined to have confrontation with them?
    The Prime Minister: I think the last four years have adequately shown that the policy of the previous Government on confrontation and conflict was not successful. We have been much more successful in the policy of conciliation that we have followed. As for next year's incomes increases, I propose to wait, listen and hear what the trade union conferences which are now taking place have to say. They will come to an end in July. After that the Government will have to put forward their own proposals.
    Mr. Joseph Deanasked the Prime Minister if he will list his public engagements for 13th June.
    The Prime Minister: I refer my hon. Friend to the reply which I gave earlier today to the hon. Member for Leominster (Mr. Temple-Morris).
    Mr. Dean: I welcome my right hon. Friend's earlier reply to my supplementary question, but will he emphasise to the trade union movement the benefits which the Labour Government have conferred on their members, and stress that they should not be kidded by the Opposition, who appear to be trying to woo the trade unions with false promises?
    The Prime Minister: I shall certainly point that out to the trade unions, but I believe it would be better if there were an all-party view about the importance and significance of the trade union:: and of the great role that they play. It would
    830
    serve the Opposition far better if they were to emphasise that aspect, instead of constantly attacking the trade unions.
    Mr. Cormack: As the Prime Minister referred to this evening's banquet, will he reflect how he can best commemorate the extinction of freedom and democratic Socialism that took place in Czechoslovakia 10 years ago?
    The Prime Minister: President Ceausescu on that occasion spoke out clearly against what took place in Czechoslovakia, and I am very glad indeed that he did so.
    Mr. Nobleasked the Prime Minister if he will list his official engagements for 13th June.
    The Prime Minister: I refer my hon. Friend to the reply which I gave earlier today to the hon. Member for Leominster (Mr. Temple-Morris).
    Mr. Noble: In the course of a busy day, will my right hon. Friend find time to reflect further on the subject of inflation, particularly the rate of increase in food prices, which is now the lowest since 1970? Will he make it clear to the country that if the Opposition have their way in devaluing the green pound, the healthy situation that now obtains on food prices would be totally destroyed?
    The Prime Minister: I am glad to say that there is no doubt that food prices have risen far less rapidly in the past 12 months. The figure I have is 6·7 per cent., which is very good indeed. The devaluation of the green pound has the effect of putting up prices, but I repeat that it is the Government's policy and intention, so far as we can carry the country with us on issues in which the country is involved, to try to keep inflation down. We are succeeding at the moment, and we hope to continue to do so, because I think that the people of this country understand the issue.
    Mr. Higgins: Is it not the case that by increasing the national insurance contribution the Government will put up food prices, whereas if they increased value added tax that would not happen?
    The Prime Minister: An increase in value added tax would have put up immediately the retail price index substantially. [HON. MEMBERS: "What

    831
    about food?"] Hon. Gentlemen are baying as though they are in the zoo, waiting to be fed. The food index, as the hon. Member for Worthing (Mr. Higgins) knows, even if his Conservative colleagues do not, is part of the overall index and not separate from it, and forms only one element of it. The simple truth is that the Opposition cannot escape from the responsibility that they have forced the Government to introduce a measure that is unwelcome to the Government—namely, the national insurance surcharge. The only alternative would have been to increase value added tax, and that would have increased the retail price index even more. The Opposition can take their choice of which part of the responsibility they wish to assume.
    Mr. English: I know that my right hon. Friend has tried to alter this silly system, but will he, in future, when met with a Question such as the one before him, or Question No. 1, answer it in the style of an American President? Leaving out matters of security, will he give the details of his engagements during one day? That might persuade hon. Members that they should not ask Questions to which they do not want answers.
    The Prime Minister: As always, I shall take my hon. Friend's views into careful consideration.
    Mr. William Clark: If it is necessary to recoup the £500 million to the Treasury because of the amendments moved on the Finance Bill, will the Prime Minister explain to the country why it is essential to put a tax on employment of £1,500 million?
    The Prime Minister: The tax is to recover the amount that has been lost this year—namely, £500 million. That is what it will do. As I am sure the hon. Gentleman knows, the tax itself does not come into effect until November. There will be another Budget next April, when the matter may be reconsidered.

    ANKARA
    Mr. Christopher Priceasked the Prime Minister when he next intends to visit Ankara.
    The Prime Minister: I have at present no plans to visit Ankara.
    Mr. Christopher Price: If my right hon. Friend sees Mr Ecevit in the near future, will he tell him that although we welcome the new co-operation agreement between Europe and Turkey and sympathise with Turkey's economic difficulties, the present Government take human rights very seriously, particularly the machinery of the European Convention on Human Rights?
    What action will British Ministers take in Strasbourg when this matter is next considered? Is my right hon. Friend aware that if the complaints against Turkey about violations of human rights in Cyprus were got out of the way it would help Britain's reputation for a belief in human rights, in terms not just of complaints against Russia but of human rights throughout the world, and would assist a final settlement in Cyprus?
    The Prime Minister: I know that my hon. Friend takes a deep interest in these matters. The question of human rights, which my hon. Friend raised in the debate on foreign affairs last week, is a matter for the Council of Europe to reach a conclusion upon. I gather it has failed to do so on the last two occasions on which it has considered the subject. I hope that it will reach a just conclusion on the next occasion when it considers the matter. British Ministers will endeavour to ensure that that is done. If so, that conclusion should be published. I agree with my hon. Friend that this matter should not be left hanging around.
    Mr. Ian Lloyd: If the Prime Minister has an opportunity to discuss these matters with the Turkish Government, will he explain to them that if they have either civil or military aircraft with Rolls-Royce engines requiring repair, the possibility of having those engines repaired will depend not on whether they pay the bill but on the view taken by the T and GWU—not the Foreign Office—of human rights?
    The Prime Minister: No, Sir. I do not think that it will be necessary to explain that to the Turkish Government.
    Mr. Molloy: In view of world concern about human rights, and particularly in respect of the discussions taking place between the two great Powers—the United States and Russia—on the dangerous situation that still exists in Africa

    833
    and the serious situation affecting the policy of detente, what is my right hon. Friend's view about the holding of a summit conference in the not-too-distant future?
    The Prime Minister: As my hon. Friend knows, a conference of seven of the major industrial Powers is to take place, but I do not believe that we shall be discussing the question of Africa or detente. That conference will be concerned with the economic prospects of the Western world.
    Mr. Hooson: Does the right hon. Gentleman think that the richer NATO countries should extend more economic aid to Turkey and to Greece, particularly having regard to their key position in NATO and the fact that the Soviet Union is extending more and more economic aid to Turkey?
    The Prime Minister: That matter could be looked into. When the Turkish Prime Minister, Mr. Ecevit, saw me, he asked whether we could assist in supplying arms because of the difficulties that Turkey is having with the United States Congress. I undertook to look into the matter, but so far no propositions have come forward that would be satisfactory.

ROLLS-ROYCE ENGINES (CHILE)
Mr. Adley: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the deliberate and provocative refusal of Her Majesty's Government to return to the Government of Chile four Rolls-Royce Avon engines, the property of that Government, sent here for servicing in 1973 and subsequently held by Her Majesty's Government at the instigation of shop stewards at the East Kilbride factory of Rolls-Royce, where the engines are currently held in defiance of a court order that the Chileans' property should be released and returned to them."
This is a specific matter because it refers to a known consignment of Rolls-Royce Avon engines. It is a specific matter because it is known to the Department of Industry, which in an answer to a Written Question last night informed the House that the Chilean Government
834
"have applied for an export licence for the Avon engines and this application is currently being considered by the Departments concerned."
I stress the plural "Departments", which I believe is relevant, as I shall later show. It should be borne in mind that the answer fails to point out that this issue dates back to 1973, when the engines were sent here, or certainly to 1974.
The matter is urgent because the news of the court action has only just become public, it appearing to have been concealed by Her Majesty's Government. There seems little doubt that other foreign Governments, or foreign customers, considering sending goods to Britain for servicing, will be confused by these events and will want to know just where they stand in the event of there being a change of Government while their goods are here, or in the event of shop stewards taking the law into their own hands. The issue creates doubt among trading partners and puts our exports at risk. The matter is, therefore, urgent.
I feel that there is little doubt about the importance of the matter. It is not merely a commercial matter. The implications of the Government's action—bowing to the threat of force of the shop stewards and defying a court order—indicate that my right hon. Friend the Member for Sidcup (Mr. Heath) was right when in 1974 he asked the people "Who governs Britain?".
I stress that, however important this issue is, we are not discussing the rights or wrongs of the situation in Chile. We are not discussing the sale of arms, because the engines belong to the Chilean Government. They have been paid for years ago. We are discussing nothing less than international banditry by Her Majesty's Government.
I have sought, Mr. Speaker, to find an analogy which I think is relevant. If you, Mr. Speaker, were to take your bicycle to a cycle repair shop, and that shop subsequently were to be taken over by, shall we say, the hon. Member for Sheffield, Hillsborough (Mr. Flannery), who decided that he did not like you and that he would keep your bicycle, and you subsequently went to a court of this land and obtained a court order to the effect that you could have your bicycle back and the owner of that shop decided that you were not to have your bicycle back, you

835
would think, Mr. Speaker, that that was a poor show. When that is done by a Government entitled Her Majesty's Government, it is a serious matter.
I refer finally—
Mr. Flannery: On a point of order, Mr. Speaker.
Mr. Speaker: Order. First, the hon. Member for Christchurch and Lymington (Mr. Adley) picked on the wrong George when talking about a bicycle. However, he is coming to a conclusion.
Mr. Adley: I finally refer back to the answer that was given last night containing the use of the plural "Departments". The Department of Industry did not indicate which other Government Departments were involved. Was it the Ministry of Defence, to which I originally tabled the Question? Was it the Foreign and Commonwealth Office? Both Departments have maintained a gutless silence in the face of this long delay.
The use of the phrase "the rule of law" tends to be over-used, but in this instance I submit that the Government are stealing somebody else's property. That cannot be condoned by the House, nor even by the Government. On that basis, Mr. Speaker, I seek your agreement that we should debate the matter at an early date.
Mr. Speaker: The hon. Gentleman gave me notice before 12 o'clock this morning that he proposed to ask leave to move to Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"the Government's attitude towards the court order to return aero engines the property of the Chilean Government to that Government".
I listened carefully to what the hon. Gentleman said. The House knows that it is not for me to decide the importance of a matter but whether it requires an emergency debate in the House. I have to rule that the hon. Gentleman's submission does not fall within the provisions of the Standing Order. Therefore, I cannot submit his application to the House.
Mr. Flannery: On a point of order, Mr. Speaker. The hon. Member for Christchurch and Lymington (Mr. Adley) implied that I have your bicycle. I can
836
assure you, Mr. Speaker, that unless a military coup takes place in my shop I shall ensure that you get your bike back.
Mr. Speaker: I am obliged. It is 40 years since I had a bicycle.

ROLLS-ROYCE ENGINES (CHILE)

  WELSH AFFAIRS
  Ordered,
  That the matter of Youth Unemployment in Wales, being a matter relating exclusively to Wales, be referred to the Welsh Grand Committee for their consideration.—[Mr. Coleman.]

STATUTORY INSTRUMENTS, &c.
Mr. Speaker: By leave of the House, I shall put together the Questions on the three motions relating to Statutory Instruments.
Ordered,
That the draft Social Security Benefits Up-Rating Order 1978 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Supplementary Benefits (Determination of Requirements) Regulations 1978 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Child Benefit and Social Security (Fixing and Adjustment of Rates) Amendment Regulations 1978 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Coleman.]

WATER SERVICES CHARGES (REBATES)
3.38 p.m.
Mr. Andrew F. Bennett: I beg to move,
That leave be given to bring in a Bill to provide for rebates on water services charges in respect of pensioners and low income families.
A large number of my constituents have written to me about water services charges. Probably most hon. Members know them better as water rates. However, they were renamed in the 1973 legislation. More recently, in addition to the letters that constituents have written, I have taken the trouble to consult many of my constituents on what is clearly to them a major problem. Many of them have taken much trouble clearly to express their views to me.
It is clear that all my constituents who have spoken to me are dissatisfied with the North-West Water Authority and the

837
way in which its charges have increased and increased since it was set up in 1973. It is clear that the Authority is extremely unpopular. Indeed, almost every other water authority in England and Wales is equally unpopular. That which concerns my constituents especially is that the North-West Water Authority is in no way publicly accountable. It is run by a board of appointed people who have no responsibility to the public in any way. My constituents find this a deplorable situation.
My constituents are particularly concerned at the way in which the North-West Water Authority appears to have carried out many public acts which appear deliberately to push up charges. They are particularly appalled—it may be a small matter—about the incident regarding the chairman's number plate. They are concerned about the glossy annual reports which the North-West Water Authority sends out. They are concerned about the way in which industrial metering has been changed and the problems that has produced for sprinkler companies and others. They are concerned about the way that bills are being sent out. At one time bills were sent out from the local town hall. But the North-West Water Authority set up its own empire to send out the bills. There are many areas in which the North-West Water Authority appears unnecessarily to have put up charges.
It is clear that those of my constituents whom I have consulted would like me to bring forward a Bill to abolish the North-West Water Authority. I suspect that in the country as a whole a Bill to abolish the water authorities would be extremely popular. But, as far as I can see, that is not practical in a Ten-Minute Rule Bill. I think that my constituents would like the water authorities to be abolished, the Government nationally to take responsibility for collection of water and disposal of sewage and the local authorities again to have the task of supplying water to individual premises and to remove sewage. But that is not practical in a Ten-Minute Bill. However, I hope that the Government will do something about the matter quickly.
I am seeking leave to introduce a Bill which will relieve the worst of the hardship. The use of rateable values to make charges is not fair when dealing with
838
general rates, but at least one can justify using rateable values for the general rates, because that system permits local democracy to have some say in the levels of expenditure on services. We managed to reduce some of the unfairness of the general rate as a result of legislation in the early 1960s which introduced the means test and produced the rates rebate. Therefore, we can say that rates allow for local democracy and some modification as a result of the means test and rate rebates.
However, rateable values, when used for water services charges, even if a standing charge is involved, are in no way controlled by locally elected people and take no account of how much water or sewage is involved in a particular household. Nor do they take account of the individual's ability to pay.
Rebates for general rates were first introduced in the 1960s. If we had included the water rate at that point, the charge would have been very small—in most instances under £5. To have included that in the rebate system would have involved a lot of unnecessary administration for very little benefit. But that is no longer true. The water rate and sewerage charges are becoming considerable burdens.
I should like to quote one example of one of my constituents, Mr. Williams, who came to my advice bureau on Saturday morning. I think that his problem is typical of that facing many pensioners. He had with him two bills. One was for his general rates. It set out clearly that the charge for his premises would be £121. He then had his rebate taken into account. As a result of the means test and his ability to pay, he had to pay £16·58. His bill amounted to £121, but it was reduced as a result of the rebate to £16·58.
The second bill was his water service charge which worked out at £35·66. There was no rebate on that at all. Therefore, the actual amount that he had to pay was £35·66. In other words, he was being asked to pay over twice as much for water and sewerage as for all the other local government services. In his case and in many other cases the water and sewerage charges are now causing a great deal of hardship. We are, in effect, asking for 50p or £1 a week for water and sewerage services.

839
I know that some of the boards have made great claims about having made it easier for people to pay by instalments or a stamp scheme. But most of these easy payment schemes are not easy payment schemes at all, because they involve people making payments much earlier than if they paid the lump sum.
I suggest that the problem is particularly acute for pensioners who have a grievance about the amount of water that they use. It is also true for many low-income families who have great difficulty in finding a lump sum of about £50 to pay these charges.
I have had many letters from pensioners pointing out how little water they use. Often they feel resentful that they cannot use more water. Many of them find it extremely difficult to get in and out of a bath, so they do not use as much water as they would like. Others, who cannot afford automatic washing machines and take their clothes to a launderette, find that they have to pay for the water that they might have been able to use at home in addition to the charge at the launderette to have their clothes washed.
Many pensioners live next door to families which have two or three children. Such families have frequent baths and often have an automatic washing machine. Water is also used for the garden or for cleaning the car. In such households the tanks and the pipes never seem to stop gurgling as the water goes through. Yet for pensioners living next door, who use very little water, the charges are identical.
Some of my constituents believe that metering water supplies would solve the problem, but the vast majority are opposed to metering on public health grounds and the cost of installing and reading water meters. They feel that the immediate need is to give a means-tested
840
rebate on the water services charge and then to get on and reorganise the water authorities. They feel bitter about the reorganisation not only of the water authorities but of the Health Service and local government generally by the Conservative Government in 1973. However, they are increasingly beginning to say "That lot may have made a mess of it in 1973. But why on earth have not this Government got on with putting things right since?"
I ask the House to allow this Bill to be introduced. My constituents know that at this point in this Session it does not have much chance of becoming law. However, they ask the Government to see the need to do something now and to note the justice of rebates on water services charges. They hope that it will not be necessary for an hon. Member to raise this matter again next Session, but that the Government will take a lead from the national executive committee of the Labour Party and ensure that it becomes Government policy that we have rebates on water charges and that they either bring forward legislation or support my Bill.
Question put and agreed to.
Bill ordered to be brought in by Mr. Andrew F. Bennett, Mr. George Rodgers, Mr. Max Madden, Mr. Brian Sedgemore, Mr. Robert Kilroy-Silk, Mr. Frank Allaun, Mr. Mike Noble, Mr. Terry Walker and Mr. James Lamond.

WATER SERVICES CHARGES (REBATES)
  WATER SERVICES CHARGES (REBATES)
  Mr. Andrew F. Bennett accordingly presented a Bill to provide for rebates on water services charges in respect of pensioners and low income families; And the same was read the First time; and ordered to be read a Second time upon Friday 14th July and to be printed. [Bill 145.]
ORDERS OF THE DAY
  STATE IMMUNITY BILL [Lords]
  As amended (in the Standing Committee), considered.
  STATE IMMUNITY BILL [Lords]
    Clause 3

      COMMERCIAL TRANSACTIONS AND CON TRACTS TO BE PERFORMED IN THE UNITED KINGDOM
      3.50 p.m.
      The Parliamentary Secretary to the Law Officers' Department (Mr. Arthur Davidson): I beg to move Amendment No. 1, in page 3, line 1, leave out from 'loan' to 'other' in line 2 and insert
      'or other transaction for the provision of finance and any guarantee or indemnity in respect of any such transaction or of any'.
      The purpose of this amendment is to widen the scope for non-immunity with regard to all financing transactions. It is intended to meet a criticism of the existing provisions and of the amendment moved by my right hon. and learned Friend the Solicitor-General in Committee.
      The criticisms were voiced by the right hon. and learned Member for Wimbledon (Sir M. Havers). I hope that he will concede that these provisions clearly cover transactions for the provision of finance by means of forward purchase of foreign exchange over the next few years. The right hon. and learned Gentleman specifically mentioned that example in Committee.
      I thank the right hon. and learned Member for Wimbledon for the constructive contributions that he has made towards making this a more comprehensive Bill. I also wish to put on record, as the Solicitor-General did in Committee, the great assistance which has been given by the City of London Solicitors' Company. Its advice has also been invaluable. I hope that the right hon. and learned Gentleman will find that this amendment meets his criticisms.
      Sir Michael Havers: The passage of this Bill has been a tribute to the valuable co-operation which has
      842
      existed between the Lord. Chancellor's Office, Ministers and the City of London Solicitors' Company. Between them they have done much to improve the Bill.
      This amendment is another example, following the objections that I raised in Committee, of Government reaction to make improvements, with the assistance of the City of London Solicitors' Company. It covers one example which I raised in Committee because the amendment that was moved then still left open a gap.
      I wish that it were possible to remove the doubt about the definition of the exercise of sovereign authority. A solicitor should not be left in a position where he is unable to advise a client whether in certain cases the exercise of sovereign authority may operate and is therefore unable to give a firm a certificate that it will not apply. This could still have a damaging effect. The object of the Bill is to remove that doubt. That doubt still exists for the reasons that I explained in Committee.
      It might be worth considering whether it is possible to look at the nature rather than the purpose of the transaction or activity in question so that one could get round the difficulty. As a matter of law, there is support for an amendment on those lines. In Lord Denning's judgment on the famous Trentex case, he held that by entering into a commercial transaction a State waives its immunity as regards proceedings relating to that transaction and that in deciding whether a transaction was a commercial one the intrinsic nature of the transaction rather than its object was the material consideration. In Article 7 of the convention on State immunity there is support for what I say.
      In the spirit of co-operation that exists in both Houses I suggest that the Parliamentary Secretary should consider again the amendment which, unfortunately, was a starred amendment and could not be discussed. The Government have a chance to think again and to make the necessary amendments in the Lords.
      Mr. Arthur Davidson: I thank the right hon. and learned Member for Wimbledon (Sir M. Havers) for what he said. The purpose of the amendment is to ensure that the advice of lawyers to their clients is given with as much clarity and certainty

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      as is reasonably possible. The right hon. and learned Gentleman's suggestions have helped.
      I understand what the right hon. and learned Gentleman is getting at. He will appreciate that the determination whether there has been an exercise of sovereign authority will have to be made in the light of the circumstances of each case. It is not easy to foresee how the definition that he suggests would work in the context of the many varied circumstances that would arise.
      Establishing what is the nature of a transaction or activity is likely to involve an examination of all aspects of that transaction or activity. It is difficult to see how the amendment suggested by the right hon. and learned Gentleman would assist the court since it would merely impose a limitation on the consideration of the question whether there has been an exercise of sovereign authority. Instructing a court to consider the nature of a transaction would not lead it to consider anything that it would not consider in any event.
      Without making any firm assurances that an amendment will be tabled in the Lords, I assure the right hon. and learned Gentleman that I shall look at the matter again on behalf of the Government.
      Amendment agreed to.
      Mr. Speaker: I congratulate both the right hon. and learned Member for Wimbledon (Sir M. Havers) and the Parliamentary Secretary on not discussing the other amendment.

    Clause 13

      OTHER PROCEDURAL PRIVILEGES
      Mr. Arthur Davidson: I beg to move Amendment No. 2, in page 7, line 31, leave out from first 'property' to 'which' in line 32.
      Mr. Speaker: With this we may discuss Government Amendments Nos. 4 and 5.
      Mr. Davidson: Amendment No. 2 is a drafting amendment. Amendment No. 4 is a paving amendment. Amendment No. 5 is of substance. It has three main objects. First, its purpose is to clarify the drafting of Clause 14(3) which my right hon. and learned Friend the
      844
      Solicitor-General undertook to examine in Committee in answer to criticisms and doubts raised by the right hon. and learned Member for Wimbledon (Sir M. Havers). Secondly, it brings together all the provisions relating to central banks in one place. I am sure that the House agrees that that is sensible. Thirdly, it ensures that a central bank or other monetary authority shall have the same immunity with regard to execution or in respect of relief by way of an injunction or order for specific performance or for the recovery of land or other property as a State shall have, irrespective of whether the central bank is a separate entity or is acting in the exercise of sovereign authority.
      Under the Bill as drafted the immunity of a State's central bank which is a separate entity and is not acting in the exercise of sovereign authority is slightly less than that of a central bank in other circumstances. That is the point that the right hon. and learned Gentleman made in Committee. I hope that he agrees that this amendment covers the point satisfactorily.
      Sir M. Havers: I hope that what the Minister said rang with great clarity in your mind, Mr. Speaker. But it is a highly technical matter. The amendment follows an issue that I raised in Committee basically because the independence of the central banks is jealously guarded by them. It is essential that they should be put into an entirely independent position throughout the Bill. I am grateful to the Government for responding to what I said in Committee.
      Amendment agreed to.
      Mr. Arthur Davidson: I beg to move Amendment No. 3, in page 7, line 42 leave out from '(5)' to 'to' in line 44 and insert:
      'The head of a State's diplomatic mission in the United Kingdom, or the person for the time being performing his functions, shall be deemed to have authority to give on behalf of the State any such consent as is mentioned in subsection (3) above and, for the purposes of subsection (4) above, his certificate'.
      I hope that I shall explain this amendment with the same clarity. It is equally technical but I am sure that you. Mr. Speaker, will understand every word of it.
      The purpose of the amendment is to meet the criticism that whereas Clause

      845
      2(7) specifies who may submit to proceedings on behalf of the State there is no provision in Clause 13 about who should be deemed to be entitled to give the consent of the State to execution or to the issue of relief against it by way of an injunction. The amendment provides that it is the head of the State's diplomatic mission who shall be deemed to be competent to give such consent.
      There is no need to make any special provision with respect to consent given in a prior written agreement because if the court is satisfied that the agreement was made on behalf of the State, the consent clause in the agreement is sufficient. Provision is needed only to cover the cases where there is no prior consent to execution.
      4.0 p.m.
      Particularly since I have expounded it with such complete clarity, I hope that the right hon. and learned Gentleman will consider that that meets his point.
      Amendment agreed to.

    Clause 14

      STATES ENTITLED TO IMMUNITIES AND PRIVILEGES
      Amendments made: No. 4, in page 8, line 40, after "entity", insert
      "(not being a State's central bank or other monetary authority)".
      No. 5, in page 8, line 44, leave out from "entity" to end of line 5 on page 9 and insert—
      "(4) Property of a State's central bank or other monetary authority shall not be regarded for the purposes of subsection (4) of section 13 above as in use or intended for use for commercial purposes; and where any such bank or authority is a separate entity subsections (1) to (3) of that section shall apply to it as if references to a State were references to the bank or authority.".—[Mr. Arthur Davidson.]
      Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
      Bill accordingly read the Third time and passed, with amendments.

  COMMUNITY SERVICE BY OFFENDERS (SCOTLAND) BILL
  As amended (in the Standing Committee), considered.
  COMMUNITY SERVICE BY OFFENDERS (SCOTLAND) BILL
    New Clause No. 2

      NATURE OF COMMUNITY SERVICE
      "In determining the nature of community service the courts may request the local authorities to relate the work to the nature of the offence.".—[Mr. Teddy Taylor.]
      Brought up, and read the First time.
      4.3 p.m.
      Mr. Teddy Taylor: I beg to move, That the clause be read a Second time.
      As the House will be aware, this Bill introduces community service orders in Scotland. As the Minister explained in Committee and on Second Reading, we have had a number of experiments in Scotland so far, and the Bill provides formally the powers to introduce the scheme throughout Scotland.
      In Committee the Opposition moved a new Clause which suggested that in determining the nature of community service the courts and local authorities should have regard to the desirability of relating the work to the nature of the offence. The Minister certainly accepted our reason for putting the proposal forward. We thought that a useful use of community service might be, particularly in cases of vandalism and malicious mischief, that the penalty should seek to ensure that the person who had committed the crime should carry out some public service or work associated with it.
      One obvious example would be that if a vandal had been caught putting graffiti on a wall, it might be a useful discipline for him to be invited to clean up the mess. That was the kind of thing that we had in mind and why we proposed the new clause in Committee. However, the Minister put forward a convincing argument and a number of reasons for not accepting it. As reported in column 87 of the Committee proceedings he said that it was not possible or practicable for the court to have the detailed knowledge of the kind of work that an offender should be doing against the background of his offence, and he said that it was not possible or practicable for the courts to have

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      detailed knowledge of the availability of work that would be required.
      He pointed out that under the Bill it was for the courts to determine the number of hours that a community service order would run for an offender, and that it was for the social work departments, which would supervise the order, to decide the content of the work which the offender would perform.
      In spite of the Minister's explanation, the Opposition pressed the matter to a Division. After one of the intermittent visits, such as we are again having today, of the hon. Member for Glasgow, Garscadden (Mr. Dewar), we stood by our belief in the value of the clause.
      The Minister rejected our case, but he indicated that in considering giving an offender a community service order the court would have the ability to recommend that an offender should carry out certain work. That is what we are trying to propose today as a compromise. We think that this is something which could be done, as the Minister has indicated, and it might be useful and helpful to write that into the law. That is why we are putting forward the new clause which it appears has the unanimous support of the Liberal Party. Under the clause the courts, in determining the nature of the community service, may request the local authorities to relate the work to the nature of the offence.
      There is no doubt that the whole country is concerned not only about the increase in crime, but about the extent to which our prisons are becoming full. The Minister supported his Bill by saying that it might be an alternative to imprisonment or a fine. There was a telling example of the increased recognition that now exists of the problems of vandalism only last night when the Minister of State, Department of Health and Social Security, winding up a debate on preventive medicine, asked what might be done about children buying cigarettes from automatic vending machines. He pointed out that the problem was disappearing because the machines were being destroyed by vandals.
      We have put forward a reasonable compromise which is consistent with the Under-Secretary's words in reply to our new clause in Committee. We are not
      848
      saying, as we said in Committee, that the courts should have the absolute power to determine the nature of the work of community service. We say only that in determining the nature of community service the courts may request the local authorities to relate the work to the nature of the offence.
      In Committee the Under-Secretary pointed out that it might be preferable for an offender to do some work which was related to his special skills or abilities. What we have in mind is a form of service related not to particular skills or abilities but to something which does not need a great deal of skill. It would be most useful if someone who destroyed a garden had to do some gardening. Equally, it would be useful if someone who defaced a wall had to clean it up. It would be quite wrong if the courts were to have no indication in the Act that they could influence the nature of the work done.
      I hope that the Minister will accept our clause as being fair and reasonable and consistent with his speech in Committee. I hope that he will accept that if we do not put in the clause there will be nothing in the Bill to give the courts the right to determine or influence the nature of the work to be done.
      Mr. George Thompson: I intervene briefly to support the clause, as I supported the earlier clause in Committee. I took the point that the Minister made then, and I congratulate the hon. Member for Glasgow, Cathcart (Mr. Taylor) on having phrased the new clause in a way that meets the points raised by the Minister. I hope that the Minister will accept it.
      The hon. Member for Cathcart referred to special skills. It might be possible to make someone who has wrecked a garden do some gardening. But that person might be completely hopeless at gardening and might replant the flowers or potatoes in such a way that they simply would not grow. The clause will mean that the local authorities, which will have the responsibility of devising the schemes, will be able where it is appropriate to make the punishment fit the crime and, where that would not be appropriate, because of the offender's lack of skill, they could choose some other form of work. I therefore commend the clause to the House.
      Mr. Donald Dewar: Like the hon. Member for Galloway (Mr. Thompson), I rise only briefly. This matter was aired in Committee, and although the hon. Member for Glasgow, Cathcart (Mr. Taylor) has ingeniously altered the wording of the clause, his arguments remain basically the same. I think that he now has the worst of the argument.
      To suggest that in determining community service the courts may request the local authorities to relate the work to the offence is to invite friction. There is nothing to prevent the sheriff from expressing his informal opinion, and I hope that an opinion expressed by a sheriff would also be persuasive on a social work department.
      However, the clause would not give the courts the right to determine, instruct or lay down the sort of work to be done. It merely gives a spurious kind of statutory authority to a sheriff's suggestion. I believe that either a sheriff should have the power—a proposal that was rejected in Committee—or the matter should be left on a completely informal basis. The clause is something of a halfway house which may be ingenious but is certainly not desirable.
      I remain of the view—and I hope that my Front Bench will also remain of the view—that however attractive it is to argue that the punishment should be made to fit the crime, given the difficulties over the availability of jobs under a community service order and the difficulties of supervision—whether by statutory staff or by people in the voluntary sector who may have an offender seconded to them—that the placing of the person who has been put under a community service order should and must remain the responsibility of the social work department.
      In a way, if we were to follow the reasoning and the logic of the hon. Member for Cathcart what we would be doing would be confusing the role of the social worker and the sheriff. I believe that that would be a mistake.
      It is clearly a matter for the sheriff to look at the offender, to look at the circumstances of the offence, and to look, perhaps, at the public interest, and to decide in terms of the Bill, when it is an Act, whether the person could appropriately be made the subject of a com-
      850
      munity service order. It seems to me that we must leave to the social worker the judgment how that should be carried out and which particular tasks, given the range that is available, are appropriate in the individual case.
      I am not necessarily quarrelling with the theory that if someone destroys a garden—as has been suggested—work in public parks, therefore, or in tidying up the gardens of old-age pensioners, and so on, might well be appropriate. But I do not think that the nature of the offence is or ever can be the only criterion that should govern where someone is placed in terms of a community service order.
      It may be that the person has special skills of another kind that the sheriff, when making the order or when making the kind of recommendation for which the Conservatives wish in the new clause, will not have the full information about the skills and aptitudes or, indeed, the full availability of the work that is available to the social worker when he decides on the final placement.
      I would not wish to fetter the discretion of the sheriff in making suggestions, but it seems to me that it is inappropriate that the power to suggest should be enshrined in the Bill, as the hon. Member for Cathcart is suggesting. I should prefer to leave it as a social work judgment. After all, if we were to have this power, it seems that we would have to have a situation in which the social worker, when providing the original report, would give an exhaustive list of all the places that are available at that stage and the whole range of community service tasks. The sheriff would then have to give attention to what was available as well as what seemed peculiarly appropriate in terms of the offence that he was considering.
      It seems to me that the new clause is inappropriate. It is inviting the sheriff to do something which he is not qualified to do and which, in the majority of cases, it would not be appropriate for him to do. I should prefer to leave the Bill as it is and leave it to the social worker, once the decision on suitability for a community service order has been made by the court, with his particular and specific expertise to decide on the best method of supervision and the best way in which a community service order should be implemented.
      Mr. Nicholas Fairbairn: I listened with care to what was said by the hon. Member for Glasgow, Garscadden (Mr. Dewar). There is some validity in it at first hand. However, I rise to support the new clause, and for this reason. Given a social worker upon whom there is the necessity to find something for someone upon whom a community service order has been imposed, perhaps he will just look at the matter and say "What shall we do with you, George? I know. You can go and repaint the footbridge at such and such a place." I think that there will be a grave likelihood, in view of the pressures on such people, that they will merely find a job for them to do in order to exercise the order.
      I am impressed by the new clause because it is important that there should be a relationship between the punishment and the offence. I say that because I remember that shortly after the war there was a competition amongst schoolchildren as to what they would have done to Hitler if they had been able to punish him alive. The child who won said this: "Turn his heart kind and then introduce him to his victims."
      I think that it is easy, perhaps, for a child to wreck a fence or to throw a bottle through a window, but to have to meet the family through whose window the bottle was thrown or to have to dig the garden of a poor old women after one has wrecked it could be a most beneficial and reasonable way of introducing the awfulness of a crime. Crime is so easy to commit at a long distance and so difficult to commit face to face.
      If the new clause is accepted, the relationship in which we may achieve some resolution of the criminal abandon in the realisation of a human effect might well be realised. That is why I support the new clause.
      4.15 p.m.
      The Under-Secretary of State for Scotland (Mr. Harry Ewing): As the hon. Member for Glasgow, Cathcart (Mr. Taylor) pointed out, we are returning to a discussion that we had at length in Committee on another new clause moved by the Opposition. I indicated then that, for various reasons, I did not feel able to accept it. I do not feel able to accept this new clause either.
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      Perhaps I could begin with the remarks of the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn). With great respect, there seems to be a fundamental misunderstanding of the community service system as it has been set up and as it has operated in the four experimental areas in Scotland that we have had over the past few months. There seems also to be a belief that the courts have no say or influence in the kind of work that is made available to offenders. That is a total misconception of the position, because in the four experimental areas, and in all areas in which in future the social work department advise my right hon. Friend the Secretary of State that a community service order scheme is available and my right hon. Friend would in turn inform the courts, local advisory committees have been set up.
      A local advisory committee consists of representatives of the police, the social work department, the trade union movement—which has a role to play in this matter in identifying the kind of jobs that could be made available to the offenders for community service work—and representatives of the sheriffs. Therefore, the courts themselves have some say and influence in the kind of work that is made available to offenders who are made the subject of community service orders.
      The new clause would merely confuse the position of the social work department vis-à-vis the courts.
      The hon. Member for Cathcart has framed the new clause to state:
      "In determining the nature of community service the courts may request".
      That presupposes that it is the courts that determine the nature of the community service. That is not so. It is the social work departments that determine the nature of the community service when they are putting these schemes together. Therefore, the new clause would have the effect of confusing the position of the court vis-à-vis the social work department which would administer the community service order once it has been attached to an offender.
      Even apart from that, the new clause is unnecessary because at present courts have powers to make recommendations when an offender comes before them. We should bear in mind that we are still talking about a position in which the offender

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      has in the first place to accept a community service order. We are not talking about a position in which a community service order could be applied against the wishes of the offender.
      It may well be—it is only speculation—that the giving of this kind of power to the court would have the effect of stopping many offenders who would be disposed of by the CSO disposal method from accepting a CSO, albeit that the alternative to that would possibly be imprisonment. One should think of the effect on the offender of courts having this kind of power.
      Mr. Teddy Taylor: Does the Minister agree that the present position is that a sheriff would be making such an order almost blind, not having any knowledge of the kind of work which would be done? Would it not be helpful to put in the Bill some indication of the court having some influence on the matter, otherwise many sheriffs will be in the difficulty of agreeing to make a CSO which in the course of events might in their view prove to be totally unsuitable.
      Mr. Ewing: The hon. Member for Cathcart misses the point that I made at the beginning that in deciding the kind of jobs that would become available in a social work area the sheriff has a say through the local advisory committee, which is made up of the sheriff, the police, the social work department and the local trade union movement. What the hon. Member is saying in proposing the new clause is that the sheriff should have an extension of this power to identify a job that had not been identified by the local advisory committee as being part of the community service by offenders scheme that had been put together by the regional council's social work department. That would be dangerous. It is not the kind of power that the courts would welcome.
      We have had many representations on the Bill about all sorts of matters, major and minor. But this is one of the issues on which we have had no representation. The courts and the social work departments are happy with the way in which the experiment has worked. No concern has been expressed to us on the matter.
      As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) has
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      said, we would be in danger of loading the statute book with unnecessary requirements when at present the court has the ability to say to a social work department that the sheriff thinks that the offender should be put to work on such-and-such a job. The sheriff will know what jobs are available, because he is part and parcel of the local advisory committee set-up.
      Mr. Fairbairn: I was not on the Committee, though I have read some of the proceedings of the Committee. Does the advisory committee and the trade union members on it say what work they will tolerate offenders doing, and thereafter does the sheriff merely commit them to it and say that the work will be gardening rather than painting lamp posts, if local authority employers will allow such work to be done by offenders? Do I understand that the sheriff has no power to say "You will not just dig gardens, but you will dig Mrs. Smith's garden"?
      Mr. Ewing: The hon. and learned Member, of all people, appreciates that we live in a democracy, and that—I hope it always remains the same—we can do basically only what we can get agreement to do.
      Mr. Fairbairn: By the unions.
      Mr. Ewing: Not necessarily by the unions. Sometimes more often by the legal profession. Often many of the things that we would like to do have been frustrated not by the trade union movement but by professional organisations such as the legal profession. I do not complain about that. We are a consensus nation and can do only what we are allowed to do.
      We have had these experimental schemes running for some months and have experienced no difficulty with them. We are therefore anxious to extend these schemes—we are on the point of doing so—and to get one more region in Scotland. We are anxious, as the Bill provides, to give this scheme legal back-up. The powers contained in the new clause are totally unnecessary because the courts already have the power to suggest to a social work department what work an offender should do. Such a recommendation will be made with the knowledge of what jobs are available.
      The basis of the new clause is that we should make the punishment fit the crime.

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      I am not opposed to that. However, we must bear in mind also that there are some offenders who for various reasons would not be suitable to do some jobs that people are suggesting might be made available to those treated by the CSO system.
      I have been no more convinced in this debate than I was in Committee. No new points in support of the proposition put to us in Committee have been made today in support of the amended proposition. I accept that it is an amended proposition. It is not good legislative government to clutter up the statute book with this kind of unnecessary requirement. I hope that the House will not allow the new clause to be read a Second time.
      Mr. Alexander Fletcher: We were encouraged to see among the names added to the new clause three distinguished Members of the Liberal Party. We were disappointed that in this short debate none of them has seen fit to come into the Chamber to support the new clause.
      We have tried to give the Minister the opportunity for second thoughts on the matter. We discussed this at some length in Committee and we felt then that the Minister was too rash in rejecting our proposal. The Minister today still takes a narrow view of the point that we are anxious to make. In the Bill the local authorities will have the sole responsibility of deciding the sort of work that offenders should do. Yet the courts, where the case will be heard, will have exercised their option under Clause 1 of the Bill of making a CSO instead of imprisonment, a fine or taking some other action.
      This is important as the court will have heard all of the evidence and judged the character of the offender before deciding that a CSO is appropriate. It is difficult to follow the argument put forward in Committee by the Minister.
      Mr. Harry Ewing: Does the hon. Member not accept that the courts have an influence, through membership of the local advisory committee, on the kind of jobs that are made available for community service by offenders? If he accepts that, the new clause is not necessary.
      Mr. Fletcher: There is no reference in the Bill to courts having an influence through advisory committees, which are presumably set up in an administrative exercise and could just as easily be abandoned. Secondly, as was said by my hon. and learned Friend the Member for Kinross and West Perthshire (Mr. Fairbairn), the advisory committees are essentially of a general nature.
      We are suggesting that the court, having listened to the evidence and judged the character of the offender and his suitability for a CSO, could make a specific recommendation as to the nature of the work. I put it to the Minister that there is a difference between the court making a specific recommendation of which work should be done in an individual case and a general recommendation made through some generalised committee structure which can be abandoned at any time because it is not part of the Bill.
      Mr. Harry Ewing: The House is in danger of getting itself into some difficulty. Will the hon. Member explain what would happen under the new clause if a sheriff in a sheriff's court recommended that an offender be given some specific kind of work and the social work department said that such work was not available for the offender to do or that it was available but not suitable for the offender to do? Would that not lead to conflict rather than co-operation between the social work departments and the courts? That is the very thing that we have sought to avoid right through the experimental scheme, and we have avoided it.
      4.30 p.m.
      Mr. Fletcher: The way that the Bill is constructed is more likely to lead to conflict than are the contents of the new clause. The Minister is floating a typical red herring because it is not unusual for courts, if in doubt about the suitability of a sentence or any other consideration regarding the offender, to take time for consultation before reaching a decision. The Minister must know that, and his intervention is not relevant.
      Mr. Dewar: Does the hon. Gentleman not accept that it is clear in the new clause that even if a sheriff makes a specific request for a particular offender and the social work department decides to

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      ignore it, that might leave a frustrated and annoyed sheriff, but there would be nothing he could do about it? Equally, if after 100 hours of a 200-hour order had been completed, that type of work ran out, the social work department would have no option but to depart from the sheriff's suggestion.
      Mr. Fletcher: That is the position without the new clause. We are trying to give the sheriff some standing in this matter. I take the point that if the social work department ignored the sheriff's recommendation, there would be nothing under the new clause that he could do about it. However, I am sure that we all hope that relationships between the courts and the social work departments would be better than that. It is in order to try to ensure that these relationships get off to a good start that we are trying to give some right to the court in deciding the nature of the work to be done rather than having that right as the sole domain of the social work department.
      Mr. Dewar: Does the hon. Gentleman not agree that there are great disadvantages in inserting suggestion clauses in statutes? While statutes can be enforced, the new clause proposes inserting a right to suggest but not the right to enforce. That is extremely clumsy and unsatisfactory.
      Surely it would be better to follow the logic of what the hon. Gentleman has said. We hope that there will be good relationships between social work departments and sheriffs and that suggestions from the bench, as they normally are, will be given serious consideration by the social work department. We would do better to leave it on what might be called a scout's honour basis because that would make for happier relationships and a much tidier Bill.
      Mr. Fletcher: The defence of the Minister against the new clause is that advisory committees exist. However, the hon. Member for Glasgow, Garscadden (Mr. Dewar) will agree that there is no reference to these committees in the Bill.
      Mr. Dewar: That is another point.
      Mr. Fletcher: No. It is relevant to the debate. Secondly, we admit to having softened the wording of the new clause and that it is not perfect. We softened the
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      wording because when it was in a harder form in Committee and provided that the courts "shall have regard to", we found that it was not acceptable to the Committee. Indeed, the hon. Member for Garscadden was one of those who voted against it.
      Mr. Fairbairn: Does my hon. Friend agree that judges in the High Court may recommend a minimum period that a man convicted of murder should serve and, as far as I know, it has not been suggested by the Government that this causes friction between St. Andrew's House and the Senate of the College of Justice on the basis that a Minister might recommend that a man should be released, contrary to a judge's recommendation.
      It is one thing to say that a court should be able to recommend that a man should pick raspberries in Forfar for the whole summer, without any right to enforce that recommendation under an Act, and it is another to have a statutory right to request, which is more likely to improve the respect that the Bench and social work department have for one another than to cause aggravation.
      Mr. Fletcher: I agree entirely with what my hon. and learned Friend has said. His intervention is fundamental to the debate and the Minister should pay some attention to and make some reference to those points.
      The hon. Member for Garscadden is taking too strict a legal view of the matter. He seems to be following very much the line of the Minister. I am surprised, because the hon. Gentleman has had some time in which to disentangle himself from these doctrines. I am also surprised that he should come back to the House without having broadened his mind on some of these matters.
      Mr. Teddy Taylor: He has got worse.
      Mr. Fletcher: Having considered the case in detail, heard the evidence for and against the offender and considered the damage done by the offender, as well as the plight of the victims, the courts have a unique role and should have the right to relate the community service order to the nature of the offence. The court is in a different position from the social work department or any local authority official. The court considers the case on its merits and listens to all the evidence,

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      including the character of the offender. That is why we feel that the court should be in a position to make a recommendation.
      Mr. Dewar: The hon. Member showed great loyalty to the views of his hon. and learned Friend the Member for Kinross and West Perthshire (Mr. Fairbairn) who seemed to believe that the sheriff should suggest that an offender should put right the damage in the garden that he had vandalised or the house into which he had broken. In those circumstances, would it not be important to have a new clause to provide that the unfortunate person who is to be the recipient of these services should be consulted before the sheriff goes ahead with his suggestion?
      Mr. Fletcher: The new clause says:
      "In determining the nature of community service the courts may request the local authorities to relate the work to the nature of the offence."
      That is the point we are making. There is no substitute for the courts in the discharge of this function. Without the new clause, there would be nothing in the Bill to give any rights to the courts.
      Mr. Fairbairn: I am sorry to intervene again, but it is important to point out that the social worker will hear none of the evidence, will not have been present in court, will probably know nothing about the offence and will probably know only of the conviction. How can such a person be responsible for deciding the sentence?
      Mr. Fletcher: My hon. and learned Friend underlines the points that we are making. So far, they have not been answered by the Minister.
      In Committee, the Minister said:
      "It may well be that on the positive side of this argument an offender has a particular talent not related to the offence he has committed. It would be better if we utilised that talent for the benefit of the community".—[Official Report, First Scottish Standing Committee; 25th May 1978, c. 88.]
      Having heard all the evidence and considered the offender's character, the court might think that the purposes of the Bill would not be served if he were to indulge in his favourite pastime—which is what the Minister suggested.
      Mr. Harry Ewing: No. I suggested that he should use his particular talent.
      Mr. Fletcher: But that is likely to be the same as indulging in his favourite pastime. If there is any possibility of that suggestion being adopted by local authorities, the new clause is doubly relevant. There should be some reference to the nature of the offence and the court should be able to make a contribution here.
      I said in Committee that it was in the interests of the social work departments that the courts should have the right to relate CSOs to the nature of the offence. If the full responsibility for prescribing the work lies with social workers they will bear the brunt of any criticism. The responsibility should be shared by the courts and the local authorities.
      We want the Bill to have the broadest possible acceptance by the public, the police, the courts and the local authorities. This is not a party matter. I hope that the Minister will respond favourably so that the Bill may be more satisfactory to all concerned.
      Question put and negatived.

    Clause 1

      COMMUNITY SERVICE ORDERS
      Mr. Harry Ewing: I beg to move Amendment No. 1, in page 1, line 8, leave out from 'of' to 'make' in line 9 and insert
      'dealing with him in any other way,'.
      Mr. Deputy Speaker (Mr. Oscar Murton): I understand that it will be convenient to discuss at the same time the following amendments: No. 2, in page 1, line 9, after 'imprisonment', insert 'or'.
      No. 3, in page 1, line 9, leave out 'or a fine'.
      Government Amendment No. 4.
      Mr. Ewing: Amendments Nos. 1 and 4 meet a commitment that I gave in Committee in response to representations from social work departments and others about the meaning of the Bill. We were anxious to make it clear that CSOs should not be seen as an alternative to a fine but should be used where imprisonment would be imposed.
      Mr. Teddy Taylor: Does Amendment No. 1 do a great deal It simply takes out the reference to specific alternative penalties and inserts the words:
      "dealing with him in any other way".
      The options which are removed are imprisonment, detention and a fine. Is this just an amendment in wording without real effect? After all, I can think of no option but those three.
      Perhaps I have no right to ask this question, but it seems that Amendment No. 4 is putting right something which was left out. It provides that nothing shall be construed as preventing a court which makes a CSO from imposing, for instance, a disqualification. In other words, no other penalty is ruled out. Presumably, in a driving offence, a CSO and disqualification could be imposed. I know that this will puzzle the hon. Member for Glasgow, Garscadden (Mr. Dewar) but many things do these days.
      To ensure that the Bill is perfect, I wonder whether the Government would consider Clause 4, which refers to a £50 fine, to ensure that the court would not be prevented from imposing that fine and an additional fine. Might there be a case for a similar amendment to Clause 4?
      4.45 p.m.
      Mr. Dewar: These intriguing amendments deal with a matter which raised considerable discussion in Committee on Opposition attempts to remove the phrase "punishable by imprisonment" from Clause 1. I thought that that was an argument about psychology and the influence of wording in statutes on the actions of courts. That phrase is hardly a limitation of the imposition of community service orders, since any common law offence—vandalism, assault or dishonesty, for instance—is punishable by imprisonment, so CSOs would be permitted on almost anything.
      However, it was suggested that CSOs should not be the alternative to imprisonment but should be something much wider—for example, a sanction for the non-payment of a fine—or that they should be confined to first offenders whom the courts were often unlikely to sentence to imprisonment.
      Some of us thought that, although we should not exclude the possibility of a CSO being an alternative to monetary penalty, the emphasis should be on it as
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      the alternative to prison. Of course there should be a choice—the courts should not be fettered—but we should encourage this emphasis. The CSO should not be a way of beefing up a probation order or an alternative to a fine. By their amendment, the Government have gone some way—I hope that this is the intention—to achieve this.
      I do not want to alarm the hon. Member for Glasgow, Cathcart (Mr. Taylor) with that introduction. I agree that the amendment has no substantial practical effect, but some social work departments and some hon. Members were alarmed that the reference to a fine was an invitation to sheriffs with a different view of the Bill from that which I and the Government have.
      I should prefer Amendments Nos. 2 and 3, but I accept that they might lead to difficulties. I am prepared to stop at the halfway house suggested by the Government.
      Mr. Teddy Taylor: Can the hon. Gentleman disabuse us of the suspicion that he might be using a drafting amendment to make a Second Reading speech? What difference does the amendment make? What other options are there but imprisonment, detention or a fine? The Government appear to have replaced a reference to three options with a general phrase. What difference does that make?
      Mr. Dewar: I suggest that the hon. Gentleman is hardly in a position to tell me when I am in order or out of order. No doubt another person will be keeping an eye on that. I agree with the hon. Gentleman in this respect. I do not think that this is a matter of the psychology of the Bill. I do not think that it makes a great deal of practical difference in terms of the substantive law. I welcome it because I think that it is a shift in the right direction.
      In emphasising the removal of the specific reference to a fine, it may be removing the encouragement to sheriffs who see a community service order not as a replacement of imprisonment but as a way of strengthening probation orders, and as an alternative to a monetary penalty. I have talked to sheriffs who have told me that they see the community service order in that light. I hope that the Minister will confirm that this is his

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      intention in removing the phrase and putting in the omnibus words which do not refer to the specific series of alternatives. It may do something to bolster those of us who see it as an alternative to imprisonment.
      Mr. Alick Buchanan-Smith: I share the puzzlement of my hon. Friend the Member for Glasgow, Cathcart (Mr. Taylor) about the reason why the amendment has been put forward. I have no argument with the Minister to the extent that, as I said in Committee, these community service orders should be used as alternatives to imprisonment. I have therefore no argument whatsoever with the objective of the Bill or with the professed objective of the amendment.
      The hon. Member for Glasgow, Garscadden (Mr. Dewar), in reply to the intervention by my hon. Friend the Member for Cathcart, seemed to be saying that if we remove the word "fine", psychologically we take away the emphasis of the word "fine", and the sheriff will not consider a fine. But equally, if we are trying to put more emphasis on imprisonment, surely we are also taking away the emphasis on imprisonment by taking out the word "imprisonment". I find it very difficult, in drafting terms or in legal terms, to know what, if anything, is achieved by the amendment.
      If we are trying to achieve what the Minister is trying to achieve, we ought to be adopting not Amendment No. 1 but Amendments Nos. 2 and 3, in the name of the hon. Member for Edinburgh, Central (Mr. Cook), because to my mind his amendments go much more specifically towards the point here. If the use of the words is purely cosmetic, the Minister ought to leave in the words in the first part that he is seeking to take out, that is to say, the reference to imposing a sentence of imprisonment, and then go on to talk about dealing with the offender in any other way. If we want to place emphasis on imprisonment, that is the way in which to achieve it, if it is purely cosmetic. But if the Minister genuinely wants to try to make this an alternative to imprisonment, we ought to be considering the amendments of the hon. Member for Edinburgh, Central.
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      Frankly, in legal terms and in terms of the way in which the Bill will work, I cannot see that anything whatsoever is achieved by the change proposed in Amendment No. 1. Before I would be prepared to accept the amendment I should like the Minister to spell out in drafting terms precisely what it achieves over and above what is in the Bill as it stands. If the Minister does not intend to achieve any more and is merely introducing it as a cosmetic, I respectfully suggest that it would be better to leave the Bill as it is and not to play around with words. If he genuinely wants to change the Bill in order to give an alternative of imprisonment, I do not know whether it is the aim to try to maintain a certain amount of flexibility, but the amendment would appear to be trying to introduce an element of flexibility without producing any improvement whatsoever.
      Before accepting the amendment, therefore, I should be grateful if the Minister would spell out precisely what difference it makes in relation to the kind of sentence which the courts will pass. I cannot see what improvement it is on the Bill as it stands at the moment. My understanding of the English language may be different from that of the Minister's, but I cannot see what the amendment achieves.
      Mr. Fairbairn: I think that I can answer the question which was asked by my hon. Friend the Member for Cathcart (Mr. Taylor) and, indeed, the matter that was raised by my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith). The Minister should consider my point, which is that the amendment does the reverse of what he suggested it is intended to do.
      It is very nice to know that the hon. Member for Glasgow, Garscadden (Mr. Dewar) thinks that sheriffs will think that the Bill means what he thinks it means, but as a lawyer he will know that it does not matter a monkey's tuppence what Parliament intended the Bill to mean. Once the Bill is given the Royal Assent, it means what it says and what it is capable of being read as saying.
      I hope that the Minister will consider the fact that there are other disposals available to a sheriff. There is, for instance, admonition. There is also

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      absolute discharge. The amendment would mean that a sheriff could impose a community service order rather than admonition and rather than an absolute discharge.
      As I understand it, that is the reverse of what is intended by the amendment. With the amendment, that is what the Bill will mean, whether the Minister likes it or not and whether that is what he intends or not. Those courses would be available to the sheriff. If the Minister does not want that to happen, he should look again at his amendment.
      Mr. Norman Buchan: I am prompted to rise because of the remarks of the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn). Half his time in the House seems to be spent in telling us about the great value of the courts, and in emphasising that the judgment of the courts must be listened to, and so on. For the rest of the time he seems to attribute to the courts an astonishing stupidity. I am not saying in which way I would strike the balance. On this occasion I shall come into his camp on the first half of his proposition, and give the courts more credit than I have usually given them for making an intelligent approach to the problems before them.
      It seems to me that if it is in the mind of the Bench to admonish or to give an absolute discharge, the Bench will do that. The amendment is a modest proposal to try to meet some of the anxieties which were brought up in Committee. Incidentally, the only modest proposal with which the Tory Benches ever appear to agree is that of Dean Swift. I believe that the modest proposal put forward by the Minister goes some way towards meeting the anxieties expressed in Committee.
      I agree that there is no real shift in specific meaning. What it might do, however, is to give a balance of advantage. As the Bill stands, the sheriff has to consider a number of questions in deciding what he should do. First, should he punish? If he punishes, should the punishment be in the form of a fine, imprisonment, or detention? The wording suggested opens up the possibility of the use of the community service order. In other words, it provides one alternative to retributive punishment, instead of having three or four other available courses of action.
      Mr. Fairbairn: I can envisage many situations in which a sheriff would tell himself that imprisonment was not suitable, and in which a fine would be ridiculous because it could not be paid and would merely be a punishment of other members of the family. The sheriff could say to himself "Without this Act I would have to admonish, but instead of that I shall make this person do 50 hours of work". I think that that is what is more likely to happen if the amendment is passed.
      Mr. Buchan: But it is not a bad thing, surely, that the sheriff should have this alternative open to him. The hon. and learned Gentleman is suggesting that the sheriff might say "I think I should punish but I cannot see a means by which I can punish, therefore I shall admonish". That does not seem to me to be a particularly satisfactory decision for a Bench to make. If the Bench considers that an alternative of the community service order will serve a social purpose, and be helpful for the person before the Bench, it should be open to the sheriff to adopt that alternative. For all these reasons, I support the amendment.
      Mr. Harry Ewing: Perhaps I can take up the point about the case in which a sheriff was considering admonishing or giving an absolute discharge and, as an alternative, imposing a community service order. We are again wandering into the area where the belief seems to prevail that a sheriff can make an offender do community work. He cannot. The offender has to accept a community service order. What the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) is suggesting is that in a case where a sheriff would consider admonishing he says to the offender or the accused "I want to dispose of you by a community service order", the offender or the accused person says "No" and then suddenly finds himself in prison. I just do not believe that people with the legal knowledge of the hon. and learned Gentleman believe that that situation will prevail.
      5.0 p.m.
      Mr. Fairbairn: The sheriff will not say "Now look here Harry, my boy, I shall either admonish you or I shall give you a community service order. Which would you rather I do?" What he actually says

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      is "I am thinking of disposing of your case by means of a community service order. Do you accept that?" The accused person does not know whether the sheriff will send him to prison, fine him, or whatever.
      Mr. Ewing: I was depending on the hon. and learned Gentleman's well known ability for reading the mind of a sheriff. That is what the hon. and learned Gentleman told the House he was able to do when he made his contribution to the debate. What has been said in that regard just confuses a very simple issue.
      I thought that I sensed the feeling of the House to get on. I accept that I moved the amendment rather quickly. But during the debate on this aspect of the Bill in Committee, representations were made through my hon. Friend the Member for Edinburgh, Central (Mr. Cook). My hon. Friend the Member for Glasgow Garscadden (Mr. Dewar), the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) and several others made a different point during that debate. The hon. Member for North Angus and Mearns said that CSOs should be available only where imprisonment would have been imposed as an alternative. Representations were made about the concern expressed by social work departments about the emphasis in Clause 1 on fines. I said at that time that I would consider this and produce a form of words which would remove the emphasis from the word "fine" and make the Bill presentation-ally better in this respect.
      I want to make it perfectly clear that these amendments do not, in any shape or form, alter the legal situation of the Bill. Through these amendments we have really met the wishes of the social work departments which made representations to us.
      The hon. Member for Glasgow, Cathcart (Mr. Taylor) properly referred to Government Amendment No. 4. This is consequential on Government Amendment No. 1. The effect of Amendment No. 4 is to make it clear to the court that it still has the ability to suspend someone from driving or to confiscate the tools that have been used in the commission of an offence. It has the ability to do these things at the moment. We
      868
      felt that that might not be clear and that it was necessary, as a consequence of moving Amendment No. 1, to move Amendment No. 4 in order to clear up that point.
      The hon. Gentleman also referred to the question of a fine on a community service order offender. The position is that if a community service order offender breaches a community service order the court can impose a fine of up to £50 if the community service order is to continue. But if the CSO is not to continue, the offender will be disposed of by the court in a way in which the court feels fit. If a breach was committed, and the service order was to continue, the court would impose a fine of up to £50. I hope that I have made that clear.
      For the benefit of the House I should say something about the two amendments of my hon. Friend the Member for Edinburgh, Central. They are not acceptable to the Government because they have the rather drastic effect of giving the courts the ability to impose both a fine and a community service order, in other words, to impose up to 240 hours of community work and a fine as well. In our view, that is not acceptable. I am not saying that that is what my hon. Friend sought to achieve. What I am saying is that if the House were to accept his amendments that would be their effect. I am sure that the House does not want that.
      Mr. Teddy Taylor: The Minister has rightly pointed out that the main reason for Amendment No. 4 was to make it clear that if a CSO were imposed it would not prevent the courts, for example, from also disqualifying someone from driving. As for a fine of up to £50 for breaching a CSO, it would seem to me from a reading of Clause 4 that the intention is that this £50 fine is the penalty for breaching the order and that the court can then go on to deal with the original penalty as it would have been dealt with but for the CSO.
      Perhaps between now and consideration in another place the Minister will see whether the same problem has arisen in Clause 4 and in Clause 1, that by imposing a £50 fine the court may be precluded from going on to deal with the original penalty with an additional fine. Will he look at Clause 4 in exactly the same way as he has looked at Clause 1,

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      in order to make sure that by imposing a CSO the court is not prevented from doing other things? Perhaps he will even drop me a note about this, or sort it out before the matter is considered in another place.
      Mr. Ewing: I can give an undertaking that I shall certainly look at this. If there is a need to sort the matter out in another place, we shall certainly be very happy to do so.
      Amendment agreed to.
      Amendment made: No. 4, in page 2, line 34 at end insert:
      '(7) Nothing in subsection (1) above shall be construed as preventing a court which makes a community service order in respect of any offence from—

      (a) imposing any disqualification on the offender;

      (b) making an order for forfeiture in respect of the offence;

      (c) ordering the offender to find caution for good behaviour.'.—[Mr. Harry Ewing.]

      Motion made, and Question, That the Bill be now read the Thrd time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
      Bill accordingly read the Third time and passed.

TUVALU BILL [Lords]
Order for Second Reading read.
The Parliamentary Secretary to the Treasury (Mr. Michael Cocks): I have it Command from the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Tuvalu Bill, has consented to place Her prerogative and interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
5.7 p.m.
The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Evan Luard): I beg to move, That the Bill be now read a Second time.
It is only two or three weeks since the House debated the independence Bill for the Solomon Islands. That is a very much larger territory than that with which we are concerned today. The Solomon Islands is a country with a population of about 200,000. On that Bill we encountered considerable complexities in the nationality provisions which aroused a good deal of discussion and debate.
Today we are debating the independence of a very small territory indeed, whose total land area is little more than 10 square miles. It has a very small population, of only about 9,000 people. I am glad to say that on this occasion we shall not encounter the difficulties and complexities with regard to nationality provisions which gave rise to so much debate on the previous occasion.
Before describing the contents of the Bill, I should like to say something about the history of Tuvalu and the developments which led to the introduction of the Bill. Most hon. Members may find the name "Tuvalu" somewhat novel and confusing—they know this territory much better by its old title of the Ellice Islands. Most of us are very familiar with the name "Gilbert and Ellice Islands".
Tuvalu itself comprises only nine coral atolls lying between Fiji and the Gilbert Islands in the South-West Pacific. The total land area is only about 10 square miles in a chain stretching along about 360 miles of sea. The people are mostly Polynesians. Most of the territory is covered by coconut palms, and it enjoys a tropical climate.

871
The first European settlers in Tuvalu were missionaries who came from the London Missionary Society and arrived in about 1865. They installed Samoan pastors on the islands and the islanders were quick to embrace the new faith. Since then, the Protestant Church has had a strong and continuing influence on life there.
In 1877, we established the West Pacific High Commission to protect the islanders from the practice, which at that time was very common in the area, of what was known as "blackbirding"—it was labour recruitment—and we were able to control and to a large extent to put a stop to that activity.
In 1892, the Ellice Islands became a British protectorate, and in 1916 they were joined with the Gilbert Islands to form the Gilbert and Ellice Islands colony.
During the Japanese occupation of the Gilbert Islands in the Second World War, many Tuvaluans worked to help the Allied forces and I am glad to say, showed admirable courage and loyalty in that cause.
The Gilbert Islanders are Micronesian and differ culturally, socially and linguistically from the Polynesian inhabitants of the Ellice Islands. The Ellice Islands are also geographically distinct from the Gilbert Islands. It was as a result of these differences that, during the early 1970s, the Ellice Islanders expressed the desire to separate from the Gilberts and to make their own way to independence. This was not a matter of controversy with the Gilbert Islanders. They did not object to separation and, in 1974, a referendum was held in the Ellice Islands which was observed by the United Nations. An overwhelming majority voted in favour of separation.
In 1975, the Ellice Islands were formally established as a separate colony, with the traditional name of Tuvalu. Independence day is planned for 1st October of this year, which is the third anniversary of separation.
In February of this year, a constitutional conference took place in London under the chairmanship of my right hon. and noble Friend the Minister of State, Lord Goronwy Roberts. It was agreed that, subject to the approval of Parlia-
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ment, Tuvalu should become independent as a constitutional monarchy under Her Majesty in October 1978. The report of the conference was published as a White Paper and presented to Parliament on 31st March of this year.
This Bill makes provision for Tuvalu to attain independence and for various connected matters. Clause 1 provides for the independence of Tuvalu within Her Majesty's dominions as from 1st October 1978. Schedule 1 deals with the consequential enlargement of the powers of the Tuvalu legislature.
Clauses 2 and 3 deal with nationality. There are similar to the nationality provisions usually found in independence Acts and, as I mentioned earlier, they contain none of the unusual features included in the Solomon Islands Bill, which caused a certain amount of controversy in this House when we discussed it. Given the concern which was expressed about that Bill, I should make it clear that no resident of Tuvalu will be left stateless as a result of this Bill, and immigration rights will be unchanged.
Clause 4 and Schedule 2 deal with consequential modifications of other enactments. Clauses 5 and 6 deal with interpretation and citation.
I turn to matters which are not covered by the Bill but about which the House may wish to be informed. The independence constitution will provide in detail for the protection of the fundamental rights and freedoms of the individual, about which we in this House have always been so concerned. The constitution will also provide for a legislature of 12 Members elected by universal suffrage, for a Cabinet responsible to the legislature, and for an independent judiciary and public service. We are satisfied that the traditional concern for human rights, which I am glad to say has been shown on these islands, will be maintained there in the future when the country moves to independence.
Mr. John Lee: This is following the usual practice, as we know, but can my hon. Friend say when the Order in Council encapsulating the constitution is likely to be available for perusal? One assumes that the contents of this will deal with entrenched clauses dealing with the matters to which my hon. Friend has referred.
Mr. Luard: I recognise that the House has an interest in such matters. That is why I am saying something about the terms of the constitution. But it is traditional that the Order in Council is not published until after the debate on the independence Bill itself. I can say that it will be published fairly shortly, as was the case with the Solomon Islands Bill.
Right hon. and hon. Members will be concerned about the future economic viability of this very small territory, with its very small population. Inevitably, the economy and development of Tuvalu will depend for some time on outside donors of aid. I am glad to say that we are by far the biggest contributors to development and will remain so for some time. We shall be giving about £6 million over the next few years for the development of these islands, with their population of 8,000 or 9,000. In addition, Australia and New Zealand will contribute to development, as will the European Development Fund, as donors of capital aid. The United Nations Development Programme will provide assistance, through which the United Nations Specialised Agencies will help. The Commonwealth Fund for Technical Co-operation, the South Pacific Commission and the United States of America will also provide technical co-operation funds.
Mr. Christopher Price: Is it the intention that Tuvalu shall accede to the Lomé Convention?
Mr. Luard: My hon. Friend anticipated my next sentence. I was about to say that Tuvalu is also expected to accede to the Lomé Convention.
For the first two years after separation from the Gilbert Islands, much of our own aid programme was directed towards providing the necessary infrastructure for good government and creating the administrative backbone for the colony. This work has included the construction of Government buildings, hospitals, schools, harbour works and protection against further devastation by hurricanes. Much of this work has now been completed, and a start has been made on development aid projects which are intended to widen the revenue earning base of Tuvalu. I am sure that we all agree that the ultimate objective must be not to go on providing aid indefinitely but to put Tuvalu in a
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position in which she can provide her own revenue funds for the future.
A special development fund of £2·5 million with no time limit is included in the financial settlement. This fund will be used for projects of a developmental nature agreed between the British and Tuvalu Governments. We shall also be providing budgetary aid, ordinary capital development aid on grant terms and technical co-operation until 1980. The terms for this have already been agreed.
Mr. Paul Dean: I am not altogether clear what the relationship would be between the special development fund and what I think the Minister called ordinary capital development of other types. What is the distinction between the two? I think that the special development fund is a somewhat new concept. I am not clear what the division of effort is between that fund, the capital development aid and the technical cooperation.
Mr. Luard: The capital development fund will be going for projects which have already been agreed. The special development fund is for projects agreed between the British Government and the Tuvalu Government over the next few years for special programmes which we think will be of assistance in the way that I described.
I am sure that everyone in this House will want to join me in wishing this territory the best for the future. It is probable that there has never been a territory so small in resources or in population for which we have seen an independence Bill through this House. Most of us will feel nothing but admiration for the courage of the population and their Government in embarking on the perilous road to independence with so few resources and so small a population.
I hope that the House will join me in congratulating the people and Government of Tuvalu, especially their Chief Minister, on the great progress that they have made in the short time since they were separated from the Gilbert Islands and on the statesmanlike way in which they have worked to ensure a successful and peaceful future in an independent Tuvalu.
I am confident that our long association with that country and the friendship

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between us will continue for many years. Tuvalu has expressed an intention of joining the Commonwealth, and I am pleased that it will be as fellow members of the Commonwealth that we have the prospect of continuing the close ties that exist between us.
5.20 p.m.
Mr. William Shelton: We join with the Under-Secretary in offering good wishes and congratulations to the people of Tuvalu. I would like to refer to the remarks of Lord Elton, on 9th May, in another place, in which he said that it was impossible not to admire the courage of such a small people setting out on a course of independence in this very hazardous world.
Tuvalu has a population of between 9,000 and 10,000 of whom 2,000 live abroad. Therefore, the numbers on the nine islands total only 7,000 or 8,000. When one thinks that the nearest capital to Funafuti, the capital of Tuvalu, is Suva, which is 650 miles away, and that Sydney is more than 2,500 miles away, one has some idea of the vast spaces in that part of the world and the hazards encountered by those who cross them.
I also welcome the decision of the people of Tuvalu who wish the Queen to remain the Head of their country. The Chief Minister, the honourable Toalipi Lauti, said that it was the unanimous wish of his people that that should be so. Also, we welcome the decision of the Tuvalu people to remain in the Commonwealth.
I believe that we shall see increasingly strong regional groupings of the Commonwealth throughout the various parts of the world. This is something that will gain in force and importance and to which we must give a welcome. At the meeting of the ASEAN and Commonwealth Prime Ministers in Australia in February there was a move in that direction. I would regret it very much if this regional grouping in any way lessened the links that this country has with our friends in the Commonwealth. I hope that these Commonwealth connections will continue the strength of our links with the people of Tuvalu.
There are four criteria by which the independence of a country should be considered when that country wishes to sever its links with us. First, let the
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people of that country want independence themselves; secondly, we should at least leave as strong a bulwark for justice and liberty as we can in this uncertain world; thirdly, the country that is obtaining independence should have sufficient economic strength, or the prospect of it, to maintain independence; fourthly, the severance should be a just and reasonable one, accepted by both parties with good will and amity.
For the first criterion, there is no doubt that this move represents the wishes of the people of Tuvalu. The Chief Minister said in the constitutional conference that independence was the wish of the people. After 86 years of "togetherness" it is with some sadness that we accept that the people of Tuvalu want their independence. We would never wish to stand in the way of the united desire of the people of any country to go their own way, and when that moment comes on 1st October we shall wish Tuvalu the very best of fortune.
The second criterion is that of justice and liberty. As the Under-Secretary has said, in the independence constitution we have provision in detail for the protection of fundamental rights and freedoms of the individual. The only sadness we have seen in other parts of the world is that however entrenched these clauses may be they can always be overthrown by the leaders of people who do not themselves believe in justice and liberty. The history of this century has shown that it is impossible to entrench in a constitution or to write into a paper enduring liberty. It must rest within the hearts and minds of those who live in the country and especially those who control their destiny.
I am sure that justice and liberty will be the future history of the people of Tuvalu, especially as I understand that the Church in that country is deeply rooted, and the Christian tradition is strongly represented. Therefore there is a strong hope and prospect that justice and liberty will remain there.
I turn to the third criterion of the economic situation, which, in Tuvalu is more difficult. It calls for one or two questions to the Under-Secretary. I read with special interest the speech at the constitutional conference by Dr. Tomasi Puapua. He represents the unofficial opposition. It seemed that the conference

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was a great success, except for the non-arrival of the Minister of State, Lord Goronwy-Roberts, who was snowbound. It must have been very strange for the delegates from Tuvalu to find that the Minister was snowbound.
Dr. Tomasi Puapua had some reservations. He said that the Tuvalu people were fully aware that they had been neglected by their old colonial masters—ourselves. He said that the future position of Tuvalu in economic terms could be decribed only as grim. He finished his speech by saying that the delegates had come to the conference carrying empty brief cases, but they hoped that they would leave with brief cases filled with pound notes to take back home. This slight sense of bitterness springs partly from the arrangements that were made when the split between the Gilbert and Ellice islands was arranged by the British Government.
The difficulties involved in these arrangements were touched upon in the speech by the Church representative, the Reverend losia Taomia, who said that the people of Tuvalu had come out of the previous Gilbert and Ellice Islands colony empty-handed and with a sense of injustice, loss and disappointment. He referred specifically to two reasons why they felt that sense of injustice.
The first reason was to do with the Gilbert and Ellice Islands reserve fund. This is a fund of about 30 million to 40 million Australian dollars, which was built on revenues from, phosphates from the well-known Ocean Islands and the even better-known Banabans. This fund was built up jointly by the Gilbert and Ellice Islands, but on the occasion of the split the fund remained with the Gilbert Islands. None of it was passed to the Ellice Islands. It was asked why no share of this fund had gone to the people of Tuvalu.
The second reason, which seemed to have been the cause of some bitterness, was that the previous colony of the Gilbert and Ellice Islands administered the Phoenix and Line Islands. On independence the people of Tuvalu have asked why they have had no share in continuing the administration of these islands. The nine islands of Tuvalu represent only 10 square miles. The people are short of land, but they intend to prosper and develop. They believe that some share
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in the Phoenix and Line Islands would have been of value to them. From what they have said, it would seem that they have some reason for taking that view. I read the reply made by the Minister at the conference, which was brief and perhaps somewhat inadequate.
I think there is some truth in the fact that in the 86 years of colonial rule the Gilbert Islands came out of matters more favourably than did the Ellice Islands. It was only in 1975 that Tuvalu was given its own secondary school and a hospital large enough to deal with emergencies in the nine islands.
We are discussing the future of a small chain of islands far away from us—islands for whom we still have responsibility and whose inhabitants still have an apparent sense of injustice. Their economy is based on the export of copra and on remittances sent home by the 2,000 or so of its citizens who work mainly as very good sailors in various parts of the world. The postage stamps from the area, which I remember very well from my stamp collecting days, bring in considerable revenue to the islands. There is also the fishing industry, which is of great importance to the islanders. The islanders, however brave their words, are in a vulnerable position. They have a problem with fishing limits, but it is by no means as difficult as our problem. They wish to have a limit of 200 miles, and I trust that they will effect it more easily than we have tried to effect our limit.
There is a slight area of discord, which I hope has been met by the aid described by the Minister today. That aid amounts to £6 million or £7 million, including a figure of £2½ million from the Special Development Fund, and budgetary and development aid, which will last until 1980. A meeting is to be held in 1980 to see what, if any, further aid is required. However, it must be expected that on independence the islanders can look to wider sources of aid than a colony can be expected to look to. They can join the Lomé Convention. Since the Japanese are interested in fishing, we must remember that the waters round Tuvalu provide excellent fishing grounds. Therefore, perhaps the islanders will be able to come to an advantageous arrangement with their neighbours in that respect.

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I hope that the Minister will be able to reassure the House that any bitterness or sense of injustice has diminished and that the conference ended on a note of optimism and reassurance. I hope that the representatives of Tuvalu feel that, however history may have served them, they have been fairly and properly treated and are satisfied within reasonable terms that the aid provisions are adequate and that they can have confidence for the future. The citizenship arrangements outlined by the Minister appear to be very satisfactory. The islanders will become citizens by law on 1st October, the day of independence. We wish them well.
We wish god-speed to the citizens of Tuvalu and to their Government as they become a new and independent country. We hope that they will not sever their links with this country, but that independence will serve to strengthen the ties and friendship between our countries, within the Commonwealth, and with Her Majesty the Queen as our monarch.
5.34 p.m.
Mr. Jeremy Thorpe: I wish to intervene briefly on behalf of my Liberal colleagues to express our good wishes and support for this Bill as the people of Tuvalu advance towards the courageous and daunting prospect of nationhood.
There was some difference of opinion in another place as to the exact population of Tuvalu. Clearly it is under 10,000. When one considers that Members of this House represent anything from 50,000 to 70,000 electors, and constituencies even beyond those figures, one is staggered by the fact that here is a population of only 10,000 in an area of 10 square miles who now join the comity of nations. That must be a courageous and daunting step.
Tuvalu has one of the smallest populations in the world. There are one or two other nations that are of equivalent size, but I shall not go into them now because if I did I should leave out some and include others incorrectly. Tuvalu will be dependent on the good will of the variety of organisations to which the Minister referred. Commonwealth technical assistance will be vital. Therefore, it is some consolation to us to know that it will remain members of the Common-
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wealth. Capital aid funds in the form of ACP through the Lomé Convention will again be a manifestation of the interest of the European Community towards the Third World.
The friendship of Australia and New Zealand will be vital to Tuvalu, as will that of Fiji, on which she will rely for some of her aid staging facilities. The United Nations will need to devote to the islanders the attentions of the Specialised Agencies, particularly WHO, FAO and the Special Fund. We do not know whether the islanders of Tuvalu will become full or associate members of the United Nations; that is a matter for them. I hope that they will not trouble to go to the expense of becoming full members and that they will not look on such membership as an automatic virility symbol. The United Nations will face problems if areas with small populations are to be burdened with the expense and political involvement of full membership. I hope that they will not feel in any way second-class citizens of the world if they do not opt for full membership. They might bear in mind the fact that Switzerland has not become a full member, though for different reasons.
We have been associated with the islanders of Tuvalu for nearly 100 years and that association will continue, but in a new form. Perhaps the Minister will be able to tell the House whether there has been an approach in respect of defence treaties or arrangements. The hon. Member for Streatham (Mr. Shelton) mentioned the subject of fishing and the interest of Japan in the area. We all know that territorial waters can sometimes turn into troubled waters. Sometimes it is a good thing for a small territory to feel that in times of trouble it has some backing from another nation. Various defence arrangements already exist in that part of the world, there are the various economic groupings, and it will be for the Government of Tuvalu to make approaches. I merely wish to be told whether we have been asked for any form of defence guarantees, or whether such requests have been made of Australia and New Zealand.
I welcome the fact that in 1980 there is to be a review of the British aid programme. I hope that we shall continue to give as generous help as we can then

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afford to what will still be a small population with a very low per capita income. This appears to be pre-eminently a case in which we should be able to call in our Commonwealth and European partners to help.
I warmly support the Bill and wish the people of Tuvalu success and good fortune in their independence. They have the friendship of this House, of this country and, I hope, of many other nations, too.
5.40 p.m.
Mr. Christopher Price: I, shortly, add my welcome to the Bill and congratulations to the people of Tuvalu on joining the independent countries of the world. I do so as Secretary of the Anglo-South Pacific Group of the Commonwealth Parliament Association and as someone who comes from a long line of London Mission Society missionaries. My grandmother was born on a Polynesian island not within Bali but not very far away.
I echo everything that has been said about the importance of the Church at this stage in the development of Tuvalu. Almost every politician on the islands at present was trained as an LMS missionary. The small Pacific countries are training grounds for the Church, teaching, politics and everything else that is essential for a country's administration. Although we have rather less to be proud of in some ways in our treatment of the people of the Pacific over the past 100 years, in that respect we have a certain amount of which we can be proud.
I echo the remarks that have been made about the problems that Tuvalu will face with a population of only about 8,000. It is worth sounding a word of warning. The past few independence treaties—certainly for the Solomon Islands and the Gilbert Islands, the latter of which will be coming before us—have come not so much from passionate campaigning in the colonies for immediate independence but from a passionate desire in the Foreign Office to complete the proces of decolonisation. We may argue which is the greatest force, but both forces were present on this occasion.
There may be a tendency to sweep countries towards independence without thinking of the problems that will be
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faced in the world by a country consisting of eight tiny islands with a population of only 8,000. I am glad that Tuvalu will joint the Lomé Convention. When I had discussions with the representatives of Tuvalu when they came to this country they expressed doubts about joining the convention, for the same reasons that the right hon. Member for Devon, North (Mr. Thorpe) had doubts about Tuvalu's joining the United Nations. Those in Tuvalu are anxious not to involve themselves in membership of international organisations that presents them with unjustifiable expense.
I hope that I shall have an assurance from my hon. Friend the Under-Secretary of State that the Foreign Office will consider arrangements for new accessions to the Lomé Convention by small countries to ensure that that does not involve them in unnecessary expense and does bring direct benefit to them.
Tuvalu will have a problem with diplomatic representation. I understand that it will be heavily reliant on Fiji to help it in representation throughout the world.
When Prime Minister Kirk became Prime Minister of New Zealand, some years ago, genuine efforts were made to try to establish a constitutional structure so that the small islands of the Pacific would not, if they did not wish to, have to go for total independence but could join some sort of organisation. It is sad that since the new regime in New Zealand there is not nearly so much thrust to try to organise something of that sort. In my view, such a move will be essential over the next 10–20 years.
Mention has been made of a 200-mile fishing limit. Japan has already signed an agreement with the Solomon Islands for fishing. It may move to try to make some arrangements with Tuvalu. If it does, the people of Tuvalu will need some negotiating strength vis-a-vis the great strength of Japan.
Tuvalu has a small land area but it will have a large sea area if it goes to a 200-mile limit or beyond. My hon. Friend the Under-Secretary of State knows—he is the House's greatest expert on the sea bed—that as we run out of mineral resources on land the countries that have control over mineral resources under the sea will become enormously

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more important, strategically. Therefore, they will become of enormously greater interest to the great Powers that want to get their hands on some of the resources.
If Tuvalu suddenly became important in any negotiations with any of the great Powers, it would not be in a strong position. That is why it is essential to Tuvalu, the Solomon Islands and, when we come to them, the Gilbert Islands—it is to be hoped that when the French get round to stopping exploding atomic bombs in the Pacific this will apply to French Polynesia and New Caledonia—that when they reach independence they join the already independent countries, such as Fiji, Samoa and Tonga, and enter some sort of federation. If that is done, such countries will be in a position to get together to stand up against those from the rest of the world who want to make arrangements with them when the sea bed attains greater strategic importance. In that way they will be able to ensure that the resources are exploited properly and not in a way that does not assist them, causes pollution, or has a number of other bad side-effects.
I know that the United Nations, the Commonwealth and other agencies will be of assistance to the Government of Tuvalu in that respect, but in welcoming Tuvalu to its independence I very much hope that the British Government will do all in their power to help Tuvalu get together with its neighbours. I am sure that something of that sort will be necessary.
Finally, we need not have any fears about human rights and the people of Tuvalu. If anything, they have a few things to teach us about such matters. The Polynesians are one of the five original races in the world. Their record on human rights is a million times better than the record of Europeans. We need have no worry on that score, and there is no need to preach to them. It remains to welcome the people of Tuvalu to their independence and to give them our good wishes for their independence.
5.47 p.m.
Mr. Andrew Welsh: I welcome the Bill and congratulate the people of Tuvalu on gaining their independence from the United Kingdom. The Scottish National Party appreciates their
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desire to run their own affairs in their own way. We wish them well in their attempt to seek democratic self-government.
I hope that the people of Tuvalu will share my sense of irony and that of other Scots when we hear hon. Members in this place advocating so strongly self-government and the benefits of self-determination and producing a short Bill—it consists of only five pages—granting independent government to other people in the world. The five pages of the Bill show how easily independent government may be granted. I hope that hon. Members will take note of that.
We find that the Bill refers to "independence within the Commonwealth". That is exactly the SNP's policy for Scotland. Every membership card shows that. The remarkable agreement in principle on SNP policy is surely too good an occasion to miss.
Mr. Stanley Newens: I am following the hon. Gentleman's argument with great care. Do I understand that in expressing enthusiasm for the Bill he is also expressing enthusiasm for the independence of all islands? Is he, therefore, advocating such independence for the Shetlands?
Mr. Welsh: The hon. Gentleman's concern over the Shetlands is of recent origin. I am sure that it blinds his concern for the whole of Scotland. Our policy on the Shetlands is straightforward, and I recommend that he reads it. We believe in the maximum reasonable devolution of powers.
I was tempted to produce an amendment to the Bill to delete "Tuvalu" and insert "Scotland". Let me assure the House that I did not table this amendment because I do not want to spoil the independence celebrations on Tuvalu.
I was tempted to ascertain how serious the English are about giving independence to Tuvalu and to demonstrate to hon. Members now present how easy it would be to give similar independence to Scotland.
In passing, I note the new Tory philosophy—
Mr. R. A. McCrindle: Is there not a vital difference between giving independence to the

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people of Tuvalu because they want it and giving it to the people of Scotland, who we know do not?
Mr. Welsh: That is an interesting point. I was about to note the new Conservative philosophy in regard to this matter. The Conservative Opposition's policy on Tuvalu, which we have heard enunciated today, is abundantly clearer than the shambles that they have created on devolution for Scotland, and thank goodness for that. Of the four criteria, I hope that Tory Opposition Members will do everything they can to honour the fourth when the time comes.
The people of Tuvalu may be lucky in that they have not discovered oil off their shores. Perhaps they are lucky that their geography makes them more distant from London than is Scotland. It is a surprise that Tuvalu did not have a referendum on this issue with a 40 per cent. blocking amendment. It is probably just as well that they escaped the attention of the hon. Member for Islington, South and Finsbury (Mr. Cunningham) in their 1974 referendum.
Indeed, where is the inevitable and—I nearly said "iniquitous"—ubiquitous hon. Member for West Lothian (Mr. Dalyell)? I am surprised that he has not scanned every word, comma and dot in the Bill in order to preserve the essential unity of the British colonies as he likes to maintain every possible vestige and ounce of London rule wherever it exists throughout the world. The hon. Gentleman should be here to attack Tuvalu's separatism, as is his wont elsewhere.
I find it ironic that Papua New Guinea, the Solomon Islands, Belize and other parts of the British Empire—good luck to them—should be given the blessing of the House on their complete independence, with no caveats, whereas month after month has been spent in this House and in another place haggling over every minor detail of even the most minimal of devolution powers to the ancient nation of Scotland. But, in looking at and approving this Bill, I leave that to the consciences of hon. Members. I hope that those who have spoken in support of the Bill will remember their words when they consider both devolution and a similar Scottish independence Bill when it arrives here.
This is, however, Tuvalu's day. I wish these nine islands and their almost
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10,000 population well in their move towards independence among the States of the world. I welcome their independent status within the Commonwealth of nations, which Scotland will also one day soon achieve.
5.53 p.m.
Mr. John Lee: The hon. Member for South Angus (Mr. Welsh) has had his fun, and I think that we have all enjoyed it. When my hon. Friend the Member for Harlow (Mr. Newens) intervened, he might have mentioned future independence for St. Kilda as well. One never knows where all this will end.
I follow the argument of the hon. Member for South Angus in perhaps being a little more controversial than some hon. Members who have spoken in the debate, for reasons which I shall make clear later. Before doing so, I want to say what I suppose almost all hon. Members should say on these occasions. I express a welcome and a word of good will for the country that is to become independent.
It is strange how, over the years, these occasions should have become numerous, but progressively less and less controversial. After the rather bitter debates over India immediately after the war, the tempo has diminished until now, unfortunately, the number of hon. Members taking part is small. [HON. MEMBERS: "Rhodesia."] I hear the word "Rhodesia". That is a very special case, as we know.
There is an irony about the Bill which the hon. Member for South Angus did not notice. The Ellice Islands were separated and given a new name and provided with legal authority to stand on their own, but a somewhat similar course of action has been denied to Ocean Island. I do not wish to compare unlike with unlike, but I think that I am entitled to make the point that if Tuvalu is very small, Nauru is smaller still, but not notably larger or smaller than Ocean Island was before it was devastated by the phosphate exploiters. Indeed, Nauru and Ocean Island go very much hand in hand. They were both exploited by the same organisation—the British Phosphate Commission. They are both small and compact islands. Whereas Nauru has been granted independence by the Australians, the future of Ocean Island remains in doubt.

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I am using this debate, among other things, to give notice to the Government that I find it significant—I hope that I shall derive some satisfaction from this fact—that, whereas it was thought that there were to be three Bills providing for independence in the Pacific in this Session, there appear to be only two: the Solomon Islands Bill, with which we have already dealt, and the Tuvalu Bill with which we are now dealing. The third Bill was to relate to the Gilbert Islands.
I have a feeling that the absence of the Gilbert Islands from the agenda may not be unconnected with the controversy surrounding the future of Ocean Island. I give notice to the Government that if a Gilbert Islands independence Bill should materialise while I am still a Member of the House, it will be subject to a large number of amendments. Indeed, I can speak confidently on behalf of the hon. Member for Essex, South-East (Sir B. Braine), who takes the same view as I do and is a more adept filibusterer than I am. I am sure that he, too, will put down a large number of amendments. If that occurs, I anticipate that that Bill will go through the kind of treatment that another place is dealing out to the Scotland Bill now.
The hon. Member for South Angus shakes his head sadly. He and I may have much the same views about the right of the other place to legislate. It is an interesting precedent. Constitutional Bills, by convention, have to be taken on the Floor of the House, whether they are highly controversial, like the Scotland Bill, or unexceptionable, like this Bill. Therefore, Government managers may look forward to a bit of trouble if there should be a Gilbert Islands Bill and if justice is not done for Ocean Island's rightful owners. We know that there has been a financial settlement, but their request, that Ocean Island should go into associate status with Fiji, where the Banabans have been living in exile for the last 30 years, still has to be resolved.
Having said that, I shall return to perhaps less controversial matters.
Mr. Anthony Kershaw: Surely the case of Ocean Island and the Banabans is different from what we are discussing now. Ocean Island could not pos-
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sibly support more than a few hundred people. The mass of the Banabans live on Fiji territory. It would be absurd to imagine that Ocean Island could be a constitutional entity in itself.
Mr. Deputy Speaker (Mr. Oscar Murton): Order. This measure relates to the independence of Tuvalu, and we should remain there.
Mr. Lee: I shall walk circumspectly in view of your ruling, Mr. Deputy Speaker. However, I think that it is in order for me to say that the constituted colony of the Gilbert and Ellice Islands, from which Tuvalu was hived off and is now to be made a fully independent country, was an arbitrary creation. Not only were the Ellice Islands arbitrarily lumped in with the Gilbert Islands; Ocean Island, which had existed separately for a considerable time, was lumped in in the same arbitrary fashion at the same time in the middle of the First World War. I think that that to that extent I can answer the hon. Member for Stroud (Mr. Kershaw) without transgressing the Chair. There was a time when it would have been viable. As it is, the proper justice of the case can be met now only by Ocean Island going into Fiji.
I come back to the provisions of the Bill. I intervened earlier to ask the Minister about the constitutional arrangements in the Order in Council under the provisions of the British Settlements Act. Of course, that cannot be produced until there is the necessary legal authority for its provision. We would like to know—I echo the remarks of the hon. Member for Streatham (Mr. Shelton), who made some observations about civil liberties, from which I am sure none of us dissent—what kind of entrenched clauses are likely to be found.
The hon. Member for Streatham was right to say that, sadly, one constitution after another in the Commonwealth has been ripped up, sometimes only shortly after being produced. The record must be held by Zanzibar. It became independent one month, there was a revolution a month later, and its constitution was thrown out of the window. There were endemic weaknesses in Zanzibar. As a sultanate it was an archaic nonsense. One cannot put too much faith in constitutional provisions, although there is a duty to provide them.

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Are there to be entrenched clauses to deal with appointments to the judiciary and a public service commission to deal with Civil Service appointments? I assume that the Judicial Committee of the Privy Council will remain the final court of appeal for certain matters. That has been the case in a number of territories, including many in the new Commonwealth, such as Fiji. A colonial governor once said somewhat acidly that he was vexed by the unhelpful decisions of distant judges, but if this were to be the case Tuvalu would be relieved of the responsibility and expense of having its own appellate court.
We are not faced with the same problem of nationality as we were when dealing with the Solomon Islands and which troubled some of my hon. Friends, including my hon. Friend the Member for Lewisham, West (Mr. Price). It would be helpful to know whether there will be such provisions.
The people of Tuvalu have undertaken a difficult task by deciding to go it alone as an independent nation. I wish them all the luck in the world. Unlike Belize, they do not face a direct military threat. I suppose that that is the only reason why Belize is not yet an independent territory. The fear is that if we walk out somebody else, such as the Guatemalans, will walk in. But Tuvalu is small and economically vulnerable. There must be a risk of a measure of undesirable economic penetration. I hope that we shall be generous with them for a long time.
One cannot talk in terms of an open-ended commitment. No Government could do that in a technical sense because no Parliament can bind its successor. It would be unrealistic and basically undesirable for an open-ended commitment of an indefinite character to be made The recipient might not want such a commitment. But I should like more detail about what economic development is envisaged.
These islands are too far from any main centre of population to be a tourist attraction and for tourism to be a fruitful source of income. Although they are beautiful islands, they are not as beautiful as Samoa, which I had the pleasure of visiting three years ago. These islands are a little further off the beaten track. They do not have the urban amenities
890
required by the rich tourists who are the only tourists who are likely to go there for some time.
What my hon. Friend the Member for Lewisham, West said about undersea resources is only too true. If resources were to be discovered the situation there might be transformed overnight. But it might also subject the people of Tuvalu to pressures and temptations and the possibility of improper interference from other sources. What type of defence assistance is to be provided? I regard most of British defence policy as singularly unrealistic and expensive but I have never subscribed to the view that there should be no such thing as defence. Perhaps in this context we can, for once, do something useful without it being too expensive.
I echo what my hon. Friend the Member for Lewisham, West said about overseas representation. I assume that we shall continue to bear the diplomatic burden on Tuvalu's behalf for many purposes. I cannot believe that they will wish to beggar themselves by having diplomatic representations all over the world merely for prestige.
When one looks at progress towards independence it is strange to find that this territory has been under British administration for longer than many of the mainland territories in Africa, and yet those territories received independence some time ago. One of the principal reasons was not a reluctance on our part to grant independence but the difficulty of finding a way to make the islands economically viable.
Sir Raymond Gower: We are dealing with territories which a few years ago we never contemplated would want independence or separatism because they were so small. Will it not be a real problem to make reasonable provision not only for defence but for education and health care in contemporary terms? It is a terrifying thought that the Bill states:
"the United Kingdom shall have no responsibility for the government of Tuvalu."
It might as well say "no responsibility for the people". That is terrifying in a territory as small as this.
Mr. Lee: I understand that. The hon. Member has made a point of substance.
I hope that the idea of some kind of West Pacific federation will be promoted

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in the next few years. Federations have fallen into disrepute—and for good reason. Two or three have been tried since the war. With the exception of the West Indies, which was a good idea—I sadly regret that it foundered—some are distinctly suspect in character. I am thinking of the South Arabian Federation and the Federation of South Rhodesia and Nyasaland. One would not regard them as happy precedents.
Such a federation would enable burdens to be shared among a number of territories which are small in potential and likely to remain so. If several East African mainland territories can have the East African Common Services Commission, which Tanzania, Kenya and, before the recent unspeakable events, Uganda joined, something similar should be possible among the Gilberts, the Solomons, Tuvalu and Fiji.
My hon. Friend the Member for Lewisham, West referred to the Western Pacific High Commission. Although he might be technically correct that this concept originated in the nineteenth century, it was not until 1952 that the Western Pacific High Commission per se was separated from the governorship of Fiji, and then it lasted only for about 20 years. They incorporated the Gilbert and Ellice Islands, the Solomons, the Phoenix Islands and one or two other territories. When my hon. Friend the Minister replies to the debate I hope that he will say a few words by way of encouragement for the concept of a federation.
There is a University of the Pacific, which is another example of shared amenities among a number of different territories. It must be a daunting task to administer a university which has a catchment area larger than the areas of some continents. However, in that part of the world the people seem to be used to large distances and they can deal with them reasonably well.
I have made a few criticisms and raised a few controversial points, but like everyone else in the debate, from the far Left to the far Right, I have nothing but good will for these people and hope they have a prosperous and happy future, and that they will continue to want to stay in the Commonwealth, as they have so far indicated.
6.11 p.m.
Mr. Paul Dean: I rise to give a warm welcome to the Bill and to wish the people of Tuvalu, who are about to embark upon independence, well. I say that having visited a number of island nations in the South Pacific. The people are among the most friendly and kindly that I have met anywhere, and I am sure that that will stand Tuvalu in good stead as it approaches independence.
I have had the privilege of meeting many of the statesmen from Tuvalu, and I pay a tribute to them for the way in which they assisted in the constitutional conference and in the other conferences which took place in earlier months. I also pay tribute to the Government, and particularly to Lord Goronwy-Roberts for the outstanding part he played in winning the confidence of the statesmen he met and in conducting negotiations which, even when they are between countries which have bonds as strong as those between Tuvalu and Britain, are inevitably difficult.
A number of hon. Members have mentioned the courage of this small nation, and at this time we remember its immense courage during the Second World War. That courage will stand it in good stead for the tasks ahead. I am delighted that Tuvalu will have as head of State Her Majesty the Queen, that it intends to be a member of the Commonwealth and that it intends to sign the Lomé Convention. These steps will ensure the maintenance of strong bonds between Tuvalu and Britain. The two countries also have a strong common Christian heritage, a heritage which is perhaps stronger in Tuvalu these days than in Britain. It is noticeable that many of the leading people in that community are either in orders or have had the benefit of an education by missionaries and so on.
It is also particularly interesting to note that in that part of the world there are a number of British colonies that will be receiving independence at about the same time. Among those colonies is the Solomon Islands, the Bill on which we discussed a few weeks ago. I was unable to take part in that debate because I was in West Africa. There are also the Gilbert Islands, and we look forward to their receiving their just and due independence before too long. I hope that

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as part of that independence settlement there will be justice for the Gilbertese and a proper place for the Banabans. One hopes that before long the New Hebrides will be following the same path.
There is, therefore, a series of island States in that fascinating part of the world all of which are approaching independence at about the same time. I am glad that the Under-Secretary emphasised that Australia and New Zealand will continue to play a leading part with Britain in providing various kinds of aid for this new nation, Tuvalu.
Against that welcoming background, I wish to raise two specific points that I hope the Under-Secretary will deal with. A number of hon. Members have suggested that a federal solution is probably the answer to these island nations in that part of the world. I wish to utter a word of caution about this. We in this country have had some experience in the last 20 to 25 years of trying to impose federal solutions. On the whole they have been unsuccessful. For us to appear to be trying to sugegst a solution of that kind at this time would be very unwise. After all, we are discussing independence for Tuvalu when only recently it separated of its own free will from the Gilbert Islands. It may be that in process of time these nations will wish to come closer together economically. However, it is far better that that should happen as a natural and evolutionary process and that there should be no suggestion of that type of solution being imposed or even suggested from this country.
I turn now to the economic future. The Under-Secretary rightly emphasised the importance of the aid and investment that is provided being used to ensure that the economy of this small nation becomes viable both in its own eyes and in the eyes of the world. I hope that the Minister, however, will be able to give the House more information about what is proposed. He did not give an adequate answer to the questions I put earlier. I hope that he will deal with this matter during the debate so that we may judge a little better the effectiveness and direction of British aid in particular.
The Minister mentioned that there would be budgetary aid. That is fully understood. That follows the normal pattern for a country of this kind. He also mentioned that there would be
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capital development aid on grant terms and technical co-operation. He said that these three types of assistance had been agreed up to 1980 and that before they ran out further consideration could be given to additional assistance which might still be required. That follows a fairly traditional pattern, and I understand it. He said, however, that in addition there would be a special development fund with no time limit. It would be helpful at this stage to have a little more information as to the nature of the fund and the sort of projects that it is intended should be promoted by it.
I wish to deal with the Lomé Convention. I am delighted that Tuvalu, along with one or two other countries, such as Fiji, which are already benefiting from the Lomé Convention, intends to sign it.
However, I hope that Her Majesty's Government recognise that Tuvalu will need a lot of assistance from Her Majesty's Government in making its appropriate applications to the Lomé Convention. One cannot expect a country of this size, taking on independence, to know its way around Brussels and to know how to make applications under the Lomé Convention for the various grants that are available.
I hope, therefore, that the Under-Secretary will give an assurance that in relation to this particular form of aid which will be available Her Majesty's Government will do their utmost to ensure that the Government of Tuvalu understand the procedures in order to make applications, because I feel that they will welcome the advice and help of Her Majesty's Government in ensuring that they are able to gain whatever is their due under the Lomé Convention.
I hope that the Under-Secretary will be able this evening to enlarge a little on those two points.
I conclude, as I began, by giving a warm welcome to the Bill and by sending, along with the whole House, warmest wishes to the Government and people of Tuvalu as they embark on their independence.
6.21 p.m.
Mr. Stanley Newens: The achievement of independence by the people of Tuvalu is very much to be welcomed, and I join with other hon. Members in adding my good wishes.

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I believe that it is right that all peoples, even those living in remote islands constituting only small populations, should have the right to self-government and the right of their national self-determination to be recognised. We do it in the case of larger populations, and I think it is equally desirable that we should do it in a case such as that of the people of Tuvalu. I therefore express my support for the Bill very warmly.
At a time such as this, however, it would be wrong if we did not recognise the difficulties, to which hon. Members have already drawn attention, which confront a small population of 10,000 people in facing up to the very many problems which independence will bring. In much larger territories, political independence has not always been followed by economic independence. Indeed, the discovery of some source of economic wealth has frequently led to the end of effective political sovereignty for people of a particular territory. In other words, colonialism has all too frequently been succeeded by neocolonialism.
The bitterness that some citizens of Tuvalu may feel at present about past events could in certain circumstances be paralleled by future bitterness produced by difficulties arising from the discovery of some source of wealth. In these circumstances, I hope that we shall give all possible help to the people of Tuvalu in overcoming any problems that arise in this way.
As has been said, Tuvalu will undoubtedly need economic aid, and aid in terms of grants may not be sufficient. The people of Tuvalu may well wish to visit this country. I hope that we shall be prepared to welcome to Britain the citizens of Tuvalu who wish to undertake educational or training courses and that we shall be prepared in the future to endeavour to assist them with all the technical, educational and training aid that they require. I hope that we shall assist them by providing them with personnel if that appears to be what they desire.
It is important that in a debate of this sort it does not appear that we are merely washing our hands of certain islands and certain people which have become troublesome in the conditions of the
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modern world. I very much welcome their independence and wish the people of Tuvalu well, but I hope that they will continue to feel that they have friends in this country. I hope that we shall assure them that in the future we shall be prepared to give them tangible proof of our friendship, not by undermining their independence but by offering them any reasonable form of assistance that they may require.
I believe that over the years many difficulties will be faced by a people in a small territory such as this, but if they genuinely feel that they can turn to people in Britain, or elsewhere for that matter, for assistance without the feeling that they will merely be subjected to some form of economic thraldom, this will greatly assist them in making progress and in achieving proper standards of life and decent conditions.
On this basis, I take great pleasure in welcoming the Bill and wishing all prosperity to the people of Tuvalu in their independent future.
6.25 p.m.
Sir Raymond Gower: I merely want to add one or two remarks to what has already been said.
Naturally, like all others who have participated in the debate, I support the Bill and I wish everyone in this very small territory every good fortune in the years ahead. At the same time, as I intimated in an intervention earlier, this is something on a scale completely different from the kind of Bill that was passed years ago when we first embarked on the very difficult operation of extending self-government to territories of differing sizes, histories and attainments. As I intimated, it was not long ago that we did not contemplate the possibility that territories of such limited resources and such small populations as this would be likely to embark upon self-government.
In one sense, I suppose that our obligation to a territory of this size may be deemed to be greater than was the case with a much larger territory such as Nigeria, with its far greater resources. Indeed, it can be said that Britain has still sufficient wealth to do something for the smaller territories. We simply do not have the resources to do much for some of the great territories such as India and

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Pakistan and countries of that size, but I imagine that for the foreseeable future we can hope to do something if countries such as Tuvalu unfortunately have probblems which cannot now me foreseen.
Mr. Welsh: In accepting the Bill and the principles behind it, is the hon. Gentleman saying that there is no country in the world that is too small, too poor or to separatist to be given independence?
Sir R. Gower: No, I am not saying that. I am pointing out some of the very serious problems that are likely to arise for a territory as small as this. If the hon. Gentleman cannot draw a distinction between a small, remote territory in the middle of the Pacific Ocean and a country such as Scotland, which is part of the single island of England, Scotland and Wales and is integrated with the life of England and Wales, I just cannot understand his argument. We are dealing with something very different. I was trying to emphasise some of the difficulties.
That is why there is something almost sombre about the phraseology of Clause 1, which says that after independence day
"Her Majesty's Government in the United Kingdom shall have no responsibility for the government of Tuvalu."
It is almost a frightening phrase. It is almost like saying that we should have no responsibility for the people of Tuvalu. I suppose that legally that is the position. This is the legal language in which the Bill must be couched. But we have a very great moral responsibility for the people of this territory, and of similar territories, although there are very few in the particular position of this territory. They will have very great problems.
The hon. Member for Harlow (Mr. Newens) said that some of the people will be coming here on visits. Of the 8,000 or so people there, how many does he think will be able to afford to come here on a visit? It is inconceivable that many of them would be able to afford it.
Mr. Newens: I entirely agree with what the hon. Member has said. I hope that we will endeavour to assist people in making that tremendous journey if they want to come to here for education and training. That was precisely my point.
Sir R. Gower: There is nothing in the Bill or in the associated arrangements to ensure that. Perhaps it is merely a pious hope, with which I agree. However, we should be doing something more. There is nothing envisaged beyond what was outlined by the Minister at the beginning of the debate.
I share the hope of the hon. Member for Birmingham, Handsworth (Mr. Lee) that there will not be compulsion. My hon. Friend the Member for Somerset, North (Mr. Dean) was quite right in saying that there must not be compulsion or a dogmatic approach to the problem of a federal solution. On the other hand, we should be persuasive in pointing out the advantages that could accrue from some getting together of these territories. With our constitutional know-how, we could try to persuade territories such as Tuvalu to co-operate more than they at present intend to do.
There must be some organisation beyond anything that we have at present to assist territories such as this, which are too weak. Tuvalu will be a weak and frail State for some time to come. It will not have the resources to arrange for reasonable education for its citizens, to ensure modern health treatment and so on. It will need help, encouragement and finance from the countries which have the means to give it assistance.
I welcome the principle of the Bill, but I am not entirely happy about the way in which this small territory is prematurely plunging into the great responsibility of independence without the resources to do so. While I hope that all will be well, I have anxieties. Tuvalu is not the sort of territory which can look forward to prosperity in the years to come. We must consider the possibility of its encountering great difficulties. Future Parliaments should be generous beyond the terms of the Bill or the arrangements outlined by the Minister.
6.33 p.m.
Mr. Gerard Fitt: I had not intended to become involved in the debate, but some of my colleagues in the corridors compelled me to make a little contribution. Representing an Irish constituency and knowing something of the history of Ireland, I had always believed that when independence for any territory was being discussed in the House the corridors and the Chamber would

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be packed and there would be an atmosphere of tension. I now find fewer than 20 people present to discuss the independence of Tuvalu.
There are not many people in the House who are aware of the pronunciation of the name of this territory. I have heard various pronunciations. In the Bill, we are giving independence to a territory which was formerly part of the British Commonwealth. The hon. Member for Barry (Sir R. Gower) said that this small territory with a small population might be seeking independence prematurely. When, in the view of Conservative Members, did any part of the British Empire or any colony seek independence other than prematurely? If we had been talking about whether it was right at this time, India, Pakistan, Kenya and other parts of Africa and all the colonial settlements which were formerly governed by Britain would still be part of the Commonwealth.
I recognise that there is only a small population in Tuvalu. The Government would not be extra generous if they ensured that the people of Tuvalu had a good economic future. It may be that the people cannot do better and that they are not facing the facts of life. The economic considerations of Tuvalu may make them worse off than they are now, but they have an ideology. They believe that they can govern their territory themselves rather than be governed by someone 10,000 or 20,000 miles away. They may be wrong.
I hope that the Government will some day, possibly sooner rather than later, see the wisdom of arriving at the conclusion that it may be easier not to govern a reluctant island just off the mainland of Britain.
Sir Raymond Gower: The point that I made in my speech was that in ending our responsibility for the government of the people of Tuvalu we are not ending our responsibility for the people themselves.
Mr. Fitt: I find that a hard distinction to draw. We hear statements every day from Amnesty International and other people about the moral obligation to look after the interests of the people and of the country. Perhaps we shall have the opportunity to discuss those issues as well.
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The hon. Member for South Angus (Mr. Welsh) said that there was a similarity between what is happening with Tuvalu and devolution of power from England to Scotland. I am as much a nationalist, though in relation to Irish nationalism, as any Scottish National Party Member, but it would not be totally fair to compare what is happening in the Pacific with what is happening here.
Mr. Welsh: Each situation is different. I merely pointed out the irony of hon. Members eulogising on the benefits of self-determination and independence. I hope that they remember those words when it comes to devolving some sort of political power to Scotland.
Mr. Fitt: I agree entirely with the hon. Gentleman. I have already indicated that there is not a right time for anyone wanting to break away from the British Commonwealth or the British Empire.
Fortunately, on the Labour Benches—I refer particularly to my hon. Friend the Member for Harlow (Mr. Newens)—there are many people who for many years have fought a tenacious battle to ensure that people who wanted to attain independence, whether they were right or wrong and whether there was a rosy or a bleak future for them, had the opportunity to find out for themselves.
I hope that this small country, with its small population, will have a rosy future. I wish the people of Tuvalu all that they wish themselves, but I hope that future British Governments will not take the view that because the island has cut its links and is no longer part of the Commonwealth we should disregard its economic future. I hope that British Governments will be as generous to this small group of people as they have been to others in the past.
6.40 p.m.
Mr. Luard: I shall try to reply to as many as possible of the points raised by hon. Members. The debate has shown that there is no controversy about the main purpose of the Bill. We all welcome independence for Tuvalu and wish the best possible future for its Government and people. Hon. Members have referred mainly to detailed points about the way in which the island's future will be safeguarded, arrangements made by the British Government and so on.

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The hon. Member for Streatham (Mr. Shelton) referred to the criteria that he and the Opposition consider when a question of independence arises—for example, do the people wish to have independence? There is no doubt that the people of Tuvalu wish independence for themselves. Are their constitutional rights and liberties adequately safeguarded? I said earlier that such arrangements had been made. We were concerned about this point, and I shall mention it in greater detail later. Has the economic future of the territory been adequately safeguarded? I said quite a lot about this, and I shall elaborate about the precise ways in which we hope to give assistance in future.
The hon. Member for Streatham raised specific points that he said had been brought up by the opposition group at the independence conference. One was the feeling among some people in Tuvalu that they might have been able to have a share of some of the phosphate revenues for Ocean Island. The Government of the Gilbert and Ellice Islands had a share of those revenues when Tuvalu was still in association with the Gilberts. This was not primarily a matter for us. Tuvalu was asking for separation from the Gilbert Islands, and that had to be conceded by the Government of the Gilbert Islands. Not surprisingly, they made certain conditions and one was that they would retain control of the phosphate revenues fund. This was accepted voluntarily by the representatives of Tuvalu. They may have raised certain matters, but they accepted that they could not claim any share of those revenues. Discussion is continuing about Ocean Island and the Banabans in that respect, but that is a separate problem.
The hon. Member for Streatham also raised the claims made during the independence conference that Tuvalu should be able to make a claim to one of the Phoenix and Line Islands. This claim could be conceded only by the Government of the Gilbert Islands, and they believe that all the Phoenix and Line Islands should be part of the Gilbert territories. They were not prepared to concede the Tuvalu claim, but it was left that this was a matter that was open to the Government of Tuvalu to continue to raise with the Gilbert Islands
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in any manner open to them. They accepted that in accepting the proposals for independence.
The hon. Member for Streatham said that one of the opposition leaders had spoken with some bitterness at the independence conference and had felt that Tuvalu had been neglected by the previous colonial Government. I think that this was said more in hope for the future than in regret for the past. I think that the leader in question felt that Tuvalu was not the most prosperous place in the world. No one denies that, but we have been engaged in a fairly extensive development programme over several years and Tuvalu was sharing in the general development of the Gilbert and Ellice Islands in previous years. More important, we have made substantial commitments of economic aid in future. Those who went away from the independence conference were reasonably well gratified with our offers—and that includes members of the opposition group in Tuvalu.
I was asked about future arrangements for the defence of Tuvalu. A territory with 9,000 people cannot expect to be able to engage in extensive defence forces of its own. No one in Tuvalu, least of all the Government, has any great ambitions in that direction. Neither we nor the Government of Tuvalu believe that the island is subject to any external threat. It does not expect to be invaded by its neighbours, and the fact that it has no defence forces is not a matter of great concern to the Government of Tuvalu.
Arrangements to help directly or indirectly, in the defence of the island could be made only on a regional basis. We all accept that the long-term future and security of a little territory in the Pacific must lie in close co-operative arrangements with its neighbours. However, if the Government of Tuvalu asked us for help in acquiring a fisheries protection capability we would be prepared to give training and assistance for that, but that would be help of a special sort designed to help them to help themselves.
My hon. Friend the Member for Lewisham, West (Mr. Price) asked a number of questions. He welcomed the fact that Tuvalu was to be party to the Lomé Convention but wondered whether more assistance could be given to small States of this sort. We have given a good deal

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of help. Of course, we recognise that, in the initial stages, we must help in making such arrangements. For example, immediately after the independence conference we made arrangements for the Chief Minister of Tuvalu to go to Brussels. Our representative there arranged for him to meet significant figures in the EEC Commission in order to set Tuvalu on its way to making such arrangements. I am sure that we shall continue to be willing to give whatever assistance of this sort is needed, as we do for other small territories.
My hon. Friend also mentioned other problems faced by small States when they become independent, particularly the fact that there was a need for regional arrangements, possibly even for a federation in the area, and he stressed that these small island territories are able to claim large areas of the ocean as part of their 200-mile zone, both for fisheries purposes and for claiming the resources beneath the seas.
My hon. Friend seemed to regard this as representing a threat to them because those attributes might be attractive to large Powers which might feel tempted to try to get their hands on them. I look at this in another way. The claim that these territories are able to lay to large parts of the surface of the waters and areas beneath the seas represents one of the few resources at their disposal. These resources should not be minimised, because they provide the best hope for the future of many of these territories. They need not fear that they will be subject to claims from elsewhere. Such claims can usually be settled through normal diplomatic negotiations, as similar fisheries claims are being settled all over the world.
My hon. Friend mentioned the need for co-operative arrangements. Tuvalu will be represented in the South Pacific Fishing Agency, when it is formed, which will negotiate fishing rights on behalf of small territories with fishing fleet owners from outside the area. That is one arrangement which will assist Tuvalu.
The hon. Member for South Angus (Mr. Welsh) and my hon. Friend the Member for Birmingham, Handsworth (Mr. Lee) talked about the prospects for independence of some other territory with which this debate is not concerned.
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That semed an abuse of the procedures of the House. As the hon. Member for South Angus said, today is the day of Tuvalu, and most of us came here to discuss its affairs and to wish it well. It is not a constructive approach to spend most of the time on the affairs of Scotland. However, the constitutional futures of both Ocean Island and Scotland are being debated elsewhere and these matters will be resolved through normal constitutional procedures.
Mr. Welsh: The Minister mentioned abuse of parliamentary procedures. I hope that he and others will draw some general principles from this debate which may be of use elsewhere. Let him think about that.
Mr. Luard: There is one general principle which the hon. Gentleman totally ignored, and that is the only one which is relevant here. We are talking about a territory whose people are almost unanimously clamouring for independence. That is not the case with Scotland. A handful of hon. Members claim to want that, yet every opinion poll that I have seen shows that little more than 20 per cent. of the population of Scotland—I am sorry to devote any time to Scotland at this moment—might want independence. There may be an opportunity of testing their wishes in the near future.
My hon. Friend the Member for Handsworth mentioned the arrangements to safeguard human rights after independence. As I said, it is never possible to publish the constitution at the time of an independence debate of this kind—it will be published shortly—but obviously its text is known. I assure my hon. Friend that those points are adequately safeguarded.
A whole chapter of the constitution is concerned with the protection of fundamental rights and freedoms of the individual—the right to life and liberty, the security of the person, protection of the law, freedom of conscience, of expression, of assembly and association, protection for the privacy of the home and of other property, protection from deprivation of property without compensation, provision that no person shall be deprived of his life intentionally, protection of the right to personal liberty, and freedom from inhumane treatment and from slavery and

905
forced labour. I hope that that reassures my hon. Friend.
However, I agree with my hon. Friend the Member for Lewisham, West that few peoples in the world have less need of special protection of their rights than the peoples of the Pacific areas, who have traditionally shown great concern in that respect.
I can also assure my hon. Friend the Member for Handsworth that a right to appeal to the Privy Council will be maintained and included in the constitution.
My hon. Friend also asked for more detail about the types of development that we hope to assist in Tuvalu. As I said, we are anxious to work in cooperation with the Government of Tuvalu. What happens will depend on the application for assistance that they make, but I can suggest the kind of areas where we think development assistance will be of value.
Obviously, there is great scope for the development of fisheries, with which we are already giving assistance. There is scope for the development of coconuts and the copra industry—one of the few crops which can be grown in this small territory is the coconut. We shall also be helping with the development of the handicrafts industry and to some extent with subsistence agriculture. There is also the possibility of developing fish-related industries.
My hon. Friend also mentioned regionalism.
Mr. Lee: On an allied point, has the question of currency been considered? This is not strictly a matter of economic development, but newly independent countries sometimes like to mark their break with the past by creating their own currency—often with disastrous consequences, because it has no negotiable value and crashes to the floor. I hope that the Government of Tuvalu will not fall into that trap and that they will be counselled to that effect by my hon. Friend.
Mr. Luard: So far as I know, that question has not arisen, but I will look into the matter and write to my hon. Friend if necessary. As he knows, I was not myself concerned in these negotiations.
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Regionalism is an important question considering the future of Tuvalu. My views fall between those of my hon. Friend the Member for Handsworth and those of the hon. Member for Somerset, North (Mr. Dean). We certainly cannot impose any kind of federation or federalism in the Pacific area. That must be a matter for the peoples and Governments of those islands, and it is up to them to enter into discussions and negotiations.
However, no one would deny that there must be the closest co-operation between those peoples and Governments. Some of them are small territories. They have a number of common problems. We should all wish to see closer co-operation under which they can face those problems with common solutions. Apart from the effort and activities of the Governments themselves, a number of outside bodies may be able to help.
The British Government will give whatever help they can, although we are no longer closely involved. Obviously, the Governments of Australia and New Zealand will wish to take a close interest in the affairs of these territories and to help in promoting co-operative arrangements. Some international organisations may be concerned. The Commonwealth may have a role to play. The regional meeting in Sydney promoted by the Australian Government earlier this year was a valuable initiative which may set a precedent, not only in this area but in other parts of the Commonwealth. I hope that that kind of regional arrangement will be promoted and sustained by the Commonwealth.
If I may give my personal view, I should like to see the United Nations playing a larger role in assisting newly independent territories which face great difficulty. I said that the UNDP will be giving some economic assistance, but perhaps the United Nations could play a larger role.
The hon. Member for Somerset, North spoke of the warm and friendly character of the people of Tuvalu and, indeed, of the whole area. I entirely endorse what he said. I welcome what he said about the role of my noble Friend the Minister of State, Lord Goronwy-Roberts, who has had the entire responsibility—I hope it was a pleasant one—of undertaking these negotiations and whose very valuable contribution I personally know very

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well. I am glad to join in the tribute paid to him by hon. Members today.
The hon. Gentleman also asked about a federal future in the area. I have already covered that aspect.
The hon. Gentleman asked me in particular about the type of aid which the Special Development Fund would be providing. I have indicated the areas in which that money might be used. What is specific is that the projects will be proposed by the Government of Tuvalu rather than by the British Government. There will be no time limit. The other types of assistance are in regard to moneys to be spent largely by 1980, and we shall then consider what we can do for the future. This is a continuing programme involving £2½million, and it will remain in existence for some time to come.
The hon. Gentleman also asked about the possibility of giving assistance in helping the Tuvalu Government to make their arrangements under the Lomé agreement. As I have said, we are prepared to give help of this kind. We have already given some help, and we shall continue to do so in the future.
I do not think that there was anything in the remarks of my hon. Friend the Member for Harlow (Mr. Newens) with which I could disagree. I confirm that we shall by no means be washing our hands of Tuvalu and the people of Tuvalu when the independence Bill is passed. Clearly, we shall not be doing that. I mentioned the development assistance, which will be continuing for a considerable time in the future. We shall be maintaining contacts through the usual channels. We shall have diplomatic representation through our High Commission in Suva. Tuvalu will be maintaining links of the same kind with the fellow members of the Commonwealth, so that there will be a number of forms of contact and communication. We shall take account of the points that my hon. Friend mentioned in his speech in considering how our development aid should be used in the future.
I do not take quite such a gloomy view as my hon. Friend took or as the hon. Member for Barry (Sir R. Gower) took in his speech. The hon. Gentleman seemed to feel that it would be impossible for such a very small territory to survive at all. I do not think that this is necessarily
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the case, provided that our own Government, above all, and others, such as New Zealand and Australia—as well as the United Nations, the Commonwealth and the international organisations that I have mentioned—continue to play an active part in giving assistance. I believe that with such assistance, territories of this kind can survive perfectly well and become better able to survive in the future on their own resources than they are now.
Mr. Newens: I am sure that my hon. Friend did not understand me to take such a gloomy view that I did not believe that Tuvalu would be able to survive. I very much welcome the Bill. I merely asked about certain forms of aid and in particular about the ability of the people of Tuvalu to visit this country and to receive education and training here.
Mr. Luard: The people of Tuvalu will be able to qualify for educational grants in the same way as other people from developing countries, and in many cases those grants will provide for funds to enable them to come to this country.
It was the hon. Member for Barry who was taking a very gloomy view as to the possibilities of the people of Tuvalu being able to survive on their own. My answer is that they will not be entirely on their own. They will have friends who are willing, ready and anxious to help. I believe that the people of Tuvalu will develop capacities of their own and industries of their own—above all, the fishing industry—which will make them better equipped than they are today to survive on their own feet.
I hope that I have answered the main points raised in the debate. I reiterate, in conclusion, the very warm welcome that we in the Government give to the Government and people of Tuvalu on attaining independence. I wish to say how pleased we are that they will remain a fellow member with us in the Commonwealth. On behalf of the Government and of the House, I extend to Tuvalu our very warm wishes for the future.
Question put and agreed to.
Bill accordingly read a Second time.
Bill committed to a Committee of the whole House.—[Mr. Jim Marshall.]
Bill immediately considered in Committee; reported, without amendment.
Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
Bill accordingly read the Third time and passed, without amendment.

TUVALU BILL [Lords]

  EXPORT GUARANTEES AND OVERSEAS INVESTMENT BILL [Lords]
  Bill read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Jim Marshall.]
  Bill immediately considered in Committee; reported, without amendment.
  Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
  Bill accordingly read the Third time and passed, without amendment.

OATHS BILL [Lords]
Bill read a Second time.
Bill committed to a Committee of the whole House.—[Mr. Jim Marshall.]
Bill immediately considered in Committee.
[Mr. BRYANT GODMAN IRVINE in the Chair]
7.10 p.m.
The Second Deputy Chairman (Mr. Bryant Godman Irvine): With the permission of the Committee, I shall put Clauses Nos. 1 to 8 together.
Mr. Ivor Stanbrook: On a point of order, Mr. Godman Irvine. May I ask that you put Clause No. 1 separately from the others?

Clause 1

  MANNER OF ADMINISTRATION OF OATHS
  Question proposed, That the Clause stand part of the Bill.
  Mr. Stanbrook: This is a consolidation Bill, but it seems a great pity that it does not consolidate the law on this subject. This is a complaint that I have made before. I do not think that the consolidation process of the House is being properly done if we are leaving law surrounding one subject inadequately covered by a consolidation Bill.
  For example, Clause 1(1) states the form of the oath in the case of the New Testament and the Old Testament. It gives the appropriate words which should be used, but it goes on to say:
  "followed by the words of the oath prescribed by law."
  This is just one of those occasions when surely the words prescribed by law ought to be included in the statute which deals with this subject. For that reason, I believe that Clause 1(1) is quite inadequate to deal with the point, as is subsection (3), which states:
  "In the case of a person who is neither a Christian nor a Jew, the oath shall be administered in any lawful manner."

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  Here again, there is no assistance to anyone who looks up the Oaths Act to see what is the legal definition of an oath with regard to what is a lawful matter.
  The Parliamentary Secretary to the Law Officers' Department (Mr. Arthur Davidson): I am delighted that someone has actually shown interest. As the hon. Gentleman knows, this is purely a consolidation measure. The clause to which he refers merely reproduces the identical section which is embodied in previous legislation and which is existing law. Therefore, whether or not the hon. Gentleman considers that the law is inadequate is a matter which, unfortunately, cannot be discussed on this consolidation Bill, fascinating though it might well be. All that the Bill does, as in the case of any consolidation Bill, is to put in one enactment the existing law which is embodied in several other enactments. The Bill does exactly that.
  Mr. Stanbrook: What the Bill should do is consolidate the law. That is the purpose of consolidation Bills. Instead of that, the tendency has been to consolidate only certain statutes. If the process has to be consolidation of the law, it should certainly be the duty of those responsible to gather all the law relating to the subject and consolidate it and not leave us with little Bills of this kind
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  which only amend the law, because a lot of it is contained elsewhere in different statutes. As a result, we do not have a comprehensive statement of the law in one consolidation measure.
  Mr. Davidson: I shall, of course, pass on to the appropriate sources what the hon. Gentleman has said The Bill has been before the Joint Consolidation Committee. It has been carefully scrutinised by it and by another place. The Bill consolidates the statute law. However, I understand the hon. Gentleman's concern. I assure him that I shall pass on what he has said to the appropriate sources, who, I have no doubt, will read it with great interest.
  Question put and agreed to.
  Clause 1 ordered to stand part of the Bill.
  Clauses 2 to 8 ordered to stand part of the Bill.
  Schedule agreed to.
  Bill reported, without amendment.
  Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
  Bill accordingly read the Third time and passed, without amendment.

EUROPEAN COMMUNITY (NON-LIFE ASSURANCE)
7.16 p.m.
The Under-Secretary of State for Trade (Mr. Clinton Davis): I beg to move,
That this House takes note of EEC Documents Nos. R/95/76 and R/467/78 on Non-Life Assurance.
I very much welcome the opportunity of debating Commission documents Nos. R/467/78 and R/95/76 which are now before the House. No one can doubt that insurance is a vital industry in this country. At home it provides a full range of services and abroad it makes a massive contribution to our export earnings. Without a doubt London is the prime insurance market of the world. I am sure that hon. Members will agree that any proposals emerging from the European Community which might affect this industry's ability to maintain its fine record are, therefore, of great concern to all of us.
There is another reason for welcoming a debate on this subject at this stage. That is that the directive is still in the process of detailed negotiation, and significant changes may still be proposed. Accordingly, the views which hon. Members express will be of extreme value in the development of the Government's policy over the coming months. I think it is right that the voice of the House of Commons should be heard. That is not without significance to the ability of our negotiators to proceed to the best possible advantage in improving these matters.
Before I go on to deal with the directive itself I should like to bring the House up to date with progress in Brussels on insurance generally. It is against that backcloth that one must view these Commission documents. I am happy to report that there has been some progress. Just 14 days ago, after difficult and protracted negotiations, the Community coinsurance directive was adopted. This represents the second major step towards a common market in European insurance. This opens up to competition the whole area of those very large commercial risks which, because of their size and nature, need to be shared among a number of insurers.
When this directive comes into operation, Lloyds and other companies in this
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country will be able to participate in covering such risks through their United Kingdom establishments. But the directive offers Europe much more. It will allow those among our partners who fear the effects of a more liberal insurance market to see how in reality such a market is able to operate to the benefit of Europe as a whole. Perhaps of still more relevance, it will pave the way for the increased freedom of insurance services envisaged by this directive.
The other main directive under discussion in Brussels is that covering establishment for life business. It will be recalled that it was debated in this House about a year ago and that a number of difficulties arising out of it were discussed. I do not think that I am being overoptimistic when I say that there is now some prospect of compromise being reached on the major outstanding issues. Our delegation at Brussels will be tabling proposals tomorrow leading, we hope, towards a solution, and our industry has accepted these after a considerable amount of heart searching. I pay tribute to those who have worked closely with my officials in trying to arrive at a solution.
Inevitably, it involves compromise, and our action on this life establishment directive should be regarded by our European partners as a sincere effort to solve certain difficult issues. Equally, it should help towards creating a good climate in which discussion of this non-life services directive may be pressed ahead in Brussels.
It remains true that progress on the insurance front has been slow, and it may be helpful if I outline some of the reasons for this. Enormous differences in current practices exist between different member States. It is not only a matter of what degree of protection the State should seek to provide for the insured or even of the extent to which protection should be provided to business men insuring their interests. It involves different philosophies of means of control. We seek to give consumers freedom of choice from a wide range of contracts offered by competing companies. We rely more on looking to the general financial strength of companies. This reflects substantially the fact that our industry plays a major part in international trade in insurance. Some other member States regulate the contents of policies and the premiums

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charged. Some also control in detail the investment of money by their insurance companies. The differences of approach inevitably make for difficult decisions for all.
The directive that the House is considering has been under discussion in a Council working party since the beginning of 1976 and it has reached the stage at which the major points of difficulty have emerged and had some detailed consideration.
It may be considered in two parts. First, it contains rules on the further coordination of certain aspects of non-life insurance operations and of insurance contracts generally. Amongst the most important of these are the calculation of technical reserves and the treatment for tax purposes of these reserves. It is our belief that some harmonisation is possible on the methods of reserving, but article 3 of the directive is unacceptable in its present form. We would wish to see a more flexible approach. On the taxation aspects in the same article, we consider that any proposals for harmonisation should properly form part of a tax directive rather than appear in an insurance directive.
Secondly, the main purpose of the directive is to settle the rules under which insurance companies may do business throughout the Community on a services basis without having to set up establishments in each member State and have the business regulated by that State. I might note here that we in the United Kingdom already freely allow such services business. The other members have regimes with varying degrees of liberality.
The key to the directive lies in Articles 4 and 6. The first paragraph of Article 4 says that, pending co-ordination of national provisions covering insurance contracts, they shall be governed by the law of the country in which the risk is situated. The second paragraph then provides the exception that the law chosen by the parties shall govern contracts covering a listed range of commercial risks. Article 6 then provides that each member State may continue to apply national rules relating to policy conditions and tariffs save for the range of commercial risks enumerated in the
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second paragraph of article 4 to which I have already referred.
The effect of these two articles taken together is that each State can ensure that the mass consumer and smaller business risks remain subject to its own national rules, but that free international competition will become possible for contracts covering, first, credit and surety ship risks; secondly, marine, aviation and transport risks where the insured is engaged in business and the risks resultant to his business activity; and, thirdly, commercial property, fire and damage risks of above the minimum sizes set out in the article, plus any associated liability risks.
We would have liked to see the directive providing freedom further down the line and will be pressing for further amendments, for example, for lower limits for the cut-off points in article 4 for industrial and commercal property risks. However, the present provision would open up to our industry major new opportunities in Europe. This is the nub of the whole directive.
The principles enunciated in article 4 concerning freedom of choice of contract law, are of fundamental legal importance. At the instance of my right hon. Friend the Secretary of State, therefore, the Lord Chancellor has referred this matter to the Law Commission and to the Scottish Law Commission because we need their advice on the exact effect of current proposals and on how they will affect other aspects of the law. There is a more general implication, and it is right that the Law Commission should examine the position. We shall need to hear the opinion of these bodies before we make any decision on the final line we are to pursue in Brussels. Moreover, I should add that it is possible that all the provisions relating to choice of law and applicable law may well be transferred to the Private International Law Convention, which is also under negotiation in Brussels.
Article 8 of the directive provides that any company wishing to do business on a services basis in another member State should seek separate authorisation for this from its own national supervisory authority. We consider this to be unnecessary.
We are also opposed strongly to the principle enunciated in article 13.2 that

917
underwriting liabilities expressed in a particular currency must be matched strictly by assets expressed or realisable in the same currency. It is our opinion that insurance companies need flexibility in applying such a rule. There is, I should add, a working party of experts examining this whole question, following agreement on the coinsurance directive, and the final text in the non-life services directive is likely to reflect very closely its eventual conclusions.
Finally, we are examining the Commission's latest proposals, which follow closely the views expressed by the European Parliament, that companies whose head offices are situated outside the Community should benefit from the directive on an equal footing only where the third countries concerned have concluded a reciprocal agreement with the Community. I should welcome the views of the House on this point in particular.
In introducing this debate, I have sought to keep any remarks uncharacteristically short. I have not entered into detail on many points. There are good reasons for that, I am sure. In particular, I have not described all our detailed points of difficulty on the directive.
If I am pressed on any point I shall try to elaborate, assuming that the House gives me leave to speak again. I am not sure that I would welcome that, but I am prepared, if requested, to make yet another appearance.
In conclusion, I emphasise the importance of the directive for this country's insurance industry. I know that it does not cover all the types of risk that we would have wished to see covered, but we welcome it as marking a further major step towards a true common market in insurance, which is the wish of us all.
The directive provides the way ahead for an opportunity, which will be seized by our industry. The industry has been yearning for that opportunity, and I hope that it will not be denied it for much longer.
7.21 p.m.
Mr. Cecil Parkinson: I thank the Minister for the way in which he introduced the subject of these very complex and important documents. I welcome the progress that has been made recently on the co-insurance directive, and I hope that the directive
918
on establishments for life assurance also will make progress in the near future.
Many of us recognised when we joined the EEC that some of our industries would find themselves facing very keen competition. However, we had confidence that overall, once they had adjusted to the keener competition with the EEC, they stood to gain. We recognised that some industries would find it more difficult to compete than others.
One of the industries for which we had great hopes was insurance. We have a highly developed, sophisticated insurance industry, as the Minister pointed out, and London is the leading insurance market in the world. We felt that insurance would be one area in which we stood to gain substantially from our membership.
Since 1973, when we joined the EEC, we have opened our market to a whole range of products produced by our EEC partners—particularly cars. It is rather ironic that one of the results of the agreement that we reached with the Japanese on their voluntary restriction of car exports is that French, German and Italian cars have been coming into Britain in increasing numbers.
I shall give one example of the dangers of protectionism. It is a fact that because we are importing fewer Japanese cars the Australians are exporting fewer raw material to Japan. Because of that, the Australians are buying fewer goods from the United Kingdom. Therefore, as a result of Japan's voluntary limitation on the export of cars to us, our European partners are selling more cars to us and the Japanese are buying less from the Australians, who in turn buy less from us. In this instance, far from gaining we are losing out.
This is an example of European manufacturers gaining enormously from our membership of the EEC. They have access to our markets and are selling more cars as a result. It was inevitable that as a consequence of joining the Common Market some of our weaker industries would find the keener competition difficult to cope with.
Equally, our more innovative and competitive industries stood to gain. We had hoped, and still hope, that insurance would be one of these industries. Many of us have viewed with some concern the growing protectionism within the

919
EEC. We joined the EEC and supported our membership in the hope that the Community would be committed to a growing and free market within itself and at the same time be an outward-looking body. Some of the trends revealed in the past few months have caused concern to those of us who are enthusiastic supporters of our membership of the Community.
Britain has a highly competitive insurance industry. As the Minister and I both agree, it is second to none in the world. But, of the non-life assurance business written in Britain at present, the EEC represents far too small a part. We write twice as much non-life business in the United States as is written in the EEC and nearly three times as much as in the rest of the world.
One reason for this is that the French and Germans are very protectionist about insurance. However, this stems not altogether from a dog-in-the-manger attitude but from a different philosophy of insurance. We believe that the insurance market should not be too tightly controlled or directed. We believe that it should be supervised and regulated but at the same time should be allowed a fair degree of freedom to show its ability to introduce new policies and search out new business. Our Continental friends take a much stricter, more dirigiste approach to insurance, and, therefore, it has been very difficult to find common ground. We have a basically different approach to the problems of the industry from that of the French and Germans.
Therefore, one must accept in these circumstances that the evolution of common principles will take time. I was interested to read an article in the Financial Times of 22nd March last year in which Mr. Eric Short, writing about the slowness of members to unify their policy, said that if we were to make progress
"this will involve breaking down some very rigid traditional barriers and over-riding some very entrenched positions."
One accepts that this is right and that it is not because people are being bloody-minded. It stems from a basically different approach to the insurance industry.
Having said that, I pay tribute to Christopher Tugendhat, our Commis-
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sioner, who is trying to put zip into this process. However, one must express the feeling that progress has been too slow and the hope that our Continental friends will recognise this and try to reach agreement with us with a greater sense of urgency.
I was interested to read Mr. Tugendhat's remarks in the debate in the European Parliament earlier this year in which he said this about the directive:
"The implementation of this directive will constitute an important step towards the effective exercise of freedom to provide services in the area of insurance to the greater benefit of policyholders, insurers and the Community as a whole."
He believes that these directives are very important and that their implementation and agreement by the Council of Ministers will represent a major step towards producing a European common market in insurance, which I am sure we all want.
I was also interested to read in the Sunday Telegraph last week that these directives were described as
"the jewel in the Crown".
It was said that the EEC's non-life service directive, if approved by Ministers
"would at one stroke open up the entire community market for indemnity insurance to all-corners."
Therefore, we are discussing tonight documents which, if implemented, would have a major impact on the European insurance market. The report goes on to refer to the string of technical questions to be hammered out—a list which, frankly, is awesome. I share that view.
Nevertheless, we have the directive in front of us, and, thanks to the efforts of Mr. Tugendhat, among others, there appears to be more and more of a sense of urgency and a desire to get something done. We must support that effort and build on it in every way we can.
It is very difficult for the nine Member countries to harmonise their insurance. If they find this difficult, how are we to tackle the problems of economic and monetary union? This is a tiny foothill compared with the mountain represented by EMU. There are two ways in which an insurer can increase his business and operate within the EEC. The first is by freedom of establishment, the second is by freedom of service. The latter already exists in

921
the United Kingdom. If we are to achieve a common market in insurance, we believe that it is essential that this freedom should be extended throughout the EEC.
It is a matter of regret that the directive effectively limits this vital freedom to the large marine, aviation and transport risks and to large industrial and commercial risks. We welcome it as a first step. In particular, we support the concept of the directive under which the services provided are governed by legislation of the country from which the service is provided—the concept of head office control as opposed to the country-of-risk control, which some of our friends would have preferred. This principle of head office control is very important indeed to Lloyd's, which operates only through brokers, but it would also bring benefit to the United Kingdom insurance market as a whole.
I turn to three major points of detail. The first relates to article 4. It must be a matter for regret that the country-of-risk principle is stated first in article 4(1), with the free choice of law—the head office control principle—for the larger risk being allowed as a derogation in article 4(2). British insurers have indicated to me that they are prepared to go along with this approach, although they would have preferred the emphasis to be the other way round.
The key is the thresholds at which the freedom to derogate is to be allowed. May I urge the Minister to resist in every way open to him any attempt to raise this threshold? If there is any movement at all in the thresholds, I believe that they must be lowered. Indeed, I urge the Minister to press for a lower threshold. There is a suspicion that the threshold may be raised rather than lowered, thus effectively entrenching the country-of-risk control as a basic principle of Community law while paying lip service to the principle of head office control. It is the duty of the Minister and of the Government to ensure that that does not happen. I assure the Minister that, however robust he chooses to be in pressing that point of view on our Community partners, he will have our backing.
I wish now to deal with the problem of liability insurance. In terms of the directive, this relates to class 13 business. As currently worded, it would appear
922
that freedom for liability insurance arrives only when the sum insured for the insured's other business exceeds the 7 million units of account threshold. British insurers feel that there should be no threshold for liability business, and the simple solution may be to move class 13 business from article 4(2)(c) to article 4(2)(a) and (b). They feel that this would achieve their objectiveI urge that point on the Minister.
I wish now to deal with article 13, which deals with technical reserves of insurance, the unexpired premiums and claims for which insurers have to provide before they can declare their profit or loss for the year. The importance of this topic is obvious. For the most part, article 13 makes common sense provision for it. There is, however, a problem lurking in the last sentence of the article:
"This requires the reserves to be covered by matching assets."
In terms of the 1973 EEC directive on insurance, matching assets are defined to mean assets
"expressed or realisable in the same currency as the liability,".
Some people have suggested that article 13 owes more to the fears of the French for their balance of payments if we have a free insurance market than it does to the needs of policyholders. Obviously, an insurer who writes a portfolio of international business with contracts in a variety of currencies has to make suitable arrangements to protect himself against exchange fluctuations. As a matter of prudence, he will usually provide for reserves in a currency in which he has a substantial volume of business. This is a problem of which the larger British insurance undertakings have had many years of experience. They are well able to make their own arrangements, and hitherto the Department of Trade has not found it necessary to lay down any detailed rules.
The problem is that, if we are to have a rigid application of the rule laid down in article 13, it could lead to insurers being compelled to keep small amounts in all sorts of different currencies—a procedure which would do nothing for policyholders and would create many administrative problems.
Let me give an example which has been put to me. Let us take the case of a marine insurer who hitherto has carried out all his business in sterling and who,

923
for the first time, seeks to insure an Italian ship and receives a premium of 1 million lire. Either that one ship will sink, in which case he would need to pay out a great deal more than 1 million lire, or it will not, in which case he would not have to pay out any Italian lire. Therefore, there will be no point in that insurer keeping 1 million lire in Italian currency against an eventuality which he would not be equipped to deal with and which the 1 million lire would do nothing towards solving.
In that instance, no purpose would be served by keeping such a small fraction of reserves in Italian currency. Indeed, much inconvenience could be caused administratively if one had to do it. It seems that that is not a sensible feature of article 13. I hope that the Minister will press for the proposed rule to be relaxed. It is not in the interests of policyholders and it does little to protect them. It could cause additional expense and much unnecessary administration.
As originally drafted, article 15 would have provided for the directive to apply to agencies and branches established within the Community and belonging to undertakings whose head offices are outside the Community. As now amended, in accordance with the recommendations of the European Parliament, the article makes the application of the directive to the branches of third country undertakings conditional upon the existence of a reciprocal agreement with the third country concerned.
I pay tribute to the work of the European Parliament on the draft directives. The debate in the European Parliament was extremely interesting. As a result of that debate, some major amendments have been made to the draft. It is a better document as a result of the work of Members of the European Parliament, especially the British Members.
The law applying to agencies and branches is of great importance to the London market, in which branches of numerous American, Japanese, Swiss and other foreign insurers are functioning. There is a danger that if we discriminate against non-EEC insurers we may invite retaliation against ourselves. Under the old version of article 15, such branches would have obtained the right
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to business originating in other EEC countries. They will now not obtain that right.
The change seems objectionable on various grounds. First, it is objectionable because it is at variance with the basic principle of a common market in insurance. There are already standard EEC conditions laid down in the first co-ordination directive of 1973 for the admission of branches of external insurance companies to any EEC country. The branches that are functioning in London have satisfied conditions that may be taken to be adequate in the eyes of all EEC Governments. They have been admitted to the market already. If it is a single market, they should be admitted to the whole of it. To provide otherwise is to say that we shall have one common insurance market for enterprises with head offices in the Community but we still have nine separate national markets for those which have head offices outside the Community but have satisfied Community requirements for the setting up of branches within it.
The second objection to the proposal is that it draws an artificial distinction between the branches and subsidiaries of external companies. For example, if an external company forms a subsidiary here, the subsidiary is liable to one set of regulations. However, if a company forms a branch it is liable to another set of regulations. We feel that the real and practical differences between a branch and a subsidiary do not justify that discrimination. We believe that it would be far better to revert to the original draft of article 15. If that cannot be negotiated with the other member States, the second-best option might be to delete article 15 altogether, so that member States which wish to take a more liberal attitude towards branches of third country insurers will remain free to do so while leaving other member States which feel unable to take a liberal attitude free to exclude such branches from writing business emanating from their own countries.
I can well understand that the House found the important and exciting issue of Tuvalu independence far more riveting than the directives. They seem fairly technical and it is easy to underestimate their importance. However, we are talking about gaining freer access for one of our major and most successful service

925
industries—the insurance industry—to the greatest insurance market in the world. It is important that our insurers have the opportunity to trade and to succeed in that large market. I hope that as a result the of debate the Minister will go to the next European meeting with his colleagues determined to back up Mr. Tugendhat in pressing hard for real progress on insurance harmonisation. That is vital to Britain.
When we think that we have only 11 per cent. of the market and that that represents £654 million worth of business, it is easily recognised that we are talking about large and important sums. I wish the Minister every success in pressuring his colleagues to get a move on with the implementation of the directives. In particular, I wish him every success in pressing for the modification of articles 4, 13 and 15 on the grounds that I have suggested.
7.57 p.m.
Mr. Ian Wrigglesworth: I take up the final remarks of the hon. Member for Hertfordshire, South (Mr. Parkinson) by saying how pleased I am that on this occasion when debating a directive it seems that for a change we shall have no one in the House saying what damage it will do to British industry. I hope that those protectionist noises will not be present in the debate. That is a good change and one that some of us who were much in favour of going into Europe expected to see. That is because we thought that many of our service and manufacturing industries were well able to compete with industries of the other members of the Community. It is a pleasure to have an instrument before us that will be of benefit to Britain and to the insurance industry.
I congratulate my hon. Friend the Under-Secretary of State on the way in which he has been of such great assistance in pursuing the directive. I am grateful to him and the Department in seeking to help the interests of the insurance industry not only during recent times but over a long period during which the directive has been discussed.
As has been said, these are enormously complex matters. When we consider the different attitudes and the different laws and regulations applying to the insurance industries in the different countries of the Nine, we realise what a problem it is to
926
achieve harmonisation. The Department deserves our congratulations for the way in which it has pursued with vigour the interests of the industry, to the benefit of both the industry and the whole country.
As we all realise and hope, the coming into operation of the directive could be of enormous benefit to the insurance industry. It could lead to economic benefits, financial benefits and, we hope, employment benefits, as a result of any growth in business that comes from our access to the European market. I think that sonic of the insurance industry in Europe is worried about Britain having access to the market. There is concern that we shall go in and soak it all up, or swamp it. We are asking for a fair competitive opportunity to go in on a freedom of services basis and take a share of what is a growing market without taking away vast amounts of business from European companies.
It is particularly important, as the hon. Member for Hertfordshire South said, to Lloyds which is restricted to operations in the City of London. It can operate only through brokers. It cannot operate under the freedom of establishment it can operate only under the freedom of services. That remarkable institution is of enormous benefit to the insurance industry in this country. It attracts a great deal of insurance business and benefit to our economy in invisible exports and has a high reputation for its services to the rest of the world. The benefits which will accrue to that organisation from having the freedom of services are welcome and we look forward to Lloyds benefiting from them.
There is only one point in general terms which I wish to make. The Minister has already assured the House that he will fight on this matter. In addition to the points referred to by the hon. Member for Hertfordshire, South, I want to refer to one matter before going on to a point which I made in our previous debate on insurance and the EEC. I refer to article 8. The Minister said that this was totally unnecessary. I support him in that view. It seems silly, when providing freedom of access in this way and throwing off the shackles, that article 8 should seek to impose upon insurance companies the necessity to gain authorisation from the national regulatory body

927
before going into the European market. Indeed, in some ways it seems to negate the whole objective of the directive. I hope that the House will support me in saying more power to the Minister's elbow in fighting this point with his colleagues in Europe.
As the House knows, I am a Labour and Co-operative Member. The Co-operative movement has a successful and large insurance society. I do not have any direct connection with it. Most nonlife insurance in this country is transacted by companies which also transact life insurance.
When we last considered insurance in the EEC, which was on 27th April last year, some hon. Members were concerned about the possibility that an EEC directive would require British composite insurance companies to be split into separate companies transacting life and nonlife business separately, to conform with the practice in some, but not all, EEC countries.
At that time, the Government considered the argument against composites to be invalid, but they were prepared, in the interests of obtaining agreement, to accept a compromise that the formation of further composites should not be permitted, on the clear understanding that existing composites would not he touched in respect of their business within the United Kingdom. The Minister gave a specific assurance on that point during that debate.
It now appears that despite the assurance given last year, proposals have been made that the British Government should agree to a ban on new composites without the quid pro quo of an assurance that existing composites would not be attacked. Indeed, I understand that the proposals go even further and include provision for a review of existing composites, and envisage the possibility that they may be required to be broken up by a subsequent EEC directive. Clearly, it would be a serious matter if all composite insurance companies were required to be split into separate companies for life and non-life insurance. I see hon. Members nodding in agreement. I might add that there would not be any compensatory benefit for policyholders.
It would be especially serious for the Co-operative Insurance Society because,
928
as a co-operative society, it cannot raise equity capital. It is a mutual body and it cannot go to the market to raise equity capital. It provides the necessary capital backing for its substantial non-life business by holding its free reserves in common between its life and non-life business. A requirement for it to be split into separate corporate bodies transacting life and non-life insurance might make it impossible for the society to continue to transact non-life business on a co-operative basis. That would be a most unfortunate result. I am sure that would be agreed by all my colleagues in the Co-operative Group and, I hope, by other hon. Members on both sides of the House.
I raised this matter last April and was glad to receive the assurances that the Minister gave. I hope that he will now confirm these assurances and, in particular, tell the House that the British Government will not agree to a ban on new composites being included in an EEC insurance directive, except as part of a package under which it is agreed that existing composites can continue, or to any requirement for a review of existing composites being included in any directive.
8.5 p.m.
Mr. R. A. McCrindle: As is usual in debates on insurance, I start by declaring an interest as the parliamentary consultant to the British Insurance Brokers' Association. Perhaps a little unusually, I should explain that among the membership of that organisation are both the largest brokers at Lloyds and the largest non-Lloyds brokers in the country, whose responsibility stretches to the placing of international risks throughout the world and who therefore have more than a passing interest in what is likely to happen to this draft directive.
Mention has been made both of Lloyds and of the insurance companies. I should like to pay my tribute to the major progress made by insurance companies and Lloyds in maintaining our reputation as the insurance capital of the world. However, like my hon. Friend the Member for Hertfordshire, South (Mr. Parkinson), I should like to indicate a note of regret. Whereas in the United States of America our proportion of business is sizeable to the point of being more impressive than

929
that of any other insurer outside the United States, the same cannot yet be said of our involvement in Europe. Therefore, any opportunity which appears to be developing to increase our insurance business in Europe to the benefit of this country is to be welcomed.
I welcome the draft directive as perhaps the first strong indication that at long last we are on the move towards a liberalisation of insurance within the EEC. I have no doubt that although we shall meet competition from insurers in other leading EEC countries we have nothing to fear, because, traditionally, we have been competitive and prepared to travel the world to introduce our expertise in this sphere. I look forward to the day when we are able to compete within Europe on equal terms with, for example, France and Germany.
It may be a little unusual, but I should like at this stage to pay tribute to the Commission—a body which is not used to frequent congratulations from hon. Members. It appears that it has at long last introduced a note of urgency into the liberalisation of insurance within Europe. For that we are entitled to congratulate the Commission.
It will come as a surprise to the Minister but we are also entitled to congratulate the Government for bringing forward with considerable speed this debate on the draft directive. There may be reasons for doing this which are not related to the European Community. Perhaps the Government are a little short of business to bring before the Commons for discussion. Perish the thought, but perhaps the Government see this as a relatively harmless debate to fill in the time between now and a General Election. For whatever reason, we are pleased that the Government have seen fit to allow a debate on the directive as quickly as they have.
Mr. Clinton Davis: I hope that the hon. Member has concluded his observations on that matter. Clearly this is a matter of significant importance. That is why the Government thought it right that it should be debated. I am sure that it is a matter that is on the lips of every constituent in Brentwood and Ongar.
Mr. McCrindle: I would not for a moment deny the Minister's last observation, because it is self-evident that this
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is the only topic of conversation in my constituency.
I am particularly pleased because not only have the Government provided time to debate the draft directive but the Minister was at some pains to emphasise that what we say tonight not merely involves comments on an event which has passed but provides an opportunity to influence the Government reaction to the draft directive. I welcome that. It also allows me to deliver a general welcome to the directive.
I should like to give voice to a few cautionary words. Like my hon. Friend the Member for Hertfordshire, South, I shall begin with a reference to article 4. This is a lawyer's paradise. As a non-lawyer, I do not pretend wholly to understand the ramifications of the article. There is no doubt that the long controversy which developed before the present compromise was reached was largely as a result of the powerful resistance of certain of our EEC partners, particularly Germany and France, who were obdurate that no compromise was possible in the choice of the law under which a contract would be written when the directive is in operation.
It is, therefore, all the more surprising and commendable that a compromise has been reached against such tough opposition. But I must express concern because the freedom to choose the law under which the contract would be written now appears to be dependent upon the size of the risk.
I echo what my hon. Friend the Member for Hertfordshire, South said. British insurers feel obliged to accept this as the best compromise available, but they are anxious that the threshold above which alone a choice can be exercised should not go on being increased during the remaining stages of discussion on the directive. Ideally, the insurers' interests in this country would like to see the threshold reduced. We should be opposed to raising the threshold further.
I am not clear about one matter. The directive refers to marine, aviation, transport, commercial and industrial insurance. On the face of it that is clear. That allows us to understand the types of insurance to which the threshold will apply. In the draft directive little reference appears to be made to what I

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shall call the liabilities. Perhaps the greatest opportunity for British insurance to develop within the EEC lies in that sphere. I hope that the Minister will make clear where the liabilities fall within article 4 and whether the threshold conditions to which I have referred apply to liability insurances as well as to those to which more specific reference is made.
I turn to article 13. By hon. Friend the Member for Hertfordshire, South did the same, and I could not help feeling that we had seen the same brief from the insurance interests in this country. It does no harm to repeat the fear of British insurance interests about article 13. This involves our old friend—matching reserves to liabilities in the country in which the risk is written. It is difficult for the British to understand the almost paranoic insistence of some of our partners in the EEC on this matter. In further discussions on the directive, the Minister would be well advised to accept that strict and absolute matching of reserves to liabilities is neither desirable nor essential.
For example, the question of the management of investments within an area in which a risk is written is a qualifying feature. I believe that a relaxation of the strict rules that the Germans and French would like is something that the Minister should be pressing upon our EEC colleagues.
I turn to article 15. I understand the difficulty that hon. Members and the public have in understanding this article, with its references to branches and agencies and third country insurers writing business within the EEC. But certain principles are involved. A brief produced by the insurance industry on the article states that
"if a third country insurer is good enough to have a branch or agency in the U.K., then surely it should be allowed to operate in the other E.E.C. States. Thus we would prefer to go back to the previous text, but if this is not possible then we feel the Article 15 could best be deleted altogether, as this would leave individual Member States free to decide upon the attitude they would wish to adopt to the agencies and branches of third country insurers wishing to transact services business into their countries from another E.E.C. Member State."
I do not imagine that by reading that extract I have cast great additional light on an inevitably abstruse subject. I hope
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that the Minister will take on board the fact that the insurance industry feels sufficiently strongly about article 15 to make either an amendment going back to the status quo ante or a deletion preferable to the proposal that we are discussing.
I warmly welcome the liberalisation that is implicit in the draft directive. I warmly welcome, too, the breaking of the log-jam which, for far too long, has prevented the British insurance industry from increasingly turning to Europe.
I echo the congratulations that have been offered to Mr. Christopher Tugendhat. There is no doubt that since he became a Commissioner the impetus behind getting insurance moving in the EEC has been considerable. I noticed that in a newspaper interview the other day he said that he would be very disappointed if we did not have a complete Common Market in insurance by 1980. I cannot help feeling that in view of what has happened in the past, that is a little optimistic, but I imagine that most hon. Members will join me in hoping that at the earliest possible moment we can create a truly free market for insurance in Europe.
8.21 p.m.
Mr. Ernest G. Perry: It gives me great pleasure this evening to join hon. Members on both sides of the House in welcoming to some extent the directive. I suppose that the insurance officials of the Department of Trade have put a great deal of work into trying to iron out any difficulties that exist over differences between the way that we conduct insurance in this country and the way it is conducted on the Continent. I, too, believe that we owe a debt of gratitude to the officials in the Department who have negotiated these terms. We are particularly grateful to Mr. Christopher Tugendhat, who has represented this country in the Commission.
In insurance Britain is pre-eminent in the world. We have something to offer Europe, and that is why so many countries in Europe are trying to impose restrictions through the terms of the directive. The insurance expertise and knowledge of this country has been built up over hundreds of years. If by 1980 these regulations have become effective, the British insurance industry will render

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to Europe the finest insurance service any country can give.
There are a number of points about which we should be most careful, and one concerns article 4 and the threshold. In future negotiations we must keep this threshold at least as low as it is now. At no time must we agree to an increase.
Article 8 requires special authority or authorisation from the Government of the country in which an insurance company intends to operate. If there is to be unanimity in the Common Market, I do not see why there should be the need for special authorisation. Plain authorisation is all that should be required.
On article 13, I believe that the matching resources and the establishment of huge funds in every country in Europe should no longer be required. We should stick our necks out on this matter and tell the Community that this is just not on.
The British Insurance Association, which represents all the insurance companies and pension societies in the country, is the expert body to which we should all look. We expect from the association guidance on what is best for our industry. In 1980, when I shall no longer be in this place, I hope that the House will ensure that our industry gets its full shale of opportunities to develop in Europe.
I regret that my hon. Friend the Member for Thornaby (Mr. Wrigglesworth) is no longer present. He is, I know, serving on the Finance Bill Committee and he is having to be in two places at once. He has asked me to apologise on his behalf to the House for his absence. I wish to reiterate what he said. I am worried about what may be proposed for the big British insurance societies and companies which operate in practically every sphere of insurance, from the general to the life business. We are concerned in this directive with non-life business. If there is ever any attempt to try to break up our enormous insurance companies—I am thinking of the Prudential, the Pearl, the Co-operative, the London and Manchester and all the large companies which transact all types of business—into a large number of separate companies each to conduct one aspect of insurance, we should resist that to the utmost.
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Our insurance companies, which have been transacting every type of business for 150 years, should not have to change their style of business in order to fit in with some countries which, to put it bluntly, do not understand the world insurance industry as the British insurance industry does.
We all welcome this directive. It is most agreeable this evening to have something from the Community on which there is unanimity in the House and on which the serried ranks of the anti-Marketeers, who will oppose anything because it comes from Europe, are not present. The directive is the greatest fillip that the British insurance industry has had for a long time. I only hope that we may take full advantage of it in order to show Europe that we have the finest insurance industry in the world.
8.28 p.m.
Mr. Paul Dean: I agree very much with what has just been said by the hon. Member for Battersea, South (Mr. Perry) about the insurance industry and the directive. I am bound to say that I had forgotten that the hon. Member intended to retire at the end of this Parliament. We shall all miss his contributions on insurance and other matters and, indeed, his friendship in the House.
Like my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle), I declare an interest in insurance matters, and I add my qualified welcome to the directive. It is a qualified welcome for a number of reasons, the most important of which is that, in spite of efforts on the part of the Government and many other people, progress has been painfully slow. In many areas of the EEC in which our competition is somewhat weak, we have seen things being introduced much more quickly. Here is an area in which the British insurance industry is in the forefront of the world, but it is an area in which one cannot disguise the suspicion that some of our partners within the EEC, knowing the effective competition that would come from a common market in insurance, are dragging their feet.
One of the messages which I certainly suggest should go out from the House tonight is that we are dissatisfied with the progress that is being made. One of the intentions of the debate is to strengthen

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the hand of Her Majesty's Government in trying to ensure that progress in the future should be quicker.
In the explanatory memorandum from the Secretary of State for Trade, I notice that it is said of the text of the directive:
"It may be submitted to the Council of Ministers for adoption in the latter part of 1979."
That simply is not good enough. One of the things that the House of Commons—in every speech that has been made so far this evening, I think—is saying to the Minister is that this progress is not satisfactory, and we hope that the House of Commons is strengthening the Government's hand to try to ensure that speedier progress is made.
My other main general criticism concerns the growing fear in the industry, a fear which I certainly share, that we are going in for far too much detail in this and other directives and that we are beginning to depart from the essential element of flexibility and freedom which has characterised legislation on insurance matters in this country and is one of the reasons why British insurance has made such an effective mark throughout the world.
I beg the Government—I was glad to hear the Minister making this point—to go all out to retain that element of flexibility which has stood our insurance industry in such good stead in the past. I fear that there are some indications from this directive and others that the Continental tradition, which is for much more detailed regulation, is beginning to creep into this and other directives. I hope that this tendency can be resisted.
Those are my two main regrets about the general approach and the timing of the directive. Having said that, however, I welcome it, as other hon. Members have done, as a step towards a common market in insurance, albeit a modest step. I particularly welcome the principle, which appears to be enshrined here, that insurance services provided should be governed by the legislation of the country from which the service is provided. As I understand it, this means that a United Kingdom insurer will be able to cover a risk in any EEC country from London and be subject to United Kingdom legislation. This is a very important principle
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to get established. To use the jargon in the trade, it is the concept of head office control.
Having given that welcome and expressed those qualifications, perhaps I may very briefly underline some of the particular criticisms made by my hon. Friends the Members for Hertfordshire, South (Mr. Parkinson) and Brentwood and Ongar and by Labour Members. I want to refer briefly to two articles—articles 13 and 15.
I was very glad to hear the Minister refer, when he was making some critical remarks about article 13, to the importance of retaining flexibility. I entirely support what he said about that. Article 13(2) refers to the technical reserves being covered by equivalent matching assets. Many criticisms have been made about this from both sides of the House. A recent experience with another directive which was recently passed by the Council of Ministers gives concern that this article will cause the introduction of strict and absolute matching requirements. That would be quite unacceptable to British insurance. The rules relating to the matching of assets must take proper account of all practical considerations, including the need for efficient management of investments and the true significance of exchange risks.
Rightly, British insurers would like to see article 13(2) amended to indicate that, while technical reserves shall be represented by matching assets, relaxations to this rule should be granted by the supervising authorities in the individual member State. That seems to me to be a reasonable element of flexibility on which the Government would be on very sound ground in taking a strong stand.
On Article 15 I merely reiterate the points already made. I believe that the insurance industry is right in saying that the present text is a step backward and that it is not as good as the original text. If it is not possible to go back to the original text, I agree that it would be much better to delete this article altogether and to leave the matter in the hands of the individual States.
I hope that the debate has strengthened the hand of the Government as regards timing and in trying to preserve the essential flexibility which has been one of the strengths of the British insurance

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industry. I hope that it will also strengthen their hand in the specific but very important detailed points which have come in unison from both sides of the House.
8.38 p.m.
Mr. Roger Moate: It will not come as a surprise to the House if I introduce a dissenting note into the debate. I have been rather surprised by the immense amount of gratitude bestowed on a variety of people. It has been expressed to the Commission, to Mr. Christopher Tugendhat and even to the Minister—for what? I do not believe that the British people, either today or in the future, will really feel any great benefit from this directive.
My dissenting note is one not of opposition but of total scepticism to the directive. I think that many hon. Members have been guilty of slight exaggeration in describing it as a great step forward, or in seeing it as a great opportunity to create a common market in European insurance. Listening carefully to the debate, one has detected in almost every speech criticisms of the directive that undermine the very case that hon. Members were welcoming. The criticisms that the Minister made, rightly, of the directive have been reinforced by almost every other speaker, and they are at total variance with the desire to have a free market in insurance. If some of these articles go through in their present form, the status quo will continue to prevail and we will not have taken a step forward.
My criticism is on a much broader base than that. When we were arguing about membership of the EEC, it was said by many people in the insurance profession that there were great opportunities in Europe for British insurance. I was sceptical of that claim, and I think that the lack of progress of British insurance in Europe so far—although the time scale has not been long—has borne me out.
Nevertheless, one of the features of our membership that I welcome is the freedom of provision of services, the free movement of capital and the free trading elements that, certainly in financial matters, come through.
If one were talking simply about a genuine common market in insurance, in principle I would welcome that. The London insurance market has become the in-
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surance capital of the world because of our free trading approach to insurance. Paradoxically, that supremacy in world insurance has arisen because of the protectionist nature of other countries. It is because France, Germany and other great industrial nations have had such a restrictive and narrow approach to their insurance business that they have not offered us competition around the world. It is because of that that London has been able to secure an immense amount of the reinsurance business that is derived from those fairly small national businesses.
If one succeeded in breaking down the restrictive approach of such countries, it would not necessarily work to our benefit. It could work to our detriment. We have benefited from the narrow-minded attitude of some of our Common Market partners. I am more concerned to ensure that London remains the insurance capital of the world than that we manage to put up our share of the European market from 11 per cent. to 15 per cent. or 20 per cent. We must be sure that we do not jeopardise our position in world trade terms for the sake of improving to a small degree our share of the market in Europe.
I thought that I heard my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle) agree.
Mr. McCrindle: How does my hon. Friend know that it would be a small increase?
Mr. Moate: I shall return to that point. There is ample evidence to show that it is unlikely to be a great amount, judging simply by the attitudes adopted by other members of the Common Market. I cannot see that they will allow great inroads to be made into their domestic markets.
If article 13 were accepted in its present form it could damage our position with third countries who are not members of the Community. It could result in restrictions being imposed upon British insurance in the United States or in other countries. We must avoid that danger. There has been total unanimity on that point.
My scepticism is on a broader basis. A case has not been made out for saying that we will gain enormous benefits from membership of the Common Market in terms of the London insurance market.

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The principles enunciated in the preamble to the 1976 directive are fundamentally wrong. On page 15 it says that
"Whereas it is necessary to develop a European insurance market …"
—it is not necessary, though it might be desirable—
"due in particular to the steady increase in the size of risks to be covered."
That is not true, because we do not need to have an insurance common market simply to cater for the increase in size of industrial risks. London has always managed to provide remarkably fine facilities for other nations which have not got sufficiently large insurance markets. This is where London has scored handsomely by being able to create international facilities here that could cover ever-increasing industrial risks. The size of the risks does not justify this directive. The fundamental reasons for it are not evident.
The directive is pretty unsound. It will not achieve very much. However, it might not do too much damage as long as we can have the amendments to which the Minister referred.
Article 13, requiring that
"These reserves may be located in the Community without territorial restriction. They must in all cases be covered by equivalent and matching assets"
is a dangerous proposition. I was glad to hear the Minister state that the Government will oppose it. I hope that he realises that he has the backing of the House in his efforts in that direction.
The provisions of article 15 concerning the way in which we deal with third countries could be very damaging to our position in the world insurance market. People often fail to understand how significant is the London insurance market, not just as a powerful base for British insurance companies but as a genuine international market. There is no other place in the world with such a concentration of large commercial institutions, from almost every other nation. An insurance broker in London could walk around the City and, within hours, get hundreds of names of different insurance companies from all over the world that have come to London because of the immense commercial advantages. We must not jeopardise that.
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I agree with the Minister that if Britain, as the authorising authority, has authorised those companies to trade in London, it should be adequate for them to be authorised to trade throughout the EEC. I hope that we can have that established as a principle and I trust that the directive would not be approved unless such a concession could be secured.
The Minister referred to article 3 and said that the Government were opposed to its implications for taxation. I had not noticed those implications, so I looked quickly at the article. I presume that the Minister was referring to paragraph 4, which contains the only reference to tax. It says that
"The reserves referred to in this Article shall be disregarded for purposes of calculating the solvency margin and shall be under exemption from any liability to tax."
The House should be cautious about allowing the EEC to dictate taxation provisions to our insurance companies. I hope that the Minister will resist any such intrusion on the taxation powers of this country.
Article 14 also deals with taxation and imples that there is a commitment to harmonisation of indirect taxation on insurance. Are we simply to accept that proposition without debating it further? Are we committed to it? We should have an explanation from the Minister. The article says that
"Without prejudice to subsequent harmonisation of indirect taxes on insurance, all insurance contracts concluded by way of the exercise of freedom to provide services shall be subject solely to the relevant taxation in force in the Member State in which the risk is situated."
For the time being, the position is satisfactory, but alongside article 14 are the words:
"Pending the subsequent harmonisation of indirect taxes on insurance".
This trespasses on the whole question of powers of taxation between this country and the EEC, and we must have an explanation on the point.
I welcome the Minister's powerful reservations. There has been general agreement that he is right and the House is behind him in the negotiations. Contrary to the general, almost enthusiastic, welcome that has been given by other hon. Members, I regard the directive as being more in the realm of pious hopes

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conceived out of the Brussels bureaucracy and being almost incomprehensible gobbledegook in its 50 pages of paperwork. However, no harm will be done if we can secure the amendments to which the Minister referred.
8.49 p.m.
Mr. Hugh Dykes: My hon. Friend the Member for Faversham (Mr. Moate) and other hon. Members are right to raise the objections which they have raised. Where my hon. Friend is wrong, but where we have long since abandoned all hope, is in his practice of transmuting those detailed objections, on which I share his anxieties, into a generalised objection to the document because it is an EEC instrument. That is because of his usual opposition to our membership. It is a continuing mistake, but he is entitled to make it and his views are well known. Those views are not shared by most hon. Members, as repeated votes have shown. What is unanimous in this debate, even grudgingly from my hon. Friend, is support for the draft directive.
Most of the detailed of objections have related to article 13. I share the substantial concern expressed about the excessively rigid approach, which is often seen among Continental authorities governing insurance functions, to the need for an excessive reserve stipulation. It is unnecessary. It perhaps reflects the precarious position of insurance companies in those countries many years ago but it is no longer realistic, even for them, and certainly not for the British insurance companies with their long history of safety, experience, investment sagacity and insurance risk-writing wisdom in general.
I hope that the Minister will be armed to the teeth with all these objections and will return to the negotiations on this document—it has taken a long time, but this is a complicated business—with a strong negotiating position, seeking to get full justice for the British industry. I am sure that the House welcomes the directive as a practical example of the Community working positively and sensibly, despite some enormous difficulties and differences, for the good of the Community itself and for that of each member State.
Some of the media in this country have indulged in familiar anti-EEC
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noises. The Daily Express at the beginning of the week ran a feature saying that the housewife wanted to come out of the Community. I do not believe that there is evidence of that. When the British public is fairly presented with concrete examples of the Community's sensible working and of the progress that it makes, even if it is as slow as with this directive, the housewives and their husbands will see that there is much in the Community to commend it and to give greater prosperity in the long term to all its citizens.
As the months pass, general attacks on the EEC will be applied to the particular and to everything which comes from the Community, including this directive—if the Daily Express thought that enough of its readers would read about it. That is unlikely; it must stick to the emotional material and not get into the technical stuff, which might bore its readers. That is the general attitude of newspapers like the Daily Express. I recall with affection an emotional headline in the mid-fifties—it will be claimed that it is apocryphal, but I am sure it is true—which read:
"English student killed by German thunderstorm".
We see now a recrudescence of that attitude not only to the EEC but to all foreigners.
So far as correspondents of the Daily Express have the courage tomorrow to read a debate like this, which will show them what the EEC means more than will the emotional anti-foreigner tirades in which that paper will indulge in the coming months, I welcome not only the particularities of this debate but its generality as well.
8.55 p.m.
Mr. Clinton Davis: The caution that I would utter to the hon. Member for Harrow, East (Mr. Dykes) is that he tended to be a little too euphoric about the benefits of the Common Market. It is that euphoria which perhaps made a little disreputable some of the arguments in the membership debate. However, my view about that at that time is fairly well known.
It is interesting that people who were such worthy protagonists of the Common Market are urging me to take a very tough line about our Community partners. I welcome that. Indeed, that was

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the purpose of the debate, and I anticipated that they would be wanting to urge that course upon me.
The hon. Member for Faversham (Mr. Moate) has, perhaps, been dealt with a little unjustly by some if his hon. Friends. He is quite capable of defending himself and he does not need me to do that for him. I know that he has no intention of being killed by an EEC thunderstorm. If he is to be killed in that way, he will be killed by a British or Commonwealth thunderstorm. That is for sure.
The interesting feature about the debate is that, whatever one's basic views have been about the Community, the history of entry and so on, there has been very strong advice—advice which I sought—given to the Government by both sides of the House on a number of important issues.
The hon. Member for Hertfordshire, South (Mr. Parkinson) made an extremely thoughtful speech in going through a number of anxieties that he had. He made the point—I also referred to it, although not in quite as much detail—that it was regrettable that our insurance industry, which is a worthy, highly competitive and efficient industry, had, for reasons that were not within its control, not been able to break into Europe to the degree that was desirable.
The industry does not seek in any way to get any unfair competitive advantages. It is not seeking to take a sort of Eastern bloc or Russian shipping approach in this matter. I say that because I have spent hours in Luxembourg discussing that question, and it is still residing with me. That is not the approach of the insurance industry. It wants to compete on totally fair terms. So far, that opportunity has been denied to it, at least in part, and it is regrettable.
It is against that background that the progress which has been made in the directive is significant. That is why it is welcome. But there is much negotiation still to be undertaken before we can view the position with complete satisfaction.
The hon. Member for Hertfordshire, South echoed many of the criticisms that I had made in my earlier speech. He said in particular, in relation to article 4, that the thresholds should in no circumstances
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be raised. That view was also mirrored in a number of other speeches that we heard. The hon. Member argued also for an extension of the principle of freedom of choice in law.
The argument about thresholds is very important indeed, and I take very strongly into account the advice which has been proffered today. I think that it would be deleterious to the interests of our industry if there were any question of raising the thresholds. We are not happy about the present level, and we are arguing, therefore, for a reduction.
I think that the fact that it seems to be common ground on both sides of the House that the Government should continue to negotiate along those lines is bound to be positively helpful. I cannot, of course, guarantee the success of the negotiations. However, I hope that those voices will be listened to where it matters—where the negotiations are undertaken. I believe that the voice of the House of Commons is, in fact, paid attention to by those on the other side of the argument.
Another point mentioned by the hon. Member for Hertfordshire, South and by a number of other hon. Members related to the doubts about the question of liability insurance and how this featured in the whole argument. One of the questions which was basically being asked—here I am trying to summarise the points made by a number of hon. Members—was as follows. Should liability insurance be given the same degree of freedom of choice in contract law as marine aviation and transport insurance? That was one of the underlying questions that was posed. We certainly take the view that it should. Liability insurance shares the international character of these other classes of insurance. Our partners are currently examining a paper, which we put round, suggesting that liability insurance should be given the same freedom. Logic points wholly in that direction, but logic does not necessarily dictate the result of negotiations.
Or, again, should freedom of choice of law provided in article 4 be limited only to policyholders with the status of a trader? That is not a point which was made, but it is a fair point which we ought to pose. As it stands, this limitation is not satisfactory because it excludes policyholders who are engaged

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in professional activities. We are confident that we have a reasonable chance of being able to negotiate a satisfactory definition so that such people will also benefit from these provisions.
The hon. Member for Hertfordshire, South, together with others, went on to take up the remarks that I had made about the inadequacies—indeed, the undesirability—of the rigidities set out in article 13. He said, as did others, that reserves to be covered by matching assets injected what amounted to an unrealistic position. I think that it is unrealistic. It is much too inflexible. For that reason, we are opposed in principle to article 13(2).
Mr. Dykes: Following his earlier remarks, does the Minister agree that since the industry itself in this country has, we understand, proposed a very pragmatic and gentle compromise—namely, that discretionary authority by the national governing authority to relax the rule, even for temporary periods, is quite adequate in this context—outright opposition to this article is not in that sense necessary?
Mr. Davis: To use the expression of the hon. Member for Faversham, I am a little sceptical about that. Anyway, I do not think that it would be very helpful from the point of view of negotiating posture if I were to agree with the hon. Gentleman, which I do not. He says that the industry has taken that view. Perhaps he is aware of evidence of which I am not. I think that it is an illogical state of affairs and one to which we should object in principle. The hon. Gentleman and I may choose to differ, but that is my point of view.
Perhaps I ought to say a little more about this because I think that the hon. Member for Hertfordshire, South really put his finger on it. The example that he cited was very pertinent. It can get insurance companies into all sorts of difficulties if we pursue that sort of line. The sort of difficulty in the application of the matching rule without any degree of flexibility is that the practicalities of the operations of an insurance undertaking are necessarily ignored. They are not ignored in every respect, but they are in major and fundamental respects.
Amongst the most specific reasons why we have opposed this absolute rule are,
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first, that it is impossible to operate for classes such as marine, aviation and transport and liability insurance where the eventual claim may occur in any currency; secondly, if any small amounts of business are written by a company, it may be very difficult administratively and may be unwise financially to hold small packets of currency; and, thirdly, a company must have an opportunity not to speculate but to invest its funds wisely from the point of view of investment income. For those three reasons alone, the arguments which have been adduced by hon. Members are right.
The hon. Member for Hertfordshire, South went on to refer, as did others, to article 15. He and virtually everyone else who referred to its had the strongest reservations. He referred to the artificial distinction between branches and subsidiaries in third countries, and so on. I do not wish to go further than to take note of that. I invited hon. Members to comment on the matter. We have not made any final judgment, and the comments made tonight have been of considerable help to us and will be taken into account.
My hon. Friend the Member for Thornaby (Mr. Wrigglesworth) raised a number of matters. Unfortunately, as he said, he is engaged in the Finance Bill Committee, and we understand why he cannot be in the Chamber to hear my reply. He was concerned primarily about the position of the composite company, and I know that representations have been made to him by the CIS. He was good enough to refer to the correspondence I had with him. On 16th May last year I wrote to him on this very matter. I know that he is concerned about this and asked me to give him certain definite assurances. However, it is not directly relevant to the matter that we are immediately discussing although I understand why, since we are referring to some extent to composites, he thought it right to present a marker to the House about the matter.
We are undertaking a review, and I think that it would be wrong at this stage to prejudice the results of that review. I recognise, however, that any changes from the present system could have very serious and important implications for the CIS. My officials and the

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Registrar of Friendly Societies will consider carefully any problems which may arise from this position. I am in no way making concessions, but obviously we have to take account of possibilities and consider future options. Any problems which may arise will be considered carefully, and I suggest that the CIS discusses with my officials the issues involved.
However, perhaps my hon. Friend will be able to take some comfort from the fact that the matter is not likely to be finalised for several years, during which time I hope that a satisfactory formula can be found for erasing the anxieties which he indicated. I do not accept the point that my hon. Friend has sought to make that the review itself admits of the possibility of destruction of composites. That is going too far.
The hon. Member for Brentwood and Ongar (Mr. McCrindle) made a number of points to which I have already referred. He referred to article 4 as a lawyer's paradise. I can think of better lawyers' paradises than that. However, I see his point in trying to comprehend article 4 myself, as a layman to some extent in this field.
The hon. Member reiterated the point about thresholds, to which I have referred. He also referred more specifically to the question of liability risks and the freedom for transport liability where the insured is a business man and the risk arises from the business. In those circumstances I understand that no threshold limit applies. That refers to Article 4(2)(b). In article 4(2)(c) there is freedom for liability associated with a general, commercial or industrial fire or accident risk where this is above the threshold limits
Mr. McCrindle: I know that the Minister is trying to be helpful in response to my inquiry. I do not expect him to respond to my point straight away, but perhaps he will write to me. I am especially anxious to know the position of a British insurer wishing to transact a liability business where there is no associated marine, industrial or commercial risk. What is his position under article 4 of the draft directive? If the Minister cannot answer now, I understand, but I hope that he will take account of the
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point. I was trying to separate the situation which he has just described from the situation in which only liability insurance is involved.
Mr. Davis: I am glad that the hon. Member has offered me an avenue of escape from answering such a complex question now. I do not think I can do it justice at present, so I shall avail myself of this escape route, take advice and write to him as soon as possible.
The point was made by the hon. Member for Hertfordshire, South and was reiterated by other hon. Members about article 15 who claimed that it would be better, if one could not go back to the original text, to scrap the whole thing altogether. I listened to their arguments, I have taken note of them, but I cannot go beyond that now.
My hon. Friend the Member for Battersea, South (Mr. Perry) has made many contributions to debates about insurance over the years—long before I became a Minister. During the time I have been a Minister, I pay tribute to his constructive role in insurance debates, except for those on the Policyholders Protection Bill. I think on that occasion I was proved right. I should like to take up the comments of the hon. Member for Somerset, North (Mr. Dean) about my hon. Friend the Member for Battersea, South. We shall miss him from our councils on this matter and on many others, both inside and outside the Chamber. He has been a good friend to many of us, and particularly to me as a fellow London Member. I have had a lot of advice, help and guidance from my hon. Friend and I am still relatively youthful in this House.
Mr. Parkinson: Is the hon. Gentleman retiring soon?
Mr. Davis: No, he will not be going for another 18 months.
The hon. Member for Somerset, North speaks with great knowledge about these matters and made a fair point, but I think he did not answer the matter in his arguments and did not apply his mind to answering it. He said that the influence of some of the directives was aimed at increasing rigidity whereas in the United Kingdom we wanted to retain flexibility. I agree with that principle absolutely. However, we are living not

949
in an ideal world but in a world where, if progress is to be made, one has to compromise between different philosophies.
I do not speak from the same standpoint on the EEC as do a number of hon. Gentlemen who have contributed to this debate, but if we apply this argument pragmatically I believe that it is to the advantage of the insurance industry to achieve a common market in insurance as quickly as possible. In order to do that, compromises have to be achieved. Although I accept the point in principle, I believe that it would not be possible to retain to the full the degree of flexibility which we should all like to see.
The hon. Member for Faversham expressed scepticism about the directive and the thinking behind it although, having given vent to his views, he gave the directive a sort of welcome. I do not complain about a degree of scepticism when one is negotiating. If one goes into negotiations without a fair degree of scepticism, as I learned as a solicitor, one's client has not a chance. It is right that such an attitude should be displayed, and I take many of the hon. Gentleman's points. However, ultimately he came round to many of the same conclusions as were reached by other hon. Members.
The hon. Gentleman asked a very important question on article 3 and also on article 14, concerning taxation. Article 14 reads:
"Without prejudice to subsequent harmonisation of indirect taxes on insurance, all insurance contracts concluded by way of the exercise of freedom to provide services shall be subject solely to the relevant taxation in force in the Member State in which the risk is situated."
I am advised that there are no discussions or proposals about harmonisation in this respect. It is a phrase which has been imported into the article with a sort of reservation. It is without prejudice to the possibility of the situation arising, but as yet there has been no discussion about it. I hope that the hon. Gentleman will accept that point.
Mr. Moate: Would the directive lose anything at all if article 14 were omitted? Judging by the way the Minister has described the matter, and if there is no commitment to subsequent harmonisation, if there were no article presumably the present position would remain and all contracts would be subject solely to the
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relevant taxation in force in the member State.
Mr. Davis: The hon. Gentleman makes a fair point. I do not know what has gone into the discussions behind this article in detail, and I am merely responding to a point he made in the debate. I took specific advice about whether there had been any commitment. I am assured by those who have been involved in the negotiations that there is not. Perhaps the article is fairly meaningless, and maybe it is as well to leave it in that way.
The hon. Gentleman made one point with which I disagree. He said that he could not see how our partners in Europe—I know that he does not like that term, but I use it—will allow great inroads into their markets. The directive as drafted gives freedom for a whole range of risks that I listed in my opening remarks. The directive would be a major opportunity for our industry. Other States have made concessions and we have had to make some. In fairness, the action of other States should be recognised. The proof of the pudding will be in the eating.
Mr. Moate: My point was on taxation. The hon. Gentleman referred to his own reservations on article 3, which is a different aspect of taxation. The hon. Gentleman has not commented on my point, which I imagine to be a fairly important negotiating matter.
Mr. Davis: I dealt with that matter at some length in my opening remarks. Repetition does not improve the argument. I have already indicated my feelings on the matter to which the hon. Gentleman refers.
I know that my hon. Friend the Member for Grimsby (Mr. Mitchell) has been waiting in the Chamber for the opportunity to address a full House on the Adjournment. I thank hon. Members for their participation in the debate. It has been a wholly helpful debate, and I hope that it will give great encouragement to those of my officials who will now embark once again upon difficult and delicate negotiations.
Question put and agreed to.
Resolved,
That this House takes note of EEC Documents Nos. R/95/76 and R/467/78 on Non-Life Assurance.

TUNNEL VISION
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Tinn.]
9.22 p.m.
Mr. Austin Mitchell: If I had wanted to grab the headlines or address a packed Chamber, I should not have called for a debate on retinitis pigmentosa. It is not a phrase that trips from everyone's tongue. In my experience it is a phrase of which people fight shy. Those to whom I have mentioned it today have automatically and wittily replied "You what?" or "Say that again". That is a reaction that I am sure accounts for the tumultuous attendance for the debate. If it had only been known that it was about tunnel vision, I am sure that the Chamber would have been packed.
First, I define my terms. Retinitis pigmentosa is a group of diseases whose common feature is a degeneration of the light-sensitive cells of the retina. It is a deterioration that shows itself first in bad vision, impaired vision, loss of vision in dim light, such as in the dusk or in the dark, and goes on gradually to loss of peripheral vision, so that merely the central portion of the visual field remains. That is the tunnel in the phrase "tunnel vision". It is a tunnel which all too tragically can close, resulting in complete blindness in the severest cases.
Between 10,000 and 25,000 people are afflicted by retinitis pigmentosa—between two and five persons in every 10,000 of the population. It is a progressive, degenerative inherited disease. It is not something that one just catches. Apparently it is a Northern disease. It seems to be more common in the North than in the South. There is, for instance, a high incidence of retinitis pigmentosa in Tristan da Cuhna, because of inbreeding in the population. I do not know whether that explains the high incidence in the North, but it is a feature of an inherited disease, and because it is inherited there is no way of escaping it. That is the beginning of the tragedy that it poses for families throughout the country.
The disease is often difficult to diagnose. Its victims appear awkward rather than blind. They stumble in dim light. They bump into things that are on the edge of their field of vision. In most cases,
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however, they can still read. They can still see perfectly well at the centre of the tunnel. Therefore, missed diagnosis of the disease is all too common.
I have a letter from a Mrs. Hoden, of East Herringthorpe, near Rotherham, that sets out a tragic example of the sort of misdiagnosis that may occur. Her two girls, who suffer from retinitis pigmentosa, were diagnosed as mentally backward, because of the effect of the disease on their ability at school. Their clumsiness at night was put down to the same thing. A boy who suffers from retinitis pigmentosa was classified as ineducable. These children should have been treated in a special school for impaired sight, not intellectual ability. They are now in that special school, but only after what amounted to years of delay because of misdiagnosis.
Even sadder is the fact that if retinitis pigmentosa is diagnosed, the victims all too often have to be told that in the present state of medical knowledge little treatment is available in this country. Therefore, when the disease is diagnosed, all they can do is to wait for the results of research that is going on in this country and overseas. They have to wait for the development of new methods of treatment to replace the old discredited methods of vitamin injection and placenta implantation—methods tried in the 1950s and 1960s—while going slowly, irrevocably and sadly blind.
It is hardly surprising that people are not prepared to wait. People faced with the negative despair produced by this disease and with the lack of opportunity for treatment in this country are naturally and inevitably prepared to clutch at any straw, any prospect of hope, that the disease can be not necessarily cured but checked, so that the progressive deterioration can be stopped. Therefore, they turn to hope emanating from overseas, specifically from Switzerland and the Soviet Union. They clutch at the hope offered by treatments there, because that offer of hope is not available in this country.
I have a letter from Professor Bangerter, the head of the Opos Eye Clinic in St. Gallen, Switzerland. His English is not of the best—like mine—but he says:
"The letters, we got from England, are so numerous that one of our secretaries is nearly completely engaged in answering them. The

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balance of these letters is extremely oppressing."
He is deluged with letters from people in this country who want help.
Inevitably, faced with the prospect of the steady loss of their sight, their friends, neighbours and acquaintances who do not want them to go blind are prepared to offer help. Therefore, appeals are made in different parts of the country, particularly in the North, to raise money to send these people to Switzerland, more commonly, but also to the Soviet Union, for treatment.
The figures for these appeals make instructive reading. I have heard of £22,000 being raised in an appeal in Liverpool for one family—the West Vale family fund. In Retford, £11,000 was raised for a girl called Shirley Dexter. In Sowerby Bridge, £6,000 was raised for Tracy Brown. In Keighley, £4,500 was raised for Garry Turton. In Grimsby, £2,000 was raised for Sid Owen. I read them in that order, but that league table of figures is not necessarily a league table of generosity in those places. If it were, Grimsby would certainly be at the head, not the bottom, of that league. Those are the kinds of appeals which have been launched and subscribed to all over the country. The list goes on.
The result is that people are being treated in Moscow, but more commonly in Switzerland. The numbers being treated in Switzerland must run into hundreds, possibly thousands, because of the period during which the Opos Eye Clinic has been carrying out treatment. I understand that last week, at St. Gallen, nearly a score of British people were being treated at the clinic. They included a family of 13 from Liverpool, seven of whom were being treated in the clinic for retinitis pigmentosa.
I hold no brief for either of these treatments. A British expert from Edinburgh University, Dr. Reading, attended a USSR national symposium last December. He came away unconvinced that the Russians had made any advances in treatment. Dr. Bangerter, the founder and head of the Opos Eye Clinic, is regarded, even in his country, as a fringe figure.
If I wanted to set myself up as a confidence trickster with the happy prospect of receiving large sums of money I could think of nothing better than to open an opulent clinic in Switzerland with large
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numbers of patients so desperate for help and treatment that they would be prepared to fork out £700 a time for treatment and to come back every three months for further treatment and, once the initial treatment was over, to come back every year for further treatment to stop the deterioration of the disease. Such people would be prepared to pay out £10 for a box of vitamin pills, and even pay for sitting in the waiting rooms. I heard of a lad who went by himself because his money was in short supply, could not find his way round the town, and was charged for sitting in the waiting room of the clinic.
This situation naturally produces suspicions. Those suspicions are amplified because Dr. Bangerter has never published facts to show the success or failure rate of the treatment. People will continue to go to Switzerland and the Soviet Union to pursue any available treatment, so long as that treatment holds out a hope which is not available here.
When they return many such people claim that their sight has been improved. They do not say that they have been cured. Some newspapers have highlighted claims from people who say that they have been cured by this treatment, but no such claim has been made by the Russians or the Swiss. The most that I have seen claimed by the Swiss is that they can retard considerably the progress of the disease or stop it over a long period. There is no claim of a cure. The claim is of stopping the progress of the disease. People do return and say that their sight is improved.
One would need a national survey to discover total figures. I talked to Sid Owen, from Grimsby. He has not had the full treatment, but he says that he can now read better than he could before. I have spoken to Garry Turton, from Keighley, whose specialist has commented on the increased activity in his eye. I talked to the parents of Tracy Brown, of Sowerby Bridge. They say that her condition has been improved by treatment at St. Gallen. I have also spoken to two others.
I cannot evaluate these claims. All that I can do is to report that such claims are made. They could mean something or nothing. There are examples of spontaneous remission, and that could be

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associated with the treatment. It could be anything. It could be hope, desperation, and confidence exuded by the Swiss clinic which makes people feel that they have been helped. It is also possible that having spent all the money which has been donated by others, patients will not admit that there has not been an improvement. Perhaps they claim an improvement to support those who have backed them.
The claims of improvement which are made by those who have been to Switzerland for treatment have not been professionally evaluated. The reason for that is that in son-le cases the patients have broken with their specialists, who did not wish them to go to Switzerland. In other cases the doctor or specialist did not wish to know about the treatment. There is no collective evaluation to give us a picture of the incidence of the disease being checked. There has been no attempt to follow up the hundreds of people who have received treatment, and continue to do so, to find out whether there has been an improvement or deterioration in their conditions.
We have not studied the Swiss treatment on the spot. The Medical Research Council's working party on retinitis pigmentosa did not do this. So far as I know, none of the specialists who dismiss the Swiss treatment has been to Switzerland to look at the treatment, although the clinic would welcome an inspection team. I quote from a letter in Professor Bangerter's classic form of English. He said:
"Personally I do not have any greater desire than to finally find doctors who are ready to join us in the tight against retinitis pigmentosa. So it is quite self-evident that the English team will get any insight and complete orientation"—
this is a typically Swiss note—
"free of charge".
So these people are prepared to open up their facilities for inspection by a team from this country. We welcome that kind of inspection, but it has not so far been forthcoming.
In answering my questions on the subject, the Minister of State has dismissed the Swiss treatment as though it were just a matter of the implantation of placenta of a type done here in the 1950s and 1960s. However, as I understand it, there is in the Swiss clinic a combination
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of treatments which include injections to expand the vessels in the eye, the contraction of which is associated with the disease, the implantation of amnion from chicken eggs, vitamin and other treatments to check the loss of nucleic protein and, finally, play optics or exercises to expand the field of vision, the contraction of which is a dominant factor of this disease.
If the treatment is to be evaluated at all, it must be evaluated as a collective group of treatments, each element of which might or might not make a contribution, but all of which must be taken together because it is in that way that the patients experience them. Evaluation of this treatment must be carried out, for no one who is afflicted with the disease will be prepared to heed the warnings of doctors and specialists against going to Switzerland for treatment, because no one trusts the judgment of the doctors, and will not, unless it is reinforced by a specific study of the treatment and its results.
One needs positive evidence in order to give positive advice to people who are afflicted by this disease. Whether that advice is pro or contra, it must be based on evidence.
I dwell on the Swiss and Russian treatments because of the numbers of people who are trying to take them up. The numbers who are seeking treatment in Switzerland and the Soviet Union show the scale and desperation of the search by those concerned for some form of treatment—the scale of demand for something to be done to help those who suffer. Clearly, no words in this House will deter those high hopes, but words in this House can add to the demand for an expansion of research into the causes and treatment. They will lead to a demand for a greater concentration of resources on this matter, particularly of money, which here, as in so many other fields, is the key to progress with the diagnosis and treatment of the disease, and the key to success.
More prosaically, we can ask, as I have tonight, for an evaluation of the Swiss and the Russian treatments and of their effect on the people who have taken them. Preferably there should be a before-and-after evaluation, so that we can say with certainty, with authority and

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with evidence, either that these treatments are no use and that people should not go, or that there may be something to them and, if there is, that they should be developed in this country.
If we do not study the treatments and assess them in this fashion, we are letting down the victims of retinitis pigmentosa—people who are bound, whatever we in this House say, and whatever experts tell them, to rage against the dying of the light.
9.39 p.m.
Mr. J. W. Rooker: I am grateful to my hon. Friend the Member for Grimsby (Mr. Mitchell) for allowing me a few minutes in this short Adjournment debate. Contrary to what my hon. Friend said when he started his speech, this is probably one of the best attended Adjournment debates that has taken place for a few weeks. In any event, it is very useful to have a short debate on the visually handicapped, because it is a subject and a group of people that we do not discuss enough in this House in terms of the treatments that are available, on which my hon. Friend concentrated, and the help that the State can give to people who suffer from a visual handicap.
I want to draw the attention of the House to only a couple of points, but they are extremely important, the more so because the proceedings in Standing Committee on the Finance Bill—which we are not allowed to discuss in detail—took an unexpected turn on 24th May. My hon. Friend the Minister will he aware that the Financial Secretary to the Treasury made a commitment to the Committee on 24th May that on the Report stage of the Finance Bill the Government would be bringing forward a concession in the Bill concerning the visually handicapped. He is reported at column 493 of the Committee proceedings as saying that he hoped to bring something back on Report.
The term "visually handicapped" covers all those who suffer from a visual handicap, whether they suffer from the disease upon which my hon. Friend the Member for Grimsby has been concentrating this evening or from total blindness. Tonight the Minister ought to tell us what the Government are doing in regard to this particular disease. It is
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outrageous that in 1978, when we have a Welfare State that is advanced as that of any other nation, various groups of people and neighbours of people who suffer from various diseases have to club together and sub around to send people abroad for treatment that ought to be carried out in British hospitals. The Government have recently forked out expenditure to send two Ministers and two civil servants to watch a football match in Argentina—thousands of pounds of taxpayers' money which could easily have been spent on half a dozen operations of the sort to which my hon. Friend has drawn attention. That is an absolute disgrace.
It is not demeaning the subject, of course, to point out that the people who were playing those football games must themselves be suffering in some small way from a visual handicap.
My hon. Friend the Minister ought to address himself to the central issue—the issue that is central in addition to that of the treatment of these diseases. That is the matter of what the State is doing for these people in 1978. For example, why do the visually handicapped not receive mobility allowance? Perhaps the Minister will tell us how many of the visually handicapped in Britain receive mobility allowance. That is a much fairer system than giving them a tax relief or a tax benefit, which, by definition, benefits only the best-off and only those who pay income tax. It does not benefit the visually handicapped person who cannot seek or gain employment and who, therefore, does not pay income tax anyway.
The money that is already spent by the Government on tax relief could be spent on mobility allowance and could be used by individuals. If the Government will not put the treatment of this disease on the NHS, where it ought to be, at least individuals would have the right to spend their mobility allowance or to save it up so that they did not have to rely on neighbours to pay for flights abroad and operation fees in Swiss or Russian clinics, or wherever they have to seek the treatment.
At the minimum, we ought to make sure that these people can afford to get the treatment needed if it is not provided under the NHS. That is not an argument for private treatment. It is an argument

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for extending the NHS so that everyone in Britain who suffers because of poor health, an impairment or a disability can get treatment free at the point of use on the NHS. If the NHS is not up to that, it is up to the Government to see that individuals have the means to obtain the treatment so that they do not have to grub around among neighbours. The Minister ought to tell us the Government's view on this matter.
The other point to which I draw attention is the other benefits that the State gives to the visually handicapped and those who suffer from retinitis pigmentosa. I should be interested to know whether the sufferers from this disease are entitled to get even the minimum that the State gives to others—that is, car parking under the orange badge scheme. I am not sure whether the Department, in its sometimes callous treatment of the handicapped—though that is certainly not true of the Minister—has included these people within that scheme.
I ask the Minister also to mention abuses of the scheme. If the visually handicapped are to benefit from the scheme—if that is what my hon. Friend is to announce—how will he ensure that those driving them do not abuse the use of the orange badge when using vehicles on their own account? This is important. The question of the visually handicapped covers a multitude of problems, since some of the diseases are incurable, and it behoves the State to make the best possible allowances and conditions for those who so unfortunately suffer from them.
On the other hand, the State has the responsibility to put money into research and treatment so that people do not have to fly around the world seeking treatment which they should be able to get on the National Health Service. I hope that my hon. Friend will make known the Government's plans on this issue as well as dealing with the narrow but important points that my hon. Friend the Member for Grimsby has raised in this very important debate.
9.47 p.m.
Mr. Harry Gourlay: I congratulate my hon. Friend the Member for Grimsby (Mr. Mitchell) on securing this debate on a subject that is of great importance to many thousands of people.
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I support his demand that more money should be given for research into this tragic disease. A number of my constituents suffer from it—one in particular has been writing to me for several years in sheer desperation because of the publicity given to some of the so-called successes of operations and treatment in other parts of the world, particularly Moscow.
I understand that this constituent has spent hundreds of pounds of his own money trying to secure private treatment from various sources in this country which claim to have produced some results in trying to stop the progression of the disease, but unfortunately in his case it has been of no avail. In sheer desperation he wrote to me not long ago asking whether the Government could find a way to finance a visit by him to Moscow in order to secure treatment there.
This request arose out of the hope, engendered by Press reports, about individuals going to Switzerland and Moscow and returning with some indications that a certain improvement had been made. I hope that the Minister and the Department, in addition to coming forward with more money for research into the problem, will also give more publicity to the true position of the treatment being given in Moscow and Switzerland, and its results, so that persons suffering from this sight problem in Britain will not feel that they have been prevented only by lack of Government funds from having their sight restored.
This is a very important point. When there is Press publicity about one or two individuals who have had the backing of private or collective funds for this treatment, those who have not been so fortunate in getting such assistance feel that they are being denied something. The replies that Ministers have given me about this disease have clearly indicated that the results of the experimentation so far undertaken in Moscow and elsewhere do not give the kind of results in general that one is led to believe. Therefore, if we can get more publicity from the Government about what is happening elsewhere, those individuals will feel that the Government are doing as much as they can about the disease.
My hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen), in a Question in May 1976, asked why research

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into the causes of blindness, including retinitis pigmentosa, has been halted at Edinburgh University. The reply from the then Secretary of State for Education was:
"I assume my hon. Friend is referring to the research programme at the Medical Research Council's Brain Metabolism Unit, Department of Pharmacology in Edinburgh."
He said:
"The unit's programme does not include research into causes of blindness generally but did include work into retinitis pigmentosa. The Council informed me that this work was discontinued only after careful consideration and because of other more pressing claims on their resources."
There had been research in progress in 1976 which had been halted because of other priorities. Therefore, as a result of the debate tonight I hope that the priority can be restored and that more research will be undertaken into the problem as soon as possible.
While we seek more money for people suffering from this disease, the Government have given unprecedented assistance in the last four years, particularly to the blind section of our population. In terms of cash benefits and service, blind people have not gone unrewarded.
My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) referred to the orange badge scheme, which has been of considerable assistance to blind people. The hundreds of millions of pounds spent by the Government on blind people are only one indication that the Government take seriously the problem of the blind and of all disabled people, particularly since we were the first Government to appoint a Minister with responsibility for the disabled. We can rightly claim that we have gone far out of our way in order to look after people with all forms of disablement.
I congratulate the Royal National Institution for the Blind on its voluntary work on behalf of blind people in Scotland and other parts of Britain.
I appeal to the Minister to do what he can to see what further funds can be found for research into this tragic disease, so that in the future fewer people will have to fly to foreign lands to secure treatment.
9.54 p.m.
Mr. Robert Hughes: I am grateful to my hon. Friend the
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Member for Grimsby (Mr. Mitchell) for raising this important topic. Those involved with such diseases have been concerned over many years to try to find a cure. I hope that my hon. Friend the Minister in replying will give us some idea of the incidence of the disease and whether it is increasing or decreasing.
We are glad that progress has been made in reducing the number of people who suffer from diseases of the eye. Fewer young people are being born blind. Fewer people are becoming blind over the years. Many of those who become blind in later years do so as a result of either industrial accidents or road accidents. The number of people suffering blindness as a result of illness is decreasing. This causes some problems in relation to sheltered workshops for the blind, because they are increasingly becoming sheltered workshops for the blind and physically incapacitated. Of course, this is a problem which, in a sense, we welcome.
Mr. Rooker: My hon. Friend is correct, but I understand that of the 25,000 registered blind persons in this country only 10,000 are in employment. There is enormous scope for the rest of the visually handicapped to seek gainful employment in sheltered workshops or outside industry.
Mr. Hughes: I shall not digress too far into the problems of sheltered workshops except to say that, when the economy is in difficulty and there are problems for industry generally, sheltered workshops face the great difficulty of having to compete with outside industry for orders. In addition, there have been great advances in industry in relation to work for the blind and many people who would otherwise have gone into sheltered workshops are finding employment in industry. This is particularly important for blind women who, with the development of the braille typewriter, are able to take normal jobs as shorthand-typists. This is to be welcomed.
I return to what we can do about this disease. Among the suggestions in the paper by Dr. J. Marshall, of the Department of Visual Science, Institute of Ophthalmology, London, is that people who suffer from the disease should carry cards so that when they die, whether in an accident or otherwise, their eyes may

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immediately be donated for examination There is a great lack of information about this disease. It is said that only 40 eyes have been examined since 1857 when the disease was first identified and only five eyes have been examined under an electron microscope.
The idea of carrying cards is useful, but it is not enough on its own. Our experience of the kidney donor cards leads us to believe that not enough people take the trouble to carry these cards. May I emphasise to people that they should carry a card saying that when they die their eyes may be donated for medical research and that, perhaps more important, their kidneys could be made available to someone who needs a transplant?
I hope that the Minister will continue his work on donor cards in respect of useful organs. Indeed, we could all say to our next of kin that when we die, whatever use some people may feel we have made of our bodies during our lifetime, the whole of our bodies should be donated to medical research.
Since the disease that we are discussing is hereditary, can steps be taken in the genetic counselling of sufferers so that we can try to prevent the disease from continuing? If we cannot cure it, perhaps we may be able to reduce the number of people who suffer from it.
I hope that my hon. Friend the Minister will be able to answer the various points that have been made in the debate, and I congratulate my hon. Friend the Member for Grimsby on raising this subject on the Adjournment.
Mr. Nicholas Fairbairn Mr. Nicholas Fairbairn (Kinross and West Perthshire) rose—
The Under-Secretary of State for Health and Social Security (Mr. Alfred Morris)The Under-Secretary of State for Health and Social Security (Mr. Alfred Morris) rose—
Mr. Deputy Speaker (Sir Myer Galpern): Mr. Alfred Morris.
9.59 p.m.
Mr. Morris: It is customary for Ministers replying to debates on the Adjournment to thank the hon. Members who initiate those debates. I want to make it clear at the outset that my gratitude to my hon. Friend the Member for Grimsby (Mr. Mitchell) for raising the subject of retinitis pigmentosa is more than formal. He takes a genuine and
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abiding interest in the problems of handicapped people and has, for a considerable time, shown a deep and sympathetic concern both for sufferers from this distressing disease and for their families. His concern was well reflected in his speech tonight and I much appreciate this opportunity to examine and discuss the issues at stake.
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Coleman.]
Mr. Morris: I am also glad that my hon. Friends the Members for Birmingham, Perry Barr (Mr. Rooker), Kirkcaldy (Mr. Gourlay) and Aberdeen, North (Mr. Hughes) have been able to intervene. They are all colleagues whom I respect for their concern for the blind and other disabled people.
Mr. Fairbairn: On a point of order, Mr. Deputy Speaker. I was anxious to intervene in the debate and I trust that I stood up before the Minister rose to reply. I hope that, as someone who did medicine, I shall not be prevented from speaking.
Mr. Deputy Speaker: It is the practice in Adjournment debates that hon. Members who wish to take part have the agreement of the hon. Member who has the Adjournment debate. I did not see the hon. and learned Gentleman in the Chamber during the debate. Therefore, I called the Minister to reply so that we could get on to the next Adjournment debate.
Mr. Morris Mr. Morris rose—
Mr. Fairbairn: Further to the point of order, Mr. Deputy Speaker. The debate was not due to start until 10 o'clock.
Mr. Deputy Speaker: We are on the Adjournment debate.
Mr. Morris: My hon. Friend the Member for Grimsby asked about the size of the problem in this country. Although there are no reliable official figures, informed estimates suggest that there are between 10,000 and 25,000. My hon. Friend suggested that the locality in which people live may have some link with the

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incidence of the disease. I am advised that there is insufficient evidence to reach firm conclusions about that, but the possibility cannot be ruled out that differences in incidence may be at least partly determined by genetic factors, and particularly by the degree of in-breeding. For example, on the island of Tristan da Cunha, where there is a high degree of inbreeding, the disease is extremely common.
Many of our sufferers from the disease are young people. Many have families who are naturally and rightly anxious to explore any path that might lead to improvement. That is the background to this important debate.
One of the major problems, which has its effects on all research into the condition and its treatment, is that retinitis pigmentosa is not just one disease; it is a term used to denote a group of diseases in man which are clinically similar but which have different modes of inheritance and almost certainly represent different metabolic disorders. This group of diseases is characterised by progressive retinal degeneration and is accompanied by migration of pigment-containing cells into the retina. There is no accurate estimate of how many separate diseases are embraced by the term retinitis pigmentosa, but there are probably well over 10.
The different forms vary greatly in terms of the time of life when the disease becomes apparent, the rate of its progress, and other disabilities with which it may be associated.
My hon. Friend referred to tunnel vision. As he said, this distressing condition, where the peripheral vision is greatly obscured or non-existent, is one of the symptoms of some of this group of diseases and is also a symptom of other diseases of the eye. Research is currently being conducted into visual field expanders to help combat this condition, and my Department will be monitoring this research with great interest.
As my hon. Friend is aware, the Medical Research Council set up a working party to look into research into all aspects of retinitis pigmentosa. My hon. Friend has been sent a copy of its report and will have seen that, among its conclusions, the working party highlighted two basic problems.
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It said:
"Our understanding of development and pathological reactions of the retina is so incomplete that the mechanisms of the disease at present must be largely speculative".
Again:
The delineation of the clinical picture of the human disease is still poor".
It is against the background of this present unsatisfactory state of knowledge that research into the disease and its treatment must be considered. In fact, the whole history of the study of retinitis pigmentosa is chequered with treatments which at first looked promising, only to drop quickly out of favour.
Mr. Fairbairn: The Minister used the term "pathological reactions of the retina". Will he tell me what he means by that?
Mr. Morris: I much regret that the hon. and learned Gentleman did not catch your eye, Mr. Deputy Speaker. His purpose now seems to be to delay the reply to this very important debate. The hon. and learned Gentleman joined us only very recently, Mr. Deputy Speaker, and you have given your advice. I am quite prepared to answer afterwards any questions of detail that may arise. I hope that the hon. and learned Gentleman, as a fellow parliamentarian, will agree that I must in decency give a full and considered reply to my hon. Friend, who has spent a great deal of time on this subject. He has clearly been quite genuinely concerned that there should be a full ministerial statement.
The hon. and learned Gentleman asked me what I meant by a certain phrase which is taken from a report of the working party. I told the House that a copy of the report was sent to my hon. Friend. I am quite prepared to make a copy of the report available to the hon. and learned Gentleman. He has my respect. I know of his work. He is an active member of this House. However, I hope that he will see the importance of a full and considered ministerial reply on a matter which is of very deep concern to many people in this country.
I was saying that it is against the background of the present unsatisfactory state of knowledge that research into the disease and its treatment must be considered. I said that in fact the whole history of the study of retinitis pigmentosa

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is chequered with treatments which at first looked promising, only to drop quickly out of favour. This increases the distress of sufferers from the disease, and their families. Hopes for a successful treatment have often been raised and then dashed.
There has been a great deal of publicity, especially in the last few months, about two different forms of treatment for retinitis pigmentosa. One is carried out at the Opos Eye Clinic, in Switzerland, and the other at the Helmholtz Eye Diseases Research Institute, in Moscow. Many hon. Members have written to me about these treatments, often on behalf of constituents who are sufferers or relatives of sufferers. I am afraid that I have not been able to reply in encouraging terms, notwithstanding some news stories that patients have been treated abroad apparently with spectacular success.
What all of us must avoid is raising the hopes of sufferers without any proper basis for doing so. I am pleased that some patients have returned from treatment in Switzerland or Moscow with the feeling that their condition has improved, but for the benefit of all sufferers, including people who are considering trying to obtain these treatments abroad, we must have regard for the opinions of the great majority of ophthalmologists in this country.
Let me turn first to the treatment at the Opos Clinic, which I know my hon. Friend has examined most carefully. I understand that the treatment there consists primarily of implants of human placental and fetal tissue into the back of the eye. In fact, this form of treatment has been tried extensively throughout the world in years past and has been generally discarded. My advisers are not aware of its continued use anywhere now, except by ophthalmologists in Odessa, where the treatment started, and those in the Opos Clinic in Switzerland. I must emphasise that even in Switzerland no other ophthalmologists practise this treatment.
All my medical advice is that there is no prospect of this treatment being effective. When the treatment was considered by the Medical Research Council's working party, which I mentioned earlier, it made a comment which is highly relevant
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and important to our debate this evening. Again I quote:
"Tissue therapy using placenta as a biological stimulant was widely practised for the ten years following 1955. There is no convincing evidence of improvement in vision following these treatments."
My hon. Friend has suggested that my Department should undertake a survey of patients who have received treatment at the Opos Clinic. Yet I know he will appreciate that such a survey could be conducted only on a prospective basis to assess objectively any apparent improvement following treatment. Certainly, we would be most interested to know of any objective evidence of improvement of patients who have received treatment at the Opos Clinic. A research project would, however, be dependent both on the co-operation of the patients and the enthusiasm of the ophthalmologists looking after them in this country. This is, of course, something which my Department has no power to direct, but we would look at any research proposal most sympathetically. I hope that my hon. Friend will regard that as a constructive response to the suggestion that he has made.
Mr. Austin Mitchell: I am most grateful to my hon. Friend for his offer to look constructively at a research programme which might be submitted. I think that it is possible to devise a research programme which over a period will show whether or not there have been benefits from this treatment. The crucial part of the argument is whether these people have been helped. I thank my hon. Friend most sincerely for his offer.
Mr. Morris: I am grateful to my hon. Friend. Clearly, we must be in further touch with regard to the suggestion about research.
Let me stress at this stage that consultant ophthalmologists in this country can, of course, use the types of treatment practised at the Opos Clinic under the NHS if this, in their judgment, is clinically necessary. At present, the Medical Research Council is supporting two research projects into retinitis pigmentosa. The first of these concerns research into "Abnormal retinal physiology in retinitis pigmentosa" and the second involves genetic and clinical aspects of the disease. Both projects are funded for three years,

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from September 1977 to August 1980. In addition, research is being conducted by the MRC clinical and population cytogenetics unit at Edinburgh, where basic laboratory type work is being conducted in a search for genetic markers for retinitis pigmentosa. This was identified by the MRC working party as a priority for research.
Turning to the treatment available at the Helmholtz Institute in Moscow to which my hon. Friend the Member for Kirkcaldy referred, let me first of all pay tribute to the working together that has resulted from eye diseases being one of the specific matters covered by the United Kingdom-USSR agreement on co-operation in medicine and public health. In consequence of the agreement, experts in this country have been able to learn more about the form of treatment used at the Helmholtz Institute. However, although we have a fair idea about the general basis of the treatment, which I am advised consists mainly of injections of yeast ribonucleic acid and entails several repeat visits, the exact details about the composition of the injections used and their method of preparation are not available. Nor do we have details about precisely which types of patients are being treated.
The Russians do not, in fact, claim that the Helmholtz treatment cures the disorders for which it is being used but only that it arrests their development for a period of time and in a proportion of patients. For this reason alone, it is imperative that patients should not be encouraged to exaggerate the possible results. As I said before, none of us must raise the hopes of sufferers if we feel fairly certain that their hopes will be dashed.
A group of consultant ophthalmologists in this country who have considered all the facts so far available have stated that the scientific evidence is as yet incomplete. In their opinion, until further information becomes available patients cannot reasonably be advised to travel to Russia for this treatment. Moreover, I understand that this opinion reflects ophthalmological opinion generally in this country.
It is for this reason that my Depart. ment has been unable to help in the way that several hon. Members have sug-
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gested to me in their letters—namely, by use of the power under the United Kingdom-USSR agreement to assist with the funding of patients who wish to receive treatment in Moscow. There is no similar power for Switzerland.
As my hon. Friend the Member for Grimsby will appreciate, I am extremely sorry not to be able to paint a brighter picture. But it is in the best interests of sufferers and their families that we should not raise hopes that cannot be realised. I know only too well how their hopes are raised by reports of successful treatments for this distressing disease in other countries. But I know, too, how this often leads to even greater distress when their hopes are thwarted.
If I may quote just once more from the Medical Research Council's working party's report:
"There is no satisfactory evidence to suggest that any of the attempts to modify the disease process has been successful and there is little, if any, scientific justification for the various treatments which have been used … At the present time there is insufficient scientific basis for any of the treatments currently in use to warrant any support by the Council of clinical trials".
It is an unpalatable fact, but one which must be faced, that no specific treatment has as yet been generally accepted by ophthalmologists as effective in preventing, correcting or curing retinitis pigmentosa.
For the future, I hope that my hon. Friend the Member for Grimsby and those others who have spoken in the debate and through them patients and their relatives, will at least feel assured on two matters: first, that we give high priority to research through the Medical Research Council for effective treatment of the condition, and, secondly, that my Department will continue to monitor progress on any course of therapy, either at home or abroad, which shows promise of improving treatment techniques.
I turn now to the practical help that can be given to the blind and the partially sighted, including people who suffer from retinitis pigmentosa. I refer specifically to low vision aids. I am very conscious of the difference that these aids can make to the life and activities of partially sighted people, even to the point of enabling them to have a job which would not otherwise be possible. A wide range of aids is available on long-term

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free loan when prescribed by a consultant ophthalmologist. Nevertheless, we are concerned about the patchiness of the low vision aid service from one region to another.
My right hon. Friend the Secretary of State made this point when he addressed the Royal National Institute for the Blind last year. He said that it was quite unfair that the quality of life for a partially sighted person should be determined by the part of the country in which he or she lived. In order to try to overcome this problem, my officials are in the process of consulting relevant bodies, including the RNIB and the Partially Sighted Society, as a first stage towards discussions with health authorities. They will be looking for ways of ensuring that there is at least one centre in each region where low vision aids can be supplied.
The House will appreciate that even one such centre for each region may in some cases mean substantial extra expenditure, and it would not be reasonable to expect the instant supply of low vision aids to be made immediately in every area. We are, however, anxious to resolve the problems and achieve a more even distribution of the service throughout the country.
At this stage I should like to pay a warm tribute to the RNIB and the Partially Sighted Society on behalf of the House as a whole. There is little party animus on this subject as we share a deep concern for disabled people. I hope that the work of the RNIB and the Partially Sighted Society will go from strength to strength.
As the House knows, the social services departments of local authorities offer several important services to people who become blind. They can provide help with learning to cope without sight in the home. They can give instruction in mobility techniques such as the use of a long cane, and instruction in braille where appropriate. Some authorities arrange for newly blind people to attend a residential rehabilitation course run by the RNIB.
In addition, blind people are eligible, as are other disabled people, for the services provided under the Chronically
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Sick and Disabled Persons Act and the Chronically Sick and Disabled Persons (Scotland) Act. Such services include help with aids and adaptations, such as the provision of a telephone or recreational facilities such as talking books. The disablement resettlement service of the employment service division of the Manpower Services Commission provides specialised help on employment.
Mr. Gourlay: Has the Department drawn the attention of local authorities to the specific provision in respect of people suffering from this disease? This is a disease suffered by many people, but it appears that because they comprise only a small proportion of the total population the seriousness of the disease is allowed to be glossed over. Therefore, if the Department has not yet done so, will it draw attention to this class of individual?
Mr. Morris: I assure my hon. Friend that I shall give sympathetic consideration to his suggestion. I tend to refer not so much to particular disabilities or diagnostic groups but to the needs of disabled people as a whole. There are people with this disease who are handicapped within the meaning of the Chronically Sick and Disabled Persons Act. Hon. Members on both sides of the House would carry out a great service to handicapped people if they were to speak in their constituencies about the priority of the claims of local disabled people.
As I was saying, the disablement resettlement service of the employment service division of the Manpower Services Commission provides specialist help on employment. Blind persons' resettlement officers and blind persons' training officers, who can be contacted through jobcentres and employment offices, cover industrial employment. The RNIB's placing officers advise on opportunities in the commercial, administrative and professional fields and also assist visually handicapped school leavers. In this way a comprehensive service is provided.
In regard to financial help, there are real advantages in the Government's developing policy on cash benefits for disabled people. The disadvantages of blind people have long been recognised in the special provisions for them in both social security and the personal social services.

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In a real sense the blind paved the way for other disabled people for whom there was little, if any, recognition whatever. In recent years, however, there has been a development of services and cash benefits to help large numbers of severely disabled people with their problems. Blind people qualify in the same way for new help if their needs meet the criteria.
I wish to take this opportunity to reaffirm our commitment to exempt the registered blind and partially sighted from optical charges. Although the preparations are taking a long time, it remains our intention to see that this new exemption is introduced as soon as the way is clear.
My hon. Friend the Member for Perry Barr asked how many blind people receive mobility allowance. I cannot give him a precise figure tonight, but I wish to emphasise that many blind people receive the allowance. It is not, however, an allowance that can be paid for blindness alone. We are deeply aware of the pressure to do more than we have done so far. I have said on many occasions that I work in an area of activity in which there are infinite claims but only finite resources.
My hon. Friend also referred to the orange badge scheme. I am glad to have
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legislated for that scheme in 1970. It is a source of pleasure to me also that the scheme now confers benefits on blind people. The blind, of course, cannot drive, but they can be driven by other people. Therefore, the orange badge scheme is very important to them. It is not possible for me now to deal with the matter which was mentioned about discussions in Standing Committee. I have no doubt, however, that the point will be carefully noted by my colleagues.
My hon. Friend the Member for Kirkcaldy asked for more research. Research is proceeding, and I hope he will agree that I have made a positive response to the suggestions which he and my hon. Friend the Member for Perry Barr made. My hon. Friend the Member for Kirkcaldy takes a close interest in these matters. All that he said tonight will be carefully and sympathetically considered in—
The Question having been proposed at Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Quesion put, pursuant to the Standing Order.
Adjourned at half-past Ten o'clock.