Commons Sitting of 8 February 1979

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

PRIVATE BUSINESS
BRITISH RAILWAYS (No. 2) BILL (By Order)
CHESHIRE COUNTY COUNCIL BILL [Lords] (By Order)
CITY OF LONDON (VARIOUS POWERS) BILL (By Order)
COUNTY OF MERSEYSIDE BILL [Lords] (By Order)
EAST KILBRIDE DISTRICT COUNCIL BILL (By Order)
Orders for Second Reading read.
To be read a Second time upon Thursday next.

FELIXSTOWE DOCK AND RAILWAY BILL (By Order)
Read a Second time and committed.
GREATER LONDON COUNCIL (GENERAL POWERS) BILL (By Order)

  LONDON TRANSPORT BILL (By Order)
  Orders for Second Reading read.
  To be read a Second time upon Thursday next.

  WEST MIDLANDS COUNTY COUNCIL BILL [Lords]
  Motion made,
  That, notwithstanding the provisions of Standing Order 109, the West Midlands County Council Bill [Lords] shall not stand referred to the Committee of Selection in respect of Clause 99, and that Clause 99 of the Bill be committed to a committee of the whole House.—[Mr. Andrew F. Bennett.]
  Hon. Members: Object.

ORAL ANSWERS TO QUESTIONS
  AGRICULTURE, FISHERIES AND FOOD

    European Community (Council of Agriculture Ministers)
    Mr. Hicksasked the Minister of Agriculture, Fisheries and Food when next he will attend a meeting of the Council of Agriculture Ministers of the European Economic Community.
    Mr. Hoyleasked the Minister of Agriculture, Fisheries and Food when he expects next to meet his European Community ministerial colleagues.
    The Minister of Agriculture, Fisheries and Food (Mr. John Silkin): I shall attend the meeting of the Council of Agriculture Ministers on 12 February.
    Mr. Hicks: Can the Minister confirm that for the United Kingdom dairy sector the combination of the suggested co-responsibility levy on additional milk products, taken with the inadequate proposed green pound devaluation, could mean the total erosion of the profitability of British dairy farmers? Does he agree that that would be disastrous for that sector of the industry and would have adverse effects upon the structure of the British countryside?
    Mr. Silkin: The Commission's proposals for a green pound devaluation is a separate matter. The co-responsibility levy is highly discriminatory against United Kingdom dairy farmers. It conflicts entirely with the doctrine in which the whole House believes—that those who do not create the surplus in a commodity should be entitled to expand their production efficiently.
    Mr. Hoyle: When my right hon. Friend meets the Ministers will he continue to support a general price freeze on agriculture products? If necessary, will he use the veto? Will he continue to defend the interests of the British housewife and never mind the Eurofanatics on the Opposition Benches?
    Mr. Silkin: I am more worried about the Euro-fanatics round the table in Brussels. But I can assure my hon.

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    Friend that not only shall we maintain to the final degree a freeze on common prices this year—which might involve the use of the veto, although I hope that it will not—but we intend to do so until the structural surpluses have been eliminated.
    Mr. Dykes: In the context of those negotiations, would it not be a good idea to return to the theme of keeping down the intervention part of the agriculture budget and increasing the guidance payments to persuade inefficient farmers to leave the sector?
    Mr. Silkin: Although I understand why inefficient farmers have to be compensated there is no reason why that cost should be added to the price of foodstuffs throughout the Community. That is a national concern and should be so considered.
    Mr. Torney: When my right hon. Friend next meets his fellow Agriculture Ministers in Europe, will he remind them that the price of butter in the EEC is almost four times the price that it is on world markets? Will he therefore press hard that the best way to get rid of the huge butter surplus is to reduce the price of butter to housewives throughout the EEC, including Britain?
    Mr. Silkin: Yes, and I have pointed this out on a number of occasions, and as recently as last Tuesday. Whatever they may say, in practice the German housewives who queued up to go on butter ship trips agreed with me.
    Mr. Peyton: First, will the right hon. Gentleman give his full support to the French and Italians in seeking to get the proposed devaluation of the green currencies moving without delay? Secondly, is he aware of the warm agreement with what he said about the co-responsibility levy? It would be quite intolerable if the Germans, who are contributing the lion's share to this surplus, were allowed to be exempted from the rather fierce measures that are proposed, while our dairy farmers feel their full force.
    Mr. Silkin: On the second point, I welcome the support of those on the Conservative Benches and of the right hon. Gentleman in particular. It is vital that people should understand that. But the right hon. Gentleman is a little wrong about the devaluation. Although there
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    was an original French proposal that they should join, they remained totally silent about it, and I am not certain that they want a devaluation in advance. On the other hand, the Italians do. My position is clear. If the Italians get a devaluation of the green lira ahead of the price fixing, that will be one less worry for them in the price fixing. In that event, I reserve the British right to do the same, and it will be one less worry for us.
    Mr. Geraint Howells: If the Minister fails to gain the agreement of his counterparts in Europe to devalue the green pound, what alternative plans does he have to help industry in this country? Secondly, when does he think that the price review negotiations will be finalised this year?
    Mr. Silkin: On the second question, it might be quite a long summer. There seem to be some little local difficulties in the Community which have to be got out of the way first. The hon. Gentleman's first point is interesting. I have some ideas at the back of my mind, but they would imply that we never had a price fixing.

    Glasshouse Growers (Fuel Cost)
    Mr. Newensasked the Minister of Agriculture, Fisheries and Food if he will make a statement on the progress so far made towards the equalisation of fuel costs to glasshouse growers in different EEC countries.
    The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Gavin Strang): As I told my hon. Friend on 16 November 1978, the cost of oil, which is the fuel predominantly used by British growers, does not differ greatly here from that in other EEC countries.
    Mr. Newens: Is my hon. Friend aware that I cannot accept this? According to my figures, the cost of gas to Dutch growers is approximately three-quarters the price of the equivalent amount of oil, taking 24p per gallon for heavy oil as approximately the current price. As Shell has permission to impose an increase of 1½p per gallon, which will probably be followed by the other oil companies, will not this increase the existing disparity and disadvantage of an efficient British industry compared with its European competitors? Does this not again illustrate

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    how British horticulture has done badly out of the EEC?
    Mr. Strang: I understand my hon. Friend's concern about energy costs, particularly as he is a resolute champion of the interests of those who work in horticulture in his constituency. But in my answer I was referring to oil. Gas is relatively cheap in Holland, but that is for geographical and geological reasons. The gas is onshore and the glasshouses are reasonably near these fields.
    Mr. Wiggin: Is it not true that the Dutch have a favourable arrangement with the fuel authorities in Holland and that it has nothing to do with the proximity of the fuel source to the glasshouses? We have growers who could be just as close to natural gas sources, but the Dutch Government treat the matter differently.
    Mr. Strang: The production costs of gas in Holland are much lower than in the United Kingdom. The hon. Gentleman must face the fact that we have no evidence—we have looked at this closely—of gas being supplied to Dutch horticultural producers below the cost of production.

    Thames Flood Barrier
    Mr. Jesselasked the Minister of Agriculture, Fisheries and Food what discussions he has had with the Greater London Council about the increasing cost and the delay in the construction of the Thames flood barrier.
    Mr. John Silkin: The aim of the discussions which my officials and I have had with the GLC in recent months was to see what could be done to achieve the earlier completion of the barrier and to contain costs. I am glad to say that the recent agreement between the GLC and the contractors approved by the Government gives every prospect of meeting these objectives.
    Mr. Jessel: Within the next three years there is about one chance in 17 of a major flood disaster in London in which large numbers of people might be drowned, thousands of homes flooded and the London Underground and power stations put out of action for months on end. Why has the completion of the flood
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    barrier been allowed to fall several years behind schedule and the costs to rise faster than inflation, to a current level of £500 million or £600 million?
    Mr. Silkin: I agree with the hon. Gentleman. It is many years since the Waverley committee first suggested that a barrier should be built. When rather to my surprise I discovered that the Thames barrier was within my responsibilities, I immediately got in touch with the GLC to try to shorten the period of completion. Until then, it had been mid-1984. The completion date is now 1982, and I hope we can meet that date.
    Mr. Pavitt: Will my right hon. Friend redouble his splendid efforts? Last week there was a warning for the area around the Palace of Westminster that there was once again the possibility of a flood. Will he try even harder with the GLC?
    Mr. Silkin: We must now ensure that the contract is kept to time, and I am reasonably satisfied that that can be done. But we must also make people aware of the dangers. The hon. Member for Twickenham (Mr. Jessel) was right. It could be extremely damaging to life and limb in London.
    Mr. Jopling: In view of what my hon. Friend the Member for Twickenham (Mr. Jessel) said about the possible catastrophe that hangs over London, does the Minister recognise that the responsibility for this project and its completion is largely his?
    Mr. Silkin: No; it is a matter for the GLC. The Government provide the money and we set the policy, and the policy is to get the barrier built. That was why I put a slight bomb under the GLC to get the period shortened—if I may put it like that.
    Mr. Sydney Irving: Whatever the timetable, will my right hon. Friend ensure that the Darenth barrier is completed before the Thames barrier becomes operational in order to prevent my constituents from being flooded out by the backwash from the Thames barrier?
    Mr. Silkin: All these highly complex matters must be taken into consideration.
    Mr. Molloy: May I remind my right hon. Friend that there was severe flooding in Greenford, in my constituency, two years ago? People are not happy about

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    what has been undertaken by the local authority and the GLC and do not believe that it is any guarantee that it will not happen again. Will the Minister make inquiries on the real progress that has been made to prevent a future similar disaster?
    Mr. Silkin: The possibility of flood is principally the concern of the GLC and the London boroughs. I hope that hon. Members representing London constituencies will take an interest in this problem. The hon. Member for Twickenham (Mr. Jessel) said that there was a 17 to 1 chance of serious flooding and everyone should recognise that fact and do what he can.

    White Fish Authority
    Mr. Costainasked the Minister of Agriculture, Fisheries and Food when next he will meet the chairman of the White Fish Authority.
    The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. E. S. Bishop): My right hon. Friend has no immediate plans to do so, but there is close and continuing contact between the Authority and my Department at all levels.
    Mr. Costain: Does the Minister recall that when he visited the port of Folkestone some years ago the fishermen there impressed upon him the sheer necessity for conservation of fish stock? Is he satisfied that everything is being done to see that the fish are being properly conserved?
    Mr. Bishop: I do recall the visit and the representations the hon. Member has made since on this matter. He will be aware of the significant number of conservation orders put before the House in the last few months and earlier. He will also be aware of the order laid on 6 December last—the White Fish Authority (Researeh and Development Grants) Order—which raises the amount of money available from central funds to the authority by £1 million. Not only is conservation important; so are other aids to the industry to make it viable.
    Mr. Powell: When do the Government expect to announce the general scope of the conservation measures which will be imposed in 1979 in relation to those which were imposed in 1978 and 1977?
    Mr. Bishop: We are taking action continually to conserve certain species of fish. Apart from that, it is important to get the agreement of the Community on these matters. This is receiving our urgent attention.
    Mr. John Home Robertson: When my right hon. Friend meets members of the White Fish Authority will he ask them to ensure, when they are allocating grants for building new fishing vessels, that orders for new boats are spread fairly around the country? Will he particularly bear in mind Eyemouth, in my constituency?
    Mr. Bishop: I am sure that the Authority will bear in mind the points made by my hon. Friend. The most important thing is to know the future shape of the industry by getting an early resolution of the common fisheries policy.
    Mr. Shepherd: Can the Minister give any indication of when he will bring forward legislation to clarify and redefine the position of the White Fish Authority, as presaged some seven years ago?
    Mr. Bishop: The hon. Member will be aware of the recommendation of the Trade and Industry Sub-Committee that this should be done. However, I do not think that the Sub-Committee stressed urgency. There is a great deal of integration between the two organisations principally concerned and we are in consultation with them towards that end.

    United Kingdom Agricultural Supply Trade Association
    Mr. Newtonasked the Minister of Agriculture, Fisheries and Food when next he will meet the chairman of United Kingdom Agricultural Supply Trade Association.
    Mr. Bishop: My Department is of course in close and regular contact with the Association, but my right hon. Friend has no immediate plans to meet the president of UKASTA.
    Mr. Newton: In the course of this close association, has the Minister become aware of the anxieties of the relevant committee of UKASTA and the British Edible Pulse Association about EEC policies which are rightly designed to increase our self-sufficiency in animal feedstuffs, but which are unfortunately

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    choking off United Kingdom production of processed peas for human consumption? In view of the importance of this crop in Essex and other Eastern counties, will the Minister make sure that these anxieties are removed?
    Mr. Bishop: Our officials are in close touch with UKASTA and undoubtedly if this matter is raised, we shall give the fullest co-operation.
    Mr. Litterick: When the Minister next meets the chairman, will he point out that every economic forecast produced in the last few months has asserted that global prices of food are falling? Will he ask the chairman to give an explanation of why the food index shows no sign of falling? In the meantime can the Minister offer the House any tentative explanation of this strange fact?
    Mr. Bishop: One of the major factors is the situation in Brussels. My right hon. Friend's views on this matter of price levels are very important.

    Food Supplies
    Mr. Adleyasked the Minister of Agriculture, Fisheries and Food if he will make a further statement on the extent to which food and foodstuffs are being delayed by industrial action; and if he will make a statement.
    Mr. John Silkin: The distribution of food is now returning to normal and I do not think I need make any further statement.
    Mr. Adley: I understand the Minister's wish to put recent events behind him, but can he tell us whether he personally, as a member of the Cabinet, is satisfied that the law on picketing is clear and not in need of amendment? Can he also tell us, as a member of the Cabinet—[Interruption.]
    Mr. Speaker: Order. This question is about the supply of foodstuffs and industrial action. If the hon. Member has a question on picketing he should put it on the Order Paper.
    Mr. Adley: But Mr. Speaker, it is about the fact that the Minister sanctioned and approved the agreement reached with the lorry drivers. That is the point behind this question. In the
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    light of this dispute, what is the Government's pay policy now?
    Mr. Silkin: It has just occurred to me that the hon. Member has got the wrong Silkin.
    Mr. Stoddart: Is my right hon. Friend aware that there is a new threat to foodstuffs looming on the horizon from the decision of the European Court of Justice yesterday on the operation of tachographs? Will he sound an early warning in the Cabinet that this judgment will cause great problems?
    Mr. Silkin: A warning was sounded in Europe that it would cause many problems for us. If we are talking about the high price of foodstuffs, a little of the answer is to be found in Brussels.

    Common Agricultural Policy
    Mr. Corbettasked the Ministry of Agriculture, Fisheries and Food what recent discussions he has had concerning the common agricultural policy.
    Mr. John Silkin: The most recent were at the meeting of the Agriculture Council in Brussels earlier this week.
    Mr. Corbett: Does the Minister accept that the common agricultural policy is like a bank which never closes and which only pays out money?
    Mr. Skinner: Then why does my hon. Friend support it?
    Mr. Corbett: Will my right hon. Friend draw the specific attention of his colleagues to the fact that the way this crazy policy operates at present means that consumers pay higher prices than they need to andthen, as taxpayers, they are caned for a second instalment on intervention?
    Mr. Silkin: My hon. Friend might have added a third element—that the majority payment into this non-closing bank happens to be British.
    Mr. Wm. Ross: As the CAP has such a tremendous influence on the pattern of food production in this country, will the Minister tell us when he will produce an updated version of "Food from Our Own Resources"? When he produces that version, will he tell the United Kingdom farmers what the Government expect of them in the future?
    Mr. Silkin: There is a later question on the Order Paper on exactly this subject. I hope that hon. Members who have asked me this question will not regard it as a discourtesy if I answer it now. The answer is that copies will be available today in the Vote Office after 3.30 pm.
    Mr. Madden: As the French and Germans are top of the first division in defending their own national interests, will my right hon. Friend understand that his vigorous defence of British interests commands widespread support throughout the country? As the charge for our membership of the Common Market now represents £20 a head for every British man, woman and child, will he continue that vigorous defence and ensure that there is no increase in the price of British food as a result of our membership?
    Mr. Silkin: We have to see where the problem lies. It is in the accumulation of high-priced surpluses in Europe—not in this country. It is my intention that we shall continue year after year to see that the prices do not rise until the surpluses have been eliminated. That is the best help that we can give to British housewives, and indeed to those of other EEC countries.
    Mr. Scott-Hopkins: Does the right hon. Gentleman agree that, apart from keeping prices down as far as possible, we need a switch from guarantees to guidance? Does he agree that structural plans must be revised and that it is about time we had a rural fund to deal with the rural areas not only in this country but also in Europe? This would help people get out of production in cases where there are surpluses.
    Mr. Silkin: The object of the hon. Gentleman's question is right. I am not sure that it would be altogether right to switch it from one payment by the Community as a whole to another. It seems to me that these should be national payments. When I look at where the main problem lies, and the country where it lies, it seems to me that that country can well afford to pay for it.

    Animals (Export)
    Miss Fookesasked the Minister of Agriculture, Fisheries and Food what
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    progress has been made in the EEC Council of Agriculture Ministers on the question of ending the export of live animals for slaughter.
    Mr. Strang: The Commission has now tabled proposals for improving the protection of animals during international transport. We shall press for early discussion on these in the Council.
    Miss Fookes: May I ask the Minister to press with equal enthusiasm the notion that the export of live animals for slaughter from this country should be stopped? Will the Government please stop pussyfooting on this issue?
    Mr. Strang: I cannot accept that the Government are pussyfooting on this issue. I hope that the hon. Lady will accept that not only should we be concerned about animal welfare in this country but that, indeed, we should be concerned internationally and that we should do everything possible to reduce the unnecessary suffering of livestock.
    Mr. Gwynfor Evans: Will the Minister and his right hon. Friend give every possible assistance to building abattoirs of EEC standards in the areas where the animals are produced, so avoiding the necessity for long transport trips?
    Mr. Strang: Yes, indeed. The hon. Gentleman is aware that it is Government policy to encourage the slaughter of animals in this country. Indeed, that is why we provide significant grants for the modernisation of slaughterhouses.
    Mr. Ronald Atkins: In view of the protracted nature of the EEC discussions, will the Minister take legal action to prevent those live exports that are against the law?
    Mr. Strang: Certainly. If my hon. Friend can bring any instances of lawbreaking to our attention, we shall pursue the matter. As to the EEC directive, we should bear in mind that there already is a general directive which we were involved in pursuing when we had the presidency. We are now talking about an implementing directive, which is an important and recent proposal and on which we want to see a decision soon.

    Livestock Feedstuffs
    Mr. Ridleyasked the Minister of Agriculture, Fisheries and Food if he is satisfied with current arrangements for the supply of feedstuffs for livestock.
    Mr. John Silkin: Since my statement to the House on 22 January I am pleased to be able to report that the supply of animal feedingstuffs has much improved. Most feed manufacturers are receiving adequate supplies of raw materials and are reintroducing their better quality rations. I am hopeful that arrangements will soon be back to normal.
    Mr. Ridley: The House will be glad that this cruel threat to animals has been averted. Does the Minister agree that the greatest threat to the wellbeing of animals came from secondary picketing and not exports? Would not the RSPCA be better advised to urge a change in the law on picketing to the other Silkin?
    Mr. Silkin: The hon. Gentleman might address part of that question to the other Silkin.
    After the code of practice was agreed with the TGWU, the problem of animal feedingstuffs and the danger of their short supply began to diminish. Indeed, recently I was pleased to receive the public commendation of Mr. Tom Boden, the deputy president of the NFU, and Mr. Sidney Robinson of UKASTA at the way in which my Department and I managed to safeguard the passage of animal feedstuffs.
    Mr. Jay: Is my right hon. Friend aware that maize and barley, which are major feedingstuffs for the British livestock industry, now bear an import tax approaching 100 per cent. as a result of the European Communities Act and that that Act was supported by, amongst others, the hon. Member for Cirencester and Tewkesbury (Mr. Ridley)?
    Mr. Silkin: I was aware of both those facts. As the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) is so keen on the welfare of animals, he may draw the conclusions himself.

    Dairy Trade Federation
    Mr. Goodladasked the Minister of Agriculture, Fisheries and Food when
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    next he will meet the president of the Dairy Federation.
    Mr. John Silkin: I am in regular contact with the president of the Dairy Trade Federation, but I have no specific plans for a meeting at present.
    Mr. Goodlad: Will the Secretary of State discuss with the president, when he meets him, the possible consequence to producers of the strict health regulations on milk in this country not being renewed in 1980 and there being an influx of cut-price milk from Ireland and the Continent? Will he also consider the consequences on the consumers if our traditional door-to-door deliveries are not continued? Will the Minister say what he is attempting to do to get. Continental safety standards up to our own?
    Mr. Silkin: The hon. Gentleman put his finger on an important point. This is one reason, among many others, why we must do everything we can to preserve the proper hygiene regulations. Otherwise it seems to me that we are liable to be flooded with cut-price milk but of a standard that we have not had in this country, to the best of my knowledge. Those who advocate such a policy should—I am not a vindictive man—be sentenced to drink Charlemagne building milk for three months.
    Mr. Ioan Evans: When my right hon. Friend meets the president, will he assure him that he intends to resist the EEC proposal for a levy on dairy farm production? Is it not a fact that the common agricultural policy is working against the interests of consumers, taxpayers and the farming community?
    Mr. Silkin: There is no doubt that the co-responsibility levy to which my hon. Friend referred would—certainly in its present form—be disastrous for our dairy production. I do not know what changes there may be. This is an example of the Commission not having the courage of our convictions. The co-responsibility levy is meant to be a tax by which to bring down the support price of dairy products throughout the Community. This should be done directly. There is an understandable case for our prices going up somewhat. There is no case whatever for leaving as they are, let alone increasing, dairy prices in the Community.
    Mr. Nicholas Winterton: When the Minister next meets the president of the Dairy Trade Federation will he advise him that he is fully aware that this country is not self-sufficient in liquid milk and milk products and that in no circumstances will he permit the co-responsibility levy, at present proposed by the EEC, to be implemented? I am glad he indicated that earlier. Will he also emphasise the important point made by my hon. Friend the Member for Northwich (Mr. Goodlad), that there must be no undermining of the health and hygiene regulations of this country, which would result in the mass import of bulk liquid milk of a lower quality which would destroy our daily pinta within a year or two?
    Mr. Silkin: I do not mind saying all that to the president of the Dairy Trade Federation. No doubt he would be interested to hear me say it. However, it would be much better if I said it in Brussels.
    Mr. Watkinson: Will my right hon. Friend give consideration to Commissioner Gundelach's proposal to encourage greater expenditure on milk marketing and dairy marketing generally in the Community? Perhaps he would care to point to the model of the British Milk Marketing Board, which the Community attempted to destroy.
    Mr. Silkin: That is right. That is not the only matter about which we should be concerned. It is not only a question of cutting down production. There are many people in Europe who, if the price were right, would be willing to consume. I am distressed that, in spite of the fact that we could have saved £3¾ million of the budget we pay to Brussels, no fewer than 42 Conservative councils in this country have refused to operate the free school milk scheme.
    Mr. Jopling: Does the Minister agree that there is widespread concern in the dairy industry about the package which Mr. Gundelach proposed in the past week? Will he try to relieve some of that gloom by commenting on the report in The Daily Telegraph this morning that Mr. Gundelach is climbing down on the matter of the co-responsibility levy, and that it may not be necessary to exempt farmers in Europe from the levy?
    Mr. Silkin: We shall have to see what happens in the course of what I said that I believe will be a fairly protracted series of negotiations. The matter on which I do not want the Commissioner to climb down, however, is the price freeze.
    Mr. Dykesasked the Minister of Agriculture, Fisheries and Food what recent representations he has received from members of the public concerning the effects of feedstuff shortages in live-stock in the recent lorry drivers' strike.
    Mr. John Silkin: To date I have received three such representations.
    Mr. Dykes: From the previous stoppage of supplies, which lasted a short time, will the Minister say whether there are any lessons to be learned for the future, just in case the Minister's own union starts to cut up rough again about deliveries, for wholly unconnected reasons?
    Mr. Silkin: I think that the lessons are that, if we find ourselves in this sort of position again—and obviously I hope we shall not—it will be preferable to deal with it locally, with the Government watching overall to see that the different problems as they arise are dealt with on a nationwide basis, with talks taking place locally between Government officials, MAFF officials in particular in this case, the NFU and the striking people, whoever they may be. That is a very tolerable way of dealing with the position, and that is exactly what happened.
    Mr. Hardy: Although the supply of feeding stuffs was immensely better than was suggested by both the media and the Opposition during the recent dispute, is my right hon. Friend aware of, and will he investigate, the quite sharp increases in the price of feeding stuffs which have been imposed, both directly and by the termination of discounts, during and since the recent dispute?
    Mr. Silkin: I think there was bound to be an increase in the price of feeding stuffs, partly because feeding stuffs were obviously in shorter supply, and that has its effect, and also partly because, in order to get the supply going, feeding stuffs had to be taken rather greater distances. But there were other factors involved. We must remember that we

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    have had one of the worst winters for 20 or 30 years. That added to the cost.

    Potatoes
    Mr. Edwin Wainwrightasked the Minister of Agriculture, Fisheries and Food how many tons of potatoes were produced in Great Britain during each of the past four years; and if he will also give the selling price per ton.
    Mr. Bishop: As the question calls for a number of statistics, I will, with permission, circulate them in the Official Report.
    Mr. Wainwright: Will my right hon. Friend give comparable figures for potatoes which have been produced in the other EEC countries? Will he bear in mind that if the price of potatoes in the United Kingdom is kept at a very artificially high level, higher than prices on the Continent, that would be a great disadvantage to the processed potato food producers in this country, in that cheaper potatoes in the EEC countries would allow cheaper potato processed foods to come to this country?
    Mr. Bishop: My hon. Friend will be aware of the discussions which are under way concerning the future of the Potato Marketing Board and the potato regime generally. It is important to encourage our producers to produce and at the same time ensure that reasonable prices are available for the consumer.
    Mr. Powell: Will the Minister point out to his hon. Friend the Member for Dearne Valley (Mr. Wainwright) that if he wants the figures for the United Kingdom, he should ask for them?
    Mr. Bishop: The figures which have been asked for will be in the Official Report.
    Mr. Wells: Will the Minister explain to the House the fact that the weather conditions have a very big effect on the supply of potatoes, and that therefore in many years it is not a particularly profitable crop?
    Mr. Bishop: We are expecting or estimating a surplus of some hundreds of thousands of tons, but there may be significant wastage as a result of frost damage and for other reasons.
    Mr. Robert Hughes: Is it the case that many thousands of tons of potatoes have been bought off the market and destroyed in order to keep up the price? If so, is it not just as wrong to destroy them as to keep a mountain of them?
    Mr. Bishop: I think that my hon. Friend will be aware of the need for a buying-in programme to give stability to the market. Surplus potatoes are also used for feedstuffs, which is very helpful.
    Mr. Welsh: What consideration has the Minister given to the creation of a separate guaranteed price system for seed potatoes, in order to encourage a quality product for export, as well as for United Kingdom use? What lessons has he learned from the Dutch Government in this respect?
    Mr. Bishop: Ensuring that the consumer gets good quality potatoes is a matter for the Potato Marketing Board, but the Ministry is in very close touch on these matters.
    The information is in respect of potatoes grown in Great Britain in the crop years listed. The average prices relate only to sales through merchants licensed by the Potato Marketing Board, and do not take account of other, unrecorded, sales:

    Estimated total Great Britain production

    Total sales through licensed merchants

    Average price for sales through licensed merchants

    Crop year

    (tons)

    (tons)

    (£/ton)

    1974–75

    6,392,000

    4,112,205

    25·80

    1975–76

    4,241,000

    2,609,851

    105·63

    1976–77

    4,388,000

    2,534,734

    131·61

    1977–78

    6,060,000

    3,341,025

    43·75

    Farm Prices
    Mr. Wyn Robertsasked the Minister of Agriculture, Fisheries and Food to what extent recent shortages of agricultural supplies have affected prices to farmers.
    Mr. John Silkin: There have been some increases in the price of some supplies, but it is difficult to give a general answer.
    Mr. Roberts: Has the right hon. Gentleman made an estimate of the effect of the lorry drivers' settlement, which was more than 20 per cent., on farmers' costs? Will he promise that the settlement, and

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    the likely high level of other settlements, will be taken into account?
    Mr. Silkin: It would be quite impossible to make such an assessment. Indeed, it is all very confused, for while, for example, the price of eggs and potatoes—and of cereals, in a few areas—has undoubtedly risen, there has been no increase in the price of fertilisers, there has been no increase in the price of seeds and there has been no increase in the price of sprays. As I said in reply to an earlier question, some of the increases are due to the bad weather, anyway.

    TRADES UNION CONGRESS
    Mr. Tebbitasked the Prime Minister when he expects next to meet the Trades Union Congress.
    The Prime Minister (Mr. James Callaghan): I met representatives of the TUC at a meeting of the National Economic Development Council yesterday and further meetings will be arranged as necessary.
    Mr. Tebbit: Is the Prime Minister aware that in his dealings with the TUC, if he stands by his brave words of last night that present pay offers in the public sector disputes are pretty well the limit, he will have the support of all Opposition Members, even if he cannot command the support of members of his own party? Will he further remind the TUC, on the subject of reform of the law on picketing and the closed shop, that opinion polls show that it is my right hon. Friend the Leader of the Opposition, and not the TUC, who speaks for the trade unionists in this country?
    The Prime Minister: I am very glad to have from the hon. Gentleman the official statement of the Opposition's position on pay claims. I am sure that he has been to the fountainhead in order to derive the authoritative exposition that he gave us.
    As for the TUC and the question of picketing and the other very controversial matters, discussions are going on now. I hope that they will succeed and will result in a better code than we have at present.
    Mr. Faulds: When my right hon. Friend next meets the TUC, will he con-
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    vey to it that, since the motivation of the Labour movement is concern for the less fortunate in our society, and since Conservatism is a belief in grabbing for oneself, is it not perhaps time that some of the more powerful and self-concerned unions, with their belief in free collective bargaining, became affiliated to the Tory Party?
    The Prime Minister: I am constantly reminded by the Opposition that there are a large number of Tory trade unionists, some of whom are at the moment on strike or leading the strikes.
    My hon. Friend was absolutely correct as to the concern that is expressed about the origins of the trade union movement. The movement was born out of a desire that there should be justice for those who singly or individually were not able to command justice for themselves. That should be true now in the trade union movement, not only for its own members but also in its concern for all the community.
    Mrs. Thatcher: Will the Prime Minister discuss with the trade union movement today's rise in interest rates? Is he not aware that an increase in interest rates to 14 per cent. is a potential disaster for home buyers? Is it not the case that mortgage rates are already higher than at any time before 1974 and that it is the home buyer and the small business who are having to pay the price for the Government's economic failure?
    The Prime Minister: I am grateful to the right hon. Lady for spelling out some of the consequences of the policy she has been advocating. Perhaps she will now give me greater support in the Government's determination to keep inflation down and to achieve moderate wage settlements as a means of so doing and to ensure that the degree of uncertainty about the level of wage settlements, which is partly responsible for the increase in the minimum lending rate, is put at an end. I would be very happy to have her support on those matters.
    Mrs. Thatcher: Is the Prime Minister aware that if he wishes genuinely to get down inflation, he must get down Government borrowing? The real reason for the increase to 14 per cent. is the high

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    amount of borrowing which this Chancellor has been doing and his declared intention to increase that borrowing by a further 2½ per cent. next year.
    The Prime Minister: The right hon. Lady is, as so often, partly right. The level of Government borrowing clearly influences the level of interest rates. The level of Government borrowing in this country is about on a par with that of a number of other major industrial countries as a proportion of our gross domestic product. It would be helpful if we could reduce it, but I prefer that it should be done not by cutting public expenditure but by increasing economic growth, which would give us additional revenue.
    Mrs. Thatcher: If the Prime Minister is so anxious to reduce Government borrowing, will he withdraw the present White Paper on public expenditure?
    The Prime Minister: The present White Paper, which provided for a modest increase of 2 per cent., was generally regarded as a sensible approach to these matters. The right hon. Lady has no need to adopt a hectoring tone about this. But the uncertainties of the present pay situation, including the high additional cost that would result from meeting some of the claims being put forward in the public sector and in the public services—whether in the local authorities or the Civil Service—or some of the other claims, would mean, if carried through, that we would have to review total Government expenditure and the borrowing requirement. There can be no escape from that.
    Mr. David Steel: When the Prime Minister and his colleagues meet the TUC in these discussions, are they equipped with up-to-date figures on the present level of wage settlements? Can he give the House any figure for the level over the last month or so?
    The Prime Minister: Yes. We are equipped with the notifications which are made. I believe they are not complete. I have not charged my memory, and I hope that the hon. Gentleman will not hold me too closely to what I say. But my recollection is that up to about a month ago, they were running at a little under 10 per cent. One or two of the most recent large settlements, including
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    the lorry drivers' settlement, which the House will remember was 22 per cent., are now nudging the level above 10 per cent. This is the Government's concern. We should avoid getting on to this escalator which, four or five years ago, carried us up to 30 per cent. by the end of the round. Therefore, the Government must, and intend to, stand firm in their own area. If the country has to suffer a certain amount of disruption, I shall regret it. But that disruption will be less significant in the long run than it would be if we gave way to all these claims.

    CONFEDERATION OF BRITISH INDUSTRY
    Mr. Whitneyasked the Prime Minister when he plans next to meet the Confederation of British Industry.
    The Prime Minister: I met representatives of the CBI at a meeting of the National Economic Development Council yesterday and further meetings will be arranged as necessary.
    Mr. Whitney: At the next meeting, will the Prime Minister invite the CBI to explain to him the grave damage to British industry and to those of us who depend on it and work in it which will be caused by the latest massive rise in interest rates, due to the incompetence of his Government?
    The Prime Minister: The last part of the question will be a matter of judgment and argument. As to the first part, there is no doubt that high interest rates, if sustained for a considerable period, are damaging to industry and especially to small firms. That is one reason why it is important that we should maintain our insistence on keeping inflation under control. That, in its turn, will ensure higher employment. If we allow all these things to get out of control, there is no doubt that unemployment will increase.
    Mr. Cryer: Will my right hon. Friend explain to the CBI, when it seeks legislation to control the unions, that the experience of the Opposition when in Government was to succeed in losing 23 million days in 1972? That must be an all-time record. Will he accept and also inform the CBI that its opposition to industrial democracy and to planning agreements helps to produce the industrial

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    situation that we face today? Does he also accept that the basic solution to industrial problems is to provide decent basic wages and working conditions?
    The Prime Minister: The answer to the last part of the question must be "Yes". As regards the first part, we had some discussion at NEDC yesterday about what is called in shorthand "industrial democracy". There is a difference between the Government and the CBI on the methods that should be employed. I am bound to tell the House that the CBI representatives said officially that they believe it is important that all CBI members should make available as much knowledge as possible of firms' investment programmes, profitability and future programme. There were complaints that a number of companies were not doing that. The CBI said that, if it could use its influence to ensure that companies did co-operate, it would do so. But there is still this difference over the method by which the Government would hope to proceed on industrial democracy.
    Mr. Lawrence: Can the Prime Minister tell the House which Conservative trade unions are currently on strike or taking industrial action?
    The Prime Minister: No, Sir.

    PRIME MINISTER (ENGAGEMENTS)
    Mr. Parryasked the Prime Minister if he will list his public engagements for 8 February.
    The Prime Minister: This morning I presided at a meeting of the Cabinet. In addition to my duties in this House I shall be holding further meetings with ministerial colleagues and others. I will also be meeting my hon. Friend and other of my hon. Friends representing Merseyside constituencies.
    Mr. Parry: Will my right hon. Friend reflect this afternoon on the "World in Action" programme shown on Monday which linked mortality with unemployment? A reference to Liverpool suggests a possible 1,000 premature deaths. Will the Prime Minister order a Government inquiry into this latest disease? Does he not agree that large private companies such as Dunlop and Plessey have announced substantial redundancies in
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    Liverpool and could possibly be considered in the future to be parties to murder?
    The Prime Minister: There is undoubtedly a connection—I am obliged to my hon. Friend for drawing this to my attention—between poor urban conditions and a higher rate of mortality just as there is a distinct relationship between earlier deaths among manual workers compared with deaths among non-manual workers. These are factors that must always be taken into account. I note what my hon. Friend says about closures. Let us also remember—because Merseyside gets such a bad reputation—that Schreiber's is making a substantial improvement and hoping to employ several hundred more men. So is GEC Fairchild. There are, therefore, elements on the positive side as well as negative ones.
    Mr. Baker: Does the Prime Minister appreciate that if there is a choice between a policy of high money interest rates and reducing Government expenditure, for the Government always to choose to increase money interest rates means that they are sacrificing future growth prospects of the economy? Is it not evident that the Government are embarked on a policy of low growth with the inevitable consequence of low wages?
    The Prime Minister: This is a matter of dispute among economists. I do not think that we will clear it up by means of a supplementary question and answer. It would not be right to say that the Government have allowed public expenditure to go ahead untrammelled. Indeed, the complaints of my hon. Friends below the Gangway are that we have restricted it to too great a degree. In terms of the needs to be met, they are right, but the Government, the Chancellor and I always have to consider how we balance those needs. It would be very shortsighted to suggest that we should cut back substantially on public expenditure in a number of areas where needs are so great. Hon. Members should consider what we are hearing now about the National Health Service and other services. It would be very short-sighted to cut back further there, though, as I said earlier, it may be necessary to do something in those areas.
    Mr. Ashley: Will the Prime Minister find time to reflect that our low-paid

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    workers require something similar to the Roosevelt New Deal to give them a guarantee that the benefits that they achieve will not be eroded within the next few months? Does he agree that the guarantors of such a new deal cannot be the Government, but must be the better-paid and more powerful groups in our society and that, until those groups pursue productivity and stop leapfrogging, we shall all continue to suffer—low-paid workers and society in general?
    The Prime Minister: I am obliged to my hon. Friend for his comments. He has raised one of the most difficult issues which has to be resolved. Clearly, if everyone gets the same increase as the low-paid workers or, as I have heard some claim, twice as much as the low-paid workers, the man on low pay will either remain in the same relative position or fall further behind. The problem has to be resolved. The Government have made an approach and an offer to low-paid workers.
    Mr. Skinner: It is not good enough.
    The Prime Minister: The hon. Gentleman is not negotiating. He had better leave that to the negotiators. We have proposed for low-paid workers a fixed sum and a study of comparable pay for
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    comparable effort in order to see whether low-paid workers in the public sector get less than low-paid workers in the private sector. That is a matter of much dispute and only an examination will reveal the truth.
    Sir Geoffrey Howe: Does not the Prime Minister remember that 12 months ago, the minimum lending rate stood at 6½ per cent? Today it stands at 14 per cent. Does he not accept that that increase in interest rates, which is doing such damage to home buyers and industrial confidence, is the direct result of his Government's plan to increase public spending this year by £4,000 million—more than 6 per cent? Is it not clear that continued increases in interest rates without reductions in public spending are quite inadequate to redress the balance in the economy?
    The Prime Minister: I do not accept a great deal of what the right hon. and learned Gentleman says. A combination of internal and external policies has resulted in MLR going to a far higher level than any of us ought to want or desire. Another element that the House must take into account is that it is important to maintain the stability of our currency. The increase in interest rates is, partly, a protection for that purpose. That will help to keep down inflation.

FALMOUTH DOCKS
Mr. Penhaligon Mr. Penhaligon (by private notice) asked the Secretary of State for Industry if he will make a statement about the proposed closure of Falmouth docks.
The Minister of State, Department of Industry (Mr. Gerald Kaufman): This is a matter for British Shipbuilders and they have informed us that they intend to announce later this afternoon the cessation of ship repairing at Falmouth.
In the light of that, my right hon. Friend the Minister of State will be taking the necessary steps to make the Falmouth employment office area a special development area.
Mr. Penhaligon: The south-west of Cornwall will be pleased to hear the latter part of the Minister's reply, but is he aware what the loss of 1,400 jobs in the Falmouth travel-to-work area will mean? Is he aware that for a long time the docks have been the economic backbone of a significant part of Cornwall? Can he tell us what alternatives have been considered? The harbour is one of the nation's great natural resources—
Mr. Speaker: Order. The hon. Gentleman must ask a question—and he has asked three already.
Mr. Kaufman: I fully acknowledge that this is a serious blow for that part of the country. That is why the Government have immediately decided to take steps to assist the area. I must tell the hon. Member for Truro (Mr. Penhaligon) that if his vote had been successful and the Act to nationalise the shipbuilding and aircraft industries had not been carried, the ship repair company at Falmouth, which was a loss-maker when it was nationalised, would have been closed long ago, and the workers who are being displaced now would not have had the benefit of the Government's special shipbuilding redundancy payments.
Mr. Stephen Ross: Absolute rubbish.
Mr. Mudd: Since Falmouth is my constituency, will the Minister answer two questions, both based on fact? Why did he not make clear that the docks are being closed with the approval of the Government, at the request of British Shipbuilders? Why did he also not make
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clear that Falmouth docks were not nationalised as a consequence of the Act but were voluntarily bought by British Shipbuilders from the private owners, ostensibly because British Shipbuilders thought that the docks could reach a break-even point in their economics?
Mr. Kaufman: There had been losses by the ship repair yard for many years. When it was taken over, the loss in the last full year of private ownership was £1,262,000. British Shipbuilders took it over voluntarily in an effort to assist on the basis that they believed that it could be turned round to viability, despite the years of losses under private enterprise. However, as a result of the recession and a continuing record of low productivity, it is British Shipbuilders' considered commercial judgment that there is no prospect of commercial viability in sight. The hon. Member for Falmouth and Camborne (Mr. Mudd) must tell us whether he wishes the Government to use public expenditure to subsidise the docks.
Mr. Litterick: Will the Minister confirm that the Conservative Party has repeatedly declared that it will not give public financial assistance to private enterprises that are making losses? Will he also confirm that the Conservative Party has also said that it will close any public enterprise that is making a loss?
Mr. Kaufman: The right hon. Member for Leeds, North-East (Sir K. Joseph) says that repeatedly. British Shipbuilders took on the firm, knowing that it was a loss-maker, and endeavoured to turn it round. In the very difficult circumstances of the world ship repair market, they have found that impossible. Unlike what might have happened under private enterprise, however, British Shipbuilders have decided to look after the 120 apprentices who are employed at Falmouth.
Mr. du Cann: What plans are being made for the possible reactivation of Falmouth docks, which are, as the hon. Member for Truro (Mr. Penhaligon) rightly said, an important national asset, in the event that the long-term plans for the development of oil resources off the Cornwall coast should materialise?
Mr. Kaufman: I am grateful to the right hon. Gentleman because he has raised a practical and important question.

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The fact that the cessation of ship repairing is to take place does not mean that British Shipbuilders are to close Falmouth docks totally. They will retain them with a small work force for some residual activities on a care and maintenance basis. If circumstances change, in the way that the right hon. Gentleman hopes, it may be possible for British Shipbuilders to re-examine the position.
Mr. Stoddart: Is the Minister aware that, although it is a matter of regret that Falmouth docks should be closing, I congratulate him on the immediate action that he has taken to make Falmouth a special development area? Will he do everything else he can to help employment in that part of the South-West which is a general area of high unemployment and low wages?
Mr. Kaufman: Certainly. A deputation from Cornwall county council is coming to London on 19 February to meet my right hon. Friend the Secretary of State for Employment and these matters will be considered at that meeting. I should like to assure my hon. Friend that the Government are considering urgently the scope for other measures to help Falmouth, including the provision of more advance factories, for which land is being sought.
Mr. Norman Lamont: Have not British Shipbuilders got other closures in mind? Since those most likely to be affected have a right to know, will the Minister of State tell us when he will release the corporate plan, which he has had for two months, with his proposals for 12,000 redundancies?
Mr. Kaufman: I have no proposals for 12,000 redundancies. The Government are carefully considering the corporate plan—which, as is well known, contains a number of options—because they refuse to be rushed precipitately by the Opposition into the kind of activity that they most like—getting rid of jobs indiscriminately.
Mr. Nott: On a point of order, Mr. Speaker. Leaving aside entirely the fact that, as a matter of courtesy, a Member who raises a point about another Member's constituency normally informs that Member, may I ask whether you are open to receiving application for private notice
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questions of this kind if redundancies are likely to occur in another Member's constituency? I have constituents who sometimes become redundant in the constituency of the hon. Member for Truro (Mr. Penhaligon), but I do not seek to put down a private notice question about it. If I did, I should certainly have the courtesy of referring to the hon. Gentleman before doing so. Would you, Mr. Speaker, please say whether in future you will accept applications for private notice questions concerning another Member's constituency? If so, I have a number to put to you about the hon. Gentleman's constituency.
Mr. Penhaligon Mr. Penhaligon rose—
Mr.Speaker: Mr. Penhaligon, further to that point of order.
Mr. Penhaligon: It is a fact that about a quarter of the employees at these docks live in my constituency.
Mr. Speaker: Order. I do not want an explanation about the question. I thought that the hon. Gentleman wanted to refer to the point of order.
I should tell the House that when I looked at this application I was conscious that the constituency Member had already made an application under Standing Order No. 9 for an emergency debate on this matter and had thus shown his deep concern for his constituents. I was well aware that the hon. Member had taken many steps to deal with it. I do not want to give my reasons to the House, but I decided on balance to allow this private notice question, which is apparently of great important to the South-West.
The normal courtesy of letting each other know is generally observed if a Member seeks to raise a matter concerning another Member's constituency. That is a matter for hon. Members, but it is normally the way that we conduct our affairs.
Mr. Mudd: On a totally new point of order, Mr. Speaker, may I say that I recognise that feelings are running very high on this matter regarding alleged trespass in other Members' constituencies? However, I refer to the Minister's reply, which I found highly subjective and dubiously distorted. Therefore, I beg to give notice that I shall seek to raise this matter on the Adjournment.

LOCAL AUTHORITY EMPLOYEES (PAY)
Mr. Heseltine Mr. Heseltine (by private notice) asked the Secretary of State for the Environment if he will make a further statement on the present state of the local authority pay negotiations.
The Secretary of State for the Environment (Mr. Peter Shore): The employers made an offer of 8·8 per cent at the national joint council meeting yesterday. The offer embodied the £3·50 underpinning arrangement for the lower paid proposed by the Government, but was rejected by the union side.
I regret that a settlement was not reached yesterday. I am in close touch with both sides, and I trust that negotiations will be resumed shortly.
Mr. Heseltine: I welcome the fact that the Secretary of State is calling a meeting later today, because that recognises that what is at stake can be resolved only by a settlement between the unions, local government and national Government.
Does the right hon. Gentleman accept that the Conservative Party, in this House and in local government, will give him every support in resisting further escalation of this claim?
I remind him that six weeks ago he forecast rate increases, on average, in single figures. The latest offer of virtually 9 per cent., which has now been rejected, must mean that rate increases this year will, on the Secretary of State's calculations, average nearly 15 per cent. Does he also accept that there can be no case for encouraging the unions to seek an extra settlement which is so designed that the ratepayers, not the Government, will be expected to pay?
Does the right hon. Gentleman recognise that the negotiations that he is now conducting have an implication far outside the area of local government? Many trade unionists have already settled within the Government's targets, and the moderate and responsible leaders of those unions which have already settled will be left—[Interruption.]
Mr. Speaker: Order. I say to hon. Members below the Gangway that a running commentary whilst a Member is speaking is offensive and ill mannered.
Mr. Litterick rose—
Mr. Speaker: Order. I should not have thought that that called for any comment. I should think that the whole House agrees that it is rude to keep interrupting from a sedentary position whilst others are speaking.
Mr. Litterick: On a point of order, Mr. Speaker. The procedures of the House are being violated before our very eyes in that an alleged question is being turned into a speech.
Mr. Speaker: Order. The day may come when the House gives its trust to the hon. Gentleman and puts him in this Chair. But, until that day comes, he must leave it to me.
Mr. Heseltine: May I ask the Secretary of State to recognise—[Interruption.]
Mr. Speaker: Order. I must warn the hon. Member for Bolsover (Mr. Skinner) that, if he continues to interrupt from a sedentary position, I shall ask him to withdraw from the Chamber.
Mr. Heseltine: May I ask the Secretary of State to recognise the implications of these negotiations outside local government? Many trade unionists have already settled within or close to the Government's guidelines. They will be left in an impossible position if the Government are now seen to abandon their targets at the first sign of any trouble.
Finally, will the Secretary of State clearly reiterate that inflationary settlements—the present offer is already inflationary—will do nothing to help the low paid? Does he agree that all that will result will be a further deterioration in our economic position from which the low paid, like everyone else, will suffer?
Does the Secretary of State recognise that the public are in a mood to see this matter settled within the existing offer and that he should therefore advise local authorities to consider the use of volunteers and contractors to maintain essential services?
Mr. Shore: I shall not trespass on the time of the House in the way that the hon. Member for Henley (Mr. Heseltine) has done. I shall simply make three points.

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First, I am aware, as is everyone else, that there are implications for the rates in any settlement with local government workers. Everyone is aware of that. But, at the same time, I caution the hon. Gentleman not to go in for premature assumptions about what level of rates is likely to be struck by councils during the next few weeks.
Secondly, we are aware of the importance of this settlement. As many people rightly say, the local government manual workers' settlement, coming where it does in the public sector pay round, is influential in terms of settlements which come after it. We have that very much in mind.
Thirdly, I note what the hon. Gentleman said about giving every support to the offer of 8·8 per cent. I am grateful for support these days. But the greatest support that he and his party could have given us was not to have voted in the way in which they did in December, and not to have given rise to a sense of deep-seated unfairness in the minds of those in the public sector with regard to treatment between the private and public sectors.
Mr. Mellish: Will my right hon. Friend go into these negotiations absolutely impartially, in the sense of considering the merits of the case? We have read that there has been a rejection of a comparability study. What are the reasons for that rejection? I thought that there was a universal desire for such a study. When is that likely to get off the ground?
Mr. Shore: There are, of course, a number of issues within this negotiation. One of the most important is the question of comparability and comparability studies, which, in my view, have a very important part to play for the future. As yet, there is not an identity of view on this question, but I believe that the gap on comparability which at present exists between both sides is narrow and is capable of being bridged.
Mr. Viggers: Has the right hon. Gentleman seen press reports of the intention of public sector workers to paralyse for several days a major centre in Hampshire by stopping the operation not only of hospitals and ambulance services but of drains and sewers? Does he agree that, regardless of the merits of the pay claim
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involved, this action is unacceptable and disgusting to the overwhelming majority of people? What positive steps are the Government now taking to make sure that this action does not succeed in its purpose?
Mr. Shore: That question does not immediately arise in relation to the state of the negotiations. I have had reports that action is being planned somewhere in the county referred to. It is not a matter of anticipating events. Of course, very serious actions have been taken by public service employees in a number of major urban centres. These are very damaging to the life and welfare of the people in those areas. I strongly urge the unions concerned to de-escalate the action which they are taking and to remember the effect that it is having on those communities which they normally and very willingly serve.
Mr. Molloy: Will my right hon. Friend also tell the leaders of the trade unions concerned, while acknowledging that they face a difficult situation, that they should realise that inflation is the greatest menace facing the country? The bulk of the trade union movement has made a massive contribution in this respect over the last few years. But when we ask the Conservative Party and the CBI to make their contribution to holding down prices, they fight tooth and nail against it and give no evidence whatever that they have any contribution to make in fighting inflation in anyone's interest, let alone the national interest.
Mr. Shore: I agree with my hon. Friend. What we have at present is basically a policy which the hon. Member for Henley (Mr. Heseltine) and his colleagues approve of, which is what they call free collective bargaining in the private sector and inevitably restricted bargaining in the public sector. The consequence of that is strife from one end of the country to the other.
Mr. Emery: In considering the negotiations, since they have not reached a conclusion, will the right hon. Gentleman consider giving guidance to the local authorities specifically with regard to garbage collection and the vast amount—nearly mountains in London and some other places—of refuse which is gathering

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in the streets? That is entirely unacceptable to everyone, and something must be done about it very soon.
Mr. Shore: Through our regional offices, we are keeping in close touch with the local authorities affected. Indeed, about a quarter of local authority areas are now affected by strikes in their refuse collection services. But this is not unprecedented action in this particular area. As the hon. Gentleman will recall, there have been previous experiences and there are procedures for dealing with them which have worked successfully in the past.
Mr. Stephen Ross: Is it true that certain local authorities are negotiating, and in some cases have reached agreement, with their work force? If so, what action does the right hon. Gentleman propose to take? Has he warned them of the effect that this will have on cash limits?
Mr. Shore: I am not aware that any local authority has reached an agreement with its employees. I am aware that possibly four have indicated a willingness to negotiate or to reach agreement separately. Whether they will do so or whether they will wait—as I believe most will—on the national settlement, we shall have to see.
Mr. Newens: Does my right hon. Friend agree that the Conservative Opposition have no real interest in achieving a settlement in this dispute and that their whole activity is designed to create the maximum amount of mischief and dissension for their own narrow, political advantage? Does he recognise that many of us find it quite disgusting for people on high salaries to lecture about people whose take-home pay is less than £40 a week? Will he persevere in his attempts to achieve a settlement which recognises the rights of the lower paid as well as the tremendous need to prevent further inconvenience to the public?
Mr. Shore: My hon. Friend is right to draw attention to the problem of low pay in parts of the public sector. I believe that hon. Members on both sides of the House would be very foolish if they did not recognise that there is real grievance here. I believe that the structure of the offer that has been made has been designed to give particular help to those
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in the public service who are on the lowest pay. Furthermore, I genuinely believe that the use of comparability in the future will enable better and fairer settlements to be made—settlements that will be seen to be fairer—than it has been possible to make in the past.
Several Hon. Members rose—
Mr. Speaker: Order. This is an extension of Question Time. However, I propose to call three more hon. Members from either side of the House.
Mr. Charles Morrison: Does the right hon. Gentleman agree that the position of the local authority negotiators has already been seriously undermined by the extraordinarily high offer that has been made to the water workers? Does he also agree that he is very lucky to have Conservative-controlled local authority organisations which are currently giving him full support in his endeavour to control the level of increase? Would not it be a lot better if he received the same amount of support from his hon. Friends below the Gangway?
Mr. Shore: I hope that I enjoy the support of the whole House in my efforts to achieve a settlement—
Mr. Skinner: Talk to your friends; do not talk to me.
Mr. Shore: —which takes account of the problem of the lower paid, and which will at the same time help us reach what I hope is a shared objective of reducing, or at least containing, inflation. If that is not an agreed objective of all of us, I do not know what is.
The hon. Gentleman asked about local authority negotiators having the feeling that they are being undermined. I do not think that is true, nor do I believe that they think it. They recognise that the water industry is a public utility and a different industry altogether. It is differently financed, and there are properly available in that industry possibilities of productivity that do not appear to be available in the same way in local government.
Mr. Pavitt: I accept that my right hon. Friend's immediate purpose in the present negotiations must be to deal with the urgent situation that has arisen. At the same time, will he take into account

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that grave injustice is caused to low-paid public service workers when, in comparison with those in the private sector, they are unable to exercise their rights in precisely the same way without hitting third parties? Does he agree that there is a strong need for a long-term policy to iron out the anomaly, which does great disservice to those working in hospitals and local authorities who are not able to exercise the normal free rights of trade unionists?
Mr. Shore: My hon. Friend points properly to the difficulty of industrial action in the public service sector. He is right to indicate that it is inevitable that action in that sector must damage the community that public servants exist to serve. That cuts both ways. It means that there is an obligation on employers to behave fairly towards those in that position. It means that there is a special obligation on those in the public service to remember the interests of the community that they serve.
Mr. Michael Morris: Does the right hon. Gentleman agree that the position facing ratepayers is bleak, especially in the counties? Are not rates likely to increase by double the rate of inflation? Does he recognise that, if he is to be fair to both sides that are negotiating, there must be a settlement in the National Health Service? Until that settlement is reached and known, there will not be peace and calm in the local government sector.
Mr. Shore: It is not for me to answer questions on the Health Service. However, I am aware of the connection between manual workers in the Health Service and those in local government. The problem for ratepayers would be severe if those concerned were unable to reach a settlement—I very much hope that they will be able to—near the figures that have already been announced.
Mr. Norman Atkinson: Does my right hon. Friend agree that his own experience in recent weeks, together with that of his colleagues, has proved how disastrous it is to try to negotiate wages across the Floor of the House, and how disastrous it is for him to be directly involved in wage negotiations? Does he further agree that by becoming so involved public sector workers are con-
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verted into economic regulators, which is totally unfair to them? Does he accept that the best approach is to return as soon as possible to the Labour Party's original intention of allowing joint councils freely and independently to negotiate wages and then to report to the Government?
Mr. Shore: I note what my hon. Friend says. We have gone beyond a period in our economic history, and in terms of our experience of inflation, when we can say that all these matters may be left to be resolved by arbitrators, which I think was the main thrust of the question—
Mr. Norman Atkinson: Joint councils.
Mr. Shore: —and that the results will add up to a total that is consistent with a tolerable level of inflation. We could find settlements through arbitration in all instances of difficulty, but unless we were clear about the parameters within which the arbitrators were to make their settlements we would have rip-roaring inflation.
Mr. Bowden: Is the right hon. Gentleman aware that the minority party in the Brighton district council is doing everything possible to try to persuade the council to settle at a level in excess of 10 per cent.? Will he openly and clearly condemn that irresponsible action?
Mr. Shore: It is not for me to comment on what goes on within certain councils. I am rather more interested to know the view of the majority party, which I gather is responsible for local affairs in Brighton.
Mr. John Ellis: After a period of restraint, when some have not had the opportunity of enjoying expense accounts and free cars, does my right hon. Friend agree that there was bound to be dispute? We are all becoming increasingly interdependent. How much, for example, is a consultant worth? How much is a lorry driver worth as against a financier or even a Member of Parliament? Are they worth 10 times or 20 times more than a lorry driver? If we all play a part in society, is someone worth 100 times more than another, or should one person be worth 10 times as much as another? Is it not time that we addressed ourselves to these fundamental issues and realised

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that those who do the dirty and arduous jobs are no longer to be regarded as the lowest of the heap?
Mr. Shore: I much agree with my hon. Friend. The comparability studies that we hope will result in an agreement will make a contribution, but if we are to achieve long-term peace and order in salary and wage negotiations there must emerge a better consensus on the proper differentials that should exist between one occupation and another.
Several Hon. Members rose—
Mr. James Lamond: On a point of order, Mr. Speaker. We have had two private notice questions this afternoon. To ensure the removal of any unjustified suspicions on the part of Back Benchers that they may be treated unfairly, will you examine, Mr. Speaker, the time that the hon. Member for Henley (Mr. Heseltine)—
Mr. Litterick: Six minutes.
Mr. Lamond: —spent in asking his supplementary question and advancing his argument and compare it with the time that had elapsed when the hon. Member for Truro (Mr. Penhaligon) was asking his supplementary question, and you felt it necessary, Mr. Speaker, to interrupt him to tell him that he had already asked three questions?
Mr. Cryer: Further to that point of order, Mr. Speaker. You may recall, Mr. Speaker, that a few minutes ago you expressed some concern about the views being expressed by some Back Benchers during the course of the comments made by the hon. Member for Henley (Mr. Heseltine). It seemed to some of us that there was a disparity between the treatment of the hon. Member for Henley and that of the hon. Member for Truro (Mr. Penhaligon). The House must know clearly and categorically whether on private notice questions Opposition Front Bench spokesmen are to be allowed two, four or five times the time that is given to Back Benchers, and whether that is to become a rule of the House. If that proposition is put to the House, I for one shall resist it.
Surely all hon. Members should be treated with exactly the same degree of fairness. Whether a Front Bench spokes-
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man or a Back Bencher asks a private notice question, a reasonable time, and no more than that, should be allowed for the asking of a series of supplementary questions. The hon. Member for Henley is noted for becoming excited on these occasions. It would be prudent for you, Mr. Speaker, and the House to draw attention to these circumstances and to curtail the hon. Gentleman when he is getting into that state.
Mr. Pardoe: Further to that point of order, Mr. Speaker. I intended to raise the matter with you after business questions but I am grateful to you for taking it now. It is not only the lion. Member for Henley (Mr. Heseltine) who gets away with it. There is no doubt at all in the minds of Back Benchers that there is a difference in the rulings that you give, Mr. Speaker, when you are dealing with those on the Front Bench compared with Back Benchers—
Mr. Speaker: Order. I am not prepared to listen to that unless the hon. Gentleman or anyone else wishes to place a motion on the Order Paper. The hon. Gentleman is welcome to do that. However, he should weigh the words that he is using.
Mr. Pardoe: You misinterpret my words, Mr. Speaker. I was not in any way criticising you. I am not criticising you, Mr. Speaker. I am asking you whether there is a precedent, ruling or procedure of any sort that states that Front Benchers are entitled to have four, five or six bites at the cherry whereas Back Benchers are not. There is a clear difference in the procedures that are adopted. I am not saying that that is your fault, Mr. Speaker. I am asking for your guidance, Mr. Speaker, not criticising you. I am asking you to say whether there is a ruling or any procedure that allows that to happen. It happened this afternoon. You checked my hon. Friend the Member for Truro (Mr. Penhaligon) on the forty-sixth word. I guarantee that there were substantially more than 46 words from the hon. Member from Henley. Are we equal in the House before Mr. Speaker or are we not?
Mr. Speaker: Order. The House will not expect me to stay here and be subjected to points of order of the kind we

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have been experiencing. I answer with one simple statement. I do my best by the House to be fair. It is true that the hon. Member for Henley (Mr. Heseltine) took a long time this afternoon—and he knows it. However, there is a long custom in this House that an official spokesman is always allowed a little extra latitude in this House. That has been a custom, not only since I came to this House, but long before.
Several Hon. Members rose—
Mr. Speaker: I do not intend to argue the question. I tell the House straight that I shall not be put in a position in which hon. Members argue with me about how I conduct the affairs of the House.
Mr. Pavitt: On a point of order, Mr. Speaker.
Mr. Speaker: Is this a different point of order?
Mr. Pavitt: Yes, Mr. Speaker. I seek your guidance on how we should try to protect the reputation of this House. I raise this point with you because of the fact that our proceedings are now broadcast, and because impressions may arise outside the House which are not necesarily shared inside the House.
You may recall that during Prime Minister's questions the hon. Member for Wycombe (Mr. Whitney)—I may have misheard him—said that he relied on industry for his well-being and his interest. It is know to you that there are large numbers of hon. Members whose only source of income arises from membership of this House, where they spend 12, 15 or even 18 hours a day carrying out their job and who do not rely on any outside source of income. Therefore, does it not reflect on full-time Members of this House when the impression is given outside that we are amateurs and dilettantes?
Mr. Speaker: I would remind the hon. Member that during my time in the House, I, too, have been an amateur, but it is clear that we do not always please everybody.
Mr. Norman Atkinson rose—
Mr. Speaker: Is the hon. Gentleman returning to the subject of the earlier points of order? If so, I am not taking
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further points of order. I leave it to the House to do what it likes. That is my attitude on that.
Mr. Atkinson: Do you not intend to take any further points of order, Mr. Speaker?
Mr. Speaker: Not relating to my conduct in the Chair.
Mr. Atkinson: There are points of order, Mr. Speaker, which we have to raise with you from time to time because it is the only way in which Back Benchers can protest about traditional practices of whatever form.
I wish to raise with you the whole question of this place being founded on a citadel of privilege. These surely are the occasions when we seek to remind you that Privy Councillors and others have privileges compared with Back Benchers. It is surely in the best traditions of Mr. Speaker and of the House to try to eliminate some of those privileges—whether they concern replies sent to Back Benchers by Ministers, access by Privy Councillors to Departments which is not afforded to Back Benchers, car parking or even cloakrooms. A mass of privilege has been built up and accorded to Privy Councillors from which Back Benchers are excluded.
Surely if we are to examine any of these matters, the whole position should be considered. Many of us were thrilled, Mr. Speaker, when you first occupied the Chair because we looked to you, with your magnificent record in these matters, to redress the position and to try to iron out the amount of privilege which has been mounted year after year.
Mr. Speaker: Order. There are various privileges which the House, by long custom, gives to various people, and Privy Councillors come under that heading—
Mr. Mellish: I do not get any.
Mr. Speaker:—including the right hon. Member for Bermondsey (Mr. Mellish).
On the other matter which was raised—and of course I wish to have a right relationship in this House—sometimes difficult and nice decisions have to be taken by the Chair when an official spokesman may be said to be going on for too long. Obviously from time to time some hon. Members will disagree with my judgment.
Mr. Mellish: Further to the point of order, Mr. Speaker. In view of the point of order raised by my hon. Friend the Member for Tottenham (Mr. Atkinson), will you be kind enough to send me a list of all the privileges to which Privy Councillors are entitled? I am not getting any of them at all.

BUSINESS OF THE HOUSE
Mrs. Thatcher: Will the Leader of the House state the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): The business for next week will be as follows:
MONDAY 12 FEBRUARY—Second Reading of the Credit Unions Bill.
Consideration of Lords amendments to the Price Commission (Amendment) Bill.
TUESDAY 13 FEBRUARY—Supply [7th allotted day]. There will be a debate on the state of British industry, which will arise on an Opposition motion.
WEDNESDAY 14 FEBRUARY—Remaining stages of the Banking Bill.
Motion on EEC documents R/3185/78, R/3089/78, R/3090/78, R/3146/78, R/3093/78, R/3312/78 and 4102/79 on the Communities' budget.
THURSDAY 15 FEBRUARY—Second Reading of the Public Health Laboratory Service Bill [Lords].
Remaining stages of the Vaccine Damage Payments Bill.
FRIDAY 16 FEBRUARY—Private Members' Bills.
MONDAY 19 FEBRUARY—Supply [8th allotted day]. There will be a debate on the first report from the Select Committee on Procedure, Session 1977–78, House of Commons Paper No. 588, which will be brought to a conclusion on Tuesday 20 February.
Mrs. Thatcher: When will the House be able to debate the White Paper on public expenditure? The right hon. Gentleman will be aware that such matters are always important but, because of today's rise in interest rates, they have now become even more relevant.
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Secondly, in regard to the debate on procedure, will we at the conclusion of procedure, will we at the conclusion of that debate be given the opportunity to vote on specific recommendations?
Thirdly, the right hon. Gentleman will recall that last week I asked him specifically for a statement to be made by the Secretary of State for Defence about defence contracts with Iran. That is a most important matter because, if the contracts are to be suspended or are to go in breach, alternative arrangements for that equipment will have to be made.
Mr. Foot: On the point put to me by the right hon. Lady about the White Paper on public expenditure, no doubt the Expenditure Committee will wish to comment on the position before a debate takes place. We are still awaiting its report. Obviously it is, as the right hon. Lady said, an extremely important matter.
On the second point relating to the debate on procedure, surely we should have the debate first before deciding whether to table motions on the second day. I am sure that that is the best way to proceed. However, we can discuss the matter.
On the third question relating to defence sales to Iran, we have been invited to enter into discussions with the Iranians on the deferment, curtailment or possible cancellation of defence contracts with the United Kingdom. Since these discussions are now beginning, I think that the present moment is not the best time for an immediate statement. No doubt a statement will be made at a fairly early date after those discussions.
Mr. Bidwell: Has my right hon. Friend noticed from examination of questions and motions on the Order Paper that there is still considerable disquiet about the operation of the immigration rules, particularly highlighted by what has become known as the virginity test case? The family concerned in my constituency and the community as a whole are grateful to the Home Secretary for acting with alacrity to bring about the cessation of these abominable tests.
Does my right hon. Friend realise that disquiet continues because the previous Minister who occupied the job said that he gave orders to discontinue such tests? Should we not debate the operation of the

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immigration rules, particularly as the right hon. Lady the Leader of the Opposition appears to be shy about raising the subject at all?
Mr. Foot: I thank my hon. Friend for what he said in reference to the statement of the Home Secretary on this subject. I fully accept what he has said and what was said last week by my hon. Friend the Member for Barking (Miss Richardson) on the abhorrence which many must feel about some of these occurrences. I believe that what was said by the Home Secretary so speedily was welcomed by the whole House. Whether we should have a debate on the whole matter more generally is another question, but I take account of my hon. Friend's representations on the subject.
Mr. Beith: Would the right hon. Gentleman look again at the arrangements for the debate on the report of the Procedure Committee? Does he not recognise that if we do not have motions laid before the House on the main recommendations of the Committee we may never, as a House, have the opportunity to vote upon those recommendations, because eventually it will be upon those which the Government select that we have to vote? Will he look again at the proposal made by the hon. Member for St. Marylebone (Mr. Baker), supported by other members of the Committee, that the Government should table the main recommendations of the Committee and allow the House to vote upon them?
Mr. Foot: I will look at that, but I should not like to give a commitment about it. I believe that the proposals of the Select Committee on procedure are very far-ranging and important, and I feel that the House should have a debate about them before we decide how we are to proceed on them. I have promised the right hon. Lady the Leader of the Opposition that I will look at the question, but I am not altogether optimistic that that is the best way to proceed.
Mr. Powell: Does the right hon. Gentleman consider it satisfactory that the important EEC documents set down for debate on Wednesday should be disposed of in one and a half hours, or does he propose to make arrangements to ensure that there is adequate time?
Mr. Foot: I quite agree with the right hon. Gentleman. I do not think that one and a half hours would be adequate to dispose of all of those documents, but we may be able to embark on the discussion earlier and therefore more time will be available for the discussion—certainly much more than one and a half hours. But if we find that that is not the case, I give the right hon. Gentleman the same undertaking as I gave last week to the right hon. Lady the Leader of the Opposition—that if we find there is not sufficient time we must arrange for further time to be provided later.
Mr. Skinner: When we discuss the question of the Common Market budget, will my right hon. Friend take the necessary steps to get the Secretary of State for the Environment to come here and explain why it is that low-paid hospital workers and others are contributing £20—as are every man, woman and child in this country—to supplement the wage packets of the Germans, the French and others, so that he can fully justify, if he can do so, in the anti-Market stance he sometimes adopts, why British low-paid workers have to subsidise highly-paid Germans?
Mr. Foot: My right hon. Friend has a very much more consistent and longstanding attitude on this subject than my hon. Friend, who I think would be well advised to listen carefully to what my right hon. Friend says on all these matters.
Mr. Nicholas Winterton: Is the right hon. Gentleman aware that shortly a trade delegation is to leave for the People's Republic of China, under the leadership of a Government Minister? Would he arrange for a representative of the appropriate Government Department to make a statement at the Dispatch Box, so that the concern of the textile industry over the ultimate implications of this trade visit may be expressed to the Government before that delegation goes on this visit? Is the Lord President aware that the industry has written to the Government expressing concern on this subject?
Mr. Foot: I will look at the question raised by the hon. Gentleman. Whether it should be dealt with by a statement in the House is another matter.
Mr. Russell Kerr: Will my right hon. Friend tell the House with which Iranians discussions have taken place as far as outstanding arms contracts are concerned?
Mr. Foot: Discussions are taking place with authorities in Iran.
Mr.Kerr: With which ones?
Mr. Foot: There are various authorities in Iran, and it is partly because of the amorphous state of affairs in that country that I do not think it would be sensible for the House to have a major discussion on it at present. Of course, at some stage the Government must make a full report to the House about it.
Sir Bernard Braine: Does the Leader of the House recall that just before Christmas, when I drew his attention to the strong feeling in all parties in the House that justice should be done to the small Banaban community in the Pacific, he gave an assurance that a Bill would be brought before the House very shortly? Now, almost two months later, can he confirm or deny that the Government, knowing the strength of the opposition that exists in this House, have chosen to send the Bill to the other place?
Mr. Foot: The Bill was introduced in another place yesterday, but it was not to avoid any criticism or discussion of the matter in this House. As the hon. Gentleman knows perfectly well, the matter will come to this House for discussion and he will have the fullest possible opportunity on it. He must not spread any suggestion that his views, or those of any other hon. Member who wishes to raise questions, will be suppressed
Mr. Hoyle: Does my right hon. Friend recall that I have asked him before about a debate on microprocessors and he said that he would give consideration to an early debate? So far this has not occurred. I must remind him that this is a very important subject with far-reaching consequences for industry and for employment prospects and it would be a tragedy if everybody else except this House of Commons were debating the subject.
Mr. Foot: I quite agree that the subject should be debated, but, as I have said many times before in the House, hon. Members should always look at the business for next week. I am sure my
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hon. Friend can make a contribution to the debate next Tuesday, on the state of British industry. That does not exclude the possibility of having a further debate at a later stage, but I always tell my hon. Friends that it is worth looking every Thursday to see whether one can make a speech in the following week.
Mr. Eldon Griffiths: With rubbish piling up in the streets, sometimes to a point where rats and stray dogs are beginning to feed on putrefactive matter, will the Lord President next week make a statement on two matters? First, will he say that there are central Government arrangements—not just local government arrangements—for monitoring this problem in case a public health hazard arises; secondly, that there are contingency plans within the Department of the Environment to take action, if need be with troops, to clear rubbish which becomes a public health hazard?
Mr. Foot: The Government always consider these matters and have considered them in this context. If it is necessary to make a statement to the House, the Government will be most willing to do so.
Mrs. Hayman: Has the Leader of the House noted the support for early-day motion 153 on infant health and the maternity grant? Is he aware that, in the year of the child, a statement by the Secretary of State for Social Services on the Government's intentions and actions to improve the pre-natal mortality rate would be greatly welcomed by many hon. Members?
[That this House, recognising the importance of proper nutrition and care for the unborn child during pregnancy, deplores the erosion of the value of the maternity grant by inflation; is gravely disturbed by the high correlation between social deprivation and infant death; sees no justification for excluding many of those mothers whose babies are at most risk from automatic right to maternity benefit; and urges Her Majesty's Government to raise the maternity grant to£100 and pay it at intervals during pregnancy to all pregnant women.]
Mr.Foot: I will certainly convey my hon. Friend's comment to my right hon.

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Friend and see whether an early statement can be made to the House about it.
Mr.Dudley Smith: Would the Lord President consider urgently having a debate on rates in view of the current situation and the ultimate likelihood of a fairly high settlement for local government workers? Is he aware that the likely consequences of this are causing fear among ratepayers in the county areas who are on fixed or low incomes, many of them getting less than the strikers?
Mr. Foot: The Government have all these considerations in mind, which is one of the reasons why my right hon. Friend the Secretary of State spoke as he did a few minutes ago. But, on the question of a debate, I feel we should await the outcome of the negotiations. I do not think that it would be intelligent to have a debate right in the middle of the negotiations.
Mr. Cryer: Would my right hon. Friend consider the possibility of a debate on the Peachey report? He may recall that I asked him this last week, and I should be grateful if he would give some indication, when arranging the programmes for each Thursday's announcement, that he has this in his thoughts.
With regard to the Iranian contracts, does he not think that, in view of the serious repercussions of the possible cancellation of this programme, it is important that we should have a debate on the Lucas Aerospace shop stewards' imaginative plan for the conversion from war production to production for peaceful purposes, and that instead of allowing that plan to be strangled in the Department of Industry we should have a debate upon it on the Floor of the House?
Mr. Foot: Those are two very good eligible subjects for debate, but, as I have said to my hon. Friend and others on a number of occasions, there are plenty of opportunities for private Members also to initiate debates.
Mr. Kenneth Lewis: Is there a Minister for employment, or has he gone on leave? In all the turmoil of the last few weeks, the Minister who is supposed to be concerned principally with industrial relations has not said anything from the Dispatch Box. We have not heard from him. Are the Government stopping him from making a statement?
Mr. Foot: That is a very silly slur on my right hon. Friend He has worked consistently throughout, day and night. He has been to the Dispatch Box to answer questions. I do not know what the hon. Member was doing then, but he should think again before he makes such unjustified slurs.
Mr.Ovenden: Will my right hon. Friend find time for an urgent debate on the economy, particularly about today's decision to raise the minimum lending rate? If he cannot arrange that, will he ask the Chancellor of the Exchequer to come to the House soon to make a statement?
Is he aware that, although we do not adopt the bogus alternatives advocated by the Opposition, many of us on this side of the House are worried about the Government's acceptance of a policy of high interest rates which has been advocated by the Conservative Party and thrust down the Government's throat by the Bank of England? Does he accept that many of us believe that, far from helping the fight against inflation, that policy puts such burdens on working people as to make wage restraint impossible?
Mr. Foot: I know that there is a deep concern among my hon. Friends about this subject. That deep concern was expressed by the Prime Minister when he replied to questions a few minutes ago. I do not think that a special debate on the subject is likely next week. But the subject can be referred to during Tuesday's debate.
Mr. Eyre: This afternoon the Leader of the House will have heard the Secretary of State for the Environment refer to the threat by unions to impose restrictions of particular severity on major urban centres, including Birmingham. Manchester and Liverpool. In view of the unprecedented nature of that threat and the great distress that would be caused to vulnerable groups in those cities, will the Leader of the House undertake that a ministerial statement will be made next week setting out the measures by which the Government will encourage volunteers and use troops to reduce the severe harm that could be caused by such action?
Mr. Foot: I have nothing to add to what my right hon. Friend said about that matter.
Mr. Faulds: The non-publication of the full Order Paper and Hansard—what is the reason this time, Sir? Is my right hon. Friend aware that every time I make a particularly effective speech in the House there is non-publication of Hansard the following day? Does he think that these matters are connected?
Mr. Foot: My good nature forbids me to answer that question directly. I did not know that my friends in the National Graphical Association were as quick on the draw as that.
There are serious consequences when the papers of the House are interrupted. An alternative arrangement is made to meet the situation immediately. Discussions are taking place, and I hope that they will have an early effect in overcoming the difficulty.
Mr. Gow: The House indicated on Tuesday by a decisive majority that it wished to give further consideration to the Picketing Bill. The House indicated yesterday by a scarcely less decisive majority that it wished to give further consideration to the Workers' Freedom Bill. As the guardian of the rights of Back Benchers, will the Leader of the House provide time to debate those two measures?
Mr. Foot: The hon. Member knows that if I were to facilitate the immediate procedure on Bills that are passed in that way, I would clutter up the business of the House. Indeed, I would be setting a precedent. The hon. Member must not tempt me to depart from the rules of the House.
Mr. Stoddart: Is my right hon. Friend aware that the ruling by the European Court on the tachograph has caused much consternation? Is he aware that it will put up the cost to industry and perhaps lead to a new confrontation with the lorry drivers? Is he aware that it might also lead to confrontation between Parliament and the European Court? Is the matter to be debated in the House?
Mr. Foot: I agree that the decision raises many important questions. The Government will consider the matter carefully. I am sure that at some stage the matter will be discussed in the House.
Mr. Raison: Will the Leader of the House think again about the question of picketing? Is it not extraordinary that the consultation document issued before Christmas by the Department of Employment has not been debated in the House? Will he now arrange for a debate because, apart from anything else, it would give the Secretary of State for Employment a chance to make a comeback?
Mr. Foot: The Secretary of State for Employment has been discussing this matter with many of those who are concerned with the subject. I trust that next week we shall produce a document which will have been agreed by the Government and the Trades Union Congress on this important question. Of course, it will include references to these matters. That is much the most intelligent way to go about this. I am sure that when the House sees the work that has been done it will be eager to pass a unanimous vote of thanks to my right hon. Friend the Secretary of State for Employment.
Mr. Stanbrook: Is the Leader of the House aware of the early-day motion which seeks the dismissal of a High Court judge? Is it not the practice of the House that such a motion should be debated without delay, or withdrawn?
[That an humble Address be presented to Her Majesty, praying that she will be pleased to remove the Honourable Sir Desmond Ackner from the office which he holds as Justice of the High Court.]
Mr. Foot: Not necessarily. I agree that such motions should not be left upon the Order Paper for a long time. I shall examine all the precedents before making a further judgment.
Mr.Skinner: On a point of order, Mr. Speaker. I do not pay too much attention to what Ministers say to me in reply to my questions since I know that they are not likely to share anything like my point of view. But it has been suggested that my right hon. Friend—or, more appropriately in this case, the Lord President of the Council—said in answer to my question about the Common Market that the Secretary of State for the Environment had been more consistent than I, that is, the Member for Bolsover, about the Common Market.

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I do not know whether that was a slip of the tongue. It might well have been But Hansard is there for everybody to check. I have never voted in favour of the Common Market. What is more, unlike my right hon. Friend the Secretary of State for the Environment, and, for that matter, the Lord President of the Council, I have continued my opposition when others such as they have fallen by the wayside.
I want the Lord President of the Council to put the record straight. If he fails to do so, it does not really matter because I have had a chance to put my statement on the record and in Hansard—when it is printed.
Mr. Foot: My hon. Friend is good at dishing it out. He must learn to take it, too. It is high time that he learned to take it. If he thinks that he can insult everybody in the House without anybody making the most tentative reply, he had better learn what the place is about.

BILL PRESENTED
  TRADE DESCRIPTIONS
  Mr. Martin Flannery, supported by Miss Joan Maynard and Mr. Frank Hooley, presented a Bill to extend the operation of section 1 of the Trade Descriptions Act 1972: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed [Bill 73].

STATUTORY INSTRUMENTS &c.
Mr. Speaker: With the leave of the House, I shall put together the Questions on the two motions relating to statutory instruments.
Ordered,
That the Haddock (West of Scotland and Rockall) Licensing Order 1979 (S.I., 1979, No. 71) be referred to a Standing Committee on Statutory Instruments, &c.
That the New Towns (Limit on Borrowing) Order 1979 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Foot.]

ORDERS OF THE DAY

  CROWN AGENTS BILL
  Order for Second Reading read.
  4.40 p.m.
  The Minister of State for Overseas Development (Mrs. Judith Hart): I beg to move, That the Bill be now read a Second time.
  I have it in command from the Queen to acquaint the House that Her Majesty, having been informed of the purpose of the 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.
  Perhaps the first thing that I should say is that this is historically a considerable event. It is the first time since their inception in 1833 that this House has legislated about the Crown Agents' status. Therein has lain one source of the recent problems which have troubled us so much. I hope that the Bill will provide a sensible and satisfactory basis for the constitutional relationship between the Crown Agents, the Government and Parliament. It may even be that it can do so for the next 150 years, though I would not be so brave as to predict it.
  I shall, of course, explain the Bill to the House. But at this point I can best summarise it by saying that it gives the Crown Agents a recognised legal status as a statutory corporation, responsible to the Minister of Overseas Development. It gives important powers of direction to the Minister, as in the case of other public sector corporations. It puts the Crown Agents on a financial basis comparable with that of other public corporations, including provisions about reserves, borrowing powers and audit arrangements.
  But there is one important difference between arrangements in the Bill and other Acts of Parliament concerning natonalised industries and public sector bodies. It reflects the very special function of the Crown Agents in relation to their principals—their clients, whom they serve. The Bill carefully protects this, which is their traditional role, in their relationship with overseas Governments and bodies. It would not be right
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  for the Minister and the Government here in Britain to be involved in the arrangements for procurement or money management carried out by the Crown Agents on the instructions of, and on behalf of, an overseas principal, subject of course to the proper financial safeguards in the Bill. So it is a public sector corporation with a difference.
  To explain the real and urgent need for the Bill, which seeks to establish beyond doubt a new constitutional relationship, I must remind the House of the background. As hon. Members know, it has been my responsibility, shared with my Treasury colleagues, to cope—there is really no other word—with events, crises, urgencies and inquiries stretching back over the last three Parliaments. But one should begin at the beginning, and that was in 1833. The House will forgive me if I spend just a few moments on the history.
  The Crown Agents were first established in 1833 by the Secretary of State for the Colonies, then Mr. Stanley, later the Earl of Derby, to act as agents for the procurement of goods and services for colonial Administrations. It was the heyday of colonialism and empire, and throughout the last centutry and the first half of this century a Crown colony Government would put its orders in to the Crown Agents.
  The relationship with the Secretary of State for the Colonies emerges very clearly in a report of a Select Committee of this House in 1909. As a Minister, one does not have time for such entertaining historical reading, but I read it in the Library in my Oppoistion years as Shadow Minister, and I recommend it strongly as a fascinating read to give the full rich flavour of empire and colonialism.
  The report, which was Cmnd. 4473, said:
  "the Crown Agents form part of the general machinery of Crown Colony government and are necessarily subject to the instructions of the Secretary of State.
  The fact that the Crown Agents are allowed, especially in financial matters, considerable discretion in transacting a Colony's business, and that it is their duty to point out to a Colony if and when its interests could best be served by some modification in its orders, certainly does not enable them to overrule the maintained opinion of a Colonial Government. They may appeal to the Secretary of State from the decision of the Colony, and ask for his instructions on uncontroversial matters when

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  the question is urgent and cannot wait for reference to the Colony; but the Secretary of State decides all such questions on his own authority in virtue of his powers of control over the Crown Colony Governments, and the Crown Agents can only act on his instructions, and have no independent authority. On this question the Committee feel that the evidence which they have taken leaves no doubt."
  The evidence of an assistant undersecretary, Mr. Bertram Cox, to that 1909 inquiry further clarified the position. The Crown Agents were—
  "servants of the Colonial Governments paid out of Colonial funds … and appointed by the Secretary of State as representing the Crown's final controlling power in Crown Colonies."
  So in 1909 the Government had complete powers of direction on questions of detail as well as of principle, exercised through the Secretary of State for the Colonies. So continued the position.
  The next time Parliament interested itself in the Crown Agents was in the Session of 1947–48. The Estimates Committee reported on colonial development. Perhaps it was inspired by the grant of independence to India in August 1947. In the course of its investigation, which was concerned mainly with delays in procurement of orders, it took evidence from the Senior Crown Agent of the time, Sir John Calder. In its report, which was the fifth report in Session 1947–48, it said inter alia:
  "The Crown Agents act on behalf of Colonial Governments in a great many matters requiring to be dealt with in the United Kingdom. Though they are under the general supervision of the Secretary of State for the Colonies, the Crown Agents receive their instructions direct from the Colonial Governments."
  The Government's reply to various of the recommendations made in that 1947–48 period included this:
  "It must be remembered, however, that the Crown Agents are in fact, as well as in title, the agents for Colonial Governments; and that it is only in very exceptional circumstances that interference can be justified with the normal flow of orders placed and deliveries secured by an agent."
  So, looking at it historically, between 1909 and 1947 it would seem there had already been a subtle change of emphasis, probably as a result of the emergence of self-government in a number of colonies. The Secretary of State for the Colonies had slightly distanced himself from the Crown Agents.
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  In 1954 it was announced in the London Gazette that the Queen had approved the change of name from "Crown Agents for the Colonies" to the "Crown Agents for Oversea Governments and Administrations", which is the title that we give to them in the Bill. It was from that point onwards, in my view, that the area of constitutional confusion developed, as what is summarised as "the wind of change" swept through our world of empire. In 1965 the management structure of the office was reorganised and a board was formed consisting of the Senior Crown Agent, Assistant Crown Agent, Assistant Crown Agent and Engineer-in-Chief, the Directors of Finance and Contracts, head of the computer installation group, Establishment Officer, Head of External Relations Department and an Additional Member—capital A, capital. M. When Sir Stephen Luke retired as Senior Crown Agent in 1968, the title of the office was changed and Mr. Claude Hayes—now Sir Claude Hayes—was appointed as first chairman of the Crown Agents. In the same year management consultants recommended the continuance of the board system of management established in 1965 and advised an extension of membership. Four additional directors were appointed.
  In August 1966 the Secretary of State for the Colonies disappeared—not literally; my noble Friend Lord Lee of Newton has certainly not disappeared. His post was absorbed into the Commonwealth Office, and in fact I replaced him as Minister of State. In October 1968 the Commonwealth Office merged with the Foreign Office.
  The next clear statement of the relationship between the Government and the Crown Agents occurred in 1968. The noble Lord, Lord Brockway, speaking of arms supplies to Nigeria, asked:
  "Who are the staff at the Crown Agents? … Are they British civil servants? Have they any responsibility to the Houses of Parliament?"
  In reply, the Government spokesman, then Lord Shepherd, said the Crown Agents were
  "a completely independent body responsible to no Minister and not responsible to Parliament."—[Official Report, 29 April 1968; Vol. 921, c. 951–69.]
  My own inquiries in early 1970—as the Fay report records—established only

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  that the Minister of Overseas Development had the power to appoint the Crown Agents but appeared to have no power to give them directions, and that the constitutional position was, to say the least, unclear.
  This Bill makes it clear, and, I hope, clear beyond doubt. The Crown Agents will retain the title given to them in 1954—the Crown Agents for Oversea Governments and Administrations. But, in spite of the name, they will no longer retain their present Crown status, which is why I made my introductory remarks about the consent of the Queen. Also, they will lose their present immunity from taxation.
  On the appointed day, when the new corporate body comes into existence, it will be my intention to appoint the chairman and board at present serving in our ad hoc situation. They are doing a splendid job, and have done so in very difficult circumstances, as indeed did the recently retired chairman, Sir John Cuckney, who met the acute crises of the past years with courage, resilience and determination. We owe a great debt of gratitude to him. We are fortunate that Mr. Eburne has now succeeded to the post of chairman. He was managing director, and is thoroughly familiar with the Crown Agents' affairs. I am confident that he will carry on the work of his predecessor with the same success.
  I would also like to thank a number of hon. Members on both sides of the House for their co-operation in all our joint efforts to retain overseas confidence in the Crown Agents at those points when I have had to announce Government support for them as the degree of financial crisis in the past unfolded. We have succeeded. Their traditional operations, so valuable overseas, have not suffered. They stand high in respect and regard all over the world.
  The Bill regularises the constitutional relationship. I have given an interesting historical background to that. It provides for the capital structure of the Crown Agents. It defines their functions and powers. It does not impair the traditional confidential nature of their relations with their principals.
  I turn now to the financial aspects. I would like to stress that the Crown
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  Agents have no liquidity problem, and under the arrangements proposed the new Crown Agents will start on a sound footing. As the House will recall, in July 1974 I directed the Crown Agents—on this ad hoc basis without proper constitutional backing—that they were no longer to engage in own-account activities in property and secondary banking.
  On 31 July 1974, I announced the creation of a new board structure for the Crown Agents; the appointment of a new chairman from 1 October; and my intention to issue new investment guidelines for the own-account business. On 18 December 1974, I told the House of Commons of the Crown Agents' financial difficulties and announced the Government's intention to provide a recoverable grant of £85 million. On 23 April 1975, I announced the Government's decision to appoint a committee of inquiry under Judge Fay, QC.
  On 16 October 1975, the Government announced their intention to publish a White Paper setting out their proposals for legislation to incorporate the Crown Agents. The White Paper was published in April 1976. On 3 May 1977, I told the House of the arrangements which had been made for dealing with the Crown Agents' Australian property investments, and in July 1977, on my instructions, my Department issued further detailed guidelines to the Crown Agents about consultation over realisation of their own-account investments.
  On 1 December 1977, the report of the Fay committee of inquiry was published, together with the earlier Stevenson report, which I felt should be published, and a statement by the Government. On 15 February 1978, I announced the Government's intention to give a further grant of £90 million to the Crown Agents in respect of losses on their own-account business, and on 28 February 1978, following a considerable debate in the House in December, the Home Secretary announced the Government's intention to set up a tribunal of inquiry into the conduct of events described in the Fay committee's report.
  As I told the House in reply to a question yesterday, there is no longer any need to have the standby facility with the Bank of England. This was arranged in December 1974 as part of the rescue

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  package. It is not needed because the liquidity position of the Crown Agents is now entirely satisfactory, so it has been discontinued. We have had to provide two large grants, as the House is very well aware. It is also aware that the full background to the own-account activities of the Crown Agents which led to this disastrous situation are now being fully investigated by the tribunal of inquiry under Mr. Justice Croom-Johnson.
  Mr. Dennis Skinner: Can my right hon. Friend assure the House that in the period after 1974, when properties were sold off which hitherto had had connections with the Crown Agents in this rather sleazy episode, the disposals were made correctly and in the appropriate manner? This part of the operation will not be dealt with by the Croom-Johnson tribunal, which is concerned only with events up to 1974.
  Mrs. Hart: My hon. Friend is right. The tribunal of inquiry will be dealing with the events that led to the disastrous losses on own-account activities. I gave instructions to the Crown Agents to disengage from those own-account activities in property. The process of disengagement has been a matter of steady and, I hope, careful and intelligent consultation between myself and the Chief Secretary, together with the Crown Agents themselves. If my hon. Friend has any doubts about the way in which the process of disengagement has occurred—
  Mr. Skinner: I wrote to the Minister.
  Mrs. Hart: My hon. Friend wrote to me. I wrote to him about one or two aspects of this matter. If he wishes to discuss this further or write to me about it, I shall be happy to engage in that. The realisation account is a matter for the Chief Secretary, myself and the Crown Agents. I should not wish to feel that anything that was done in the process of that, which we could affect, was not being corrected. I hope that that meets my hon. Friend's legitimate point.
  This is relevant to my hon. Friend's point. The Bill provides for the maximum possible separation between the financial consequences of those own-account activities between 1967 and 1974 and, on the other hand, the Crown Agents' financial responsibilities in their
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  continuing traditional services. This is to be done by incorporating also a separate holding and realisation board. It will have the same management as the Crown Agents but will be under direct and close ministerial control, which in effect means very close consultation between myself and the Chief Secretary, concerning the management of the withdrawal from past own-account activities from which disengagement is to be made—which means of all of them. On all these matters I consult closely with my right hon. Friend the Chief Secretary.
  The major remaining unrealised asset lies in the Abbey Capital Property Group investments in Australia. A fairly lengthy period of disengagement offers the best prospect there of reducing demands on public funds. We should not do it too quickly. It is best to make it a fairly lengthy period. When the realisation account is no longer needed, the separate holding and realisation board will be wound up. If, in the event, there should prove to be a surplus, there is provision in the Bill for the Minister to pay this to the Consolidated Fund in recognition of the grants made as a result of the Crown Agents' losses on their own-account business.
  I am certain that I have taken scrupulous care, which the House would want me to do, to protect the confidential relationship between the Crown Agents and their principals. In the Bill before us, the Minister does not intervene in the day-to-day operations involved in this important relationship, which lies at the heart of the Crown Agents' success in their traditional activities of procurement and services for overseas countries and public bodies. It is most important that this should be so.
  The Crown Agents' functions have grown steadily and successfully over the years to cover not only procurement but recruitment, management and investment on behalf of and as agents for their principals. Those hon. Members who read the Quarterly Review of the Crown Agents will be well aware of the importance of all they do and of its value to so many Third world countries.
  At the same time, I have been determined that there should be complete safeguards against any possibility that at any time in the future the Crown Agents

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  might follow the dangerous road which they pursued in their own-account affairs a few years ago.
  We all know of course—as I have said in the House before on a number of occasions—that what essentially happened was that the Crown Agents walked straight into the trap of property speculation. They did it not only unwisely but with amateurism. I must not trespass upon the affairs of the tribunal of inquiry, but I have said these things sufficiently often before not to do so again. I can refer to a number of highly informed newspaper comments by reputable and distinguished financial journalists. The Crown Agents involved themselves with the shady side of the City.
  I should like to pay a particular tribute to Mr. Charles Raw, then of The Guardian and now of the Financial Times, for the investigative work he did, which my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham)—who I know is not able to be here today—and I so much appreciated at a time when we were all trying to look into these matters.
  This must never be allowed to happen again. So I have taken specific and considerable powers in this Bill, for any Minister to exercise in the years ahead, to define and direct what the Crown Agents may and may not do in their own right, as distinct from acting on behalf of their clients and their principals. Very largely these powers, spelled out in necessary detail, I fear, in the Bill, embody the practices which have been willingly and happily agreed upon and accepted by the Crown Agents without legislative backing since the new era began in 1974.
  The Minister's powers of direction in these matters are comprehensive and precise. But I think this is necessary. I think it is right. I hope that the House will agree.
  The Bill is not a simple one, but I should tell the House that every possible effort has been made to make it as clear-cut as it possibly can be. I use a cliché, but no stone has been left unturned to make it as short and understandable as strict legal requirements allow.
  I should draw attention to one aspect of the Bill in clauses 4 and 5. It seemed
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  right to me that we should not at this moment in time encapsulate the Crown Agents in their present field of activities on behalf of their principals, so we do not define them once and for all in this Bill. It allows an extension of their services and activities in the future, but it provides that any such extension shall have the approval of Parliament. For example, at present the Crown Agents carry out feasibility studies for development projects. They provide inspection services for the supply of goods. They give professional advice on technical matters. All these activities they carry out as paid services to their overseas principals.
  The Crown Agents also act for us under various technical co-operation schemes such as the Colombo plan, and they administer the supply of goods which we supply as tied aid both for development projects and programme aid. They are often deeply and quickly involved in our urgent disaster relief programmes.
  A number of these activities have developed very substantially during the last decade or so. I think it is right that a door should be left wide open for the future. I should not like to find—or for my successor to find in years to come—that some valuable new area of activity in which the Crown Agents could even more usefully help their overseas principals, or enter into even closer co-operation with our programme of development assistance to the Third world, was closed to them because this Bill was too tightly drawn.
  Mr.Christopher Price: The Minister spoke of some of the services which the Crown Agents perform for the Government. She referred to additional services that might take place in the future. She will be aware that at one stage many of our defence arrangements, run under Millbank Technical Services which somehow turned into International Military Services, were hived off from the Crown Agents and put under the Ministry of Defence, where I suspect they should properly be. Will the Minister give an assurance that she does not envisage the Crown Agents taking on further defence responsibilities of that kind as an agent for the Government? Can she see any other areas similar to Millbank Technical Services

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  which should properly be taken away from them and put directly under Government Departments?
  Mrs. Hart: I can give my hon. Friend that assurance. The hiving off of Millbank Technical Services to the Ministry of Defence is now absolutely complete. The Bill does not, and the Crown Agents do not, deal in that way with arms supplies. That is entirely a matter for the new body which is responsible to my right hon. Friend the Secretary of State for Defence. I do not envisage in any way that by opening a door here for future developments we are at all likely to include anything to do with defence and arms sales. This is one of the reasons why the hiving off took place. It is most important that any activities that we might envisage in the future for the Crown Agents—that is why I want to leave a little door open, subject to parliamentary approval—should be concerned essentially with development. I give my hon. Friend that complete assurance. He will find that the Bill is drafted tightly enough to provide that assurance within its clauses.
  Essentially, then, I want to leave freedom for the right kinds of initiatives concerned with development—freedom to meet the changing needs which could arise in the years ahead and to respond to new challenges in development. We cannot at this moment say what they will be. But it is right that Parliament should approve any developments of this kind, and clauses 4(3) and 5(5) do this.
  There are, naturally, several clauses in the Bill which follow standard Treasury procedures in relation to public bodies, and which can be further explained, if need be, in Committee. They provide for an appropriate capital structure, with the usual powers of borrowing to meet the functions very precisely specified in the Bill and its schedules.
  The Bill, in clauses 13 to 24, brings the Crown Agents for the first time within the general financial framework for public sector bodies, as outlined in the Government's White Paper on the nationalised industries, published in March last year. In particular, it has been decided that the Crown Agents, like other bodies in the public sector, should be required to make a reasonable return on the public resources invested in them. This is a
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  necessary test of whether those resources are being efficiently used—until we discover some other test that serves the purpose. Thus, the Crown Agents will be required under clause 17 to assume a commencing capital debt in respect of the assets transferred to them on the appointed day.
  This debt will be deemed to be a loan from the national loans fund, which means that the Crown Agents will be required to service the capital employed in their assets at the rate of interest which would have applied had they borrowed from the national loans fund in order to acquire their assets. Rates of interest on loans from the NLF are geared to what the Government have to pay to borrow money. This represents a change in the financial basis on which the Crown Agents have operated to date, and the Bill therefore provides for a transitional period of five years, which may be extended to seven years by order, during which interest on the debt may be waived. This should give the Crown Agents time to adjust to the new financial framework.
  There is no question of levying interest charges on the Crown Agents during this period in a way that would put their commercial viability in doubt, nor is it the intention in any way to penalise the Crown Agents for the own-account losses of the past. The financial powers and duties laid down in the Bill with respect to the Crown Agents have been drawn up solely and entirely in relation to the ongoing business.
  Mr. Nicholas Ridley: I should like to put a question to the Minister, to clear up a doubt in my mind. If the Crown Agents prosper, will they be allowed to pay back their £25 million commencing capital debt, or whatever it will be, or is that something that the hon. Lady envisages will remain for ever?
  Mrs. Hart: Perhaps we can explore this in greater detail in Committee, but the position is that there are the two accounts, the realisation account and the normal account. If on the realisation account it is possible to pay back into the Consolidated Fund money which has been granted by the Government, that will be done. That is the purpose of having the two accounts. Concerning the seven-year period during which the

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  Government will decide what is the proper rate of return, we shall be having regard to the circumstances of the Crown Agents during those years. But perhaps we can explore this a little further in Committee.
  We have, of course, very recently had another illustration of the unsatisfactory nature of the existing constitution of what the Bill describes as the "unincorporated Agents". This was the legal advice, of which I informed the House three months ago, to the effect that in strict law the Crown Agents' revenues should have been paid into the Consolidated Fund as hereditary revenues of the Crown, and their expenditure met from Votes. I remember reminding the House that this all went back to William IV. It was described by a Conservative Member as a bizarre situation, with which I completely agree. In addition, as a matter of constitutional practice, their borrowing should have had the authority of Parliament. I told the House then that I could see no alternative to allowing the Crown Agents to carry on as they had for many years, until we could legislate to regularise the position. The House will, I am sure, be glad that this can now be done in the Bill, and I shall be glad if the House will be so kind as to do so. I hope that the House will agree to make an honest woman of me, because that legal discovery made me feel that I was offending a little against all constitutional proprieties.
  There could have been alternative approaches to that which is presented here. As the House will know, the Stevenson report, presented in 1972—which I decided in 1977 should be published—put forward some possible options, and there have been others. They ranged from incorporation by Royal charter to a mere definition of powers and functions with no statutory backing, and from a public trust to incorporation as a limited liability company.
  I do not believe that any of these would meet our needs. We must have the firm legislative authority of Parliament to define the functions and powers of the Crown Agents, against the background of the past. We must create a sound and responsible capital structure with sensible financial arrangements. I believe that the Bill provides a workable
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  and flexible basis for the future and which can, I hope, carry on into the future.
  I mentioned earlier the great anxieties that we have all had at the various points of past crisis. It was always utterly possible that there could be a crisis of confidence overseas in the Crown Agents. A great deal of consultation and care went into every one of my past statements. I stressed throughout that the Government stood behind the Crown Agents, and I know that Opposition Members supported that view as much as did my right hon. and hon. Friends. It is now in the past. The Crown Agents, concentrating now entirely on those traditional services upon which their history has been built, are going from strength to strength. They deserve to do so. I hope that we can all agree, as I know that overseas Governments agree to do, to regard the inquisitions upon the past as just that—inquests upon a brief inglorious and costly episode in a history of over 150 years.
  I am sure that the whole House will agree that we all place our complete confidence—and the backing of Parliament as well as of the Government—in the ability, the capacity and the potentiality of the Crown Agents to serve their overseas principals in a way which will assist the process of development which will engage them in one of the most fundamental economic developments in the world today.
  5.19 p.m.
  Mr. Richard Luce: The Minister will know that on a number of issues concerning overseas development she and I do not always see eye to eye. On this occasion, she will not be surprised to learn that we on this side of the House give full support to the principle behind the Bill. It can only be right that the status and the function of the Crown Agents should be clearly defined for all to see, that the Crown Agents should have proper statutory authority, and that they should be fully accountable for their activities.
  The catalyst for the introduction of this Bill has been the appalling story of the so-called own-account activities, the financial disasters that took place in the 1960s and, particularly, in the early part of the 1970s. I agree with what I believe the Minister was implying in her

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  introduction to the Bill, that a sharp distinction should be drawn between the traditional services of the Crown Agents, that have grown up substantially and steadily since the establishment of the Crown Agents in the last century, and the short-lived but nevertheless sad episode of the own-account activities. The Government seem to acknowledge that there should be a sharp distinction. As the Minister explained, the Bill establishes two separate organisations to deal with the two separate sets of activities or problems.
  The Crown Agents are a unique organisation providing a unique range of services. I can think of no parallel organisation, certainly in the United Kingdom, or, indeed, in any other part of the world. Perhaps some hon. Members can. I do not believe that there is an organisation in any part of the Western world which is parallel to the kind of organisation that has grown up in the form of the Crown Agents. It is right that we should consider this as a unique body and deal with it on a pragmatic basis. We should accept the Bill in some respects as a unique measure to deal with the situation.
  The right hon. Lady has set out clearly the historical background to the introduction of the Bill. I do not intend to weary the House by repeating what she has said. She has highlighted the fact that since the early part of the last century, for nearly 150 years, the Crown Agents, who started by providing a service for the procurement of goods and services to our colonial territories, have expanded and extended their range of services to the financial, professional, technical and commercial fields, provided in various colonial dependencies and to a vast range of independent Governments, most of them, if not all, members of the Commonwealth, granted independence in the 1940s, 1950s and 1960s.
  Two notable developments have occurred since the independence of these countries. The first, stemming from the process to independence, was the financial disaster and the accompanying reports and inquiries with which we have been dealing throughout this decade. Secondly, the Minister revealed another notable facet to the whole problem on 10 November last year when she told the House in so many words that some genius—
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  because he must be a genius—in her Department—
  Mrs. Hart: Not mine.
  Mr. Luce: —well, some genius in the Government or somewhere—I would love to know who he was, because, if we are to have an honours system, he deserves a high honour—had actually discovered that after nearly 150 years of the existence of the Crown Agents they had been operating, however successfully in their traditional services, illegally and unconstitutionally.
  An extraordinary situation was revealed to us. I described it at the time as an Alice-in-Wonderland situation. We had two options. One was to deal with the matter promptly, to face the past and eliminate it and to produce this Bill. Alternatively, I suppose, we could have had another inquiry, summoning from the dead all the ex-Secretaries of State for the Colonies since 1833, and taking further evidence. But this Bill is also intended to deal with that situation.
  I should like to say a few words about the own-account side of the Crown Agents and then briefly turn to the traditional services. As the Minister has said, the problem of the financial crisis of the 1960s and the 1970s stemmed from the process towards independence of these Governments. The right hon. Lady has stated that while they were colonial territories they were the responsibility of the British Government and there was therefore a much tighter control, using the Crown Agents as the agents over the whole operation. As these territories proceeded towards independence, I can understand that the Crown Agents were anxious to know how their organisation would develop, how they would make themselves viable in the long term, and how they would get extra business.
  The White Paper of 1976 highlighted this problem as perhaps one of the reasons why the Crown Agents had a major financial setback. They developed a wide range of services and built up investments and reserves. They invested catastrophically in secondary banking and property development. We know the story of the insolvency, of Government grants, of the inquiries and the losses which, I believe, amounted to over £200 million. The whole story is familiar to the House.

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  The Fay report contained a massive condemnation of unwise decisions taken by those within the Crown Agents at the time, the lack of expertise, the neglect of accounting systems and also the failure of Governments to inform themselves of developments. We now have yet another 1921-type tribunal to look at the past. It has been a sorry chapter in an otherwise distinguished history for the Crown Agents.
  The Minister has provided in the Bill for a Crown Agents holding and realisation board. She is right to treat that as a separate problem. The right hon. Lady described as recoverable grants the two sets of grants of about £175 million provided by the Government. It is obviously hoped to recover as much as possible. It would be helpful if the Minister who is to reply to the debate could say more about this matter. I appreciate the right hon. Lady's point that it may take time to recover some of the losses.
  I should like an impression of the Government's hopes for recovering at least part of this sum, although it would be better if the whole of the grant could be recovered. I should also like to know how long the Minister expects it to take to make a reasonable recovery on the losses. It is sensible to allow time. There is property in Australia. It would be sensible to allow the realisation of possible potential assets there.
  Mrs. Hart: I do not think that my hon. Friend the Under-Secretary will be able to add much to what I have said. As hon. Members will be aware, it is a most difficult procedure to anticipate what one may recover in terms of selling assets. The Australian property investment is one which we think, if we take a little time, may yield something. But it would be most unwise to make any predictions as to whether we think we will get some money back. It is not predictable at the moment.
  Mr. Luce: I am grateful to the right hon. Lady. I entirely accept the unpredictability of the problem. It may be possible for us to explore it further in Committee.
  I turn to the traditional services. It is remarkable to note the wide range of principals served by the Crown Agents.
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  They include more than 100 Governments, all within the Commonwealth, local government organisations, many ports and harbours throughout the Commonwealth, banks and currency boards all over the world, development and research bodies, universities and schools in the Commonwealth and Government-sponsored organisations in this country and elsewhere. It is not fully understood what a remarkable range of principals the Crown Agents serve.
  It is a measure of the maintained confidence that the principals have in the Crown Agents that, despite the financial setbacks of the past few years, the traditional services have continued to increase. The House and the country should note that.
  The Crown Agents provide a wide range of services which were listed in the 1976 White Paper. They bring in visible and invisible earnings and make a healthy economic contribution to this country. They serve many of our traditional Commonwealth friends in many ways. For example, they have recently provided railway wagons for Bangladesh, cyclone relief equipment for India and a colour television station for Brunei. Those are just some examples of the remarkable range of services that they provide for the Commonwealth, the Third world and many of our traditional friends throughout the world.
  My hon. Friends and I believe that in the previous chairman, Sir John Cuckney, and the present chairman, Mr. Eburne, the Crown Agents have had two outstanding men who have contributed in a unique way to enabling the Crown Agents to get through a very difficult period and to enter a new and healthier future. That is good news for the House and for the country.
  The Bill provides for an incorporated body for the traditional services. I agree that it is right to have tight ministerial control over the own-account activities, which will have a separate board, because they involve a great deal of taxpayers' money.
  The Minister started to explain the structure for the traditional services. The Stevenson report suggested four models for consideration. One was a nationalised industry-type model and the second suggestion, which was most strongly recommended, was a model on the lines of a

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  private sector body with minority Government interests. I accept that a lot of water has gone under the bridge since that report was prepared, and the financial aspects have been the main part of the story.
  The Minister told us that none of those models has been accepted. She has taken parts of models one and two and has established a body along the lines of the relationship between the Government and the Commonwealth Development Corporation. Perhaps the Minister who is to reply will indicate whether the Government see that proposal as distinctive from the four recommendations of the Stevenson report. It would be helpful to have the Government's understanding on the record.
  Mrs. Hart: It is important to understand that the Stevenson report was prepared in 1972 and the Government of the day were not fully aware of the own-account activity losses.
  When I approached the matter in 1974, I did not do so on the basis of asking which of the possible Stevenson recommendations could be accepted or modified. I took a new view of what should be the responsibility between the Government and the Crown Agents in order to protect the taxpayer against future losses. It was a matter not of taking the Stevenson options and asking whether we could modify them but of taking a distinctly new approach.
  Mr. Luce: I am grateful to the Minister for that intervention. The Crown Agents are a unique body and it is right that they should be treated in a unique way.
  The question of accountability is critical. It is crucial that Parliament should be able to scrutinise sensibly the activities of the Crown Agents. I hope that the Minister who is to reply will tell us to what extent he and his right hon. Friend will be able to answer questions in the House and how far they will be able to go in answering questions on both aspects of the Bill—the own-account activities and the traditional services.
  Subject to closer scrutiny in Committee, I hope that the Bill will provide the basis for the eradication of the one major financial blot in the history of the Crown Agents and, more important, will provide
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  a foundation for a new era to enable the traditional services to expand their business confidently to the benefit of both this country and many Commonwealth countries.
  5.37 p.m.
  Mr. Donald Anderson: The Crown Agents are a peculiarly British institution. They were not planned and their role developed, as we have learned lately, in an unconstitutional way over a longish period at a time of rapid change in the decolonialisation period.
  The role of the Crown Agents was adjusted to meet new demands, but their services were greatly valued and, had they not existed in their original form, something like them would probably have had to be invented. They have played a significant and beneficial role and have made a major contribution to British prestige overseas and to our own industrial and export efforts.
  I agree with the hon. Member for Shoreham (Mr. Luce) that it is sad that, after such a long and distinguished history, the Crown Agents' record was impaired in the early 1970s as a result of their intoxication in the heady days of property speculation. Amateurishness was displayed by the Crown Agents in the own-account activities in that area—though many who thought that they were experts also had their fingers badly burnt at that time.
  Worse than that, there was a lack of control by the Government at that time. It is significant that it was largely as a result of investigative journalism by Mr. Charles Raw and others that the full extent of what was going on was revealed to the public. The result of those activities must have been a considerable blow to the morale of those working for the Crown Agents, and there must have been some diminution of the esteem in which the Crown Agents are held overseas. However, it is good that the principals are still going—and now in greater numbers—to the Crown Agents, recognising that that was but a brief and unhappy period in what has been an excellent record of service to their principals over a long period of time.
  What are the lessons of the past that have been revealed by Fay and are now being revealed by the tribunal? The

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  Government have sought to learn those lessons and to make control as watertight as possible over the Crown Agents by the Treasury and by Parliament. A good example of such increased control is the one given by my right hon. Friend, namely, that Parliament should be consulted for approval before there is any extension of the competencies of the Crown Agents. That is set out in clause 4(3).
  However, in spite of the commendable attempt by the Government to make more watertight the Executive and legislative control, I feel that there are still gaps in the Bill that might properly be filled to ensure that what occurred in the early 1970s will be a thing of the past, because that was an unhappy blot on an otherwise excellent record.
  I believe that Treasury control of the Crown Agents should be spelt out more clearly in the Bill. Clause 18(4) provides:
  "The Minister shall not give any consent or authority under subsection (2) or (3) except with the approval of the Treasury",
  but that provision has not been made in clause 6, relating to ancillary powers. Subsection (3) (b) states that the Crown Agents
  "except with the consent of the Minister, shall not have power in their own right to guarantee any obligation (however arising) incurred by such a subsidiary."
  The Treasury is not mentioned specifically there, but it is in clause 18.
  Surely the lesson of the past, revealed particularly by Fay, is that the Treasury must be given muscle to intervene directly. Officials of the sponsoring Department were previously misled or bamboozled—or perhaps there was inadequate financial expertise in the Department. The Treasury must be shown at every stage to have ultimate authority, and that should be written into the Bill in much clearer terms. It is mentioned in clause 18 as a specific reference to overseas transactions, but I believe that there should be a specific reference in clause 6, as it may also encompass overseas transactions.
  I turn to the control to be exercised under the new dispensation by the House over the Crown Agents. The Bill recognises, properly, that the shareholders in the new company are the taxpayers, who
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  are represented in the House. Therefore, there should be proper control by the House over the activities—and the possibly extended activities under clause 4—of the Crown Agents. If that control is to be meaningful, Parliament should see the report and the accounts as soon as possible.
  The Bill lays reasonably strict obligations on the Crown Agents vis-à-vis the Executive. The obligations vis-à-vis Parliament are not nearly so strict. It was pointed out by Fay that the lack of time limits caused a number of the problems associated with the sad events of the past. There should be a strengthening of the time limits in clause 11, particularly under subsection (1). There should be a strict timetable within which the Crown Agents must report to the Minister and consequently the Minister to Parliament.
  For example, what objection can there be to an obligation on the Crown Agents to report within a period not less than a stated maximum? Similarly, under clause 11(3) why should there not be an obligation to lay the report in Parliament within, say, 28 days of receipt? There can be no question of waiting for the audited accounts, because those will be dealt with separately. Parliament is entitled to know when it can receive the reports.
  There is a distinction between the lack of time limits under the reporting clause, clause 6, and the obligations under clause 22(7), where it is said:
  "As soon as the accounts kept, and the statement or statements prepared, by the Crown Agents in pursuance of the preceding provisions of this section have been audited, the Crown Agents shall send to the Minister a copy of the statement".
  Therefore, there is an immediate obligation at that time. There is no similar obligation in clause 11 in respect either of a report to the Minister or the laying of that report by the Minister to Parliament in clause 11. If, in reply, my hon. Friend says that no Minister would unduly delay the laying of such a report. I feel that is hardly an onerous obligation on the Minister. It would be, in strict terms, what the Minister would do in any event.
  A relatively minor point is the possible unfairness vis-à-vis the principals under clause 8(3). Unlike the normal agent

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  at common law, the Crown Agents do not have to account when acting as a surety—they only pay interest. Therefore, that goes further than in a case of an ordinary agent and may enable the Crown Agents to make a profit out of smaller associated States which pay in advance.
  I am told that in some cases, and for certain services, the smaller associated States are bound to use the Crown Agents. That would not be significant in the case of, for example, Hong Kong and countries of that financial standing which are able to look after themselves, but it would be more significant for the smaller States. The Government should consider carefully whether the interest obligation in clause 8 should be at normal commercial rates of interest—bank rate plus 2 per cent. or whatever is the relevant definition.
  I welcome the Bill. It represents a major advance in control over the Crown Agents. I believe that control can be strengthened in the respects which I have mentioned, namely, control by the Treasury and by the House. That might be done, and certainly is done by the House, by stricter time limits being set and by not having a discretionary reporting obligation.
  5.50 p.m.
  Mr. J. W. Rooker: I do not intend to delay the House for very long on Second Reading. I apologise for not being here for the whole of the two Front Bench speeches.
  I welcome the Bill. It is a pity that we have had to wait nearly three years for it, following publication of the White Paper in 1976. One does not normally go into great detail on Second Reading, but there is one aspect of the Bill which is worthy of being brought out here and now. I refer to clause 32(3), which deals with the repeals in schedule 7. This Bill will have the effect of repealing the whole of the Moneylenders (Crown Agents) Act 1975. That was retrospective legislation introduced by the right hon. Member for Newham, North-East (Mr. Prentice) when he was a member of the Government. Much as he despised bringing forward retrospective legislation, it was necessary for the public purse, in effect, to fund the bucket-shop operations which had been carried out to the tune of £85 mil-
  608
  lion because of the unacceptable aspects of capitalism that the Crown Agents had unwisely got themselves into. It is nice to know that that Act will no longer remain on the statute book following the passage of this Bill.
  I think that people should constantly be reminded of the actions of the Crown Agents and the fact that the Government—the taxpayer—had to come to the rescue of many fringe operators in the City. I refer to some of the fringe banks and the property speculation which went on with the misuse of the Crown Agents' funds. It was outrageous. It is a tragedy that it has taken so long to find out what went on and to do something about it.
  I want to ask only a few questions of my hon. Friend the Parliamentary Secretary. I hope that he will forgive me if I speak briefly, but I have to attend a meeting. If my hon. Friend wishes to write to me about these matters, I shall certainly take on board any comments that he makes.
  The questions relate to certain aspects of the Crown Agents' operations. The Crown Agents go under many names. There were many subsidiaries of the Crown Agents. One could not tell from looking at the name of a company whether it was the Crown Agents. Occasionally, if one was in the know and knew the address of the Crown Agents at 4 Millbank, when one saw a company, such as Four Millbank Nominees or Four Millbank Holdings, the bells might ring and one might realise that was the address of the Crown Agents.
  The Crown Agents went under many other names as well. One was Millbank Technical Services Ltd.—MTS—which operated in a wide range of spheres. Of course, it provided business for this country. I applaud the operations of the Crown Agents 100 per cent. I do not knock them in any shape or form. But, because of their unincorporated status, they had to create these self-imposed internal quangos, as it were. All the agents put themselves on the boards and sought business overseas for this country.
  On 24 November last year I spotted a question by my hon. Friend the Member for Walsall, South (Mr. George) about Millbank Technical Services Ltd. The question was posed to the Secretary of

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  State for Defence. I could not see the significance of it at the time. It turned out that the name Millbank Technical Services Ltd. had been changed to International Military Services Ltd.
  On 11 December last I put down a question asking the reasons for that change. I was referred back to an answer on 29 March 1977 in reply to a question asked by my hon. Friend the Member for Dearne Valley (Mr. Wainwright), who, as far as I know, had no wide-ranging interest in the operations of Millbank Technical Services Ltd. or the Crown Agents. I am not knocking my hon. Friend. However, he had clearly been co-operating with the Minister by putting down a question so that the Minister could make a statement. It was a planted parliamentary question. It happens all the time.
  MTS was a wholly-owned subsidiary of the Crown Agents. It was supposed to have been getting orders from overseas principals for all kinds of civil and defence equipment to be supplied mainly by British companies. In 1977 the Crown Agents were still a matter of public and almost daily concern in this House. MTS was wrapped up. Its name was changed and ministerial accountability was transferred from the Ministry of Overseas Development to the Ministry of Defence. It would seem that the most massive laundering operation of the decade has been perpetrated. It is not shown in the Bill, as far as I can tell. This operation has been carried out by virtue of planted parliamentary questions and announcements. There was a further question only a few days ago. On 29 January my hon. Friend the Member for Horn-church (Mr. Williams) put down a question, to which the answer was that the shares had been transferred on 24 January 1979—the day before the Bill was published. The Bill was actually published on 25 January.
  For two years there had been questions and answers telling us in obscure ways that this laundering operation had started. Then, on the day before the Bill was published, the shares in International Military Services Ltd. were transferred from the Ministry of Overseas Development or the Crown Agents—they are one and the same as far as I am concerned—to the
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  Ministry of Defence. Apparently legislation will be brought forward as soon as parliamentary time permits to cover that.
  Why is there not a schedule to the Bill to deal with that matter? This is the appropriate vehicle. There is no pressure on Second Reading. This debate will be over in a few minutes. Why has this Bill not been used as the vehicle for transferring those shares? If it were, hon. Members could discuss this laundering operation in the context of the change of status of the Crown Agents now and not in some future debate on the Army or on some aspect of the Ministry of Defence.
  Some commissions have been paid or earned—I have to use the word "earned"—by people working for Millbank Technical Services Ltd., such as the famous Sir Shapoor Reporter, who was reputed to have got £3 million commission for arranging to flog or sell 800 Chieftain tanks to the Shah of Iran. That is some commission—£3million. It is a good thing that the Shah did not buy Concorde. I understand that Sir Shapoor Reporter would have got £10 million commission through MTS, because he was the agent—"consultant" was the posh name used—of the Crown Agents and Millbank Technical Services Ltd. as well as the Ministry of Defence, the British Aircraft Corporation missile division and GEC.
  MTS is now dead and buried. The name has been changed and responsibility for the shares has been moved to another Department. There have been no press statements about this matter. It has been done by planted parliamentary questions. Why is the Bill not being used as the necessary parliamentary vehicle to effect that transfer? Last week it was admitted that on the day before the Bill was published the shares were transferred in deed and name.
  Is any action being taken about the commission paid by MTS and the Crown Agents to people, such as Sir Shapoor Reporter, who got massive commissions out of these contracts? That is the way business is done in the Middle East. Is anything being done to recoup any of that commission?
  I do not expect my hon. Friend to give off-the-cuff answers, because I did not warn him that I proposed to raise these matters tonight. If my hon. Friend would

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  care to write to me, or arrange for one of his ministerial colleagues to write to me, about this matter, I would be extremely grateful. The nub of the argument is that this laundering operation could have been included in the Bill. What I really want to know is why it has not been done in that way.
  6.0 p.m.
  Mr. Nicholas Ridley: The speech of the hon. Member for Birmingham, Perry Barr (Mr. Rooker) was most interesting. I hope that the Minister will not answer the hon. Gentleman by letter but will tell the House the answer, because he raised points of general interest.
  I do not want to go over the history of the Crown Agents. It has already been amply documented by the Minister of State and by my hon. Friend the Member for Shoreham (Mr. Luce). However, there is one point which neither of them touched upon, and that is that in 1832 Mr. Patrick Maxwell Stewart, MP, was appointed agent for Tobago. What surprises me is that, as a Member of this honourable House, he was allowed to be an agent.
  It is a curious thought that colonial secretarial control over the Crown Agents has weakened in the years since 1832. In those days hon. Members were allowed to be agents, but according to the Bill they are not allowed to be agents, and I am sure they have not been allowed to be agents in the recent past. Indeed, schedule 1(9) makes it clear that they cannot be agents in the future either.
  Mr. Anderson: A quango.
  Mr. Ridley: I was coming to quangos. I must plead that I am a newcomer to these debates on the Crown Agents. I think that I have only one record in Hansard as contributing to recent statements and debates, and that was when I called the Crown Agents a quango. Indeed, I think that they were a quango, though they will be slightly less quango-shaped when this Bill becomes law.
  The tale about Mr. Patrick Maxwell Stewart illustrates the problem, which is that the Crown Agents had no owners. They were not responsible to the Crown, they were not responsible to shareholders, and over a period they ceased to be res-
  612
  ponsible to Ministers. I believe that in any commercial enterprise there has to be an owner or proprietor of some kind to exercise that ultimate supervision of the use of the funds.
  No hon. Member of this House criticised the Crown Agents on their activities on behalf of principals. Indeed, there has been universal praise for what they did. We are told that last year they traded £216 million with the principals but that 65 per cent. of the orders came to this country. That is held out by all to be of great economic importance to us. I press Ministers and hon. Gentlemen not to overdo the praise, because it gives the impression that there is, as it were, some special advantage to the United Kingdom which brings this business here, which might not happen if we did not have the Crown Agents. It is even as if they were slightly bent in favour of this country to praise them thus. That, I believe, is not so. The Crown Agents have always been required to get their supplies in the market at the cheapest price. Indeed, in the instructions to the agents—I think this was at the end of the nineteenth century—they were required to act as follows:
  "You are to procure all such stores by public tender and open competition, or by applying to three or more different tradesmen for a list of the net cash prices at which they would supply the articles required; in which latter case the lowest tender is to be accepted."
  That should still be the rule for their trading on behalf of their principals, and there should be no particular advantage derived to us unless it be that we put in the lowest tender. We all congratulate the Crown Agents on that part of their activities and wish them well for the future in their actions on behalf of the principals, although we cannot escape the fact that we should discuss recent troubles in the own-account side. Indeed, the hon. Members for Perry Barr and Swansea, East (Mr. Anderson) did just that.
  I think that the House should pay a tribute to Judge Fay for the clarity of his report. It reads like a really good novel. It is almost impossible to put it down once one has started to read it. It is one of the most literary excellent and convincing documents emanating from Her Majesty's Stationery Office that I have ever read. Yet it comes out again and again that it was lack of control which caused the disaster.

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  In passing, it is worth commenting that there are several other bodies to which that lack of control is perilously close to applying. I remember the old saga of the Mersey Docks and Harbour Board in 1970. I believe that the National Enterprise Board is in a very similar position in relation to lack of parliamentary control and lack of access by the Comptroller and Auditor General to the affairs of the Board.
  I hope that the affairs of the Crown Agents' own-account trading will be a lesson to the Labour Party. However much it might like to think that the State can engage in trading, banking, insurance, investments and risk-taking, what is likely to happen is the same as has happened with the Crown Agents. The concept of the nationalisation of banking, which has been advocated by many Labour Members, is that the State would not make a much better fist of it than the Crown Agents. Therefore, I hope that that lesson has sunk in.
  All the civil servants who were concerned with monitoring this affair do not come out of it very well, nor does the Comptroller and Auditor General. I believe that no one really thought that it was his responsibility to control what was going on. The lessons which come out of it are as follows. First, there are lessons about accounting. I believe that this House should make sure that the Comptroller and Auditor General has access to all bodies which receive or borrow public money so that he can report to the Public Accounts Committee.
  The Government have now agreed to set up an inquiry into the future role of the Comptroller and Auditor General, and that is welcome. We understand that legislation may be in preparation. But the diffidence of the Comptroller—which comes clearly out of the Fay report—to take action which would have been sufficiently drastic to make sure the Treasury and civil servants in the Ministry of Overseas Development took action and his inability to alert the Public Accounts Committee are weaknesses which would be remedied if the reports of the Public Accounts Committee and the Select Committee on expenditure were put into practice.
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  In addition to what has already been said, I believe that we need a code of practice laid down by the Comptroller, so that where there is a public body which may be employing private auditors—quite properly—those private auditors follow that code. In addition, I believe that the Comptroller and Auditor General should have the right, and the power if necessary, to go in and check that proper accounting procedures are being followed, and to report accordingly to the Select Committee if he feels that something is wrong. That is one of the lessons which we learn.
  The second lesson that I believe we learn is that the Civil Service can never be equipped with the necessary skills to monitor complicated banking and property transactions of this sort and that it is quite wrong to expect that sort of skills of it. The third lesson—this is one which I think the right hon. Lady has eminently accepted and put into the Bill—is that there should be limits on the activities in which nationalised industries can engage, and that it is when they get out of their immediate responsibility that troubles such as this are liable to arise. It is possible that this scandal could have occurred in an organisation such as the National Coal Board. I do not say for one moment that it has, but there is very little to have stopped it happening.
  I commend the right hon. Lady for drawing tight limits upon what the Crown Agents may or may not do. I believe that this will be salutary for the future. If we have learnt that lesson, it will be some contribution towards avoiding this happening in the future.
  The last lesson—again I pay tribute to the Government for learning it very thoroughly—is that the constitutional position should be clear. It is to the Bill that I turn to discuss that. I should like to know why the illegality of the last 130 years which the right hon. Lady brought to the House in November did not go undiscovered earlier. It is extraordinary. There was inquiry after inquiry in the Ministry of Overseas Development. There were inquiries in the Treasury. There were so many inquiries that I cannot remember how many. There were the Fay report and the Stevenson report, and Sir Arthur Grattan-Bellew, the legal

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  adviser, spent a considerable time on investigating the constitutional position of the Crown Agents. Yet, after all that activity, it was in November of last year that the right hon. Lady was first alerted to the illegality and unconstitutionality of the Crown Agents. I wonder how the fact unearthed then went unknown for so long.
  Mrs. Hart: As the hon. Gentleman will appreciate from the brief historical account that I tried to give of what developed in the constitutional, non-constitutional and unconstitutional relationships between the Crown Agents and the Government from 1833 through to 1909 through to 1947, and the reply that was given in the House of Lords in 1968, there were clearly a number of matters in which the intelligence and capacity of Government had not been fully involved. As a result of the preparation of the Bill, greater intelligences and greater involvement ensued, as a result of which the legal advice available to the Government indicated that this was another factor in the situation which up to then none of us had fully appreciated. I can only explain it in that way.
  Mr. Ridley: I must accept that. To my way of thinking, there are other directions in which the intelligences and capacities of Government are not fully developed, although we must not go into them now.
  I come to the question whether the right hon. Lady and the Government have chosen the right model for this new statutory corporation. I can find very little difference between what is in the Bill and the first model put forward by Stevenson, which, in effect, is a nationalised corporation. I accept and agree with the distinction that there is no ministerial power of intervention over the activities of the Crown Agents in respect of work for their principals. But that exception might almost be paralleled by saying that the Secretary of State for Energy does not have power to decide the best type of pick for the pickman to use underground. To that extent, there is very little difference between the form of the legislation and the forms of the numerous committees on nationalisation Bills on which I have had the privilege to serve in the past.
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  I wonder whether the right hon. Lady is entirely right about this matter. As was said, a lot of water has flowed under the bridge since Stevenson. It is this excess of speculation on the side which makes it perhaps more undesirable than was perhaps said earlier strictly to limit what happens. Nevertheless, the role of the Crown Agents in the future is remarkably without incentive and without possibility of reward for doing well. The whole financial set-up for the repayment to the Government of part of the reserves of the existing Crown Agents seems to be putting the Crown Agents into a suitably tied-up situation in the future, but the room for scope, initiative and connecting reward with success is rather too limited.
  I do not quite know why the right hon. Lady rejected the possible solution suggested by Stevenson that there should be share capital for the Crown Agents with at least the majority of it owned by the Government. In fact, there is little difference between a nationalised corporation and a "company law" company in which 100 per cent. of the shares is owned by the Government. In many respects there are extraordinarily few differences, except that it enables shares to be given perhaps to the managers or the agents, and even at some stage allows other corporations or investors to partipate with or without losing control. It makes it a less rigid framework for the future.
  To that extent, we shall want to ask the Government in Committee to justify their choice of model. I personally believe that there was a strong case for at least having the Crown Agents represented by shares which could be used to try different forms of organisation for the future.
  I believe that there should be two separate funds. I personally entirely support the concept of the realisation board. But we have some concern about how long the assets in Australia will go unrealised. I accept that we should await the peak of the market before they are sold, but I see a slight temptation never quite to believe that we have reached the peak. I should not like it if in five years the British Government were still the owner of large office blocks and buildings in Melbourne and Sydney which we could well have disposed of. That is

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  something on which we shall want to press the right hon. Lady in Committee.
  I should also like to refer to the commencing capital debt. As I understand the transaction, about half of the present reserves of the Crown Agents is to be paid over to the Consolidated Fund, leaving half of them in the hands of the Crown Agents as working capital. But, at the same time, they are debited with a commencing capital debt—I do not think that I am disclosing anything that I should not—which I believe will be about £25 million. That represents the value of their land and buildings. This is a rather restricting atmosphere. The commencing capital debt could have been public dividend capital, which is known as PDC. I am not enamoured of PDC. At one time I thought it meant "payment deferred constantly".
  Is the commencing capital debt repayable by the Crown Agents? If with the five-year moratorium on their capital, their £7 million reserves and their enterprising and successful chairman, which in every respect he certainly is, the Crown Agents prosper and do well, will they be able to pay back their commencing capital debt in five years or 10 years, whatever it may be, and once again build up balances that a different and less scrupulous chairman may be tempted to use in a different way? I am not criticising. I am merely asking whether they are stuck with the commencing capital debt for ever or whether they may repay.
  That question has never arisen before when dealing with a nationalised industry. I do not know of any other nationalised industry that has ever been in the position to repay its capital debt.
  Mr. Anderson: What about British Gas?
  Mr. Ridley: That is probably true. I should like to ask the Secretary of State for Energy whether that nationalised industry will pay its commencing capital debt. I accept that I should not be in order if I were to put that question to the right hon. Lady.
  Various aspects to which I have referred require a little more explanation. However, the form in which the right hon. Lady has established the new structure of the Crown Agents is acceptable.
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  The success of the Crown Agents will be the success of those who are engaged in their business. I wish them well. I am glad to know that they will not be civil servants or Crown servants. I am glad to know that they are to be employees of the Crown Agents. That will help enormously to give the board and the chairman the power to recruit widely and to obtain those with the skills that they require rather than relying on Buggins's turn. One of the facts to emerge from the Fay report was that that is a most unsatisfactory way of filling high commercial posts, as has been shown in the past.
  It seems that the employees of the Crown Agents will have inflation-proofed pensions. What accounting procedures have been used? They are not to be civil servants and presumably they will not be bound by Civil Service pay scales. On the other hand, they are to have inflation-proofed pensions. With all respect to them and with all good luck to them, we do not want them to have the best of every bargain.
  There are many who are free to earn as much as they can in the market. There are many who are not so free, such as those in the Civil Service, but they have the privilege of inflation-proofed pensions. There are not many who are free to earn as much as their efforts justify in a commercial atmosphere who at the same time are blessed with inflation-proofed pensions for which they probably do not pay the full contribution. That is another matter that we should consider in Committee.
  Once or twice during the past five years I have felt it right mildly to criticise the Government for some of their actions. It is only fair on this occasion to say that they have the Bill fairly nearly right.
  6.24 p.m.
  The Parliamentary Secretary to the Ministry of Overseas Development (Mr. John Tomlinson): This short debate has been worth while and constructive. Although the speeches have been few in number, I am happy to pay tribute to the positive and helpful way in which the Bill has been approached.
  The essential purposes of the Bill have been well set out. There is no real need for me to elaborate on them further. Both

  619
  in the Bill and in the debate we have made it clear that our aim is to strike a balance between the legitimate interests of the public in the operations of the Crown Agents and the requirement that the Crown Agents should have day-to-day freedom to get on with their job of providing goods and services for their principals.
  The Bill does not ignore the past or the lessons to be drawn from it. The decision to establish two corporations—the Crown Agents and the Crown Agents holding and realisation board—flows directly from the past losses of the unincorporated agents and the need, as a result, clearly to distinguish between the realisation of the old own-accounting business and the continuation of the on going traditional business of the Crown Agents on behalf of their principals. That is a traditional business to which everyone who has participated in the debate has paid tribute.
  The hon. Member for Shoreham (Mr. Luce), speaking from the Opposition Front Bench, welcomed the Bill and rightly drew attention to the sharp distinction between the traditional activities of the Crown Agents and the period of own-accounting activity that led to the tribunal of inquiry. Illegal and unconstitutional activity has been taking place for over 150 years. As that was before the 1832 Act, I suggest that that probably exonerates the spiritual forebears of my right hon. Friend and myself, most of whom would not have been enfranchised at that time.
  The hon. Gentleman asked a number of specific questions. He asked about the £175 million that has been described as recoverable grant. That is an important matter, and, as my right hon. Friend said in an intervention, it is difficult, if not impossible, to make a forecast. I merely add that the Bill makes provision for any money in excess of that needed to enable the board to discharge its liabilities to be paid into the Consolidated Fund. Thus any money that would have been available to repay the grants will come back to the Government. There is no need specifically to preserve the liability of the unincorporated agents to repay the grants.
  Clause 26 clearly establishes a link between the liability of the old agents that
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  has been extinguished and the power of the Minister to recover money from the board.
  The hon. Gentleman referred to the Stevenson committee recommendations on alternatives to incorporation. That matter was also referred to by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). As my right hon. Friend said in an intervention, the Stevenson recommendations have largely been overtaken by subsequent events, notably the ending of the own-account business and the new legal advice on the treatment of Crown Agents' revenues, which has made legislation necessary.
  It is clear that none of the alternative solutions that has been suggested in the past will on examination offer all the benefits that accrue from the proposed incorporation. If we were to summarise the benefits, we could say, first, that there will be a readily comprehensible solution on recognised lines and corporate status ending the Crown Agents' status as a Crown body, including, secondly, their immunity from taxation. Thirdly, there will be statutory backing for their powers and functions as well as for the Minister's functions. Fourthly, there will be provided detailed parliamentary scrutiny of the proposals. None of the alternatives suggested by the Stevenson committee offers as wide a range of benefits as those that stem from incorporation.
  The hon. Member for Shoreham asked a number of questions about accountability, some of which he may wish to pursue in Committee. He was concerned about the details of the report to Parliament on both sides of the new Crown Agents' activities. The Minister will be answerable for the exercise of specific powers relating to Crown Agents' activities in their own right. Obviously the Minister will have to give consent for borrowing to take place, to financial targets and to the controlling of reserves. The annual report and accounts will be laid before Parliament and the report will inevitably specify any directions given to the Crown Agents by the Minister during the year that the report covers. This question of accountability was dealt with in some detail by my hon. Friend the Member for Swansea, East (Mr. Anderson). The detailed question that he raised about Treasury control is one which we will have to look at in more

  621
  detail. My right hon. Friend will, as she explained in her speech, maintain the closest consultation with Treasury Ministers in exercising her powers of financial control; and in regard to the regulations which will govern the Crown Agents' investment of funds in their own right, these are all covered under the general statement in clause 31 where this is specifically required to be done in conjunction and with Treasury approval.
  The other question raised by my hon. Friend concerned parliamentary control. In particular, he deplored the lack of a timetable and a time scale in relation to the reports. He pointed out that there was a specific requirement upon the Crown Agents for a time scale in which they would present their reports to Ministers, but not a similarly closely defined time scale on which Ministers needed to act in laying their reports before Parliament.
  That is a reasonable point which my right hon. Friend and I will certainly consider. I welcome my hon. Friend's approach in making these detailed criticisms and in indicating that this Bill was a major advance in both Treasury and parliamentary control.
  My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) raised the question of Millbank Technical Services, which he rightly said had been renamed International Military Services Ltd. International Military Services Ltd is no longer a subsidiary of the Crown Agents. That is why it is not dealt with in this Bill. The shares were transferred to my right hon. Friend the Secretary of State for Defence on 22 January, and this arrangement, which my hon. Friend saw as being an attempt to avoid saying anything to Parliament—in view of the fact this this arrangement only happened a couple of days before this Bill was published—was merely the completion, in a legal sense, of a transfer of responsibility which was effected by an agreement as long ago as April 1977.
  The transfer of the shares had to await the resolution of certain legal technicalities. It was a coincidence rather than a Machiavellian plot that it took place so close to publication of the Bill. However, if my hon. Friend, who has apologised for not being present, would like
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  further details, I would be happy to hear from him and to reply.
  The hon. Member for Cirencester and Tewkesbury, in replying to the debate, ranged rather widely in a number of his observations. I do not complain, but to me the dreadful saga of own-account activity, which he seemed to see as a condemnation of public sector activity, did, I think, rather turn on its head the argument about what happened during that period. The problem was not one of public sector activity but more one of the unacceptable face of capitalism as reflected in the areas of property speculation and secondary banking.
  Though we may well differ about the cause of the problem, I welcome the fact that the hon. Gentleman welcomed the Bill. He suggested other forms of organisation for the board, and yet in his concluding remarks he seemed to think that my right hon. Friend had got the Bill just about right.
  The hon. Gentleman pursued the idea that shares should be used to try different forms of organisation. Something the Crown Agents can well do without at the moment is any great innovation or experimentation. Experimentation in the form of own-account activities is one factor which has brought us to the present situation. I should not like to see any further experimentation. Incorporation makes the position quite clear and does not need any basis on which we can experiment in future.
  But if the hon. Member was suggesting, when he talked about shares being used to try new forms of organisation, that we should perhaps establish the Crown Agents as being a company under the Companies Act, that is a different matter. We have no reason to suppose that the Crown Agents' principals would regard this as a preferable scheme to incorporation by Act of Parliament, which has been the expressed intention since the White Paper of 1976. Legislation would, in any case, be necessary, by reason of the legal advice received last August, in relation to the revenues of the Crown Agents being hereditary revenues of the Crown.
  Moreover, legislation would be required to provide the necessary statutory backing for the Ministers' continuing functions

  623
  in relation to the Crown Agents. My right hon. Friend said in her opening speech:
  "We are sure that the powers conferred on the Minister in the Bill are the least which are called for in the circumstances of the case."
  If the Companies Acts were to be used, the same sort of provision would have to be brought in, presumably in a memorandum and in articles of association. It would be extremely complicated and unusual in relation to such memoranda and articles, and I believe that we have it absolutely right in seeking in this Bill not a Companies Act company but the process of incorporation.
  The hon. Gentleman mentioned a number of points in relation to audit arrangements which we will want to look at in detail in Committee. The same applies to the detailed question raised concerning the borrowing powers. I have been particularly glad to note the recognition afforded throughout this debate to the valuable services provided to their principals by the Crown Agents. That is one of the threads which have united everybody who has spoken in the debate. I do not doubt for a moment that an understanding of the importance of the Crown Agents' work, not only for their principals, but also because of the benefit which this country derives from their services, will animate our further deliberations on the Bill.
  I look forward to a constructive discussion when detailed consideration is given to the clauses in Committee. I am encouraged in my conviction that hon. Members on both sides of the House share the objective of making this Bill a sound foundation on which the Crown Agents will be able to build a secure future.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  CROWN AGENTS BILL
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act of the present Session to reconstitute the Crown Agents for Oversea Governments and Administrations as a body corporate ('the Crown Agents') and make other provision with respect to them, including the establishment of a Board ('the Board') to realise certain of their assets, it is expedient to authorise—
  (1) the payment out of the National Loans Fund of any sums required to enable the Minister of Overseas Development ('the Minister') to make loans to the Crown Agents or the Board, subject to the following limits:—

  (a) the aggregate of—

  (i)the amounts outstanding in respect of the principal of the Crown Agents' commencing capital debt and of other money borrowed by them otherwise than from their wholly owned subsidiaries; and

  (ii) such other liabilities as, by virtue of the said Act, are to be taken into acount for the purposes of the limit on the Crown Agents' indebtedness,

  shall not at any time exceed £50 million (or up to £80 million by order);

  (b) the aggregate of—

  (i) the amounts outstanding in respect of the principal of money borrowed by the Board otherwise than from their subsidiaries; and

  (ii) the amounts outstanding in respect of the principal of money borrowed by any subsidiary of the Board otherwise than from the Board or another subsidiary of the Board,

  shall not at any time exceed £275 million (or up to £325 million by order);

  (2) the payment out of the Consolidated Fund of any sums required to fulfil guarantees given by the Treasury in respect of sums borrowed by the Crown Agents or the Board or in respect of financial liabilities of the Board;
  (3) the payment out of money provided by Parliament of—

  (a) any sums required to enable the Minister to make grants to the Crown Agents or the Board;

  (b) any sums required to be paid out of money so provided for the purposes of any order dissolving or winding up the affairs of the Board; and

  (c) the administrative expenses of the Minister;

  (4) the remission of—

  (a) the liability of the unincorporated Agents to make, at the direction of the Minister, repayments in respect of the

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  sums totalling £175 million paid to them by way of recoverable grant; and

  (b) any obligation of the unincorporated Agents to pay their revenues into the Consolidated Fund;

  (5) the payment of any sums into the National Loans Fund or the Consolidated Fund;
  and for the purpose of this Resolution 'the unincorporated Agents' means the persons from time to time holding office under the Crown as the persons appointed to act as agents or trustees for overseas governments and administrations.—[Mr. John Evans.]

LOUGHBRICKLAND—NEWRY ROAD
Motion made, and Question proposed, That this House do now adjourn.—[Mr. John Evans.]
6.39 p.m.
Mr. J.Enoch Powell: It is sometimes necessary for an hon. Member speaking to this motion to apologise to the Minister for having detained him in the House to an unreasonably late hour. In this case, I owe the Minister an apology for breaking into the middle of his working day.
The Loughbrickland—Newry Road, which is the subject of this three-and-a-half to four-hour debate, is not a byway or a lane. It is the southernmost sector of the main road between Belfast and Dublin, one of the principal routes in Northern Ireland and now, I understand, designated as one of the principal routes in the European Economic Community.
Except for the section with which we are dealing, the whole of that road from Belfast to Newry and the border or to the port of Warrenpoint on Carlingford Lough is either double carriageway already—that applies to the vast majority—or, in the few places where it is not, has full provision for doubling in due course, the earthwork necessary for that purpose having already been done.
The proposal of the Department of the Environment is, nevertheless, that the remaining section of 10 or 11 miles should not be dual carriageway, except for a minor portion, but should in principle be an improved single carriageway.
Even at first sight, that is a paradoxical and improbable proposition; and the
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more I have studied it in the last few months, the more I have become convinced that it would be a disastrous mistake which would speedily be regretted. I sought this opportunity in the House because I felt it my responsibility to put on record the grounds on which I call—as does the relevant council, the Newry and Mourne district council—for a decision to provide a dual carriageway so that, if that decision is not taken, those concerned in years to come who regret it will know whom not to blame.
The Minister a few weeks ago received a deputation from the district council and undertook to reconsider the matter with an open mind—I know that was no mere formality—and he has further agreed to suspend judgment until this Adjournment debate is over, so that the whole case can be on the record and so that we may know exactly on what basis the decision is to be taken.
The Department has, very properly, a rule of thumb on which to judge whether the provision of a dual carriageway is justified. That rule of thumb is a throughput of 17,000 vehicles a day, to be foreseeable, if anything in this world can be foreseeable, within a 15-year period. I wish in the next few minutes to judge our present knowledege of traffic on this road against that standard set by the Department.
We have a traffic survey which enables us to compare the traffic in 1976 and in 1978: we know what has been the growth of traffic on this section of road in the two-year period mid-1976 to mid-1978. It is interesting to note that the volume of traffic in 1976 was somewhat below what it had been in 1968. I shall return to that point a little later. However, for the moment I am concerned with the change in the volume of traffic on that road between 1976 and 1978, a period of two years.
Those two years showed an increase of 39 per cent. in the traffic using the road. I am no lover of straight-line, ruler-drawn extrapolations; but to illustrate the significance of that rate of growth I wish to point out that if one extrapolates at that growth rate, one arrives at the Department's standard for a dual carriageway not 15 years ahead but somewhere in the year 1983—less than four years ahead from where we are now.

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So, we are confronted at the outset by the fact that the crude traffic growth in the last two years shows a rate of increase which would fulfil the Department's requirements in one-third of the period of time which its rule of thumb posits. Therefore, on the face of it there is a case to be considered.
We then have to judge whether that two-year sample is a reasonable indication of what the future holds. That is the purpose behind the further facts which I wish to put before the House.
There has undoubtedly been a change in the composition of traffic on this road. If we could go back to 1968, we should find not only fewer commercial vehicles among the total but much smaller commercial vehicles. We are now moving into—if we are not already in it—the age of the juggernaut, and there is a great deal to be learnt from the survey of commercial vehicles passing into and out of the United Kingdom through the checkpoint just south of Newry.
I accept that not all those vehicles, though probably the majority, proceeded along the section of road with which we are concerned, but my point is first to draw attention to the staggering rate of growth in the vehicles entering and leaving at Newry and to the profile of that growth. The figures—which I shall state to the nearest thousand so as to make them easier on the ear—were in 1976, 93,000; in 1977, 104,000; in 1978—the latest figure that could be estimated—142,000. That is not only an increase in commercial vehicles of 53 per cent. over the two-year period 1976 to 1978, but what is especially significant is that the great impetus has not died away but lies in the second part of that two-year period.
So, we know two things. We know, first, that the present trend of the traffic in total on this road is far within the requirements of the Department to justify a dual carriageway. We further know that the rate of increase of commercial vehicles using that road—primarily using that road—northwards or southwards is increasing at an enormous rate, and increased faster as that two-year period went on. Therefore, it is not foolish to extrapolate from the experience of those two years.
We must then examine the question of size of vehicle. Customs and Excise, which
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kindly supplied me with the figures I have just quoted, does not classify by size of vehicle. But there is no doubt that the increase in the numbers of commercial vehicles is less than the increase in their size. There is a grim statistic which bears upon that. It is the fact that in the hospital at Daisy Hill in Newry, which is in the constituency of my hon. Friend the Member for Armagh (Mr. McCusker), the number of road casualties being treated has grown rapidly in the last three years—that is to say, over the period to which the statistics relate. The surgeons whom I have consulted have no doubt whatever about the reason for the growth in those road casualties. They tell me that this growth, which occurred in spite of the fact that the roads on the whole have improved, is due to the fact that when an accident occurs heavier vehicles are involved and therefore the casualties and their seriousness are heightened.
The picture, then, as a basis of judgment, is that the growth of vehicle traffic is amply sufficient to justify by projection—even by the most modest and qualified projection—a dual carriageway on the Department's own standards; that that projection is borne out by the staggering growth of commercial traffic through Newry; and that the moral is reinforced by the increase in the weight of those commercial vehicles.
A little earlier I referred to the fact that our base line, so to speak, of 1976 for this modern comparison happened to show rather less traffic than in the year 1968. We should be greatly mistaken if we were to regard 1968 as providing any indication for the future which now lies ahead. Let me give a number of separate and distinct reasons for saying that we are now living in a new era altogether, that we are living not with the projection from 1968 but with that from 1978, which is quite different.
In the year 1968 Warrenpoint was a very small harbour, not very different from the harbour developed there at the end of the eighteenth century. It is now one of the largest ports of the island of Ireland. Its traffic is growing at an exponential rate year by year and it has a roll-on, roll-off facility which, I am prepared to wager the Minister, will not long

629
remain unused both by regular service traffic and by container-carrying vehicles.
So we are near the beginning of the development of Warrenpoint, which incidentally is already connected with Newry by a fine dual carriageway, a very scenic and spectacular one along the shore of Carlingford Lough. We are confronted with a new development, the development of a new port, whose future growth will centre around the roll-on/roll-off facilities that will be discharging heavy vehicles on to the very road we are discussing. That is something which did not exist in 1968. It is something of which only the mild initial effects could yet have shown themselves even in the year 1978.
Newry itself has been through a bad time. As the Member for South Down, I must confess to having a soft spot for Newry. It is by nature and by situation a fine town, but it has suffered heavily in the disturbances of the last 10 years. That has not prevented the efforts of the Government and of those in the locality to stimulate industry, efforts which are bearing a good deal of fruit already, despite the adversities which Newry has faced. He would be a strange prophet who, standing at the gateway of 1979, was prepared to prophesy that further industrial development in Newry itself, generating traffic to and from Newry, does not lie ahead. So we have a second factor, completely distinct from the throughput of the port of Warrenpoint.
There is then the more general phenomenon of what is sometimes called "the return to normality". Every visitor to the Province who had been there earlier in the last decade is astonished by the alteration now in the atmosphere, by the growth of confidence and optimism on the part of all sections, except one. I refer to the terrorists. For the rest, all sections share in this optimism and hope for the future.
But return to normality is not a correct description for what is happening. Neither Northern Ireland nor Newry is looking back and saying "By and by we shall have returned to 1968". That is not how it is at all. They are moving into a new world, a world which is going to be new in terms of the industrial and commercial activity which will be created and the pattern of transport it will gene-
630
rate. After all, in 1968 rail transport between Belfast and Dublin was still a substantial feature. Nobody, whatever his good wishes for the rail link, can doubt that expansion in the future is going almost wholly to road transport. Short-distance and long-distance vehicles, small vehicles, service vehicles and juggernauts are all going to characterise the commercial activity which lies ahead for Northern Ireland and particularly for the part of it which radiates from the town of Newry. That has hardly started yet. We can feel it starting, but it has hardly begun. Those who visit the area feel this; they know that something is on its way which has hardly started yet, nor yet shown itself in the statistics we possess.
Finally, there is tourist traffic. Nothing can prevent tourist traffic from not just returning to Northern Ireland but expanding at a great rate. The Minister himself was in my constituency in Newry only two or three days ago, launching a brochure to promote tourism in a region which includes the very area we are discussing. He was engaged in promoting traffic on the road link which we are discussing.
The Under-Secretary of State for Northern Ireland (Mr. Ray Carter)The Under-Secretary of State for Northern Ireland (Mr. Ray Carter) indicated assent.
Mr. Powell: I am glad to have the assent which the hon. Gentleman could hardly logically withhold.
Possibly, though I doubt it, in Great Britain and on the Continent of Europe wheeled tourism may be reaching some kind of plateau. I can assure you, Mr. Deputy Speaker, that in Northern Ireland it has hardly started yet. When people discover that they can come with their cars—in due course they will come by Warrenpoint, but they can already come by other routes—into a land which offers them a unique welcome and scenery, the present tourist traffic will bear no relation to the traffic which will be generated. A good part of that traffic will use the road link with which we are concerned.
My proposition, then, and my own personal conviction—I would not be urging this unless I were personally convinced—is that the extrapolation of 17,000 vehicles a day to be reached in four or five years may be crude and excessive but that all the pointers indicate that the requirements

631
to justify a dual carriageway will be amply fulfilled long before 15years have elapsed.
Let us come to some of the practicalities. Of course, a dual carriageway will cost more. The present proposed road works to provide a single carriageway of an improved character are costed at £4·7 million. An additional £3½ million will be involved for dualisation. Of that, I say at the outset that when one compares with the £3½ million the cost of making a mistake, of providing a single carriageway for a heavily used road which justifies a dual carriageway over 15, 20 or 25 years, a mistake which, made now, will mean that it will be a quarter of a century before we can come back to look at it again, the cost is negligible against those standards.
There is another factor which the financial comparison does not bring out. Much land will have to be acquired for this road improvement; but the land will have to be acquired for the single carriage way in different circumstances from those which would obtain in order to dualise the existing road. In order to provide an improved single carriageway, it will be necessary to drive a largely new line, which will separate farms and holdings and destroy existing access points to the main road from the holdings on either side. On the other hand, the land which would be acquired to dualise the existing road is land which is already provided with its points of access to the road—a road which already separates holdings, so that the acquisition does not divide them further.
The Minister will understand that I am not saying what I am about to say by way of a threat; but he will find the vesting procedure proportionately more lengthy and costly for the proposed single carriageway, disregarding as it does the existing tenures and, as it were, the lie of the land, than if he goes for the dual carriageway which everyone expects and looks forward to and which would not encounter the same kind of opposition from the public or those to be dispossessed.
So certain does the district council feel that we must take the right decision, and take it now, that it said to the Minister, and authorised me to say, that it would sooner wait several more years with the road unimproved than be committed at this stage to an improved single
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carriage way instead of a dual carriageway.
That is quite something for an elected local authority to say—that it will wait with an unimproved road for several years if that is the price to be paid for being sure that, when this section is dealt with, it will be provided with a dual carriageway, uniform with the rest of the road from Warrenpoint to the motorway and Belfast.
There is a manifest case for a revision of the decision. If that revision occurs, as I hope it will, the Minister should not feel any repugnance about changing his mind or think that it reflects upon the advice which he and his predecessors have received in the past, for I have pointed out how dramatically, even in recent months, the pointers have changed. When the plan was drawn up originally, we were still living in a different world from that which we can now see ahead as we take our stand in Newry and look to the future.
So far as I can help it, I want to prevent a grave error from being made. I want to prevent a blunder which will be regretted for a quarter of a century. Moreover, I want to prevent a mistake which will cramp, and will be felt to cramp, the development of all kinds that can and should take place in this area of Northern Ireland.
I make my appeal to the Minister; and I go on record for the future, whatever the decision may be.
7.5 p.m.
The Under-Secretary of State for Northern Ireland (Mr.Ray Carter): In the three hours and twenty-six minutes that we have left of this debate, I shall attempt to answer the case that was so eloquently deployed by the right hon. Member for Down, South (Mr. Powell).
The Deputy Speaker (Sir Myer Galpern): That is almost time to build a dual carriageway.
Mr. Carter: We are not going to decide upon that tonight, Mr. Deputy Speaker.
I am looking once again at the criteria and all the information surrounding the question whether to dual the carriageway between Newry and Loughbrickland. There has been a considerable amount

633
of correspondence between the council and my Department. The right hon. Member for Down, South led a delegation to my office, when we covered most of the questions that he has asked tonight. I assure the right hon. Gentleman that I shall be looking at the matter with as open and as fresh a mind as possible.
This is a controversial matter. The people of Newry might say that three and a half hours is not long enough to devote to this issue. Probably it is not long enough. It is an important road.
Strict standards must be maintained to determine precise priorities in our road programme. I know of the importance that is attached to this road in the area. Indeed, when I first went to Newry, almost three years ago, the state of the road was uppermost in the minds of the people. I am in no doubt about the importance that the local people attach to the road. As the right hon. Gentleman said, it is an important cross-border road. It is Northern Ireland's most important road link with the Republic of Ireland. That can be gauged in part by the fact that we are currently assessing the need to improve the road south of Newry.
I shall be stressing that our minds are made up, and have been for some time, but that we shall be looking at the matter again. There are always exceptions to general rules and this might well prove to be such a case. I cannot say that with certainty, but I am bound to look at the question again.
There is a general criticism in Northern Ireland that its roads are below the standard of roads in other parts of the United Kingdom. That is far from the truth. Road standards in Northern Ireland, from the narrow byways of Fermanagh, Newry and Mourne to the high motorway complex in and around Belfast, are probably the best not only in the United Kingdom but in Western Europe. Sometimes misplaced and misleading criticisms are made of the road programme.
The past Governments of Stormont placed much importance upon the high standard of the Northern Ireland road system, because roads are the principal means of communication, and the present direct-rule Administration continue to do that.
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I can understand the right hon. Member's concern for the road which runs through the heart of his constituency. It is one of the most important routes in the Province, linking as it does Newry and Belfast. The particular aspect that concerns the right hon. Gentleman is that the route from Loughbrickland to Newry is not being converted to a dual carriageway.
It would be useful if I could begin by recounting the various decisions taken in connection with this route. Whilst, with hindsight, these appear to conflict, I am, nevertheless, convinced that each was right at the time, taking into account the circumstances prevailing.
In the early 1960s it was proposed to build a motorway to supersede the existing road on an entirely new line between Hertford Bridge near Moira and the M1 and border south of Newry. It was the Government's intention at that time that such a motorway would connect up with the route to Dundalk in the Republic of Ireland.
I have no doubt that the right hon. Gentleman is aware that in recent years the scale of the motorway programme planned for Northern Ireland has been considerably reduced. Initially, the motorway proposal was replaced by a proposal to provide an all-purpose dual carriageway, basically on the same lines as the existing road but bypassing all major centres of population.
Work commenced on dualling the route from Belfast to Newry in 1968, and at that time it was hoped to have this completed by 1975. Difficulties in land acquisition and subsequent cuts in public expenditure prevented that time scale being met. The economic considerations and revision of standards have forced a departure from the intention to reconstruct this route entirely to dual carriageway standard.
Of the 35-mile distance from Belfast to Newry, some 26½ miles has been constructed or is under construction as dual carriageway. The scheme to bypass Banbridge at present in progress includes earthworks which will permit future dualling, and the short realignment at Mullan's Corner was designed as a single carriageway of a future dual.

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Of the last 8½ miles south of Loughbrickland leading to Newry, Lisnagonnell has been constructed as a single carriageway of a possible future dual. Reconstruction of Buskill has already been completed as a dual carriageway. A further one mile of dual carriageway is planned at Tinker Hill, where it has been found that the difference in cost would be marginal because of the extensive realignment which single carriageway would entail in achieving acceptable sight distance standards. It is planned to reconstruct the remaining five miles as high-standard single carriageway.
It is Government policy that the scale of a particular stretch of new or improved road will not be constrained by the standards of other sections of the route. Thus the choice of a particular standard for any stretch of road depends on the need assessed by current methods of prediction and not on what was provided in the past on other sections of the same route. Schemes are assessed using similar economic, geometric and capacity standards to those in use in Great Britain. These have regard to all relevant factors, including an economic appraisal which takes into account the estimated value of time saved and the average cost of road accidents.
Strict application of these criteria to the schemes yet to be carried out on the Loughbrickland to Newry section would not warrant the schemes at present programmed. Nevertheless, because of my acceptance of the importance of this route as the main road link between Belfast and Dublin, I have authorised the inclusion of these schemes at single carriageway standard in the road programme, despite the substantial negative rate of return on the expenditure likely to be incurred. Dual carriageway schemes would consequently be even less economically viable.
The predicted traffic loading on this road has obviously been a significant factor in deciding upon design standards for the schemes remaining to be carried out between Loughbrickland and Newry. The design capacity for a single carriageway is assessed at 17,000 vehicles per day, with grade separated junctions. The figures taken at the biennial census south of Ban bridge and north of Newry last year were 7,845 and 7,195 vehicles per day respectively. That indicates a growth
636
rate of 22 per cent. and 39 per cent. respectively over the 1976 figures. The percentage increases for heavy goods vehicles using this route are 14 per cent. and 15 per cent. respectively at the same census points for the period August 1976 to August 1978. While the figures obtained for 1978 show a marked increase, they are still below those which would have been expected had normal traffic growth continued from 1968. But it would seem that during these two years there has been some return to normality. Traffic flows are now approaching the level which might have been expected if there had been normal growth after 1968.
Mr. Powell: I would like to clarify one point. The Minister referred to the calculations that preceded the decision in favour of a single carriageway. Those calculations and assessments must presumably have been made before the 1978 census was available.
Mr. Carter: That is almost certainly the case. It takes a long time to design a motorway, and a lot of time is spent just thinking about the design. I imagine that the figures that we are working on go well back. I shall check and confirm that in writing.
On the basis to which I was referring, it is now thought that the traffic flow between Banbridge and Newry in 1986 will probably be between 9,300 and 12,600 vehicles per day—still within the design capacity of a single carriageway. The estimated cost of the proposed works between Loughbrickland and Newry is £4·7 million. The alternative of completing the remaining schemes in dual carriageway is estimated at £8·2 million. Even in single carriageway form, the schemes proposed show a substantial negative rate of return on the expenditure likely to be incurred. Dual carriageway schemes would consequently be even less economically viable.
There are four schemes remaining to complete reconstruction between Loughbrickland and Newry—Tinker Hill, Sheepbridge, Ballintaggart and Damolly. Tinker Hill is in the reconstruction programme for 1979–80 and design work is in progress. It is hoped to publish notices of intention to make direction and vesting orders later this year. In the case of Ballintaggart, it is expected that a notice of intention to make a direction order will

637
be published within a few weeks. The scheme is programmed for 1980–81. A direction order for the Sheepbridge scheme was published last November. Objections were received, and it is proposed to hold a public inquiry in order to have this resolved. The scheme is scheduled to start in 1980–81.
The Damolly scheme is in the reconstruction programme for 1983–84. In the case of the Sheepbridge, it is conceded that the provision of a single carriageway will have a serious effect on a number of small farms because of land severance. A dual carriageway with a more curving alignment might not meet the same opposition, although the total area of land required would obviously be greater. The effect on the farms concerned is to be regretted, but the additional cost of the provision of dual carriageways will be difficult to justify at present.
I assure the right hon Gentleman that traffic growth on this road will be monitored carefully. If at some future date it becomes necessary to add a second carriageway, this option would still be open. As I said earlier, we are continuing to look at the alternatives suggested by the right hon. Gentleman.
There are no physical restraints which would make the addition of a second
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carriageway unduly difficult. For the predictable future, however, the expected traffic loadings and the much greater cost of dual carriageway construction would indicate that the completion of the reconstruction of this road in entirely dual carriageway form is not justified.
I would like to make it clear, however, that whilst this opinion is based on the best information available at present, I do not rule out a reassessment of the situation if conditions change. The right hon. Gentleman can rest assured that the points raised in tonight's debate will be taken fully into account by my Department. I assure him that those words mean precisely what they say. Following the discussions that I have had with him and with the councillors from Newry, I have already set in train a re-examination and a reassessment. Following this debate, I shall go back on Monday and urge that we look closely at all the criteria and before any announcement is made publicly or to the Newry council I shall inform the right hon. Gentleman of our views and perhaps we can talk once again about the whole subject.
Question put and agreed to.
Adjourned accordingly at twenty minutes past Seven o'clock.