Commons Sitting of 7 July 1980

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

    Cable and Wireless Limited
    Mr. David Atkinsonasked the Secretary of State for Industry if he has any plans to introduce legislation to denationalise Cable and Wireless Limited.
    The Minister of State, Department of Industry (Mr. Adam Butler): In pursuit of their policy of introducing private sector capital into appropriate public holdings, the Government have been looking at the possibility of selling some of their shares in Cable and Wireless. The Government will consider legislation in the light of their eventual decision on the sale of shares.
    Mr. Atkinson: I thank my hon. Friend for his encouraging reply, which I am
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    sure will be welcomed not only by Conservative Members, but by the chairman and board of Cable and Wireless. In view of that company's considerable overseas business, will my hon. Friend assure the House that he will consult overseas client Governments before such legislation is introduced?
    Mr. Butler: I am grateful to my hon. Friend for his remarks. He is right to point to the international ramifications of the sale of shares in Cable and Wireless. I assure him that no final decision will be taken until the views of overseas Governments concerned have been obtained.
    Mr. Ioan Evans: In view of the fact that the private sector is crying out for investment, and that manufacturing investment is decreasing, why are the Government choosing this time to sell off parts of the public sector? Will there be guarantees that there will not be decreased investment in Cable and Wireless?
    Mr. Butler: The hon. Gentleman must not draw conclusions before a decision is reached. I hope that he has carefully listened to and studied my reply. There will he considerable benefit to the public sector borrowing requirement through the disposal of shares in companies such as Cable and Wireless, and that will be of great advantage to the private manufacturing sector.

    Investment
    Mr. Adleyasked the Secretary of State for Industry what further steps he intends to take to stimulate investment in industry.
    The Secretary of State for Industry (Sir Keith Joseph): The Government are pursuing the slow, difficult policies necessary to abate inflation, and reduce the level of interest rates and the degree of crowding out of private industry. I am trying to persuade the trade unions, which urge more investment, that they could transform the prospects for investment and jobs as inflation abates if they would throw their influence into offering employers higher productivity and a rise in the catastrophically low level of real profits on average in manufacturing industry by reducing restrictive labour practices and overmanning.
    Mr. Adley: Is the Secretary of State aware that he will be thwarted, rather than assisted in his efforts, by activities of companies such as the Reed Group, which in my constituency is closing the Shand Kydd factory in Christchurch, and is refusing to negotiate with a group that is willing and able to take part of that factory in order to maintain some of the employment? Is he further aware that the unions are deliberately pushing up wage claims at national level that are creating further insolvency in the company? Will not my right hon. Friend deplore this sort of attitude, which is surely contrary to the Government's intention of encouraging small businesses?
    Sir K. Joseph: There are parts of my hon. Friend's supplementary question with which I agree in general, but I cannot pronounce on an issue which is not known to me.
    Mr. Foster: Does not the Secretary of State agree that the private sector is not investing because the real rate of return is too low? If we are ever to get out of this vicious circle of low productivity and low investment will not central Government need to create a fund to channel North Sea oil revenues into manufacturing industry, particularly into areas of high unemployment, such as the North-East?
    Sir K. Joseph: I agree with the hon. Gentleman that low productivity, high in-
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    flation and low profits are a poor background for greater investment. However, it would not be sensible to try to channel North Sea oil money into investment decisions via the Government, as opposed to via the consumer.
    Mr. Bruce-Gardyne: Will my right hon. Friend agree that over the years the record of State investment in selecting the commercial winners of the future, from Concorde downwards, compares somewhat unfavourably with that of a drunken punter with a bent pin?
    Sir. K. Joseph: I will even give my hon. Friend a puff by saying that his book on the subject, coupled with the words of my hon. Friend the Financial Secretary, should be required reading.
    Mr. John Silkin: Is not a greater deterrent to investment by private sources in this country the Government's own policy in three distinct ways: first, an overvalued pound, second, the highest interest rates in the history of our country and, thirdly, the abolition of exchange controls, all of which together have made it much more profitable for private investment to go abroad or into areas other than manufacturing industry?
    Sir K. Joseph: No, I think that the right hon. Gentleman is wrong on all three counts. The pound reflects the demand for and supply of the currency and is not overvalued in the market in that sense. Interest rates at their supply and demand level are a necessary part of reducing inflation. As for the abolition of exchange controls, contrary to the mythology that is widely believed by some people, including the Opposition and many trade unions, there is to some degree a choice between money and jobs going abroad.
    Mr. Silkin: Is the Secretary of State aware that we disagree with him entirely in his analysis? Is he also aware that he has not answered the question? Is not a greater reason for the present lack of private investment those three aspects of Government policy?
    Sir K. Joseph: The answer is "No", because an attempt to manipulate downwards the exchange rate or interest rates would accelerate inflation, which is the biggest danger of all to investment.

    Central Region of Scotland
    Mr. Canavanasked the Secretary of State for Industry whether he has now reached any conclusions as a result of the meeting held in May between the Under-Secretary of State and representatives from local authorities in the Central region of Scotland about industrial development.
    The Under-Secretary of State for Industry (Mr. David Mitchell): I am giving careful consideration to the arguments raised by the deputation about the changes in regional aids in the Central region.
    Mr. Canavan: In view of the fact that, since that meeting, the unemployment position in the Central region has got even worse, with thousands more young school leavers looking for work and about a thousand more notified redundancies in the past few weeks alone, why are the Government so hell-bent on going ahead with downgrading development area status in some parts of the region? Instead of simply blaming unemployment on the unemployed, is it not time that the Secretary of State realised that he is the biggest single cause of unemployment in this country, because his mad policies are causing the high rate of inflation, the high interest rates and the cuts in public investment which are crippling industry in this country?
    Mr. Mitchell: We shall take into account in our review all the matters that the hon. Gentleman has raised. He may wish to take some satisfaction from the fact that unemployment has risen by a smaller percentage in Scotland than in Great Britain as a whole.
    Mr. Spriggs: Is the hon. Gentleman aware that his right hon. Friend told the Members of Parliament from the North-West group that downgrading of areas represented success? If success means higher unemployment figures in each of the towns concerned in the North-West, how does he—
    Mr. Speaker: Order. The hon. Gentleman may ask about the Central region of Scotland but if he wishes to ask about the North-West he may have an opportunity later.
    Mr. Spriggs: I accept your ruling. Mr. Speaker.

    Inmos
    Mr. Gwilyn Robertsasked the Secretary of State for Industry if he will make a further statement on further aid for Inmos.
    The Under-Secretary of State for Industry (Mr. Michael Marshall): No, Sir.
    Mr. Roberts: Will the hon. Gentleman agree that, although in last week's debates there were differing views on the feasibility of Inmos and the conditions which will be associated with any further money, there was almost complete consensus that the Government now have no choice but to give a second £25 million, and that the delay is merely damaging Inmos and costing additional money?
    Mr. Marshall: The hon. Gentleman, who played a valuable part in the debate, called for a bipartisan approach, but his summary of the debate is a little inaccurate.
    Mr. Butcher: Will my hon. Friend agree that the granting of the second tranche of £25 million could be conditional on all future investment being made from private funds? Might not that course of events make the company more attractive to private funds in the future?
    Mr. Marshall: That is a consideration to be taken into account, but the first step must now be to await the review.
    Mr. Flannery: Will the hon. Gentleman accept that the answer to the debate last week was most unsatisfactory? Major countries throughout the world are investing hundreds of millions of pounds in the silicon chip. This is a potentially lucrative area, as my motion on the Order Paper shows. Will the hon. Gentleman reconsider his decision lest we fall behind every other major country in developing this very lucrative area?
    Mr. Marshall: The hon. Gentleman is venturing down a dangerous path in suggesting that we should have some kind of investment support war on these lines. If he considers these matters more carefully, he will see that, on the matter of inward investment and on the matter of standard chips, under the Government two further projects have come

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    forward from National Semiconductors and from General Instruments, both for investment in Scotland, which are to be welcomed.
    Mr. Archie Hamilton: Will my hon. Friend accept that one of the problems of introducing private capital into Inmos is the great difficulty that private companies have in getting any information from either the National Enterprise Board or Inmos?
    Mr. Marshall: If my hon. Friend has any information on those lines I shall be happy to pass it on, but it is not a view that has been put directly to me.

    North-West
    Mr. Strawasked the Secretary of State for Industry whether he has any proposals to alleviate the economic and social consequences of job losses in industries, other than the steel industry, in those areas in the North-West where such losses have been concentrated and substantial.
    Mr. Arthur Davidsonasked the Secretary of State for Industry, in view of the economic and social consequences of the substantial and concentrated job losses in the North-West, what plans he has to alleviate the deteriorating situation.
    Mr. David Mitchell: As money supply comes adequately under control and inflation declines, it will be seen that our policies have created the conditions for a sustained revival of wealth and job-creating enterprises throughout the United Kingdom, including the North-West.
    Mr. Straw: Is the Minister aware that his answer will be found unconvincing in many areas of the North-West and that it runs wholly against the experience of that area over the last 12 months? Is he aware that, while the population of Blackburn is only 2 per cent. of that of the North-West, its increase in unemployment was so great last month that it contributed one in six to the increase in unemployment in the whole North-West region?
    Is the Minister aware that, just as in the steel industry, there are in north-west Lancashire and in Blackburn concentrated areas of job loss which require urgent
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    Government attention? What prospect is there of this Government attention being given?
    Mr. Mitchell: The hon. Member may consider my response to be unconvincing. Time will prove it to have been right. The hon. Gentleman is asking what we can do. In helping to encourage new businesses in the area, including small businesses, we have now entered into an arrangement with the Norwich Union which will ensure that its funds become available for small firms through the use of our counselling service.
    Mr. Arthur Davidson: Is the Minister aware that, while the money supply is coming under control—if it ever does—thousands and thousands of jobs are being lost day after day, and the people who suffer the loss are not, oddly enough, monetarists? Will the hon. Gentleman say how long it will be before he will take some radical action to help an area which has never known as bad a time as it is going through at present?
    Mr. Mitchell: I understand the problem to which the hon. and learned Gentleman is drawing attention, but he has to accept—I am sure he does—that inflation is the greatest destroyer of jobs that there is, and it is essential that the attack on the causes of inflation should be the Government's first priority.
    Mr. Fletcher-Cooke: Has my hon. Friend had an opportunity to consider the case of my constituent, a small business man in Blackburn, who sought the help of the counselling service for his industry and was told by the Department that he would be able to get some assistance if he moved into a special area but that he could not now get it in Blackburn? Will my hon. Friend bear in mind that sort of case when he is considering how regional policy is to work?
    Mr. Mitchell: The whole purpose of our regional policy is to concentrate help on the areas of greatest need. That inevitably means that there is less help concentrated on the areas of lesser need.
    Mr. McNally: Has the Minister seen the letter from the Manchester chamber of commerce which suggests that the true crisis in the North-West is being masked temporarily by a cutback in investment, training and apprenticeships and stock? Is he aware that, unlike the hon. Member

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    for Knutsford (Mr. Bruce-Gardyne), many workers in my constituency, in Fairey, Ferranti, British Aerospace and ICL have every confidence in public investment to protect jobs and back winners?
    Mr. Bruce-Gardyne: They should read the record.
    Mr. McNally: They have.
    Mr. Mitchell: If the. hon. Gentleman wants to do something constructive to help to prevent unemployment, he might care to go back to his constituency and explain that if workers ask for more wages for producing the same amount of goods, the goods will cost more and will become less competitive and jobs will be lost.
    Mr. Trippier: Will my hon. Friend accept my thanks for successfully negotiating a deal with the English Industrial Estates Corporation whereby it will invest in small workshop units up to 2,500 sq. ft. and for negotiating terms with the Norwich Union whereby it will invest its money, not taxpayers' money, in small firms? What interest has been shown in these two schemes?
    Mr. Mitchell: We are expecting to start over 1,000 small units of up to 2,500 sq. ft. in assisted areas during this year. The Norwich Union scheme, like the Post Office scheme, is in its early stages, but a good deal of attention has already been aroused.

    Post Office Monopoly
    Mr. Bruce-Gardyneasked the Secretary of State for Industry whether he has yet concluded his review of the Post Office monopolies; and if he will make a statement.
    Mr. Adam Butler: The reviews of the postal and telecommunications monopolies are nearing completion. My right hon. Friend will make a statement as soon as possible.
    Mr. Bruce-Gardyne: I am grateful to my hon. Friend for that reply. I am sure that he will agree that the review of the mails monopoly has been some time in coming. Will he assure the House that, when my right hon. Friend makes his announcement, he will take note of and act on the fact that the Monopolies and Mergers Commission has already found
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    that a monopoly of the mails acts against the public interest?
    Mr. Butler: There has not been any undue delay in coming forward with policy statements either on the postal or telecommunications monopolies. We hope that statements will be made before the Summer Recess. The report of the Monopolies and Mergers Commission has been studied and is being taken into account in deciding exactly what we should do.
    Mr. Foster: Does the Minister accept that excessively tight cash and borrowing limits are now preventing commercially profitable investment in British communications? Will he consider a more flexible system in this area?
    Mr. Butler: The external financing limit covers matters such as investment, but it is conditioned by a number of factors, including the levels of wage costs and settlements in the industry.
    Mr. Gummer: Will my hon. Friend ensure that he will take into account, when making a decision, in view of all the pressures for the ending of the monopoly, that rural areas will be very expensive to supply? Does he agree that we want an efficient Post Office service and that if we were to concentrate on that we would get what we wanted?
    Mr. Butler: I assure my hon. Friend that we want the efficiency and the service for the rural areas.
    Mr. Les Huckfield: Will the hon. Gentleman bear in mind that there is a great concern in rural areas along the lines stressed by his hon. Friend the Member for Eye (Mr. Gummer)? How does he intend to maintain and improve the service that the Post Office provides in rural areas if the service in the inner cities and other profitable areas will in future be subject to competition? Will he also bear in mind that there is great concern about how the monopoly can be preserved, or even diminished, while the service in rural areas is improved even further?
    Mr. Butler: The hon. Gentleman will have to wait for my right hon. Friend's statement, but I ask him not to stir up anxieties needlessly.
    Mr. Maclennan: Will the Minister undertake that before the review is completed he will consult the Post Office Users National Council for its views on this matter?
    Mr. Butler: I assure the House that we have had very wide consultations with the POUNC, the unions and all other interested parties, as far as I am aware.

    Northern Region
    Mr. David Watkinsasked the Secretary of State for Industry if he will make a statement on the level of industrial investment in the Northern region.
    Mr. Dormandasked the Secretary of State for Industry if he is satisfied with the progress being made in attracting industry to the Northern region; and if he will make a statement.
    Mr. David Mitchell: In 1978, the latest year for which figures are available, investment by manufacturing industry in the Northern region totalled £648.7 million—10.8 per cent. of the total for the United Kingdom. The Government's regional policies concentrate help where the need is greatest. Much of the Northern region is a development or special development area where high levels of regional assistance are available to industry.
    Mr. WatkinsAre not the Government's policies pricing investment out of the Northern region? Is the Minister aware that I have received a letter from the chairman of York Trailers, which had 165 redundancies in my constituency during this year, in which he makes the point that what he refers to as the present "usurious interest rates" are his company's main bugbear, preventing expansion? Is he aware that this is in one of the special development areas to which the hon. Gentleman has just referred?
    Mr. Mitchell: High interest rates are a necessary part of dealing with the muses of inflation. It ill behoves the Labour Party, having left us the Augean stables to clear up, to complain about the size of the shovel that we have to use.
    Mr. Dormand: Does the Minister agree that the problems of the Northern region are unique and therefore require special solutions? Is he aware that the
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    disastrous effect of his right hon. Friend's policies is the destruction of business confidence with its long-term effects? My experience is the same as that of my hon. Friend the Member for Consett (Mr. Watkins). Will the hon. Gentleman, as a matter of urgency, seek to persuade his right hon. Friend to accept the proposal put to him recently by hon. Members for the establishment of a Northern development agency? We do not think that it would work miracles, but it would be the first step in the rehabilitation of the Northern region.
    Mr. Mitchell: The proposal for a Northern development agency has been around for a very long time, including the period when the Labour Government were in office. My right hon. Friend is considering the representations that have been made to him. Perhaps I could helpfully add that, to encourage investment in the North-East and in other development areas, interest on European Investment Bank loans has now gone down to 10 per cent. fixed for seven years. That may be helpful to a number of projects.
    Mr. Adley: Is my hon. Friend satisfied with the activities of the financial institutions in the Northern region in providing risk capital for new industrial development?
    Mr. Mitchell: I can assure my hon. Friend that we are doing our best to encourage the banks to extend the frontiers of their lending wherever they can see ways of doing so.
    Mr. Urwin: Is the Minister aware that the Government's industrial policies are having a calamitous effect on the industrial base of the Northern region? We may now be running the danger of creating an industrial wasteland in the North as a result of these policies. Worse still, industry will find itself in an almost irrecoverable position as a result of these policies. Will the hon. Gentleman at least give us some idea of the more objective and conclusive approaches which may be expected from the Government as a result of successive ministerial visits, including his own two or three weeks ago to Sunderland, and all the difficult problems which were presented to him by trade unionists, local government members and Members of Parliament?
    Mr. Mitchell: It is regrettable that the right hon. Gentleman should seek to destroy confidence in that way when those who have examined what we are seeking to do to attack the causes of inflation have great confidence in the success of our policies in the longer term.
    Several Hon. Members rose—
    Mr. Speaker: Order. I appeal for short questions, if possible, and, of course, answers will be short to follow.
    Mr. Thompson: Is my hon. Friend aware that the problems of the Northern region are not unique and that a more even-handed national policy would be welcomed?
    Mr. Mitchell: Yes, Sir.
    Mr. John Silkin: Will the Under-Secretary explain how Government policy of increasing the inflation rate from 9 per cent. on 3 May 1979 to 22 per cent. a year later by means of the highest interest rates that we have ever known, and increasing value added tax to 15 per cent. can actually bring down inflation?
    Mr. Mitchell: The right hon. Gentleman is aware that there is a direct correlation between the time at which one increases the money supply and the time, about 18 months later, when inflation comes through. We are now—and the right hon. Gentleman knows it—on the flood tide of the inflation caused by his Government.
    Mr. Silkin: I am not aware of that and neither is the Minister of Agriculture. Fisheries and Food.

    Ferranti Limited
    Mr. Marksasked the Secretary of State for Industry when he expects to make an announcement on the conditions he will impose on the sale of Ferranti shares by the National Enterprise Board.
    Mr. Charles R. Morrisasked the Secretary of State for Industry what guidance of direction he proposes to give to the National Enterprise Board in relation to the sale of the National Enterprise Board's 50 per cent. shareholding in Ferranti Ltd.
    Mr. Adam Butler: I have nothing to add to my right hon. Friend's statement of 1 July.
    Mr. Marks: The Secretary of State was not very clear about the conditions he would impose on the sale of the 4 per cent. of shares to the work force. Will he have any objections to the purchase of shares by groups of workers? Will he have any objections to the representation at annual meetings of those workers by their trade unions?
    Mr. Butler: It is true that the details of the proposed scheme have not been worked out. This will be done in consultation between the Department and the National Enterprise Board and the company. With regard to representation at the annual general meeting, the purchaser of a share, irrespective of whether it is held in trust, under the Finance Act, for instance, will be able to attend and vote in the normal way.
    Mr. Morris: In the light of the exchanges which took place on the Secretary of State's statement on the Ferranti company, has the Minister given further consideration to the adequacy of the 4 per cent. shares allocated for distribution to the 17,000 employees and staff of the company, who make such a signal contribution to its success?
    Mr. Butler: I think that the amount of shares, which is 2 per cent. of the total, and at the valuation of 530p equivalent to about £2¼ million, will be sufficient.
    Mr. Archie Hamilton: Will my hon. Friend also consider putting the same conditions on those shares sold to the employees—of their not being able to sell them for two years—as will be the case with the institutions?
    Mr. Butler: As I have told the House, we have not yet worked out the proposals, but if, for instance, those shares were put in trust under the relevant Finance Acts, they would have to be held for two years.
    Mr. McNally: While acknowledging that the Minister of State has to operate under the ever-ambitious shadow of the hon. Member for Knutsford (Mr. Bruce-Gardyne), may I ask whether he will concede to the House that, without the intervention of the Labour Government to save Ferranti, the country would have lost a

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    major advanced industry, and the similar companies which could be of service to the country in the future will be left naked in similar circumstances by the present Government's philosophy?
    Mr. Butler: We had a long question and answer session following my right hon. Friend's statement. I think that these points were covered and I have nothing to add to them.
    Mr. Bruce-Gardyne: Just to set the record straight, may I ask my hon. Friend whether he agrees that, had there been greater reassurance in the private sector that those who might have come to the aid of Ferranti when it ran into trouble would be allowed to undertake the necessary rationalisation of the transformer business by the then Labour Government, there would have been no need for the NEB in the first place?
    Mr. Butler: I think that my hon. Friend speaks truth, as so often on these occasions. We certainly hope that in the future the private sector will be able to cope with these situations.

    Footwear
    Mr. Marlowasked the Secretary of State for Industry how many people in his Department are primarily dealing with matters concerned with the footwear industry.
    Mr. David Mitchell: There are nine officials in the relevant sponsorship branch of the Department dealing with, but not exclusively with, the footwear industry.
    Mr. Marlow: Have these officials told my hon. Friend that, for the first time, 50 per cent. of the home market is now being provided by imports, and this on a declining market; that the British footwear industry is a very efficient industry with a reputation for quality second to none, and yet at the moment it has massive redundancies and massive layoff spending; and that this is largely due to the dumping of foreign shoes in this country and the closure of markets, also, in industrialised countries, against British footwear?
    Will he discuss with his right hon. Friend and his right hon. Friend in another Ministry things that can be done so that the footwear industry, for which
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    he has some responsibility, is fairly treated and has a fair industrial base from which to operate in the future?
    Mr. Mitchell: My hon. Friend will be aware that the industry suffers from a shrinking market in the United Kingdom, at the same time as there has been an increase in imports. As to imports being in the form of unfair competition, as soon as we receive evidence to that effect we take action as quickly as possible.
    Mr. Greville Janner: Is the Minister aware that in previous recessions the so-called shrinking market has not affected British footwear because people still have to wear shoes even when afflicted by Tory Government policy? Has not the time come when he should recognise the grim misery in places such as Leicester, which depend traditionally on the footwear industry, and when he should make efforts to see that foreign shoes are not dumped on our market?
    Mr. Mitchell: Both I and the Minister for Trade conveyed to the Brazilian ambassador very frankly our concern at the dramatic increase of exports to the United Kingdom of Brazilian footwear only last week.
    Mr. Trippier: Is my hon. Friend aware that the retail commitment in the footwear industry is virtually non-existent and is certainly not being effectively monitored? Is there not a case for a new retail commitment, monitored by Government, with Government actively encouraging the retailers to buy British wherever possible?
    Mr. Mitchell: That is a matter for the trade. Certainly we shall be happy to co-operate with it in that attitude.

    California
    Mr. William Hamiltonasked the Secretary of State for Industry if he will make a statement on his recent visit to California.
    Sir Keith Joseph: I visited San Francisco from 28 to 30 May to fulfil an invitation to address the Electronics Association of California. Whilst there I met industrialists contemplating investment in the United Kingdom and held discussions with people in the electronics

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    and biotechnology industries. I was impressed by the vigorous and adaptable economy of California, by the wide-ranging employment oppportunities being opened up by microelectronics and by the role of venture capitalists in promoting high technology.
    Mr. Hamilton: Is it not a fact that when the right hon. Gentleman was speaking there, he said, in seeking to attract United States investment here, that we enjoyed—he did not use that word, but that was what he implied—a low wage and good industrial relations society? If that is correct, how does he square that with the brutally crazy concept that he enunciated a week ago, that if workers who are now being threatened with unemployment would seek reduced wages, they could maintain their jobs?
    Sir K. Joseph: But it is true that we have low wages, relatively, in this country, because we have low output, relatively. It also remains true that people can preserve their jobs or price themselves into jobs if they offer to their employers lower unit labour costs, either by way of lower earnings or by higher productivity, or by a combination of both.
    Mr. Kenneth Baker: Will my right hon. Friend consider making one of his colleagues in his Department specifically responsible for information technology, so that he could act as a focal point for the whole of this industry, ranging from microtechnology in schools to new public procurement policies? Is it not clear that in the difficulties that we are facing in the industrial and manufacturing area this particular industry provides some of the greatest opportunities for Britain, where in certain products we have a world lead?
    Sir K. Joseph: My hon. Friend has picked on one of the several suggestions in his recent speech on the subject which is certainly being considered by the Government.
    Mr. Barry Jones: When he was in America, did not the right hon. Gentleman show that he has not yet grasped the enormous damage that his policy has done to British industry? Is he not unnerved by the great tide of redundancies, lay-offs and closures in British manufacturing industry? Is it not likely that when
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    the recession ends our country will suffer the humiliation of having no manufacturing industry to meet supply and of having to import manufactured goods?
    Sir K. Joseph: The precipitation of current problems is well covered by the New Statesman in its leading article this week. The onslaught by trade unions on efficiency, modernisation and profits over recent years has caused the chickens that are now coming home to roost in such abundant numbers.
    Mr. Forman: Does my right hon. Friend agree that one of the lessons of Californian success is the extent to which the State is open to public sector procurement and to a positive relationship between the private sector and the public sector? When will his Department put flesh on the skeleton of the suggestion advanced by my right hon. Friend the Prime Minister some time ago in the "no confidence" debate?
    Sir K. Joseph: It is right that a huge defence programme in America is a vehicle for public procurement of an enlightened order. We are seeking to spread the good public purchasing practices of significant sections of the public sector to the sections that need to learn from it.
    Mr. Les Huckfield: If the right hon. Gentleman was impressed by the capability of the economy of the State of California to generate about half a million net new jobs every year, will he take into account that most recent studies have shown that that is connected not with the tax-cutting activities of propositions 13 and 9 but with the Government's own research and development expenditure through their own budget, through the aerospace industry?
    Sir K. Joseph: There is probably more than one cause in the phenomenon but the phenomenon is impressive.

    West Midlands
    Mr. Hal Millerasked the Secretary of State for Industry what representations he has received about the state of industry in the West Midlands.
    Mr. Winnickasked the Secretary of State for Industry if he will now take steps to reverse the industrial decline in the West Midlands.
    Mr. Adam Butler: In addition to questions tabled by hon. Members, my right hon. Friend has received a number of representations from local authorities and other bodies about the industrial situation in the West Midlands. Industry in that region will benefit from the national measures that the Government are taking to put the economy on a sound footing.
    Mr. Miller: Is my hon. Friend aware that in spite of the fillip to confidence given by the reduction in interest rates this week, there is a widespread feeling in industry in the West Midlands that it is competing on an unequal basis with many imports? Is he further aware that that feeling is aggravated by the suspicion that industry is bearing the brunt of the squeeze on the money supply while public expenditure goes unchecked?
    Mr. Butler: My hon. Friend will know that his constituents' supposition is wrong in that the money supply is very much under control. However, he is right in pointing to the need for that control as a benefit to the private sector.
    Mr. Winnick: Is the hon. Gentleman aware that hardly a day passes without news of further redundancies in the West Midlands, and that dole queues are becoming longer and longer in a once prosperous region? Bearing in mind the remarks made over the weekend by the Minister of Agriculture, Fisheries and Food at the Tory Reform Group, is that not an additional reason why the Secretary of State for Industry should be sacked to ensure some economic and industrial sanity?
    Mr. Butler: The hon. Gentleman knows that the rate of inflation is the greatest enemy of business, whether it is in the West Midlands or elsewhere. It is that battle that the Government are starting to win.
    Mr. Grieve: Does my hon. Friend agree that the salvation of industry in the West Midlands, as elsewhere, lies more than anything else in greater productivity per man and greater productivity at work? Does he further agree that, however much some may complain of imports from abroad, any protective measures would be disastrous for a
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    country that depends on free trade for its living?
    Mr. Butler: There can be no doubt that import controls of the sort advocated by the Opposition would have an effect on productivity would reduce the progress that is being made and would increase prices.
    Mr. Les Huckfield: Does the hon. Gentleman recollect that his hon. Friend the Under-Secretary of State for Industry, the hon. Member for Basingstoke (Mr. Mitchell), referred to growth industries in the West Midlands at the previous Industry Question Time and promptly failed to identify them? Is he aware that since then 1,300 employees of Alfred Herbert have been given their notice and that another large British Leyland closure somewhere in the Midlands is rumoured, apart from the closures forecast by Sir Michael Edwardes? Against that background, will the hon. Gentleman tell the House, especially West Midlands Members, what are supposed to be the growth industries in the West Midlands?
    Mr. Butler: My hon. Friend did not have time to identify the growth industries in the West Midlands at the previous Industry Question Time. However, the hon. Gentleman will remember that during the debate on the West Midlands I drew special attention to two such areas. Many small businesses are expanding and businesses involved in high technology are also expanding.
    Mr. Dudley Smith: Will my hon. Friend confirm his belief that a British car industry should be retained not least because of the thousands of jobs in the car component sector which are dependent on the industry and which are mainly located in the West Midlands?
    Mr. Butler: We recognise the continuing dependence of the engineering component industry and other industries on the car industry in the West Midlands, although there has been an element of diversification in recent years. My hon. Friend is aware of the assistance that has been given to British Leyland.

    Leicester
    Mr. Greville Jannerasked the Secretary of State for Industry whether he

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    will consider extra aid for the economically deprived industries of Leicester; and whether he will make a statement.
    Mr. Adam Butler: It is not possible to get high employment, successful industrial enterprise and economic growth, either nationally or in the regions, simply by paying out taxpayers money in grants and subsidies. Our priority is to overcome inflation and create an economic climate in which industry can prosper.
    Mr. Janner: Is the hon. Gentleman aware that, far from creating a climate in which economic prosperity can grow, he has created one of the deepest gloom in every section of industry in the East Midlands, from knitwear, hosiery and footwear to engineering and confectionery? Every business, large or small, is affected by this misery. Does he intend to sit complacently on the Government Front Bench while our industry decays?
    Mr. Butler: I shall do what I was doing this weekend in my constituency in the East Midlands—namely, visiting companies and factories that are expanding.

    British Steel Corporation
    Mr. Hooleyasked the Secretary of State for Industry what progress is being made with the capital reconstruction of the British Steel Corporation; and if he will make a statement.
    Sir Keith Joseph: As my hon. Friend told the House on 22 May, we intend to introduce legislation in the next parliamentary Session to provide for a capital reconstruction of the British Steel Corporation. The timing, extent and scope of the reconstruction have not yet been determined.
    Mr. Hooley: Is the right hon. Gentleman aware that the £2,000 million of taxpayers' money that has been put into the British Steel Corporation over the past few years has created an industry of enormous modern technological productive capacity? Will it not be an act of folly to massacre that industry, which is capable of producing real wealth to the tune of £4,000 million a year?
    Sir K. Joseph: It is true that the industry has been equipped by the taxpayer to a large extent with massive modern plant. However, low productivity, an under-emphasis on the market and
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    a lack of competitiveness mean that the taxpayer has, to some extent, a bad investment, and part of it will have to be written off.
    Mr. du Cann: Will my right hon. Friend be good enough to keep in mind the suggestion that I made to him a few days ago—namely, that in view of the serious situation in the steel industry, and while recognising the immense problems facing the new chairman, he should seriously consider making a further statement on the position of the steel industry, the Government's intentions towards it and the chairman's plans before we rise for the Summer Recess?
    Sir K. Joseph: I shall bear in mind my right hon. Friend's suggestion. I think that he will agree that not even the parliamentary timetable should truncate the time needed by the new chairman to assess the position.
    Mr. James Hamilton: Will the right hon. Gentleman remember that I have the tube producing side of the steel industry in my constituency? A multi-pass mill is required urgently to enhance expertise in the tube producing sector and to enable it to enter world markets. Is it right that the Government, on behalf of the BSC, are about to announce the hiving-off of the tube manufacturing side to private industry?
    Sir K. Joseph: I do not know of any such intention, but I am sure that the chairman of the corporation will read the hon. Gentleman's question.
    Mr. John Silkin: If the right hon. Gentleman is concerned about keeping a bulk steel industry—I thought that his answer the other day was highly ambivalent—why does he talk about low productivity in relation to the closure of the Consett works? Does he not accept that that plant is viable and extremely well and productively operated?
    Sir K. Joseph: The right hon. Gentleman's party introduced legislation which left decisions on such issues to the British Steel Corporation. It was its judgment.

    OPERATION COUNTRYMAN
    Mr. Christopher Priceasked the Attorney-General when the Director of Public Prosecutions will have reached his conclusions about further prosecutions as

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    a result of the Operation Countryman investigations.
    The Attorney-General (Sir Michael Havers): The director has under consideration at the moment allegations against 11 officers as a result of these investigations. It is impossible to estimate when he may reach a decision in respect of any of them.
    Mr. Price: How does the Attorney-General reconcile his statement in the House earlier this year—to the effect that, although there had been no obstruction by senior officers, there could have been obstruction by junior officers—with Deputy Commissioner Kavanagh's recent statement from Scotland Yard, to the effect that there had been no obstruction by anybody? In addition, how does he reconcile his statement with that made by Mr. Hambleton, the previous head of Operation Countryman and retired chief constable of Dorset, who said that there had been considerable obstruction by junior officers and some obstruction by one senior officer? Does he not accept that such statements should be cleared up before Operation Countryman is brushed under the carpet?
    The Attorney-General: Naturally, I have sought to clear up what has been reported in the press. As regards junior officers, some weeks ago I said in the House that anybody, whether a police officer or not, was entitled to refuse to answer possible incriminating questions that were put by police officers inquiring into criminal allegations. Like any other citizen, he is exercising a right that is protected by the law. That cannot be treated as obstruction. I can see nothing inconsistent about Mr. Kavanagh's statement and my answer. I have had a long interview with Mr. Hambleton. The Director of Public Prosecutions has seen him several times. At no time did Mr. Hambleton give me, or the Director of Public Prosecutions, details of any obstruction of the type reported in the newspapers.
    Mr. Emery: How long has Operation Countryman been in progress? Is it not an inordinately long time? Although everybody wishes to ensure that the police are above reproach, does not my right hon. and learned Friend accept that it does good to no one if such things are allowed to drag on for so long?
    The Attorney-General: It is inevitable that an inquiry of this size, which involves several allegations that have been made by people serving long sentences of imprisonment, should take a considerable time to investigate. Other delays have been caused for other reasons. For example, it was intended to call two persons to give evidence in a case against a police officer. Those two persons were awaiting trial. It was rightly decided that the trials involving the future witnesses should be concluded before the two persons were called as witnesses for the prosecution against a police officer.
    Mr. Jeffrey Thomas: How many more police officers will be investigated by the Operation Countryman team? Is the right hon. and learned Gentleman aware that any attempt to truncate the inquiries will be seen as an attempt at a cover-up?
    The Attorney-General: I can reassure the hon. and learned Gentleman that there is no intention of truncating the inquiry. Eleven more officers are now under investigation by the Director of Public Prosecutions. As the inquiries are in progress it is impossible for the Director of Public Prosecutions or me to estimate how many more cases there will be. Neither the Director of Public Prosecutions nor I intend to call a halt to this inquiry before it has been properly concluded.

    PRIVILEGED COMMUNICATION
    Mr. Greville Jannerasked the Attorney-General why he has decided not to refer the matter of privileged communication to the Law Commission.
    The Attorney-General: The matter was considered by the Law Reform Committee in its sixteenth report, published in 1967. It concluded that the law at that time was broadly right and, as it has undergone no significant change since that date, it is not thought there is any present need for a further review.
    Mr. Janner: Is not the Attorney-General aware that there is grave unease among journalists at the distinct possibility of their being imprisoned if they refuse to disclose their sources? Will not he consider my Bill, which is designed to protect journalists where the public in-

    25
    terest so demands? Will he undertake to introduce such legislation in the next Session, if the opportunity arises?
    The Attorney-General: It would be wiser for the House to await the decision of the other place, which is likely to consider a case soon. In the meantime, there does not seem to be any evidence to suggest that the present law inhibits free expression or, in suitable cases, fails to protect confidential communications. In general, the court must still balance the interests of those involved against the need to reach a just conclusion in judicial proceedings.
    Mr. Archer: Does the Attorney-General agree that the type of balance to which he referred is essentially a political question? Does not he accept that whatever the existing law may be held to be it is ultimately a matter for debate and decision by Parliament?
    The Attorney-General: We cannot comment on the present case, but when it is concluded I am sure that the House will be able to discuss this problem.

    CUSTODIAL SENTENCING POLICY
    Mr. Soleyasked the Attorney-General if, in the light of the recent statement by the Secretary of State for the Home Department on prison overcrowding, the Lord Chancellor will arrange a sentencing conference for magistrates to discuss reducing the use of custodial sentences in cases of social security fraud.
    The Attorney-General: Adequate facilities for sentencing conferences already exist, and full use will be made of these. A single sentencing conference for the entire magistracy, whether for a single purpose or generally, is not a feasible proposition.
    Mr. Soley: Does not the Attorney-General owe it to the Home Secretary to help him face the crisis in our prisons? Is he aware that a man in my constituency was recently gaoled for one month for defrauding the DHSS of £110, despite the fact that he had not been in trouble for 12 years? Does not the right hon. and learned Gentleman accept that as we do not readily gaol people for fiddling expense accounts or income tax, there can be no justification for doing so in such social security cases, where com-
    26
    munity service orders are available? Will the Attorney-General arrange a sentencing conference that will give guidance to magistrates and judges?
    The Attorney-General: Guidance to magistrates will come from sentencing conferences—which are going on all the time—from the presiding judge, from the Lord Chancellor or, more often, from the courts. I remind the hon. Gentleman of what was said in the Divisional Court on 8 October 1979. The presiding judge said:
    "Where persons deliberately defraud the State of social security moneys, an immediate custodial sentence is inevitable and is to be expected where there is a substantial plundering of the public purse."
    Mr. Archie Hamilton: Does not my right hon. and learned Friend accept that, as overcrowding continues, pressures on magistrates to impose shorter sentences, or no sentences for lesser crimes, are increasing? Is not the answer to build more prisons?
    The Attorney-General: Until that situation has been achieved, my right hon. Friend the Home Secretary and others will advise magistrates. Obviously, directions cannot be given. Only advice can be offered. The present tendency towards finding an alternative to custody for less serious crimes is appreciated by the courts.
    Mr. Spriggs: Is the right hon. and learned Gentleman aware that constituents who are charged with defrauding the DHSS are being convicted by magistrates' courts without being given legal aid or advice? Will he take powers to ensure that the poorest people in the land are given the best legal aid in defence of their cases?
    The Attorney-General: I am surprised that that has happened. Generally, legal aid is available to anyone who does not have the means of providing for his defence in a magistrates' court. If the hon. Gentleman writes to me about the cases he has in mind, I shall make inquiries.

    JURY VETTING
    Mr. Dubsasked the Attorney-General if he is now in a position to make a statement on jury vetting.
    The Attorney-General: Following a recent decision of the Court of Appeal I thought it desirable to consult again the Lord Chancellor and the Home Secretary and other interested parties. I have nearly finished these consultations but those with the chief officers of police, which are being conducted through Home Office officials, will not take place until Thursday of this week, 10 July. I hope I shall be ready to make a statement not long afterwards but, in any event before the House rises for the Summer Recess.
    Mr. Dubs: Is the Attorney-General aware that everyone understands his embarassment at finding himself in the difficult position of having given an undertaking, to this House that jury vetting would not take place without his consent when such jury vetting is taking place without his consent? Does he appreciate that we look forward to an early statement so that we can clarify the present muddled position?
    The Attorney-General: I accept that the position is not as clear as I should like it to be. But I reassure the hon. Member that any case which involves vetting with Special Branch records will still be reserved for my decision. In any event, I have said that there is to be no inquiry made at local CIDs except to resolve identification problems when there may be four Smiths involved in a jury list.
    Mr. Grieve: In my right hon. and learned Friend's consideration of this
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    important matter, will he never lose sight of the fact that the administration of justice is not to be polluted or diverted by persons of serious criminal conviction serving on juries? To that extent, jury vetting is essential for the protection of the public and the administration of justice.
    The Attorney-General: That is one of the matters which I shall take into consideration when I reach a conclusion.
    Mr. John Morris: Will the Attorney-General accept that the Opposition welcome his assurance that there will be a statement on this matter before the recess? In his consideration of the statement, will the right hon. and learned Gentleman bear in mind the statement made by Lord Denning in a recent Court of Appeal case that jury vetting is unconstitutional? In view of the disquiet and apparent conflict in decisions, should not this matter come to Parliament for right hon. and hon. Members to decide whether there should be an increase in the classification or any change in those who should be entitled to serve on a jury? Will the Attorney-General consider asking a senior judge to look into the various differences that have arisen and to make recommendations for legislation?
    The Attorney-General: I shall bear in mind what the right hon. and learned Gentleman has said.

TOP SALARIES REVIEW BODY (REPORTS)
The Prime Minister (Mrs. Margaret Thatcher): With permission, Mr. Speaker, I should like to make a statement on two recent reports by the Top Salaries Review Body.
Both reports have been presented as Command Papers and are available in the Vote Office this afternoon.
The first of these reports—the Review Body's fourteenth report—makes recommendations for the salaries of the higher Civil Service, senior officers in the Armed Forces, members of the judiciary and chairmen and members of boards of nationalised industries. The House will recall that in 1978 the Review Body made recommendations for these groups of public servants, which our predecessors accepted but decided to implement in three stages, on 1 January 1978, 1 April 1979, and 1 April 1980. Last year the Review Body recommended an updating of the second and third stages, which we accepted. The third stage has been in payment since 1 April this year. The present report is concerned with the increases required to bring that third stage up to date from the levels appropriate on 1 April 1979 to the levels appropriate on 1 April 1980.
The other report now submitted—report No. 15—makes recommendations for the salaries of Members of Parliament, Ministers and other paid office holders. Last year the Review Body made recommendations that the House agreed should be accepted but should be implemented in three stages, on 13 June 1979, 1980 and 1981. The first stage was paid to all those concerned. The second stage has been in payment since 13 June last for Members of Parliament but not for Ministers and other paid office holders. The Review Body's latest report is concerned with the increases required to bring the second and third stage payments up to date from the levels appropriate on 13 June 1979 to the levels appropriate on 13 June 1980.
The Review Body has arrived at detailed recommendations over the whole field on the basis of all the factors that are traditionally relevant. The Government are grateful to Lord Boyle and his colleagues for their thoroughness and
30
attention to detail, and for all the time and effort that they have devoted to the review.
They recommended increases of 14·6 per cent. in the second and third stage payments to Members of Parliament, and similar increases for Ministers. The general level of the increases that they recommend for the four groups of public servants is about 19 per cent., though they propose larger increases than that for certain categories within these groups. If these larger increases are taken into account, the overall cost of the increases recommended for these groups of public servants would work out at about 26 per cent.
The Government are committed to accepting the recommendations of the Review Body, save where there are clear and compelling reasons to do otherwise. Indeed, my right hon. Friend the Leader of the House told the House some months ago that the Government would accept the recommendations of the Review Body for updating the second stage increases to hon. Members. I should like to explain to the House, Mr. Speaker, why, notwithstanding these commitments, the Government take the view that there are clear and compelling reasons, of a kind that the Review Body could not take into account, for not accepting the Review Body's recommendations in full on this occasion.
The overriding priority to which the Government's economic and monetary strategy is directed is the reduction of inflation. At over 20 per cent., the rate of inflation is unacceptably high, in absolute terms and in relation to the rate of inflation in most of the countries with which we compete in world markets. We shall not be able to make progress in resuming sound economic growth and in reversing the rise of unemployment until we succeed in reducing the level of inflation very substantially. By sticking to our monetary targets we shall bring the rate of inflation down. It is likely to be falling in the next few months, but unless the growth of earnings is broadly consistent with the rate of monetary growth the fall in inflation will be accompanied by a larger rise in unemployment.
Pay increases in the private sector are clearly beginning to respond to the combined pressures of tough market conditions and financial constraints. But the

31
private sector cannot be expected to take the whole of the strain. Levels of pay increases in the public sector must likewise be reduced, if public expenditure is to be kept under control and our monetary objectives achieved. When we are looking to other groups in the public sector to accept pay settlements that fall below what might be suggested by any traditional comparisons with movements of other earnings or of prices, the Government think it right to expect people in positions of responsibility and leadership in Parliament and the public services to act in a way that we hope others in the country will follow.
This is the background to the Government's proposals, to which I now turn.
First, as to Members of this House, we are in the virtually unique position of determining our own remuneration. Our calls to others to show restraint and act responsibly will be judged by what we do ourselves. The Review Body has recommended a parliamentary salary of £12,300 from 13 June 1980 and £13,750 from 13 June 1981. These figures represent an increase of 14.6 per cent. The Government think it right to propose to hon. Members that they settle for a substantially smaller figure. We shall therefore invite the House to approve a resolution to provide a parliamentary salary of £11,750 from 13 June 1980. That represents an increase of £1,025 or 9.6 per cent., on the second stage salary of £10,725, which has been in payment since 13 June last. We propose also to provide in that resolution for an increase of the same percentage in the third stage salary, due to take effect on 13 June 1981, taking it from £12,000 to £13,150.
We propose that the secretarial and research allowance for hon. Members should be increased by 9.6 per cent. to £7,400, with effect from 13 June 1980.
Ministers and other paid office holders are not yet in receipt of their second stage payment. We shall invite the House to approve an order putting into effect the second stage payments recommended by the Review Body last year, increased as for Members of Parliament by 9.6 per cent. save in the case of Cabinet Ministers and my right hon. and learned Friend the Attorney-General. For them, the increase will be reduced to 5 per cent.
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The order will also provide for the same percentage increases to be applied to the third stage payments due to take effect next year.
We propose to adopt the Review Body's recommendation that we should unify the parliamentary salary payable to Ministers in the House of Commons from three rates to a single rate, and we propose that that rate should be £6,930. Although junior Ministers in the House of Lords now receive a secretarial allowance of £1,000, which we propose to increase to £1,100, they do not receive any salary specifically in respect of their parliamentary duties. This is a very real problem, and we propose to consider how the arrangements for their remuneration should be revised to take account of it.
The Government propose that peers' expense allowances, which are related to relevant costs, should be increased as the Review Body recommends.
I turn now, Mr. Speaker, to the four groups of public servants covered by the Review Body's fourteenth report.
The Government consider that they should be expected to accept no less a reduction, as compared with the Review Body's recommendations, than Members of Parliament are being asked to make for themselves. The increase that we are proposing for hon. Members is about one-third below that recommended by the Review Body. We propose that the average, increase for the four groups of public servants concerned should also be about one-third below the general increase of about 19 per cent. recommended by the Review Body. That will bring the overall cost of the increases to these groups down to about 12½ per cent.
This will not be paid as straight percentage increases across the board to all those concerned; it will be so distributed as to mitigate the compression of differentials between the groups covered by the Review Body's report and those directly below them, and within those groups to preserve generally, though, of course, at lower salary levels, the pattern of differentials and relativities recommended by the Review Body.
The result of distributing the, total sum in this way will, in fact, be that most of those at the highest levels—the permanent and deputy secretaries in the Civil Service, the equivalent ranks in the Armed Forces.

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and the chairmen of nationalised industries, will, like hon. Members and Ministers, receive percentage increases in single figures.
The new salary rates for all four groups will be effective from 1 April 1980. The effect of implementing them will be to reduce the cost, as against full implementation of the Review Body's recommendations, by about 50 per cent.
A special problem arises in the Civil Service. When other grades recently received increases following pay research, it was agreed that new salary scales for assistant secretaries and senior principals—the grades immediately below those covered by the Review Body's remit—should not be settled until the outcome of the Review Body's report was known. The results of pay research for the assistant secretaries would take the maximum of their scale above the rate we now propose for under-secretaries. In order to preserve tolerable differentials, it will be necessary to set a lower scale for assistant secretaries from that which would result from the application of the pay research findings. There will also need to be a slight adjustment at the top end of the scale for senior principals.
I will, with permission, Mr. Speaker, circulate in the Official Report schedules showing the current and proposed rates of salary for the main groups and grades concerned. Full details of the Government's proposals will be placed in the Library.
For the groups covered by the Review Body's fourteenth report, who have completed their staging, the rates of salary now proposed will be used for the purposes of calculating pension entitlements. For hon. Members and for Ministers and other paid office holders, pension entitlement will be calculated on the revised third stage salaries.
With regard to the remuneration of nationalised industry board members, the Review Body, in its fourteenth report, questions the appropriateness of its role, and suggests that the Government should reconsider its remit in this respect. The Government share the doubts that the Review Body has expressed. We have therefore decided that this should be the last occasion on which the Review Body is asked to recommend on the remuneration of the chairmen and mem-
34
bers of boards of nationalised industries. In future years, these salaries will be determined by the Minister concerned in each case, with the approval of the Minister for the Civil Service.
I am very well aware that in making the proposals that I have now described to the House the Government will be accused of going back on commitments and breaking agreements, and of failing in their obligations to the public servants concerned, on whose hard work, loyalty and integrity society depends. But they must have regard to their wider obligation to propose what we believe to be right. In present circumstances, the Government believe that these proposals would give fair levels of remuneration to hon. Members of this House and to the public servants to whom they apply, and at the same time measure up to the needs and expectations of those to whom we, in this House, are answerable and who, in the end, have to find the money.
Mr. Foot: Will the right hon. Lady at least understand that the House will accept that she is proposing a series of discriminations against the public service and that the proposals will have to be examined on that account? How, for example, can she reconcile what she has proposed in the statement for the chairman and others working for nationalised industries with the agreement in which she was glorying only a few weeks ago with Mr. MacGregor, appointed to the British Steel Corporation, when she herself enunciated the principle of "Grab all you can" as being the one that she supported? How does she reconcile that proposal with what she is now putting before the House of Commons?
On the proposal made by the right hon. Lady and the Government for Members of Parliament, does she not agree that it involves a direct breach of what was stated from the Government side of the House and from the Government Dispatch Box on behalf of her Government? Does she not agree that she has abandoned that undertaking altogether? Why, in those circumstances, should anyone believe what the Government have to say from the Dispatch Box in the future? When the right hon. Lady says that she is taking the figure of 9½ per cent. as the inflation rate under which increases are to be made, is she not working on

35
the figure of the previous Government and not on the record inflation achieved by her own Government?
The Prime Minister: The right hon. Gentleman has, I think, raised three points. When we appointed Mr. MacGregor we took the view that the steel industry and the difficulties it was then facing, about which we now know even more, deserved the very best person that we could get. We took the decision to get the best person. I believe that that was the right decision.
The right hon. Gentleman says that we had a commitment. Yes, we did, and I explained that in the last paragraph of my statement. I thought that I had better take it directly, before the right hon. Gentleman pointed it out. We have an even greater commitment to the people of this country to recommend what we believe to be right. Thirdly, with regard to what this Government have done to increase the salaries of hon. Members, the figure that we are now recommending, of £11,750, is 70 per cent. more than that which obtained when we came into office.
Mr. Foot: Does the right hon. Lady seriously think that she can escape from undertakings given to the House in the manner that she has done?
The Secretary of State for the Home Department (Mr. William Whitelaw): Yes.
Mr. Foot: I am not asking the Home Secretary.
Will the right hon. Lady explain what factors have arisen since 4 March which enable her to ask the House that she and her Government should be released from the positive assurances that she gave to it, without any modification whatsoever in this sense? What are those factors? When did they come to her attention? In future, may we have the assurance that whenever undertakings are given from the Dispatch Box she will explain all the reasons why they should not be believed?
The Prime Minister: Broadly speaking—the enormous increases in public sector pay that have followed on the
36
various stagings and updatings and to which our attention was drawn by the Select Committee on the Treasury, and the difficulty of keeping public expenditure under control when such vast amounts are going out in public sector pay; secondly, the fact that public sector pay and the increases given are taken into account in the private sector in making their claims for the next pay round. I am asking the right hon. Gentleman, in his distinguished position of leadership, to give a lead. I hope that he will be able to do so.
Mr. Foot: We were quite prepared to give a lead when we were in Government, and we did so across the whole board. When we asked the House of Commons to accept those figures we asked it because that was what was being applied across the rest of the country. I am asking the right hon. Lady specifically what are the agreements reached since 4 March which persuade her that she is entitled, in the House, to commit her Government to a plain breach of faith?
The Prime Minister: I have already answered the latter point. With regard to the right hon. Gentleman's former point, his Government left the salaries of Members of Parliament at £6,897. This Government have already accepted increases of up to 70 per cent. and have proposed a further increase for next year which will bring those increases up to 90 per cent. Will the right hon. Gentleman point to any time when the then Prime Minister agreed to accept the decisions of the Review Body, whatever they were? He never did.
Mr. Foot: Will the right hon. Lady understand that we never gave the House such an undertaking as was given by the Leader of the House? Why is she breaking her word, and why will she not take responsibility for it?
The Prime Minister: I am quite prepared to take, and am indeed taking, responsibility for what I recommend. I notice that the right hon. Gentleman is telling the country that 70 per cent. is not enough.
Mr. David Steel: Do not these decisions represent a remarkable turn-round from the statement of the Chief Secretary

37
only last week in the Liberal Supply day debate, that incomes increases had made no contribution to inflation? If the Government believe that some intervention is now necessary on pay, would it not be better to work out a coherent overall pay policy rather than a series of ad hoc pay policies affecting individual groups? Lastly, sticking within the right hon. Lady's 9·6 per cent. figure for Members of Parliament, could she not engage in some productivity bargaining and arrange for those who have strenuously opposed the disastrous economic policies of the Government to receive more and those who have slavishly supported them to receive less?
The Prime Minister: With regard to what the right hon. Gentleman said about my right hon. Friend the Chief Secretary, public sector pay is the biggest single factor in public spending. Apart from the nationalised industries, it amounts to about £32 billion a year. If we take large increases, that will be observed by others and may have an enormous multiplying effect throughout the economy. We are perfectly prepared to take decisions, and we ask the right hon. Gentleman to follow the lead that we have given.
Mr. du Cann: Does not my right hon. Friend's statement confirm again the fact that the only satisfactory moment at which matters of this embarrassing kind should be decided is at the beginning of a Parliament? While I acknowledge that these matters, at any rate so far as Members of Parliament and Ministers are concerned, are for the House as a whole to decide, and while I acknowledge also that the Government are bound to give a lead, particularly in the serious economic situation that my right hon. Friend described—a lead that many of us will wish to follow—may I put some points to her?
Since Members of Parliament are being asked to accept a reduction in the recommended figure of 15 per cent., and since their remuneration and that of Ministers has been too low for too long, can we not peg the pension figure to what Boyle now recommends? Secondly, cannot my right hon. Friend and the Leader of the Opposition, aided if need be by representatives of the Back Benches, in the interests of the House as a whole now come to a formal and final agreement to
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remove this matter in future from discussions in the midst of Parliaments?
Last, but by no means least, so far as those in the public service are concerned, while one acknowledges again that pay is a substantial amount of total Government expenditure, all of which has to be found by the taxpayer, is it right that we should say to those who accept the huge responsibilities of leadership in the Civil Service, the nationalised industries, the Armed Forces and elsewhere, that they must be singled out and their families penalised merely in order to give an example to the rest of the nation?
The Prime Minister: I am grateful to my right hon. Friend. On his first point, about the matter being settled at the beginning of a Parliament, I doubt whether that could resolve matters for the whole of a Parliament without some revisions during its course. As for the pension figure, we have agreed that pensions shall be determined by relation to the updated third stage—updated by 9.6 per cent. We shall of course catch it up by next year. It would of course have a great effect on any dependants were we to suffer any tragedies among us during this year. That is why we agreed that pensions should be related to pay of £13,150. With regard to a formal and final agreement, I have considered—indeed the Review Body considered—all questions of linkage. I think that it came to the same conclusion as we have come to; in the end it is hon. Members who determine their own pay, and there is no way of escaping that. With regard to public servants, we are talking about the top public servants, dealt with by the Top Salaries Review Body. I believe that it is right to ask people in that position to give a lead to others. I hope that that lead will be followed.
Mr. J. Enoch Powell: Does the right hon. Lady believe that the small reduction that is proposed in the remuneration of hon. Members and of Ministers will result in any diminution in the supply offering for places in this House or in her Government?
The Prime Minister: No, Sir; like would-be miners, they are queuing up.
Mr. Higgins: Is my right hon. Friend aware that the figure of 70 per cent. that

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she gave in answer to a supplementary question is open to gross misinterpretation by those outside the House? The fact is that over, say, the last decade, if the public at large had followed the example of hon. Members, we should probably have no serious inflation problem at all. If we are to agree to my right hon. Friend's recommendations it is important that we should publicise as widely as possible the great degree of restraint that has been shown by the House in the past, and which is now proposed again.
The Prime Minister: The 70 per cent. is the obligation that the Government accepted for the House. If we go back over a decade, 15 years, 20 years, or to 1964, we must take into account the substantial increases in allowances since that time. We used to have to bear on our salaries some of the things that are now taken into account in allowances. If we are looking back over a period, for the benefit of those who have not been in the House for that period, those factors should be taken into account. It should be borne in mind that the average amount taken in allowances exceeds the parliamentary salary.
Mr. Willey: Does the Prime Minister realise that our main objective is to take this issue out of the House? We established a committee to deal with the matter. We are not top salary earners. We referred the matter to the Review Body and we gave it a clear commitment about our attitude towards its recommendations. It has made its recommendations and we should accept them. Is the right hon. Lady aware that her intervention is especially mean, because the Boyle committee points out that the award is substantially below inflation and substantially below other comparative salary earners?
The Prime Minister: On the right hon. Gentleman's first point about taking the matter out of the House, whatever is recommended, by whatever means, the final decision is taken in this forum. I do not see that there is any way of getting out of taking that decision. If we are the 635 leaders of the nation we should not try to get out of taking that decision. The chairman of the review body recommended less for us than for
40
other groups. There are not the same differentials for Members of Parliament, or the increments that occur in some groups in the public sector. That is why he considered the other groups in such detail, and why we have preserved his pattern of differentials and recommendations, albeit at reduced salary levels.
Sir John Eden: Is not the most important commitment that my right hon. Friend has given that to bring down the level of inflation? As there is very good reason to believe that the level of inflation will turn down in coming years, will my right hon. Friend have a second look at the rate of increase proposed for hon. Members' remuneration in 1981? Should that not be lower than that for 1980? Is there not good reason to suggest that it should not be 9·6 per cent., but 5 per cent.?
The Prime Minister: I am grateful to my right hon. Friend. The position is that the three stages were, by resolution of the House, without any further resolution, automatically put into payment on the appropriate date. If we leave the third stage as it is, about £12,000 will come into payment automatically in June 1981. We thought it right to recommend that that £12,000 should be updated by 9·6 per cent. to preserve the differential with the second stage this year. We are the only group that has not yet received the third stage. The second stage of ministerial salaries was never put into any order, and we have to provide for both the second and third stages. The percentages applied to the third stage will be those that I have indicated. That is right and proper. The question will then arise whether those sums should be updated.
I am grateful to my right hon. Friend for putting the reduction of inflation among his top priorities, and also for giving a lead.
Mr. Speaker: I propose to call three more hon. Members from either side.
Mr. Alexander W. Lyon: Is the Prime Minister aware that since 1975, when the House voted that pay should be linked to the assistant secretary level, pay for Members of Parliament has fallen by 30 per cent. in real terms? Because of that, Lord Boyle insisted that before he undertook the review he should have an assurance that the Prime Minister would

41
implement his recommendations. She gave that assurance in unqualified terms in a letter to Lord Boyle last July. Do words still have meaning for the right hon. Lady, or was that just a plain lie?
The Prime Minister: I tried to explain to the House why, although we gave that commitment, I felt it necessary to recommend to the House a lesser amount. I am recommending to the House a lesser amount. It is for the House to decide whether it wishes to accept that. If the House wishes to say that it must receive the total amount, the House is responsible and accountable to the constituents, who, in the end, provide the money.
Lord Boyle's report has been available in the Vote Office for more than an hour. The last paragraph of that report states:
"In making these recommendations we have had in mind the same considerations as in previous Parliamentary reviews. To go further would in our view be unjustified in itself, would extend well beyond our terms of reference and indeed would encroach upon the prerogative of Government and Parliament."
It is the prerogative of Government and Parliament to which we are turning today.
Mr. Montgomery: Is my right hon. Friend aware that there will be widespread support on the Conservative side of the House for the proposition that we cannot expect other sections of the community to show restraint in incomes unless we, as Members of Parliament, also show restraint?
The Prime Minister: I am grateful to my hon. Friend for his remarks. The Government's proposal is reasonable, having regard to all the circumstances. I hope that, having decided that some of our employees should go into single figures and having recommended that hon. Members should go into single figures, that lead will be followed. It is important that it should be followed.
Mr. English: Is it the case that the salary of the Prime Minister's office is about 15 per cent. of that of the chief executive of the Playboy Club? Is the right hon. Lady aware that on the Labour side of the House her estimate of her true worth will be generally accepted? What we cannot understand is why she thinks that the chairmen of our nationalised industries are worth less to the country than the chairman of a gambling club?
The Prime Minister: With regard to the hon. Gentleman's strictures on myself, I treat his remarks as they deserve.
Sir Nigel Fisher: Will my right hon. Friend bear in mind that both Ministers and hon. Members are underpaid in relation to any other comparable Parliament? Nevertheless, most of us are prepared to take our usual place at the bottom of the queue so as to set an example in the public sector. However, the least that we can expect is that Members' pensions should still be geared to the notional figure based on Lord Boyle's report instead of to the lower figure now proposed by my right hon. Friend. That would be in accordance with precedents during the past few years. It would help to sugar the pill that we are being asked to swallow.
The Prime Minister: Hon. Members' pensions are geared to £12,000, which is the figure for the third stage. We are updating that figure to 13,150, which increases the £12,000 by 9·6 per cent. We are gearing the pensions to that figure. To go beyond that would presume upon the results of next year's updating. I do not think that that would be wise. It is right to gear the pensions to the figure that we shall place in the motion that will be put before the House for its approval.
Mr. Ashton: Is the Prime Minister aware that many Back Benchers are concerned about inflation and its effects on the poor? Will she therefore give an assurance that if Back Benchers agree to take 9·5 per cent. she will bring forward the pensioners' pay rise from the last week of November to the first week of that month, so that they will have had to wait only 52 weeks instead of 54 weeks? If we play our part, will she do the same?
The Prime Minister: No. As the hon. Gentleman knows, the two sums are not comparable.
Mr. Kershaw: Was my right hon. Friend not correct in saying that ultimately the House must always decide what the pay and pensions of hon. Members should be? Was not the Boyle Commission an attempt to take the decision away from the House, and are we not now seeing the result of that? Would it not have been intolerable, in present

43
national circumstances, if we had insisted on our last pound of flesh?
The Prime Minister: I am grateful to my hon. Friend. I entirely agree with

Current salary* £

Proposed salary £

Percentage increase Per cent.

MPs (Back Benchers)

10,725

11,750

9·6

Ministers:

Examples:

Cabinet Ministers†

22,325

23,500

5·3

Ministers of State (Commons)

14,812

16,250

9·7

Ministers of State (Lords)

14,955

16,400

9·6

Parliamentary Secretaries (Commons)

11,262

12,350

9·7

Parliamentary Secretaries (Lords)

11,405

12,500

9·6

* Current salary includes second stage of 1979 pay increase.

† Excluding Prime Minister, Lord Chancellor and Lord President of the Council.

what he said. I believe he was saying what I tried to say earlier, namely, that those in positions of leadership must give a lead. That is what we are here for.
Following are the schedules:

Current salaries £

Proposed salaries £

Percentage increase Per cent.

Examples:

British National Oil Corporation:

Chairman

53,500

58,500

9·3

Members

29,250–37,750

33,000–43,000

13·4

British Steel Corporation, Post Office:

Chairmen

48,500

53,000

9·3

Members

28,500–34,500

31,500–39,500

12·7

British Aerospace, British Airways Board, British Gas Corporation, British Rail, British Shipbuilders, National Coal Board, Electricity Council:

Chairmen

44,000

48,000

9·1

Members

23,250–28,750

26,000–32,750

13·0

British Airports Authority, Cable and Wireless, Civil Aviation Authority, National Bus Company, Scottish Development Agency:

Chairmen

31,000

34,000

9·7

Members

18,500–22,500

20,500–26,000

13·4

Percentage increase for group as a whole

—

—

11·6

YOUTH AND COMMUNITY BILL
Mr. Marks: On a point of order, Mr. Speaker. May I draw your attention to an error in Hansard of last Friday 4 July? In column 2034 it reports that there was a vote on a closure motion in a debate on a Government new clause to the Youth and Community Bill. In fact, there was no vote on the closure. It was the Government's proposal which was defeated. I should be grateful if the report could be amended.
Mr. Speaker: The hon. Gentleman is quite right. The Division took place on the new clause and not on the closure. It is correctly recorded in the Votes and Proceedings. No doubt the Editor of Hansard will take note of what has been said and will wish to correct the record.

BILL PRESENTED
  RACE RELATIONS ACT 1976 (REPEAL)
  Sir Ronald Bell presented a Bill to repeal the Race Relations Act 1976; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday, 25 July and to be printed. [Bill 242].

  STATUTORY INSTRUMENTS. &c.
  Ordered.
  That the draft New Bus Grants (Extension of Period and Reduction of Rate) Order 1980 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Waddington.]

  YOUNG PERSONS
  4.12 pm
  Mr. T. H. H. Skeet: I beg to move,
  That this House, aware of the special problems facing young people in contemporary society, affirms the need of the Government to pursue a positive and realistic policy towards youth, to review the provisions of the Education Act 1944 in regard to youth provision, better to co-ordinate all departments' efforts in this field, and to provide suitable financial resources within its expenditure plans through Rate Support Grants and departments' grants for the youth service to discharge its proper role and purpose.
  There are several categories of youth. There are those who aim at self-realisation and an embellishment of their own talents. I regard those as the motivated. They are the broadest group and they will tend to evolve under the pressures and strains of life as they move through their teens into manhood and woman-hood. Problems seldom centre there, though they represent the majority of youth.
  There are those who are subject to some disadvantage not of their own choice—the inadequate, the unmotivated, the physically incapacitated, those lacking shelter following, say, their discharge from prison, the unemployed during a cruel turn of the economic cycle and those belonging to ethnic groups who are subject to prejudice emanating from insensitive or hostile people. There are also those who suffer voluntary afflictions—drugs, alcohol and crime. All 17 million or so of them under 21 form a composite—British youth.
  It is not what we make of them or allow them to make of themselves that counts. Society cannot afford to increase the size of the human scrap-heap. On the other hand, it may rejoice if it has managed, by its ingenuity or its provision, to realise much latent talent. In a myriad of cases, society must condition, encourage, stimulate, motivate and mature those within its charge to promote a real harvest.
  The post-war era has not shown that we have been particularly adept at meeting the challenge of the age. In the United Kingdom there is a lack of co-ordinated effort. The generality of youth is faced by too many Departments involved in various aspects of its life.
  48
  As my right hon. and learned Friend the Secretary of State for Education told a seminar on youth and young people at the University of London Union on 3 March last year, when he was the Opposition spokesman:
  "Many of the current problems with provisions for young people stem from lack of co-ordination—between one central Government Department and another, between central and local Government and between statutory and voluntary bodies."
  I regret that my right hon. and learned Friend is not here today, because I feel that he is a great supporter of the young people of this country.
  The Under-Secretary of State for Education and Science (Mr. Neil Macfarlane): It may be convenient if I tell the House now that my right hon. and learned Friend the Secretary of State had looked forward to taking part in the debate, but unfortunately he has fallen victim to influenza. It remains to be seen whether he will be able to return to London and take his place in the House tomorrow. I know that he greatly wanted to take part in the debate. It may set the scene if I make that clear at this stage.
  Mr. Skeet: I am obliged to my hon. Friend for that information.
  The lead Department is the Department of Education and Science, which appears to treat youth over 16 as of purely peripheral interest. In my judgment, its tutelage over the past 35 years has revealed that youth's dependence on the DES is open to serious question.
  There are, at least five other Departments that may claim responsibility. The Department of Health and Social Security provides social services for the young and the disadvantaged, administering, for example, the Children Acts of 1948 to 1975, the Children and Young Persons Acts of 1933 to 1969 and the Chronically Sick and Disabled Persons Act 1970.
  The Home Office is concerned with delinquent children and community development programmes, especially community service orders, the Children and Young Persons Act 1969 and the crucial Powers of Criminal Courts Act 1973. The Department of Employment is concerned with careers service, which offers vocational guidance to the young under the Employment and Training Act 1973.

  49
  The Department of the Environment provides housing and support and youth activities towards conservation and environmental improvement. It is responsible for miscellaneous Acts, including the Housing Act 1957 and the Housing (Homeless Persons) Act 1977. Finally, the Foreign and Commonwealth Office concerns itself with youth exchanges abroad.
  In my judgment, the demarcation lines between unions are nothing like the demarcation lines between Government Departments. For example, social workers from the DHSS vie with youth workers of the DES. Proper co-ordination need not prove expensive; it could be managed simply through a shift of resources between Departments at both national and local levels.
  Abroad, several countries have tackled their problems more realistically. The Federal Republic of Germany has a Ministry of Youth, Family Affairs and Health. France has a Ministry of Youth, Sports and Leisure. The Netherlands has a Ministry of Cultural Affairs, Recreation and Social Welfare, and Australia has a Federal Ministry of Youth and Employment.
  The options available to the House are either a tight, education-based service or a wider, community-based service. I would opt to combine youth with the responsibilities of the Minister with responsibility for sport, much along the lines of the composite Ministries in the EEC.
  In past years the DES has failed to provide both an education system that is suitable for a modern industrial State and a youth service to meet the challenge of our times. If investment has to be made in men or in institutions there is no doubt in my mind that it should be made in the former, because man may shape institutions and he may act as a catalyst to produce change.
  The success of a nation rests on the ability and talents of its people, but what frequently happens is that their abilities are stultified by bureaucracy, enthusiasm becomes misdirected, and rich energies are spent on purposeless ventures. The new generation will not be ignored. It is more likely to embrace the democratic purpose if it is practised in the art and if it is involved and
  50
  participates in society, if the habit is actively inculcated in earlier years.
  I mention one or two facts about finance, since finance appears to be at the heart of most problems today. In 1978 the number of young people under 21 was 17½ million. In 1978–79 expenditure on education worked out at £8,316 million and £95 million was spent on youth and related services. That works out at 1·14 per cent. For every pound spent on education a penny is spent on the youth service. It is estimated that the cost of vandalism—£100 million per annum, of which £50 million is in schools—is, oddly enough, equivalent to what was spent on youth and related services in 1978–79.
  Among young people over 16 years of age, 32 per cent. of expenditure goes on the top 10 per cent. of the youth population and about 1 per cent. on the remaining 90 per cent. That is grossly unfair. The Secretary of State—who is not here this afternoon, for reasons that have been given—foresaw the problem in his "Cinderella" speech on 3 March 1979. It may be right for me to quote precisely what he said:
  "The Youth Service must surely be the cinderella service of education. More than three decades after the 1944 Education Act, it is still a malformed creature. Indeed, I doubt whether many people realise that the Secretary of State for Education and Science has any responsibility for it at all. And the response of local authorities to the need to provide services and recreational facilities for young people varies enormously. I am whole-heartedly committed to the ideal of a flourishing Youth Service in every part of the country. This must mean allocating adequate funds within the education budget for local authorities to strengthen their youth services in particular by giving support to voluntary bodies, who do so much voluntary work in this field."
  The Secretary of State indicated that he truly recognised the problem of youth and intended to tackle all the problems before him. In May 1980 he said that the Government's expenditure plans assumed that
  "current expenditure on youth and community projects will be held at about the present level both in the case of spending by local authorities and of central support for voluntary organisations. Capital expenditure is planned to fall in both cases."—[Official Report. 13 May 1980; Vol. 984, c. 434]
  The House might be interested to know what has happened. Fortunately, we have the report produced by Youth Service Partners, which said:
  "In these authorities "—

  51
  it surveyed about 75 per cent. of local education authorities—
  "the statutory sector of the Youth Service is being reduced by an average of 9·9 per cent. whilst support for the voluntary sector is being reduced by 13·8 per cent."
  It went on to indicate:
  "The highest spending authority spent 14 times as much as the lowest spending authority on each young person in their area. The lowest spending authority spent approximately 5 pence a week on each young person."
  I emphasise that there is no common standard of provision for young people and that the range of variation in expenditure appears to reflect a different commitment to the youth service by different local authorities. I think that every hon. Member will recognise that the voluntary organisations have made the greatest contribution in the past and that they are the most inexpensive organisations working in conjunction with the youth service. Yet it is that area of activity that is being cut back much more than the statutory sector.
  In the area of social and environmental services about 5 million people undertake voluntary work during the year and about 16 million hours are worked each week. That is equivalent to 400,000 full-time staff jobs, which, in turn, is equivalent to exactly twice the number now employed full-time in the statutory social services.
  That may all appear to be rather technical, involving many figures. I cap my case by saying that I calculate that the grants by the Department of Education and Science for 1979–80, including capital grants, work out at approximately £5·8 million. That is equivalent to the cost of building about two miles of three-lane motorway. Another illustration is that tax revenue forgone due to the extra-statutory concession on the taxation of coal miners' free coal in 1979–80 is estimated at £20 million. That is not far short of the grants made to youth services by the Ministry of Defence, the Department of Education and Science, the Department of Health and Social Security, the Home Office and the Department of Foreign and Commonwealth Affairs.
  Local authorities are obliged to make the greatest contribution of all, but it is a severe indictment of them that they do not recognise that while they are pre-
  52
  pared to cut down provision for youth their expenditure on other matters has gone up significantly, as in their dealings with vandalism and juvenile crime. It is a great pity that the Youth and Community Bill was lost last Friday because of lack of time. That Bill was designed to deal with exactly this situation.
  There are three areas of concern that I wish to mention to the Minister. The total of unemployed young people under 19 is roughly 172,000. That is 11·9 per cent. of all those unemployed. When we compare these figures with those for the higher age bracket we find that the position in January 1980 was as follows: in the age group 25–49 the number of unemployed men was 5·6 per cent., not 11·9 per cent., and the figure for the 50–59 age group was 5·5 per cent. The percentage figure begins to rise significantly among the over-60s. I believe that the House understands the reason for that.
  Special employment and training measures exist and they help youth significantly. The youth opportunities programme, the special temporary employment programme, training in industry and community industry provide 109,000 places out of a total of 314,000 places, which is about one-third.
  I wish to ask the Minister a few questions. Is the YOP programme big enough, in view of unemployment trends, particularly as unemployment affects young people more significantly than other age groups? What happens within 12 months after a young person has emerged from the youth opportunities programme? We had guidance the other day when it was indicated that the percentage of young people entering normal employment on leaving that programme in Scotland was 64 per cent. The remainder had no jobs. They must remain unemployed. The figure in 1978 was higher, at 68 per cent., but in Wales, for example, the figure in 1978 was 67 per cent.—significantly better than the figure of 53 per cent. in 1979.
  The problem therefore arises that, while a part-time palliative is created and young people can go into industry and learn all about work, after they have completed the maximum of 12 months, if unemployment is still high, what will be the next move? Do they go back on the dole, or is further provision to be made? I must

  53
  ask the Minister whether the Government will now unfold further plans to cope with this specific, difficult and urgent task.
  Another point of concern is that the Home Office working party report on fires caused by vandalism indicated that vandalism accounts for the largest percentage of the cost of fire losses. Losses in 1977—the most recent year for which figures are available—was between £80 million and £100 million. That represented about one-third of the cost of fire losses. The number of recorded cases of arson increased from 2,500 in 1970 to 9,400 in 1977. The conviction rate, as one would expect, was between 25 per cent. and 33 per cent. Two-thirds of those who were convicted were children between the ages of 10 and 17. On a more parochial note, the number of detected cases of vandalism in Bedfordshire was more than 1,000, 38 per cent. of which were committed by juveniles.
  I was rather impressed by an observation made by the chief constable of Cleveland, Mr. Christopher Payne, who advocated that the expansion of community service orders under the 1973 Act was probably the way round this situation. Delinquents would, in effect, be making reparation, not in financial terms but in physical effort, and it might make them realise the time and effort required to rectify damage perpetrated in seconds. Prevention of vandalism costs money, and local authorities should recognise that fact.
  If we do not go for prevention of trouble, which we could do by youth provision, we must face two significant things. The cost of keeping a person in local prisons or remand centres is more than £5,400 a year. If he is detained under the security category provisions it costs more than £12,000 a year. On the other hand, he may be kept in a home. There was a significant answer on 3 July this year, which showed that:
  "In the year ended 31 March 1979 the cost to local authorities in England of maintaining juveniles aged sixteen and under in community homes was £166·9 million, exclusive of administrative and field social work costs"— [Official Report, 3 July 1980; Vol. 987, c. 655.]
  Those figures should bring back to the House the importance of the preventive route, that is, more youth provision than that generally adopted by magistrates.
  54
  Young people should be put out on community service orders, which I recommend above all else. At the same time, custodial treatment is likely to be expensive for the State, and I am not certain whether it will do youth very much good.
  The final concern relates to drugs and alcohol. The average age of drug offenders tends to increase, although many younger people continue to be involved. In 1978, the figures were 24 per cent. under 21, and 17 per cent. over 30. The age of notified addicts is increasing. There were 13,394 convictions in 1978, of which 85 per cent. related to cannabis. However, that represented only the tip of the iceberg. The number of people who have tried cannabis is probably about 5 million.
  In England and Wales in 1978, the number of young people found guilty of or cautioned for drunkenness in the 17 to 21-year-old group was 19,871. In my opinion, the best antidote to drugs and alcohol is youth provision and youth involvement.
  I apologise for adducing a lot of figures. It would probably be better if they were read rather than used in the way that I have used them this afternoon. But one is primarily concerned with the future of young people and the way. I mentioned earlier that the House could either make provision for them or make it possible for them to reach their own stature by their own right. That is the preferable course. Once boys or girls are motivated, very little will go wrong with them. On the other hand, if they stray or become detached from society the results are inclined to be totally unsatisfactory.
  Recently, there was a fourth attempt to introduce legislation to reform the Education Act 1944. That failed last Friday. We are faced with a new challenge. What step do we now take? The Minister may have something to say about that. This matter cannot be left where it is. I have a feeling that the Government will do something—because they must—to face the challenge. The situation is getting worse throughout the country. It is no good referring to the many millions of young people who have made their mark in the universities, State schools and elsewhere. We are concerned with the many young people

  55
  who have not succeeded. They could succeed. The material in them is good. All that they need is the encouragement and persuasion, and perhaps the drive, which they could pick up from youth provision.
  I congratulate the statutory workers who are engaged in this sphere as well as the many voluntary organisations throughout the country. They have made a splendid effort. They could do more, but over the course of time we discover that they are receiving less encouragement than they should. Let us hope that the Chancellor of the Exchequer will take the view that if anyone gives money for youth it shall be regarded as a charity that will not attract tax, so that it can be used for that purpose.
  This country is not short of money or ideas, but youth is short of protection. Youth wants a stimulus, and it is for this House to give it.
  4.36 pm
  Mr. Neil Kinnock: I have the unfortunate task of offering my commiserations to the Secretary of State, who cannot be with us this afternoon. His misfortune is doubled, because not only could he not be here to hear the speech of his hon. Friend the Member for Bedford (Mr. Skeet), but it is the right hon. and learned Gentleman's birthday today, a distinction that he shares with Mr. Ringo Starr and my wife. Consequently, today I have more than my usual sympathy with the right hon. and learned Gentleman.
  We have just listened to a fine and well-informed speech. The hon. Member for Bedford did not have to apologise for the use of statistics. The best way of illustrating many of his arguments was to use the kind of figures that he used. We must congratulate him not only on his speech, perspicacity, foresight and luck in coming first in the ballot for Private Members' motions but on the tenacious way in which he sought to get his Youth and Community Bill on to the statute book. Sadly, that came to naught on Friday afternoon.
  Because of the absence of the Secretary of State, we have with us the Under-Secretary, who I understand was largely responsible for the demise of the Youth and Community Bill. However, we
  56
  acknowledge that he was only fulfilling his duty. Despite the fact that that Bill commanded widespread support among Conservative Members, the Government treated it as a means of avoiding any financial implications that might have arisen as a consequence of its enactment. We on the Opposition Benches felt it to be a necessary measure to improve the youth services of this country and a means of taking advantage of the zeal and enthusiasm of young people and those associated with them, including those in the voluntary sector.
  The Government's act in not allowing the hon. Member for Bedford to proceed with the Youth and Community Bill was in some way an Act of infanticide, because I understand that the measure was conceived in the Conservative Central Office and that in many ways it was the product of the Young Conservatives, an organisation which I hold in the greatest possible respect. I hope that Conservative Members understand what I mean. It is a measure of their utter harmlessness that I should hold them in respect.
  It was a well-intentioned Bill, which had remarkable antecedents. It is unfortunate that the Government have sought to use the objections of local authorities to the implementation of the measure which the hon. Gentleman proposed. We all know that the local authorities did not object at all in principle to that Bill but, rather, were fearful of the financial consequences that might arise from it. Therefore, they were caught in the pincers of wanting to implement the sensible proposals made in that Bill and, unfortunately, of being unable to contemplate doing so because of the way in which the Government have treated them by refusing to allocate finances even to enable them to maintain their statutory services in a way that they would like, let alone provide additional services that would be of benefit to youth and many others in the community.
  The motion speaks of the problems of youth in contemporary society, which are many and varied. There are the eternal problems of youth which arise simply from the fact that they are the youngest people in society, and throughout the ages youth's response to those problems has been criticised. They are newcomers to the labour market, and they are new entrants to the consumer

  57
  market. That is a permanent and natural fact which is exacerbated as a problem in any society where the expense of consumption is inflated and where the access to the labour market is constricted. In our contemporary society, with its giddy inflation and accelerating, menacing levels of unemployment, the problems of youth today are greatly compounded by the economic difficulties that are suffered by the whole of society, including youth.
  Added to those problems of consumption and employment is the fact that youth today is the target, as at no time before, of a merciless commercial onslaught by those who seek to dictate fads for profit, who dictate fashions as an indiscriminating part of our consumer force. That means that youngsters with money are exploited, and those without money become disappointed, resentful and alienated. The problems extend well beyond those that are obvious in terms of unemployment into problems of low pay, inadequate and bad housing, and extremely expensive housing, whether it is rented or whether it is acquired on a mortgage by newly married couples. Further problems are compounded for them by the fact that they are, without inviting the problem, at the frontier of the law and order initiatives of the Government. They therefore suffer disproportionately as a consequence of the zealotry that the Government seek to encourage in some areas.
  Whatever the financial background of those youngsters, whether they are in or out of work, whether they have money in their pockets or whether they do not, they have several common needs. They need guidance in order to ensure their personal development, and in this age of advancing technology, where attendance at places of work—even when it is possible—is becoming increasingly less necessary, it should include assistance in the use of extended leisure as well as in the advancement of understanding of the functions, duties and rights of citizenship.
  These young people need improvements in the provision of their education, including the provision of education in post-school years. The record in Britain in that respect is far from glorious in comparison with other advanced economies. These youngsters need training
  58
  in various forms, and in the light of our economic and technological realities, preferably training that is increasingly broad and flexible so that they are not incarcerated in one trade or skill for the remainder of their working lives. Without that, their insecurity during part of their working lives will be increased by the nature of the industrial and structural changes that take place. Above all, these youngsters have a need for work. That is not a stark or Dickensian prospect. I am not trying to play Mr. Gradgrind to the Under-Secretary's Mr. Chokumchild.
  Repeatedly, in every investigation of opinion, whether on a personal level, in conversations with youngsters, in opinion polls, or in studies of the youth papers produced by the various political or voluntary bodies, again and again the proposition is made that youth wants to work as much as it ever wanted to work. It wants interesting work as much as it ever wanted interesting work. It wants training, education, preparation and help to get that work as much as it ever wanted it. I wish to concentrate on that aspect of the problems of youth in contemporary society.
  According to the latest figures, 245,600 young people under the age of 20 are unemployed. That figure includes 187,000 school leavers, and in the latest figures available that total had risen by 137,000.Those young people under the age of 20 constitute 6·4 per cent. of the total labour force, and 16·9 per cent. of all those unemployed. Therefore, there is a massive disproportionate effect of unemployment among the under-20s, as the hon. Member for Bedford pointed out. One in 14 of all young people aged between 16 and 19 is without work. That is an immense proportion of young people who should be able to look forward during this period of their lives, if at no other, with a certain eagerness and a spring in their step as they move from childhood through adolescence into all the responsibilities, adventures and opportunities of adulthood. But for that significant proportion of youngsters, those opportunities are denied and there is no spring in their step as they trudge from potential employer to potential employer, from jobcentre to jobcentre and from employment office to employment office.
  Other problems are obscured by the figures. We are not talking about what

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  the American sociologists call a self-perpetuating culture of poverty. Admittedly, among those youngsters are those with the lowest ability, those from family backgrounds that are of little assistance, and those who live in slums in our inner cities or in remote rural areas, but, increasingly and worryingly, youngsters of above average ability and with academic qualifications are forming a larger and larger part of youth unemployment. We have only to look at the catastrophic fall in opportunities for apprenticeships in industry and commerce that are now taking place to measure the change in the nature of youth unemployment. That is as sad, tragic and alarming for the rest of society as the sheer size of the increase in youth unemployment in our time.
  There are also regional variations in those figures that are frightening. In Merseyside, Scotland, the North-East and South Wales, we are talking about proportions not of 16 per cent. but of 20 and 25 per cent. of young people who are unemployed. The consequence for those areas is a future that is a grotesque mirror of the past. Unless something dramatic is done to change the situation, we shall see in the next generation a mirror of what happened in two previous generations—mass desertion, depopulation and industrial refugees of young ages streaming out of Scotland, Merseyside, the North-East, South Wales and other afflicted parts of the country.
  The figures also disguise the fact that within that general large army of unemployed youth there are sections that are particularly badly afflicted. For instance, we know that girls will suffer worse than boys. We know that blacks suffer worse than whites. We know that handicapped and disabled youngsters suffer much worse than their fit contemporaries. Bad as things are for the fit, white boy, they are immeasurably worse for any of those other groups. The prospects of securing the succour of secure and satisfactory employment for youngsters who are disabled, for girls and for blacks in our society, are extremely remote—so much so that it is not exaggerating to talk of them as young people of the abyss in our time, in the 1980s. When we are talking of figures of 16, 18, 20 and 25 per cent., it is no exaggeration to talk of mass unemploy-
  60
  ment among the youngsters of this country.
  Those are awful facts. Had they been mentioned two or three years ago they would have brought jeers about exaggeration from hon. Members in this House and from people outside. The sad fact is that we are not talking in exaggerated terms as we described the position on 7 July 1980.
  No one can fail to recognise, either, that apart from those huge figures, for every boy and girl appearing in them probably another one will have taken on an unsatisfactory job as an act of economic panic. The inclination, quite understandable and natural in many ways, is not to try to prolong the time spent in school and not to try to delay the jump from education into the labour market by trying to remain in education for the purposes of training or of trying to seek and negotiate a better start in life. The inclination instead is to take the first job that comes along.
  The consequences of that, in terms of dissatisfaction, of alienation, of irresponsibility at work and of industrial delinquency are easy to foresee, but they are difficult to measure in advance. If a young person begins his working life in such unsatisfactory circumstances, and does not take a particular job or seek a profession or occupation by choice, the chances of his being an undesirable or unsatisfactory worker, having accepted undesirable or unsatisfactory work, are that much stronger.
  What have the Government done about it? Given that short, sharp shocks provide no refuge and constitute no adequate policy for dealing with youth unemployment, youth dissatisfaction and the effects of both, what approach have the Government taken?
  The first thing that we have seen is the Manpower Services Commission chopped up and the youth opportunities programme jeopardised in the process. Some frightening figures are being produced in this respect. The Manpower Services Commission's manpower review for 1980, published recently, said:
  "We will be unable to meet the demands on some of our major services"—
  that apparently includes the youth opportunities programme—
  "at a level we consider to be necessary."

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  That is a bland and direct statement. It is backed by a close treatment in the survey itself.
  However, even more fearful is the evidence given to the Select Committee on employment last Wednesday by Mr. Geoffrey Holland, head of the MSC's special programmes, division. It was reported in only one paper, yesterday's Observer. The article by Robert Taylor begins:
  "Only one in four of Britain's unemployed youngsters can expect any help from the Government's youth opportunities programme. This was the startling admission from Geoffrey Holland, head of the Manpower Services Commission's special employment programmes, before an unreported session of the Commons Select Committee on Employment last Wednesday."
  I draw the attention of the House to these figures.
  The article continues:
  "He estimates that there will be 190,000 school leavers still in the dole queue by the first quarter of next year, along with another 237,000 young people under 18, making a grand total of around 427,000. But at the same time only around 100,000 youngsters will be on YOP, 6,000 in community industry, and up to 20,000 in employment as a result of 64-year-olds leaving employment under the job release scheme."
  Those figures are bad enough—indeed, they are the figures that I intended to use in the course of the debate, giving them as an illustration of the fact that the Manpower Services Commission has striven, is striving and will strive manfully to deal with the problem—but the commission knows that it is impossible, on the resources that it has—even though I acknowledge that the Government have met the commission's demand for resources on the basis of forecasts of unemployment—to begin to deal effectively with the dimensions of the problem that it will face, for in addition to those figures—all of them for youngsters under 18—it is estimated that at the beginning of next year there will be over one-third of a million young people aged between 19 and 24 unemployed, in addition to most of those who are in the figure of 427,000 expected by the MSC.
  The prospect of there being well over half a million young people under the age of 24 unemployed in this country at the beginning of next year must horrify hon. Members, no matter on which side of the House they are, on which side of the
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  argument about monetarism, Keynesianism, reflation or deflation, they are, or whether they are wet or dry. They must share the horror that generally exists about the prospect of a whole generation being afflicted to that degree. That should call for the most immediate and effective action. So far, it has not. I understand that appeals are being made within the Government, but nothing has come forward so far in response.
  The Manpower Services Commission had some effective schemes for the youth opportunities programme, which achieved a 68 per cent. placement rate in the spring of 1979. The commission can see that placement rate falling to possibly as low as 50 per cent. or even lower. This programme, which has never promised to provide every youngster with a job on leaving school, has, nevertheless, been able to provide about two-thirds of youngsters with a job, but now it will be able to offer the possibility of youngsters moving out of YOP into jobs to a smaller proportion. These factors will have to be taken into account as the negotiations go on and the urgings take place inside the Government for additional resources for the Manpower Services Commission and the youth opportunities programme.
  Apart from that, the degree to which there has been a falling off by the Government in their commitment to youth is marked by the treatment of the other programmes—the special measures in addition to the youth opportunities programme. Community industry, the longest established, in many ways, of the attempts to meet the needs of the young unemployed, will, in the words of the Secretary of State for Scotland, be maintained at 6,000 places per year. That is in the face of enormously rising youth unemployment.
  The same policy applies to the special temporary employment programme. It will be maintained, to use the Minister's words again, at 12,000. In giving that information the Minister was misleading the House of Commons, for to maintain it at 12,000 is to cut it by a minimum of 2,000, and by as much as 7,000. Indeed, it will fall 18,000 short of the announced target of the previous Labour Government of 30,000 places by this time. That kind of shortfall is dramatic, especially as it is the kind of programme

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  that is especially intended to help unemployed youngsters of 19 to 24 who are at the absolute cutting edge of unemployment or in the most exposed position. It means that only about 1 per cent. of the long-term unemployed in that age group will be assisted by the special temporary employment programme.
  Figures of that sort are bad enough in themselves, but if we add together all the special measures and put them into the training for skills programme for action—known as TSPA, and another of the collection of initials that the Manpower Services Commission seems to spawn—we find that the provision of all those special measures in 1977–78 amounted to 33,414 places, and to 37,225 places in 1978–79. The Government's proposition is that all those programmes added together and the TSPA will provide 24,500 places. That is against a background of massively rising unemployment.
  I am drawing these figures to the attention of the House because I am talking to hon. Members—I include the Minister—who want a major increase in the commitment to youth employment programmes of various kinds and back the demands made by one or two members of the Cabinet for the Treasury to come to its senses and acknowledge the pressure to meet the needs of youth, to develop the youth employment initiatives already taken and to double, if not treble, that provision so that youngsters, who are in no way to blame for our current economic and industrial difficulties, shall not bear the brunt of the consequences of Government action or the condition of the economy. I wish them god-speed in their endeavours, but they will have to get greater numbers and force and a greater sense of urgency and impetus into their efforts before they can persuade the Chancellor of the Exchequer, the Chief Secretary to the Treasury, the Secretary of State for Industry or the Prime Minister to their view.
  In other spheres we have had undertakings from the Government, either in their manifesto or in subsequent announcements, to secure the expansion of vocational training. We have not seen anything in 14 months. We do not have an infant Government now. They are moving on in their second year. The
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  product of the promise on vocational training is nil. The product of the promise to review the institutional financing for youth provision is also nil. We need an additional Government commitment on a major scale to meet the needs of youth. That is vital.
  I hope that the Government understand that the youth opportunities programme cannot be, and is not, a replacement for youth and community services or for the careers service. The two should run hand in hand, gaining increasingly from the support of the Government in the light of the enormous task facing the MSC and local authority-based and voluntary provision in meeting the needs of unemployed youth.
  It is no use the Government robbing the local authorities and hypothecating the finances thus saved into the Manpower Services Commission in one form or another when the total effect is no better and probably even worse. Nor is it any good, as the British Youth Council has pointed out, the Government increasing the throughput of youngsters in various programmes with no additional expenditure, because most of the value of the youth opportunities programme and similar programmes will be lost if it is shortened any further than it is now. Greater use would be made and a greater return would be secured on the financial outlay if those programmes were extended in terms of the experience and opportunities provided for those youngsters.
  One of the worst acts of the Government, indicating their lack of commitment to the cause of youth, was the axeing of the youth service forum. I know that that was in the programme of the killing of the innocents—the mass murder of quangos. I am not a great supporter of quangos. I do not hold them in any particular affection, but this institution could have been increasingly useful. The view of many, of all political persuasions, who have been engaged in the youth service over many years is that for the youth service forum to be erased for no particular purpose seems an unnecessary and wanton act of destruction. It means that we have had no serious commitment from the Government in either an institutional or financial form to the voluntary youth sector, despite their election promises.

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  In many ways the youth service has been at the brunt of the cuts imposed by the Govenment on local government. A paper produced for the Youth Service Partners—it was referred to by the hon. Member for Bedford—showed that 24·3 per cent. of authorities are maintaining or increasing their expenditure—good luck to them—that 44·2 per cent. are cutting spending by between 0·1 per cent. and 10 per cent. and that 31·4 per cent. are cutting spending on youth services by more than 10 per cent.
  I understand why authorities are cutting spending, but I quarrel with the zeal with which some are doing it. I understand that it is because of the impositions and the cuts forced upon them by the Government. If we were not facing a crisis of youth unemployment, with all its social consequences, perhaps that would be tolerable in terms of the good husbandry of local authority expenditure. But, faced with a crisis of these dimensions, with reverberations that go through society, and with the increasing needs of youth for guidance, training, entertainment and leisure, it is intolerable that there should be major cuts in the provision of youth services.
  Perhaps the Under-Secretary will be able to give us some further details of the Government's attitude to the document "Better Start in Working Life". We have had a certain amount of lip-service and the establishment of a committee under the chairmanship of the Under-Secretary of State. However, because it is sitting in secret and, as far as I know, will not publish anything for some months—certainly not until the autumn—it is difficult to make any charitable assessment or analysis of the importance that we should attach to that activity.
  We need an expansion of the special measures and an extension of the unified vocational programme. That is among the most intelligent of the initiatives taken for mixing together all the services and improvements in provision for meeting the needs of youth, taking into account the modern dimension of changes in the nature of our employment market, employment needs and technology in a way that neither the employment service generally nor the education service has hitherto been able to do satisfactorily. We need an additional commitment so
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  that local education authorities are not required to make cuts in essential services to youth.
  I offer two warnings to the Government. First, their reliance on private sector provision to meet the need for youth employment is entirely ill-founded. I say this with regret, but it is a fact that 60 per cent. of the youth employment programme is in the so-called WEEP—work experience on employers' premises—scheme. That is altogether healthy, especially as a useful contact is established and often youth opportunities programme youngsters are able to continue with the firm with which they undertook their WEEP experience. But, as the Under-Secretary of State will know, industry is in a state of collapse. Many firms are contracting their labour forces. The realities of depression, with high interest rates, inflation, an overvalued pound and all the other problems affecting both private and public industry, mean that it will be increasingly less likely that industry will be able to take on youngsters either as full-time employees or under any kind of full-time opportunities programme.
  That is a tragic position, but it arises in large part from the Government's decision to "squeeze" inflation out of the economy. In the process of that squeezing the Government are throttling employment opportunities and the greatest sufferers are young workers, young would-be workers and older workers, as the hon. Member for Bedford showed in his profile on the problems of unemployment.
  One answer was offered by the Secretary of State for Industry. A week last Sunday he said on the radio that people can price themselves into jobs. That is an old story for the young unemployed. There have been frequent periods in our history when, to relieve pressure from wage demands and rising costs, employers have offered youngsters jobs and displaced older workers. The maxim for it is "men's work for boys' pay". Of course, vicious indenture and apprenticeship systems have been built upon the fact that youth labour has always been cheaper than adult labour. I hope that the Under-Secretary will say this afternoon that the Government will not make any attempt to encourage the development of that attitude, because that would only increase the already substantial bridge between the

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  young people of Britain and the remainder of our society.
  What it all means is that the Manpower Services Commission's desire to secure a trebling of employers' offerings to take people on the WEEP schemes has no hope whatsoever of fulfilment. The MSC has already set its hand to the task of trying to find alternative means of generating employment opportunities for youngsters, but unless and until there is stimulation of the economy, a substantial measure of reflation and a substantial measure of recovery, the possibility of young workers, just like old workers, getting the jobs that they should be getting is remote.
  To think that local authorities can make up the difference and replace the private sector as the major sponsor of WEEP schemes is nonsense. There is no possibility of that being done, because here again they are caught in the tentacles of the Secretary of State for the Environment and are denied both the resources and the permission to raise additional funds to undertake their own schemes for work provision for youngsters.
  There are many dangers that develop as a result of the system which the hon. Member for Bedford has described and the problems to which I have tried to draw attention and to which other hon. Members will draw attention during this debate. When we advocate an educational maintenance allowance so that we encourage youngsters to stay in education to improve their qualifications and to serve the country by being better equipped and better qualified for our new technological and industrial demands, and when we advertise that as a means of counteracting unemployment, I do not think that we are featherbedding or mollicoddling youngsters. I think that we are simply trying to come into line with the provisions that exist in so many other countries of similar industrial and economic status.
  It is a horrifying fact that barely 50 per cent. of our 16 to 19-year-olds are in any form of systematic training, whether in school, university, advanced further education or further education, apprenticeships, day-release schemes or the MSC schemes, and we compare hideously badly with competitor countries
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  in terms of the provision for those young people. Obviously, that must change.
  As Mr. Holland pointed out in a speech in Cambridge on Saturday, summing up the choice before the country:
  "Whilst it may be possible for industry and commerce to survive in the short term without young people, in the long term they cannot do so unless the people they employ have increasingly technical skills, welcome change and can readily adapt to new methods. Employers will get none of these things unless they are prepared to offer a very much better deal to young people.
  The same goes for the Government because of the problems of alienation, of uproar, of social dislocation and of resentment on a mass scale that we face if we do not make proper provision for our youngsters in terms of employment, youth services and careers, and in terms of preparing them in every dimension for their lives as adults, citizens and workers.
  Mr. David Hunt: Will the hon. Gentleman turn his mind to what many consider to be the most important part of the motion, namely, that part which deals with the youth service? I accept that he should comment on youth unemployment and those problems, but there are many outside the House in the youth world who were sadly disappointed at the lack of any initiatives from the previous Government. Indeed, some of them saw the hon. Gentleman's appointment as an indication that they could expect some new policies. As yet, he has not announced them. Are we to be disappointed?
  Mr. Kinnock: I have been trying not to follow the mistake of the Conservative Party when in opposition, of making flippant promises about future policy which there is no intention of fulfilling. That is why I have not offered any details. But one of the working groups that we have is that of the education and science sub-committee of the home policy committee of the national executive committee of the Labour Party. [HON. MEMBERS: "Oh."] It is a direct form of democracy, which means that members of the national executive committee and those practised and expert in the youth service can join in a working group and others can tender evidence to that group for the purposes of providing a conclusive policy, which will give us

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  the force and the impetus, one hopes, for getting the kind of resources without which manifesto promises are just words on a piece of paper.
  I hope that the hon. Gentleman will bear with us a little longer. I hope that when we produce the policy we shall enjoy his support in Divisions in the House, which we shall cheerfully force, on the difference between the youth service policy that we shall then have and the one which his Government so sadly lack. I am aware of the hon. Gentleman's expertise and commitment in these areas, and I only wish that his influence was extended and rewarded by the attentions of the Government Front Bench. He is possibly in a better position to achieve that than I am. Perhaps that position may change at some time in the future.
  The remainder of the motion, as the hon. Member for Bedford says, offers any amount of room for consideration of the real problems of youth. Indeed, the way in which it asks for an advance on the provisions of the Education Act 1944 provides scope for a debate in itself. The hon. Gentleman will understand that, in trying to choose objectives, I had to pick just one or two areas to cover. I believe that I am entirely justified, because of the grave situation facing the youth of this country, in choosing to give most attention to the problems of unemployment. I hope that the hon. Gentleman, in his earnestness and in his attention to the problems of youth, will get the reward that he deserves, which is effective and urgent action by the Government to deal with the major problem looming before youth in our contemporary society through the absence of satisfactory jobs, the absence of jobs, and the absence of necessary and satisfactory training and education. If he gets that reward, he will deserve the thanks of the whole country.
  5.17 pm
  Mr. John Lee: No debate on this subject in the 1980s can fail to be dominated by the grim realities of youth unemployment on a scale unknown in this country, probably, since the 1930s. The hon. Member for Bedwellty (Mr. Kinnock) has referred in some depth to this matter. It is a sterile and pointless exercise to look back and apportion blame as between previous
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  Governments, management and the trade unions, and I have no intention of doing that.
  There are, however, four new factors which must now be considered, as compared with the situation during earlier debates on this subject some decades ago. First, we in this country have no conscription. Secondly, we have welfare provision on a greater scale than has existed hitherto. Thirdly, in our inner city areas we have a second generation of ethnic minorities, who are amongst our most disadvantaged. Fourthly, we have a younger generation that is likely to be better educated and more socially aware than in the past. In totality, therefore, we are dealing with a whole new dimension.
  Too often, initials and phrases used in the House have no meaning to the mass of young people. Initials such as "PSBR", frequently used here, are most likely to stand for poverty, sorrow, boredom and restlessness—or, perhaps, rebellion—to unemployed youth.
  The social and political dangers of substantial numbers of unemployed young people cannot be overestimated. Extremists of the Left or of the Right are gathering like vultures. It is true that society has a number of safety nets, ranging from youth groups designed to cater for particular interests, be they sporting, religious, special interests or political interests, to professional youth bodies such as the National Youth Bureau, of which I have the honour to be chairman, through to Government-sponsored industrial training boards via the youth opportunities programme and similar schemes.
  Are those schemes on a sufficient scale to deal with the whirlwind which now approaches? Let us not delude ourselves that British industry, now going through the equivalent of open-heart surgery, will be able to generate the necessary job opportunities in the short to medium term.
  What is required? The Government should establish immediately as a matter of the highest priority a new youth commission to examine the problems, the resources available and the possible course of action open to the Government. The commission should take evidence from all interested bodies—for example, from both sides of industry and from

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  those involved in youth work at all levels. It should accept representations from Government ministries, from local authorities and from the education profession. The commission must report with speed, as time is not on our side. Government action must follow swiftly.
  I personally would favour a three-year Young Britons'-type scheme. I respectfully suggest that something of that nature—a national commitment—is required. It should be launched under the aegis of someone like His Royal Highness the Prince of Wales. The scheme that I have in mind would be very much voluntary in its nature. I suggest that the first year should consist of basic military training with limited annual training thereafter on lines operated so successfully by the Swiss. I know that the Armed Fores would not be too keen, but they have the embryo facilities and the cadre of instructors.
  I suggest that in the second year there should be more community involvement and training with, for example, a choice extending to the fire service, the ambulance service, hospitals, possibly mental hospitals, old people's homes, and especially a new and growing civil defence body, which we should have sooner rather than later.
  In the third year there should be industrial or craft training geared to certain industries. I recognise that that happens now to some extent. I hope that firms would provide facilities if such a scheme were adopted, and that colleges and schools would allow their facilities to be utilised to a greater extent as part of their participation in the training programme.
  I accept that such a scheme would be expensive, but so is youth unemployment. It is expensive in financial terms and even more expensive in human terms. The question is whether we can afford not to embark on a programme of such scale. Young people have many fine qualities, and we in the House have a duty to point the way, to restore pride and a sense of purpose to so many demoralised young people, to provide a ladder from the trough of despair and, above all, to lead the nation in holding out a hand to our youth and saying to them "Your future is our future. We are together, one people."
  5.24 pm
  Mr. Alfred Dubs: Over the past 20 years there has been a threefold increase in the number of young offenders. The increase in the number of young girl offenders has been greater than that for young boy offenders. There has been a great increase in the number of young people going to penal institutions. In 1961, 62,000 young people were taken into local authority care. By 1978 the figure had increased to 101,000. It is known that the majority of young offenders have previously been in local authority care before coming before the courts and getting into further trouble, if they have not been in trouble before going into care.
  Anyone who visits penal institutions and who meets and talks to young people in custody will realise that they are very much like young people who are not in custody, young people who perhaps have not committed any offences. There is a thin line between a young person's becoming an offender and his staying out of trouble. The nature of that thin line must give great cause for concern.
  The number of young people in trouble may still be relatively low. However, it must cause us all concern that the numbers are increasing and that for many young people in inner city areas a crisis is developing. Why is that? There are more pressures on young people in our society now than in the past. Young people have to survive difficulties, strains and stresses which our generation did not have to endure. Schools are finding it hard to cope. Some children become truants and drop out of the school system. That is only part of the difficulty.
  What are the reasons for the genuine crisis facing many young people in our inner cities? The principle reason is unemployment. Many of those who leave school cannot find jobs, or they cannot find jobs related to their skills and achievements. The unemployment figures are bad enough, but there is much evidence that they are an underestimate of the true nature of unemployment among young people. Kids who hang about the streets because they are unemployed are liable to get into trouble. That is more likely to happen if they are on the streets than if they are at work or doing other things. It is also known that the level of

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  unemployment for young kids underestimates the difficulties facing black youngsters, who may find it two or three times more difficult to get work than their white contemporaries.
  Another reason why our youth is in crisis is that boys and girls are maturing earlier. Their needs and aspirations may be very different from the constrained and confined school environment in which they find themselves in their mid-teens. Some of them under-achieve. They enter the adult world at a disadvantage when seeking the more limited job opportunities that are available.
  There is the difficulty of the transition from school to work. It is a factor that must be considered in more detail. Some of the difficulties facing young people arise from the difficult step of moving from their school into work, into a work place for which they are not as well prepared as they might have been.
  Young people feel an alienation from their environment. That is sometimes expressed in vandalism or outbreaks of antisocial and sometimes criminal behaviour. There are perhaps changing parental values and attitudes. Young people fall out with their parents. They leave home because they have rows with their parents and they do not feel able to stay in the parental home. Grandparents and other members of the family are often further away because of housing difficulty, and parents are facing a burden that a generation or two ago grandparents and others were able to share.
  There is a break-up of whole communities consequent upon the way in which we have redeveloped inner city areas. Some years ago a block of slums was being cleared. A brand-new council estate was nearby, but the housing department of the local authority refused to move the slum dwellers in one community onto the new estate. As a result, the community was broken up. That must have been disturbing for the individuals within it.
  Mr. Robert Atkins: I ask a question of the hon. Gentleman in all sincerity. It is a genuine inquiry. I do not dissent from the view that he is advancing about the difficulties of under-privileged young people in inner city areas and the pressures that they
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  have to bear. However, will he comment on some of the reports that, where there has been vandalism, or apparently senseless violence on football grounds, for example, many of the children involved come from normal middle class homes and good backgrounds? They seem to contribute just as forcefully as some of those from deprived areas of inner cities, although in some instances working-class standards are much stronger in their effect on children than middle class standards? Will the hon. Gentleman explore that factor?
  Mr. Dubs: I thank the hon. Gentleman for his intervention. I agree that it is a difficulty. I accept that there is no simple answer. I shall turn to some of the reasons why children from advantaged homes get into difficulties. As I have said, there is no simple solution. It would be facile to suggest that there is one problem that causes young people to get into difficulty and that if it is removed they will not continue to get into difficulties. The situation is much more complicated than that. It is much more difficult and not nearly so susceptible of solution.
  Many council estates contain communities that have been broken up. They sadly lack the facilities that keep young people occupied. Idle young people are more likely to get into difficulties than those who have things to do, and youth clubs and other activities to enjoy. The council estate comes first. All too often facilities are tagged on several years later, if at all. That is another cause of tension.
  During the last 20 or 30 years society has exhibited ostentatious affluence. There has been great emphasis on material goods, which in turn have offered temptation to young people. We have seen a pop culture. The advertising world has blasted at young people. There has been a general commercial exploitation of the young. The more susceptible have been too easily carried away and have got themselves into trouble. It is little wonder that various cults have proliferated, such as those of the punks, skinheads, suedeheads, mods, rockers, rockerbillies, teds, soul cats, rastas and rebels, to name but a few. Such cults are symbols of rebellion and are sometimes worthy and sometimes anti-social and damaging.

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  There is a tendency among the young to become involved in heavy alcohol consumption and drug taking. Solutions are difficult. I am convinced that the solution does not lie in penal institutions. By the time young people are taken into custody it is difficult to help them. We must help them before they get into trouble. Only a labour- or person-intensive means of helping them will work. However, we may not have the resources to do that, even if we become more affluent. We must help as many young people as possible and ensure that they get through the difficult years of their teens. We must prevent them from getting into trouble, so that they achieve a more mature outlook without a criminal record and without the difficulties that such a record involves.
  Some hon. Members have already said that we must keep young people busy, interested and active. The responsibility lies on the Government and local authorities to ensure that there is plenty to occupy them. Those who have nothing to do and who hang about will get into greater difficulties.
  I am not satisfied that we deal satisfactorily with the transition from school to work, and its effect on 15- to 16-year-olds. Teachers are aware that society has not managed to do the best for those in their last year. Young people are often alienated during that last year at school. They drop out, and are more damaged than they would have been if they had left school earlier.
  Mr. Skeet: If we raised the standard of school teachers in the United Kingdom and the way in which they conduct classes, might we not find a solution to the problem? A boy or girl will spend much of his or her time at home but much at school. Should we not place greater emphasis on young persons' preparation for life?
  Mr. Dubs: I do not accept that, if we improve the standard of teaching, we shall solve such problems. We ask too much if we expect teachers to tackle and solve problems that go wider and deeper than the hours that young people spend in particular classrooms with particular teachers.
  Mr. Tony Marlow: Although there is a philosophical divide between the two parties. I have great respect for the hon. Gentleman. I would be interested to hear his views on the subject put forward by my hon. Friend the Member for Nelson and Colne (Mr. Lee). All other countries in Europe have some form of national service. We do not wish to put people in the Army, and so on, but does the hon. Gentleman believe that there is scope for a form of national community service? That service would consist of a voluntary organisation whereby young people could be brought forward on a voluntary basis to work and contribute to society. At that age, young people want to commit themselves, to do things, and to help. Does the hon. Gentleman believe that some centralised, national voluntary organisation could be proposed that had his support as well as ours?
  Mr. Dubs: I am not sure that I have understood the hon. Gentleman's argument. A case can be made for harnessing the energy and enthusiasm of young people. Many young people work on voluntary projects in Third world countries. However, I am not sure that arrangements similar to those involved in national service are the best means of harnessing such energy. Such arrangements might attract those who are already managing and who are not in the difficulties that others face. They might represent a nice option for those who are not in trouble, but they would not tackle the difficulties facing the young offender, or potential young offender.
  There are advantages in tackling differently the last year that 15- to 16-year-olds spend at school, in achieving better links between schools and work, in devising vocational links and in using the last year as a preparation for the step into work. I appreciate the difficulty that some teachers have expressed. Children might be classified as academic or non-academic and that would prove disadvantageous. However, I believe that teachers can make sensitive judgments about whether a young person needs greater vocational than academic preparation. Several European countries, including Germany, Switzerland and Austria have tackled this problem. If we do so too, it will be to the good.

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  We need a wider concept of apprenticeship. At present, our ideas of apprenticeship are confined to a narrow range of occupations. The transition from school to work would be enhanced if apprenticeships were applied to a wider range of occupations. That would give young people a better start in the first and difficult transition into work.
  5.37 pm
  Mr. David Hunt: I congratulate the hon. Member for Battersea, South (Mr. Dubs), as he has proposed a range of imaginative solutions to the problems facing youth in contemporary society. I agree with many of his solutions. I also congratulate my hon. Friend the Member for Bedford (Mr. Skeet). As I said on Friday, on Second Reading of his excellent Bill, he has leapt into the youth scene from other pastures, undaunted and undeterred by personal injury. In those other pastures he had a reputation for specialising. He has now shown a great deal of imagination, and has held extensive consultations with the group working in the youth sector. Such groups have always felt neglected. He has given the House an opportunity to review the problems facing the youth service. Many of those outside the House are deeply grateful to him. He has already acquired an expertise that many have spent a lifetime in achieving. He deserves our thanks.
  My hon. Friend's excellent Youth and Community Bill was not only foreshadowed in the Conservative manifesto in October 1974 but had been introduced previously by three other Conservative Members. When I was national chairman of the Young Conservatives—many years ago—I took a pride in recommending the measure to Members of Parliament. I was deeply sad that the Bill did not manage to reach the statute book last Friday. I pay the same tribute to my hon. Friend the Minister as I paid him on Second Reading. He excited anticipation in the youth world because he made a series of visits to youth organisations in situ. Many of those involved had never seen a Minister before he came knocking on their doors. He has aroused the expectations of those youth organisations, and I hope that he will be able to put forward today a series of imaginative proposals to justify the hopes which have been raised.
  I was speaking just now of the Youth
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  and Community Bill. I happen to have piloted a Bill through the House. It became the Minibus Act. I had Government help in so doing, and I was promised Government time if I could not get it through. The measure had been urged upon me by the youth service, amongst others. This has happened to other Bills: the Estate Agents Bill, the Insurance Brokers (Registration) Bill, the Unfair Contract Terms Bill and many others have had Government support. It does not take much to put a Bill of that nature on to the Order Paper for consideration last thing at night. I hope that we shall have an assurance from my hon. Friend the Minister that, as the Youth and Community Bill is such an important measure and as my hon. Friend the Member for Bedford has acknowledged the right of the Minister to have a commencement clause in the Bill so that it can be implemented at a time when we can afford the provision, the Minister will urge the Leader of the House to make time available for this vital and crucial Bill.
  We are looking on a youth service which is sadly neglected. The Secretary of State, in that famous speech at the University of London Union, described it as the Cinderella service. It has been known as that for far too long. It has facilities which vary considerably between different localities and different local authorities. The Bill promoted by my hon. Friend the Member for Bedford sought to remedy that. But it is a paradox that, at a time when the MSC is receiving increasing funding, the youth service should be getting decreasing provision. I happen to believe that money spent in the youth service is the finest investment that we can have.
  The Minister acknowledged this in a letter to me dated 31 March. He wrote:
  "Within the financial constraints that exist we are doing our utmost to support the Youth Service and, so far as the Government's overall expenditure plans for 1980–81 are concerned, we have not assumed any reductions in local authority expenditure on the Service."
  Against that background, many of us are very worried about the increasing trend of reductions. The British Youth Council sent to many hon. Members before this debate a briefing paper from Youth Service Partners. At a time when 75·6 per cent. of our local authorities are reducing their expenditure on the youth service, it has become alarmingly and

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  urgently necessary for the Government to say something on that vital subject.
  The overall reductions over the whole country are now 6·7 per cent. In many areas—nearly a third of our authorities—the decrease is more than 10 per cent. That is very alarming at a time when provision should surely be increased in line with the MSC's increases, because both have a vital part to play in dealing with the major problems of youth unemployment which were highlighted by my hon. Friend the Member for Nelson and Colen (Mr. Lee). I support what he said.
  Many of us feel that the time has come for a major review of the youth service.
  It is now 20 years since the Albemarle report was published in 1960. The terms of reference are remarkably relevant to the difficulties today. They were
  "To review the contribution which the Youth Service…can make in assisting young people to play their part in the life of the community, in the light of changing social and industrial conditions and of current trends in other branches of the education service; and to advise according to what priorities best value can be obtained for the money spent."
  The report spoke in terms of a buildings-based youth service. Of course, times have changed. I think that we now need a wide-ranging inquiry very much on the lines of Albermarle, for a number of reasons. First, there is the background of youth unemployment. In my constituency it has reached appalling and unacceptable levels. In the Woodchurch estate, where I was on Saturday unemployment amongst young people has reached nearly 50 per cent. That is a frightening figure. I am very glad to see that the Under-Secretary of State for Employment, my hon. Friend the Member for Beeston (Mr. Lester), is listening to the debate. He has demonstrated a remarkable concern for the Merseyside area. I welcome his participation here and I know that, like many of us, he cares about the present alarming situation.
  Youth unemployment in my constituency is returning to the level where it peaked during the period in office of the Labour Government. Therefore, there is a need urgently to find wider solutions, and some of those wider solutions must lie in the need for a community-based youth service rather than a buildings-based youth service. Those working in the youth
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  service have skills, experience and knowledge which are underused, especially in the varying schemes to alleviate youth unemployment.
  There is a need, for instance, for a wider age range. The age group covered by the youth service was last defined in the 1944 Act as young people from the then compulsory school leaving age to the age of majority—in those days, 14 to 21. This has never been redefined, and there is an urgent need to do so. Much youth service provision now deals with the under-14s, especially in the voluntary sector.
  Mr. Skeet: My hon. Friend will appreciate that in the Bill which I presented to the House I redefined the age as being from 12 to 21 and that the Government accepted that.
  Mr. Hunt: Yes. If an inquiry is set up, I shall urge that it should consider whether the age should go even lower, perhaps to the age of 10. I had a meeting with Wirral part-time youth leaders recently, and they argued strongly that they were working extremely constructively with the 10 to 14 age group and that that work was a vital part of their service which they saw as a vital part of the youth service.
  I agree with my hon. Friend. Social trends have shown that provision should start at an earlier age. But there are also grounds for extension at the other end of the scale. The high incidence of youth unemployment places a heavy demand on services. This underlines the need for good leadership, which is more readily found amongst young people who have moved into their twenties. I should like to see the upper age limit at 25. This could be done by having three different groups, probably identified as 10 to 14, 14 to 19 and 19 to 25. But that should be reviewed by any commission which is set up.
  My second reason for wishing to see established such a wide-ranging inquiry is the argument put forward by the hon. Member for Battersea, South. It concerns the last year at school. Here the community and the youth service have a vital part to play. The careers service has failed in many vital respects in preparing youngsters for the real world outside. It is a horrifying prospect that over the past five years we have been having

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  to think of preparing youngsters for unemployment. They have been taught in school that to succeed is to get a job and that to fail is to be unemployed. We have been conditioning them for failure, and that has caused its strains in the community.
  We have to look now at a much wider scale of provision, not just for the last year at school but from the age of 14 onwards, preparing youngsters for a range of options, whether it be in the community—I wish that we could move away from putting so much emphasis on community service for the young; it should be a universal community service—or for much longer-term training and opportunities generally.
  This again ties in with the problem of overlapping Government Departments. We have almost reached the state of affairs where the nation's youth policy is not to have a policy for youth. Surely that is wrong. We have many different Government Departments overlapping, with waste occurring dramatically in many different areas.
  Thirdly, radical new approaches are urgently required to meet the problems caused by the increasing number of alienated and at-risk young blacks. As President of the British Youth Council, I led a delegation earlier this year to see the Home Secretary to warn about the deteriorating situation among youth blacks. It was not a pleasure to see our words come true a few weeks later in Bristol. The greatest problems facing young people are to be found in the inner cities. Those with the greatest problems are the young blacks at risk of alienation, or already alienated.
  My last reason for suggesting that a committee should be established with wide terms of reference is that the time is right. There is no immediate prospect of increasing funds and, although we must take steps to stop the deteriorating situation, now is the most appropriate time to review the whole area about which I have been speaking. Albemarle took 15 months in its review. Perhaps an inquiry lasting a similar period would then be able to report at a time when the Government's economic policies will have worked and provided the funds that will be necessary to implement what I am sure will be a series of imaginative recommendations.
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  There are a large number of gifted people in the youth service, indeed, in the whole youth sphere. Many have much to contribute. It is vital that we tap those resources at this time. Many good ideas have been brought forward that should be seen in their true context. In my constituency, the Birkenhead Council for Voluntary Service has produced a discussion paper entitled "National Service by Choice" which deserves closer scrutiny. A number of other interesting ideas have been put forward. Some have been mentioned in the debate.
  I hope that the Minister will come forward with some imaginative policies. He should seek to support the Youth and Community Bill and to urge that Government time should be made available. He should set up an Albemarle type inquiry and, in addition, produce some imaginative policies that can immediately start using properly the real resources of the youth service. We look to the Minister to bring about a constructive conclusion to what I have already described as a most imaginative debate initiated by my hon. Friend the Member for Bedford.
  5.53 pm
  Mr. Eric Deakins: The hon. Member for Wirral (Mr. Hunt) made some constructive suggestions. I endorse his remarks about the under-use of the resources that exist in the statutory and voluntary youth service—a service which, unfortunately, must be feeling very annoyed and frustrated as a result of the events in the House last Friday. I was present but did not contribute owing to the shortage of time. It is worth stating for the record that the Bill was killed not by the rather subtle filibustering of one or two Tory Back Benchers but by the Government. One looks forward to hearing the Minister's excuses and explanations of how the Government see the way ahead.
  There was wide support on both sides of the House for the Youth and Community Bill. In the one vote on the Bill, on a Government amendment to clause 1, which would have castrated a vital part of the Bill, the Government were defeated by 56 votes to 22. With more time, which I do not think the Government will allow, I have no doubt that hon. Members on both sides will ensure that the Bill gets through more or less in the form in which it came out of Committee.

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  A number of problems have been mentioned, and I want to allude briefly to four. My hon. Friend the Member for Bedwellty (Mr. Kinnock) and others have dealt with these matters in much more detail than will be possible in the time available for my speech. The first problem is the serious employment situation for school leavers and the estimate by the Manpower Services Commission that in the next two years the number of school leavers facing unemployment, as soon as they leave school, will increase by 125 per cent. As the hon. Member for Wirral and my hon. Friend the Member for Battersea, South (Mr. Dubs) have indicated, the situation will be far worse for young blacks in inner city areas. They will get the thick end of the deal.
  The second problem is that of the cutbacks by the Manpower Services Commission as part of the public expenditure cuts forced on it by the Government. I realise that the Prime Minister, only last week in a written answer, said that the youth opportunities programme would be expanded. There are, however, still serious doubts about whether that expansion may not be at the expense of the quality of the programme. I look forward to the Minister giving assurances that the quality will not be diluted in order to finance the increased numbers.
  The third problem which has been mentioned on a number of occasions in the House in recent months is the wide variety in local authority provision for youth services. I shall not go into detail, but the lack of facilities in many parts of the country—I do not make any party political point, as this applies to backward authorities of all sort of political complexions—is a disgrace to a civilised country. Our youth service, as a result of the failure of the Bill on Friday, has no firm statutory basis. It is disgraceful that 110 years after the education service was put on a statutory basis the youth service is still not on such a basis.
  In dealing with the last problem, I follow the remarks of the hon. Member for Wirral and my hon. Friend the Member for Battersea, South. This concerns the education of teenagers, not in their last year at school, but in their last two years at school, at a stage when it is becoming apparent that some will not stand any chance in CSE or O-level examinations.
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  Their teachers will make this fact clear to them, possibly at the age of 14-plus. It has been left to schools to cope with the consequences of teenagers who have no prospects academically and increasingly no prospects of finding a job when they leave school. They are increasingly bored. They are increasingly frustrated. They are, nevertheless, extremely energetic. They are moving increasingly towards forms of rebellion—one can sympathise with the need for rebellion in these circumstances—that often take anti-social forms.
  Hon. Members are aware of the problems of vandalism, delinquency and crime. There is also a growing problem in inner city areas where young whites aged 16 to 17 are turning to racism. They are a potent recruiting ground for the young National Front and the National Front itself. It is tragic that young people should be dragged down these paths of racism as a result of the failure of the education system.
  Mr. Donald Thompson: Does not the hon. Gentleman think that the anti-National Front that is emerging, composed of extreme Left-wing blacks, will prove an equally potent breeding ground?
  Mr. Deakins: I am opposed to racism wherever it exists. I hope that all Members, or at least most of them, share that view.
  In view of the lack of time I should like to put forward four suggestions for the way ahead. I do not expect the Government to agree with all of them, since some at least must involve a modest increase in resources. The first goes back to an idea put forward by the Labour Party—there is no monopoly in good ideas—to provide a guarantee to young people of 16 to 18 of education, training or a job during that time. That would do a great deal to resolve some of the problems.
  Secondly, there must be a bigger increase in resources for inner city areas, especially those housing ethnic minorities, with all the problems involved for teenagers.
  Mr. Kenneth Marks: There should be, not only education, training or jobs, but some sort

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  of guaranteed income. The trouble is that it pays to be unemployed, in many senses. One receives supplementary benefit if one is doing nothing but not if one is following an educational course.
  Mr. Deakins: That would add to the resources. I am not advancing my hon. Friend's proposal here and now, since a Conservative Government are in power and are committed to cutting Government expenditure. However, some additional resources will be needed for this age group, whether distributed in terms of facilities, teaching or training. We need more facilities and resources.
  In inner city areas where local authorities face problems of disaffection among unemployed young people, the youth service and the community relations councils are producing all sorts of imaginative solutions. The schemes, however short-term, need financing, and it is becoming increasingly difficult to get such finance under the urban aid programme, which is also being affected by Government restrictions on expenditure. Even if the Government can do nothing themselves in the immediate future, they should provide more generous facilities for the inner city areas through the urban aid programme.
  The third way ahead that I see is one with which I am sure every hon. Member present—apart, perhaps, from the Minister—will agree. I mention it for the sake of the record. There must be statutory provision for the youth service. The fact that the Youth and Community Bill fell does not mean that a similar Bill will not return next year or the year after if one of us is lucky in the ballot. The Government, whichever party is in power, will have to face the problem and agree to give that Bill the facilities necessary to get it through the House.
  My last suggestion is that we need an inquiry into the education of young people in their last two years at school. I do not know whether there has been a report by Her Majesty's Inspectorate in recent years on the 14 to 16-year-old group, but the problems are becoming more intense, particularly in inner city areas.
  An inquiry would show to what extent the present education and curriculum of those young people are relevant to their
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  needs, concerns and interests and would give details of the financial provision that is made. After all, there are teachers, buildings and facilities. The spending per head on this age group must be at least as much as on any other. What value for money are we getting for that expenditure? If we reorganised the system after an inquiry, would we not get better value for money and better schooling for those teenagers, thus leading to much less disaffection?
  I have no proof—no one can offer proof—of the cost effectiveness of any of these solutions, but can anyone with common sense doubt that vandalism, delinquency and racism will increase among young people as their outlook becomes bleaker? Their needs are being overlooked. Fortunately, they have not been overlooked in this House over the past couple of years, because the youth affairs lobby has done great work in presenting the problems to interested Members.
  Young people are basically our greatest natural resource. If that natural resource is wasted, the fault is ours, here in Parliament. The buck stops here. Let us at least ensure that we live up to our responsibilities.
  6.3 pm
  Mr. John Watson: I congratulate the hon. Member for Waltham Forest (Mr. Deakins) on a speech the majority of which I agreed with. He said that it was impossible to measure the cost-effectiveness of his ideas. Of course it is, but, in this age when we are cutting spending wherever possible, the yardstick of cost-effectiveness should be applied whenever it even dimly appears. If one applies it to the youth service in particular, that service emerges as one of the best bargains for Government action.
  We know with relative precision that it costs £175 a week to keep a young offender in secure care. We know that that sum must be augmented by the cost of clearing up the vandalism which has often landed him there. We do not know and never can know how much it will cost to keep a young offender out of secure care, but there is increasing evidence that less than £175 a week spent on additional youth facilities in the average British town will guarantee that

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  at least one fewer young person will go into secure care.
  Recent evidence from Devon suggests that increased expenditure in a small town of perhaps £75 a week can reduce by one over a year the number of young people who go into secure care. In those circumstances, it must make questionable sense to cut expenditure on the youth service.
  Yet local authorities are on average cutting that expenditure by 11 per cent. in real terms this year and a third are cutting it by more than 11 per cent. In Cumbria, which takes in part of my constituency, the full-time youth staff are being reduced from 41 to 18. Most of the reductions in percentage terms are being made in the voluntary rather than the statutory sector, in spite of all the compliments paid from time to time to the concept of voluntarism.
  Why are these the priorities? I concede that in the past, at least until the advent of the youth affairs lobby, the youth world was not among the most sophisticated political lobbies. There is also a natural reluctance to talk in the simple and crude terms of cost-effectiveness. It is distinctly more fashionable to talk about "personal development", about "assisted maturity", about "community responsibility" and about other undoubtedly worthy sentiments, which, distressingly, cannot be measured.
  But there is another reason—the fact that these reductions are being made by local authorities. It is they which achieve any savings. However, if the result is that more juveniles go into secure care, it is not the local authorities but the Government who pick up the bill.
  I find the local authorities' view understandable. If they are leaned on to save money, they do so. Less understandable is the attitude of a Government who are concerned to save money and who take a small amount from one pocket only to put more into another.
  In 1973, 14,000 school leavers were unemployed; in 1978, there were 140,000 and the figure now is almost 180,000. School leaver unemployment has risen six times as fast as the general rate of unemployment. The Manpower Services Commission forecasts over the next two years a 30 per cent. rise in general unem-
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  ployment but a 125 per cent. rise in school leaver unemployment.
  That dismal picture has been ameliorated slightly by one undeniable success story—the youth opportunities programme. The guarantee that a school leaver can find at least some occupation by the Easter after leaving school has done a great deal for the morale and general sentiment of young people who have been unemployed for months. One is worried by the rumours that constraints on cash and administrative resources may make it necessary for that guarantee no longer to be given.
  I say that for two reasons. First, the YOP is a cost-effective programme. Every extra 1,000 school leavers in the dole queue costs about £5 million a year. Secondly, if there are genuine wider economic reasons why unemployment must increase, let us at least remember that we are dealing with human beings and not simply with statistics. Let us remember the colossal human dignity which is being lost when we talk of 1½ million or 2 million people unemployed.
  A sentiment occasionally articulated in the country—it is sometimes reflected in the House—seeks to blame people who are unemployed for their own predicament and for the economic problems which have led to the loss of their jobs. I doubt whether it is true in any but a small minority of cases, but I am sure that it can never be true of young people who have never even had the opportunity to lose a job.
  Thirdly, I shall recount a simple but Instructive tale about a factory near my constituency in the North-East. It employs 200 people and depends on the skills of printing and engineering. In spite of the fact that in the surrounding areas the unemployment level is more than 10 per cent., the management find it practically impossible to recruit skilled engineers and printers. The firm has to pay them a fortune, bring them in from a long way away and even give then assisted housing. A few weeks ago the fork lift truck driver left, and an advert was placed in the local newspaper. There were 35 applicants for that unskilled job, of whom seven held university degrees—three in sociology, and two applicants had been through teacher-training college. When we hear such a tale, which I have reason to believe

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  is true, it is an indictment both of our careers guidance system and—
  Mr. Marks: What sort of apprentice system has the firm had in the past that it has to look outside the factory for its skilled workers?
  Mr. Watson: I concede the point that the hon. Gentleman is trying to make. It is a reflection upon the attitudes towards apprenticeships both by the trade union and the management concerned. Overall, it is an indication that the allocation of our education resources is completely out of kilter with our industrial needs.
  This has been a valuable debate. I look forward to listening to my hon.Friend the Minister when he replies. I hope that he will address himself to the points that I have raised.
  6.12 pm
  Mr. A. J. Beith: The hon. Member for Bedford (Mr. Skeet) has done the House a service by bringing this matter before it. He has come back fighting after watching his Bill blocked effectively both by Conservative Back Benchers and by the Government. He has come back today with serious and specific proposals, and we welcome that.
  The debate takes place against the sombre background of a record number of youngsters out of work and an appalling forecast from the Manpower Services Commission about the huge disproportionate increase in youth unemployment in future. The hon. Member for Skipton (Mr. Watson) quoted a figure of 125 per cent. for the predicted increase in school-leaver unemployment between 1980 and 1982. The Government could do no better service for youth in the short term than to change the main economic policies upon which they are embarked. They should reduce their reliance on unemployment as a tool of economic policy, reduce their reliance on high interest rates that deter employers from taking on extra labour, and reduce their reliance on heavy cuts in public expenditure that affect so many of the areas in which young people work—not only the public bodies but all the contracting and other firms that depend on public sector work for employment.
  If the Government changed the direction of their policies, using, for example, an incomes policy as one of their tools,
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  they would have the freedom to improve employment for youngsters—without which almost anything else would be of little or no consequence to them. As other hon. Members pointed out, while we have these high levels of youth unemployment the youth opportunities programme is of special importance. We are bound to be alarmed and despondent about the forecast given by the Manpower Services Commission about the inadequacy of that programme to meet the mounting scale of youth unemployment. We look to the Minister, in his reply, to indicate what he proposes to do to ensure that there are some alternative opportunities for the youngsters who will be out of work in the coming two or three years.
  I speak as a Member for a rural area, where the problems are particularly acute. Traditionally, many of our youngsters went away to find work. They now find that they cannot even do that, and that the access to other opportunities to train and improve themselves for work is so much less in rural areas that they are especially disadvantaged. The problems of youngsters looking for work for which they have some qualification are even greater.
  I remind the Government of the problems that they are creating for themselves. I shall quote an example from my constituency, where the Ministry of Agriculture, Fisheries and Food intends to transfer its divisional organisation from Alnwick to Newcastle, thus depriving a small town of about 50 jobs, many of which provide opportunities for qualified school leavers and for which there are no alternatives in rural centres. I ask the Minister to remind other Departments about the importance of considering the employment position in the towns in which their offices and centres are situated. The review of the Civil Service must continue, and in some cases reductions must be made, but I ask the Government to change their general approach so that Departments make local employment conditions effective in any review that they undertake. The Ministry of Agriculture, Fisheries and Food is not doing that in its departmental review.
  In his motion the hon. Member for Bedford pointed to wider issues than youth unemployment itself. He spoke about youth in contemporary society, which is a much wider issue. There

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  is so much that one could say about that, but there is not time to say it in a debate of only two hours. I make the general comment that it is not a desirable object to shunt youth and youth problems into a siding, and to suggest that they are wholly distinct from the problems of the remainder of society and have to be solved in distinct ways.
  An objective of our policies should be to encourage youngsters to recognise our society as one in which they have a place and one in which their future lies. They may wish to change it, but it is theirs. They should not be shunted into a separate series of organisations and societies. I say that despite my great admiration and respect for the work of youth organisations. They are very important. That is why I supported the Youth and Community Bill on Friday and why I support my local authority in Northumberland, which has tried to maintain its youth service and to support the voluntary youth services in many of the ways that the Bill sought to establish more widely throughout the country.
  We must encourage youngsters to accept that our society is theirs to derive some benefit from and to change when they see fit. We must give them the opportunity and the encouragement to participate in democracy and to realise that it is a society in which we expect people to be able to make changes by democratic and non-violent means. If we do not give them the opportunity to do that we invite them to go into channels that will destroy the values that we have sought to defend.
  Mr. Marlow rose—
  Mr. Beith: I should be unhappy to give way, because I have given an undertaking to the Front Bench that I will conclude my remarks in a few moments. Youngsters should be given the opportunity to participate in decision-making in schools, colleges, work and youth organisations so that they develop an ability to present their point of view and a recognition that change can be achieved by democratic processes. That is important to the future of our society. That is why, as well as giving youngsters the right to vote at 18, we should give them the right to stand for election to public bodies. I
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  do not think that that would mean the election of many 18-year-old Members of Parliament, but we might get a few 20-, 21- and 22-year-old Members of Parliament, and even more as representatives of our local authorities. We might become closer to youngsters through their representation on public bodies. It is important that we convey to them that this society can be changed and improved by democratic means and that we shall give them the opportunity to play their full part in doing so.
  As I said at the outset of my remarks, all those matters will seem remote from the youngster who does not have a job. His lack of work is the immediate concern of the Government. It is a concern that the Government cannot effectively show unless they modify the economic policies that are creating such high unemployment.
  6.19 pm
  The Under-Secretary of State for Education and Science (Mr. Neil Macfarlane): It might be for the convenience of the House if I intervene now to respond to the many points that have been raised in this useful debate. The House is grateful to my hon. Friend the Member for Bedford (Mr. Skeet). We have a certain amount of admiration for his capacity to come first in the Private Members' ballot. It enables some of the problems that were raised last week to be put in a different context. I must tell my hon. Friend of the regret felt by my right hon. and learned Friend the Secretary of State, who is unable to be here because of an unpleasant bout of influenza. There is some doubt about whether he will be back in London within the next 48 hours. I am sure that the House wishes him a speedy return. He was most anxious to participate in the debate. I know that he will read the proceedings fully.
  Both the House and youth organisations throughout the length and breadth of the land have every good reason to acknowledge the commitment made by my hon. Friend the Member for Bedford to the young people of Britain over the past year or so and to thank him for initiating the debate. Most of his work has been carried out while he has been the victim of a particularly painful injury—a fact that seemed to generate a degree of levity among Back Benchers.

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  We wish him a speedy rejection of the walking stick and crutches and a return to good health.
  My right hon. and learned Friend wants me to make clear that he supports the terms of the motion. Hon. Members on both sides have made important contributions. Important points have been made about the MSC, the YOP and Department of Employment responsibilities. I shall answer some and try to answer others, and my hon. Friend the Under-Secretary of State for Employment will answer various points in correspondence.
  No one has underestimated the grave problems that young people have faced for many years—the difficulties of obtaining a job, the adjustment to the change from school to adulthood, and the growing pace of change. All involved in education have to ask whether education and training over the past 10 to 20 years have matched the national need. All of us have a view on that matter, and I want to cover some of the key areas embraced by Government policy.
  The Government have been proceeding with work on the school curriculum. We have been considering the development of unified vocational preparation and have set in hand a detailed examination, with local education authorities, of the educational provision for the 16 to 19-year-old group. The hon. Member for Bedwellty (Mr. Kinnock), who was kind enough to indicate that he had another meeting to attend, raised that point, but he seemed to indicate that the review was carried out in secret.
  We are not conducting the review in front of television cameras and microphones, but the review group was acknowledged in a written answer some months ago. I am grateful to the 20 or so colleagues throughout the country who serve on the group, and particularly to the two Labour education leaders from Sheffield and Wakefield. There is no secrecy. It is an important group, and we are hoping to reach conclusions by the late autumn or early winter. We should have liked to complete the report by now, but everyone who has been associated with provision for this age group will understand the problems involved.
  I was particularly interested in the speech of the hon. Member for Batter-
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  sea, South (Mr. Dubs). He confirmed a view that I have held for many years, namely, that we need greater flexibility in our school system up to the age of 16 and in the transfer to other education institutions as well as to the work place. That requires the elimination of the barriers that have grown up over the years and a commitment by all involved to understand some of the complexities that those barriers represent.
  The hon. Members for Battersea, South and for Bedwellty also mentioned apprenticeship training. Employers and trade union leaders have an important role to play in that matter. We are actively pursuing a co-ordinating role in preparing an initiative between schools and industry, and the first of 10 regional conferences will take place in the autumn.
  We have a regular dialogue with our colleagues in other Departments. Hon. Members will recognise that the problem is wider than the responsibilities of one Department. Regular links with my colleagues at the Department of Industry, the Department of Employment and the Home Office are an integral part of my Department's policy, and I am glad to see that the motion specifically refers to better co-ordination in all Departments. My hon. Friend had every right not to be apologetic for the interesting statistics that he produced and the information that he gave about the way in which other Commonwealth and EEC countries organise their provision for youth, leisure and recreation.
  Hon. Members will understand that I am reluctant to stray into other Ministers' territory. I shall try to confine my comments to the realistic policies that we have adopted in the DES and to touch on some aspects of the YOP. I am the last to deny that there is an overlap between Departments. There is a considerable overlap, but there is much good will between Departments and we are trying to grapple with many of the problems.
  The role that education departments are playing in terms of the curriculum is important. We are faced with shortages of mathematics and science teachers and shortages in craft design and technology. There has been a glare of publicity on problems of literacy and numeracy. I add to those categories that

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  of dexterity, which seems to be missing from the curriculum.
  We have responded, as have education departments throughout the country, to public concern about the standards and content of school education. In January we published our consultative proposals for a framework for the curriculum and we intend in due course to publish guidance to LEAs and schools. Our proposals are based on the place that each subject should have in the education of each pupil and on the balance and coherence of the curriculum in relation to the aims of education. Of particular relevance to the debate is the role of school education as a preparation for working life.
  I hope that the conferences later this year, which will involve teachers, unions and the CBI throughout all the regions, will play a great part in bringing a new cohesion to the role of school-industry links, and that we shall find industry marching well over 50 per cent. of the way to tell schools what it thinks they should be producing.
  The number of youngsters in the 16–19 age bracket will fall from its 1980–81 peak by 25 per cent. over the next 10 years. That is bound to concentrate our minds on the organisation of the education provision to meet their needs, because it has such clear and direct implications for the institutions that teach that age group. The aim must be to offer young people as full a range of education possibilities as they can benefit from. One thing is certain; there will have to be much more co-operation between schools and colleges of further education. We are approaching an era of great change over the next decade and we need open minds and flexibility.
  We have learnt much from discussions on the consultation documents "A Better Start in Working Life" and "Providing Educational Opportunities for 16–18 Year Olds". I am the first to acknowledge that we inherited that initiative from the previous Administration, and one of our first acts last year was to announce the continuation of the investigations.
  I preside over the group that has, alas, come to be known by my name, whether I wanted it or not. I hasten to tell hon.
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  Members that I did not call it the Macfarlane review group. I think that that was done by the media. It was set up at the suggestion of the local authority associations and it brings the DES and representative,s of the associations together to discuss those matters. I hope that we shall achieve our objective of producing a report by the end of the autumn or the early winter.
  I turn to unified vocational preparation. There remains the major problem that large numbers of young people who stand to benefit most from continued education and training on leaving school will have none of it. They need further preparation for work, but they are not attracted by the education system's traditional offerings.
  The concept of unified vocational preparation was developed to bridge that gap. The pilot programme of UVP courses has been an outstanding example of collaboration between education departments and the MSC and between colleges of further education and the training system. It confutes the critics who deny that such collaboration is possible. We are seeing encouraging signs and are continuing with the experiment until September 1981.
  By vocational preparation—a theme that the hon. Member for Waltham Forest (Mr. Deakins) mentioned—we mean a combination of education and training based directly on work and covering learning on and off the job. It embraces the acquisition of skills needed to carry out specific tasks at work and the development of attitudes and knowledge that will enable young employees to play their part more effectively in the working community. It also aims, where possible, to lay foundations for further education and training later in life.
  We believe that the teaching methods used in UVP have broken new ground. The trainees have been actively involved in the process of learning and they have learnt to enjoy the process. Employers who have taken part have also been enthusiastic.
  On our visits to Birmingham and Merseyside my hon. Friend the Under-Secretary of State for Employment and I have been impressed by the progress of the schemes. The programme has been a success, which has been hard-won,

  97
  because the full integration of the education and training elements in UVP needs great skill and effort.
  Mr. Marlow: The burden of my hon. Friend's remarks so far, though he may say something different later on, seems to be that people should go from education prepared to go into work, as if our children must leave school at 16 and continue a working life from the age of 16 to 65.
  To expect children to work from the age of 16 is almost barbaric. That is the only concept that we have. There was a time when we had National Service. I am not suggesting that we should have a similar form of National Service now, but it was in many ways educational; it was broadening, and it was great experience for our young people before they went into a full-time job. If there were a scheme of national community service more appropriate to today's needs I wonder whether my hon. Friend would feel that this would be something worth pursuing.
  Mr. Macfarlane: I know that my hon. Friend has deployed this argument in Adjournment debates and that my hon. Friend the Under-Secretary of State for Employment has replied in some detail. I know that my hon. Friend has his rose-tinted spectacles on when looking at his national service days and his Regular Army days. He says that it was rewarding and enlightening. There are some who might have a more jaundiced view of precisely what it was.
  I take the point that my hon. Friend makes about the community context, but I am not sure that he carries me all the way with his argument. He must be allowed to develop that argument himself and I know that given his diligence he will continue to do so.
  Where do we go from here? Inevitably we must reckon with the costs if we are to proceed beyond the pilot stage. We are now analysing the experience of that stage and completing our study of the responses to the proposals for extending the scheme that were canvassed in "A Better Start in Working Life".
  I turn to the youth opportunities programme. What of those who cannot get jobs? That important point has been raised by hon. Members on both sides
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  of the House. I apologise to hon. Members if I am unable to highlight them and their constituencies by name, but I must get on.
  The news media have recently been full of the very serious problems that our young people are facing in getting work. The Government have never pretended that these problems are anything but serious, and I note with deep regret that the numbers of unemployed school leavers have risen so markedly. But the rise in youth and school-leaver unemployment has only recently started after many months of continuous decline when compared with the same months of the year before.
  In January this year, the most recent month for which comparable youth unemployment figures are available over a number of years, the total of young people unemployed was still lower than in any January since 1976. The problem of youth unemployment has been with with us for some years, with a five-fold increase in school-leaver unemployment between the early months of 1975 and 1980. So it is important, first of all, to get the headlines and the problem in perspective.
  Mr. Barry Sheerman: Will the hon. Gentleman give way?
  Mr. Macfarlane: I know that the hon. Member for Huddersfield, East (Mr. Sheerman) comes from an education background, but if he will permit me I feel that I must get on. He has not been present at any stage during the debate. I would willingly have given way on any other occasion. I hope that he will let me get on.
  The problem can be solved in the longer term only by the Government's wider economic measures designed to slow down inflation and restore our international competitiveness—from which increased employment opportunity for all age groups will flow. Opportunities under the programme can increase their self-confidence and improve their skills and their prospects of finding a job. Even in the present economic situation, the record shows that seven out of 10 work experience trainees have found work after completing their period of training.
  The Government and the MSC have renewed for 1980–81 the undertakings

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  given last year to offer places in the programme to all unemployed school leavers and young people unemployed for over 12 months. This is a major commitment at a time of high unemployment and when Government spending needs to be contained. The number of places provided under YOP this year is about 60 per cent. more than was provided in 1978–79, and although there is now an upward turn in youth unemployment the size of YOP more than matches it. This is a measure of the Government's concern for the employment future of our young people.
  I am certainly happy to tell the House that YOP has been expanded by about 30 per cent. since May last year. That is an increase of 25 per cent. in the year 1980–81. The point made by hon. Members about the programme pinpoints the fact that quality is still the watchword of that programme.
  I have spoken about the education policies that we are pursuing, but I want to turn to youth service provision in view of the wording of the motion and the reference that my hon. Friend made in his remarks. I refer to the voluntary sector of the youth service. Hon. Members have paid their tributes. I value very highly, and pay tribute to, the work done for young people by the voluntary sector of the youth service. I find it remarkable how well the youth organisations, with their long histories and strong traditions, are responding to the challenges of our modern society; how they are seeking to give young people a greater say in shaping and organising their activities within each organisation, and how they are encouraging an interest in the institutions of our society and the democratic process, social and political education, and participation in a developing community. These are major themes of the modem youth service, as they were of my hon. Friend's Bill. They are the particular concerns of the British Youth Council, which speaks for all young people in voluntary youth organisations.
  My hon. Friend the Member for Wirral (Mr. Hunt) was kind enough to refer to my reputation and my start in the youth world last year. I know that his own years as president of the British Youth Council were rewarding and I pay tribute to what he has done for that youth
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  movement in bringing it closer to the minds of politicians at national level.
  My hon. Friend may know of the major projects that the council has in hand. One is to develop and disseminate political and social education material and the other is to study local youth councils and assist in their development. Did my hon. Friend know that these projects are funded by my Department? I dare say he did. Our estimate of grant to the BYC in the present year is £62,500. This is £10,000 more than last year and provides for the appointment of two new staff to expand the council's social and political education programme, and a project to promote participation in the Commonwealth youth programme.
  My Department also meets the major part of the cost of the National Youth Bureau, which is the major support agency for the development of youth work. Our grant this year is expected to be in the region of £280,000.
  I pay tribute to the work achieved by the hon. Member for Lewisham, West (Mr. Price) who was the NYB chairman until January this year and I recognise the fruitful work that he accomplished in bringing the importance of the work that that excellent body does in Leicester to the minds of politicians at Westminster. I wish his successor, my hon. Friend the Member for Nelson and Colne (Mr. Lee), good fortune. I know that he will enjoy his dealings with the NYB. We are grateful for his speech today.
  I have found over the years, as has my right hon. and learned Friend, great enthusiasm and commitment with all the youth bodies. I have had about 26 meetings inside 12 months with these organisations and associated bodies. I visited the BYC headquarters, and council members visited me. I visited the NCVYS, the National Youth Bureau, and the youth affairs lobby. They have had talks with me in my office. I have also had talks with the National Association of Youth and Community Education officers and I have spoken at annual general meetings of NAYC and other organisations. I was proud to address a joint national council for voluntary youth services and the Industrial Society seminar earlier this year. I wish to place on record, alongside that of my right hon. and learned Friend, my admiration for

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  the work of these bodies and to guarantee them our continued support and interest throughout the next few years.
  I turn to the issue of youth service provision, because my hon. Friend the Member for Bedford referred to it. How encouraged we were that he kept his remarks down to about 24 minutes to enable me to give a full reply. I have promised to let him have 10 minutes to conclude.
  I have spoken about the education policies that we are pursuing. I must insist, first, that the Government have not only affirmed their commitment to the youth service but have lived up to that pledge both in their manifesto and since. Our expenditure plans allow for current expenditure on the youth service to be maintained at a constant level both in the case of spending by local authorities and central support for voluntary organisations.
  I have listened to the comments of hon. Gentlemen who have expressed concern about the reduction in certain areas, and I am aware of that. In addition, in our public expenditure plans we have provided for expenditure on non-advanced further education to increase this year and next and then remain at the higher level. This means that increased resources will enable enrolments to grow by about 10 per cent. by 1983–84.
  I must not go over the ground covered in last Friday's debate, and I have digressed from the question of expenditure. My hon. Friend referred at length to £80 million or so that is identified as youth service expenditure. I put it that way because many resources feeding into the youth service go unidentified. I think that my hon. Friend would agree with that. It is difficult to identify precisely what the youth service is and to identify what the percentage is of the £8 billion of the total education budget.
  Nearly all of that larger budget is directly relevant to the needs and problems of young people. There is also, of course, the budget of the MSC's youth opportunities programme, which is about £140 million in 1979–80. There are many other subventions from public funds that go to the benefit of the young.
  Many of us get into a certain amount of difficulty when we try to define what we mean by "young" or "youth". My
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  hon. Friend the Member for Wirral referred to the age group 10 to 25. In Committee, we discussed the age groups 14 to 25 and 12 to 25. I think that everybody would have a different opinion if we conducted a poll on it. Possibly there would be a tremendous amount of variety. When we talk about youth, I tend to think that we are talking about someone from the age of 14. That is a critical area in our curriculum survey, because while we talk about the 16 to 19 age group, it is the question of 14 to 19 preparation and the overlap that is of paramount importance. It is something that Ministers in the Department are assessing very swiftly.
  But what I am anxious to see—and, indeed, if I can, to promote—is a much greater contribution to the needs of young people from the private sector. The hon. Member for Battersea, South thought that we would not get too much of a contribution from the private sector. Indeed, the hon. Member for Bedwellty also mentioned that. The Budget announced measures to encourage charitable contributions to voluntary organisations —and that was mentioned by one hon. Member. I am thinking not so much of the private benefactor as of the possibility of tapping the resources of industry and commerce. I believe that there is a potential contribution from private enterprise, which the youth movement has hardly begun to tap.
  I have had discussions with the CBI and the Association of British Chambers of Commerce, because I think that we tend to deal far too much with the multinationals and major corporations. I believe that there must be a dialogue with the smaller organisations to find out what facilities and amenities they can provide, and whether or not they will release their personnel free of any financial penalty if they work in the youth arena and the voluntary sector.
  From my discussions already I believe that the good will is there. The Government have played their part by providing tangible support for the voluntary sector through a variety of measures announced by the Chancellor in his Budget Statement in March. These included doubling the capital transfer tax exemption for bequests to charities, reimbursement of the higher income tax rates on deeds of covenants subject to a ceiling of £3,000 a year, some

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  easement of stamp duty, and reducing the period for tax relief on deeds of covenant from seven years to four years. We think that those measures will cost £30 million in a full year. They are designed to provide the right conditions for substantial growth in the important partnership between voluntary service and the rest of the community.
  Mr. Marks: The tax concessions that the Minister is talking about will help Eton College, which is a charity, but I doubt whether many of the voluntary youth organisations will receive much benefit. Is not their problem that their income lags a long way behind inflation and that people who gave £5 in past years still tend to give £5? Is not the Minister aware that the voluntary organisations are suffering considerably from the cuts imposed by local authorities and because they lag behind the rate of inflation?
  Mr. Macfarlane: Let us hope that anyone from Eton who reads the report of the debate will increase the amount that he perhaps already gives to voluntary organisations in the area. I understand the point that the hon. Gentleman is making, but I hope that he will forgive me if I do not comment in detail now.
  Many more hon. Members wish to speak in this debate, so I want to bring my remarks to a conclusion. I should like to have said more about Government support for young people—for example, the assistance given by the voluntary services unit of the Home Office to community service volunteers and Task Force—and their sponsorship of the young volunteer resources unit at the National Youth Bureau. Support in a financial way has come from the private sector, too. We certainly need more, and it is my objective at the Department of Education and Science, in conjunction with colleagues, to make the private sector infinitely more aware of what its commitment should be to the community in which it is located.
  We believe that we have adopted a realistic co-ordinating role within the confines of existing legislation. The youth organisations know that they can talk with us. I was taken to task by the hon. Member for Bedwellty for winding up the Youth Service Forum, which he seemed to identify as a quango of major
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  proportions. It was created in the mid-1970s. I shall not bother to say why, because I am not certain of the reasons and I was not privy to it at the time. It was certainly just a talking shop, and I far prefer individual dialogue with the individual organisations. On balance, I believe that those organisations know that my door is ever open if they want to come and talk about some of these points.
  We know that the figures for youth unemployment are gravely high. That is no new problem. Difficulties are created by the birth bulge, but the long-term strategy must be an economic one. We all know the problems in the various regions of the United Kingdom that we represent. We know that there will be an impact of the new technology on young people. The education system alone cannot predict the future, but I do believe that the system is well seized of the implications of technological change and is responding appropriately. We have been able to find resources for a national development programme in microelectronics, and we have also allowed for growth in the budget for non-advanced further education. That is another contribution in helping our young people.
  A series of actions are needed by all responsible for youth, but Government acknowledge the part that they have to play. I acknowledge fully the part that my hon. Friend has played over the past year. I know that he feels disappointment that this Youth and Community Bill was lost last week, but he knows my reservations about statutory legislation. He has done a great deal to further the awareness of youth, at all political levels, and we are grateful. For all the reservation that the Government expressed, my right hon. and learned Friend has asked me to say that he in. tends to pursue a review of provision for youth which will include an assessment of the need for legislation during the lifetime of this Parliament—a Bill having regard to the framework of my hon. Friend's Youth and Community Bill, embracing amendments tabled by the Government on Report. Should changes be recommended, discussion with LEAs would be an integral part of the programme, but my hon. Friend knows that I cannot predict the outcome.

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  I conclude by congratulating my hon. Friend not only on coming first in the ballot but on his commitment to our young people. It is of enormous benefit to all those involved in the welfare of young people. It is a fact that those involved number many thousands. It is not one person or one Department who can help the youth service to progress. It has to involve all the representatives of education at both national and local level, employers, trade unions, the voluntary sector and private enterprise. I believe that my hon. Friend the Member for Bedford has gone a long way to helping that partnership by his diligent efforts over the past year and the Government are prepared to accept his motion to the extent that I have indicated.
  6.47 pm
  Mr. Skeet: I listened with considerable interest to the Minister. Only a few days ago we saw the demise of a very important Bill. The hon. Member for Waltham Forest (Mr. Deakins) said that what this country and youth require is a Bill in the nature of that which was presented to Parliament. Not merely did we indicate our views in Committee, when we rejected the proposal put forward by the Government, but last Friday, when the Government put down their own new clause, we rejected it on that occasion, too.
  I am grateful to my hon. Friend for saying that within the lifetime of this Parliament the Government will review all the circumstances of this matter. I hope that at the end of the day they will legislate to deal with the problem. The youth of this country will keep them to that. We do not intend to see the demise of good legislation which would affect more than 20 million people, bearing in mind that since 1944–35 years ago—there have been no new and important provisions on this subject.
  In order to reach that point, other decisions will have to be taken. What about the Wolfenden report on voluntary provision? People have been sitting on that report for some years, but so far there has been no result. What about the departmental review on the Housing (Homeless Persons) Act 1977? A lot will also depend upon that.
  I remember that when I toured the country a gentleman from Bradford said "If local authorities continue to cut, and if the Government do not make pro-
  106
  vision, they will pay the price 10 times over later on". I feel that many people in the coming generation will be disappointed at what has happened. The present economic cycle is not the fault of the Government. It is world wide, and it would have happened to the Labour Party had it been in government at the present time.
  Some of these young people will be disappointed and disaffected. They want an opportunity in life. They have attended courses, they have been to university to learn in order to be able to work, and they now find that there is no work for them. I put the point to the Minister that the percentage of young people entering normal employment in Wales after having completed the programme was 67 per cent. in 1978, and in 1979 the figure had dropped to 53 per cent. Therefore, it is evident that many young people are leaving the programme and going back on the dole. That is not good for youth. The Department of Education and Science and the Department of Employment must work more closely together to provide a satisfactory solution. Youth is looking for a way ahead, and something must be done about it.
  The Minister indicated the immense sums that are being provided. The Department of Education and Science has provided about £5 million, including capital arrangements, but the totality of expenditure by the DES is no more than would be spent on building about two miles of a three-lane motorway. Therefore, we equate two miles of motorway with a provision for over 20 million people. But people count, not things.
  I was interested in an observation that was made recently by a probation officer, who said that he was interested not in statistics but in people, because he worked with them. Educationists must realise that they have to prepare people to enter life and to live life for the rest of their years—to the age of 60, 65 or 70. They must also prepare their students to enter industry and to make their contribution there. That is why I said earlier that the education system in Britain has failed, particularly in its provision for youth.
  At least the supporters of the Bill have done something. People throughout the country who have done something for

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  youth have brought to the attention of the Cabinet and the Prime Minister the fact that something is essential and urgent. Time is not on our side. It was wisely said that we should look at what happened at Bristol and at Scarborough, with the skinheads and so on. Those things occur, but they need not occur. There can be prevention, and if we take the appropriate steps at the appropriate moment, all will be well.
  The Minister mentioned the work that his Department has done for the youth service, but I retaliate by saying that the youth service department has produced evidence to the National Youth Bureau which refutes much of what he said. A recent survey carried out on behalf of the youth service department found that 55 per cent. of local education authorities are planning to reduce their real expenditure on the youth service during 1980–81. Has the Minister been talking about the current year, or the following year? Is he not saying that the youth service departments have done well up to date but that there will be cuts next year? Will more departments be like that in Cumbria? Will some departments be a little better than Cambridgshire? The Minister rightly indicated that local authorities act differently throughout the country. The supporters of the Bill have sought, and I now implore the Minister, to provide a certain standard of provision throughout the country. If the expenditure that can be provided on education is 1 per cent. of total expenditure, why does he not say that 1·5 per cent. or 2 per cent. is a consistent figure, whatever happens?
  Mr. Marks: Does the hon. Gentleman agree that the real culprit is not the Department of Education and Science or the Department of Employment but the Department of the Environment? The Secretary of State for the Environment is forcing local authorities to make these cuts in the youth service. In a crisis such as this, non-statutory powers will enable cuts to be made.
  Mr. Skeet: I appreciate what the hon. Gentleman is saying. That happened many years ago, even when the previous Labour Government were in power. I cannot push two heads together, because I may make an ass of them.
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  My hon. Friend the Member for Nelson and Colne (Mr. Lee) spoke about a youth commission. We have had youth commissions, papers and inquiries. We have had the lot. What we want now is action. Because of the demise of the Bill, and because this problem has been drawn to the attention of the Cabinet, I believe that something will be done. In other spheres of operation, something must be done to win the confidence of youth. The suggestion of a commission is a good one, if we have the time, but we must prescribe the solutions quickly. The Albemarle report made one or two remarkable suggestions. Following that report a body was established, but, unfortunately, it was terminated by the Prime Minister when she was Secretary of State for Education and Science. She may have done so for good reasons. Other bodies have also been brought into being, but they, too, have been terminated.
  In order to reach an appropriate conclusion we need a report on Wolfenden to decide what part the voluntary effort should play in the provision of youth services and whether the emphasis should be on the statutory or the voluntary side. My recommendation is that it should be on the voluntary side. Much information has been provided by youth groups, youth organisations, outside seminars and erudite bodies throughout the country, and it is important that some action should be taken.
  The hon. Member for Battersea, South (Mr. Dubs) mentioned the transition from school to work. That is extremely important, and it was mentioned in the Bill. It is remarkable that at 16 a youth slides into life and is on his own. That is the great cut-off point. But if he enters higher education, the education service looks after him for a few more years. I said earlier that 33 per cent. of expenditure on education would be allocated to those who go on to higher education, but the remaining 90 per cent. of the population are not considered in that category.
  I am bearing in mind that I must be careful not to talk out my motion. I hope that the House will support it. I stress that it is essential that youth should be recognised. It is determined in its course. Those who are prepared to advocate its case will not be dealt a final blow simply because the Government brought about

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  the demise of certain legislation last Friday.
  6.59 pm
  Mr. Marks: The Government's decision to support this motion suggests that they will support motions but that they will defeat any Bill that tries to do anything about the youth service. The Government have taken a hypocritical attitude to youth in defeating the Bill on Friday, and in supposedly supporting this motion today.
  Young people live an insecure and worrying life, even if there is full employment and a sound economic situation. The Government are making things worse for youth. Youth, especially black youth, is having to bear more than its fair share of unemployment. The Government are creating a major crisis for the future. If they expect young people to respect this House and the nation, they must give them the opportunity to attain self-respect.
  Question resolved and agreed to.
  Resolved,
  That this House, aware of the special problems facing young people in contemporary society, affirms the need of the Government to pursue a positive and realistic policy towards youth, to review the provisions of the Education Act 1944 in regard to youth provision, better to co-ordinate all departments' efforts in this field, and to provide suitable financial resources within its expenditure plans through Rate Support Grants and departments' grants for the youth service to discharge its proper role and purpose.

  NURSES (PAY)
  Mr. William Hamilton: I beg to move,
  That this House, recalling that the Prime Minister has said that the Government has a moral obligation to respond positively to the commitment of nurses not to take industrial action, drawing attention to the remarks made by the present Minister of Health, (Official Report, 15 March 1979, Volume 964, column 800), namely, that nurses came within the same category as the police, the firemen and the members of other services which look after our essential needs, and recalling that in the same debate the present Minister of State at the Home Office, the hon. Member for Aylesbury, said that the Government must respond to public opinion and ensure that the nurses receive the kind of treatment that the country is demanding for them and that nurses should be regarded as a very special case (Official Report, column 756), calls upon Her Majesty's Government to translate into practice these noble sentiments of the present Prime Minister and two of her Ministerial colleagues by granting salary increases as generous as those awarded to policemen, firemen, servicemen and Civil List Annuitants in the last two years, without equivalent deductions for living accommodation.
  I want to make one point on nurses' pay. The Prime Minister, some weeks ago, called attention to the fact that the Government had a moral obligation to respond positively to the commitment of nurses not to take industrial action. Two other Ministers have made the same kind of commitment The Minister for Health said that the nurses ought to be treated in the same way as firemen, Service men and policemen. The Minister of State, Home Office, made the same kind of commitment to the nurses. The nurses have been betrayed by the Government in exactly the same way—
  It being Seven o'clock, the debate stood adjourned.

ORDERS OF THE DAY

  CIVIL AVIATION BILL
  As amended (in the Standing Committee), further considered.
  7 pm
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Since Mr. Speaker made his provisional selection of amendments the official Opposition have suggested that with new clause 15 we should take amendment No. 30, Government amendment No. 35, amendment No. 36, Government amendment No. 63 and sub-amendments (a) to (e) thereto, amendments Nos. 37, 38 and 68, and Government amendments Nos. 65 and 51. I hope that this will be for the convenience of the House.
  New Clause 19

  CIVIL AVIATION BILL

    LOST PROPERTY AT AERODROMES
    Byelaws made in relation to any aerodrome under section 3 or 4 of the Civil Aviation Act 1968 (byelaws at local authority and certain private aerodromes) or section 31 of the Civil Aviation Act 1971 (byelaws at Civil Aviation Authority aerodromes) may include provision for securing the safe custody and redelivery of any property which while not in proper custody is found on that aerodrome or in an aircraft on that aerodrome; and any such byelaws may in particular—

    (a) provide for requiring charges to be paid in respect of any such property before it is redelivered; and

    (b) provide for authorising the disposal of any such property if it is not redelivered before the expiration of such period as may be specified in the byelaws.—[Mr. Tebbit.]

    Brought up, and read the First time.
    The Under-Secretary of State for Trade (Mr. Norman Tebbit): I beg to move, That the clause be read a Second time.
    Mr. Deputy Speaker: With this it will be convenient to take new clause 18—Custody and disposal of lost property at aerodromes.
    Mr. Tebbit: I do not think that I need detain the House for long over the clause, which the Government have tabled to take the place of the new clause tabled by the hon. Member for Batley and Morley (Mr. Woolmer). It confers on aerodrome owners a power to make byelaws covering the safe custody and redelivery
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    of lost property at aerodromes. It will allow charges to be made for redelivery to the owner, and allow disposal where the property has not been reclaimed within a reasonable period. The byelaws would require confirmation by the Secretary of State.
    We received representations from the joint aerodromes committee of local authorities and the Aerodrome Owners Association to the effect that the absence of such powers is causing difficulties for some of their members. Substantial amounts of unclaimed property accumulate during the holiday season at a few aerodromes, and the legal position regarding the right to dispose of it is in doubt. The British Airports Authority has regulations, made by statutory instrument, which govern these matters at its airports. The intention is that the Secretary of State will seek to encourage aerodrome authorities to model any byelaws they may make under the new clause on the BAA regulations. Where property may have been lost at either end of an air journey within the United Kingdom, it is clearly desirable that each should be treated uniformly as far as possible.
    Consideration was given to whether the objective could be achieved by making regulations which would apply at selected aerodromes, as the hon. Member's clause would have done. However, this would have created a difficulty of repealing overlapping provisions in local Acts and dealing with the circumstances of the CAA aerodromes in Scotland. The byelaw method carries the advantage that where a strong case for local variations in practice can be made, it will be simpler to introduce them.
    It will, for instance, be necessary to accommodate any byelaws made at Scottish aerodromes to the law of Scotland, and that law is at present under review following a report on lost and abandoned property by the Scottish Law Commission. That is a further reason for making use of the flexibility that the byelaw method offers us. It is a modest but useful provision which some aerodrome authorities have long sought, and I commend it to the House.
    I thank the hon. Member for Batley and Morley for raising the issue by tabling his new clause. I hope that he will be willing not to press it, in favour

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    of the version that I have tabled. If the hon. Gentleman had not tabled his clause, this opportunity to set the position right, or at least to make things easier for aerodrome operators and those who lose their property at aerodromes, might easily have been lost.
    Mr. K. J. Woohner: I am happy to accept the Minister's assurance.
    This is a matter that has concerned the members of the joint aerodromes committee of local authorities, of which there are 22 members. As the Minister said, a difficult situation arises when lost and mislaid property accumulates, often for many years. The local authority airports have not known with any certainty how they can properly dispose of their legal obligations.
    Although I am happy, as I have said, to accept the Minister's assurances, I think that he will not be surprised if I remind him that perhaps on occasions ministerial assurances on certain matters are given somewhat greater flexibility than is expected, just as the motions of Opposition Back Benchers sometimes turn out to be different from what has been expected.
    If, in due course, the powers in the Government's new clause prove to be less than satisfactory, I hope that the Minister will be open to further discussions. He will appreciate that I have not had time to have proper consultation with the airport authority concerned.
    I thank the Minister for his courtesy in accepting the spirit of my new clause and for acting so promptly in bringing forward what we are assured will be a more fruitful clause than mine.
    Question put and agreed to.
    Clause read a Second time, and added to the Bill.

    ' (5) The following section shall be inserted after section 23 of the Act of 1971— 23A.—(1) It shall be the duty of the Authority to perform its air transport licensing functions in the manner which it considers is best calculated to ensure that British airlines compete as effectively as possible with other airlines in providing air transport services on international routes; and in performing those functions the Authority shall also have regard—

    10

    (a) to any advice received from the Secretary of State with respect to the likely outcome of negotiations with the government of any other country or territory for the purpose of securing any right required for the operation by a British airline of any air transport services outside the United Kingdom; and

    (b) to the need to secure the most effective use of airports within the United Kingdom.

    15

    (2) In considering whether to grant any air transport licence it shall be the duty of the Authority to have regard to the effect on existing air transport services provided by British airlines of authorising any new services the applicant proposes to

    New Clause 15

  APPEALS
  In section 24(6) of the 1971 Act (which deals with regulations governing appeals) there shall be substituted for paragraph (a) the following paragraph—

  "(a) conferring on persons of prescribed descriptions a right to appeal (otherwise than on a point of law) to the Secretary of State from any decision of the Authority with respect to or to an application for a licence;"

  and there shall be inserted in paragraph (d) after the words "paragraph (b) of this subsection" the words "accept a finding of fact made by the Authority" and there shall be deleted the words "have regard in particular to the duties imposed on the Authority by section 3 of this Act" and substituted therefor the following "be required to act in a manner consistent with the objectives imposed on the Authority by this Act as amended. Provided that where the Secretary of State does not accept an earlier finding of the Authority he shall not reverse or vary the decision in question without first requiring the Authority to publish its opinion of the effect of the reversal or variation proposed by the Secretary of State, which opinion shall be formed only after a rehearing by the Authority in accordance with procedures to be established by regulation.". —[Mr. John Smith.]
  Brought up, and read the First time.
  Mr. John Smith: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker: With this it will be convenient to take the following amendments.
  No. 30, in clause 11, page 11, line 37, leave out subsection (2).
  Government amendment No. 35.
  Amendment No. 36, in page 12, line 28, after 'efficient', insert ', reliable '.
  Government amendment No. 63, in page 12, leave out from beginning of line 30 to end of line 45 on page 13 and insert:

  20

  provide under the licence, and in any case where those existing services are similar (in terms of route) to the proposed new services or where two or more applicants have applied for licences under which each proposes to provide similar services, the Authority shall have regard in particular to any benefits which may arise from enabling two or more airlines to provide the services in question.

  (3) Subject to section 3 of this Act and to subsections (1) and (2) of this section, it shall be the duty of the Authority in performing its air transport licensing functions to have regard to the need to minimise so far as reasonably practicable—

  (a) any adverse effects on the environment; and

  25

  (b) any disturbance to the public; from noise, vibration, atmospheric pollution or any other cause attributable to the use of aircraft for the purpose of civil aviation.

  30

  (4) In addition to the duties with respect to particular matters imposed on the Authority by the preceding provisions of this section, it shall be the duty of the Authority to perform its air transport licensing functions in the manner which it considers is best calculated to impose on the civil air transport industry of the United Kingdom and on the services it provides for users of air transport services the minimum restrictions consistent with the performance by the Authority of its duties under sections 3, 22 and 23 of this Act and the preceding provisions of this section.

  35

  (5) In this section—

  (a) references to the air transport licensing functions of the Authority are references to its functions under sections 21 to 23 of this Act and any functions conferred on it by regulations made under subsection (1) of section 24 of this Act; and

  40

  (b)' British airline ' has the same meaning as in section 3(1) of this Act.".

  (6) in section 24 of the Act of 1971—

  (a) subsection (2) (which contains provisions relating to guidance given by the Secretary of State under section 3) shall cease to have effect; and

  45

  (b) at the end of subsection (6) (duties of the Authority to which the Secretary of State is to have regard determining appeals) after the words "section 3" there shall be inserted the words"and section 23A ".

  50

  (7) This section, and the repeal of section 24(2) of the Act of 1971 provided for in Schedule 3 to this Act, shall come into force on such day as the Secretary of State may by order made by statutory instrument appoint; but the day appointed under this section must be later than the date of publication of the first statement of the policies of the Civil Aviation Authority under section 12 of this Act.'.

  Sub-amendment (a) to amendment No. 63, in line 6, leave out ', also have regard' and insert' (a) accept the'.
  Sub-amendment (b) to amendment No. 63, in line 7, leave out '(a) to any'.
  Sub-amendment (c) to amendment No. 63, in line 11, after '(b)' insert shall have regard '.
  Sub-amendment (d) to amendment No. 63, in line 16. leave out from 'licence' to end of line 20 and insert—
  '(3) In section 23(2) of the Act of 1971 (which provides the Authority with powers to revoke, suspend and vary air transport licences) there shall be inserted at the end the words "but only if it is satisfied that the holder of the licence consistently failed to provide an efficient and adequate service in accordance with the terms of the licence.".'.
  Sub-amendment (e) to amendment No. 63, in line 19, after benefits', insert and disadvantages '.
  No. 37, in page 12, line 37, after 'that', insert —
  'taking account of economic considerations and international agreements'.
  No. 38, in page 13, line 7, leave out also have regard, in assessing that effect, to any' and insert:
  'accept the'.
  No. 68, in page 13, line 45, at end insert:
  '(7) In section 5 of the Act of 1971, in subsection (1) at the end shall be added the words "provided that it shall be not less than three.".'.
  Govenment amendments Nos. 65 and 51.
  Mr. John Smith: This group of new clauses and amendments offers the House an opportunity to debate the changes in air traffic licensing policy that the Bill introduces—or perhaps does not introduce, because there is such a confusion of thought at the moment as to what the Bill means and how it is to be interpreted that I think I am entitled to put that gentle qualification at the beginning of my remarks.
  The new clause is an attempt to provide a better method of dealing with appeals. It arises directly out of the decision of the Secretary of State on the licensing of the Hong Kong to London route. It is an attempt to provide a better method of deciding these matters. In particular it draws a clearer distinction between what might be regarded as political grounds for making a decision and the

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  more ordinary grounds on which the Civil Aviation Authority might arrive at a decision.
  The main purpose of the debate will be to consider the whole question of air traffic licensing. Many people thought that we had a satisfactory method of dealing with it before the Bill was thought of, but along came the Government with the Bill. They said "We intend to make a change, not a very dramatic change but an important change. We shall remove from the Secretary of State and from Parliament the power to give guidance to the Civil Aviation Authority as to how it carries out the administration of the policy."
  We objected to that. We have argued about whether the Government or Parliament have the right to dictate principles on which civil aviation licensing is carried out and leaving to the CAA the difficult job of administering it. The Government said that they disagreed with our view, and from time to time the Under-Secretary said in Committee that it would be unfortunate to leave these things to politicians. I wonder whether he has thought about that since, in the light of the decision that the Secretary of State took recently. No doubt the Under-Secretary has had to think about it since then.
  But whatever the merits or demerits of the policy advocated in either side, the Government's position was that the making of licensing policy, as well as its administration, should be left to the Civil Aviation Authority. In a sense, they were building up the Civil Aviation Authority and giving it a wider role—some of it at the expense of the Government and of Parliament. Or so it all seemed.
  We were sailing along with a Bill which proposed this wider, greater and more effective power for the Civil Aviation Authority. There was uncertainty as to what it would mean and there was a certain amount of concern among airline operators as to what new policy the CAA would devise. To meet that concern, the CAA published some guidelines indicating what it thought would be its policy. It turned out to be not all that different from the policy that it had been operating under the terms of the guidance that had been given to the CAA
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  by the previous Government and Parliament. Some people said "Plus ça change, plus ćest la même chose. Very little will change in practice as a result of the Bill.
  Mr. Tebbit: I should like to prevent the right hon. Gentleman from going down a wrong track. That guidance and consultative statement was based on existing, not new, law. The CAA will shortly begin to consult on the basis of the new law when it knows what it is likely to be.
  Mr. Smith: The Under-Secretary has drawn the attention of the House to the monumental task facing the CAA in issuing new guidelines. First, it will have to find out what the law is. It seems that the Government and Parliament do not really know what the law is. Therefore, I do not know who will help the CAA in that task. I shall move on to that point shortly.
  I had taken the House to that stage in the present drama where the Government had indicated that the CAA was to be given a wider role. But suddenly out of the blue the Secretary of State made a decision on the Hong Kong-London route which seemed to controvert the whole system of civil aviation licensing in this country and certainly the policy that the Government were enunciating until that time. In one swift blow. as it were, he changed the whole situation. It was perhaps a matter of accident that the Bill had not got to this stage before that decision was reached and it therefore gave us an opportunity to consider it in greater depth.
  No hint was given by the Government in Committee that they were moving towards a policy of greater competition, if that is what they are moving towards. No doubt the Under-Secretary will tell us what they are moving towards when he replies.
  Certainly, as the Under-Secretary pointed out at various times in Committee, one could not draw parallels between this Bill and the deregulation which was being carried out in the United States of America. After all, as the Under-Secretary pointed out—this is column 813 of the Committee report—the way in which things had been done in the United States was for a deregulation Bill

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  to be passed and then for the Civil Aeronautics Board to carry out the policy that Congress had enunicated. He was implying that if we were to move to a policy of deregulation or greater competition, Parliament should say that was to be the policy and should put it in the Bill so that the CAA would know what to do. There was and is no reference in the Bill to any policy. The position was not that the Government wanted to change policy but that they wanted to leave policy-making to the CAA.
  What happened about the Hong Kong-London route? The Civil Aviation Authority, after considering applications from British Caledonian, Cathay Pacific and Laker Airways, reached the conclusion that only British Caledonian should be licensed on the route in addition to British Airways. In its decision and reasons it set out clearly why it had reached that conclusion. It was operating under the criteria of the existing legislation, although I think it is clear that it would have reached the same decision if the Bill were now law.
  The reason why the Civil Aviation Authority declines applications by Cathay Pacific and Laker Airways is not that there is any prejudice against those airlines—indeed, it made it clear that for most of the purposes of the Act all the applicants qualified—but that it did not think there was enough room on the route for more than one operator.
  One would have thought that was the type of assessment that the CAA was well qualified to make. It listened to the evidence submitted by all the applicants. The only argument for the route being able to take a larger number of carriers was that put forward by Laker Airways. That argument rested on assertions made by Laker about what was called the "forgotten man" at the bottom end of the market. Presumably some parallel was being drawn with the North Atlantic situation. That was gone into in detail by the CAA, and it reached the conclusion that there was no significant charter market for which scheduled services might develop as they had developed in the North Atlantic. The CAA said:
  "The Authority must regretfully regard the forgotten man as a myth. There is certainly no evidence that he is waiting hopefully for
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  the opportunity to travel between London and Hong Kong."
  Having gone into the matter carefully, the CAA rejected the Laker contention, which one would have thought was crucial to the Laker application. The CAA considered the evidence of the other parties; and British Caledonian and Cathay Pacific, in addition to British Airways which already held the licence for the route, argued that there was a limit on the capacity of this route. As that was the view of everyone apart from Laker Airways, it is no surprise that the CAA reached the view that there was some limitation on the range of demand. Indeed, it regarded it as part of its duty not to create excess capacity on the route from the start.
  7.15 pm
  In its decision, the CAA said:
  "The evidence of British Airways, B Cal and Cathay was that the route would not support three carriers although B Cal were willing to live with the presence of two other carriers if this were decided for wider reasons. The Authority agrees with the evidence. Since there is no foreign competition on the route, the Authority has considered whether it should experiment by licensing both B Cal and Cathay and leaving them together with BA to tailor the capacity to experienced demand. However, there must be a possibility that if the Authority were to choose this course, excess capacity would be provided from the outset, the regime would be unstable and one or two carriers would pull off the route. Given the importance of this route to Hong Kong the Authority does not feel able to take this risk. It must be in the interests of Hong Kong that the future regime should be sufficiently stable to secure for it an adequate and reliable service."
  The CAA then goes on to say that the evidence suggests that the licensing of both a second and third carrier on the route would at best result in a suboptimal outcome. On that basis, neither of the new operators on the route would have a sensible operation, and the needs of the consumer would be poorly met.
  That is talking about a situation without Laker Airways coming on to the scene. That is the situation with British Airways, British Caledonian and Cathay Pacific. It is clear from what I have quoted that the CAA went into this matter with some care, reached definite conclusions on the evidence and, assessing it with the experience that it brought to bear upon it, reached a clear view on how the application should be determined.

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  The CAA having made the decision, that was that. But the other parties appealed. The Secretary of State's decision might just have been understood if he had introduced one other carrier on to the route, but he introduced yet another—Laker Airways—and said to Parliament that he was operating on the same evidence as the CAA—I have just referred to some of the evidence—and that in his opinion the CAA had reached the wrong decision and that both Cathay Pacific and Laker Airways should be allowed on to the route.
  Purporting to act on the same evidence as the CAA had used in reaching its decision, the Secretary of State reached a different conclusion and completely overturned the CAA's decision. I should make it clear that he was not giving the CAA a political direction, which he has power to do if some international air service complication or general foreign policy consideration were involved. He could have given a direction to the CAA and used his powers in that way, but he chose not to do so. He professed to have a better understanding of the evidence than the CAA and therefore felt justified in reaching a different conclusion.
  That was a surprising conclusion for the Secretary of State to reach. It was not one that could have been predicted on the basis of what had been said by the Government since taking office and certainly not from the terms of the Bill up until that time.
  The important question is: where do we stand now? An optimist in the Department of Trade issued a press briefing which stated:
  "It has been suggested that the Bill as drafted would not in future allow a decision similar to that taken by the Secretary of State for Trade in respect of appeals about licences for the London-Hong Kong route. The Government believes this to be an erroneous view "—
  one would have thought that if the Government believed that to be an erroneous view, they could have let matters lie and that would be all right—
  "but has decided to clarify the position and put beyond doubt the factors which have to be taken into account when considering application for licences."
  That is why we have amendment No. 63, which introduces more criteria to be used by the CAA. It is not, of course, that there is any need for it, one should understand, according to the briefing from the
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  Department of Trade. If the House were in an impish mood tonight, I should have thought that it could take the Department at its face value and refuse to give it these extra powers, on the simple view that they are not necessary and that we should not be taking up the time of Parliament with them. Perhaps the Under-Secretary will endorse the view which these optimists in his Department have been putting about the place and, in particular, suggesting to the press.
  But where do we stand? This is a very serious matter. I think that civil aviation licensing is the most important function of the CAA. It is a matter of very great importance not just to airline operators but to the travelling public. Do the Government have a policy on the matter? The previous Government had a policy on it. The Conservative Government before them had a policy, I think. Both Governments were both operating under the guidance which the Secretary of State could give to the CAA, and Parliament was consulted as well. When the present Government came into office, we thought that the only change that would take place would be that they would give the policymaking role to the CAA.
  As I say, we did not particularly approve of that, but at least that was explicable—that the Government did not want to make the policy so they would give that role to the CAA. But that appears not to be the case, because from time to time it appears as though the present Secretary of State for Trade wants to be thought of as an open skies Minister, as a man who has opened up this closed world of civil aviation licensing and let the people in, dressed as Mr. Laker. That appears to be what he wants people to think of him. He has been benefiting from editorials in some of the more popular newspapers saying what a bold, ingenious and determined Minister he is, cutting through all the red tape and all the claptrap and allowing cheaper fares to operate on international aviation markets.
  I have not seen the Secretary of State rushing to deny any of these plaudits, or turning them away and saying "It is unfair so to describe me". He seems to be quite enjoying it. I am not so sure that his Under-Secretary enjoys the Secretary of State getting that kind of credit. That might be a rather more complicated

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  matter to investigate. Certainly, from time to time the Under-Secretary must feel very like a monkey when the organ is grinding out a different tune and he has to come to Parliament and offer us his little thoughts on the matter.
  I know that the Secretary of State is presently in Nigeria. I wish him every success there. He told me that he would be there for this stage of the Bill, and I take no objection to his not being present tonight. However, occasionally it would be an advantage if he were to come to the House and tell us what his aviation policy is. It would be an advantage to us, and I dare say that it might be of some advantage to the Under-Secretary as well, because we do not know what the policy is. We have some idea at the beginning. We have absolutely none now.
  Are the Government in favour of more competition? Is that what it is about? Are they in favour of an open skies policy or of a sort of moderate open skies policy—a wider skies policy, or some such phrase? I do not know what it is they have in mind. They should tell us. They should certainly tell the airlines of this country what kind of policy it is that they want followed. They might even be decent enough to drop a hint to the CAA, which has the responsibility, as to what kind of policy the Government think it ought to be following.
  If we were to take the Hong Kong decision as being an example of the Government's policy in operation, that would be an all-comers policy: "If you want to put in for a licence, put in for it. Make as many assertions as you like about what a route can bear. Everyone should be allowed to compete. Let all the applicants get a licence. Do not worry too much if you fail at the first hurdle, because that is only the first stage of a two-stage rocket. You nip round to the Department of Trade as soon as the ink is dry on the CAA licensing decision and get it change by a very obliging chap called Nott, who sits along at the Department of Trade but who does not have much time for the CAA decisions. He is the chap to put it right. Just write a nice letter to him. If you cannot see him, see the other chap there. He is not known to be so keen on the
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  policy, but he can pass it on to his boss, and perhaps you will get there quite easily and quite quickly."
  I wonder if that really is the Government's policy. Do they want to encourage more competition? Do they believe that one should not have regard to the capacity of the route but should let everyone run on it? I suppose that that is the policy. If the Government believe it, they should state it. If they have recently come to that view, they should state the time of their conversion and tell us what it was that led them to that view. It is difficult for us to understand why they now hold that view, because they have kept so silent about it at all stages until now.
  Parliament needs to know before the Bill becomes law, because there are severe dangers, to put it no higher. If the Government now believe in the policy of deregulation, they have been seriously misleading the House up until this stage, and they have got the approval of the House for this Bill, as it has been given so far, on a false prospectus. Therefore, we need to know, the airlines need to know, the travelling public and the whole travel and leisure industry need to know, what is the Government's policy.
  If the CAA, to which the policy-making role has been given, is not allowed to exercise it but is to be cut down on appeal after appeal, is it not time that the Government reversed the whole idea of giving the CAA this responsibility? If they have no faith in the CAA's capacity to devise policy, there is little point in giving it that policy-making role. Will the Under-Secretary address himself to this matter. I am sure that he will have a very wide and interested audience.
  Secondly, what are the implications of this Hong Kong decision? Is it one aberration, something that stands on its own, sui generis, something which can be explained in its own facts and almost entirely in its own circumstances? Or is it the harbinger of things to come? Is it the sort of decision that the Secretary of State would like to see the CAA taking without him having to be bothered about an appeal? Is it, as I say, peculiar to the circumstances, an aberration from the norm, or is it something which will characterise the way in which the Secretary of State handles future applications?
  Mr. Clinton Davis (Hackney, Central): An aberration from Norm is absolutely right.
  Mr. Smith: Yes—an aberration from Norm, if not an aberration from the norm. I think it was probably an aberration from dear old Norm as well.
  The other very important matter about which the Under-Secretary should tell us is where we stand now about applications to the CAA. I think that this is the first time for a very long time, if not the first time ever, that a Secretary of State has overruled a CAA decision in such an all-embracing and cavalier manner. It is not just a difference of interpretation; it is a totally different approach, allegedly on the same facts. I take leave to doubt whether it was on the same facts. I know why the Secretary of State said that to Parliament, though. If he had said to Parliament that he had taken a decision on something other than the same facts, he would have had a case brought against him by some of the disappointed applicants. All that he was doing in Parliament was proofing it against legal challenge rather than telling Parliament the truth. That was just a legal device.
  Looking at the same evidence, no one could have reached such totally opposite views about it. It is not open to any reasonable man to believe that explanation. So the Secretary of State had his tongue firmly in his cheek and half way down his throat when making that statement.
  Mr. Tebbit: That is difficult.
  Mr. Smith: It is very difficult. It is almost as difficult as it is to explain the Secretary of State's policy. That will give the Under-Secretary some idea of the challenge that he has to face.
  What does it mean? Does it mean that the Secretary of State will just take his own view on the evidence and all future applications? What will the future policy on appeals be? Can anyone ever again have faith that he will get a hearing from the CAA and that some respect will be given to the decision that has been arrived at there?
  As I have said, what comes out with crystal clarity from this particular case is not just a slight difference of view or a feeling that the Secretary of State had
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  that perhaps the CAA had not given sufficient weight to one particular piece of evidence. It is such a totally different approach. I suspect that it is as simple as this. The Secretary of State decided that he was in favour of Mr. Laker being allowed on this route and was determined to let him in on this route whatever the state of the evidence was and whatever the view of the CAA. I think that I am not very far from the truth. That was a totally political personal decision arrived at without any consideration of the normal method whereby these things are done, without any regard for the machinery or the rights of the parties, and something which was just brought in and covered with sufficiently careful words when he spoke to Parliament to stop there being any legal challenge of it. That is the present situation.
  Under the new clause we suggest that there is a way of dealing with this matter which is a little better. Parliament ought to consider this, if Secretaries of State continue to behave in this way. It would have been much fairer for the Secretary of State to refer the matter back to the CAA. If he really felt that it had been unfair to Laker, why did he not refer the matter back to the CAA and say "I think that you did not give enough weight to what Mr. Laker said and you should listen to his evidence again." That would have allowed B Cal, Cathay and the other parties, and British Airways, to look into the matter carefully and offer some critique, even a more developed critique, of what had been offered in evidence by Mr. Laker, and the CAA could have had another look at it. If it had reported back and said "Secretary of State, we have reconsidered the issue and we have reached the view that we were right in the first place"—no doubt it would have come to that decision—it would have been crystal clear that the Secretary of State was acting on political prejudice or favouritism, or on some basis of political choice and not a proper evaluation of the evidence.
  7.30 pm
  Mr. Cranky Onslow: The right hon. Gentleman seems to be getting rather obsessive about the Laker angle to the Hong Kong hearing and the decision that emerged. What does he say about the fact that Cathay was originally

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  denied a licence and about the decision of the Secretary of State? Is he to brush that totally aside?
  Mr. Smith: I am dealing with what I think is the most surprising part of the Secretary of State's decision. I think that even the hon. Member for Woking (Mr. Onslow) will concede that it is pretty surprising to subvert the evidence. As the hon. Gentleman knows, Cathay was not asking for such a result. The nature of the Cathay application was that only it in addition to British Airways should be licensed on the route. As I understand it, it was not asking for an openskies policy. I did not want Laker to get a licence; nor did it want British Caledonian to be licensed. Cathay wanted Cathay to be the only competitor. As I understand it, that was the way in which it made its application to the Civil Aviation Authority.
  I can understand more clearly the Secretary of State intervening to allow in Cathay. The market will be less stretched if another one is allowed in than if another two are given licences. That must be so. The hon. Member for Woking has a great capacity for shaking his head in apparent incomprehension. He may not understand what I am saying, but surely it is fairly obvious. If a market is stretched by two operators it will be a damned sight more stretched if there are four operators.
  If the Secretary of State had doubts about any of these matters, he should have referred the issue back for further consideration. That would have allowed the other parties the opportunity of further comment. They had no idea that the Secretary of State was about to reach such a decision. Some of them took action upon the granting of the licence, For example, I think that British Caledonian acquired other aircraft in anticipation of its being able to run the route on the terms on which the authority had granted it a licence.
  As a result of the Government's having made a botch-up of this licensing application we must now wonder whether they have seriously misled Parliament and the industry on the authority's civil aviation licensing policy. Secondly, they have created total uncertainty about that policy. The Under-Secretary of State
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  will have to try to straighten it out and tell us what the policy is. Thirdly, they have upset any confidence that there might have been. There was a considerable amount of confidence in the developing expertise of the authority as a fairminded arbiter.
  I am surprised that the Under-Secretary of State chuckles. After all, he was advertising that the authority was good at carrying out policy and that it should be given responsibility for devising it. He knows that there were difficulties between the authority and the previous Labour Government. However, that Government never over-turned the authority in such a cavalier manner as the present Government have done.
  Mr. Tebbit: I am amused, because I recollect the long hours of debate in Committee when I was saying constantly to the right hon. Gentleman that he should not continue to imply that the authority consisted of a bunch of nutters who would go around tearing everything up by the roots and throwing it about the place. I said that in the event that it got it wrong from time to time, the Secretary of State would have the opportunity to put matters right on appeal.
  Mr. Smith: I do not think that I ever described the authority as a bunch of nutters. On reflection, I am sorry that I did not describe the Secretary of State as a nutter. That would have been not only apt but an accurate prediction of how he would behave. The hon. Gentleman knows that there was no dispute in Committee about the competence of the authority to handle applications or about the expertise that it had developed. The issue in dispute was whether it was right in terms of parliamentary democracy to give it responsibility for making policy. I can understand that the hon. Gentleman wants to return to the old arguments, but he must realise that they are now behind us. It appears that those issues do not divide us. The division represents our inability to understand the policy that the Government are proposing. No doubt the Under-Secretary of State will rise to tell us what the present civil aviation policy is if he can explain it in a word.
  It is hard to understand how a greater botch-up could have been made of anything than the Government have made of something that is not inherently difficult

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  —namely, the devising of a sensible civil aviation policy and ensuring that it is carried out with sense and discretion. Surely that is one of the minor tasks that any Government have to face. However, the Government proposed a change of policy. They had everyone walking down one garden path and then promptly introduced an abrupt change of policy that led to general confusion and bewilderment. It would have been hard to have made a greater mess of civil aviation policy.
  I suggest that the Government take these issues away and think about them rather more clearly. There was no need to put these changes into the Bill. There is no especial relationship between civil aviation licensing and other parts of the Bill. It would have been better if in the first instance the Government had issued a White Paper or a Green Paper and had set out what changes, if any, they wished to make in civil aviation licensing policy. They should have canvassed opinion widely and perhaps had a consultative debate in Parliament. With the wisdom culled from those different sources—there would have been a fair amount of wisdom from hon. Members—the Government could have proceeded with a more intelligible civil aviation licensing policy.
  It is still not too late for the Government to adopt that approach. The only way in which they can effectively recompense those concerned for the total shambles that they have created is to adopt such an approach. That would involve their not proceeding with amendment No. 63 and giving these issues much further consideration.
  Mr. Robert McCrindle: I welcome the fact that new clause 15 has been grouped with a number of additional amendments. That grouping enables me to make one speech instead of the four that I had planned. The bad news is that I shall probably detain the House a little longer on this occasion than I had originally expected.
  I start by directing my attention to the appeals procedure in the new clause. There is no doubt that questions have been asked about the value of the appeals procedure in the new circumstances of air traffic licensing that the Bill under-
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  pins. If there are to be no guidelines from the Government to the CAA, and if that body is to be left to create its own guidelines, an appeal will lead only to a reversal of a CAA decision. If the Secretary of State is prepared, in effect, to overthrow the guidelines that he is requiring the CAA to issue, I fear that the appeal procedure will amount to nothing more than going through the motions. I fear that it will have no real value and will certainly be unlikely to lead to a frequent reversal of CAA decisions. If that is not so, the value of the CAA, on which the Government are placing so much faith, will be undermined.
  That had been my understanding as the Bill passed through Committee. However, we now have the experience of the Hong Kong decision. Whatever else one may say about it, it is not tinkering with a CAA decision; it is positively overthrowing a CAA decision. I understand the considerable pressures that must have been brought to bear on the Secretary of State for Trade to reverse the decision of the CAA on the Hong Kong route. However, in the light of the confusion that now seems to prevail in several quarters about what the appeals procedure is to contain there is a duty upon the Government to spell it out and to clarify it as we come to the concluding stages of our consideration of the Bill.
  It is on record that I said that the Hong Kong decision was not right. I take that view for several reasons. It is correct that two additional carriers may just have survived on the London-Hong Kong route. However, the addition of Laker Airways will mean a scramble for travellers, particularly at the lower end of the fare scale. I hope that the Minister will forgive me for saying that no one —not even the Secretary of State—has convinced me that that additional number of travellers to Hong Kong exists. Even if those travellers were to exist, I would respectfully question whether sufficient hotel accommodation exists in Hong Kong to attract additional visitors. I would question whether there is a reasonable possibility of such accommodation being provided in the near future. That is my first practical reason for questioning whether the Secretary of State has made the right decision.

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  My second reason for questioning the Secretary of State's decision is more fundamental. I do not accept that market forces alone should be the deciding factor. If one of the airlines now authorised to fly the route, namely, British Caledonian, were to go out of business as a result of the decision, there would be wide ramifications. The argument in favour of market forces is good up to a point, but market forces should be qualified and should take account of such ramifications.
  Thirdly, I note the crazy fares. There is no other way of describing the fares now offered competitively by all four carriers. Such fares cannot be sustained for long. If British Airways set their mind to it, they can undercut the other three carriers, because they have the necessary muscle. That cannot be of advantage to British Caledonian, Laker Airways, or Cathay Pacific. For those three reasons, I question the appeals procedure contained in the Bill.
  I respectfully suggest that the CAA is also dismayed by the Hong Kong decision. That is hardly surprising. It thought that it was required, under present and prospective procedure, to assess the economics of running a particular route. It thought that it was required to consider the traffic potential. However, it appears from the decision that the Secretary of State has opted not to take account of such considerations. The CAA also felt that appeals to the Secretary of State would, at the very least, lead to a further approach to the CAA before a basic decision was overthrown. However, the Hong Kong decision has shown that under existing procedure that is not so.
  In the interests of all, the policy should be more clearly spelt out. On the positive side, appeal may involve the prospect of changing a CAA decision. That should not be entirely dismissed. In such circumstances, what price delegating the creation of the guidelines to the CAA? Why not allow the Department of Trade to retain control over setting up the guidelines and restore the understanding of appeals endorsed by the Secretary of State's decision on Hong Kong?
  New clause 15 does not meet my questions about the appeals procedure. I am therefore unlikely to support it as it
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  stands. However, I hope that it will lead to a clearer statement of Government policy on appeals.
  7.45 pm
  I shall consider amendment No. 30 in conjunction with new clause 15. The amendment deals with the guidelines. Either the Department of Trade issues guidelines and there is a worthwhile appeals procedure to the Secretary of State along the lines that I have described or the CAA issues its own guidelines—as proposed in the Bill—and an appeal against those guidelines becomes almost a matter of form. A third option—which I believe we are being given—is that the CAA issues its own guidelines, with a full-blown appeals system in operation at the same time. That would undermine the CAA, in which the Government place so much reliance. In such circumstances everybody will wish to test the CAA line. Government intervention will become greater, not less.
  One of the assumptions behind the Bill is that Government intervention should decrease. However, if my assumptions are correct, Government intervention will do no such thing. Everybody will feel that there is reason to appeal against a CAA decision. I hope that the Under-Secretary of State will reconsider the Government's position on appeals, and their intention to concede to the CAA the right to create its own guidelines.
  I understand the arguments in favour of non-intervention. I do not suggest that the CAA is unsuited to the task that the Government wishes to give it, but international agreements will oblige the Government to become involved. Government success in international negotiation will force intervention in CAA licensing policy. I admire my hon. Friend the Under-Secretary of State's softly, softly, step-by-step, approach to negotiations with European Governments with a view to opening up aviation in Europe. However, if he succeeds, he will be unable to restrain himself from intervening in the creation of guidelines. At its heart, the Bill intends to hand that power over to another body. We should be better advised to leave the issue of loose guidelines in the hands of the Department of Trade and to firm up the appeals procedure in the process.
  I turn to Government amendment No. 35 and amendment No. 36, which stands

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  in my name. I have always believed that aviation policy—no matter which Government are in power—should be based on a combination of competition and stability. I accept that we should open up air routes to "measured competition." However, we should not do so to such an extent that it leads to day-to-day uncertainty about whether an airline will retain its licence. Efficiency and reliability are fundamentally important. Competition should help to achieve that. Uncertainty and a lack of day-to-day knowledge whether an airline will be allowed to continue serving a route will prove damaging. The Government should remove such uncertainty.
  Every carrier needs to apply forward planning. An airline should be able to order new equipment with some assurance that, provided it continues to serve the route adequately, it will not be pushed off that route unceremoniously. Instability will lead to a poorer service for the passenger. The airlines will live virtually from day to day, going only as far as competition requires them to go in introducing an upgrading of their services.
  The subsection that it is the intention of Government amendment No. 35 to remove is in the Bill in the first place because I joined the Opposition in voting along those lines in Committee. I am unrepentant about having taken that step, because I believe firmly that competition is splendid but that it must run hand in hand with some stability for the airlines.
  I seek in amendment No. 36 to add the word "reliable" to make clear my intention in voting with the Opposition in Committee to insert this subsection.
  It is astonishing how widespread has been the support that I have had in being a party to the introduction of the subsection. I have had indications from three very different sources that they are in favour of retaining the subsection that the Government would have us remove. I have had an indication, for example, from British Airways that it is their wish that the subsection remain. Their reason is understandable. They wish to retain the routes that they have at present if they can prove that they are serving them well.
  One would have thought that almost inevitably that would lead to the oppo-
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  site position being taken by such airlines as British Caledonian and Laker. That is not the case. I have had indications from both those independent airlines that they also support the retention of the subsection. They believe that if it remains in the Bill it will give them a chance to break in competitively to routes which at the moment are served exclusively by British Airways. That surely is a demonstration that the subsection reflects an opportunity to compete but at the same time provides some protection against unfair competition and instability.
  It is all too easy to offer massive improvements either in fares or in frequencies in order to get in on routes and then to find it impossible to provide those improvements. It is no good then our turning to the former airline to revive the routes that it previously served. Either it will be no longer there or it will be no longer interested.
  I contend that my approach represents the most balanced one that it is possible to achieve. It would encourage competition. At the same time, it would keep an eye on the instability with which airlines cannot live.
  I understand that the CAA is opposed to the inclusion of the subsection, and presumably it has helped to persuade my hon. Friend that he should move to take it out. If the CAA takes that line because it is worried about the definition of vague terms in the subsection, let us help it. Let us say that we are prepared to meet its objections. But let us, in rejecting the subsection, be careful that we are not creating dangerous instability such as that which I believe will emerge if we are seen to be engaging in overmuch deregulation.
  I turn finally to Government amendment No. 63 and to my own amendments Nos. 37 and 68. The amendments are all about opening up routes and reducing fares through competition.
  I have no hesitation in placing myself foursquare behind the idea that competition should be permitted and that, as a result, fares should be allowed to fall. But I believe sometimes that we are deluding people by pretending that there is some vast opportunity, almost overnight, to reduce fares between London and European destinations. There is, no doubt, an opportunity to make reductions, but it will arise

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  principally at off-peak periods. I am not saying that that is bad. I am not opposed to it. I should like to place on record my warm support for such initiatives as British Caledonian's mini-prix approach. I wish it well. I hope that the Government, in their discussions with other European Governments, will give British Caledonan's approach any boost that they can.
  Although there are opportunities for reducing fares in Europe, reductions can be achieved only if we persuade other countries in Europe to do likewise. No matter what the Secretary of State may feel, I am certain that the Under-Secretary, who has been at the sharp end of these negotiations, will realise that such negotiations are neither easy nor quick.
  I turn, then, to Government amendment No. 63. It calls for an opening up of routes to competition by other carriers. I have no difficulty in agreeing with that. However, it asks the CAA to license two or more carriers in a route where "benefits may arise". That is singularly lacking in precision. Benefits to whom? Obviously the intention is that the benefits should be to the traveller. But will the long-term benefits to the traveller still be as easy to sustain if our action leads to a major dilution of the profitability of the airline?
  I appreciate that the purpose of the amendment is to clarify the Government's competition policy. This was touched on by the right hon. Member for Lanarkshire, North (Mr. Smith). I am very much in favour of opening up these routes to competition. But I hope that the Minister will forgive me when I say that I am not sure that the amendment takes us as much further along the way to clarification of the Government's policy as it should.
  I repeat my theme, which whatever else hon. Members may say against the position that I take I hope that they will concede has been my consistent approach over a long period. The service to the passenger over the long term as well as the short term is extremely important. Anyone can cut fares at a stroke. It is the difficulty of maintaining over a lengthy period the lower fares that competition is alleged to bring about that leads me to put a few question marks around the policy proposed by my hon. Friend.
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  I am convinced more than anything by the American experience over the last few years that too much competition, plus rising oil prices and unrealistically low fares, will result only in plunging profitability. That in turn equals potential disaster, which, in turn, means fewer and not more benefits to the passengers. I think that we should know the yardstick by which the benefit described in amendment No. 63 will be judged and whether the medium term and the long term will have any part to play in its assessment.
  I turn briefly to my amendment No. 68. The simple point that I wish to make is that if the CAA is to be given power to create policy and to lay down guidelines a balancing curb is needed to avoid the numerous appeals to which I have referred. I cannot believe that if the CAA obtains the guidelines and operates under them—in fact, creates its own guidelines—there will be a reduction in the number of appeals. On the contrary, I believe that the number will increase.
  I take this opportunity to say that the CAA has performed very well since it was created. It is no disrespect to it to say that the industry fears that one CAA member sitting in judgment on an application for a route licence is not sufficient. Eminent aviation lawyers Peter Martin and Denis Henry, QC, have both supported that line strongly. Under the present set-up the CAA is given discretion about how many people should form a quorum. The simple basis of my amendment No. 68 is that it should continue to be given discretion but that the minimum number should be three. I would be surprised if the CAA took major exception to this modest proposal.
  I hope that I have said sufficient to make the Government realise that while I continue to be a firm supporter of competition policy I am at least as firm a supporter of the stability of the aviation industry. It is in that spirit that I propound the amendment.
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  Mr. Tebbit: It might be for the convenience of the House if I intervene at this stage. Perhaps, if the House is kind enough, I can add a few words towards the end of the debate to tie up some of the ends. We are discussing in this package a large number of amendments which, to a large extent, are interrelated.

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  The right hon. Member for Lanarkshire, North (Mr. Smith) was a little unkind to me. He tried unjustly, to dissociate me from the plaudits offered to the Secretary of State. Like the Secretary of State, I enjoy a plaudit or two myself. It was most unkind of the right hon. Gentleman to imply that there was some difference between the two of us which meant that I was not worthy to receive the plaudits that the Secretary of State received.
  Mr. Clinton Davis: The Under-Secretary is very much a reformed character. There was a time when he seemed to yearn only for a standing aversion.
  Mr. Tebbit: It is nice of the hon. Gentleman to say I have reformed. He should not necessarily believe it.
  We are not taking civil aviation policy away from the House of Commons. How could we? We are debating it this evening. This is the appropriate way to debate it and to legislate upon it. The problems of the guidance route taken by the Conservative Government in 1971 came to light during the period of the previous Labour Government. I remind the House that this is the only legislation on the statute book that uses the technique or device of offering guidance under the main Act to an authority such as the Civil Aviation Authority.
  It was not surprising that the technique was adopted when the 1971 Act was first passed by the House. After all, the whole concept of the Civil Aviation Authority as a licensing authority was new. Not unnaturally, the House and the Government of the day felt that some guidance of that sort, outside the statute, was desirable, but the problem that arose was that guidance, if it is to go further than what we have referred to in the industry, in shorthand terms, as the motherhood clauses, telling the CAA "Do not forget to be kind to the customer; do not forget to be nice about the environment; do not forget to behave rather well," suffers inherently from the danger of being in conflict with the Act.
  If guidance is important but is not in conflict with the Act, it is not necessary. If it is important and conflicts with the Act in any way, it will be ruled by the court to be ultra vires. That was the fate of the guidance issued by the previous Labour Government. The pre-
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  vious Government had a pretty rough time in many ways over that issue. They were not trying to be wicked in the way that they framed their guidance. They simply hit the rock upon which guidance is likely to founder unless it founders in the opposite direction by meaning nothing except a few nice phrases.
  I was surprised by the right hon. Member for Lanarkshire, North, who should have had at the back of his mind all the time that he was talking about Hong Kong the case of Laker—the remarks made in the past about Laker and the general idea of the lower fare concept and greater competition. His right hon. Friend the Member for Stepney and Poplar (Mr. Shore), who was then Secretary of State for Trade, said of Skytrain:
  "Moreover, having regard to the existing facilities that are available for cheap travel, it would confer no really worthwhile benefits to the consumer."—[Official Report, 11 February 1976; Vol. 905, c. 443–44.]
  That was the basis of the policy towards civil aviation that the right hon. Gentleman's Government pursued. They believed that Skytrain would offer no worthwhile benefits to the consumer. What has the consumer said since that time? He has taken a very different view, and so has the whole civil aviation industry. I was not surprised at the attitude taken by the Labour Government. When the then Secretary of State made his statement that day on the general principle of his aviation policy —he put it time and again in debate—the one person that he never mentioned was the passenger. If this Government's policy on civil aviation can be encapsulated shortly and sharply, it is that they believe that the industry exists for the passenger, not that the passenger exists for the industry.
  The right hon. Gentleman asked about the Hong Kong case. He talked of the matter as though it was deregulation. Of course, it is not deregulation. The right hon. Gentleman should know that. Deregulation exists when it is not necessary to apply for a licence and when one is able to operate freely without any licensing restrictions. That is not the case in this instance. To talk of this as deregulation, whether or not one is in favour of deregulation, is not correct.
  Mr. Clinton Davis: It would help if the hon. Gentleman would clarify the

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  point that he seeks to make. While it is true that there had to be a licensing procedure, is it not right, in relation to fares, that on the Hong Kong route there is a free-for-all? There is no licensing procedure in relation to the assessment of the fares.
  Mr. Tebbit: If the hon. Gentleman is asking whether the Government exist to keep the level of fares higher than the airlines would otherwise offer, the answer is that they do not. The Government allow the airlines to offer the fares which they, in their judgment, think appropriate to the circumstances. The fares are not regulated, but entry to the route is regulated. What is known as deregulation in the United States means that there is no regulation of entry on to the routes. That is the key point. The right hon. Gentleman was talking not so much about fares as about which carriers were allowed on the route.
  Mr. John Smith: Does the Minister expect the House to appreciate that there is much difference between what has happened over Hong Kong and what happens under a deregulated system, namely, four carriers, without restriction on fares, operating on one fairly thin route?
  Mr. Tebbit: The right hon. Gentleman still misses the point. If six carriers had turned up, it does not mean that six would have been licensed. If two more carriers asked to go on the route tomorrow, there is a licensing procedure and they would have to make their case. They would either be accepted or turned down. That is the whole concept—
  Mr. Smith: Or get it on appeal.
  Mr. Tebbit: Or get it on appeal. That is the whole concept of a licensing procedure. No carrier can operate on the route without a licence. It is not deregulated.
  The right hon. Gentleman also affected not to know quite how the Secretary of State had managed to decide on the appeal in the way that he did. If he looks at Hansard of 17 June—not that this is really necessary, because he was present while I, unhappily, was in the United States and not able to enjoy the day at first hand—he will see exactly what the Secretary of State said:
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  "In particular, I was convinced by Sir Freddie Laker's contention that there is a large untapped market for this route if fares are pitched at the right level… I also felt that the authority had placed too much emphasis on the economics of the proposed additional services in the short term, and too little on the benefits to the development of the United Kingdom civil aviation industry generally of choice of service and competition on a route such as this—in particular, competition with other non-British airlines."—[Official Report. 17 June 1980; Vol. 896, c. 1359.]
  Mr. Smith: This is all blarney.
  Mr. Tebbit: The right hon. Gentle-many may say that it is all blarney, but that is the basis on which my right hon. Friend made his decision. The right hon. Gentleman asked whether it should be taken from this that in all future cases where there was a multiplicity of airlines applying for a route, they would be given the rights. I have to remind him that Hong Kong is a cabotage route, but not like other cabotage routes. It is not like London to Manchester or any such route. It is much longer and it is a thicker route. Nor is it like other international routes.
  The rules of the international route game do not apply, because in many cases on international routes a restriction is imposed by the other country—seldom by ourselves—that the traffic should be split 50:50 between the two national carriers, or that if we put on two carriers, our 50 per cent. share must be split between them.
  It is therefore unwise to think that this Hong Kong route decision can be read across in every respect to other decisions that will come before the CAA—or, indeed, will come before the Secretary of State on appeal. It would therefore be helpful if I mentioned a couple of difficulties that I see in the way of accepting the new clause.
  First, the new clause is framed—I do not know whether the right hon. Gentleman intended this; perhaps he did not—in such a way that there will be no appeal to the Secretary of State on a point of law. That means, not that the Secretary of State cannot interfere, but that the unfortunate applicant cannot appeal to the Secretary of State, even if he thinks that the CAA has made an error on a point of law. He has to drag the matter all the way through the courts to achieve his end, when he could achieve it much more

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  simply, expeditiously and cheaply by an appeal to the Secretary of State.
  Mr. Clinton Davis: Again, it would be helpful if the Minister could clarify the matter. Is it not the case that at present if an aggrieved party considers that the CAA has erred in law he might have a right to go to the courts, but, at all events, if he believes that the Secretary of State has erred in law, he might consider that he has a right to go to the courts? Perhaps the Minister could explain the position.
  Mr. Tebbit: Of course the hon. Gentleman is right, but the point is that the new clause would remove the right of appeal to the Secretary of State on a point of law—needlessly so, I believe.
  Secondly, the new clause would require the Secretary of State to accept findings of fact by the CAA. What is a finding of fact? Is a traffic forecast a fact? What exactly is a fact in this sense? As soon as we use such an expression, the question whether something is a fact becomes disputed and once again the matter would have to be dragged through the courts, not for the substance of the appeal, but on whether an appeal could be made.
  Mr. John Smith: The hon. Gentleman may be unaware of it, but the phrase "findings of fact" is used constantly by lawyers, especially in relation to appeal proceedings. If he rests such importance on the meanings of words, he must be careful. If he asks "What is a fact?" some of us may ask him "What is a benefit, and to whom?"
  8.15 pm
  Mr. Tebbit: Yes, but a benefit is adjudged by the CAA. If it judges that there is a benefit but others dispute it, that is a matter that can be appealed. The question whether something was a fact would not be capable of appeal.
  Is the right hon. Gentleman saying that the CAA is incapable of error and that if it says that something is a fact it is a fact? That is the implication of the new clause. I can see the most appalling number of legal wrangles over points of law, points of fact, which were which, whether one had a right of appeal to the Secretary of State and so on. It would be much better not to abridge the
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  rights of applicants to go to appeal, as the new clause would do.
  A further defect is that the new clause would change the duty imposed on the Secretary of State by the 1971 Act when considering whether to give directions as a result of an appeal from a duty to have regard in particular to the duties imposed on the authority by section 3 of the Act to a duty to act in a manner consistent with the objectives imposed on the authority by the Act as amended.
  I think that the intention must be to strengthen the obligation placed on the Secretary of State, but that is unnecessary. The point will be covered by clause 11(6)(b), as amended by Government amendment No. 63. That inserts at the end of section 24(6) a reference to the new section 23A which is inserted by amendment No. 63. It would therefore be appropriate if I dealt briefly with amendment No. 63.
  This amendment arises partly because of an excellent point made by the right hon. Gentleman in Committee. He said:
  "Instead of making amendments to section 3 of the Civil Aviation Act, the simple thing would be to repeal the whole section and rewrite the provisions in the new Bill."— [Official Report, Standing Committee B; 22 February 1980; c. 665].
  He said that if one kept "popping in and out" with bits and pieces the legislation would be much more difficult to read. [Interruption.] Yes, indeed. I am not trying to put words into the right hon. Gentleman's mouth, but I agree with him that it was extremely difficult to read in the way that it was originally drafted. Whatever view one takes of the substance of the amendment, at least the provision will now be clearer to read.
  I took the view that the Bill as drafted should have made it reasonably clear to all those concerned which way it was pointing the CAA. However, the removal of section 3(1)(b) from the 1971 Act—the section which provided that there should be opportunities for competition with British Airways by at least one other British carrier—has led in some people's minds to the belief that our amendments were steering the CAA in a direction which would virtually prohibit dual designation.
  I did not take the view that the Bill as drafted did that, but I think that it is better for the elimination of doubt, so

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  far as that is possible in these matters, to make the position clear. The new section 23A(2), which is the substance of amendment No. 63, sets out the matters anew. The only substantial change appears at the end of the subsection, where it refers to the CAA giving consideration to the benefits that may come from competition. That does no more than put the CAA on notice, in the same way that section 3(1) (b) of the 1971 Act did that there should be the opportunity for competition.
  Section 3(1) (b) was wrong in that it referred only to other British airlines having the right to compete with British Airways. Why should competition be allowed on British Airways' routes and not on those of British Caledonian or Laker? Why should we assume that there should be competition for British Airways by another British carrier between, for example, London and Johannesburg? Even if that was not hinted at strongly, it would have been possible, yet there was nothing in the Act about the desirability of competition for Laker from other British carriers on the London to Los Angeles route. The objective was to make matters fair between all British carriers and to make it plain that, under all circumstances, whoever the carrier on the route, the CAA should consider whether competition would bring benefits.
  Mr. Neville Trotter: Will the CAA also take into account the argument that fragmentation could be disadvantageous to civil aviation? That argument may have been advanced too often, but it sometimes has validity.
  Mr. Tebbit: The argument would have to be set against any benefits from competition, and also the snags that would inevitably occur.
  Mr. Clinton Davis: The new clause specifically refers to benefits. The Minister is arguing that the CAA is entitled to take account of the snags and disadvantages. Why did he not include the words "disbenefit" and "disadvantage" following the word "benefit" when drafting the Bill? That would have made the position clear beyond peradventure. It is the subject matter of an Opposition amendment.
  Mr. Tebbit: It was not necessary to do so. We have not removed from section 3 of the 1971 Act the matters relating to the concern of the CAA for the economic well-being of the industry. The only snag that is likely to arise from competition is that it might be so intensive among British carriers from a share of the market that was artificially restricted by another Government's legislation or policies as to damage the health of the industry.
  The British public do not object to competition in a choice of carriers, or that fares are low, or to anything of that nature. It is appropriate that a reference should be made to the benefits of competition in that context in the way that, in section 3(1)(b) of the Act, there is an implied benefit that might come from competition to British Airways from another British carrier.
  Mr. Davis: Does the position that the Minister is currently adumbrating mean that the CAA, without any amendment being required, is entitled to take, into account snags and disadvantages that relate to other matters—for example, the unavailability of hotel accommodation or the saturation of an airport at the other end of the route? Can the CAA take those matters into account under the current legislation? If not, how does the potential legislation deal with it?
  Mr. Tebbit: Those matters would not be taken into account directly, although it is not for me to say which matters the CAA should take into account. Clearly, if there were insufficient accommodation it is likely that the traffic would not flow. That would be one of the matters that the CAA would take into account when considering the amount of traffic on the route. It might influence the answer that it gave to the appeal.
  The hon. Member for Hackney, Central (Mr. Davis) mentioned hotels, as did my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle). The "hotels in Hong Kong" argument can easily be overstated. Will all the traffic between London and Hong Kong, or even much of it, want to stay in hotels? Nobody has discovered that. Will it be what is called "visiting friends and relations" traffic? A great deal of it will be and will not require hotel accommodation. Will

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  some of it be drawn by Cathay Pacific from other places in the Far East? Will Laker draw traffic back through London from Europe to Hong Kong? How quickly can Hong Kong build hotels?
  Mr. John Smith: Very quickly.
  Mr. Tebbit: The right hon. Gentleman says "Very quickly". A hotel could be built in Hong Kong during the time that it takes the CAA to make a major route application, for it to go through appeal, and for a couple of arguments in the House during Adjournment debates. We should not underestimate the ability of Hong Kong in that sense.
  Mr. Barry Sheerman: The Minister is wriggling rather visibly on this matter. Is he not avoiding the issue? All the experts and authorities have suggested that the route will be overcrowded by full carriers. He has not, and neither has the Secretary of State, brought forward any evidence that that is not the case.
  Mr. Tebbit: The Secretary of State said in the House that he gave more weight to the Laker forecast of traffic than to the other forecasts.
  Mr. Sheerman: That is a lot of expertise.
  Mr. Tebbit: It is a lot of expertise. Who was right about Skytrain to New York, and who was wrong? Sir Freddie Laker was right and the Labour Government were wrong. Who was right about Skytrain to Los Angeles? Sir Freddie Laker was right. He is operating that service successfully. If I were asked to choose between the expertise in air transport matters of the hon. Member for Huddersfield, East (Mr. Sheerman) and, with the greatest respect, the right hon. Member for Lanarkshire, North and Sir Freddie Laker, I would think that Sir Freddie knew as much about it as either the right hon. or the hon. Gentleman.
  Mr. John Smith: It is not my expertise, that of my hon. Friend the Member for Huddersfield, East (Mr. Sheerman) or that of any other hon. Member that is in question. The Minister knows that the CAA examined that argument closely and came to the conclusion that Hong Kong was in an entirely different position from the North Atlantic. It gave
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  specific reasons for reaching that decision. The hon. Gentleman must perceive that there is some expertise on the economic policy side of the CAA. What is wrong with the authority's argument on the facts given to it? Where did it go so badly wrong?
  8.30 pm
  Mr. Tebbit: In the opinion of my right hon. Friend the Secretary of State and myself, the CAA put too much emphasis on one forecast rather than another. It is not unusual for a Minister to differ from the CAA and to act accordingly. Let me remind the right hon. Gentleman of what the Labour Secretary of State said about the Skytrain licence:
  "The CAA…would prefer the licence and designation to be kept in being and, more generally, that wider discretion should be left to the licensing system in the control of long-haul scheduled services. However, I see considerable disadvantage in prolonging the present uncertainty and have accordingly told Laker Airways that its designation will be withdrawn."—[Official Report, 11 February 1976: Vol. 905, c 444.]
  The then Secretary of State was in headlong dispute with the CAA and its experts.
  Mr. Clinton Davis: But the Labour Government made a political decision that dual designation on that sort of route should disappear. If the present Government had announced a different sort of policy and said that they believed in a form of dual designation and in the market philosophy prevailing and had produced a White Paper to explain their policy and what should guide the CAA, that would have been a fair assessment of the position. But they have left the whole area in considerable doubt.
  Mr. Tebbit: The hon. Gentleman objects to the fact that we have overturned a judgment of the CAA that the Opposition like because it looked after British Caledonian, though the Opposition have never before shown much friendship to that airline. The Opposition must reflect on the fact that the previous Labour Government contradicted the CAA over Laker and they must not be surprised if we look at the evidence and come to a different view from the CAA.
  Mr. John Smith: The hon. Gentleman has referred to the evidence that Laker produced. May I refer him to the CAA decision which said that Laker put forward proposals without any convincing evidence? What was the evidence on which the Secretary of State relied?
  Mr. Tebbit: It was the evidence that the CAA did not find convincing. The right hon. Gentleman's predecessor as Secretary of State in the Labour Government did not find Sir Freddie Laker's evidence convincing. Nor did he find the CAA's evidence convincing when it supported Sir Freddie Laker.
  Mr. Sheerman: Will the hon. Gentleman give way?
  Mr. Tebbit: I hope that the hon. Gentleman will forgive me, but I think that I should abuse the procedures of the House if I went on for too long. It would be better for the hon. Gentleman to make his speech later. Perhaps I may have the opportunity to comment on it.
  I cannot accept amendment No. 30 in the name of my hon. Friend the Member for Brentwood and Ongar. It would once again reinstate guidelines. I explained that guidelines did not prove to be a success, and they landed the previous Government in an embarrassing legal tangle which created great uncertainty. It is better that we put clearly in the Act the obligations laid upon the CAA.
  In referring to his amendments Nos. 35 and 36 my hon. Friend said that British Airways, Laker and British Caledonian all liked his amendments but must have done so because they believed that they meant different things. I suggest that that is a good reason why we should get rid of that sort of dubious expression.
  Mr. McCrindle: Is that any different from all the varying interpretations that are placed on the word "benefit" in Government amendment No. 63?
  Mr. Tebbit: It is, in the sense that those who object to our amendment and those who praise it are rather more predictable than the group that my hon. Friend found were all in favour of his stand. I am sure that my hon. Friend agrees that they could not all have read his amendment in the same way. He will
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  have a great deal of trouble persuading me that I should agree with it.
  Amendment No. 37 is not necessary. It seeks to impose on the CAA, when it is performing air transport licensing functions in the manner that it considers best calculated to ensure that British airlines compete as effectively as possible with other airlines in providing air transport services on international routes, a duty to take account of economic considerations and international agreements. They are already covered. I think that that issue of economic considerations is adequately covered in section 3(1)(a) of the 1971 Act. I believe that it is certain that in order to achieve those objectives the authority must take into account economic considerations.
  So far as concerns the duty to take account of international agreements I think that the intention of this part of the amendment is precisely met by the provisions of the new section 23A(1) (a), which is to be inserted into the 1971 Act by Government amendment No. 64. I hope, therefore, that my hon. Friend will feel able to withdraw that.
  I would also resist amendment No. 38. First, it has been dislocated by the changes in clause 11 effected by Government amendment No. 63, if the House accepts it. The purpose is clear enough. It is intended to secure that the CAA should accept, rather than have regard to, advice given by the Secretary of State with respect to the likely outcome of international negotiations for the purpose of securing rights required for a British airline to operate on an international route.
  I think that that is unreasonable. The amendment is based on the false premise that the CAA might wilfully ignore the advice given by the Secretary of State. I do not believe that that is so. I think that that amendment springs from former criticisms by Opposition Members that the CAA is liable to act in a capricious manner. I do not believe that that is likely and I do not think that this amendment is necessary or desirable.
  Mr. Clinton Davis: This is quite an important issue. If it becomes clear, as for example it did in relation to the Scandinavian air services agreement, that the Minister is of the view that a certain outcome will result from those negotiations,

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  why should it not be incumbent upon the Civil Aviation Authority to accept that advice? What difficulties would arise as far as the Minister can see? What the Minister is arguing is that the CAA would not act capriciously in that context. But why not make the matter clear beyond peradventure, since in relation to the Scandinavian air services agreement the CAA sought to avoid, as far as I can recall, the advice of the Secretary of State.
  Mr. Tebbit: Yes, indeed, and I think that, perhaps, the hon. Gentleman is still a bit sore about that particular occasion. However, he will recollect that the Secretary of State had his way in the end over that matter, which had been fully and thoroughly ventilated. I think that it was for the benefit of the industry generally that it was so ventilated. I do not think that the CAA was capricious. It may have been a little obstinate in making its point. It may even have thought that the Secretary of State's advice was advice that it should take note of and have regard to rather than accept in its absolute entirety straight away at the first shot. I recollect that we had a long debate on that matter in Committee. I remain of the opinion that we should leave the position as it has been for the past nine years or so.
  My hon. Friend also referred to amendment No. 68, which concerns the quorum of members of the board for licensing applications. Briefly, I do not think the House should legislate to provide that the quorum should be not less than three. If we did that it would require that there should be a quorum of not less than three members in relation to a wide range of the authority's responsibilities covering not only air transport licensing but such functions as the registration of aircraft, certification of operators of aircraft and the licensing of pilots. That would impose an unnecessary and severe burden which would, probably, be unworkable. But I assume that it was not the intention of my hon. Friend to go as wide as that and that he really wishes to relate it to a quorum for air transport licensing functions only.
  The present position is that under regulation No. 6 of the Civil Aviation Authority regulations of 1972 an unopposed application to grant, revoke or vary a licence may be granted on behalf of the authority by one board member or even by an employee. I think that
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  that is reasonable where there is no objection. Where there is an objection, or where the authority refuses the application or grant in terms other than those requested, section 5(1) of the 1971 Act applies, and regulation 6(1) provides that the quorum shall be one board member.
  We are not unsympathetic to the thought in my hon. Friend's mind, but there are two points that I should like to make. The first is the one that I have already mentioned, that it goes too far, even in respect of air transport licensing, and the second is that it need not be done in this way.
  I share what I assume is the belief that in general it is undesirable to have CAA hearings conducted by one board member sitting alone, and that is a view which is shared by the authority itself. The evidence is that in the great majority of instances, the more important and difficult cases have been heard by more than one board member. The occasions when a member has sat alone have been rare and at times of particular difficulty, and are not expected to reoccur frequently.
  The authority is limited to a maximum of 12 board members and it has a wide range of functions to perform. Therefore, in practice, only about half the board membership can be involved in licence hearings. The proposal that there should always be three board members would be a distinct departure from the practice which has been normal, and in many cases I do not think that it would be justified.
  We could make a change to the size of the quorum by an amendment to section 6(1) of the CAA regulations of 1972, and those regulations are under review at the moment. The Government are certainly ready to look sympathetically at the possibility of increasing the quorum from one to two, but I do not think that a quorum of three would be practicable, nor would it be desirable to impose it on all occasions. In those circumstances, and knowing what is in my mind on these matters, I hope that my hon. Friend will feel able not to press that amendment.
  Mr. Onslow: Can my hon. Friend also confirm that before any change is made it will be desirable that the opinion of the Council on Tribunals should be sought? Since some comments were

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  made by that body following the criticisms to which my hon. Friend referred, I understand that the CAA has been in touch with the council, and it is desirable that its opinion should guide whatever changes may be made.
  Mr. Tebbit: My hon. Friend is right We shall certainly take note of the opinions which are expressed by the council. I hope that the Council on Tribunals will be satisfied with the changes which I have it in mind to make.
  Having dealt as best I can with the purpose of some of the amendments and set them in context, it may be for the convenience of the House if I now sit down and allow the debate to go on unimpeded to some extent by the cross talk between the right hon. Gentleman and myself.
  Mr. George Foulkes: I am beginning to understand the frustrations of the airline pilot, as I have been sitting here ready for take-off for about 45 minutes and have been delayed for what are called "technical reasons". I am sure that the House will appreciate the helpful comments made by the Under-Secretary. I was sorry not to have been present for the previous part of this Report stage. Appropriately enough, for most of the time I was up in the air—literally, not figuratively, which some of my colleagues seem to think I am from time to time.
  I am sorry in one respect that we have not had the excitement that we had in Committee. There we had an exciting time, with allusions to polecats, blue herrings and grandfather rights, which took us into all sorts of flights of fancy. Now that we are on Report, and given that we must take account of the Hong Kong decision, it is perhaps appropriate that we should be more serious.
  8.45 pm
  It is pleasant and reassuring that, as in Committee, we have here the independent and individual thought of the hon. Member for Brentwood and Ongar (Mr. McCrindle). That brings me to amendment No. 35, which recalls an historic occasion in Committee when the Opposition won—not a frequent occurrence but one that is always pleasant when it
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  occurs. That historic occurrence was brought about by the wisdom and bravery of the hon. Member for Brentwood and Ongar, who joined the Opposition in defeating the Government. I understand that the Government's ire is raised —their having lost in Committee—whether they are lobbied by the Civil Aviation Authority or whatever.
  In Committee I learnt a lot, as did my hon. Friend the Member for Perth and East Perthshire (Mr. Walker). It became clear that an air transport licence was more valuable to an airline than real estate. Air transport licences should not be given and taken casually and frivolously. It also became clear that if an airline does not use a route that it has been granted it will not have any grounds for complaint if the route is withdrawn. But, as the hon. Member for Brentwood and Ongar said, where airlines have large investment programmes, financed either by Government or by private investment, it is important for people who support that investment to know the prospects of the airline. In that context the routes that they operate are their most valuable asset. Therefore, after careful consideration the Committee reached the conclusion that this clause should be included.
  I hope that there are 50 friends of the hon. Member for Brentwood and Ongar present, who are equally wise and brave and who will follow him through the Division Lobby with the Opposition, and repeat what we achieved in Committee or the Floor of the House. However, I am not optimistic that that will happen. Perhaps that is a flight of fancy.
  This discussion is more important now because of the Government's decision on the Hong Kong route. I support new clause 15. In Committee my right hon. Friend the Member for Lanarkshire, North (Mr. Smith) said that there was a lack of thought and lack of preparedness and consultation on this matter. I support the argument that the Bill should be held over for further discussion and consultation.
  I should also like to raise one or two points that my right hon. Friend the Member for Lanarkshire, North did not raise in Committee. Unusually, I quote

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  the Under-Secretary of State in support of my arguments. In Committee he said:
  "If the Civil Aviation Authority were collectively to go out of its mind, presumably there could be scope for abuse. On the other hand, if that were to happen there is an appeals procedure which would come into effect if suddenly, contrary to what we have required here, the Civil Aviation Authority began to act in an arbitrary manner,".
  He then gave a good and helpful example, He said:
  "If, say, the authority licensed four British carriers on a route where there was clearly only traffic for one, that would not be in the best interests of the industry." [Official Report, Standing Committee B, 26 February 1980; c. 682.]
  We have British Airways saying that there is not room for four, we have British Caledonian saying that there is not room for four, we have the Civil Aviation Authority saying that there is not room for four, and we have Cathay Pacific saying that there is not room for four. It is not, with respect, the Civil Aviation Authority that is going collectively out of its mind; it is the Government, and perhaps, individually, the Secretary of State.
  Mr. Michael Colvin: Surely the hon. Gentleman is not saying that all four carriers will be forced to operate. It is up to them to decide for how many there is room, once the licences are granted. If all four want to operate, good luck to them, but if one of them says, "Four will be too many", let that airline back down.
  Mr. Foulkes: I am talking about the position described by the Under-Secretary of State. He was not saying that the CAA would force them. He said that licences would be granted. I shall ask the Under-Secretary a question in relation to that. I understand that one airline has announced its intention to start. I shall come to that in a moment.
  The Under-Secretary says that the Secretary of State put great store on the evidence presented by Sir Freddie Laker. I hope that the Under-Secretary will tell us when Laker Airways is to start on the Hong Kong route. When is it to put its money where its mouth is? When is it to put its aircraft where its mouth is? I shall be very interested to see.
  Mr. Tebbit: It is not for me to say when Laker will start his services. It is
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  not for me to say whether he should start his services. It is only for the Government to say that, if he so wishes, alongside the other carriers he has the right to start his services.
  The hon. Gentleman found a passage that I thought somebody might find—and suitably misinterpret—because, of course, the point is that I referred to a route where there was enough traffic for only one carrier. The Civil Aviation Authority found that there was traffic for two. Both Cathay and British Caledonian gave evidence in Hong Kong that there was traffic for three. We found that there was enough for four.
  Mr. Foulkes: I think that the Under-Secretary's intervention helps my argument. I agree with him; it is up to Laker. But since the Secretary of State said—and the Under-Secretary repeated today—that in overruling the Civil Aviation Authority the evidence that he took account of above all else was that of Sir Freddie Laker, I shall be interested to see when he will start operating that route. The Minister made light of the problem of hotels, which was mentioned by the hon. Member for Brentwood and Ongar, and said that they could be put up in a few weeks. Perhaps they can. Perhaps we have a new phrase for "jerry-built"; perhaps we should say "Hong Kong-built" if they are to be constructed that hurriedly.
  We are talking about the possibility of four jumbo jets coming in daily to Hong Kong, which is already overcrowded. I estimate that that means about 1,800 people coming every day just from London. That is the kind of quantity that we are talking about.
  I turn now to other aspects of the Hong Kong decision. I was particularly disturbed by one small aspect of it. I refer to the announcement regarding the Hong Kong route. I was present in the House when it was made, at about 4.30 pm. The next day, when I opened my copy of The Times, I found on page 3 not what is to be found on page 3 of some other newspapers but a full-page advertisement for that flight that Cathay Pacific is running to Hong Kong.
  I may not know a great deal about the airline industry, but I know enough about the newspaper industry to be able to say that it is quite impossible to plan, to

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  organise and to have inserted a full-page advertisement in The Times as quickly as that. I should like to know when Cathay Pacific was informed of the decision, when it was intimated that it would be successful, and how, as a result, it was able to get that carefully planned advertisement with all the details in The Times. I do not know a great deal about breach of privilege, but it seems to border on it.
  Mr. Tebbit: As the hon. Gentleman knows, I was not in London when the decision was announced. However, I can assure him that any intimation to any of the carriers was given, at the earliest, in confidence only immediately before the House heard it. I doubt whether Cathay Pacific heard it before the House. It would have been possible for it to have had alternative copy available—either a protest advertisement or the advertisement saying that it was about to start.
  Mr. Foulkes: I accept that assurance without qualification, but it seemed strange to me and to some of my colleagues. So, also, was the fact that the announcement was made on the day that the Secretary of State was guest at the Hong Kong Association dinner. However, I am sure that that also was fortuitous.
  I should like to raise another point on the Hong Kong decision, namely its effect on Caledonian Airmotive and jobs in Ayr, the constituency of the Secretary of State for Scotland, and in my constituency and that of my hon. Friend the Member for Central Ayrshire (Mr. Lambie), who is present.
  After the announcement on 17 June the right hon. Member for Western Isles (Mr. Stewart) asked the Secretary of State what effect it would have on the Caledonian Airmotive operation at Prestwick. The Secretary of State said:
  "I do not believe that the right hon. Gentleman's latter statement is correct. I have read a statement made by Mr. Kelvin Kellaway, the managing director of the plant in Scotland to which the right hon. Gentlemn referred. I believe it to be an accourate report. On Friday he was alleged to have dismissed the fear that the right hon. Gentleman hs enunciated. He said that:
  'the plant had been planned before British Caledonian was awarded the Hong Kong
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  licence. The possible loss of work—about 6 per cent. of the total expected business—was easily within the business fluctuations fore-case.'
  That is what he is reported to have said. I have no reason to believe that that is an inaccurate report of his views."—[Official Report, 17 June 1980; Vol. 986, c. 1363.]
  It may not have been. That was Kelvin Kellaway, who runs that operation, but he does not understand the overall finances of British Caledonian, and particularly Caledonian Airmotive, as was made clear on Thursday. Adam Thomson, who is in charge of Caledonian Airmotive as part of his responsibility to British Caledonian is reported in The Scotsman of last Thursday as follows:
  "The Government's decision to allocate the London-Hong Kong route to four airlines rather than two as expected will delay the creation of jobs at the new Caledonian Air-motive factory at Prestwick, according to Mr. Adam Thomson, chairman of Caledonian Airways.'
  It will delay jobs. This chap knows what he is talking about. He is in overall charge. The decision will delay the provision of jobs in an area where unemployment is already far too high.
  A number of us who are concerned about the airline industry recently spoke to a staff member of IATA. He gave us an account of the effects of deregulation in the United States. The Under-Secretary of State contended earlier, and no doubt will contend again, that this is not deregulation. But it is effective deregulation. As my right hon. Friend the Member for Lanarkshire, North said, it has the same effect as deregulation. The effect of deregulation in the United States has been that hundreds of routes have been lost. Many remote areas of the United States previously served by airlines are now no longer served. Those of us who represent peripheral areas out-with the main centres of population should be particularly concerned about this matter.
  Another effect, contrary to what was expected, is that the profitability of the airlines, which it was thought would increase by concentrating and competing on particular routes, has decreased. The airlines' experience would be against deregulation and against this kind of effective deregulation.

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  I have gone on for longer than I had intended, mainly because of the comments that have been added to what I have been saying. As I have said, what the Government are suggesting is indica-
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  tive of the fact that on this issue, just as on many others, they are guilty of what they accuse the CAA of being guilty of—going collectively out of their mind.
  9 pm
  Mr. Onslow: In Committee, the hon. Member for South Ayrshire (Mr. Foulkes) picked up a few things as he went along, and we have got to know his style. He has been fairly characteristic tonight, particularly in his peroration. However, I was particularly interested to hear his moving appeal to the House to support the amendment made to the Bill by my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle)—who is not in the Chamber at present. I have to say to the hon. Member for South Ayrshire that I regret not having been in the Committee when that was discussed. Unfortunately, I was abroad at the time. I hope that if I had been there I would have been able to persuade him, if not my hon. Friend, that if one has an amendment which gets the support of British Airways, British Caledonian and Laker Airways, there must be something rather imprecise about it, because it is impossible for them all to support an amendment of this kind if they all think that it means the same thing.
  Quite clearly, from my conversations not everyone whose support my hon. Friend prayed in aid thinks that the amendment means the same thing. When we have a piece of proposed legislation which is capable of interpretation in two such wholly different ways, I think that it is quite a good idea to remove it from the Bill. I believe that that would be the right course for us to take.
  However, I agree with one thing that my hon. Friend said. That was when he made an appeal for a clearly spelt out policy. I welcome Government amendment No. 63 for precisely that reason. It gives us a clearly spelt out policy. I believe that when the Bill came before the House first and when the Bill was going through the Committee, most of us knew very well what we were trying to do. That was to create a situation that was more satisfactory than the one which the previous Act left. How, in heaven's name, the right hon. Member for Lanarkshire, North (Mr. Smith) can describe that situation as satisfactory I do not know.
  We wanted to get a more satisfactory situation. Broadly, we wanted to get less
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  intervention and more competition. Thank goodness that the Hong Kong appeal came along, because that had the effect of concentrating everyone's mind and, I think, of making many people understand that the legislation itself needed clarification of the kind it has now got. I mean no criticism of my own Front Bench when I say that, but in my experience of several Civil Aviation Bills, they tend to get better as they go through Parliament, and this one will clearly not be an exception.
  I welcome the Government's amendments, and with one particular thought in mind. That is a saying coined by an old friend of mine—who my hon. Friend the Under-Secretary will also know—Citizen Tony Lucking, a great expert on air travel, who maintains through thick and thin that airlines are for passengers. It is probably just as well to start from that proposition when we consider any civil aviation legislation. Airlines are not for airline operators or aircraft manufacturers. They are not for employees of either. They actually exist to serve passengers. If they are not doing that properly, they are not fulfilling their proper function.
  I do not make any apology for repeating that or for saying that Government amendment No. 63 now sets out in a systematic and ordered way the various duties which the House will want the CAA to observe when it comes to consider how it allocates licences. I do not believe that it is the CAA's function to ration capacity. I do not believe that it is the CAA's function to try to outguess the airlines. It is unfortunate that from time to time the CAA has appeared to do that. But certainly there will be no reason and no excuse for its doing so in the future.
  Mr. Michael Neubert: Will my hon. Friend give way?
  Mr. Onslow: I shall not give way. I am sorry. I want to be brief. Others wish to speak. I hope that my hon. Friend will excuse me.
  The situation that we were in danger of having, and a situation which the right hon. Member for Lanarkshire, North appeared to regard as satisfactory, is one in which the CAA really knew best. It decided how much capacity there should

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  be. It decided precisely how airlines should be making money. The more one examines that, the less satisfactory it becomes.
  Objections concerning Hong Kong hotels have attracted a certain amount of attention this evening. Those objections fall to the ground when we consider that an airline that wants to set itself up with hotel capacity in Hong Kong is hardly likely to do so before it is given a licence. It is much more likely to do so if it thinks that it will be able to fly passengers to Hong Kong.
  It is wrong for the CAA or for anyone else to say "The hotels are not there. Therefore, they never will be there. Therefore, there never will be anywhere for passengers to stay when the service comes into operation." These are not judgments that we are competent to be making or should be making. In the original Edwards report, which I am sure everyone has read from cover to cover, great emphasis was placed on one feature of civil aviation operations that we do not hear much about now—namely, the connection that was supposed to exist between financial stability and operational safety. It was widely accepted in the Edwards thinking that that was so. There is no reason why it should be so or should be allowed to remain so.
  The prime function of a licensing authority should be to license safe airlines. The way in which the CAA tackles the problem should not be based on examining the accounts of an airline. It should ensure by physical inspections that its operations, equipment and crew standards are all that they can be. That is a development that we should recognise and welcome.
  As airlines are for passengers, it is only reasonable that competition should be in the interests of passengers. There are those who talk about measured competition. The measuring is to be done by whom? It should not be done by the CAA. Competition should be measured by the fair system that allows an airline operator to apply for a certain route if he thinks that he is able to offer a reasonable operation. If he satisfies the licensing authority, he should be able to obtain the route. It is up to him to justify that judgment. As my hon. Friend the Mem-
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  ber for Bristol, North-West (Mr. Colvin) said, an operator does not have to operate any route. The fact that licences have been issued for the Hong Kong route does not make it compulsory for anyone to fly it. That should be recognised.
  I think that we have made progress tonight. I do not wish to appear to patronise my hon. Friend the Under-Secretary of State. The Bill will be much better if the Government's new clause and amendments are accepted. I hope that the response of the aviation industry will cease to be as inward looking and pessimistic as some have suggested it should be.
  The way in which independent airlines and British Airways have risen to the challenge does them credit. I have no doubt that they will continue to adopt that approach. I should much rather hear about British Caledonian renewing its application for lower fares to Europe than hear others dwelling upon the possible unemployment consequences if British Caledonian cannot use the aircraft that it has bought.
  Surely the right response is to go out and win more business, to serve passengers and to blast the Secretary of State into doing something to obtain lower fares from Britain to Europe—namely, to make it possible to fly from London to Glasgow or Paris more cheaply and more conveniently. That is what the industry is for and that should be the prime purpose of a licensing system.
  Those who have discussed these matters with the airlines—especially with the CAA—will, I am sure, have found no mood of despair as a result of the Hong Kong decision or the changes in the Bill that are now proposed. I believe that the CAA welcomes the amendments. It is prepared to live with them and it regards them as a positive and unqualified step in the direction of more competition. It welcomes them on those grounds. We are not likely to be told by anybody that that is a mistaken view.
  We have made progress in introducing the amendments, clearing our minds and clarifying Government policy. By achieving less intervention and more competition passengers will benefit. The airlines that serve them best will benefit, and that is as it should be.
  Mr. Sheerman: My remarks will be brief. However, as a member of the Standing Committee, I could not let the opportunity pass without commenting on new clause 15 and on some of the Under-Secretary's responses. Members of the Committee were puzzled by the amount of time that elapsed between the conclusion of Committee proceedings—an occasion for great celebration by hon. Members of all parties—and discussion of the Bill on the Floor of the House. When we heard the Hong Kong decision and witnessed the remarkable Government amendments on Report, we understood more clearly what had been going on. Reading between the lines, it seems that the Government embarked on a Bill of whose purpose they had no idea. Having got two-thirds of the way through the Committee stage, they suddenly realised that the direction that the Bill was taking was not one that they had intended. Perhaps it was the brilliance of Opposition Members—although I am too bashful to suggest that—or the brilliance of one or two Conservative Back Benchers that led the Government to understand the nature of the Bill.
  The Government were, and still are, suffering from a central dilemma. They do not understand the Bill's implications for civil aviation. The new clause brings home the schizophrenic nature of the Government's thinking. The root of the problem is that two philosophies run through the Government's thinking. The Bill represents a microcosm of the Government's policies. Running through the Bill is a desire to import free market competition, with its ensuing thrusting, fighting and competing, in order to reduce fares to the consumer. Perhaps the Secretary of State holds that desire more dear than does the Under-Secretary of State.
  The idea that the free market is the end runs throughout the Bill. In Committee we heard another voice that desired a well-regulated and Governmentfree—even politic-free—CAA to administer that industry. It appeared that the Government could not decide whether they wanted to import free market forces, or whether they wanted regulation by a CAA that was free from political interference and ministerial dabbling, and that could administer the industry without hindrance.
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  When we heard the Hong Kong decision, we realised that one voice that had spoken loudly in Committee had been taken over by another. Perhaps the Secretary of State suddenly realised that part II of the Bill would not produce the effect that he desired. Perhaps he saw the implication for the decision on the routes to Hong Kong.
  As a consequence, we saw a massive Government rethink, and it has been embarrassing for the Under-Secretary of State to hear the comments and the revelations which Opposition Members have made. My hon. Friend the Member for South Ayrshire (Mr. Foulkes) pointed out how, without thinking, the Minister had given the exact example where such a decision would have been nonsense. It was exactly that kind of nonsense that the Government announced at the time of the Hong Kong route decision.
  9.15 pm
  The overturning of the CAA ruling makes nonsense of much of the Bill, which tries to give strength to the CAA and to make it a more powerful and independent body for the regulation of civil aviation.
  Again, it is a confusion of models with which the Government get into trouble. I mentioned earlier when we discussed British Airways that the confusion was between having or not having a British Petroleum model. In the area that we are discussing at the moment, it is a confusion about what competition means in the aviation industry.
  We are put into an unhappy position if we deal with an industry that by its very nature cannot have the free market model applied to it. Government supporters know that that is precisely at the root of their problems. The hon. Member for Brentwood and Ongar (Mr. McCrindle) knows only too well when he talks about the aims of the aviation industry that any realist knows that its success must lie in the pursuit of competition and stability.
  Perhaps I may bore the House for a moment by using that rather clumsy terminology which economists have been known to employ from time to time. The problem facing the Government is that this is an industry which by its very nature, in the interests of the consumer, in its own interests and in the interests of all concerned in it must be an oligopoly.

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  It must be made up of a few large carriers. The great danger is that if too much competition is injected into it, the oligopoly will be destabilised. At the moment, it is working well in the consumers' and in the airline operators' interests. But if there is destabilisation, there will be a brief period of intense competition. It may last for six months or even for three years, and it may be very good for the consumer to travel cheaply to Hong Kong, Los Angeles or New York. But, if the oligopoly is destabilised, after a short period there will be a reversion to what no one wanted in the first place, which is total monopoly. That is what many of us on both sides of the Committee argued, and we will continue to argue it.
  The Government must have the intellectual ability to understand that the airline industry is an oligopoly and that that oligopoly is a very delicate balance to maintain. I suggest that that danger becomes very real if these amendments are accepted. The delicate balance will be upset.
  There is no virtue in trying to be the Freddie Laker of the House of Commons. It is no use saying "I am the Secretary of State for Trade. Fly me." Hon. Members say glibly that they are in favour of the passenger. Do they really believe that any Opposition Member is not in favour of the passenger? The passenger is the person whom we represent. My own interest is in one aspect that is not mentioned in the Bill. I am concerned with passenger safety, and I hope that the Minister will find time to pay a little more attention to that aspect.
  We are all in favour of the interests of the passenger being accorded high priority. But the passenger will not thank the Minister or the Government who intervene in this delicate balance, finishing up, after a few heady days of tripping here and there, with a monopoly that can charge what it likes, when it likes, leaving the consumer with no choice at all. The consumer would prefer a choice of regulated competition between a few main carriers to having to travel with one carrier and having to pay its price.
  World aviation is in an unstable period. The Government should recognise that fact. It is an unstable period not only due to events beyond this Government's control but also because of actions by the Government in the last 14 months.
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  The Government's decision on the Hong Kong route, together with elements of the Bill, have made international aviation more unstable. The taxpayers have a stake in British Airways. Yet, at a time when stability is at a premium, the Government are making the base of British Airways more unstable. The consumer will be diddled by a Bill that undermines the value of his investment in British Airways. I urge all hon. Members to give serious consideration to the Opposition's amendment and to vote for it.
  Mr. Bill Walker: I am delighted to have the opportunity to speak on this part of the Bill. I was interested in the comments of the hon. Member for South Ayrshire (Mr. Foulkes). The hon. Gentleman and I were learning as the Committee stage proceeded. I hope that one is always learning. I remind the hon. Gentleman that I have a long and lasting interest in Prestwick. There have been three loves in my life—politics, aviation in all forms, and the third I leave the hon. Gentleman to decide.
  There are sound reasons for not accepting new clause 15. It states:
  "Provided that where the Secretary of State does not accept an earlier finding of the Authority he shall not reverse or vary the decision in question without first requiring the Authority to publish its opinion of the effect of the reversal or variation proposed by the Secretary of State, which opinion shall be formed only after a rehearing by the Authority in accordance with procedures to be established by regulation."
  When that is linked to what the same new clause says about inserting the words
  "accept a finding of fact made by the Authority "
  I suggest that this is not the way to look after the best commercial interests of airlines and the best interests of potential passengers or the Government. They cannot be catered for in this way. It is a lawyers' charter, providing more work for lawyers. In contrast, I welcome Government amendment No. 63, which lays down the clear rules we have been seeking. The amendment says
  "in performing those functions the Authority shall also have regard—

  (a) to any advice received from the Secretary of State with respect to the likely outcome of negotiations with the government of any other country or territory for

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  the purpose of securing any right required for the operation by a British airline of any air transport services outside the United Kingdom; and

  (b) to the need to secure the most effective use of airports within the United Kingdom."

  My mind always turns to Prestwick when I read paragraph (b). It is important to makes the best possible use of our fine airports, many of which are under-used.
  In his definition of "oligopoly" the hon. Member for Huddersfield, East (Mr. Sheerman) must have included the Cooperative Society, since it required stability and a protected market share to survive. Look what has happened. Because it was inefficient and lacked the management and marketing skills of the other High Street stores, it has watched its share of the consumer purse go down year by year. It is not in the consumer's best interests to protect any part of the market.
  Because aviation licensing is important, I am glad that the Government have shown how they feel about it by the way in which they have dealt with the Hong Kong run. They have shown that they are prepared to allow real and meaningful competition, instead of the protected and sham competition that we have seen in civil aviation for far too long, with the interests of the passengers the last to be considered when framing future airline policy.
  I hope that the experience gained in the operation of the Hong Kong run, of a number of airlines offering a competitive service, will be a guide to the CAA and the airlines in their future deliberations and decisions. I believe that it will also provide a guide to all who consider appeals in future.
  Airlines and potential passengers can obtain considerable benefits from increased competition and from the more effective use of British civil air transport and airfields without damaging the economic viability of the competing airlines. It is not in any of our interests that that viability should be damaged. I do not believe that it will be, provided that the airlines are prepared to meet the competition.
  Who can deny that the presence of Laker Airways on the North Atlantic route has had a dramatic effect on fares? That has been good for the airlines and
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  for the consumers. Who can deny that the potential presence of Laker Airways on the Hong Kong route has already influenced pricing policy on that route? No one can deny it. I therefore welcome the Government's attitude to route licensing and particularly amendment No. 63.
  Mr. Trotter: It is almost incontrovertible that the change proposed by the Government to allow more than one British operator on a route has come about as a result of decisions by the Civil Aviation Authority since the Bill was published. I accept what the Minister said about the new provision reading better than the old. However, there is an important change in this guidance—that is how we must see it—to the CAA that in future it should have regard to the possibility of more than one British operator on a route.
  The Secretary of State has taken a bold decision on Hong Kong. I believe that, for the reasons hinted at by the Minister. This is a cabotage route. The opportunities for the development of the flow of passengers are enormous as a result. I do not think that 1,800 passengers a day between Europe and the Far East is a large number. That is what we are talking about—the two gateways to and from the Far East.
  Not long after the fares to Hong Kong come down we shall see a substantial distortion of the traffic in our favour—for instance, if passengers from Amsterdam to Manila find it much more economical to travel via London and Hong Kong than to go direct. The opportunities for the number of passengers are great, and all four airlines will be able to make a success of the route initially. I say "initially" because we shall see in the Far East what happened in the North Atlantic after the introduction of Skytrain. We shall see the other services between Europe and the Far East inevitably introduce lower fares. There will be an initial rush of traffic, but there will be difficulty in maintaining it in the following period.
  9.30 pm
  I looked up the fare for flights over the Atlantic. It is a confusing picture. More than 60 fares between London and New York are quoted in the ABC. It is not easy to see who offers the best value,

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  because there are many different conditions attached to the various fares. There is no doubt, however, that the initial reduction has set a pattern not only between London and New York but between Europe and North America. I think that we shall see the same happening in Hong Kong and there will be a permanent benefit to passengers.
  I turn to the decision of the CAA about a number of applications for European routes. I wonder whether the Government have also had in mind the decisions of the CAA in that respect. Some of those routes are under appeal to the Minister, and he may not be able to say a great deal tonight because of the sub judice aspect. The British Caledonian application for mini-prix would have provided a standby fare of 80 per cent. less than the normal fare, at £15·50 from London to Paris, London to Brussels or London to Amsterdam. That is the sort of fare that I and other hon. Members want to see. That is aviation for the man in the street.
  Mr. McCrindle: I endorse my hon. Friend's remarks. However, for the sake of accuracy, will he concede that the only way in which one could travel between London and those centres at the price that he mentioned is by travelling off-peak? I am not complaining. I wish, for the sake of accuracy, to record that that would be a necessary condition.
  Mr. Trotter: My hon. Friend is absolutely right. It would be at limited times, and perhaps even on limited days. But it gives people the opportunity to fly to Paris who would not otherwise be able to do so.
  Mr. Michael Brown: Is my hon. Friend aware that only last week I travelled from London to Brussels at off-peak times, on both the outward and return journeys? There was no opportunity for a reduced rate. I paid the full fare of £113.
  Mr. Trotter: I am obliged to my hon. Friend for his intervention. From time to time I go to talk to the EEC Commission. It is an expensive business for those of us who have no way of reclaiming the fare. I would be prepared to plan my journey to go on a limited basis such as the mini-prix standby.
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  Laker applied for a Skytrain-type service to many places in Europe. Britannia Airways put forward an interesting suggestion that, as the scheduled operators were able to take charter passengers for half the load on their planes, there was no reason why charter operators should not be able to take scheduled passengers for half the load on their charter planes. I come from a regional centre, and I can affirm that that suggestion would be of particular benefit to the regional airports, which could not expect a scheduled regular service to many destinations. Air UK also applied for services to a number of places on the Continent. The four airlines applied for routes to the Continent. British Caledonian obtained a small proportion of the number of routes for which it applied, but nobody else obtained any. I wonder whether that decision by the CAA was taken into account by the Minister in deciding to change the new clause and insert the requirement for competition to be taken into account in future.
  I have mentioned a number of airlines by name. However, it is important that in the House we should not argue for any particular airline because it has a certain personality at its head, or because the pretty stewardesses wear an attractive uniform, or because its engines are maintained in one part of the country or another. We should argue on behalf of the passengers. That is the only way that we should approach the question of who flies where on British airlines. Who gives the best value for the passenger?
  It is interesting to note that British Airways have introduced a £99 fare to Hong Kong, which goes by the appropriate name of "Firecracker". That is different from the fare to Newcastle. Before I rose to speak I extracted from my wallet a single ticket to Newcastle, which cost £42·50. That is not a Firecracker fare. I am not sure what would be the appropriate description.
  Mr. Michael Brown: A damp squib.
  Mr. Trotter: That would be more accurate, but I do not think that the airline would get far by advertising a fare with that name. On the basis of the fare to Newcastle, the Hong Kong fare should be about £1,000, not £99.
  I wish to concentrate on fares to Europe. The fare to Zurich is £99 single,

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  for 480 miles. According to the ABC, the cheapest return fare is £100. Therefore, at the cheapest it is £50 each way to Zurich—a distance of 480 miles—while £99 is the cheapest fare for the 6,525 miles to Hong Kong. In other words, £1 buys 10 miles of travel on the Zurich route but 65 miles on the Hong Kong route. A great deal of improvement could be made in lowering fares to passengers in Europe. That is where our efforts should go in the immediate future. The BCal mini-prix suggested a standby fare of £21.50 to Zurich.
  There have been references on both sides of the House to safety. It is right that that should be the first requirement of any authority dealing with civil aviation. The trade and industry Sub-Committee of the Expenditure Committee in the previous Parliament started to look into fares on domestic services. The inquiry was frustrated by the election, but I asked the first question of the chairman of the CAA at the first session. I asked whether there was any correlation between safety and fares. The answer was categorical, to the effect that there was none whatsoever, and that the licensing of the safety side of airlines was quite independent of the economic side. That was the answer that I expected, but I was pleased to have the confirmation. Safety is a red herring when we are talking about fares.
  I must refer to the attitude of foreign Governments. We can press my hon. Friend the Under-Secretary for changes on what happens between London and Newcastle. Changes in the fares are within the power of the CAA, but that is not the case on routes between London and Zurich, Paris, Amsterdam or other destinations on the Continent. There must then be agreement with the foreign Government as well as with our own.
  Earlier this year I spoke to a number of foreign airlines and foreign Governments. It was interesting to see the contrast with our own situation in Britain. European countries have only one airline each—Holland has KLM, Germany has Lufthansa and Switzerland has Swissair. The relationship between each airline and its Government is very close, and when talking to the airlines and the Governments one almost gets the impression that one is talking to the same people. We
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  have a great problem in persuading a foreign Government to bring fares down as we wish unless their airline also wishes it.
  One comes away from such meetings with an impression of the strength of the British industry in a number of directions. Germany, Holland and Scandinavia have no problem about who flies scheduled services. They each have only one carrier. We have the same problem as do their Governments of getting the right to fly into a foreign country, but we then have the additional problem of having to decide whether it is to be Laker, British Caledonian, Air UK, British Airways or one of the other operators that exist as a result of the strength of the British aviation industry and the initiative shown by its operators.
  Mr. Gerry Draper, the commercial director of British Airways, said in evidence to another place:
  "The principal frustration of British Airways lies in the field of persuading other Governments and airlines to recognise that change has taken place in the needs of the consumer."
  It is wholly to the credit of British Airways that they are taking the lead among the major national European airlines in seeking to bring about a reduction in fares. It is a pity that their "Channel hopper"—a £20 fare to Paris—was not approved by the French Government. Presumably Air France did not approve and therefore the French Government did not approve.
  I hope that British Airways will continue to press, not just in Europe but elsewhere, for the reduction of air fares. In this context I mention Australia. That is a place where fare reductions are also badly needed. I believe that the best way for British Airways to preserve their present network is to take a lead—as, to their credit, they are doing—in seeking a reduction of fares and in persuading their long-established partners in other national airlines that such reductions are necessary.
  The factors taken into account by European Governments are extremely complex. In Germany, for instance, I was told that their railways were an important factor, because there was a great deal of political support for German railways and that if there were a fare reduction on short flights into neighbouring countries it would spill over into pressure for

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  low fares on internal air services in Germany. So the railways there are an obstacle to lower fares. I was also told that in Germany they did not need a Laker. I doubt whether that is a correct assumption, but it is an assumption against which one must start to discuss the issues with them.
  The problem at the moment is that ever-increasing fuel costs make it more difficult for fares to be reduced in the way that we are seeking. At the same time one cannot help commenting on Government charges for navigation and airport security. I was told recently by a British operator that of its operating costs for a one-hour flight 25 per cent. was taken up by security charges before the plane got into the air. That is a problem. All those factors work against low fares.
  There is a definite need to ensure maximum competition, which must be our aim. In evidence given in the other place the CAA said that it did not believe that we would see lower normal fares until there was more competition. I do not think that the CAA has always been courageous enough in seeking that competition and I believe that my hon. Friends the Ministers are right in persuading the authority that it must do so. There must be a united approach by Government and the CAA. I welcome the revelation in the evidence given by the CAA in the other place that there is to be an exchange of letters between the Government and the CAA about their roles once this Bill becomes an Act. Perhaps my hon. Friend will expound a little on that tonight.
  We have an outdated system of air fares in Europe. There is a need for experimentation, and I believe that my hon. Friends will see to it that that experimentation is carried out through the implementation of the Bill.
  Mr. Michael Colvin: It is a pleasure to follow my hon. Friend the Member for Tynemouth (Mr. Trotter), who has successfully shot at least two of my foxes. That will enable me to be comparatively brief.
  The debate on new clause 15, Government amendment No. 63 and the amendments grouped with it provides the opportunity to invite my hon. Friend the
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  Under-Secretary to say a word or two about the general lines for air transport policy, which my right hon. Friend the Secretary of State will attempt to pursue on appeal. I welcome what my hon. Friend has already said. No doubt he will be saying more later.
  I would like to ask my hon. Friend one particular question about aircraft type. I wonder whether aircraft type will be taken into consideration when dealing with appeals and also when licence applications are made the CAA applies the provisions in the Bill concerning the need to minimise, as far as is reasonably practicable, any adverse effects on the environment and any disturbance to the public arising from the use of aircraft as specified in subsection (3).
  If aircraft type is taken into account, there are important implications for the European Airbus since that aircraft is probably the quietest and environmentally the most acceptable wide-bodied jet presently on the market and is a project in which this country has an important stake. The Secretary of State has just made a decision about the London-Hong Kong route. Some people would describe that judgment as Delphic. I would call it Solomonic. Others have been less flattering, but the air traveller is, I am sure, absolutely delighted. It remains to be seen how the route works, but it is certainly a solution which is well worth trying.
  Opposition Members have said that that decision has left the industry wondering where it stands. I think that it stands like a bird let out of the cage of over-regulation. The big question now is: will the bird fly or has it forgotten how to fly?
  An open skies policy may be all right for flights to a Crown colony, but is it applicable to other routes? If only we had more Crown colonies today. If only there was as much of the map of the world still coloured pink as there was when I was doing my geography lessons at school, the licensing of airlines, from the British point of view anyway, would certainly be a great deal easier. Alas, those good—or perhaps bad—old days are gone. Now, the twin hurdles of nationalism and protectionism must be overcome, and we must recognise that the various world markets which could open up for British airlines vary tremendously.

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  9.45 pm
  A policy for the North Atlantic may be quite wrong for Africa, and a policy for the Far East would probably be wrong for South America. That is why I think that the Secretary of State is quite right not to lock himself into specific guidance to the CAA.
  I should like to look briefly at one specific market which probably offers Britain greater opportunities than any other—Europe. We have just seen the excellent report by the House of Lords Select Committee on the European Communities entitled "European Air Fares". That showed that air fares in Europe are much higher than in the United States, in some cases more than twice the cost for single fares. That is not entirely because fuel is cheaper in the United States or that some of the charges, such as en route navigation facilities, are carried by the Federal taxpayer. Nevertheless, the difference is significant and the absence of true competition in Europe must be an important factor in this high air fare market.
  In Europe, most countries have nationally-owned airlines, and take steps to protect them from competition. Surely that is against the competition provisions of the Treaty of Rome. Therefore, a major task for the EEC is to achieve as soon as possible a market environment in which fair competition can flourish, at least among member States. I am sure that the House welcomes the work done towards that objective by my hon. Friend the Under-Secretary, who is doing his best to ensure that the Europeans match their words with actions.
  We heard what the EEC had to say about the development of European air transport services when the Commission published its official memorandum on this subject in July 1979. That contained four very important objectives. It called for a total network of air services unhampered by national barriers, financial soundness for the airlines with lower costs and higher productivity, the safeguarding of the interests of airline workers and an improvement in conditions of life for the general public. The memorandum concluded that:
  "The Community should follow an evolutionary method in tacking these issues and avoid changes which would not leave sufficient time for adjustment."
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  It is debatable whether evolution or revolution is the right method for change in the civil aviation industry. Laker on the North Atlantic was certainly revolutionary, but perhaps we must tread more softly in respect of Europe.
  In accepting those broad parameters, it should be possible to aim for a Europe-wide network of services which were regular, reliable, free of discrimination or artificial restrictions and at a price which everyone could afford. I would have preferred the EEC objectives to have said more about the needs of airline passengers, but, alas, they did not.
  There need now be no barriers at all to such services if the will to achieve them exists. That must come from the operators and the Government involved. In their report on European air fares, their Lordships said:
  "It is frustrating to see proposals by airlines for cheap and advantageous fares and services being refused by the civil aviation administrations of Member States of the Community".
  It almost seems as if some national Governments and their civil aviation administrations are doing their best to prevent progress. Far too often, the interests of the consumer seem to be second to national prestige. Surely the Community should be promoting competition in the area of civil aviation, as it does in other areas, in order to enable airlines to satisfy the demand which is known to exist.
  I am sure that the House will applaud the Government's determination to lead the way in Europe, and the efforts or our airlines to blaze a trail with enterprising schemes that will widen markets and increase efficiency. The application by British Caledonian to start its mini-prix services between the United Kingdom and 23 cities in Continental Europe should be followed by other airlines.
  The aeroplane is said to be fulfilling the same role in the twentieth century as the railway did in the nineteenth century. The aeroplane has transformed our way of life. Travel enriches the mind, and surely scheduled, cheap, air travel should be available to all. It should no longer be the prerogative of the rich or the business man. In Europe, more travel will lead to a greater understanding

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  between members of the Community, and we should all welcome that.
  I applaud the determination of our Government and our industry to lead the way. That is why I support wholeheartedly the Government's free enterprise attitude to civil aviation, as exemplified in the amendment that we are now debating.
  Mr. Clinton Davis: Rarely can the perambulations of the hon. Member for Wells (Mr. Boscawen) have produced such insignificant results. The debate ended on a curious note. The hon. Member for Bristol, North-West (Mr. Colvin) referred to birds in cages. I suspect that he was referring to the fact that the Government have laid an egg. We are dealing with a capricious decision that was taken by the Government—a whimsical decision. I suppose that the Secretary of State was trying to show that he has a whim of iron, but he has shown a scant regard for the Civil Aviation Authority, and for its ability to assess evidence.
  Of course the right hon. Gentleman has asserted that his decision was nonpolitical. He is left with no recourse. If he were to say that he made a political decision and that he did not invoke the appropriate parts of the Civil Aviation Act to justify that, he would be opening himself up to a severe rebuke. So the Government camouflaged it all, and they deny it. That is to be expected.
  In this instance the Secretary of State has asserted that he has performed his quasi-judicial role. I do not believe it. It was more quasi than judicial. Effectively, he is saying that the evidence that was carefully scrutinised by the Civil Aviation Authority does not conform to his taste, and, therefore, it can be forgotten.
  Tonight the Minister has not begun to assert that there is any real evidence in favour of Laker upon which he is able to rely. He has completely overlooked the assertion of the Civil Aviation Authority that there was no convincing evidence about the size of the bottom end of the market. He is not criticising politicians. He is criticising people whose objectives are to assess the evidence before them. The Minister went on to pray in aid the great results that have been achieved on the North Atlantic routes. It is as well
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  to consider what the Civil Aviation Authority said about that:
  "On the North Atlantic it seems that Sky-train caters mainly for those passengers who previously travelled on charter flights. The rate of traffic growth on the North Atlantic does not suggest generation of any significant growth of traffic. The rate of growth in the period after the introduction of Skytrain was consistent with that of the two previous years, taking schedule and charter together. There was no dramatic increase."
  The authority says that in relation to Hong Kong there is no significant charter market from which scheduled services can divert traffic, and that the forgotten man must regretfully be regarded as a myth.
  By his decision the Secretary of State has left British civil aviation in turmoil. He has declined to indicate—it would have been open to the Government to do so in a White Paper—what is the civil aviation policy of the Government. He has declined to indicate that tonight. He has preferred to enunciate a policy of some kind in a decision on appeal, inconsistent in many ways with the policy adumbrated by the Under-Secretary of State. The Under-Secretary of State, in contrast to the great fanfare of trumpets from the Secretary of State, regards it as a gentle, persuasive policy of liberalisation. Indeed, he said, in relation to an intervention from the hon. Member for Brentwood and Ongar (Mr. McCrindle):
  "I certainly agree that there is still continuing today almost de facto a spheres of interest policy. I say 'almost'; I choose my words wisely. That may well continue in some areas for the reasons which I have set out. But it is for the Civil Aviation Authority to decide."—[Official Report, Standing Committee B, 6 March 1980; c. 840.]
  Is it for the CAA to decide or is it to be for the Minister to decide on appeal? I suppose that we can expect the next major announcement on civil aviation policy at the 1981 Dragon Boat dinner in the Secretary of State's reply to the toast to the visitors, but it is scarcely a satisfactory way of announcing the Government's policy in this regard. I believe that the Secretary of State has treated the Civil Aviation Authority with a derision that it does not deserve.
  We are entitled to ask—we have not had a response from the Minister—where the authority stands now. Are we back to the old days, when we had the Air Transport Licensing Board hearings, representing a sort of pantomime, with virtually

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  every case going to appeal? That was where the effective decisions were made.
  That is the risk that we are facing at the present time because of the curious and eccentric way in which the Minister has approached the matter. As my right hon. Friend said at the beginning of the debate, by his actions the Minister has overturned the logic of his own Bill. We were told that he wanted to give the Civil Aviation Authority extraordinarily wide powers—powers that rendered it unaccountable to Parliament. He has now gone to the other extreme by making it almost an irrelevance, or a creature of the Secretary of State. Perhaps he hopes, as a result of this decision, to cause the authority in its future pronouncements to fall in line with the general philosophy that the Secretary of State has expressed, without being under any duty to follow a pattern that is set out in an Act of Parliament or that is referred to in an Act of Parliament—because that is the right way in which the authority should approach these matters.
  I do not deny that new clause 15 is unsatisfactory in many ways. It has enabled us to debate the issue, but it has also enabled us to focus attention on the fact that the Secretary of State acted in a political sense. The way in which appeals are at present conducted is very unsatisfactory if that is to be the case.
  I entirely agree with the observation made by my right hon. Friend that the Secretary of State should have remitted that part of the decision affecting the Laker issue to the Civil Aviation Authority for adjudication so that it could have been tested and so that the other parties in the case could have represented their views and cross-examined as necessary.
  Why has amendment No. 63 been introduced at so late a stage? It is not just a difference of nuance; it is a material change in the policy of the Government. We should have had an opportunity to consider it in detail in Committee, but the Government chose not to do that. In many ways it was a very unsatisfactory Committee stage, because there were so many things that we were debarred from considering because of the way in which the Bill was drafted in the first place.
  The Minister claims that there is a lack of precision in the new clause. He cannot allege that and at the same time
  180
  say that the wording of amendment No. 63 is full of precision.
  How can the issue of benefits be properly defined? There is a wide area of argument there. I fear that the result will be that many appeals will come before the Minister. What I fear then is that there will be no certainty—
  It being Ten o'clock, the debate stood adjourned.
  Ordered,
  That, at this day's sitting, the Civil Aviation Bill may be proceeded with, though opposed, until any hour.—[Mr. Boscawen.]
  Question again proposed, That the clause be read a Second time.
  Mr. Clinton Davis: There will be no certainty, no stability. That point was made with great emphasis by the hon. Member for Brentwood and Ongar in a fine analytical speech.
  What is the Government's aviation policy? What consistency is there between the statements made by the Secretary of State and the Under-Secretary? Can this policy vary from day to day? Has the "spheres of interest policy" ended? Is the Civil Aviation Authority to be invested with greater powers or is the real decision eventually to be made by the Secretary of State?
  We have had no answer to these questions. I fear that the Minister will not provide them in the latter part of the debate.
  I have listened carefully to the Under-Secretary's attempts to justify the policy, but I am not very impressed. It is incumbent upon the hon. Gentleman to offer an assurance that the Government will lay a White Paper before the House of Commons in the near future so that the airline industry, the House, passengers and, above all, the CAA may know about the Government's aviation policy.
  In the circumstances, I invite the House to reject Government amendments Nos. 35 and 63, because the Government's stance has been so irresponsible and unsatisfactory.
  Mr. Tebbit: With the permission of the House, I should like to reply briefly to some of the points that have been made.
  I have been in touch with the Civil Aviation Authority since the Hong Kong

  181
  decision. Far from feeling derided, it seemed to me to be in very good heart. There will not be a White Paper on these matters. There is no need for a White Paper. I am sorry if the hon. Member for Hackney, Central (Mr. Davis) and his colleagues do not understand the policy. It has been made clear to them. It is described in essence in amendment No. 63. It is set out clearly for all to see, with the implication that I have always made clear, namely, that the Government favour competition and the customer rather more than the entrenched interests of the operators.
  I should tell my hon. Friend the Member for Tynemouth (Mr. Trotter) that we have supported a number of low fare proposals by British airlines to European destinations, and we shall continue to do so. The problem is to persuade European countries to accept our proposals. Many European countries are still as backward in these matters as are some Opposition Members. The struggle goes on, but we are making progress.
  If my hon. Friend the Member for Bristol, North-West (Mr. Colvin) looks at amendment No. 63, he will find in subsection 3(a) that the CAA is free to take account of environmental factors in hearing licensing applications.
  The hon. Member for South Ayrshire (Mr. Foulkes) and others talked at length about jobs in Scotland and the effect of my right hon. Friend's decision on British Caledonian as though my right hon. Friend had taken British Caledonian off the route, but he has not. Hon. Gentlemen should consider how fortunate they are that I am the Under-Secretary of State and my right hon. Friend is the Secretary of State—
  Mr. Foulkes: And not the other way around.
  Mr. Tebbit: —and indeed, that it is not, for example, the hon. Member for Nuneaton (Mr. Huckfield), who is a Front Bench Opposition industry spokesman, who has any say in these matters, because he said on 11 February 1976:
  "Surely, if British Caledonian cannot survive after this lot, it should not be allowed to do so."—[Official Report, 11 February 1976; Vol. 905. c. 449.]
  182
  That was the Labour Party's attitude, and that is the attitude of one of its Front Bench industry spokesmen.
  The hon. Gentleman also said, on 15 October 1975:
  "I opposed the formation of British Caledonian although its way was paved by a Labour Government. I still believe that we should have only one airline, namely, British Airways.[Official Report, 15 October 1975; Vol. 897, c. 1097.]
  That is the authentic view of the Opposition today. If anyone in British Caledonian thinks that he would get a moment's consideration if that hon. Gentleman had any part in any considerations of aviation policy, let alone industrial policy, if the Labour Party ever came to power, he had better think again.
  I commend the Government amendments to the House and I implore the House to reject new clause 15, which is unworkable, irrational and poorly thought out.
  Question, That the clause be read a Second time, put and negatived.
  Clause 11

GENERAL OBJECTIVES OF CIVIL AVIATION AUTHORITY
Mr. John Smith: I beg to move amendment No. 31, in page 12, line 4, leave out 'any aerodrome Licensing Function' and insert 'its functions'.
Mr. Speaker: With this we are to take the following amendments:
No. 32, in page 12, line 5, leave out from 'function' to end of line 12 and insert
'to take account of the need to minimise disturbance caused to the public from noise, vibration and pollution arising from aircraft operations.
No. 34, in page 12, line 12, at end insert—
'(1A) In exercising any aerodrome licensing function it shall be the duty of the Authority to impose such conditions as it deems reasonably appropriate having regard to the Authority's duty under this subsection.
(1B) It shall be the duty of any person for the time being managing the aerodrome (or to whom the licence in question has been granted) to ensure that the conditions imposed under the Authority's functions set out in the section are complied with.'.
Mr. Smith: The House now has an opportunity in these amendments to consider the relationship of airports to the environment. In Committee we spent a considerable time on this subject. There is obviously a serious balance to be struck between the economic interests that are served by the development of airports and aerodromes and the environmental consequences upon the surrounding neighbourhood and the individuals who live near airports.
Generally, the House has tended to think of this matter in terms of the large airports and the obvious environmental consequences that affect the people around Heathrow, Gatwick and some of the larger airports throughout the country, but I should like to turn the attention of the House to the question of general aviation, which I think is covered by the part of the Bill with which we are dealing.
I say straight away that I think that the members of the Committee owe a considerable debt to the Airfields Environmental Confederation, which has drawn this point to their attention, and which has been very helpful in supplying hon. Members with information and proposals to deal with the problems. I think that the confederation is also to be commended for the fact that it has throughout the argument recognised that a balance must be struck between economic interest, which requires airports to be developed as air travel replaces other forms of travel as an important means of communication in this country, and the environmental nuisances and other things that flow therefrom.
A number of interesting debates took place in Committee. In the Bill the Government put forward a method of dealing with the problem which puts a responsibility upon the CAA to have regard to environmental effects in exercising its aerodrome licensing function. There is some doubt among some commentators, and I think that there exists some doubt within the CAA, about whether the CAA is the appropriate body to undertake a function that involves environmental control. It is much more a technical organisation to deal with matters of airworthiness, air traffic licensing and the like, but I have no doubt that if this is a duty which the House wishes it to
184
carry out it will carry it out to the best of its ability.
The problems that arise over general aviation are in some senses different from those that exist in relation to major airports. Many of the aircraft that use the smaller general aviation aerodromes are not subject to the noise certification legislation, and therefore there is not that protection, and the rights of individual citizens to take proceedings for nuisance are restricted in terms of legislation. Aircraft are specifically excluded from the noise provisions of the Control of Pollution Act 1974. I think that there can exist quite a serious problem, especially where the planning permission that is in use is of some antiquity. In fact, it may be an old wartime aerodrome that is being used to considerable purpose at present, perhaps as a training centre for pilots and the like.
One idea was to establish airfield consultative committees, which were set up under section 8 of the Civil Aviation Act 1968. Where they work they serve a useful purpose, but in many instances they are not as effective as they might be. I respectfully suggest to the Under-Secretary of State that one of the concerns of his Department should be to ensure that the committees are made more effective and that they are used as a genuine method of consultation. Only in that way will we get round some of the problems that exist.
The House should not fool itself by thinking that there is some magic legislative solution to the problem. There will be difficulties however legislation is framed. The Government advanced a set of proposals that were considered with some care in Committee. We have offered two alternative solutions. There is one possibility if amendments Nos. 31 and 32 are taken together. Amendment No. 34 is another possibility. It is clear from these different propositions, which have been sponsored by the Airfields Environmental Confederation, that we do not believe that there is one cure-all method. I think that the Government's general approach is on the same lines.
In the alternative propositions the responsibilities on the CAA are of a general character and do not depend upon the Minister specifying airports to which the obligations are to apply. One of the fears

185
about the way in which the Minister proposes to proceed is that he may not specify a suitable number of airfields. There is concern that he will specify only a small number. Therefore, the impact of the legislation will be small. It is also felt that the provisos in the legislation mean that it will not amount to very much at the end of the day.
I think that the Minister has had an opportunity to consider these matters again since our discussions in Committee. It will be useful if he acquaints the House with how far his thinking has taken him and the extent to which he may be able to meet us.
Mr. Tebbit: I thank the right hon. Member for Lanarkshire, North (Mr. Smith) for the way in which he has put these matters. He has advocated the need to make the consultative committees more effective. I approached the Bill with exactly that objective in mind. To a large extent, the purpose of having the power to specify airports where the CAA shall take environmental considerations into account in considering its licensing policy was to allow the Minister to buttress those arrangements with the ability to specify airports where things were not going right. I have in mind the arrangements that airport operators make to enable them to live in peace with their neighbours. I hope that the fact that I can specify will encourage those concerned to ensure that they go about their business in an appropriate way.
I cannot recommend to the House that it should accept the amendments. I say that for various reasons. If we were to lay the environmental consideration upon the authority in all its functions, as amendments Nos. 31 and 32 would do, we would place the CAA in a dangerous position. That is a proposition that sounds attractive. I thought about it, but decided that it would not work. Litigation by amenity groups could bring the CAA's work to a halt. A new subordinate duty would have been related to a specific responsibility.
I am sure that Opposition Members would not want the authority to attempt to control the noise climate by an artificial restriction on the number of pilots' licences issued. However, this provision would give it the power to do so and
186
it would be possible for amenity groups to seek legal action to force it to do so. We should get into a terrible tangle if we went down that road.
I shall approach amendment No. 34 slightly differently. Article 68 of the Air Navigation Order, as inserted by the Air Navigation (Second Amendment) Order 1977, makes provision for an aerodrome licence to be granted subject to such conditions as the authority thinks fit. The holder of an aerodrome licence is required not to contravene, or to cause the permit to be contravened by, any condition of the aerodrome licence.
Amendment No. 34 would not add to the provisions contained in the order in any material way. In the absence of any reference to the revocation or variation of a licence in appropriate circumstances, it might be held that the authority did not possess such a power. I am sure that that is not the intention of Opposition Members. I hope that they will agree to withdraw the amendment. The nub of the issue is that power will be in the hands of the Secretary of State and he can specify the airfields. Although it will be difficult for the Civil Aviation Authority to carry out such an environmental responsibility, and although I do not wish to overload it, I wish to make it plain to operators of airports that if they do not learn to live in reasonable harmony with their neighbours, I shall not hesitate to use that power.
Mr. Peter Temple-Morris: I do not wish to detain the House, but I welcome the amendments. They give the House an opportunity to discuss a real problem. As a result of thorough Committee discussions the Government have met an objection that was made by many of those who live round airfields, over which there is no control once one has gone beyond the planning laws.
I remind my hon. Friend the Minister, with whom I have corresponded on the subject of Shobdon airport, in my constituency, that many Conservative Members welcome the measure. They are watching proceedings on behalf of their constituents with some anxiety, as they are far from confident about the work of the consultative committees. They welcome the fact that my hon. Friend's

187
ministerial eye will watch over this problem and that he has taken more power upon himself to deal with it.
Mr. John Smith: This has been a short but useful debate. We are encouraged by the way in which the Minister indicated that he would use his powers, and particularly by the deterrent effect of specification. Much will depend on how things work out. It would be unfair to judge the method that the Minister wishes to use before it has been put into practice. He has made several reasonable points
about the amendments. Given the spirit in which the Minister has said that he would like the legislation to be enforced, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: No. 35, in page 12, line 24, leave out subsection (4).—[Mr. Cope.]
Question put, That the amendment be made:—
The House divided: Ayes 146, Noes 93.

Division No. 390]

AYES

[10.15 pm

Alexander, Richard

Griffiths, Peter (Portsmouth N)

Page, Rt Hon Sir R. Graham

Ancram, Michael

Gummer, John Selwyn

Page, Richard (SW Hertfordshire)

Banks, Robert

Hamilton, Michael (Salisbury)

Pattle, Geoffrey

Beaumont-Dark, Anthony

Hannam, John

Pollock, Alexander

Benyon, Thomas (Abingdon)

Haselhurst, Alan

Porter, George

Benyon, W. (Buckingham)

Hawkins, Paul

Proctor, K. Harvey

Berry, Hon Anthony

Heddle, John

Renton, Tim

Best, Keith

Henderson, Barry

Rhodes James, Robert

Bevan, David Gilroy

Hicks, Robert

Roberts, Michael (Cardiff NW)

Blackburn, John

Hogg, Hon Douglas (Grantham)

Rossi, Hugh

Blaker, Peter

Hooson, Tom

Rost, Peter

Brinton, Tim

Hordern, Peter

Sainsbury, Hon Timothy

Brown, Michael (Brigg & Sc'thorpe)

Howell, Ralph (North Norfolk)

St. John-Stevas, Rt Hon Norman

Bruce-Gardyne, John

Hunt, John (Ravensbourne)

Shepherd, Colin (Hereford)

Buchanan-Smith, Hon Alick

Jopling, Rt Hon Michael

Shepherd, Richard (Aldrldge-Br'hills)

Buck, Antony

Kilfedder, James A.

Sims, Roger

Bulmer, Esmond

Knight, Mrs Jill

Skeet, T. H. H.

Butcher, John

Knox, David

Speed, Keith

Butler, Hon Adam

Lang, Ian

Speller, Tony

Cadbury, Jocelyn

Le Marchant, Spencer

Spicer, Michael (S Worcestershire)

Carlisle, John (Luton West)

Lester, Jim (Beeston)

Squire, Robin

Carlisle, Kenneth (Lincoln)

Lloyd, Ian (Havant & Waterloo)

Stainton, Keith

Clark, Hon Alan (Plymouth, Sutton)

Lloyd, Peter (Fareham)

Stanbrook, Ivor

Clark, Sir William (Croydon South)

Luce, Richard

Stanley, John

Clarke, Kenneth (Rushclifte)

Lyell, Nicholas

Stradling Thomas, J.

Cockeram, Eric

Macfarlane, Neil

Taylor, Teddy (Southend East)

Colvin, Michael

MacGregor, John

Tebbit, Norman

Cope, John

McNalr-Wilson, Michael (Newbury)

Temple-Morris, Peter

Cranborne, Viscount

McQuarrie, Albert

Thatcher, Rt Hon Mrs Margaret

Crouch, David

Mates, Michael

Thompson, Donald

Dean, Paul (North Somerset)

Mather, Carol

Thornton, Malcolm

Dorrell, Stephen

Maude, Rt Hon Angus

Townend, John (Bridlington)

Douglas-Hamilton, Lord James

Mawby, Ray

Townsend, Cyril D. (Bexleyheath)

Dover, Denshore

Maxwell-Hysiop, Robin

Trotter, Neville

Dunn, Robert (Dartford)

Mellor, David

van Straubenzee, W. R.

Eden, Rt Hon Sir John

Meyer, Sir Anthony

Waddington, David

Faith, Mrs. Sheila

Miller, Hal (Bromsgrove & Redditch)

Wakeham, John

Fenner, Mrs Peggy

Mills, Iain (Meriden)

Walker, Bill (Perth & E Perthshire)

Finsberg, Geoffrey

Mills, Peter (West Devon)

Wall, Patrick

Fisher, Sir Nigel

Moate, Roger

Ward, John

Fletcher-Cooke, Charles

Morrison, Hon Peter (City of Chester)

Warren, Kenneth

Fookes, Miss Janet

Murphy, Christopher

Watson, John

Forman, Nigel

Mytes, David

Wells, Bowen (Hert'rd & Stevn'age)

Fraser, Peter (South Angus)

Neale, Gerrard

Wheeler, John

Gardiner, George (Reigate)

Needham, Richard

Wickenden, Keith

Garel-Jones, Tristan

Nelson, Anthony

Wolfson, Mark

Gorst, John

Neubert, Michael

Gow, Ian

Newton, Tony

TELLERS FOR THE AYES:

Grant, Anthony (Harrow C)

Onslow Cranley

Mr. Robert Boscawen and Mr. Peter Brooke

Greenway, Harry

Page, John (Harrow, West)

NOES

Allaun, Frank

Brown, Robert C. (Newcastle W)

Crowther, J. S.

Archer, Rt Hon Peter

Buchan, Norman

Cryer, Bob

Ashton, Joe

Campbell-Savours, Dale

Cunliffe, Lawrence

Atkinson, Norman (H'gey, Tott'ham)

Canavan, Dennis

Davis, Clinton, (Hackney Central)

Bagler, Gordon A. T

Carter-Jones, Lewis

Davis, Terry (B'rm'ham, Stechford)

Beith, A. J.

Clark, Dr David (South Shields)

Deakins, Eric

Benn, Rt Hon Anthony Wedgwood

Cocks, Rt Hon Michael (Bristol S)

Dewar, Donald

Bidwell, Sydney

Cowans, Harry

Dixon, Donald

Dobson, Frank

Lestor, Miss Joan (Eton & Slough)

Silkin, Rt Hon John (Deptford)

Dormand, Jack

Lewis, Ron (Carlisle)

Silverman, Julius

Douglas, Dick

Litherland, Robert

Skinner, Dennis

Dubs, Alfred

Lyons, Edward (Bradford West)

Smith, Rt Hon J (North Lanarkshire)

Duffy, A. E. P.

McCartney, Hugh

Snape, Peter

Dunwoody, Mrs Gwyneth

McCrindle, Robert

Soley, Cllve

Eastham, Ken

McElhone, Frank

Spearing, Nigel

Evans, Ioan (Aberdare)

McGuire, Michael (Ince)

Spriggs, Leslie

Evans, John (Newton)

McKay, Allen (Penistone)

Steel, Rt Hon David

Flannery, Martin

McKelvey, William

Slott, Roger

Fletcher, Ted (Darllington)

McTaggart, Robert

Thomas, Mike (Newcastle East)

Foster, Derek

Marshall, Dr Edmund (Goole)

Thomas, Dr Roger (Carmarthen)

Foulkes, George

Maxton, John

Tinn, James

George, Bruce

Millan, Rt Hon Bruce

Wainwright, Edwin (Dearne Valley)

Gourlay, Harry

Miller, Dr M. S. (East Kilbride)

Wainwright, Richard (Colne Valley)

Hamilton, W. W. (Central Fife)

Mitchell, Austin (Grimsby)

Watkins, David

Harrison, Rt Hon Walter

Morton, George

While, Frank R. (Bury & Radcliffe)

Haynes, Frank

Palmer, Arthur

Wigley, Dafydd

Home Robertson, John

Powell, Raymond (Ogmore)

Winnick, David

Hooley, Frank

Race, Reg

Woolmer, Kenneth

Janner, Hon Greville

Rooker, J. W.

Johnson, James (Hull West)

Ross, Ernest (Dundee West)

TELLERS FOR THE NOES:

Jones, Rt Hon Alec (Rhondda)

Ross, Stephen (Isle of Wight)

Mr. James Hamilton and Mr. Donald Coleman

Jones, Barry (East Flint)

Sheerman, Barry

Lamble, David

Question accordingly agreed to.
Amendment proposed: No. 63, in page 12, leave out from beginning of line 30 to end of line 45 on page 13 and insert—
'(5) The following section shall be inserted after section 23 of the Act of 1971—
23A.—(1) It shall be the duty of the Authority to perform its air transport licensing functions in the manner which it considers is best calculated to ensure that British airlines compete as effectively as possible with other airlines in providing air transport services on international routes; and in performing those functions the Authority shall also have regard—

(a) to any advice received from the Secretary of State with respect to the likely outcome of negotiations with the government of any other country or territory for the purpose of securing any right required for the operation by a British airline of any air transport services outside the United Kingdom; and

(b) to the need to secure the most effective use of airports within the United Kingdom.

(2) In considering whether to grant any air transport licence it shall be the duty of the Authority to have regard to the effect on existing air transport services provided by British airlines of authorising any new services the applicant proposes to provide under the licence, and in any case where those existing services are similar (in terms of route) to the proposed new services or where two or more applicants have applied for licences under which each proposes to provide similar services, the Authority shall have regard in particular to any benefits which may arise from enabling two or more airlines to provide the services in question.
(3) Subject to section 3 of this Act and to subsections (1) and (2) of this section, it shall be the duty of the Authority in performing its air transport licensing functions to have regard to the need to minimise so far as reasonably practicable—

(a) any adverse effects on the environment; and

190

(b) any disturbance to the public;

from noise, vibration, atmospheric pollution or any other cause attributable to the use of aircraft for the purpose of civil avation.
(4) In addition to the duties with respect to particular matters imposed on the Authority by the preceding provisions of this section, it shall be the duty of the Authority to perform its air transport licensing functions in the manner which it considers is best calculated to impose on the civil air transport industry of the United Kingdom and on the services it provides for users of air transport services the minimum restrictions consistent with the performance by the Authority of its duties under sections 3, 22 and 23 of this Act and the preceding provisions of this section.
(5) In this section—

(a) references to the air transport licensing functions of the Authority are references to its functions under section 21 to 23 of this Act and any functions conferred on it by regulations made under subsection (1) of section 24 of this Act; and

(b) 'British airline' has the same meaning as in section 3(1) of this Act.".

(6) in section 24 of the Act of 1971—

(a) subsection (2) (which contains provisions relating to guidance given by the Secretary of State under section 3) shall cease to have effect; and

(b) at the end of subsection (6) (duties of the Authority to which the Secretary of State is to have regard determining appeals) after the words "section 3" there shall be inserted the words "and section 23A".

(7) This section, and the repeal of section 24(2) of the Act of 1971 provided for in Schedule 3 to this Act, shall come into force on such day as the Secretary of State may by order made by statutory instrument appoint; but the day appointed under this section must be later than the date of publication of the first statement of the policies of the Civil Aviation Authority under section 12 of this Act.'.—[Mr. Tebbit.]
Question put, That the amendment be made:—
The House divided: Ayes 147, Noes 92.

Division No. 391

AYES

[10.30 pm

Alexander, Richard

Griffiths, Peter (Portsmouth N)

Page, Richard (SW Hertfordshire)

Ancram, Michael

Summer, John Selwyn

Pattie, Geoffrey

Banks, Robert

Hamilton, Michael (Salisbury)

Pollock, Alexander

Beaumont-Dark, Anthony

Hannam, John

Porter, George

Benyon, Thomas (Abingdon)

Haselhurst, Alan

Proctor, K. Harvey

Benyon, W. (Buckingham)

Hawkins, Paul

Rees-Davies, W. R.

Berry, Hon Anthony

Heddle, John

Renton, Tim

Best, Keith

Henderson, Barry

Rhodes James, Robert

Bevan, David Gilroy

Hicks, Robert

Roberts, Michael (Cardiff NW)

Blackburn, John

Hogg, Hon Douglas (Grantham)

Rossi, Hugh

Blaker, Peter

Hooson, Tom

Rost, Peter

Boscawen, Hon Robert

Hordern, Peter

Sainsbury, Hon Timothy

Brinton, Tim

Howell, Ralph (North Norfolk)

St. John-Stevas, Rt Hon Norman

Brooke, Hon Peter

Hunt, John (Ravensbourne)

Shepherd, Colin (Hereford)

Brown, Michael (Brigg & Sc'thorpe)

Jopling, Rt Hon Michael

Shepherd, Richard (Aldridge-Br'hills)

Bruce-Gardyne, John

Kilfedder, James A.

Sims, Roger

Buchanan-Smith, Hon Alick

Knight, Mrs Jill

Skeet, T. H. H.

Buck, Antony

Knox, David

Speed, Keith

Bulmer, Esmond

Lang, Ian

Speller, Tony

Butcher, John

Le Marchant, Spencer

Spicer, Michael (S Worcestershire)

Butler, Hon Adam

Lester, Jim (Beeston)

Squire, Robin

Cadbury, Jocelyn

Lloyd, Ian (Havant & Waterloo)

Stainton, Keith

Carlisle, John (Luton West)

Lloyd, Peter (Fareham)

Stanbrook, Ivor

Carlisle, Kenneth (Lincoln)

Luce, Richard

Stanley, John

Clark, Sir William (Croydon South)

Lyell, Nicholas

Stradling Thomas, J.

Clarke, Kenneth (Rushcliffe)

McCrindle, Robert

Taylor, Teddy (Southend East)

Cockeram, Eric

Maclarlane, Neil

Tebbit, Norman

Colvin, Michael

McNair-Wilson, Michael (Newbury)

Temple-Morris, Peter

Cope, John

McQuarrie, Albert

Thatcher, Rt Hon Mrs Margaret

Cranborne, Viscount

Mates, Michael

Thompson, Donald

Crouch, David

Mather, Carol

Thornton, Malcolm

Dean, Paul (North Somerset)

Maude, Rt Hon Angus

Townend, John (Bridlington)

Dorrell, Stephen

Mawby, Ray

Townsend, Cyril D. (Bexleyheath)

Douglas-Hamilton, Lord James

Maxwell-Hyslop, Robin

Trotter, Neville

Dover, Denshore

Mellor, David

van Straubenzee, W. R.

Dunn, Robert (Dartford)

Meyer, Sir Anthony

Waddington, David

Eden, Rt Hon Sir John

Miller, Hal (Bromsgrove & Redditch)

Wakeham, John

Faith, Mrs Sheila

Mills, Iain (Meriden)

Walker, Bill (Perth & E Perthshire)

Fenner, Mrs Peggy

Mills, Peter (West Devon)

Wall, Patrick

Finsberg, Geoffrey

Moate, Roger

Ward, John

Fisher, Sir Nigel

Morrison, Hon Peter (City of Chester)

Warren, Kenneth

Fletcher-Cooke, Charles

Murphy, Christopher

Watson, John

Fookes, Miss Janet

Myles, David

Wells, Bowen (Hert'rd & Stevn'age)

Forman, Nigei

Neale, Gerrard

Wheeler, John

Fraser, Peter (South Angus)

Needham, Richard

Wickenden, Keith

Gardiner, George (Reigate)

Nelson, Anthony

Wolfson, Mark

Garel-Jones, Tristan

Neubert, Michael

TELLERS FOR THE AYES:

Gorst, John

Onslow. Cranley

Mr. John MacGregor and Mr. Tony Newton

Gow, Ian

Page, John (Harrow, West)

Grant, Anthony (Harrow C)

Page, Rt Hon Sir R. Graham

Greenway, Harry

NOES

Aliaun, Frank

Dobson, Frank

Lambie, David

Archer, Rt Hon Peter

Dormand, Jack

Lestor, Miss Joan (Eton & Slough)

Ashton, Joe

Douglas, Dick

Lewis, Ron (Carlisle)

Atkinson, Norman (H'gey, Tott'ham)

Dubs, Alfred

Litherland, Robert

Bagler, Gordon A. T.

Duffy, A. E. P.

Lyons, Edward (Bradford West)

Beith, A. J.

Dunwoody, Mrs Gwyneth

McCartney, Hugh

Benn, Rt Hon Anthony Wedgwood

Eastham, Ken

McElhone, Frank

Bidwell, Sydney

Evans, Ioan (Aberdare)

McGuire, Michael (Ince)

Brown, Robert C. (Newcastle W)

Evans, John (Newton)

McKay, Allen (Penistone)

Buchan, Norman

Flannery, Martin

McKelvey, William

Campbell-Savours, Dale

Fletcher, Ted (Darlington)

McTaggart, Robert

Canavan, Dennis

Foster, Derek

Marshall, Dr Edmund (Goole)

Carter-Jones, Lewis

Foulkes, George

Maxton, John

Clark, Dr David (South Shields)

George, Bruce

Millan, Rt Hon Bruce

Cocks, Rt Hon Michael (Bristol S)

Gourlay, Harry

Miller, Dr M. S. (East Kilbride)

Coleman, Donald

Hamilton, James (Bothwell)

Mitchell, Austin (Grimsby)

Cowans, Harry

Hamilton, W. W. (Central Fife)

Palmer, Arthur

Crowther, J. S.

Harrison, Rt Hon Walter

Powell, Raymond (Ogmore)

Cryer, Bob

Haynes, Frank

Race, Reg

Cunlifle, Lawrence

Home Robertson, John

Rooker, J. W.

Davis, Clinton, (Hackney Central)

Hooley, Frank

Ross, Ernest (Dundee West)

Davis, Terry (B'rm'ham, Stechford)

Janner, Hon Greville

Ross, Stephen (Isle of Wight)

Deakins, Eric

Johnson, James (Hull West)

Sheerman, Barry

Dewar, Donald

Jones, Rt Hon Alec (Rhondda)

Silkin, Rt Hon John (Deptford)

Dixon, Donald

Jones, Barry (East Flint)

Silverman, Julius

Skinner, Dennis

Slott, Roger

Wigley, Dafydd

Smith, Rt Hon J (North Lanarkshire)

Thomas, Mike (Newcastle East)

Winnick, David

Snape, Peter

Thomas, Dr Roger (Carmarthen)

Woolmer, Kenneth

Soley, Clive

Wainwright, Edwin (Dearne Valley)

Spearing, Nigel

Wainwright, Richard (Colne Valley)

TELLERS FOR THE NOES:

Spriggs, Leslie

Watklns, David

Mr. James Tinn and Mr. George Morton.

Steel. Rt Hon David

White, Frank R. (Bury & Radcliffe)

Question accordingly agreed to.

Clause 12

  PERIODICAL PUBLICATION OF POLICIES BY CIVIL AVIATION AUTHORITY
  Mr. Tebbit: I beg to move amendment No. 41, in page 14, line 1, leave out from beginning to 'to' and insert
  'It shall be the duty of the Civil Aviation Authority'.
  Mr. Deputy Speaker: With this we may discuss the following amendments:
  No. 42, in page 14, line 2, leave out 'from time to time' and insert 'on a regular basis.'.
  Government amendments Nos. 43, 44, 64 and 47.
  Mr. Tebbit: I think that I can deal with these matters fairly briefly. [HON. MEMBERS: "Hear, hear."] I am glad that the House agrees with me.
  Amendment No. 41 removes the words
  "The Civil Aviation Authority shall be under a duty",
  and substitutes
  "It shall be the duty".
  That is merely designed to use the same form of words throughout the Bill. Amendment No. 42 requires the CAA to publish its licensing policy "on a regular basis" rather than "from time to time". That is an amendment favoured by my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle). I hope that he will not be too disappointed if I again tell him that I do not favour that amendment. I do not think that the CAA should be required to do this on a regular basis. The first occasion on which it will publish this policy will be six months after the coming into effect of the Bill in general terms, and we do not want it to be publishing policy thereafter every six months; we want it only as publication is needed, when there is a change.
  Amendment No. 43 is consequential on No. 47, to which I shall refer in a moment. Amendment No. 44 is consequential upon the decision to amend
  194
  clause 11, to bring it into force on a day appointed, which is to be after the publication of the CAA policy statement. Had we not made this further amendment we would have landed ourselves in considerable difficulties. That puts the whole thing right again.
  Amendment No. 64 gives effect to the spirit of an amendment moved by my hon. Friend the Member for Brentwood and Ongar, so he has won something, at any rate, in this debate. That allows the Secretary of State to require the authority to publish statements of its policy on particular matters as he may think fit.
  Amendment No. 47, to which I referred, requires the CAA to incorporate in its annual reports any policy statements that it makes during the year. That makes a convenient peg on which to hang, if necessary, a debate on those matters, since there could be a debate on the report of the CAA if the Opposition so wished.
  I ask the House to agree to amendments Nos. 41, 43, 44, 64 and 47, and I hope that my hon. Friend will agree to ask leave to withdraw amendment No. 42.
  Mr. McCrindle: I get the impression that the House will not be disappointed if I restrict my remarks to a few minutes. I should, perhaps, be forgiven if I say that consistently during the stages of the Bill I have tried to put pressure on my hon. Friend the Under-Secretary without, as the House will have noticed, a great deal of success so far.
  Nevertheless, I do not wish to look a gift horse in the mouth. I think that my hon. Friend was saying that though he cannot quite accept amendment No. 42 he feels that the spirit behind it is implicit in his acceptance of one of the other amendments. On that basis, he will be happy to know that I shall not seek to press amendment No. 42.
  Amendment agreed to.
  Amendments made: No. 43, in page 14, line 2 leave out
  '(in such manner as it thinks fit)'.
  No. 44, in page 14, line 7, leave out 'section 11 of this Act' and insert this section'.
  No. 64, in page 14, line 7 at end insert—
  '(2A) If the Secretary of State considers it appropriate to do so, he may by notice in writing require the Authority to publish a statement of the policy it intends to adopt with respect to any particular matter in performing those functions (or any of them); and it shall be the duty of the Authority to publish any statement required by a notice under this subsection within six months of the date of the notice.
  (2B) The Secretary of State may require the Authority to publish a statement of the policy it intends to adopt in relation to any of its functions under section 23A of the Act of 1971 notwithstanding that section 11 of this Act is not yet in force.'.—[Mr. Tebbit.]
  Clause 17

SOUND-PROOFING GRANTS TO BE TAKEN INTO ACCOUNT IN DETERMINING COM- PENSATION FOR DEPRECIATION.
Mr. Tebbit: I beg to move amendment No. 49, in page 16, line 42 after 'made' 'insert' (a).
Mr. Deputy Speaker: With this we may take Government amendment No. 50.
Mr. Tebbit: These amendments extend the provisions of clause 17 to Northern Ireland. Their purpose is to ensure that the relevant legislation in Northern Ireland is consistent with that applying in the remainder of the United Kingdom.
Amendment agreed to.
Amendment made: No. 50, in page 16, line 43 leave out from '1973' to 'corresponding' and insert:
and

(b) in Article 7(3) of the Land Acquisition and Compensation (Northern Ireland) Order 1973;

(which respectively make provision for Scotland and for Northern Ireland '.—[Mr. Tebbit.]
Clause 25

CITATION, COMMENCEMENT AND EXTENT
Amendment made: No. 51, in page 22, line 1, leave out subsection (2).—[Mr. Tebbit.]
Mr. Tebbit: I beg to move amendment No. 52, in page 22, line 7, leave out subsection (3) and insert—
196
(3) This Act, except sections (Extension of powers of British Airports Authority) and (Acquisition of land by agreement by British Airports Authority), extends to Northern Ireland.'.
All that I need say is that this is a consequential amendment arising out of the two new clauses which were agreed to earlier.
Amendment agreed to.

Schedule 3

  ENACTMENTS REPEALED
  Mr. Tebbit: I beg to move amendment No. 55, in page 26, line 6, column 3, at end insert—
  'In section 10(2) the words "(1) or (2)".'.
  Mr. Deputy Speaker: With this we may take Government amendments Nos. 66 and 56 to 58.
  Mr. Tebbit: This too, I am glad to say, is a consequential amendment. It arises from the replacement of section 8 of the Civil Aviation Act 1971, which deals with the borrowing powers of the CAA, by new clause 4. Its purpose is to repeal a reference in subsection 10(2) of the 1971 Act, as amended by the 1978 Act.
  Amendment agreed to.
  Amendments made:
  No. 66, in page 26, line 8, column 3, at end insert 'section 24(2).'
  No. 56, in page 26, line 23, at end insert—
  '1974 c.8.
  The Statutory Corporations (Financial Provisions) Act 1974.
  Schedule 2, paragraph 7.
  1975 c.55.
  The Statutory Corporations (Financial Provisions) Act 1975.
  In Schedule 2, the words, "The Civil Aviation Authority".
  Schedule 4, paragraph 6(a).'.
  No. 57, in page 26, line 24, column 3, at beginning insert—
  'Section 5(1) and (2).'.
  No. 58, in page 26, line 24, column 3, leave out from '1' to end of line 25 and insert
  'paragraphs 5, 6(9(a) and (b) and 9(2).'.—[Mr. Tebbit.]

  Title
  Mr. Tebbit: I beg to move amendment No. 59, in line 7, after '1971', insert
  'to amend section 4 of the Civil Aviation (Eurocontrol) Act 1962;
  Mr. Deputy Speaker: With this we are to take Government amendments Nos. 60 and 67.
  Mr. Tebbit: I am informed by my right hon. Friend the Prime Minister that these are all consequential amendments. They amend the title of the Bill to take account of earlier amendments.
  Amendment agreed to.
  Amendments made:
  No. 60, in line 12, leave out 'and'.
  No. 67, in line 12, at end insert
  'to extend the powers of the British Airports Authority in relation to aerodromes outside Great Britain and clarify its powers in certain other respects; to enable that Authority to acquire certain land by agreement; and to enable the owners and managers of certain aerodromes to make byelaws in relation to lost property found at those aerodromes.'.—[Mr. Tebbitt.]
  Bill to be read the Third time tomorrow and to be printed. [Bill 238.]

  STATUTORY INSTRUMENTS, &c.
  Mr. Deputy Speaker: In order to save the time of the House I propose to put together the Questions on the two motions to approve statutory instruments, that is to say, motions Nos. 5 and 6 on the Order Paper.
  Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory instruments, &c.).

  STATUTORY INSTRUMENTS, &c.
    INSURANCE
    That the draft Insurance (Transfer of General Business) Regulations 1980, which were laid before this House on 2 June, be approved.

    ATOMIC ENERGY AND RADIOACTIVE SUBSTANCES
    That the draft National Radiological Protection Board (Constitution Amendment) Order 1980, which was laid before this House on 3 June, be approved.—[Mr. Cope.]
    Question agreed to.

  NEWCASTLE UPON TYNE (PUBLIC EXPENDITURE)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Cope.]
  10.51 pm
  Mr. Mike Thomas: I sometimes wonder whether the Government have any idea of what life is like in the city that I and my hon. Friends who have been kind enough to join me tonight represent. At present, there are 14,000 people unemployed in Newcastle. In some of the wards that we represent, male unemployment exceeds 20 per cent. One out of every five men who are able to work cannot get a job. One in three experiences unemployment at some time during each year.
  Because of the lack of job opportunities, even these horrific and tragic figures understate the problem, for so demoralised are some, particularly women, that they now do not even seek a job and thus do not get into the statistics. That is not surprising when it is realised that for every vacancy there are, on average, 20 unemployed people.
  For some traditional skills the position is almost hopeless. In March, for example, there were 597 unemployed platers chasing just three jobs. For the 460 riggers seeking work there were no vacancies whatever. If we add to that the torrent of redundancies in the area, which are now running at about 8,000 a year and threaten to engulf the region, the position for the city's unemployed can only be said to be very bleak indeed.
  The economic circumstances of the people of Newcastle are not of their making and are reflected in their quality of life. In England as a whole, about 60 per cent. of households—six in 10—have access to a car. In inner urban Newcastle, only one in four has such access. Almost half of all council tenants in Newcastle receive a rent rebate or supplementary benefit, whereas for Great Britain as a whole the figure is under 40 per cent.
  In the city of Newcastle, 38 per cent. of schoolchildren are entitled to free meals. That compares with only about a quarter in all other metropolitan districts. Compared with the rest of the

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  country, Newcastle has substantially higher proportions of elderly people, of registered disabled, of children in care—indeed, of every kind of deprivation and poverty that this country knows.
  What the Government cannot seem to grasp is that all this makes the well-being of the people of Newcastle dependent upon public spending to a major degree —indeed, more dependent than almost any other major city in the country. "Cut public spending" may be a cosy slogan if someone lives in the stockbroker belt and sends his children to a private school, but for the people in Newcastle public spending is the difference between having a job and being on the dole, between living in a decent environment and living in a slum, between an inside toilet and a privy in the back yard.
  Four in 10 jobs in the Newcastle area are in the public service—the National Health Service, local government, the Civil Service, the DHSS office in my constituency and elsewhere. Even in private manufacturing industry about 38 per cent. of the jobs depend upon public spending. Whether they are in shipyards in my constituency—the Walker yard and the Neptune yard—C. A. Parsons, the power plant company, the heavy engineering plants or in the defence industries that are based in my hon. Friends' constituencies, those jobs—38 per cent. of the manufacturing work force —depend upon public spending.
  The Government have accepted that Newcastle has special problems of deprivation and disadvantage by giving a partnership to the city—the inner city partnership scheme. For years, long before the partnership scheme, the special problems of the city—that depressing vicious spiral of low educational attainment, unemployment, poor living conditions, family stress—had been dealt with by the city council, and not without success. In education, the expansion of the polytechnic and the college of arts and technology has dramatically expanded educational opportunity in the city.
  In the social services, delivery of services directly to individuals and families in need has substantially alleviated the problems of inner city poverty. In housing, over the last 10 years the figure of one in five Newcastle households that lacked the basic amenities—a bath in the
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  house, a hot water supply and an inside toilet—has been cut to only nine in 100 households—thank God. That at last puts Newcastle within reaching distance of the national average.
  The reason for my speaking about this subject tonight is the Government's response to these problems. High interest rates and economic recession are making these services even more necessary than in the past—and what are the Government doing about them? They are telling the city council in Newcastle to cut its budget, and despicably—I use the word advisedly—in briefings to the press, because they dare not say it openly, they are saying that if the city council does not cut its services they will take away the inner city partnership money. That is a disgrace, and the Minister should have no part in it.
  On one estimate—the manoeuvrings and the briefings make it difficult to discern what is being said—the Government want to cut £11 million from the city's budget. We may ask why. Is it because Newcastle is a profligate spender and is trying to grow too fast in a time of economic difficulty? No, the facts do not support that. Newcastle's budget has grown by only 6 per cent. per annum in real terms during the last six or seven years since 1974–75, in a period during which the expenditure of local authorities has grown 7½ per cent. Is it because Newcastle has some sort of overweening bureaucracy that is running out of control? No, it cannot be that either.
  When we look at the pattern of spending in the city, we see to its credit that the council has consistently made sure that spending has been concentrated on direct services to individuals and families rather than on administrative growth. An example of that is that if the whole central administration were wiped out tomorrow it would save only £7 million of the £11 million that the Government apparently seek in cuts from the city's budget. Is it because the city is excessively overstaffed? That cannot be. Newcastle employs 500 fewer people than it did a year ago—and that in a city that is under tremendous pressure to increase public service employment because of the benefit that it brings to the community as a whole.
  The truth is that the Government have got themselves entwined in the old national numbers game. Their slogan is "Get

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  the algebra right, get the formulae right, but forget about the problems and the people. Never mind that Newcastle has a different and bigger problem than, say, Nantwich or Newbury; just tell it to get its figures in line." That is what the Government say.
  People in my constituency, in places such as Walker, the community by the riverside and the shipyards, rightly believe that their councillors are better judges of their needs than are the civil servants in Marsham Street. They would like to ask them some elementary questions.
  Why will Newcastle's support from the Government through the needs element of the rate support grant, which is supposed to help and discriminate in favour of inner city areas such as Newcastle, have risen by only 90 per cent., on the Department's own figures, between 1974–75 and 1980–81 when the average for all metropolitan districts will be 117 per cent. and the surrounding districts—for example, South Tyneside—will be 170 per cent., which is almost twice as much?
  I am told—I find this hard to believe, but I have it on good authority—that the formula works on the basis of how many single-parent families the city had in the 1971 census and that if we had a few more single-parent families each would be worth £4,500 to the city in rate support grant. I wonder whether my constituents are to draw the conclusion that the only way to get adequate help for the city from the Government is for there to be a major rise in its divorce rate before the 1981 census or for a number of single young ladies to get into a state which I assume they would prefer to avoid. If this is the result that the formulae, the algebra, the magic figures produce in Marsham Street, the sooner it is abandoned the better. If the rate support grant were fairly calculated, support for Newcastle from central Government funds would be at least £5½ million more than it is—the equivalent of an 11p rate.
  In putting the city's housing to rights, the council has incurred debt charges. Why should my constituents be penalised when Government policy on inflation and interest rates has raised the cost of servicing that debt by one-third since the Government came to office—the equivalent of an 8p rate—and why, in addition, should the council be made to raise an extra 40p in the pound rate for contin-
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  gencies for inflation and interest payments still to come? My constituents ask why the Government, having got them into this kind of mess, are now clobbering them as they try to get out of it.
  Let us look at the potential effects if the Government insist on their pound of flesh. A reduction of the magnitude asked for could be achieved only by a general cutback in services to the public —home helps, teachers, meals on wheels, social work support, whatever one cares to name. If we were to cut education to this degree pro rata, it would mean an end to nursery education, youth services, the whole of the adult education programme and the loss of 300 teachers. In social services, it would mean 35 fewer social workers, 120 fewer workers in residential homes, 160 fewer home helps, and equivalent numbers in other areas would have to go as well.
  Even that draconian programme would not achieve the Government's objectives. As a direct result of pursuing that policy, public spending would rise on unemployment benefit, social security payments, health services and no doubt law and order as youngsters on the dole became more and more frustrated, and, of course, the Government would lose the tax and national insurance payments of those who are out of work.
  I hope that the Minister will have some answers to the questions that I have posed. I speak not with any sense of special pleading but to reflect the anger of the people of a great city at the way in which they are being treated and the determination of all those elected to look after their interests, whether they be Members of Parliament, councillors or in whatever capacity, to ensure that their needs and local democratic rights are not ignored.
  As the nation plunges deeper and deeper into recession, and as we see more problems of unemployment and family problems as a result, the needs of people in places such as Newcastle will become greater, not decrease. I wish that I could believe that the Government understand that. Now is the time for the Government's rhetoric of compassion to be judged against their action. Newcastle has spent a quarter of a century trying to redress the legacy of the Industrial Revolution. It will take more than the Government or the Minister to make us start to set the clock back once again.
  11.5 pm
  Mr. Robert C. Brown: First, I compliment my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Thomas) on initiating the debate and making an excellent speech. He has far from overstated the case. In parts of my constituency—for example, in Scotswood and Blakelaw—the picture is one of almost complete despair. I say "almost" advisedly, because but for the help and support of dedicated people employed by the city council who have worked so hard in the inner city partnership area to give support, the despair, especially among youngsters who have never known the pleasure of gainful employment since leaving school, would have been complete.
  A month ago, as my hon. Friend said, Newcastle had 14,000 unemployed. Within that month what prospect, what future, faced another 1,000 or so school leavers? In addition, there is the certainty that many more adults will be made redundant as the policy of this despicable Government bites harder into what is left of the city's industry and their spending cuts savage still further the 40 per cent. of all jobs in the public services.
  If Madam Flintstone Heart, the Prime Minister, carries out her promise to reduce the number of civil servants by 15 per cent., that reduction in Newcastle alone will mean another 2,000 jobs lost. Surely the Government must realise—if they do not realise it now, the sooner they do so the better—that to limit spending in this financial year on employment and training to last year's level, as they propose, with 21 per cent. inflation and galloping unemployment, and to cut spending next year, is, to put it mildly, indecent and heartless.
  If there were an increase in spending in the next five years of 28 per cent. on regional development grants, selective assistance to industry of 150 per cent., section 8 selective assistance of 85 per cent. and a 40 per cent. increase in industrial training, the Northern region strategy team could create 63,000 new jobs by 1991. However, even that would leave the region with 79,000 unemployed on the basis of the present figure of 142,000 without work in the North.
  The Secretary of State and his minions at Marsham Street must have gone completely bananas. It cannot be heatstroke
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  that is the cause. It is probably water on the brain. The Secretary of State is asking for the city to reduce its spending by '£11 million. Surely, with his extremely privileged background he must realise that it is not possible to turn off public spending like water from a tap.
  Any major cuts in public spending must, of necessity, hurt those who are already suffering most deprivation—the sick, the disabled, the long-term unemployed and old people. If we are to experience famine for two years, those who are grossly overweight because of rich living can live off their fat, but the undernourished will starve. It is as simple as that.
  The personal social services are needed more than ever in Newcastle. The Government's own advisory body, the Personal Social Services Council, recently said:
  "Cuts of the order envisaged by the Government cannot be achieved, in the Council's view, without a serious deterioration in the quality and range of social services…The prospects of those who rely on such services will be diminished to an extent that should be unacceptable in a just society."
  For God's sake, let the Government stop digging the pit any deeper lest they dig so deep that we can never again climb out.
  [11.9 pm
  Mr. Harry Conans: I rise to support my hon. Friends the Members for Newcastle upon Tyne, East (Mr. Thomas) and for Newcastle upon Tyne, West (Mr. Brown), and I thank them for this opportunity to speak. They have both ably put the case. In the short time left to us I should like to say that I see the purpose of this debate as trying to get some answers to the innuendoes that regularly come from the Government.
  During the last 15 years, 10 of which I have spent on local authorities on Tyneside—I understand that the Minister shares a bit of this background—and for six years of which I chaired a major committee, I have found that one of the things that bedevil local authorities is that the circulars that come constantly from the central Government are gobbledegook. Time and again local authorities want to do something, and the central Government put the other side of the coin.

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  In the Northern region—the rate support grant general needs element is supposed to support this; this was the reason for the needs element—we have, overall, a 9 per cent. unemployment rate. But statistics are wont to disguise the actual effect. In two wards of my constituency, the figures are 15 and 20 per cent. This in itself causes a strain on local government finance which the RSG needs element was supposed to take care of. My hon. Friend the Member for Newcastle upon Tyne, East has amplified that point.
  I want to ask the Minister some pertinent questions. Circulars from the central Government normally set a norm rate levy of 199p in the pound. As 150 local authorities have already broken that norm, one can only assume that the norm has now risen beyond that. If the alteration is to 155p, 20 local authorities, including that of Newcastle, have broken that. Perhaps the Minister will say tonight what is the present norm. Will he say whether that will be static, so that local authorities that try to implement Government policy, even with the best will in the world, will have something to go by?
  I should like to mention the immoral blackmail of local authorities. Governments of all colours have honoured the inner city partnership agreement. That reflected the spending allocation from the Government. In Newcastle's case, the total sum is about £2·8 million in the current year. That is £0·7 million from the local authorities and the balance is made up by the Government. We then read a speech—again an innuendo with no facts—delivered by the Secretary of State to the Association of District Councils on 27 June, in which he said:
  "I am also considering the support of central Government to inner city authorities under the programme and partnership arrangements."
  Perhaps the Minister would like to tell us what that means.
  I should like to remind the Minister of some of the priorities of the partnership agreement which the Government honoured. One was to encourage industry and commerce. For Newcastle, where unemployment is high, that is a good thing. Another was to improve living conditions.
  This is immoral blackmail of, and the imposition of a penalty on, an authority
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  that is already badly off and is trying to do its best. Perhaps the Minister will give us some answers that will last not just for today but for the next month or so. Will he reflect on the fact that we are not begging? We are placing facts before him. Perhaps he will reflect on those facts and give us some concrete answers.
  11.13 pm
  The Under-Secretary of State for the Environment (Mr. Geoffrey Finsberg): In eight minutes it is impossible to answer the barrage of statements by Opposition Members the like of which I have seldom heard in an Adjournment debate in the 10 years that I have been in this House. Coming from the hon. Member for Newcastle upon Tyne, West (Mr. Brown), who was a member of the previous Government who, at the diktat of the International Monetary Fund, had to make the most abject crawling to reduce public expenditure, I regard that as sheer nonsense.
  Let me say a few things which indicate that Newcastle has done virtually nothing to help itself. [HON. MEMBERS: "Oh!"] Virtually nothing to help itself.
  Mr. Mike Thomas: Disgraceful!
  Mr. Finsberg: First, we need to look at the manpower situation. The Government have asked for manpower reductions that will be met by natural wastage. The joint manpower watch figures show that although Newcastle employed 2·1 per cent. fewer full-time staff in March 1980 compared with the March 1979 figure, it has since increased its part-time staff by 5·3 per cent. On the face of it, it does not look as though a serious effort is needed to comply with the Government's overall spending targets for local government. We have always operated on the basis of a voluntary relationship between central and local government. The Government value that relationship. Local authorities have always recognised the Government's right to determine the overall level of local government spending. They should be in no doubt that they will threaten that traditional voluntary relationship if they persist, by their plans, in challenging the Government's overall spending plans which are crucial to our economic survival.

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  Let us consider Newcastle. The impact of the cuts depends very much on the decisions of the city council. We have asked for overall reductions, but individual authorities must decide where savings can be made. It has been alleged that Newcastle's high rates are due to the lack of rate support grant. That is rubbish. Newcastle has consistently levied substantially higher rates than the average for metropolitan districts in every year since 1974–75. That reflects high levels of expenditure, not a drying up of RSG.
  In response to the Government's spending targets, Newcastle has referred to the need to tackle the special problems of poor housing in its area. Newcastle's housing investment programme was allocated £18·5 million. Its allocation was enhanced to take account of the special need in the inner area of the city through the concentration of the needs element. This is distributed to partnership and programme, authorities and is part of the Government's policy of bending main programmes in favour of inner city areas.
  Reference has been made to the city's status as a partnership authority. Hon. Members have suggested that it is inconsistent for the Government to give resources in recognition of that status and then to call for reductions in spending by the city. Hon. Members should ask the city authorities whether their actions, in attempting to justify such a high level of spending, may not call into question whether the Government can continue to accept such inconsistency, and whether a flouting of Government policy might not call into question the city council's commitment to partnership.
  Hon. Members might ask the city council a few other questions. The document produced in response to public expenditure cuts states that the fundamental weakness of the local economy is recognised by the city council to be the root cause of many of the problems faced by the people of Newcastle. It is said that economic development has a high priority. Has the city council considered that its actions—in having almost the highest rate levels in the country—may be a deterrent to business and may actively work against that priority?
  I went to Newcastle once a fortnight for 20 years before I became a Minister, and I know something of the problems of
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  Newcastle and of its industry. May it not be that industry and commerce, which will provide the productive jobs that hon. Members say are desperately needed, will set up elsewhere? [HON. MEMBERS: "Name one."] The city's base will be weakened and it will become more difficult to provide the jobs and services that those in Newcastle need. How is such a high priority reflected in the city council's contribution to partnership activities? It puts only 13 per cent. of its partnership allocation into them. Hon. Members would be well advised to tell the city council that it would do better to translate its high intentions into practical actions.
  I shall leave hon. Members with some thoughts. If they believe that it is right to create jobs, the city council should provide a stronger rate base to pay for the services that hon. Members say are needed. It should do so at a lower cost to the hard-pressed ratepayers of the area. (HON. MEMBERS: "Come on" Newcastle is not alone in arguing that special circumstances mean that the reductions are not realistic. In virtually every case that I have come across, the consequences of the cuts have been greatly exaggerated.
  The particular problems of Newcastle and of other cities with severe inner area problems have been taken into account in the Governments allocations. Its problems do not exempt it from the reductions for which we have called. Neither Newcastle nor any other local authority can opt out of the problems facing the country. We sink or swim together.
  What was done by Labour Members—particularly the hon. Member for Newcastle upon Tyne, West during the years that he decorated the Government Front Bench—was to print money, believing that that would solve every problem. It is precisely because this Government are having to rescue the country from the profligate expenditure that the hon. Members encouraged with their votes for 10 years that we have to put matters right.
  I said at the beginning that the tone adopted by those Labour Members present was one that I had not heard in an Adjournment debate for 10 years. When the Conservatives were in Opposition, we tried to look at such matters constructively, realising that there was no way of isolating a particular city from the problems of the rest of the nation.

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  Newcastle, of course, has its problems. That is precisely why in the HIP allocation we put in a special amount for the needs of the inner city area there. We believe that it is only upon the backs of profitable private enterprise that fresh employment can be created. Shuffling around bits of paper does not create fresh employment.
  I have said that the manpower reductions that the Government are calling for can be met by natural wastage. I advise Newcastle city council to examine that matter most seriously. If it does not, it will have only itself to blame.
  Mr. Robert C. Brown: What the hon. Gentleman is talking about means the dole.
  Mr. Finsberg: Natural wastage does
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  not mean the dole, as the hon. Gentleman knows perfectly well in his usual more rational moments.
  Hon. Members have not done justice to the hard work being done by the industrialists in Newcastle who are trying to provide jobs but whose difficulty is that growing high rates are forcing them away. Hon. Members should learn that fact of life—
  The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at twenty-one minutes past Eleven o'clock.