Commons Sitting of 12 March 1980

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

    Afghanistan
    Mr. Stoddartasked the Lord Privy Seal what action he is taking to develop further his proposal to make Afghanistan into a neutral State.
    Mr. David Atkinsonasked the Lord Privy Seal if he will make a further statement on proposals for the neutralisation of Afghanistan.
    The Lord Privy Seal (Sir Ian Gilmour): We believe that a declaration by an independent Afghan Government that Afghanistan should be neutral and nonaligned would be in accordance with that country's traditional role; with the needs of the present situation; and with the desire of people of the region for peace.
    Since the concept of neutrality was put forward on 19 February, we and other members of the Nine have commended the proposal to the Soviet Government. We are speaking also to other countries.
    Mr. Stoddart: I am obliged to the right hon. Gentleman for that reply. Does he not agree that a constructive initiative of the sort undertaken by the Secretary of State is far preferable to trading insults across the world? If there is a significant response or gesture from the Soviet Union, will this influence the Government's position on sending a team of British athletes to the Olympic Games?
    Sir I. Gilmour: I very much agree with the first part of the hon. Member's question. Of course an initiative of this
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    sort is better than trading insults. However, I think the whole House will agree that it is for the Soviet Union to create conditions which are suitable for athletes to take part in the Olympic Games, and that means the withdrawal of troops from Afghanistan.
    Mr. Atkinson: How confident is my hon. Friend that his proposal for a neutral, non-aligned Afghanistan is in accordance with the wishes of the people of that country? Is he aware that the only terms for neutrality that the Soviet Union will accept are likely to amount to the "Findlandisation" of Afghanistan, rather than neutralisation?
    Sir I. Gilmour: I am not clear about the exact meanings of the terms that my hon. Friend has used. The suggested neutrality is the best way out of the present serious situation. As my hon. Friend appreciates, there is nothing new about neutrality for Afghanistan. It is very much in the traditions of that country.
    Mr. Spriggs: Is the right hon. Gentleman aware that the autonomous Government of Afghanistan has the independent right to invite any State it wishes to come to its aid in the event of danger within its borders? What right have Britain and America to interfere in the affairs of Afghanistan, bearing in mind that a greeat deal of blood has dripped from the hands of both countries way back in history?
    Sir I. Gilmour: What an extraordinary question. For one thing, it is not clear that the Government of Afghanistan are autonomous or that they asked the Soviet troops to come in. The only people who are interfering in Afghanistan at present are the 70,000 to 80,000 Soviet troops there.
    Mr. Fletcher-Cooke: What hope does my right hon. Friend have of the erection of an independent Afghanistan Government of whom he spoke in his original answer? Are there any signs at all that the Soviet Union will co-opreate in setting up such a Government?
    Sir I. Gilmour: So far statements from the Soviet Union have expressed neither a willingness to carry matters forward nor a rejection of the proposal. If the Soviet forces withdraw, the sort

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    of Government that we have in mind will be likely to appear in Afghanistan.
    Mr. Shore: I see nothing but advance in the concept of a neutralised or nonaligned Afghanistan and I hope that this idea will prosper. Will the right hon. Gentleman say more about how the people of Afghanistan will be able to get a Government of their own choice in Kabul, if this proposal gathers momentum?
    Sir I. Gilmour: There is a distinction, as the right hon. Gentleman will realise, between a neutralised Afghanistan and a neutral Afghanistan. The first indicates that this would be imposed. The second indicates that it would be voluntary, and that is what we have in mind.
    As to the second part of the right hon. Gentleman's question, he will be aware that the democratic processes in Afghanistan are not exactly the same as they are in this country. It is, therefore, difficult to lay down in advance the exact procedures that would take place. Nevertheless, the fact that there are difficulties, to which he has drawn attention, and which I concede, do not invalidate the proposal in itself.
    Several hon. Members rose—
    Mr. Speaker: Order. This matter comes up on later questions.

    Greece
    Mr. Adleyasked the Lord Privy Seal if he will make a statement on British relations with Greece.
    Sir Ian Gilmour: British relations with Greece are excellent.
    Mr. Adley: Is my right hon. Friend aware that there is considerable concern about the record of the Greek shipping industry in relation to maritime pollution? The "Aeolian Sky" and the "Athina B" are merely the latest examples. In view of Greece's forthcoming accession to full membership of the EEC will my right hon. Friend raise with the Greek Government this concern and seek, and we hope obtain, assurances that the standards employed and prevailing in the Greek shipping industry are as high as those in other EEC countries?
    Sir I. Gilmour: As my hon. Friend will be aware, my hon. Friend the Mini-
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    ster for Trade replied to a similar question on 13 February. I can assure my hon. Friend that the Greek Government are fully aware of our concern, and that of other members of the European Community, about the safety record of the Greek fleet. After accession, Greece will he bound by Community instruments relating to maritime safety in the same way as other member States.
    Mr. Newens: If British relations with Greece are excellent, will the right hon. Gentleman tell the House what efforts we are making, together with Greece, to get a reasonable settlement of the Cyprus problem? When does the right hon. Gentleman expect that there might be progress in obtaining recognition of the rights of Cypriots—Greek Cypriots in parparticular—who have been turned out of their homes?
    Sir I. Gilmour: The hon. Gentleman will appreciate that there are questions on that subject later on the Order Paper.
    Mr. Cormack: In view of the good relations enjoyed with Greece, will my right hon. Friend welcome the Greek suggestion that the Olympic Games should henceforth be held in that historic setting?
    Sir I. Gilmour: This is an extremely interesting proposal. In many ways it is extremely attractive. We must obviously await the outcome of Greek discussions with the International Olympic Committee.
    Mrs. Dunwoody: Part of the problem that Greece will face on accession to the Community is the fact that its borders will be open to manufactured goods of other countries of the Community. Will the right hon. Gentleman say what help he intends to give and how he intends to direct funds into Greece to increase its standard of living?
    Sir I. Gilmour: No. That would be distinctly premature, particularly in view of our other problems in relation to the Community at this time.

    Zimbabwe
    Mr. Winnickasked the Lord Privy Seal if he will make a statement on the latest position in Zimbabwe.
    Mr. Ioan Evansasked the Lord Privy Seal if he will make a statement on the arrangements for transferring power to the new majority Government in Zimbabwe.
    Sir Ian Gilmour: Mr. Mugabe has been appointed Prime Minister and has submitted a full list of Ministers to the Governor. Arrangements will be made shortly for the election of the Senate and of a President Elect. The date of independence is being discussed between the Governor and Mr. Mugabe.
    Mr. Mugabe has asked for assistance from Britain in a number of fields, including military and police training, the resettlement of members of the forces of both sides and advice on the machinery of government and on broadcasting. We shall respond positively to these requests. Decisions on longer-term capital aid can be reached only after the new Government have set their priorities. An aid mission will visit Rhodesia as soon as practicable after independence.
    The Government have informed the Commonwealth Secretary-General of Mr. Mugabe's request that Zimbabwe should become a member of the Commonwealth. The proposal has our full support and the Government hope that other Commonwealth members will agree in time for Zimbabwe to come to independence within the Commonwealth. In that event, the necessary adjustments to the Zimbabwe Act and other United Kingdom laws will be made by Order in Council.
    Mr. Winnick: We all wish the new Government and country well. Should not the South African authorities learn the true lesson from recent events, namely that the tide of history and majority rule in Africa cannot be stopped and that it is essential that black people in South Africa, too, get the rights and freedoms that the people of Zimbabwe are to achieve?
    Sir I. Gilmour: That may or may not be so. I do not think that it arises on this question.
    Mr. Evans: Does not the right hon. Gentleman agree that the stand taken by hon. Members on both sides of the House, over a long period, to the effect that there should be democratic elections in Rhodesia to achieve true representation of the people, has been
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    fully justified? Will he give consideration to the suggestion by Prime Minister Mugabe that there should be a period of time before independence is granted?
    Sir I. Gilmour: Of course, I agree with what the hon. Gentleman says about the elections. They have been free and fair elections. We welcome that. I see fully the force of what the hon. Gentleman says about the date of independence. As he may have heard in my original answer, this matter is being discussed by Mr. Mugabe and the Governor.
    Mr. Eldon Griffiths: Since good relations with South Africa are important to the new Zimbabwe in economic and other ways, will my right hon. Friend use his influence to persuade Mr. Mugabe and the other front-line States not to rush their fences, and to allow the South Africans to settle down and get used to the new situation so that, in the end, all may benefit?
    Sir I. Gilmour: What my hon. Friend says is absolutely right. My hon. Friend will have noticed the careful statement, or remarks, made by Mr. Mugabe about relations with South Africa, and he will no doubt have welcomed them.
    Mr. Jay: Does the right hon. Gentleman's answer mean that a further legislative order has to come before the House before independence is formally and constitutionally established?
    Sir I. Gilmour: It merely means there will have to be an amendment by Order in Council, as envisaged under the Zimbabwe Act. There has to be an order creating the independence of Zimbabwe, anyway whether or not Zimbabwe is a member of the Commonwealth.
    Mr. Brocklebank-Fowler: Are there any signs that, as a result of this huge election victory and his overriding majority in the new Parliament of Zimbabwe, Mr. Mugabe will seek to introduce constitutional changes differing from what was agreed at Lancaster House?
    Sir I. Gilmour: So far, no. But it is early days. I cannot speculate. Mr. Mugabe has a majority sufficient to make some constitutional changes but not others, since some parts of the constitution are entrenched and need the 100 per cent. assent of the Assembly.
    Mr. Shore: May I thank the right hon. Gentleman for his original and forthcoming reply? May I also offer my congratulations on the outcome of the whole process of settlement that began in Lusaka and was concluded in Salisbury last week? It has been a major success for Britain and the whole Commonwealth.
    Will the right hon. Gentleman turn his mind more to the urgent need for reconstruction in a war-torn Zimbabwe? Will he look again at the proposals for helping with land purchase for resettlement, mentioned during the Lancaster House conference and a major theme of the 1977 White Paper? That, I am sure, would be of enormous help and would be very stabilising to the new Zimbabwe Government.
    Will the right hon. Gentleman also consider carefully any requests made to the Governor not to terminate abruptly his stay in Salisbury but to consider prolonging it until certain important interim matters have been settled, in consultation with the new Prime Minister?
    Sir I. Gilmour: I am most grateful to the right hon. Gentleman for his kind words. I should like to thank him for the valuable tour that he carried out before and during the election. As was stated at Lancaster House, the British Government would be prepared to help with any agricultural development plan undertaken by the new Government. If an agricultural development bank or an equivalent institution were set up to promote agricultural development, including land settlement, the British Government would be prepared to contribute to the initial capital required and to support the efforts of the new Government to obtain assistance from other Governments. An ODA mission will visit Rhodesia as soon as possible after independence for further discussions on that and other priorities still to be identified with the new Government.
    On the final point, I hope that it was implicit in what I said earlier that we are not rushing these matters. I take account of what the right hon. Gentleman has said. The Governor and Mr. Mugabe are discussing the matter during the next day or two.
    Several Hon. Members rose—
    Mr. Speaker: Order. This matter also comes up on a later question on the Order Paper.

    President Nyerere
    Mr. Whitneyasked the Lord Privy Seal when next he plans to meet President Nyerere of Tanzania.
    The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Richard Luce): My right hon. Friend has no current plans to meet President Nyerere.
    Mr. Whitney: When my right hon. Friend meets the President of Tanzania, will he take the opportunity to point out that the President's misgivings about the intention of the British Government to conduct a fair election in Zimbabwe were misplaced and, on the assumption that President Nyerere may be as ready to welcome advice as he is to offer it, will my right hon. Friend suggest to him that economic progress, the promotion of human rights and the promotion of democracy in Tanzania are objectives on which the President might now concentrate his attention?
    Mr. Luce: The President is entitled to his opinions, which he expressed to us during the elections, and we are entitled to ours. I am glad to note that a few days ago the President said that he was wrong in his judgment and that he agreed that the Rhodesian elections were free and fair. No doubt the President, along with many others, will note the stark contrast between the determination of Britain to hold free and fair elections in Rhodesia and the invasion of Afghanistan by the Soviet Union.
    Mr. Alexander W. Lyon: Since the President was sufficiently gracious to say that he was wrong in his judgment about free and fair elections, will the Government be gracious enough to admit that they were wrong about President Nyerere and his development programme and allow him the funds to make Tanzania a stable, progressive State, which it is rapidly becoming even without British funds, though it would be helped by them?
    Mr. Luce: It is up to President Nyerere to determine how he pursues his economic policies. As the hon. Gentleman knows, we already give about £20 million a year in economic assistance to Tanzania. That is a subject which is constantly under review, and it is right that it should be.

    Namibia
    Mr. Cyril D. Townsendasked the Lord Privy Seal if he will make a statement on the future of Namibia.
    Mr. Luce: A team of senior officials from the United Nations secretariat is in Southern Africa at present for talks with the parties to the Namibian negotiations, in an endeavour to reach agreement on arrangements for implementing the United Nations plan. Agreement was reached on certain details of the proposed demilitarised zone on Namibia's northern border in meetings between General Prem Chand, the United Nations force commander-designate, and the military authorities in Angola, Zambia and Namibia. After useful and wide-ranging discussions in Capetown with the South African Government last week, the United Nations team is now visiting capitals of the frontline States.
    Mr. Townsend: Following the free and fair elections in Rhodesia, will the Government do all that they can to obtain free and fair elections in Namibia without undue delay? Can my hon. Friend confirm that economic sanctions against South Africa would be the wrong way to proceed towards that objective, because such sanctions would have to be maintained by force?
    Mr. Luce: We are fully committed, as are all parties, to the United Nations plan that there should be free and fair elections held under United Nations supervision. I am sure that the House will recognise that after lengthy discussions over a long period it is important that the parties proceed as quickly as possible to an agreement, but it is only human that, after the events of the past few days in Rhodesia all the parties will want to reflect carefully on the implications for the future of Namibia.
    Mr. Ford: When instructing the British representatives in the contact group, or our representative at the United Nations, on this matter, will the Government bear in mind the infrastructure of civil assistance that has been built up by South African civilian Army specialists in the operational area and which would be endangered by a withdrawal of South African troops? Is the hon. Gentleman
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    aware that Britons could usefully fill that role?
    Mr. Luce: I am grateful to the hon. Gentleman. Britain is still preoccupied with the problems of Zimbabwe, but we are equally concerned to assist the future stability of Namibia. As the hon. Gentleman knows, important discussions are taking place, with the South Africans among others, led by the United Nations team and I do not wish to pre-empt those.
    I apologise to my hon. Friend the Member for Bexleyheath (Mr. Townsend) for not commenting on his question about sanctions. At a time when we hope that there will be an agreement on Namibia between all the parties and we are determined to do our best to help in that process, it does not seem wise, sensible or constructive to talk about sanctions.
    Mr. Nicholas Winterton: Does my hon. Friend agree that considerable progress is being made in the settlement of the South-West Africa problem and that progress towards a more democratic government in that country has already taken place? Will he pay tribute to the part played by Mr. Dirk Mudge and the multi-racial black majority party that he leads in South-West Africa? Does my hon. Friend also agree that it would be wrong to put pressure on South-West Africa and South Africa at this time, bearing in mind that the Government of South Africa must be assessing what has occurred in Rhodesia recently? It could be counter-productive to constructive progress if great pressure were applied now.
    Mr. Luce: I agree in general with my hon. Friend's latter point. I think that it is the view of all parties to the problem that after such a major event as the elections in Zimbabwe, which are bound to have an effect on the future of southern Africa as a whole, it is natural that all the parties will want to reflect. At the same time, it is important that if we are to achieve a settlement in Namibia—which everyone wants and which is in the interests of everyone—we should proceed as rapidly as we can.
    Mr. Rowlands: What are the areas of difficulty and the obstacles to achieving an internationally acceptable agreement for Namibia to proceed to free and fair

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    elections? Will the hon. Gentleman draw the important lesson from Zimbabwe and realise that a flawed and inadequate internal settlement in Namibia will not produce a stable and peaceful settlement?
    Mr. Luce: Since the United Nations team under General Prem Chand and the political team are involved in detailed discussions, the issue focuses on the demilitarised zone and the proposal to provide adequate security to enable free and fair elections to take place. Many aspects of the problem are still being discussed and all the parties to the dispute, not just South Africa, are anxious to clarify many of the aspects of the proposals involved in setting up a demilitarised zone.

    Cyprus
    Mr. Norman Atkinsonasked the Lord Privy Seal if he will make a statement as to the current position of the Cyprus intercommunal talks.
    Sir Ian Gilmour: Dr. Waldheim is continuing his intensive efforts to find an agreed basis for an early resumption of the talks.
    Mr. Atkinson: Does the Lord Privy Seal agree that, judging by recent remarks of Mr. Denktash and from Ankara, the talks will not reach a successful conclusion? If the right hon. Gentleman agrees that the two priorities must be the withdrawal of Turkish troops and the free movement of people throughout Cyprus, could not the Government take an initiative similar to that which they have taken on Afghanistan and propose that United Nations troops should be asked to replace the Turkish troops occupying the island? Will the Lord Privy Seal consider that as a serious proposition?
    Sir I. Gilmour: Talk of a successful conclusion is looking too far ahead. What we want is a successful beginning, or at least a successful resumption of the talks, and that is what we are aiming for and what my right hon. and noble Friend the Foreign Secretary told Mr. Denktash when they met a few days ago. The right approach is to continue with our full support for Dr. Waldheim's efforts to restart the talks and to hope that they will soon be successful. It would be wrong for us or any other Government to try to cut across those efforts. I am sure that they
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    are the best bet for a successful resumption of the talks.
    Mr. Christopher Price: Has the right hon. Gentleman noticed that the attempt to restart the inter-communal talks has coincided with further talk of a unilateral declaration of independence on the part of the North by Mr. Denktash? Could the right hon. Gentleman confirm that if that were to happen it would impinge upon the responsibilities of Britain as a guarantor Power of the integrity of Cyprus under the 1960 treaty? Will he confirm that if that were to happen Britain would take action and condemn any such move immediately?
    Sir I. Gilmour: Any such move would be highly regrettable and I hope that it is unlikely to take place. I do not wish to say more than I have already said. Our immediate aim is to secure a resumption of the inter-communal talks since I am sure that is the only way forward. Wild talk such as that mentioned by the hon. Gentleman is to be deeply regretted.
    Mr. Jim Spicer: Does not the Lord Privy Seal agree that, given the circumstances under which the Turkish Cypriot community lived between 1963 and 1974, their views and their position ought to be given a much fuller airing both in this House and in the world community than it is getting at the moment?
    Sir I. Gilmour: I agree. Not all the right is on one side. It seldom is. The views and the interests of both sides should be given an airing. I repeat that the only way forward that I can see to a resolution of the conflicting interests of the two communities is the resumption of the inter-communal talks.
    Mrs. Dunwoody: Since it is important that the inter-communal talks should begin again and because it is essential that there should be political stability in the island, will not the Lord Privy Seal ask the United Nations to look again at the terms of reference to see whether both parties cannot be encouraged to come to the negotiating table on the basis of wider discussion?
    Sir I. Gilmour: That is up to Dr. Waldheim. The United Nations has immense experience of the problems and its

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    staff are highly expert, skilled and trusted by both sides. I am sure that if those experts believe that different terms of reference are needed they will adjust them. At the moment I am not persuaded of the need for such an adjustment.

    Helsinki Agreement
    Mr. Sainsburyasked the Lord Privy Seal whether he is satisfied with the preparations being made for the Madrid review of the Helsinki Agreement.
    The Minister of State, Foreign and Commonwealth Office (Mr. Peter Blaker): Yes, Sir. Preparations are continuing, though, as I told the House in my answer to my hon. Friend the Member for Aberdeen, South (Mr. Sproat) on 13 February, much will depend on Soviet actions between now and November when the Madrid review will take place.
    Mr. Sainsbury: My hon. Friend will recall the Soviet objections to a proper discussion of the human rights provisions of the Helsinki Agreement at the Belgrade review. Does he agree that it is now the human rights aspects of the Helsinki Agreement that most require attention if we are to make progress on co-operation and security in Europe? Does not my hon. Friend agree that it would be intolerable if the Madrid conference did not include human rights on the agenda? Should not human rights feature as the most important item on that agenda?
    Mr. Blaker: I can assure my hon. Friend that human rights will figure on the agenda at Madrid. It is right that we should discuss all aspects of the Helsinki Final Act. Various parts of it are in the first basket relating to the principles regarding the preservation of peace and we shall certainly wish to discuss that aspect in the light of recent events in Afghanistan.
    Mr. Whitehead: Would the Minister care to comment on a report in the press today that, at the United Nations, Britain has agreed to drop its request for information from the Soviet Union about Academician Sakharov in return for the dropping of a request by the Soviet Union for information about Northern Ireland? Surely if we wish to raise the issue of human rights this sort of trade-off is not the right way to go about it.
    Mr. Blaker: I am glad to assure the hon. Gentleman that there was no such bargain as that he suggests, which was implied in some press reports. The Soviet Union, of its own volition, decided to drop its motion on Northern Ireland, perhaps recognising that it would not be successful. The Western countries agreed to a proposal that the item on Dr. Sakharov—which had been well ventilated—should be placed first on the agenda at the next session of the Human Rights Commission.
    Sir Frederic Bennett: Can the Minister confirm, in regard to the Madrid conference, that if one or other of the Powers decline to attend—for reasons that one can well understand—the conference will nevertheless go ahead, despite the fact that there may be some empty seats?
    Mr. Blaker: It is certainly our intention that the conference should go ahead, as things stand. This is a conference of 35 European countries and it does not depend solely on the volition of one country or another.
    Mr. James Lamond: Since the presence of Turkish troops in Cyprus is clearly in breach of the Helsinki Final Act can the Minister say whether the Government will raise that matter at the conference?
    Mr. Blaker: We shall have to consider as time passes what matters we raise.

    Angola
    Mr. Butcherasked the Lord Privy Seal if he will make a statement on the United Kingdom's relationship with Angola.
    Mr. Luce: Britain enjoys normal diplomatic relations with the Angolan Government and a British Ambassador has been resident in Luanda since 1978. I visited Angola in October and the Angolan Minister of Petroleum visited this country in January.
    Mr. Butcher: Can my hon. Friend tell the House how many Cuban troops are currently deployed in Angola and how does he define their role?
    Mr. Luce: The estimate is that there are about 20,000 Cuban troops in Angola. It is not for me to interfere in the internal affairs of Angola, but no doubt the whole world will note the sharp contrast between the Cuban role in Africa

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    and the British role in bringing about a negotiated settlement and democratic elections in Rhodesia.
    Mr. Robert Hughes: Is not the hon. Gentleman aware of the considerable destabilising activity of the South African Government in their repeated military incursions across the border into Angola? Will not the hon. Gentleman say to the South Africans that the lesson of the recent elections in Rhodesia is that people are willing to fight until they gain their freedom and that South Africa will need to take that into account in relation to Namibia and to its own affairs?
    Mr. Luce: Undoubtedly all the parties will be reflecting carefully on the lessons of Rhodesia. I believe that in the long term it is in the interests of South Africa and Angola to reach a negotiated settlement on Namibia. That, in turn, will have a healthy effect on their relations with each other.
    Mr. Stokes: Would it be possible for the British Government to seek the help of Mr. Mugabe in influencing the Angolan Government to rid themselves of Cuban troops?
    Mr. Luce: I do not doubt that Mr. Mugabe is preoccupied at present with his important duties in Rhodesia. I think that the whole House welcomes the way in which Mr. Mugabe has set about effecting a reconciliation of the communities in Zimbabwe. Perhaps there is an example there to be learnt elsewhere.
    Mr. Rowlands: Since the Government have full diplomatic relations with the Government of Angola will they ensure that they are not involved, directly or indirectly, with any of the forces within Angola that are presently attempting to overthrow a Government whom we recognise? Is the hon. Gentleman aware of the high-level economic mission led by the Bank of England that went to Angola and identified a number of areas of economic co-operation and development between our two countries? Does the hon. Gentleman fully support that mission?
    Mr. Luce: On the latter point raised by the hon. Gentleman, I must say that we attach great importance to increasing the economic ties between Angola and Britain and it is the wish of the Angolan Government that that should be so. Our
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    exports to Angola went up by no less than 30 per cent. last year. A seminar was held recently in which 250 British business men participated and demonstrated their interest in Angola. In the first part of his supplementary question I take it that the hon. Gentleman is referring to the differences between UNITA and the Angolan Government. I hope that the example set elsewhere will be followed in Angola. Perhaps the lesson to be learnt in Angola is that a negotiated settlement might be the best way of bringing about peace.

    Middle East
    Mr. Waltersasked the Lord Privy Seal if he will make a statement on progress towards peace in the Middle East.
    Sir Ian Gilmour: We recognise the urgent need for further progress towards a comprehensive peace settlement. We hope that current efforts will lead to such progress. Meanwhile, we are considering with our European partners how we can best contribute to that end.
    Mr. Walters: President Giscard has recently spelt out very clearly that the right to self-determination for the Palestinians is an essential ingredient for achieving a lasting peace. Does not my right hon. Friend agree that the accepttance of such a principle must form an integral part of any European initiative for peace in the Middle East?
    Sir I. Gilmour: President Giscard was stating what has been the position of the Nine since last Autumn. I agree that Palestinian self-determination must be one element in a comprehensive settlement. Another, as the Prime Minister said on French television the night before last, is that the Palestinian people must undertake to recognise that Israel has a right to exist within secure borders.

  EUROPEAN COMMUNITY

    Council of Foreign Ministers
    Mr. John Evansasked the Lord Privy Seal when he expects to meet his EEC colleagues.
    Mr. Knoxasked the Lord Privy Seal, when next his noble Friend expects to meet his European Economic Community counterparts.
    Sir Ian Gilmour: At the next Foreign Affairs Council in Brussels on 17 and 18 March.
    Mr. Evans: When the Lord Privy Seal next meets his European colleagues will he take the opportunity to inform them that the story that Britain is seeking to join the European monetary system is a wicked rumour put out by the Foreign Office? Will he tell them that the United Kingdom has no intention of joining that European snake?
    Sir I. Gilmour: No, I shall not. The Foreign Office feeds no wicked rumours. We have said that the European monetary system is something to which we are extremely favourably disposed and which we have been considering for some time.
    Dr. Mawhinney: When my right hon. Friend next meets his EEC colleagues will he tell them that their failure to agree, and to agree with us, on a firm response to the Soviet invasion of Afghanistan is undermining the standing of the Community, both in the eyes of the world and in the eyes of the citizens of member countries?
    Sir I. Gilmour: With respect to my hon. Friend, he is being fair neither to our Allies nor to the European Community. When the Soviet invasion of Afghanistan took place there were certain difficulties of perception and reaction. My hon. Friend will have noted that those difficulties have been largely resolved. There is a recent agreement that the European Community will support the bringing of neutrality to Afghanistan. That is a specifically European approach. There has been a remarkable degree of convergence in the European Community in its approach to Afghanistan.
    Mr. McNamara: Will the Lord Privy Seal expand on that statement about the European approach to the Soviet invasion of Afghanistan? Does he believe that the unanimity covers economic matters? Is there a common policy on the selling of foods to Russia at a cheaper price than it is sold to Britain? Are there common policies on trade negotiations, the Olympic boycott and on what our general reaction should be?
    Sir I. Gilmour: I did not hear all that question. There is a common policy on
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    economics, as the hon. Gentleman knows. His question was purely rhetorical. There is no common policy on butter exports. We strongly oppose the export of subsidised butter to Russia. Not all our partners agree. It was agreed that traditional trade flows should continue. Even the United States has not cut all grain exports to Russia—only the additional quotas.
    Mr. Knox: Does my right hon. Friend agree that too often Britain's attitude to the Community appears to be negative and that it is important that it becomes much more positive? To that end what initiatives does my right hon. Friend propose to take at the meeting?
    Sir L Gilmour: I do not agree that our attitude has in any way been negative. Obviously, it has been affected by the question of our budget contribution. I do not wish to go into that now because there are specific questions about that later on the Order Paper.
    Mr. Shore: Is the Lord Privy Seal aware that he is announcing an awful lot of policy agreements of which I have not heard before? He ranged from the apparent agreement of the Nine on the statement about the PLO which President Giscard made in Amman—of which I certainly had not heard before and of which I believe that the House had not heard—to the announcement that there is a common EEC policy on trade and credit towards the Soviet Union, post-Afghanistan. If there are such policies may we have the exact details?
    May we hear more about the sudden announcement about the Government's great enthusiasm for the EMS? That will come as a surprise to hon. Members on both sides of the House. Will the right hon. Gentleman make it absolutely plain that there will be no agreement on the EMS until the Government fulfil their undertaking to lay the matter before us and to organise a proper and full debate?
    Sir I. Gilmour: The right hon. Gentleman is a little over-excited. I did not mention the PLO. I talked only about self-determination, which was implicit in the speech by the Irish presidency at the United Nations last October. Our position on the EMS has always been that we shall join when conditions permit.

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    I am not sure whether that was the last Government's position. It was a long time ago. We cannot tell when conditions will permit us to join the exchange rate arrangements of the EMS. As the right hon. Gentleman should know, we participate in the rest of the EMS arrangements. I can give an assurance that nothing will be agreed without consensus.

    Budget (United Kingdom Contribution)
    Mr. Deakinsasked the Lord Privy Seal if he will make a statement about progress with other EEC countries in the matter of reducing the United Kingdom budget contribution.
    Mr. William Hamiltonasked the Lord Privy Seal what further progress has been made in reducing the United Kingdom's contribution to the EEC budget.
    Sir Ian Gilmour: Some progress has been made, and we look to an agreed solution at the next European Council in Brussels on 31 March.
    Mr. Deakins: When talking of a solution to the problem do the Government mean one that will take account of the vastly increased costs of the common agricultural policy, and hence of our budget contribution, when the three new members, Greece, Spain and Portugal, are admitted?
    Sir I. Gilmour: We aim to achieve a solution that will last as long as the problem. That indicates a certain dynamism.
    Mr. Hamilton: Does the Lord Privy Seal agree that the Prime Minister in particular has blown hot and cold for months on end with singularly little positive result? Does the right hon. Gentleman agree that, in the circumstances, we should take a more robust and aggressive attitude, particularly towards the French Government, who do not understand anything else? To what progress was the right hon. Gentleman referring when he answered the original question?
    Mr. James Lamond: And that is from a supporter of the EEC.
    Sir I. Gilmour: I was talking particularly about the Commission paper of which the hon. Gentleman will be aware. I do not agree that the Prime Minister has blown hot and cold. She has been
    1328
    singularly strong and consistent on this issue. The hon. Member for Fife, Central (Mr. Hamilton) asks for a robust and aggressive attitude. He seems to believe that the quarrel should be conducted as if it were between members of the Labour Party. We do not believe that that is the right way to behave towards our partners. We have taken a strong position. If the hon. Gentleman had read the transcript of the Prime Minister's broadcast on French television the night before last, he would have noticed that she took an effective and robust attitude. We are convinced that our case is right. We are asking for an equitable solution and that is what we intend to achieve.
    Mr. Sproat: In view of the demands from France and Germany recently for Britain to do a deal on her fish contribution to the EEC, will my right hon. Friend make it clear that the Prime Minister's assurance stands—that we shall not do a trade-off in fish, particularly since it is now worth about £700 million a year, year on year?
    Sir I. Gilmour: I am not at all sure that there has been that demand from Germany, although I agree that President Giscard asked for the matters to be linked. I think that my hon. Friend knows our position. We have made clear to our partners that we are anxious to make progress on all Community problems, but that they should be dealt with on their own merit.
    Some of our partners would like to see a number of problems brought together in a single package for decision by the European Council. We note their views, but we believe that it would be in the interest of the Community as a whole to make progress on all these issues and to solve each as soon as possible.
    I entirely agree with what my hon. Friend says about the great importance of fish to this country.
    Mr. Buchan: Does the right hon. Gentleman agree that a very robust and aggressive solution to the policy was given in the resolution passed by the Labour Party in Scotland at the weekend, when it called on us to leave the Common Market? Would not that receive the overwhelming support of the British people now?
    Sir I. Gilmour: It is possible to exaggerate the importance of recommendations by the Scottish conference of the Labour Party. It is plain that the Labour Party did nothing whatever to solve the problem when it was in power. The financial mechanism that it produced in 1975 turned out to be virtually useless, and Labour got nowhere in dealing with our problems with the Community. We are negotiating in our own way, firmly and sensibly, and we do not believe that the uttering of impotent threats is the right way to proceed in negotiations.
    Sir Anthony Meyer: In view of the impact of the French television interview of my right hon. Friend the Prime Minister, in which she combined firmness, patience and courtesy with a clear expression of Britain's intention to remain part of the European Community, and as that has been my right hon. Friend's attitude all along, will he persevere with it?
    Sir I. Gilmour: I am most grateful to my hon. Friend for what he said. He described entirely accurately the television broadcast of my right hon. Friend the Prime Minister. We shall proceed with the attitude that we have been pursuing.
    Mr. Shore: I am sure that neither side of the House would wish the Government to be uttering impotent threats about the budget contribution and the general objective of broad balance. But what about uttering a few potent threats instead? A remedy lies in our own hands. As the Prime Minister said, it is our own money that we are dealing with. Why do we not make it absolutely plain that if we do not get satisfaction we shall jolly well see to it that we achieve a broad balance by our own acts?
    Sir I. Gilmour: That is the sort of attitude that the right hon. Gentleman always takes to the European Community when he is in opposition, but it is not quite the same when he is in government. We must take a responsible attitude. The uttering of potent or impotent threats—more likely impotent—is not the right way to get our way in this matter. We are pursuing our negotiations firmly and robustly, and we have made a certain amount of progress. Much more remains to be done, but the history of diplomatic negotiations throughout the ages proves
    1330
    that the uttering of threats is not the best way to proceed.

    Heads of Government (Meeting)
    Mr. Spearingasked the Lord Privy Seal what will be the likely business agenda for the EEC Heads of Government meeting in Brussels on 31 March and 1 April.
    Sir Ian Gilmour: European Councils have no fixed agenda. But Heads of Government normally discuss the economic and social situation in the Community and other topics of major interest. It is too early to say what these will be, but among them will certainly be the problem of our excessive net contribution to the Community budget.
    Mr. Spearing: Will the Lord Privy Seal give the House an assurance that when that important topic is discussed the Prime Minister will not accept any offers of offsetting grants, even if they fully displace matters that are the proper responsibility of the United Kingdom budget? If grants are offered in respect of roads, tunnels or docks, does it not mean that our money is being sent to Brussels for it to decide what should be spent in this country?
    Sir I. Gilmour: The hon. Gentleman has misunderstood the whole point. If he reads the Community documents he will see that they put forward the sort of broad areas in which Community money might be spent but that this is subject to our agreement. That is what we have been discussing with the Community in Brussels.
    Mr. David Price: Will my right hon. Friend discuss at the meeting the initiative of my noble Friend the Foreign Secretary in respect of Afghanistan, and ask the other eight Governments what they are doing to support that initiative? Could not it be pointed out to the French that it is a very good example of what they are always asking us to do, which is to produce a politique communautaire?
    Sir I. Gilmour: I entirely agree with my hon. Friend. It is a very good example of politique communautaire. I think that our Community partners particularly the Italian presidency, have been supporting the initiative. I have no doubt that the matter will come up next week.
    Mr. Roy Hughes: Apart from dealing with the massive financial contributions that this country is making to the Community, is there not also a necessity now for the Government to tell the Community of this country's need to introduce a policy of import controls to protect our essential industries, or is the right hon. Gentleman prepared for many more of them to go to the wall, with a consequential catastrophic rise in unemployment?
    Sir I. Gilmour: I in no way accept the hon. Gentleman's premises. The matter certainly does not arise on this question.
    Mr. Marlow: As the nasty historic accident of the common agricultural policy does about as much for the longterm prospects of European unity as Carabosse, the Wicked Fairy did for the wakefulness of the Sleeping Beauty, and as in the current negotiations Britain holds all the cards—the markets for European agricultural produce and for its manufactured goods, the fish and the oil —will my right hon. Friend insist at the meeting that an immediate short-term plan is devised for slaughtering this monster, so that we can have financial equity?
    Sir. I. Gilmour: I am very glad to learn that we hold all the cards. If the problem of our budget contribution is solved, that will be enough for one conference.
    Mr. Leighton: I sympathise with the right hon. Gentleman in his predicament. Can he envisage any scenario in which he will be able to give us any good news from the Common Market?
    Sir I. Gilmour: I am grateful to the hon. Gentleman for his sympathy. I hope that in a few weeks I shall no longer need it.
    Mr. Kershaw: Does my right hon. Friend think that there is any chance of the Heads of Government conveying a joint opinion to the Israeli Government that the repeated settlement of Jewish settlers on lands in Jerusalem and the West Bank does not contribute to a solution of that problem?
    Sir I. Gilmour: That is certainly the view of all the Nine, as my hon. Friend will know. Recent news of increased
    1332
    settlement in the West Bank is greatly to be regretted. But I very much doubt whether the matter will come up at the next European Council.
    Mr. Speaker: Mr. Marlow—Question No. 35.

    Structure and Financing
    Mr. Marlowasked the Lord Privy Seal whether he will make arrangements to discuss with his European colleagues changes in the structure and financing of the EEC.
    Mr. Speaker: Order. I think that I should apologise all round. I tried not to call for a supplementary question any hon. Member whose question was likely to be reached, but I have called the hon. Member for Northampton, North (Mr. Marlow).
    Sir Ian Gilmour: No, Sir. We are not challenging the own-resources system of financing the Community. However, at Dublin it was agreed to look for ways of increasing Community expenditure in the United Kingdom and on the need to consider longer-term restructuring of the budget to reduce the predominance of agricultural spending. Discussions on how to achieve this are continuing.
    Mr. Marlow: Is my right hon. Friend aware that if we do not achieve a satisfactory solution rapidly the recent suggestion by the Leader of the Opposition about withholding VAT payments will have a great deal of support on the Conservative Benches?
    Sir I. Gilmour: As I have already told the House, we are working for an equitable solution. We have been putting across our case, and none more strongly than my right hon. Friend the Prime Minister in her broadcast. That is what we are aiming to achieve at the next summit conference.
    Mrs. Dunwoody: Is not the Lord Privy Seal aware that the own-resources system is a crazy system, which works very strongly against our interests? Why is he not considering some other means of financing the Community if he is so determined that Britain should continue as a member?
    Sir I. Gilmour: I do not agree that it is necessarily a crazy system. I am not

    1333
    sure to what degree the hon. Lady understands the system. It does not work in the case of Britain, and that is why we are seeking to adjust it. However, that does not necessarily mean that it is wrong in itself.

    BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 28 MARCH
    Members successful in the ballot were:

    Mr. Robert Rhodes James

    Mr. Michael Welsh

    Mr. John Fraser

WELSH HOMES INCIDENTS (TELEVISION PROGRAMMES)
Mr. Merlyn Rees: On a point of order, Mr. Speaker. I seek your advice on a matter that brooks no delay. I can see no way in which the matter can be raised in the House, but I seek your advice because the event with which I am concerned is to take place tonight.
There is a bombing campaign in Wales against the houses of English residents and the houses of Welshmen with two houses in Wales. I understand that a television programme is to be broadcast on the BBC in Wales tonight that will show bombing devices, and will show a man who claims to take part in the bombings. The report that I have says that the bombers claim that great care is taken not to cause injury to life or limb, but they acknowledge that somebody will be hurt at some time or another.
I ask for an opportunity to hear from the Government what action they propose to take on the matter. Nobody wishes to stop genuine ideas being put forward on television, even from those with whom we disagree. However, this is a matter where people will be hurt. I ask whether some action can be taken.
The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John-Stevas): Further to that point of order, Mr. Speaker. I wish to assure the right hon. Member for Leeds, South (Mr. Rees) of the importance that the Government attach to the issue that he has raised this afternoon. I regret that my right hon. Friend the Home Secretary cannot
1334
be present this afternoon, for reasons that the right hon. Gentleman will understand. I have had a preliminary discussion with him, and he attaches the greatest importance to the intervention made by the right hon. Gentleman. At the earliest possible opportunity I shall convey to him what the right hon. Gentleman has said in the House this afternoon.
Mr. Speaker: The House will understand that there are times when although a matter that is raised is not strictly a point of order it is in the interests of the House to be forbearing.

TELEVISION PROGRAMMES (QUESTIONS TO MINISTERS)
Mr. Cryer: Further to that point or order, Mr. Speaker. The point of order that you have allowed appears to be connected with the question of programmes on BBC Television. When questions are tabled it is customary for the Table Office to say that interference with programmes is not a ministerial responsibility. I quite understand and accept that, but I have tried consistently to raise the question why the BBC is prepared to show a programme of this nature but several years ago banned a programme called "The War Game", which showed the consequences of a nuclear disaster, which, in my view, people should know about.
May I raise this issue with you, Mr. Speaker, in exactly the same terms, so that my concern about the banning of a programme that I believe to be of public importance could also be brought to the Home Secretary's attention?
Mr. Speaker: The hon. Gentleman has made his point. It was a fair point, because I exercised my discretion with the right hon. Member for Leeds, South (Mr. Rees). There are times when the House must exercise discretion on broad national issues. I hope that the House will leave the matter there.
Mr. Stoddart: Further to that point of order, Mr. Speaker—
Mr. Speaker: Order. I have appealed to the House to leave the matter there. I hope that the hon. Gentleman will not seek to pursue the matter, because it is irregular. I did what any Speaker worth his salt would do and

1335
allowed an expression of view that I believed the House wanted to hear.
Later—
Mr. Speaker: I express my gratitude to the hon. Member for Swindon (Mr. Stoddart) for his courtesy.

BUSINESS OF THE HOUSE
Ordered,
That, notwithstanding the practice of the House relating to the interval between the various stages of Bills of aids and supplies, more than one stage of the Consolidated Fund (No. 2) Bill may be proceeded with at this day's sitting.—[Mr. Peter Morrison.]

STATUTORY INSTRUMENTS &c.
Ordered,
That the draft location of Offices Bureau (Revocation) Order 1980 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Peter Morrison.]

HEALTH SERVICE COMMISSIONER (POWERS)
3.38 pm
Mr. Jack Ashley: I beg to move,
That leave be given to bring in a Bill to empower the Health Service Commissioner to investigate matters of clinical judgment.
The purpose of the Bill is to correct the balance of advantage that lies heavily against the individual patient making a complaint and overwhelmingly in favour of the hospital authorities. The aim of the Bill is to prevent the medical establishment from gagging an aggrieved patient by murmuring the incantation "clinical judgment".
The medical profession renders a valuable service to the community. The Bill does not seek to attack that service. It aims to provide patients with an impartial investigation of those complaints, which include matters of clinical judgment.
When people suffer damage or disaster they have a right to know what when wrong and why it went wrong. They have a right to seek the truth. That right is curtailed by the present system. As a consequence, patients are denied the explanation to which they are entitled. Complaints are investigated by the health authorities, but, as they are ultimately responsible, they sit both as defendants and as judges—the classical posture of indisputable authority.
It is misleading and idle to pretend that that such a system guarantees independent scrutiny. It plainly does not. It places the health authority in an indefensible position, because even when that authority acts with great care, its decisions are open to the charge of whitewash by aggrieved patients. There is always the lurking doubt that the medical authorities are protecting the medical establishment.
The present system is justified on the spurious ground that if patients have complaints they can sue. That is nonsense, because only the very rich or the impoverished—who are entitled to legal aid —have access to the courts. The majority risk crippling legal costs if they go to court. They face a powerful and well organised medical profession, buttressed by legal expertise.

1337
It is natural that many patients back away, daunted by the threat from doctors and the legal establishment and by the odds that they recognise are too heavily stacked against them. Many patients, often with legitimate complaints, have no redress whatever. That means that they are denied independent scrutiny.
Many patients complain, because they want to know what happened. Some of them are very anxious to prevent the same thing from happening to other people. I am struck by the number of letters in my postbag from people who are anxious to help others. They say that they do not want what happened to them or their relatives to happen to others. That is a major reason for their concern.
The fear that some people may complain and then go to the courts for compensation leads to the worry by the medical profession about double jeopardy, and that is understandable. It may lead to double jeopardy, but the fear is exaggerated. Double jeopardy already exists in respect of the findings of the Ombudsman, but it simply has not happened yet.
There is also a fear of defensive medicine, but as virtually nothing is known about the extent of clinical error we simply do not know whether defensive medicine will arise. We do not know what defensive medicine—whatever that phrase may mean—will do. Personally, I have more confidence in doctors than has the spokesman of the medical profession. I do not think that doctors would shy away from treating their patients on these grounds. I believe that none of the excuses about double jeopardy or defensive medicine can obscure the fact that patients feel very deeply about the need for impartial investigation.
The letters of complaint that I receive are directed at neglect by doctors, at false entries or omissions from clinical notes, at concealed evidence, and at prejudiced hearings. The complaints may constitute only a tiny minority of patients —I think that they do—but until we have impartial investigations of the complaints we simply do not know whether they are justified. We certainly do not know how many are justified. Irrespective of their numbers, the patients concerned should have a right to an impartial hear-
1338
ing. That right does not exist at the moment if clinical judgment is involved.
The Davies committee favoured independent scrutiny of clinical judgment. The Select Committee, to which I pay a high tribute for its painstaking work, favoured the Ombudsman investigating clinical judgment. That Committee went into great detail and to enormous trouble, and its decision was clear-cut and heavily in favour of clinical judgment being included within the Ombudsman's remit.
According to the magazine General Practitioner the Secretary of State for Social Services went on record in 1978 as saying that he supported such a policy. I am glad to see him on the Front Bench this afternoon. He has since said that he doubts whether the proposal will gain the consent of the medical profession. I do not think that he would be justified in giving the profession the right to veto legislation if it thinks that the proposal will be inconvenient. The moment that he concedes that principle, the same principle must be conceded to dockers, dustman and everyone else. I hope, therefore, that doctors will not be permitted to exert undue interference in the legitimate powers of the Secretary of State.
The right hon. Gentleman has currently said that he is considering alternative proposals by the general consultants' committee. He is wasting his time, because the alternative proposals will mean only that the consultant concerned should discuss the complaint with the patient. If that does not succeed he should discuss it with the regional medical officer. If that does not succeed he should bring in two independent consultants. That sounds fine, until one reads the small print and discovers that the general consultants' committee blandly insists that the names of the two so-called independent consultants shall be vetted by the original consultant. How is that for cheek? It also says that if the two vetted consultants fail to convince the patient, no further action should be taken. That is an incredible proposal for seeking to alleviate the anxieties of people with legitimate fears.
As the British Medical Association's spokesman was forced to admit, these proposals leave the patient with no alternative but to shut up or sue. That is disgraceful. The proposals constitute a travesty of justice, designed simply to get

1339
doctors off the hook. They do not bear examination.
My Bill would ensure that complaints about clinical judgment were carefully and impartially investigated by the Parliamentary Commissioner, who would be advised by medical experts seeking the truth. He would not criticise, with the benefit of hindsight, doctors who had taken actions that proved to be wrong in the light of prevailing knowledge. It is important to make that distinction, because it is all too easy for science to move on and for people to find that they have made a mistake, given the state of prevailing knowledge.
The Bill ought to reassure the vast majority of the medical profession with its very high standards. It would reassure the public, who would have the right to an independent assessment of complaints about treatment that affects their health and their lives.
3.47 pm
Mr. John Stokes: I had expected that many hon. Members would rise to oppose the right hon. Member for Stoke-on-Trent, South (Mr. Ashley) in his attempt to obtain leave to bring in the Bill. However, since no one else has done so, and since the House is not exactly full, I feel that it is up to me to do it and for my voice to be heard in opposition.
I have been a member of the Select Committee on the Parliamentary Commissioner for some months. I have some knowledge of his work, and the greatest regard for it. The question is whether we substantially extend the Parliamentary Commissioner's scope to give him the power to intervene in what are purely matters of clinical judgment. That is a big decision for the House to make without debate. I believe that it would open up a veritable minefield, and the imagination boggles at the muddle, confusion and possible danger that would ensue.
We must, in the main, trust our doctors, nurses and surgeons. I speak as one who has from time to time nearly been killed and has therefore been under their care
1340
and judgment. I am only too aware that doctors, surgeons and nurses are human beings, and, of course, are capable of error, and that they make errors. How can those difficulties be overcome? I do not believe that it is wise or sensible, without the gravest deliberations, to seek to overcome them, by allowing the Parliamentary Commissioner a vast new extension of power in a totally unknown field. As ordinary people, we do not have either the training or the knowledge to question the clinical judgment of the medical profession.
As for enlarging the scope, surely everything in life cannot be under debate and scrutiny. If we are to live reasonably some matters must be taken on trust, unless there are grave grounds to the contrary. I fear that sometimes, today, in a modern democracy, complaints become a sort of disease. If life is to be lived from the cradle to the grave, let us hope that it will not be simply one long complaint.
I believe that it would be wrong, unwise and dangerous for the Bill to be passed at this time, after only a few minutes discussion. I hope, therefore, that it will be rejected by the good sense of the House.
Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and Nomination of Select Committees at Commencement of Public Business), and agreed to.
Bill ordered to be brought in by Mr. Jack Ashley, Mr. Peter Bottomley, Mr. David Ennals, Mr. Charles Fletcher-Cooke, Mr. Alfred Morris and Mr. Donald Stewart.

HEALTH SERVICE COMMISSIONER (POWERS)
Mr. Jack Ashley accordingly presented a Bill to empower the Health Service Commissioner to investigate matters of clinical judgment: And the same was read the First time; and ordered to be read a Second time upon Friday 4 July and to be printed.
ORDER OF THE DAY

  CONSOLIDATED FUND (NO. 2) BILL
  Order for Second Reading read.
  Motion made, and Question proposed, That the Bill be now read a Second time.
  Mr. Speaker: Before we start the debates on the Consolidated Fund (No. 2) Bill, I wish to give the House a little advice as to the scope of the various debates. The Bill is a relatively narrow one. The rules regarding debates on Supplementary Estimates, and consequently on Bills founded on such estimates, are set out in "Erskine May", as follows:
  "If the sum demanded by a supplementary estimate is of the same order of magnitude as the original estimate, the chair has allowed questions of policy to be raised upon it which would have been in order if it had been an original estimate; but if the supplementary estimate is merely to provide additional funds of a relatively moderate amount required in the normal course of working of the services for which the original vote was demanded, only the reasons for the increase can be discussed and not the policy implied in the service which must be taken to have been settled by the original vote".
  Topics 1, 2, 8, 13 and 14 on the list of subjects are based on Estimates to provide additional funds of a relatively moderate amount. Thus, only the reasons for the increase should be discussed.
  With regard to topics 3 and 4, the Supplementary Estimate is of a similar order of magnitude to the original Estimate, and matters of policy can be raised—that is, on the questions of the sale of shares in BP and on finance for the NEB. They are the only two topics on which policy questions can, in order, be raised.

  PRISONS (WORKING CONDITIONS)
  3.56 pm
  Mr. Keith Best: I am told that one of the great fortunes of life is to be called first to speak in the debate on the Consolidated Fund Bill. I hope that fate will continue to smile on me, and that this will not be the last time that I shall be so fortunate.
  I wish to raise the matter of the additional burden on prison staff, which is
  1342
  set out in Class IX, Vote 9, where there is provision for an extra £4,085,000 for the payment to prison staff. The reason set out in the Vote is that it is due mainly to additional overtime and allowances.
  I am grateful for your guidance in the matter, Mr. Speaker, and I hope that I shall not stray beyond the bounds of propriety. I am aware that if I do so you will rapidly call me to order. Before I move to the gravamen of what I wish to say, I should like to pay tribute to the prison service. I am sure that my hon. and learned Friend the Minister of State, who is to reply to the debate, will wish to join me in paying tribute to the hard work and effort of the prison officers. I have been in and out of prisons in London for some time. [Interruption.] In view of the approbation from Labour Members, perhaps I should explain that that has been in connection with my work as a barrister rather than as a criminal.
  The reason for the increase in payment of overtime for prison officers—I suspect that people who have visited prisons in London have noted the great burden and strain that is placed on prison officers, not least upon their family lives—is the extra workload that is placed upon them due to the number of persons in prisons who should not be there. I speak of one section—people who suffer from alcohol problems—and I shall confine my remarks to that aspect.
  The number of alcoholics in prison is variously estimated. However, since the Criminal Justice Act 1977 a person cannot be directly imprisoned as a result of drunkenness, although that will not necessarily cut down the numbers incarcerated in prison for drunkenness offences. People who are fined and cannot pay their fines, or who choose not to pay their fines, will be imprisoned in default. People will be imprisoned as a result of other offences that have been generated through the consumption of alcohol. There are a number of crimes, particularly in the burglary or personal damage field, that have been committed while their perpetrators have been under the influence of alcohol. The estimate is that between 30 and 40 per cent. of

  1343
  prisoners have a serious alcohol problem. That represents about 3,000 persons in prisons.
  I should like to endorse that point by a quotation from a booklet entitled "Community Services for Alcoholics" prepared by the Federation of Alcoholic Rehabilitation Establishments working party. On page 49, it states:
  "A survey of Midland prisons in 1969 showed that 45 per cent. of inmates had an alcohol problem. Until October 1976 a unit for alcoholics functioned at Wakefield Prison but closed temporarily because it proved difficult to appoint staff to man it. The unit has not reopened and apart from discussion groups run by probation officers in prisons together with Alcoholics Anonymous groups and the Social Skills experiment at Ranby and Ashwell Prisons, little goes on in this field in prisons. Probation officers would welcome the Prison Department taking a more imaginative approach in assisting alcoholics."
  I certainly endorse that point.
  I reiterate what I said earlier about whether people with alcohol problems should be in prison at all at the vast cost and expense of recruiting extra staff and the resultant need for overtime.
  It may be questioned whether this is a Home Office or a Department of Health and Social Security responsibility. There was a transference of responsibility from the Home Office to the DHSS in 1971. Circular 21/73 was then published. I suppose that it is about the best statement of Government policy still in existence on the problems of alcohol. The circular stated:
  "The Home Secretary announced early last year"—
  that was a reference to the year in which it came out—
  "that it had been decided that departmental responsibility for the provision of facilities for those who are habitually drunk in public places should pass to the Department of Health and Social Security as part of a comprehensive treatment and rehabilitation service for all alcoholics.
  The reluctance of the public to recognise the scale and nature of the problem in their midst is well known and it would be unrealistic to expect rapid, unaided development of community provision by statutory or voluntary bodies on the scale which is needed to meet the needs of all alcoholics in the community at large as well as those of the offender group studied in the report on habitual drunken offenders.
  This Circular offers certain special transitional financial arrangements to help increase and sustain the rate of growth of the voluntary
  1344
  services which is likely to be needed during the initial phase: it will make it easier for authorities, if they wish, to work with local or national voluntary bodies to provide services for this problem group. Authorities are asked to consider the needs in their area and how a start can be made toward meeting them: the plans made should be considered within the machinery of the local joint consultative committees — and should thereafter be reflected in successive revisions of the authorities' '10 year plans'."
  That quotation will have relevance when I speak about the existing facilities—notably, the Leeds detoxification centre.
  Circular 21/73 comes to an end this year. Therefore, we are now entering a limbo period in which, subject to what my hon. and learned Friend may say, there will not be any clear restatement of Government policy. I hope that my hon. and learned Friend will remedy that to a certain extent in his remarks today.
  I was concerned about the attitude of the Departments towards this problem. In fact, in a parliamentary question to the Secretary of State for Social Services, I asked
  "if he is satisfied with current facilities for the treatment of alcoholics who are convicted of criminal offences"—
  Mr. Speaker: Order. I am sorry to interrupt the hon. Gentleman. I am trying to give him a fair run. However, he must link his remarks to the reason for the increases which the House is asked to approve.
  Mr. Best: I fully appreciate that, Mr. Speaker. The question that I put to the Secretary of State for Social Services was about those suffering from an alcoholic problem who are convicted of criminal offences. If they are convicted of criminal offences involving alcohol, there is an extreme likelihood that they will go to prison as a result. That will increase the burden upon the prison staff and necessitate the payment of overtime, which is the sphere that I am discussing this afternoon.
  The answer that I received was:
  "It is the responsibility of health and local authorities to decide, in the light of their resources and priorities, the services which are needed to help alcoholics. My right hon. Friend is including in his consideration of the report of the advisory committtee on alcoholism on the pattern and range of services for problem drinkers, consultation with my right hon. Friend the Secretary of State for the Home Department on the recommendations relating to links

  1345
  with the prison, probation and after-care services."—[Official Report, 6 February 1980; Vol. 978, c. 245.]
  It seemed that the DHSS was saying that this was not its problem.
  I then put a similar question to my right hon. Friend the Secretary of State for the Home Department. He replied:
  "Treatment facilities for alcoholics who are offenders but are not in custody are a matter for my right hon. Friend the Secretary of State for Social Services. With regard to those in custody, in addition to specific facilities for treatment at three prisons, all prisons have medical officers—many of whom have psychiatric qualifications or experience; many prisons have visiting psychiatrists; and most have an Alcoholics Anonymous group." [Official Report, 24 January 1980; Vol. 977, c. 312.]
  It will be appreciated that the additional burden of Alcoholics Anonymous groups in prisons will require extra supervision by prison staff. That must necessarily place an extra burden on those staff and involve the payment of overtime.
  Recommendations for further facilities for alcoholics so as to take them out of the prison population and to alleviate the burden upon prison officers have been made by a number of bodies. I referred earlier to the report by the advisory committee on alcoholism on the pattern and range of services for problem drinkers. That report referred to the 1971 report entitled "Habitual Drunken Offenders", which included a recommendation that
  "special arrangements for detoxification would be indispensable to any future system which attempted to deal comprehensively with public drunkenness".
  It went on to point out that
  "if after two experiments in London and the provinces demonstrated that they were an effective alternative, detoxification centres should be established where they were warranted by the extent and pattern of drunkenness offences."
  That would obviously alleviate the burden on the prison services. The recommendation of the advisory committee on alcoholism was
  "that detoxification facilities could play an important part in a comprehensive pattern of services for problem drinkers."
  Mr. Tristan Garel-Jones: My hon. Friend has raised an important point on the whole question of alcoholism and crime. Does he not agree that the problem of alcoholism extends much further than the narrow effect on crime
  1346
  figures and that it is time that the Government published the Green Paper on alcoholism the publication of which they seem to be holding up?
  Mr. Speaker: Order. The hon. Gentleman is inviting his hon. Friend to stray beyond the narrow path. That is something that I always frown upon.
  Mr. Best: You will be glad to hear, Mr. Speaker, that, though severely tempted, I fall not. I shall maintain myself along the narrow tramlines to which you so properly directed me at the beginning.
  Section 34 of the Criminal Justice Act 1972 enables a police officer, when arresting a person for a drunkenness offence, to take him to a detoxification centre. But that section has not properly been implemented throughout the country, because the detoxification centres are not available. In fairness, I should say that it is because those at Leeds and Manchester are in the process of evaluation to see whether they are indeed one of the ways by which the prison population, and thereby the burden upon prison officers, can be alleviated.
  I ask my hon. and learned Friend to tell me, if he can, what is happening about the evaluation of the Leeds and Manchester centres. When will the Government be in a position to say that that evaluation has taken place and whether it is right for further detoxification centres to be set up around the country, or, if those centres are found not to be the answer, whether some alternative method will be proposed?
  I am not alone in calling for detoxification centres. Only recently the Police Federation, in a memorandum submitted to the Home Affairs Committee on 11 February, stated:
  "I would like to inform members of the Committee that it was the Police Federation which proposed that simple drunkenness should be decriminalised. We took the view that to keep on arresting and locking up a habitual drunkard and sending him to prison for short periods was a totally unsatisfactory way of dealing with a person who is obviously suffering from a major illness. It was the Police Federation, also, which came out in firm public support of the proposals made by the last Government to establish detoxification or drying out centres. I wonder if it is public knowledge that the first legislation for drying out centres was passed a hundred years ago, and nothing was done. The advantages of detoxification centres can be seen at the highly successful centre run by skilled medical and

  1347
  social workers in Leeds which has been fighting a threat of closure for more than a year. It has transformed the position in Leeds so far as the alcoholic who is rootless and homeless is concerned. Men, some of them quite young, have been kept at the centre for several days and some of them have gone on to other houses run by the same charity in Leeds, from where they have been able to make a new start. Previously, all that could be done was to keep them on the same futile round of drunkenness, arrest, prison and release to get drunk again. Yet, because of a dispute about the level of support from public funds, it appears that the Leeds centre is still in danger of being closed."
  The memorandum then goes on to mention the hospital-based unit at Manchester and the problems that confront police officers. That leads us on to the problems confronting prison officers which gave rise to the need for them to be paid more because they are not medically trained to deal with the number of alcoholics admitted to prison.
  I had the opportunity yesterday of listening to the all-party penal affairs group which meets in the House, and to Mr. Bill Kilgallon from the Leeds detoxification centre. Also, a recent parliamentary question has shown that since the incipience of the Leeds and Manchester centres and the Salvation Army centre in Tower Hamlets, 3,670 persons have gone through the unit at Manchester and 1,283 have gone through the Tower Hamlets centre. The House will remember the estimate I gave earlier of the numbers of persons in prison suffering from an alcohol problem.
  Mr. Ivan Lawrence: I wonder whether my hon. Friend would help the House by addressing his mind to another problem in this area, which is the demarcation between the Home Office and the DHSS in dealing with matters of this kind.
  Mr. Speaker: Order. The hon. Gentleman was not here when I ruled earlier that this is a narrow debate that must be linked to the reasons for the increases in the Estimate that have been asked for. If I may be allowed to comment, I believe that the hon. Member for Anglesey (Mr. Best) has done a remarkable job in managing to keep his argument linked with them.
  Mr. Lawrence: On a point of order, Mr. Speaker. The relevance of what I
  1348
  said is that the increases might be greater if the Home Office had more responsibility than the DHSS.
  Mr. Speaker: There might be more overtime, but I think it is a fair guess.
  Mr. Best: I am grateful for your comments, Mr. Speaker. I do not believe that my hon. Friend was in the Chamber when I mentioned this possible conflict of interest between the DHSS and the Home Office. It may well be something that my hon. and learned Friend will deal with when he replies.
  I end by asking my hon. and learned Friend two questions. First, what will happen to these centres, particularly the Leeds centre? I know that his Department has offered the centre £16,000, although it actually asked for £23,000. I hope that there will be continuing funding of the centre until it can be proven that there is an alternative and better method for keeping persons out of prison and thus lessening the burden on prison staff. Secondly, what general plans has the Department under consideration for trying to keep those with an alcohol problem out of prison?
  One of the major problems that confront us today is that the increase in the number of persons incarcerated every year in our prisons, for whom society has no answer, is related to alcohol problems. This nettle should have been grasped long ago. Successive Governments have failed to grasp the nettle. We still do not have a comprehensive rehabilitative programme to deal with those who, often through no fault of their own, suffer from alcoholism and who are locked up because society has no other answer. That is an intolerable state of affairs. I hope that this afternoon we shall receive some guidance from my hon. and learned Friend or at least a restatement of the Government's determination to ameliorate this problem as soon as possible.
  4.16 pm
  Mr. Ronald W. Brown: I should like to argue from a slightly different angle from that of the hon. Member for Anglesey (Mr. Best). I want to take the item under the heading
  "Plant, Machinery, Tools and Vehicles, (2) For prison industries."
  I also want to take—
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. I am afraid that the hon. Gentleman cannot do that. He must stick to the subject that has been ballotted for, which is the additional burden on prison staff.
  Mr. Brown: With great respect, Mr. Deputy Speaker, that is really what I want to do. I am linking it to the increase in money, which Mr. Speaker said I had to do. I was being helpful. I could have gone straight on and spoken, but I thought that I would help the Minister to understand what I was speaking about. I want to speak about money for prison industries. I also want to refer to page 38:
  "Deduct: AZ Appropriations in Aid, (01) Proceeds of sales outside the Prison Service."
  I hope to show the Minister that much of the time of prison officers is wasted looking into matters that are not their concern. I wish to draw his attention to the prison industries and to tell him that they are being used for manufacturing furniture.
  Apparently, without any form of consultation with anyone, a decision has been taken to spend this increase in money on the provision of sophisticated woodworking machinery in order to set up in prisons an industry for manufacturing furniture—not just chairs and tables but three-piece suites. These three-piece suites are being retailed outside the prisons. That must place an enormous burden on prison officers.
  Does the Minister believe that that is the right job for prison officers? Are they trained in health and safety matters connected with the type of machinery that is being used? Outside people are also being brought in to help to train prisoners, which places an unfair burden upon prison officers. Why does the Minister believe that prisons should manufacture suites of furniture and sell them to the trade outside at half the price for which they can be manufactured locally? Manufacturers in the furniture industry take great exception to this, because they are being put out of business by an industry that has no right to be there.
  My union has always argued that it is prepared to see prisoners properly trained so that when they leave prison they can come back into normal life and take up a
  1350
  card in the union as furniture workers. I represent the Furniture, Timber and Allied Trades Union.
  Mr. Deputy Speaker: Order. I am sorry to interrupt the hon. Gentleman again, but I do not think that the Minister of State will be able to answer his questions, because the debate that we are covering is Class IX, Vote 9. The hon. Member will find that on page 206. It is concerned with the pay and allowances of prison staff and officers, overtime, and that sort of thing, but it has nothing to do with furniture manufacturing—unless the hon. Member connects it to pay and allowances and overtime.
  Dr. Shirley Summerskill: On a point of order, Mr. Deputy Speaker. I think that it is very important that we all get straight what we can and cannot talk about, because both speeches so far have been interrupted and I would not like mine to be so interrupted, and I am sure that the Minister would not like that either—although he probably already has a speech that is totally in order. However, Mr. Deputy Speaker, will you please say whether it is in order for an hon. Member to make a speech that puts forward suggestions for reducing the number of people in prisons at present, in order that consequently the burden on prison staff can be reduced?
  Mr. Deputy Speaker: I think that that will be in order, provided that it is related to Class IX, Vote 9, which concerns additional burdens on prison staff. That is what we are debating. I think that the hon. Member for Hackney, South and Shoreditch (Mr. Brown), who is an experienced parliamentary operator, will be able to keep himself in order within that ambit.
  Mr. Brown: I am very grateful to you, Mr Deputy Speaker. You say that you are referring to Class IX, Vote 9. I, too, am referring to Class IX, Vote 9. I have here a document that I got from the Vote Office, which I take to be the Ancient and Modern version, which has just arrived. It contains Class IX, Vote 9, which was published on the Notice Board as the subject matter that we were to discuss, and it was the prison service. [Interruption.] It may be the wrong book, but I am an Anglican, and this is the Anglican law, headed "Law, Order and

  1351
  protective services," which is exactly what the item was.
  Therefore, I submit that I am totally in order. I know that the Home Office does not necessarily want to answer this question, but I have the opportunity of raising the matter on the Consolidated Fund Bill. It is particularly apposite having regard to the increase in moneys—£2 million in one case and an increase in sales of £1 million in the other.
  What I am raising is a serious issue. This means that there is a burden on the prison staff. Since the Minister of State has not increased the prison staff for this purpose, the burden must fall upon them.
  Since they are now engaged in the manufacture of furniture, surely their rates of pay should be very different. They should now enjoy the productivity rate and something of the £9 million under this Vote—I am told that that sum is being obtained in the year 1979–80—in their pay and remuneration. Clearly, if they are being asked to act as manufacturers of furniture, they must enjoy the benefits and the rewards that come from that.
  Therefore, I want the Minister to explain today when the decision was taken to go in for manufacturing furniture commercially and what discussions took place between the Home Office and the Furniture, Timber and Allied Trades Union and British furniture manufacturers. What were the agreements that were arrived at as to the type of work to be done, and what are the outlets that the Minister feels that he has in order to get rid of this furniture—or is he just dumping it on the market, and consequently having outlets that are the normal outlets of ordinary small manufacturers employing fewer than 50 men, who are now being put out of business-50 jobs going in the process —simply because the Minister has introduced this system into the prison services? I believe that the House is entitled to know.
  Mr. Deputy Speaker: I should be grateful if the hon. Member would not now pursue that line. I think that he has made his point. Will he please return to the main thrust of the debate—the additional burden on prison staff? This is a balloted motion that Mr. Speaker has selected, and we shall stick to that.
  Mr. Brown: I am trying very hard, Mr. Deputy Speaker. However, if the prison staff are employed in their normal disciplinary functions, in keeping law and order within prisons and seeing that a prisoner serves his sentence as determined in accordance with the principles laid down by the Home Office, that is one thing. But now that the Home Office has decided that, in addition to those duties, the prison officer should become a general foreman of a furniture factory, what I am suggesting is that we are placing upon members of the staff an unreasonable burden in asking them to perform a function that has never been theirs. That is the first criterion at which one looks.
  The second matter is the question of when the Home Office entered into discussions about this matter with the relevant authorities, the trade unions and the furniture manufacturers.
  Thirdly, I am asking what training courses the staff have undertaken to fit them for being able to supervise men working with machinery. If there are any accidents—as there will be because of the type of industry of which we are speaking and the dangers inherent in furniture manufacturing machinery—are they properly trained in order to be able to save the lives of prisoners who may be hurt? How many prison officers have been placed on training courses? What are the programmes here, as outlined in
  "Plant, Machinery, Tools and Vehicles,"
  for undertaking the job of uprating the safety standards of these machines?
  Because this is a Government enterprise, these machines are excluded from the health and safety provisions. Is the Home Secretary saying that he is accepting the health and safety provisions for these machines? Who is updating the safety precautions? Perhaps the Minister of State will say when these machines were last inspected, what the standard was seen to be, and whether the Government were satisfied with the overall safety measures.
  That is important, because prison officers cannot be expected to keep up to date with all the issues involved in furniture manufacturing unless they are sent on courses regularly.
  What training colleges are undertaking the training of prison officers in the

  1353
  manufacturing of furniture? I am anxious to know which colleges are running such courses, because under the Prime Minister's proposals local government expenditure is being cut back, and it is likely, therefore, that these courses could fail because of lack of funds. I would not want prison officers, who ought to be properly trained as a part of their normal standard procedure now as furniture manufacturers, not to be trained because there were insufficient courses.
  I think that the Home Office is wrong. It has no right whatsoever to go into the manufacture of furniture. But since it has sought to do this, without consultation, will the Minister now tell me something about these proposals and what he believes to be the total production for the year 1979–1980, in how many prisons these programmes are running, and what his proposals are for 1980–81?
  4.29 pm
  Mr. Robert Kilroy-Silk: The real burden on prison officers and the reason for the unacceptable levels of overtime that they have to work—about which they complain frequently and vociferously—arises from the neglect of the prison service by successive Governments and Home Secretaries of both major parties.
  In 1975, the then Home Secretary, Mr. Roy Jenkins, said that if the prison population rose to 42,000 the situation would be intolerable and we would have a crisis upon our hands, a crisis which would affect very deeply and very intimately the work of prison officers. The prison population rose to 42,000 in October 1976. It increased to 43,000 in November 1979. Today it is at the all-time record level of 44,131. That totally unacceptable level has its origins in the constant neglect of the Home Office and successive Governments. There are consequences flowing from this for prison officers and the work that they are expected to carry out.
  The consequences of the incredible jump in two months to 44,000 men, women and schoolchildren in our prisons are gross overcrowding for prisoners and unacceptable and intolerable working conditions for prison officers. The prison officers have to inhabit the same working conditions as the prisoners. They bear the brunt of the resentment, frustration and
  1354
  bitterness that is inevitably built up in our prison system. Yet we have the nerve and temerity to claim to be a compassionate and caring society. Is it a compassionate and caring society in which we have 44,000 men, women and schoolchildren in accommodation that was built largely in Victorian times and that should contain no more than 35,000 prisoners?
  At any one time there are about 11,000 prisoners accommodated two or three to a cell—a cell built for one in Victorian times. Many thousands of prisoners are locked up for 23 hours out of 24 hours. They are denied proper access to recreation, education and vocational facilities and to the important facilities which, unfortunately, my right hon. Friend the Member for Hackney, South and Shore-ditch (Mr. Brown) chose to attack in a scurrilous, totally ill-founded and unresearched manner. If the hon. and learned Gentleman replies to the arguments advanced by my hon. Friend, I hope that he will do so in the dismissive way that they deserve.
  I have set out the situation that confronts us and the reason why prison officers are expressing their dissatisfaction and discontent. At 25 penal establishments the staff are involved in industrial action. For various reasons prison officers are expressing their dissatisfaction with Home Office policy and prison department administration. They are employing various sanctions. Today is the anniversary of the refusal of prison officers to allow a woman instructor at Leeds prison to work in an inmates' tailoring shop. She has turned up every working day for the past year. Today is her anniversary. She has continued to draw her salary as she has every right to do. The action of the prison officers has meant that she has not yet been allowed to work a full day and to give a full day's instruction to the 60 inmates. The consequence of the prison officers' action is that those inmates are being denied proper education and training facilities.
  I make an appeal to prison officers. The remedy is in their hands. If they feel that the burden that has been described today is excessive, and if they have deep, real and legitimate grievances sufficient to warrant them taking industrial action and imposing sanctions, they should not impose the sort of sanctions that they are now imposing, which have

  1355
  little or no impact upon the Home Office —witness the lengthy neglect and complacency that the Home Office has shown to prison officers taking industrial action. Their action has no impact upon the Government. The public rarely hear about it. If they are made aware of it, they are unconcerned.
  If prison officers have legitimate grievances about which they feel strongly, it would be better for them—it would relieve them of the unacceptable burden with which they are confronted—if they were to say "We shall now take industrial action that will be positive and constructive and will have an impact upon conditions in our prisons and upon our working conditions." If they were to say, for example, "We shall in future refuse to admit prisoners to our prisons once our certified normal accommodation has been reached. We shall not admit anyone over and above that figure", that would have an electrifying and immediate impact on the Home Office, the Government and public opinion.
  At Brixton, the certified normal accommodation is about 690. The present population is about 1,056. If such action were taken by prison officers, it would be legitimate. They would be taking action related directly to their working conditions and the environment that they have habitually to inhabit. They would be taking action that in a sense is implicitly endorsed by the Home Office. After all, it was the Home Office that certified the normal accommodation level that is now being breached in all our local prisons.
  If the prison officers wanted to look after their own interests, which they have a perfect and proper right to do, they should go further and seek to advance the interests of prisoners for whom they are caring and who are in then charge. It would seem acceptable for prison officers to say "From today onwards"—I hope that they will adopt this approach —" we shall no longer take into our prisons those categories of individual for whom prison is a totally inappropriate place." That would include the mentally disordered and the mentally M. It would include alcoholics, who have been referred to by the hon. Member fur Anglesey (Mr. Best). It would include drug addicts and perhaps other petty offenders.
  1356
  We all accept that prison is a totally inappropriate place for the mentally ill, the mentally disordered and alcoholics. Prison officers are not trained or equipped to deal with them. We have no right to expect them to do so, and they have no duty to do so. They have no moral duty to look after the categories of individual who should be dealt with outside the penal system. They could relieve themselves of a massive burden by ensuring that they took action that was positive and constructive for themselves and the penal system. It would certainly cause the Home Office to do what it says it wants to do, but which it rarely implements in practice.
  There are other things that could be done to relieve the burden on prison officers—for example by reducing the gross overcrowding and removing from the prison system categories of individual who are no real threat to the public or the community. We could remove thousands of petty offenders. The British Association of Social Workers estimates that there are about 10,000 petty offenders in our prisons. Naturally the Home Office is more cautious and its estimate is between 2,000 and 3,000. The governor of Holloway gave evidence to the Expenditure Committee last year and stated that about 60 per cent. of the inmates of Holloway at that time were petty offenders who were no danger to the community.
  It is always said that we do not need to have petty offenders—they are sometimes called "social inadequates"—in our prisons. The prison system does not reform or rehabilitate them, or have an effect on their re-conviction rates. It serves no constructive purpose to use our prisons as social dustbins for the inadequates of society who pose no threat to ordinary law-abiding members of the community.
  The Minister of State is sincere about his concern for the working conditions of prison officers and the state of our prisons. He could say today " We shall declare an amnesty for all petty offenders." The hon. and learned Gentleman could increase remission for those with sentences of 18 months or less to one-half of the sentence instead of the present one-third. On my estimate that would immediately reduce the prison population by slightly over 3,000. It would reduce it from the present 44,000 to the

  1357
  apparently acceptable level of 41,000, which would be well away from the intolerable level mentioned by Roy Jenkins in 1975. That could be done. All that is lacking is the political will. I accept that public opinion is a difficulty. However, it could be done, given the necessary political courage.
  On any one day there are more than 6,000 men, women and schoolchildren on remand in our prisons. They are technically innocent. They have not been tried and found guilty of offences. Nevertheless, they are remanded to our prison establishments. In the name of the community, 6,000 men, women and schoolchildren are being held on remand. One accepts that remand is necessary in many cases. People may abscond while on bail and commit further offences. However, it is highly disturbing that of those who pass through the prison system in a year, 75 per cent. of the women and girls and 50 per cent. of the men are eventually found not guilty, or are given non-custodial sentences.
  Every one of those who has been held on remand will have served the equivalent of a prison sentence. They will have experienced overcrowded and uncivilised conditions. It is disgraceful to remand people in custody, to put them behind bars and to force them to serve prison sentences. Many of them are schoolchildren between the ages of 14 and 16. Many of them are found not guilty. Often, someone who has been kept on remand may be found guilty of an offence that does not warrant a prison sentence. However, all those people will have served prison sentences. The majority of them will have been kept on remand for several months.
  It must be remembered that the guilty have a right to be tried. However, three men are now inside Canterbury prison and they have been there for 14 months on remand. I shall not speculate as to whether they are innocent. I do not know. Nevertheless, it should be a matter of concern. Two elderly American women in their sixties are at present in Holloway prison. They have been there for 12 months. They are being held on remand.
  Mr. Deputy Speaker: Order. That case is sub judice at present.
  Mr. Kilroy-Silk: I understand the sub judice rule. According to that rule, I must not name individuals. The cases that I have referred to have been cited in answer to parliamentary questions. The Table Office has allowed me to table questions and those questions have been answered by the Minister. I have said no more today than the Minister has said in answer to my questions. On another occasion we might examine the sub judice rule. I do not understand why we cannot refer to a publicly named person who has already appeared before the courts and who has been charged and committed to prison. The case Las already been made public. Everyone else can talk about it, as long as they do not refer to the merits of the case. We can all refer to "Mr. X" who has been charged with rape. However, we are not allowed to mention such cases in the House. That is ridiculous.
  Prison officers have to face unacceptable pressures. That burden can be relieved to some extent by changing court procedure and by avoiding such long delays between remand and trial. If that were done, fewer people would he held on remand. Perhaps we should adopt the system found in Scotland. If a person is not brought before the court within 110 days, he is acquitted. If the prosecution cannot assemble its evidence within three months and bring a case, the individual is set free. It is unacceptable to keep individuals in prison for 14, 12 or nine months. However, that is now the norm, not the exception.
  The burden on prison officers could be relieved by reducing overcrowding, by giving an amnesty to petty offenders and by removing many of those who are remanded into custody unnecessarily. I am sure that the Minister will be the first to accept that we should take action now. We should reduce the length of sentences. The advisory council on the penal system issued an interim report in 1977. It convincingly showed that there is no relationship between the length of sentence and the harshness of the regime and the rate of recidivism. If shorter sentences were imposed prison officers would benefit, working conditions would improve, overcrowding would be reduced and, importantly, it would involve no extra threat to the community. The Minister will know of the hysterical reaction of the

  1359
  press to that report. However, he also knows that the evidence, not least from the Home Office, is overwhelmingly in favour of shorter sentences. Every country has followed that path—notably Holland—yet we lack the political courage and will to do so.
  If certain individuals were taken out of the system, pressure on the prison service and prison officers would be eased. We should be able to adopt a more useful and constructive regime in the prison service. An offender will not be reformed or rehabilitated if he is put behind closed doors in an unnatural, single-sex, closed and secret community. If an offender is put in a tight little cell with three others, if he is locked up for 23 hours a day and denied the basic human rights of proper sanitation, food, educational, recreational and training facilities, one cannot expect him to return to society some years later as a positive, constructive, and contributing member of the community.
  The ethos of prison is dehumanising and brutalising. It is nonsense to suggest that individuals will suddenly thank the Government, the prison service or the community—in whose name those two organisations act—for the way that he has been treated. It is nonsense to think that a prisoner will come out of prison thankful and determined to become a better citizen and a constructive member of the community. That will not and does not work. No one cares enough about our prison service to acknowledge that fact, or to do anything about it.
  If we wish to reform our penal system so that the burdens placed on prison officers and the need for them to work an unacceptable amount of overtime are reduced, we should take certain categories of individuals out of that system. Certain categories—as a matter of principle—should never have been included in that system. For example, drunks and alcoholics should not be put in prison. On average more than 2,000 drunks are put in prison each year. They are put in prison not for drinking offences, but because they do not pay their fines. However, everyone accepts that they are some of the most vulnerable, disadvantaged and deprived members of our community. By definition they are homeless. They are sick, not bad. They need treatment, not punishment. However, 100 years later a
  1360
  report on inebriates, we still punish drunken offenders. No one says that we should put drunks into prison. No one pretends that prison is an appropriate place for them. We put them in prison because it is administratively convenient. We prefer to use our prisons as social dustbins into which we can dump all the flotsam and jetsam of society. We are not prepared to commit the necessary resources and to provide alternatives within the community.
  A report entitled "Habitual Drunken Offenders" was published in 1971. It attempted to relieve the burden on the prison system. It suggested a national system of care and after-care for alcoholics. It stated that 2,000 hostel places were needed immediately. A target of 5,000 hostel places was set. Detoxification centres were said to be needed throughout the country. The report confirms that prison is not the right or proper place to put such an offender. Nine years later we still imprison the same disadvantaged, inarticulate individuals. Many of them are elderly and are women in their sixties. They have no homes, relatives or friends. They have no jobs and no support. However, we consistently refuse to provide facilities in the community.
  The previous Government set up detoxification centres in Leeds and Manchester, which are now at the end of their experimental period and have run out of funds for that period. Neither is likely to survive over the next few months, let alone years, unless the Government decide to finance them sensibly instead of by joint financing through local authorities and area health authorities.
  That is a clearly defined area where action could be taken. It involves only 2,000 extremely vulnerable men and women, who are no threat to the community and no danger to the public. On the findings of every report over the past 100 years, those people should be treated more compassionately and humanely. However, we still take them through what is described as the vicious circle of arrest, police cell, court appearance and imprisonment, and the same process continues week after week. The removal of alcoholics from the prison system would greatly relieve the burden on prison officers and the overtime that they have to work.

  1361
  We should also consider mentally disordered offenders. A couple of years ago the then Minister of State, Home Office, said in this House that it was no part of a civilised society or civilised policy to put the mentally ill into prison and make prisons receptacles for those whom no other agency in society will accept. Those were fine, almost noble, words, but it remains everyday practice to put the mentally ill or disordered into prison.
  On 31 December last year there were 446 mentally disordered men and women in our prison establishments. They were defined by the responsible medical officer as coming within the terms of the Mental Health Act 1959 and requiring detention in a psychiatric hospital. The 1976 annual report on the work of the prison department pointed out that mentally ill people were entering prisons and borstals in increasing numbers, although their offences stemmed solely from their illness. In the following year the report pointed out that none of "these unfortunates" could receive appropriate medical or nursing care within the prison system.
  The director of prison medical services Dr. Orr, speaking at the annual conference of boards of visitors in 1977, said that the service could not provide the mentally disordered with the degree of medical or nursing care which their condition warranted and which was proper for them. He said that the prison medical service would not even try to do so. If it did, the organisations outside the prison service responsible for those individuals would sit back complacently and accept that the prison service was doing their job. It is a classic "Catch 22" situation, in which the only losers are the mentally ill, some of whom are deeply disadvantaged and, by definition, inarticulate. Those people have a disproportionate effect on the prison service. Their numbers may not be large, but they cause trouble and disruption for the good management and work of prison officers, as any prison officer from a prison where mentally disordered offenders are kept will testify.
  No one would say that it is a good idea to put the mentally ill in prison. No one would suggest that these people are not ill. They should be treated in regional secure psychiatric units or wards in National Health Service hospitals. Never-
  1362
  theless, those 446 people are there, and a further 200 are awaiting transfer from our four special hospitals. As a society we have not provided sufficient alternative resources and we do not use those that exist.
  Prison officers in Brixton are having to deal with disruptive and violent mentally abnormal offenders because, throughout the country, National Health Service hospitals refuse to take those people. It is not because they do not have the space, the beds, the technology or resources. It is because a consultant has decided that those individuals are too disruptive and potentially violent and might upset his comfortable, cosy regime or because the nursing and medical staff have taken similar decisions. More shamefully, members of my labour and trade union movement in COHSE and NUPE have refused to accept those individuals in National Health Service hospitals. It is appalling and disgraceful that individuals who are ill are denied the treatment that is their right. It is the duty of doctors and the medical service to provide that treatment. However, individuals or groups decide that those individuals are too much trouble and do not want to know.
  What would happen if it was decided not to treat accident victims because they were muddy, dirty and covered in blood, or heart or kidney patients, or trade unionists, or old people? There would be a major public outcry, with demonstrations in the streets, and rightly so. However, we treat the mentally ill and disordered in that way and no one says a word. No one complains, and no one wants to know.
  That is one aspect of the problem. We have the resources, facilities and ability to provide for these people, but they are troublesome, difficult and perhaps not very nice as individuals. Sometimes they even smell. We therefore use the prisons as social dustbins. These people are put out of the way of sensitive public opinion, so that our consciences are not pricked and we are not discomfited by seeing them. We do the same with alcoholics and vagrants. We sweep them off the streets and put them out of sight in a secret, closed community. We believe that we can then forget about them and stop caring.
  Unusually, the Government provided money to build regional secure psychiatric units. As long ago as 1974, the

  1363
  Butler committee on mentally abnormal offenders published an interim report that called urgently for the setting up, in each of the 14 regional health authority areas, of regional secure psychiatric units to take the mentally disordered from prisons and relieve the prison service of that pressure. They would also take people from special hospitals, NHS hospitals and from the streets. The recommendation was for 2,000 places. The then Secretary of State, Mrs. Barbara Castle, issued a circular to all regional health authorities soon after the report saying that it was a good idea and that they should be established as soon as possible.
  In 1976, because of the slow progress, the Health Minister in the previous Government decided to encourage regional health authorities by giving them a special revenue allocation, specifically related to building these units. In the first year it was £5 million, and it is now £24 million. Six years after the report, in spite of the £24 million, with a further £5 million or £6 million next week, we still do not have one such unit in the country. The first will not open until the mid-1980s and the remainder in the 1990s.
  About 90 per cent. of the money allocated to regional health authorities has been used for other purposes. Very little has been used to improve mental illness or psychiatric services generally. The South-West Thames, North-West Thames and East Anglia regional health authorities have not yet even submitted plans to the Department of Health and Social Security for such units.
  We have not even been able to deal with that one small group, which has a disproportionate affect on the prison service. We have not taken the proper steps to ensure that the NHS cannot deny them their right to treatment. If those people are ill, they should have treatment. There has not been the local political will to establish regional secure psychiatric units. They are thought of as miniBroadmoors, and no one wants one in his area. Authorities can find more glamorous, popular and acceptable projects on which to spend money, for which there is pressure and for which there are campaigns.
  Whether we are talking about the mentally ill, the mentally disordered, alcohol-
  1364
  ics, vagrants, prostitutes or drug addicts, the fact remains that none of these people should be in our penal system. They should all be cared for and rehabilitated within the community to relieve the pressure on the prison service and prison officers. These people do not have a trade union to lever any political power. They are all deeply unpopular as individuals and groups. They cannot campaign or demonstrate or write letters to their Members of Parliament, yet they are among the most deprived, vulnerable disadvantaged and inarticulate members of the community. For that reason, if no other, this House has a duty to speak for them loudly and clearly, to ensure that their proper rights are acceded to and that they are dealt with in a manner that is befitting of a so-called compassionate society.
  Yet here we are today, with empty Benches all around us. There are no speakers getting up from the Conservative Benches and very few from the Labour side. No one cares, no one is interested. The only interest of people is to put these unfortunates away—out of sight, out of mind. People seem to want longer sentences, more viciousness and more retribution without any recognition of the damage that they are doing to individuals, or of the intolerable and unacceptable state of our prison system and the constraints and pressures put upon prison officers.
  Sir Winston Churchill said a long time ago that one test of a civilised society was the manner in which it treated its criminals and those unfortunate members of it who had no political clout and no industrial leverage. By that test, we have failed.
  5.3 pm
  Dr. Shirley Summerskill: I congratulate the hon. Member for Anglesey (Mr. Best) on being fortunate enough to draw first place in the ballot and on raising this extremely important aspect of penal policy. I shall follow the excellent example of my hon. Friend the Member for Ormskirk (Mr. Kilroy-Silk), who kept entirely within the rules of order and dealt specifically with the burdens imposed on prison staff. We want to and can reduce these burdens by obtaining a reduction in the numbers of people sent to prison.

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  There are two important and valuable reports available to the House which have not been mentioned in this debate. They both throw light on these problems. They are the May report, the commission of inquiry into the prison service, and the report of the Expenditure Committee on the reduction of pressure on the prison system. The members of those bodies are to be congratulated on providing important material for any debate on this subject and decisions that are to be made upon it. I welcome the fact that the Home Secretary has announced his intention to inform us soon after Easter of his decisions on the substantial reorganisation of the prison system. I hope his decisions will reduce the burden on prison staff and will in the long term reduce the number of people in prison. We look forward to debating the proposals, as the Home Secretary has expressed a wish that we should do so.
  The May inquiry was set up by the Labour Government because it was apparent to everyone that all was not well in the prison service. The whole House was united in wanting to see a reduction in the number of people in prison and a lessening of the burden on prison staff. There was general approval of the Government's acceptance and implementation of all the recommendations on pay and allowances. This was clearly a first priority. Perhaps when the Minister replies he will say how the proposed increase in expenditure on prison staff compares in real terms with the increases made during the last few years. Apart from specific pay increases, what other aspects covered under the heading in the Vote will increase in real terms? We hope that the pay increases will have already produced not only an improvement in recruitment of prison staff to relieve the burdens on those in service hut a much-needed boost in morale. After a/i, burdens can be not only physical but mental.
  My right hon. Friend the Member for Leeds, South (Mr. Rees) has already stated that, in connection with the pay and conditions of prison staff, we support the recommendation of the May report that the Home Office and the Civil Service Department should consider returning to a situation in which matters of pay and conditions of service are negotiated directly between the Home Office and the
  1366
  Prison Officers Association. We believe that the responsible Department is the Home Office.
  Successive Governments have found that the greatest limiting factor in relieving the burden on prison staff is financial. Unfortunately, there is little public support for more expenditure on prisons. It costs the taxpayer more than £5,800 a year for every person who is kept in prison, and at the rate at which inflation is soaring the sum will go up considerably next year.
  During the debate we have heard excellent suggestions as alternatives to putting people in prison—secure centres for alcoholics and drug addicts, and secure accommodation for mentally disordered offenders. All these suggestions involve massive expenditure, if not by the Home Office by some other Government Department. My party is pledged to provide more resources for prisons and for the probation service, and we certainly support the Government fully in any increase in expenditure that they may make on law and order in general, and on prisons and their staff in particular.
  During the debate we have heard suggestions as to how overtime in prisons can be reduced. There is no doubt that an excessive burden is placed on the excellent men and women who staff our prisons. It is not fair to ask them to be just custodians who lock and unlock doors. They should have an opportunity to be more concerned with the welfare, education and rehabilitation of prisoners. Perhaps the Minister could tell us of any further steps that are being taken to increase the number of prison officers. Increased recruitment would relieve the burden on the existing staff.
  My hon. Friend the Member for Ormskirk stressed the overcrowding of our prisons. When I was a Minister at the Home Office with special responsibility for prisons in 1974, the average daily population of our prisons was 37,500. Today it is more than 43,000 for only 38,000 available places. As my hon. Friend said, far too many prison buildings are Victorian structures, but, then, so are far too many of our hospitals and schools. We are paying the price for the fact that no new prisons were built in this country between 1950 and 1958.

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  Many new prison places have been created over the years, but the sad, regrettable fact remains that the number of convicted offenders given custodial sentences is increasing at a far greater rate than the expansion in accommodation. If we are to reduce the numbers in prison and the burden on our prison staff, we must keep questioning the benefit of a custodial sentence. A sample of people who were given custodial sentences for serious criminal offences in January 1971 was studied by the Home Office. It was found that by the end of 1976 about 70 per cent. of these people had been re-convicted. This makes a very depressing statistic.
  The reasons for the increase in violent crime have to be analysed if we are to try to reduce the number of people in prison. The reasons are varied and complex. They are faced by many countries. We cannot, and do not, blame the Government for all the social, environmental and educational failings in our society. The whole community is responsible. We must jointly find a solution. That is why I regret the blame put upon the Labour Government during the election campaign last May for increased crime. I believe that this is a community responsibility.
  The Opposition would support any measures taken by the Government to reduce prison overcrowding and to reduce the burden on prison officers. We support the specific proposals in the May report, its suggestions for reducing the prison population its alternatives to prison for petty offenders and its recommendations for shorter sentences and improved prison conditions. There is nothing particularly new about the proposals in the May report.
  Mr. Ronald W. Brown: During my hon. Friend's time in office, I came to see her on many occasions to try to reduce the prison population. She refused adamantly to let out any prisoners on parole that I suggested. She will recall the hassle in which we engaged over her attitude. I find difficulty in understanding why she is now pleading for a reduced prison population when she did so little while occupying a position in which she could have reduced it.
  Dr. Summerskill: My hon. Friend refers to specific cases that he brought to me. I am dealing with general policy decisions that the Government could take that would reduce massively, we hope, in the long run, the prison population.
  Mr. Kilroy-Silk: My hon. Friend, in all honesty, must not be allowed to get away with this. She knows that the previous Labour Government in which she was a Minister were equally responsible as the present Government, and previous Labour and Conservative Governments who all paid lip service to the fine principles that are espoused. None of those Governments did much in practice to implement those principles.
  Dr. Summerskill: I have said already that because there was something seriously wrong within the prison service my right hon. Friend set up the May committee to look into the prison system. That committee has now reported. It is right that this House should have the opportunity to debate the report. We are glad that the Home Secretary will be announcing after Easter his decisions on the basis of that report. That is progress in the right direction. I am sure that the house will agree that it is more sensible to have a proper committee reporting in depth on every aspect of the prison system and for the House to decide which of its recommendations to implement than to deal with the matter piecemeal.
  One of the significant steps taken by the previous Labour Government resulted in increased use of community service orders to keep people out of prison. Their use has been generally welcomed for appropriate cases. They must have helped, to some extent, to relieve the pressure on prisons and prison officers. By 1978, almost 3 per cent. of all offenders sentenced for indictable offences were made subject to more community service orders. I hope that the Government can assure the House that the use of these orders will continue to be encouraged and that they will also be used perhaps for younger people than at the moment.
  The Labour Government also extended the provision of secure accommodation in the community homes system and increased the number of attendance centres for juveniles. Both measures can help relieve the burden on prison staff. We are

  1369
  fighting a battle against a continually increasing rate of violent crime. We are fighting a battle of limits on public expenditure that existed under the previous Government but more so under this Government, although perhaps not in the sphere of law and order. The previous Government were able to take these measures in spite of the difficulties.
  There has been a steady increase in violent crimes in the last 10 years resulting in prison sentences. The problem of alcoholism has been mentioned. In a significant speech recently, Lord Harris of Greenwich, chairman of the Parole Board, said:
  "The relationship between alcoholism and violent crime is one of the most serious issues facing our criminal justice system. Violent crime has been increasing. And the evidence is clear and unmistakable; a high proportion of the offenders are drunk when they commit their crimes".
  Mr. Best: Will the hon. Lady accept that, on my personal knowledge of the courts, although I have no statistics, not only violent crime but burglary has increased massively? The number of burglaries committed in which some element of alcohol abuse is involved is substantial.
  Dr. Summerskill: I am certain that the hon. Gentleman is right. We should be directing our attention to the problem of getting alcoholic petty offenders out of our overcrowded system and tackling the far more difficult problem of the alcoholics who commit violent crimes. That is harder to solve.
  The whole problem of alcohol abuse needs far more attention from this House and outside. Perhaps the Minister will give the House information about any plans there are for detoxification centres and, if not detoxification centres, what are called drying-out centres—a modification of detoxification centres and not so expensive. The question remains whether they would be an adequate substitute.
  A further way of reducing the burden on prison staff and reducing the prison population is to deter serious crime. When the previous Labour Government left office, the police force was 7,500 stronger than when they took office. We hope that the strength will continue to increase steadily. The most effective deterrent to potential crime is the certainty
  1370
  of arrest and conviction. That deterrent can be put into practice by having more policemen and policewomen on the beat.
  We should, therefore, concentrate on reducing crime in the first place, as well as the many measures mentioned during the debate. We should concentrate on attacking the deprivation that allows crime to flourish if we are to reduce the prison population. We must fight against the social injustice and decay in our inner cities and, above all, reduce unemployment among young people, who make up a disturbingly high proportion of the prison population.
  The social and economic policies of the Government, which involve reducing public expenditure in the inner cities and cutting job protection and job creation schemes for young people, could hold back the advances that were being made, albeit slowly, under the Labour Government. Immediate attention must be paid to the specific proposals in the May report and the Expenditure Committee's report. I hope that, after the Home Secretary has made his statement and the House has had an opportunity to debate them, the Government's proposals will be implemented speedily and that some results will be seen, if not immediately, then in the mid term and definitely in the long term.
  5.19 pm
  The Minister of State, Home Office (Mr. Leon Brittan): It is not surprising that a debate on the causes of pressure on the prison system, action that could be taken to reduce that pressure and the consequent financial implications of such action should have ranged fairly wide.
  The debate was initiated by my hon. Friend the Member for Anglesey (Mr. Best) with particular reference to the problems caused in prisons by the presence of prisoners who are there primarily as a result of alcohol problems. I shall, therefore, concentrate my remarks on that aspect, though I shall attempt to deal briefly with some of the other matters that were raised.
  I shall not seek to intervene in the private grief that has been manifested in the disagreements on the Labour Benches. Although only three Labour Members have taken part in the debate, they have found a great deal to quarrel about. The hon. Member for Hackney,

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  South and Shoreditch (Mr. Brown) has not been at one with the hon. Member for Ormskirk (Mr. Kilroy-Silk) and neither has been at one with the hon. Member for Halifax (Dr. Summerskill) who spoke from the Opposition Front Bench. Given that degree of division, it is hardly surprising that the record of the previous Government in these matters does not bear close scrutiny.
  Considering that we are not talking about relieving the prison system by the detection of crime, it was surprising that the hon. Member for Halifax referred to the police service. At one stage during the term of office of the previous Labour Government, as a result of their incomes policy, the police service was in turmoil and only the appointment of the Edmund-Davies committee defused matters. However, contrary to the express recommendations of that committee, the Labour Government did not implement the police pay proposals in full in one go, and it fell to my right hon. Friend the Home Secretary to do so within days of coming into office. References to the record of the Labour Government do not bear much scrutiny.
  The hon. Member for Hackney, South and Shoreditch referred to the production of furniture in prisons. That aspect must be looked at alongside other work of prison industries and I am sure that the hon. Gentleman and everyone who favours a humane and constructive penal system will regard it as being to the advantage of society and prisoners that those in prison should, wherever possible, be engaged in constructive work and not in the mindless toil that characterised the work of inhabitants of our prisons 100 years ago.
  I am sure that we all favour genuinely valuable work being done in prisons. Far from it being a drain on public resources, it provides a saving in the total cost of maintaining prisons and therefore eases the pressure on prison resources if prisoners are able to do work that can be sold because it is of value to the community. That is a wholly constructive development which should be extended rather than deplored.
  Of course, there may be problems from time to time in respect of a particular type of work. I understand that most furniture made in prisons is built for the
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  use of prisons and Government Departments. When prison work goes into the open market the aim is to compete in those areas where the main problem is imports rather than with domestic manufacturers.
  I am told that the trade association has been kept informed of plans for production in prisons and that we have received no representations from the association in opposition to such production. I am also advised that the prison department has a consultative committee, involving both the TUC and the CBI, dealing with these matters. When goods are manufactured for the general market the policy is not to undercut work done in ordinary manufacturing firms but to charge the market price. If the hon. Member for Hackney, South and Shore-ditch has any examples where that policy has not been followed, I shall look into them.
  The hon. Gentleman asked about the training of officers. They receive training —and have usually previously been employed in the industry—and their special training includes attention to safety in relation to any new machinery. I hope that the hon. Gentleman will feel that the work done by prisoners is the right work to be carried out in prisons.
  The hon. Member for Ormskirk made a wide-ranging speech and referred to mentally disordered offenders. He will have heard me say more than once in the House that we are concerned about the presence of mentally disordered offenders in prison who ought not to be there and we are making renewed efforts to see that they can be transferred at a faster rate to proper hospitals that are able to deal with them.
  The hon. Gentleman correctly identified some of the obstacles, and the problem in relation to trade unions is certainly one of the more important obstacles. I hope that the efforts that we are making in conjunction with my right hon. Friend the Secretary of State for Social Services will enable a faster pace to be set, thereby relieving the prisons of a group of prisoners which may be small, but is particularly disruptive.
  The hon. Member for Ormskirk also referred to the length of sentences. My right hon. Friend the Home Secretary and I have, on numerous occasions in the

  1373
  House and elsewhere, made clear that we accept the proposition that for most prisoners and offences the fact of imprisonment, rather than a lengthy sentence, is the major deterrent.
  Of course, in the case of offences of great gravity, particularly those involving violence, a long sentence is inevitable and right, but in many cases shorter sentences could be imposed with safety and that is a matter which my right hon. Friend and I have mentioned frequently. However, it is a matter for the courts to decide. The independence of the judiciary is vital in our constitutional arrangements.
  I detected in some of the hon. Gentleman's remarks less concern for the rule of law than I like to hear from an hon. Member. The rule of law is all that stands between us and anarchy. Any suggestion that it should be impeded ought not to be made lightly or at all by an hon. Member.
  The hon. Member for Ormskirk also referred to an amnesty for petty offenders. That is not a matter which should be lightly considered on an administrative basis. When courts sentence an offender, within the powers that they have, and subject to the remission laid down in advance, they are doing something that they are entitled to do and it is inimical to the concept of the rule of law, except in the most exceptional circumstances, for there to be executive intervention simply on the basis of securing pro tanto a sort of gaol deliverance.
  Mr. Best: I am sure that my hon. and learned Friend will accept that persons of good will on both sides of the House are grateful to hear his views on the rule of law and the shortness of prison sentences. Would he care to express a view on section 47 and whether we shall see a use of the suspended sentence alongside short prison sentences? My view is that that would be an extremely useful weapon in the armoury of the courts.
  Mr. Brittan: We are still considering the effectiveness of the partial suspended sentence. It has obvious penological attractions particularly in relation to pressures on the prison service. The argument that we must weigh against that is the fear that the courts may feel that a dose of prison, leaving the balance of a sentence suspended, could possibly lead to
  1374
  an increase in the prison population rather than to a decrease. Whether that would be so is a matter that we are still considering and I do not believe that I can take that issue any further.
  Mr. Kilroy-Silk: I know that the hon. and learned Gentleman will end his speech with a long list of measures to be taken immediately to relieve the pressures on the prison population, but he has already slid over the important matter of petty offenders. I know of the hon. and learned Gentleman's distaste for executive action and I appreciate that, but I also know that he accepts that there are thousands of individuals in prison who could be loosely described as "petty offenders" and who are not a threat to society. If the hon. and learned Gentleman hopes to reduce the prison population from 44,000 to a more tolerable level the quick and easy way to do that will be to reduce remission from one-third to one-half.
  Mr. Brittan: The hon. Gentleman exceeds even himself by his effrontery in accusing me of sliding over the subject matter of the debate. I am dealing with his points though not necessarily in the order in which he made them. The hon. Gentleman has had a pretty good run for his money and if he is interested in my answers to his questions he should allow me to carry on and deal with the points that he has made.
  The hon. Gentleman talks about the remand system and the plight of those on remand who are subsequently found not guilty or are given non-custodial sentences. I deplore excessively long remands in custody. The hon. Gentleman has cited a particularly notorious example. Such examples are extreme and I do not think it would be right if people outside this House were to regard the hon. Gentleman's observations as accurately describing what normally occurs. We are working toward a reduction in the number of juveniles in custody in prison establishments and the next step in that direction is currently being considered.
  The hon. Gentleman talked about overcrowding in our prisons. Here I come to one of the matters that prompted me to make my observations about his attitude to the rule of law. The hon. Gentleman suggested that, because conditions in prisons were bad, prison officers ought to

  1375
  refuse to admit prisoners over and above the number that could be normally accommodated and that they should also refuse to admit mentally disordered and alcoholic prisoners. That is a dangerous and irresponsible suggestion to which the prison service is far too wise to give any credence.
  The hon. Gentleman seems to suggest that the law should be disregarded and that decisions about who should go to prison should be taken not by the court—administering the law of the land—but on a completely unofficial basis by prison officers. That suggestion is entirely incompatible with the rule of law and with the standards of responsibility that one is entitled to expect from the hon. Gentleman.
  Mr. Kilroy-Silk: Will the hon. and learned Gentleman give way?
  Mr. Brittan: I will not give way.
  Mr. Kilroy-Silk rose—
  Mr. Deputy Speaker: Order. The Minister is not giving way.
  Mr. Kilroy-Silk rose—
  Mr. Brittan: I am not giving way. I have made that clear to the hon. Gentleman. The hon. Gentleman knows the rules—
  Mr. Kilroy-Silk rose—
  Mr. Brittan: Not only is the suggestion of the hon. Gentleman, that decisions about who should be in prison should be determined on an unofficial and informal basis rather than by the courts, completely incompatible with the rule of law; it is completely inconsistent with what the hon. Gentleman said about the mentally disordered.
  The hon. Gentleman said, of mentally disordered prisoners, that it was wrong that hospitals should refuse to accept people who had been properly thought suitable for hospital treatment. I agree that it is quite wrong that trade unions such as COHSE and NUPE—the two that he specifically named—should say that such people should not go into hospital. The hon. Gentleman considers it wrong that hospitals should refuse to take those regarded as suitable for hospital treatment and yet he seriously suggests that
  1376
  people who have been sentenced by the courts should be prevented by industrial action from being admitted to prison.
  If the hon. Gentleman expects the House and the country to take his compassion and his other proposals seriously I suggest that that would be more likely if his views were combined with a greater degree of respect for the rule of law and a greater degree of responsibility about these matters.
  There are three aspects of the problem of alcoholism as it affects the burden on the prison service. First, there is the question whether we can take action to ensure that people do not go to prison as a result of actions caused specifically by alcoholism. Secondly, we should consider what can be done to treat the condition of alcoholics when they are in prison. Thirdly, having accepted that alcoholism often leads to criminal activity resulting in imprisonment, we should seek to treat alcoholism outside the penal system though the matter of treatment for alcoholics outside prison is primarily one for the Secretary of State for Social Services.
  A number of hon. Members have referred to the relationship between the Home Office and the DHSS in dealing with these matters. There are no perfect solutions to the problems and I do not believe that shunting issues between Departments will help. However, relations between the two Departments in dealing with these issues are close and I can tell my hon. Friend the Member for Anglesey that the answer to his point about the implementation of the hospital grant scheme under circular 21/73, "Community Services for Alcoholics", was given by my hon. Friend the Under-Secretary of State for Health and Social Security, the Member for Ealing, Acton (Sir G. Young) on 19 December 1979 in reply to a question from my hon. Friend the Member for Buckingham (Mr. Benyon).
  The Under-Secretary of State said that departmental funding to local bodies was exceptional and must not be regarded as permanent. He said that no new grants would be payable after 31 March 1980. However, he recognised that the Department's pump-priming scheme was due to end at a time of difficulty and he therefore announced a programme of related transitional aid to any voluntary organisation whose grant was due to end

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  between 31 March 1980 and 31 March 1981 and which had been unable to make alternative financial arrangements. The detailed advice on those transitional arrangements was sent out on 1 February 1980.
  I turn now to the question of treatment in prison. The facilities for treating alcoholics in prison are necessarily limited. Many other categories of prisoner, such as the mentally disordered, drug addicts and sex offenders have problems. The heaviest burden falls upon the hard-pressed medical officers in local prisons where drying-out treatment with attention to physical deterioration is all that can be done in the short time available to those serving short sentences. For those serving longer sentences and who are willing to be treated, more substantial facilities are available at Grendon, Wormwood Scrubs and Holloway.
  Grendon prison specialises in dealing with those who suffer from personality or psychopathic disorders and who are likely to respond in an environment in which group therapy has an important role. It takes those with alcohol problems who are suitable for its regime. Most of them are treated in therapeutic groups led by a doctor or a psychologist. Different arrangements apply in Wormwood Scrubs and Holloway.
  In addition, most prisons have a psychiatrically-qualified medical officer and visiting psychiatrists. The initiative lies with the prisoner who has to admit that he has a drink problem and is willing to accept treatment. Nearly all prisons have an Alcoholics Anonymous group which welcomes anyone seeking help with a drink problem. The groups are run by volunteers. The Home Office is grateful for the work that they do. That work does not end when the prisoner is discharged. Help is offered when a prisoner is released to encourage him to remain in touch with Alcoholics Anonymous and to continue to fight his problem.
  Mr. Best: The Minister mentioned the specialised treatment in three prisons. What length of sentence must a prisoner be serving before he can avail himself of those facilities?
  Mr. Brittan: No specific period is laid down. When discussing the long-term treatment in the community one should
  1378
  remember that, under the auspices of the after-care service, there are hostels which provide places and which are often able to help those with alcohol problems. Daycare facilities and support-at-work schemes are run by the probation service. Hostel places, for which we provide grants to voluntary organisations, provide more than 2,400 places for ex-offenders, many of whom have a drink problem.
  I turn to the main brunt of the argument—stopping people being imprisoned directly as a result of alcohol problems. Reference has been made to the detoxification centres and to the change in the law whereby drunkenness is not a cause of imprisonment. In 1978, 2,600 people were imprisoned for failing to pay a fine for a drunkenness offence. We must consider what steps can be taken to prevent such people going to prison.
  The whole question of alternatives to imprisonment for fine defaulters is being examined. It is suggested that community service orders should be extended to deal with fine defaulters. However, one is bound to have some reservations about whether that is a practicable alternative since, to a large extent, the motivation and readiness to co-operate will in many cases be lacking in those who are guilty of fine defaulting, particularly in those who have been involved in alcohol related offences.
  There are other alternatives. Probation and bail hostels can be of help. My hon. Friend the Member for Anglesey referred to section 34 of the Criminal Justice Act 1972 which enables a constable to take a drunk and disorderly or drunk and incapable person to an approved treatment centre for alcoholics instead of placing him under arrest. The intention of that section is to divert as far as possible from the criminal justice system people who have committed no offence but whose drunkenness is a considerable nuisance.
  Since the section came into effect two centres at Leeds and Manchester have been approved by the Secretary of State for that purpose. The Department of Health and Social Security is assessing the value of the two detoxification centres. I understand that the results of its evaluation will not be available until 1981. There is no doubt that even if the

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  centres achieve their goal, they are expensive to operate.
  Statistics from the Leeds centre show that only 20 per cent. of those admitted complete the 10-day treatment programme and that 50 per cent. leave within 24 hours. Similar figures for Manchester confirm studies in Canada, which suggest that drunks need only simple places in which to sober up but from which the few who are willing or able to respond to treatment can be given access to other support.
  It is probably right to recognise that drunkenness requires long-term treatment and that that requires co-operation on an extensive scale. Even the 10-day programme may not be long enough. One must take into account the nature of the conduct that leads to people being taken to a detoxification centre and the fact that they cannot be kept there against their will. We should consider whether the right answer is a combination of the type of hostel and care provision to which I have referred for people in the acute stage of drunkenness who might otherwise be taken to court and fined.
  That view is in accordance with the recommendation of the Expenditure Committee in its fifteenth report on the reduction of pressure on the prison system. The Committee concluded that consideration should be given to the provision of a simpler and less elaborate service of an overnight kind for people who are drunk but not necessarily alcoholics. If a simple form of accommodation could be provided where drunks could sleep off the most anti-social effects of their drunkenness, it may be that we could save not only the prisons but the police and the courts a great deal of time and effort.
  We have been examining facilities already available for homeless people, in the hope of identifying a way in which they could be extended to cater for people with drink problems. Every effort will be made to encourage local authorities and voluntary organisations to make appropriate provision at local levels on these lines.
  Mr. Kilroy-Silk: I apologise for taking the hon. and learned Gentleman back to the question of law and order. I have just
  1380
  been informed that the prison officers at Wormwood Scrubs have made an official public statement tonight that if there is any concerted active indiscipline or disruption at the prison in future they will not obey orders from the Home Office, because they have been deeply disturbed by the neglect of the Home Office. Therefore, on a future occasion they will retire and decide among themselves what appropriate action shall be taken, without any recourse to advice, information or instruction from the Home Office. In the light of his earlier remarks, would the Minister like to comment on that aspect of law and order and the sovereignty of the rule of law?
  Mr. Brittan: Before I gave any such reaction, it would be wise to check the accuracy of the report that the hon. Gentleman has conveyed hotfoot to the House and to consider what it would be appropriate to say, rather than to comment from the Dispatch Box in response to such a telegraphic communication as the hon. Gentleman has been kind enough to assist the House with. Therefore, I hope that he will forgive me if I do not comment now on the information that he has given.
  When the hon. Gentleman intervened, I was dealing with a different matter—one that I am sure he will concede is important—the provision of an overnight service for people who are drunk but not necessarily alcoholics. I said that we were examining facilities available for the homeless in the hope of providing facilities of that kind. We are sympathetically examining the viability of such a scheme. We are also considering the precise way in which it should be financed. I am not in a position to make a formal announcement about such a scheme, but I can say that we are looking at it extremely sympathetically and favourably. I very much hope that it will be possible to move forward on those lines in the not-too-distant future.
  Meanwhile, concern has been expressed about the future of the Leeds detoxification centre. Funding for 1980–81 is assured from a consortium of interests, including Leeds city council, the area health authority, the police and the Home Office. We have put to the organisation running the centre an offer that the probation service regards as workable,

  1381
  and I see no reason for the centre to close.
  As I have said, we have looked at a wide variety of ways in which the prisons can be relieved of pressure. I have concentrated on the points made by my hon. Friend the Member for Anglesey, as he initiated the debate. I am glad to have had this opportunity to consider some of the broader points in relation to other sorts of offenders and more particularly to indicate the direction and shape of the Government's thinking on relieving the prisons of their present burden caused by those who are in prison as a result of defaulting on fines, usually imposed because of offences of drunkenness.
  I think that if we can make the provision that I have outlined, it will relieve the prison system of a substantial burden. That is extremely desirable, for all the many reasons that the hon. Members who have spoken in the debate have described.

  OVERSEAS AID
  5.55 pm
  Mr. Raymond Whitney: I am grateful for this opportunity to discuss the problems arising from the excess of expenditure on Class II, Vote 7—overseas aid. I am particularly grateful for the presence this afternoon of my hon. Friend the Minister for Overseas Development. I assure him that I shall not detain him for as long as my hon. and learned Friend the Minister of State, Home Office was detained in the previous debate.
  An important point of principle is at stake here, arising from the defence of, and justification for, the excess of expenditure offered in the statement of excesses on the Supply Estimates. I refer to House of Commons Paper 435, where the explanation is to be found at page 7.
  On the face of it, we are talking about an excess of £16 million. In these days of cash limits, that sum should not be regarded lightly. Without being in any way malicious, I think that the position is rather worse in accounting terms. The excesses on the year's expenditure to which we are referring do not total £16 million in gross terms. The gross excess was more than £52 million, offset—we are told—by savings of about £36 million.
  1382
  In other words, the complications of the overseas aid budget being what they are —I have some experience of them—we have reached a point where about £88 million is adrift, if my simple arithmetic has brought me to the right conclusion, on one sub-head or the other. It behoves us to look at the state of affairs that brings that about. If we accept £88 million of inaccurate accounting, that is considerably more than 10 per cent. of the net aid budget, in terms of the net aid flows.
  Therefore, I invite my hon. Friend to consider ways of achieving an improvement in the method of running that budget. I do so recognising that this is by no means the occasion to go into more fundamental issues involved in our aid budget. This is not the occasion to discuss the Brandt commission. We shall no doubt shortly have an opportunity to debate it. The commission has a certain amount to offer our thinking in this general area, but it has some banal attitudes and rather challengeable assumptions.
  I should like today to offer a few comments on the present administration of the aid scheme, rather than on a method of the North and South living together in economic terms, as what we might consider to be a more desirable and more effective way of achieving the objective set by Willy Brandt and his colleagues. They are entirely laudable objectives, although the proposed methods of achieving them are challengeable.
  I offer my thoughts on the following basis: for approximately the first 10 years after the formation of the Ministry of Overseas Development I had some involvement, in various capacities and to varying degrees, in the operation of our aid schemes in various parts of Latin America, Southern Asia and the Far East. My last overseas posting was in Bangladesh, where I spent two years. That country is high in the league of recipients of aid, not only from this country but from multilateral agencies and other members of the development aid committee of the OECD. My experience has led me to believe that the complications that we face can be avoided.
  In the document "The United Kingdom Memorandum to the Development Aid Committee of the OECD," produced in 1979, there was a reference to

  1383
  the problems created for the United Kingdom, as for other donors, by increasing lead times, and it referred especially to the problems of rural development—the objective of a major new policy of orientation.
  I accept that a certain happy event occurred on 3 May last year and that to some degree in offering the advice that I am presuming to offer to my hon. Friend the Minister I may be pushing a door that is already steadily opening. However, I hope that my hon. Friend will agree that there is some point in airing these issues on the basis of the accounting discrepancies to which I have already referred. I am sure that my right hon. and hon. Friends are dedicated to using our public resources to the maximum advantage, and we must, therefore, be dedicated to operating a system of cash limits in the public sector. Overspending is a matter of serious concern, but underspending should concern us also. Every decision on budget forecasts means that some other budget has to suffer, and the whole system goes out of kilter if we move too far above or below the Estimates.
  The problem of getting the accounting right has become increasingly difficult, because of the complexity of the method of operating our aid programme. Regrettably, the increasing complexity of operating that programme seems to have increased in direct proportion to the ineffectiveness of not only our aid programme but the aid programme of the whole of the developing world.
  Since 1964 our aid programme has reached about £10 billion. In terms of the world donor community as a whole in 1979–80 we are talking of between £120 billion and £140 billion. Therefore, in terms of North-South transfers—to use the current jargon—we are discussing a matter of fundamental importance. If, as I fear, the disbursement of that aid becomes even more complex, and therefore more ineffective, it will be a matter to which we must pay careful attention.
  In that process of complication, one reason for the excesses is that anno domini has set in among the aid administrators—and none of us is exempt from that. When the Ministry of Overseas Development was formed in 1964—it
  1384
  emerged from that Department of Technical Co-operation—it was fortunate to have at its disposal a corps of people very experienced in the realities of the developing world. I refer primarily to former members of Her Majesty's Overseas Civil Service, who worked for many years in Africa, the sub-continent of India and the West Indies. Those people lived in the villages as magistrates, district officers, or whatever the titles of their particular regimes may have been. They knew what a paddy field looked like, and they knew how to grow sugar. They lived in the countryside and acquired a fund of practical experience.
  Mr. A. P. Costain: Is that the bunch who produced the famous or infamous ground nuts scheme?
  Mr. Speaker: Order. I do not know whether the hon. Member for Wycombe (Mr. Whitney) or other hon. Members presently in the Chamber were here earlier when I gave a ruling. This is a very narrow debate, in which we can discuss only the reasons for the excesses. It is to that that we must confine ourselves.
  Mr. Whitney: I am most grateful for your ruling, Mr. Speaker, which I accept. I am trying to show that some of the problems that have led to the excesses have been the complication of our aid scheme and the steady withdrawal of the administrators of that scheme from the reality of the developing world. My hon. Friend the Member for Folkestone and Hythe (Mr. Costain) referred to the ground nuts scheme. However, I accept that you, Mr. Speaker, will not allow me to pursue that point.
  We have developed a Parkinsonian position, which must happen in bureaucracies. It is a natural phenomenon against which we have to guard—not only the bureaucracy but the Ministers in charge of those bureaucracies. That was fortified by the particular phenomenon pertaining in the Ministery of Overseas Development and other development ministries in other countries. We suffered because we had such a good start with our ex-imperial administrators, who, unfortunately, steadily left the scene.
  We have now bright young men and women who study economics at university and then specialise in development economics. They occasionally take

  1385
  foreign posting to Washington, where they are loaned to the World Bank. Occasionally they visit Dacca or Zambia, but given half the chance they work their way up through the hierarchy in Eland House. I accept that I am being a little cynical about that. However, a career pattern has been established. There are very few officials who have had, or who could have had, the sort of direct experience that was so valuable in the first 10 years of the existence of the Ministry of Overseas Development.
  I believe that the new officials have become increasingly imbued with a grand desire. Whereas the imperial administrator knew the village and the simple economics of increasing crop yield, the new breed of officials are in danger—I put it no higher—of wishing to plan grand designs and concepts. I should be happy to quote a number of examples, but they would not fall directly within the ambit of the discussion, and I would be ruled out of order.
  I am sure that the manifestation of the excesses this year is a repeat of the sort of thing that I began to experience during the period 1973–1977. Development economists get exited about planning. They go to the recipient country and meet other development economists who have been to the same universities—they have all been to Sussex university. They go to seminars at Harvard and they are very excited about planning big projects and about State bureaucracy and patronage. That is the game that has developed. I hope that my hon. Friend the Minister will tell me that it is on the decline, but it has been a phenomenon that has led to the excess on the Supplementary Estimate.
  Mr. Eric Deakins: Is the hon. Gentleman arguing that if there were fewer administrators of various sorts supervising the operation of our aid programme overseas that would be a better means of controlling expenditure and thus keeping it within the original Estimates? It does not logically follow that if there are fewer supervisors a programme will by itself somehow be brought into the sort of control that I imagine the hon. Gentleman wants.
  Mr. Whitney: I am arguing that, and very shortly I should like to come to that point. I understand that what I
  1386
  wish to suggest may be a new concept, particularly to Labour Members who have their own views on the role of the State and of Socialism here and abroad. One of the natural corollaries of the process that I have tried to describe is that it can be said that the sort of aid pattern and programmes that have been built up are a means of exporting Socialism.
  The hon. Gentleman and I will have differing views on the value of doing that. I submit that the examples of Socialism as practised in Tanzania and, perhaps, India—both of which have been large recipients of aid—do not suggest that that is the way in which the people of the recipient countries can best benefit from that aid.
  We now operate a system that leads to these great problems for the Overseas Development Administration over the lead times, particularly on the rural development projects. There is massive overspending and massive underspending, but there is also a system that puts grit in the machine—
  Mr. Frank Hooley: The Foreign Office.
  Mr. Whitney: Perhaps the hon. Gentleman is referring to the Ministry of Overseas Development, which is what it was at the time that I am describing.
  Our young men go to the recipient country with great ideas, which they want to put into operation. In my experience, far from improving relations with the recipient country that makes them more difficult. The other day we were discussing the "nannyist" State, which, sadly, has grown up in this country but is now—I hope— being rolled back. We have exported our nannyism to the re-recipient country, that makes them more political problems are created, in addition to those of an accounting nature. It is highly questionable whether any political leverage is produced.
  Therefore, I wish to suggest a simple scheme to avoid Socialism, nannyism and the complex accounting procedures that lead years ahead. My hon. Friend the Minister probably finds that he is committed to a programme for the next two or three years and that he has no room for manoeuvre. I therefore suggest that year by year we should offer

  1387
  the recipient countries balance of payments support up to a certain level and after that leave it up to them. Of course, it would be tied, but that and the question of local costs are a detail. As a general principle I would offer a line of credit, up to a limit. The countries would make their own decisions, and if they wanted advice, consultancies and training they would be provided on an economic cost basis. We would tell them that when they wanted to buy their equipment for their projects they would buy it from us.
  That would lead to far greater flexibility. The job of accountant in the ODA would practically disappear. Each year we could invite the country in question to tell its people that it was getting, say, £20 million from Britain. We would know that the money was going into the country. Progress would be jointly reviewed each year on the basis of that country's performance—whether it had been helpful to us by way of trade, or in political terms. Let us not beat about the bush. Many elements of the dialogue mean that we have to keep our North-South relationship going, but the major element must be national interest, hov— ever broadly we define it. The recipient countries understand that.
  There must be a radical look a: our aid programme along these lines before we get involved in the fundamental considerations arising from Brandt and the North-South dialogue, and it would release a lot of valuable manpower—expert economists and others—for other work. It would obviate the need for the ODA to ask the House year after year to approve excesses over its budget.
  6.18 pm
  Mr. Frank Hooley: The House is indebted to the hon Member for Wycombe (Mr. Whitney) for raising this matter, because the question of excess spending or underspending on the overseas aid Vote has been a problem for many years and has exercised the minds of many people. I think that his solution would make the Treasury's hair stand on end—although I can hardly say that of the Minister. If I understand the hon. Gentleman aright. he is proposing a massive handout of aid that is totally untied—
  Mr. Whitney: No.
  Mr. Hooley: I do not understand his proposition any other way.
  Mr. Whitney: There is no reason why the aid should be untied. There are already elements of untied aid that may or may not be open to discussion, but I did not suggest, as part of the package, that it should be untied.
  Mr. Hooley: Perhaps I had better not go into the hon. Gentleman's rather weird proposal, since he has not had the time to spell it out in the necessary detail. However, I find it difficult to see how his system would operate unless it was with a global sum, free of any close control over how it was spent.
  To be fair, in considering the question of overspending or underspending on aid we must examine the problem that the ODA has in dealing with between 80 and 90 independent Governments who benefit in one way or another from our aid distribution, quite apart from the numerous multilateral bodies, such as the European Development Fund, to which we contribute.
  The countries concerned vary enormously in sophistication and skill. They range from countries such as India, with a population of 500 million and a highly sophisticated civil service, to a small territory such as Tuvalu—which has recently become independent—with a population of around 9,000 people. We must bear that in mind if we are to criticise excess spending by the Ministry. We must also bear in mind the enormous difficulties and complications that arise from the disbursement of between £700 million and £800 million of public funds for a huge variety of objectives.
  There has been pressure on the ODA to avoid underspending, and it has reacted to that. The pressure to avoid under-spending was proper in the light of cuts that have occurred in the aid programme and the abandonment of proposals for a steady increase in that programme with a view to achieving the 0.7 per cent. target that has been internationally agreed.
  Incidentally, I think that the ODA will find it more difficult to avoid an excess of this order—or of any order—in the light of the massive increase in overseas students' fees, which will pose severe

  1389
  problems if Governments are to meet their existing commitments, let alone new commitments within their budgets.
  It is proper that we should discuss this excess spending problem, as it has been presented to us in the statement of excesses.
  It is important to look at the precise information given under Class II, Vote 7. It is stated that while there were excesses on 10 sub-heads—I am not quite clear what those sub-heads were—which amounted to £52 million, there were savings on another 42 sub-heads amounting to £36 million. By a strange argument, the hon. Member for Wycombe has aggregated the two, and he says that it amounts to mistakes of £88 million. Presumably he is also saying that it amounts to mistakes to within 52 heads of accounts. That is an extraordinary argument. In normal personal expenditure people take it for granted that here and there they may be a bit out on the top side but that there may be the odd saving on the other side. I do not see the logic of aggregating the two figures and saying that the net figure has run to an excess of £16 million. Therefore, it is right to say that the real error was £88 million, a combination of the overspending and underspending. In that respect I find the hon. Gentleman's logic peculiar.
  We are entitled to a little more information from the Minister about the overspending and underspending sub-heads. I am intrigued by the statement that there was some saving—that apparently cannot be applied to the overspending—on international subscriptions. I should have thought that in that field—unless, perhaps, it is an exchange rate problem—we would have had a fairly accurate idea of the commitment. Perhaps the Minister will explain that when he replies.
  I also understood that in the matter of excess spending or underspending—it happens to be excess spending this year—the Treasury had agreed, two years ago, on a certain amount of latitude on the carry-over from one year to another because of the intricate problems of managing a Vote that had to be negotiated in terms of expenditure with 80 or 90 independent sovereign Governments whose sophistication in matters of public accounting varies considerably. It would
  1390
  be unfair to have a debate on an excess that amounts to 2½ per cent. of the total expenditure without taking into account the enormous problems of dealing with so many Governments over whom we have no jurisdiction or control. We can negotiate in good faith, but at the end of the day what they do or do not do is their business, and we cannot control it.
  Another interesting aspect of the statement of excesses is that it refers to
  "exceptionally heavy drawing against bilateral capital"
  That is a reasonable explanation of the reason why we are faced with an excess this year. Capital projects—we have had the experience of Concorde, and so on, in Britain—are notoriously difficult to forecast in terms of cost and escalation of cost, time of starting, length of period to carry them through, and so on. I cannot see why there should be any serious criticism of the ODA on capital outlay. It might find that in any year our commitments—that we are clearly bound to honour—run somewhat higher than was estimated. Revenue is difficult enough to control, but compared with the control of the cost of capital projects in these days of inflation—in Britain it is running at about 20 per cent. and in some other countries at about 100 per cent.—and with widely fluctuating exchange rates, it is not unreasonable to expect that an excess of such a small amount as £16 million in terms of public expenditure may occasionally occur.
  The hon. Member for Wycombe produced a plan for avoiding that, but I shall not attempt to go further into it, because it has all sorts of ramifications. However, other plans have been produced for helping to finance overseas aid. A worldwide progressive tax on a sliding scale related to national income, a levy on international trade, a levy on arms production, and revenue from international property, such as sea-bed minerals, have been suggested. They are interesting ideas, which the House should explore carefully in order to find out whether we can, in this way, finance more effectively and generously the flow of resources from North to South.
  In case the Treasury is alarmed about the suggestion that there should be any sort of automatic transfer of resources over which it would not have immediate

  1391
  or special control, I remind the Treasury that, unhappily, this situation already exists in the transfer of resources from Britain to the richest countries in the world through the various levies that we have to pay to our partners in the Common Market. The idea of some form of automatic progressive tax or levy to finance overseas aid is well worth exploring.
  For the purpose of this debate, I should be interested in the nature of the excesses on these 10 sub-heads. Why did we fall short on international subscriptions? What examples can the Minister give of the large capital programmes that led to heavy drawings rather late in the financial year and gave rise to this modest and, to my mind, worthwhile excess on this Vote?
  6.30 pm
  Mr. Peter Emery: I apologise—
  Mr. Speaker: Order. This may save time. I do not think that the hon. Gentleman was present when I gave my ruling about speaking to the excesses.
  Mr. Emery: I was, Mr. Speaker.
  Mr. Speaker: I apologise to the hon. Gentleman.
  Mr. Emery: I have been in and out of the Chamber. I was about to apologise for not having been present for the whole of the debate.
  I shall detain the House for only a short while. We are considering the cash limit aspect of overseas aid. I want to draw to the attention of my hon. Friend the Minister for Overseas Development the fact that on 4 March this year an entirely new factor concerning overseas aid fell on the Government. Zimbabwe, now an independent country, will need a great deal of assistance in dealing with the ravages of war.
  Appendix 1, from page 28 onwards, deals with the amounts and types of aid that have been underspent and overspent. Will my hon. Friend consider the problem that will arise in Zimbabwe when we are dealing with future cash limits? The 1977 White Paper estimated that £1½ billion, over five years, would probably be necessary for all aid. That is an impossible figure within the United King-
  1392
  dom's cash limits. Therefore, will my hon. Friend consider—as I suggested to my right hon. Friend the Prime Minister yesterday—making an appeal to the Heads of Government within the Commonwealth, to America and to the nations of Europe, that a fund be set up to deal with the major resettlement of more than 200,000 refugees in Zimbabwe by providing finance for low-cost housing, which is the greatest requirement, and water supplies for the development of native agriculture? Such schemes are outlined in the Estimates, but it will be impossible for the British Government alone to meet the cost.
  Can my hon. Friend give any hope to the new Government in Zimbabwe that the British Government appreciate the immense requirements of that country and will look outside their own boundaries in an effort to organise international aid so that Britain does not have to enlarge on the cash limits?
  I am grateful to you, Mr. Speaker, for allowing me to make a five-minute intervention.
  6.35 pm
  The Minister for Overseas Development (Mr. Neil Marten): First, I propose to answer the question raised in this debate, which, as you said, Mr. Speaker, is limited. I shall then take up and reply to the engaging points that have been made.
  The excess Vote referred to occurred in respect of the overseas aid programme for 1978–79 when I, and the Government of which I am a member, had no responsibility for it. I am sorry that the right hon. Member for Lanark (Dame Judith Hart), who was then responsible for it, is not here to make the speech that I have to make. However, I assure the hon. Member for Glasgow, Queen's Park (Mr. McElhone) that I shall do my best to be absolutely fair to the right hon. Lady, because we are now talking about a departmental rather than a party political matter.
  It is unfortunate that, despite very tight control by ODA officials over expenditure—I know from my limited experience that it is very tight control—an excess over net estimate occurred of just over £16 million. In fact, the overspend on the overseas aid cash block was rather lower at £8·9 million—I understand that in Government

  1393
  language "cash block" equals "cash limits". This represented an error of only 1·2 per cent. in relation to the net aid programme for 1978–79 of £722 million. I wonder how many commercial firms with a turnover of that magnitude would get anywhere near 1·2 per cent. on an overspend or underspend. Nevertheless, it is not right for Government Departments to do it when they are not allowed to do it under the Queensberry rules of government.
  As I have found since taking office, there are peculiar difficulties in managing our overseas aid programme. This is where, in a way, I come to the defence of my predecessor, the right hon. Member for Lanark. It involves a large number of Governments—more than 120—most of whom, are now independent and we no longer control them. It also involves a number of multilateral bodies and domestic organisations with which we are happy to work, but over which I have no direct control as Minister.
  Payments to the International Development Association are made by deposited promissory notes. The drawings on those promissory notes are not at regular intervals or on regular occasions. Therefore, it is difficult to get them into line with our own financial year.
  A number of payments are made through the good offices of British embassies and high commissions overseas, an uncertain proportion of which are not brought into account until well after the close of the financial year on 31 March. That is not their fault. It is the fault of the Governments to whom they are accredited. So it is impossible to predict with strict accuracy just how closely out-turn will match the resources voted by Parliament, and some allowance must always be made for margins of error.
  It was with these difficulties in mind that nearly 10 years ago the Select Committee on overseas aid recommended the introduction of special arrangements to allow some roll forward or roll back between financial years in respect of an under spend or over spend.
  Exceptional arrangements of that kind were introduced in 1971 with the agreement of the Treasury—the hon. Member for Sheffield, Heeley (Mr. Hooley) said that it was with the agreement of the Treasury, and I now underline that point—and the
  1394
  House was duly informed of them. At present, I have discretion to roll forward to the next financial year but one up to £15 million of any underspend and, similarly, with Treasury agreement, to set off an overspend of up to £15 million in one year against the provision agreed by the Cabinet for the next financial year but one. So it follows that from 1980–81 we shall, in effect, repay the £8·9 million by which our cash block was overpsent in 1978–79. These arrangements, of course, are subject to the approval of Parliament.
  The degree of expenditure which can be acheived in any particular financial year within the overseas aid programme depends very heavily on the extent of the commitments entered into in previous years, a point to which the hon. Member for Heeley referred. This is because most of our bilateral Government-to-Government aid tends to be slow-spending, and there is often a considerable lag between agreement on our part to support a project and implementation by the overseas Government.
  There is always a danger that, in an attempt to over-correct tendencies towards underspending—the overseas aid programme was almost invariably under-spent in the year prior to 1978–79, the year about which we are talking—too many new commitments may be taken at once, so taking up too large a share of the resources likely to be available in future years. I think that that is what happened in 1978. Indeed the figures in respect of commitments which appear in the recent edition of "British Aid Statistics" for 1978 confirm that view. For example, whereas total bilateral commitments entered into over the years 1975 to 1977 varied only a little—between £400 million in 1976 and £416 million in 1977—the total bilateral commitments entered into in 1978 amounted to nearly £850 million. This represented a sizeable and extraordinary jump and no doubt contributed to the pressure against the approved resources which built up at the end of March 1979. It is because of the substantial commitments entered into in 1978 that much of the action we would like to have taken since coming into office last May in respect of overseas aid has had to be severely constrained.
  It is true that there would have been greater flexibility had we adhered to the

  1395
  previous Government's proposed levels for the aid programme in 1979–80 and 1980–1981. But the targets set for those years were clearly over-ambitious, having regard to the economic state of the country as we found it when we took office. It was for that reason that my right hon. Friend found it necessary in June of last year to cut the planned overseas aid programme for 1979–80 by £50 million.
  Since then my officials have been monitoring expenditure—
  Mr. Christopher Brocklebank-Fowler: I wonder whether I am correct in inferring from my hon. Friend's last remarks that had there been "greater flexibility"—to use his phrase—he would like to have seen the aid programme cut more substantially than he was able to cut it?
  Mr. Marten: That is a wrong understanding of what I said. I said "flexibility" and I meant it. What I meant was the flexibility to move an aid programme from here to there or to give a little more here or a little more there. That is the kind of flexibility I had in mind.
  As I was saying, since then my officials have been monitoring very closely expenditure against commitments and we have had to take some painful decisions, not least the reduction of some bilateral programmes to countries which we are anxious to help. We shall clearly have to continue to examine with particular care all expenditure proposals within the aid programme for some time to come, having regard to the weight of forward commitments entered into under the previous Administration.
  I would, however, assure the House that officials are doing all that they can to keep expenditure within their control. Some of our monitoring techniques were out of date, and since I took over as Minister I am glad to say that we have engaged management consultants to carry out a study on ways of improving our management information system. The results of this study should enable us to monitor expenditure more effectively in the future.
  Mr. Nigel Spearing: More expensively.
  Mr. Marten: I said "more effectively" in future. I am not an expert on managing accounts nor on management consultancy, but I felt that this was something that we had to do. In view of the report on overspending, we wondered whether we were monitoring these accounts in the best way.
  The hon. Member for Heeley raised the question of subscriptions to international organisations. He was quite right when he said that they were usually commited in dollars and that the exchange rate had had its effect on the actual payments.
  My hon. Friend the Member for Wycombe (Mr. Whitney), who initiated this short debate, referred to anno domini—I will come later to his reference to me in that context—in relation to ex-colonials, many of whom are now reaching the age when they are retiring from this line of business. I meet such people as I travel around. They have been wonderful servants both of the Empire and of independent countries after those countries gained their independence. We regret that they are retiring. The position is well known and we are trying to deal with it as best we can. We shall never regain the wonderful experience that those people had to offer to independent countries when they became independent.
  The Overseas Development Administration and its predecessors benefited from the experience of members of Her Majesty's Overseas Civil Service. We were able to recruit from this source, and most of the original staff members of the Department of Technical Co-operation were from the Colonial Office. We now seek to ensure that administration staff have overseas experience. We have a strong team of professional advisers, including economic advisers, most of whom have pursued overseas careers and who have key roles in decision taking. We also draw heavily on the knowledge of our specialised units—for example, the Tropical Products Institute—which operate at home and overseas.
  The young administrators—this, I think, is the important point—have opportunities to serve in our development divisions and some key aid posts in missions. This does not mean the short visit that my hon. Friend the Member for Wycombe mentioned. Sometimes

  1397
  they spend three to five years in a development division in, perhaps, Asia or Africa.
  Mr. Whitney: Is my hon. Friend suggesting that four years' service in Bangkok in a South-East Asian development division is in any way the equivalent of field experience?
  Mr. Marten: I did not confine it to serving in a development division. I was simply giving one example. Sometimes they go out to missions, as my hon. Friend the Member for Wycombe did, and give aid direct from the embassy or high commission to which they are attached.
  These young administrators have opportunities to serve in our development divisions and in some key aid posts. The professional advisers, who usually have a geographic specialism, travel extensively to retain their familiarity with developments in the countries with which they deal. We regret the passing on—not away, but on—of our ex-colonial servants and we are doing our level best to give experience to new members.
  My hon. Friend the Member for Wycombe, made another point with which I shall deal. I think that what he was trying to get across was that we are exporting Socialism.
  Mr. Frank Dobson: To Rhodesia.
  Mr. Marten: I am not certain whether my hon. Friend used those words, but that was the implication of his remarks. Personally, I doubt whether it is a good thing for the world as a whole to export Socialism. What I would not mind seeing is the export from this country of the practitioners of Socialism.
  Mr. Dobson: In a rowing boat.
  Mr. Marten: I shall not enter in to that discussion at this stage of the evening.
  Aid has to respond to the priorities of the recipient countries. They often want external finance to support investments and infrastructure, such as dams, roads, power stations, and railways. Most of these requirements would not attract primary capital any more than they would in the United Kingdom or most other Western countries. Of course, the effect of this Government money being used
  1398
  for these infrastructure purposes in developing countries is to produce the generated power or the roads and communication systems which result in essential benefits to private enterprise when it eventually plucks up the courage to set up business in those countries.
  Now that we have raised exchange controls, there is nothing to stop private enterprise doing that. I hope that private enterprise will be encouraged to get out there in the developing countries and invest and help the people there. But Government-to-Government aid can also be channelled through local parastatal organisations, including the development corporations which provide investment capital for small private ventures. The example is aid provided to the Botswana National Development Bank which makes loans to small farmers—for example, to individual cattle farmers to assist rehabilitation after the effects of foot and mouth disease some two years ago. We also do this sort of thing in India and Pakistan, and in other countries.
  A further channel is the Commonwealth Development Corporation. This body, funded from the aid programme resources, promotes economic development by investing in a variety of projects in association with other public or private funds.
  So those sorts of example are not exactly exporting Socialism, and certainly the Commonwealth Development Corporation is not doing that.
  Mr. Speaker: Order. I am sorry to interrupt the Minister, but he is importing something else. He is widening the debate to the whole question of overseas aid, and the same rules must apply to him—that he justifies the excesses, and does not exceed that.
  Mr. Marten: I apologise if I was wrong, Mr. Speaker, but I was answering points raised during the debate and I assumed that they were in order. Perhaps I may continue, and if I go wrong, Mr. Speaker, I hope that you will correct me.
  My hon. Friend also raised the question of trying to save a lot of money by giving developing countries balance of payments support and saying to them "Here is the cash. You get on with it and make your own decisions." But I really cannot see that that followed through in any logic, because we are here dealing with money

  1399
  which is taxpayers' money being voted by Parliament. To my mind, just to say to a developing country "Get on with this lump of money" would be a most irresponsible way to treat money voted by Parliament.
  My hon. Friend said that we must use aid more in our national interest. I think that this comes out in the statement that I made to Parliament on 20 February:
  "We believe that it is right at the present time to give greater weight in the allocation of our aid to political, industrial and commercial considerations alongside our basic developmental objectives."—[Official Report, 20 February 1980; Vol. 979, c. 464.]
  In that respect, I think that we are doing what my hon. Friend wants.
  I come finally to the speech of my hon. Friend the Member for Honiton (Mr. Emery) about Zimbabwe. He got that in very cunningly. I think that you will agree with that, Mr. Speaker.
  Mr. Speaker: Order. It was not so cunningly. I was a very tolerant Speaker.
  Mr. Marten: What my hon. Friend was really saying was that the job of aiding the revival of Zimbabwe is so colossal that it cannot be done within our cash limits. That is where he was cunning to get it in. I absolutely accept that point, particularly when one looks forward to the next two or three years and at our cash limits. The question of aid for Zimbabwe must be an international effort. A colossal effort has to go into it, but once it is there and has been there for two or three years I think that Zimbabwe has a great future for recovery and could do without aid, perhaps, altogether.
  I think that my hon. Friend had it in mind that we would take a lead in raising this money. One has to look at that matter. I am answering this oil the cuff. I should have thought that the best answer would be for the Government of Zimbabwe, when it is totally independent, to call together—and we could certainly act as whips, as it were—the countries which are likely to give the money, and have a meeting on the spot in Salisbury, under the chairmanship of the Zimbabwe Government. This may well be a way in which they can get pledges of aid of the magnitude which.
  1400
  as my hon. Friend rightly said, will be needed.
  I dealt with the debate in the earlier part of my speech, and, with those few remarks, I hope that the House will be satisfied with the answer which I have given.
  Mr. Speaker: I remind the House that the following two topics afford themselves of a wider debate, where policy may be involved.

  BRITISH PETROLEUM SHARES (SALE)
  6.54 pm
  Mr. Bill Homewood: I must admit, Mr. Speaker, that I am very grateful for the ruling that you have just given, because if it had gone the other way I would have said "Thank you Mr. Speaker" and sat down again.
  Nevertheless, it is with some trepidation that I rise to talk about company shares, because I have never owned a company share and my speculative activities are confined wholly to the time between 2 pm and 5 pm, and the returns will always be found in The Sporting Life, but never in the Financial Times.
  However, in talking about shares I am not concerning myself very much with the speculative thinking of those who paid some £290 million for the 80 million British Petroleum shares that were sold last November and were the concern of the Supplementary Estimates, on page 116, where the expense of the sale of those shares is detailed—which details have aroused my interest.
  I am talking not about the sale of the shares but only about the expense. Frankly, I am of the opinion that we have in no way fully plumbed the depths of the present Government's propensity to produce bankruptcies, and I should think that even an investment in BP, in present circumstances, must involve some risk.
  My concern is with the expense that was incurred in that transaction. My information is that of a total of £14 million involved in the expense, about £7 million went on stamp duty—I have no criticism of that, obviously, because the Government were only paying themselves—but the remaining £7 million was paid in commission to bankers and stockbrokers.

  1401
  Some 2½ per cent. of the total realised by the State for the sale of its public assets was poured into the pockets of private individuals who undertook the handling of the transaction.
  Actually, the taxpayer was lucky, for at four-tenths of a penny per share the commission could have been £12·8 million. One can only assume that some purveyors of the shares failed to cash in on the bonanza because they were unable to push through the 2,500 shares that were necessary to qualify, for I very much doubt whether the employees of BP took up 30 million shares, which would be the figure necessary to account for the shortfall, particularly when it is noted that they were restricted to 137 shares apiece.
  However, £7 million of public money found its way into the pockets of bankers and stockbrokers. Within six months of taking office the Tory Party had repaid much of the debt that it owed to its friends for their unstinting support and had ensured that the Tory coffers would not be empty at the next election.
  There could be still more to come. The Government retain a 46 per cent. shareholding in BP. The brokers, bankers and stockbrokers must be licking their lips as they contemplate the Chancellor of the Exchequer's problem in trying to give tax cuts and at the same time ease the public sector borrowing requirement to a 7 per cent. growth rate. Surely more BP shares will have to be sold despite the Government's categorical undertaking, which I shall ask to be reaffirmed by the Financial Secretary, that no more BP shares will be sold.
  The hypocrisy of the transaction becomes clear when we consider the Government's economic philosophy, or what they claim to be their philosophy. It is their idea that incentives will be created by investment and higher productivity. In what way can the gift to the City satisfy that criterion? The £7 million will change nothing at BP. The same people will take exactly the same decisions. Not one ounce of new oil will be produced as a result of the Government's gift to the City. Brokers, bankers and stockbrokers will be £7 million better off.
  In my constituency, and in Northamptonshire, parents are being asked to pay £800,000 for transport to take their
  1402
  children to school. Nine counties of a similar size could continue to provide free transport for schoolchildren, given the sum that has been handed to the brokers, bankers and stockbrokers that were involved in the BP transaction.
  I understand that the Government do not believe in cosmetic job creation. They claim that job creation must have a functional purpose. I do not know whether that was a phrase used, but that was the intention. What was the functional purpose in creating the £7 million worth of activity in the City that arose from the BP transaction? We can only hope that the Government will not engage in selling oil any more BP shares at such a high cost to the public. That cost is bound to accrue when public assets are sold off to private enterprise. We can only hope that the Government will have a long look at their policy. They must realise that it will be of no help to the public sector borrowing requirement in the long term, even if it has produced a windfall profit this year.
  7.3 pm
  Mr. Bob Cryer: This is an important debate and it raises a number of issues. I am pleased that Mr. Speaker has indicated that the debate may go wider than the narrow title and that we may refer to principle.
  The sale of a national asset to provide tax concessions for the rich—that was the basis of the sale of BP shares when the Chancellor of the Exchequer made his announcement in last year's Budget—did not take place against a background of national insolvency or of national economic difficulties. It was clone to provide tax concessions for the well off and to enable a switch from direct taxation to indirect taxation and the imposition of a 15 per cent. VAT rate. Part of the price of support, and part of the further financial income, was a once-for-all bonanza obtained by selling off a precious national asset.
  According to the prospectus issued in the Financial Times on Monday 5 November 1979, BP is not an unprofitable company. It owns partly or in whole many important oil fields, the value of which increases year by year as our finite oil supplies are used and the world's oil crisis escalates. For example, BP owns part of the Forties field—indeed, in part

  1403
  of the group it has a 100 per cent. interest—13 per cent. of the Ninian field, a 54 per cent. interest in the Buchan field, a 15 per cent. interest in the Beatrice field and a 100 per cent. interest in the Magnus field. The prospectus stated that in 1974 the group discovered the Andrews field, approximately half of which lies in the licence area in which the group has a 100 per cent. interest.
  These national assets were paraded before the public in an attempt to induce them to buy BP shares. The Government were selling off the people's assets to give them a short-term once-for-all financial income. I am sure that the Financial Secretary will tell me that in 1977 the previous Labour Government reduced the Government holding from 68·3 per cent. to 51 per cent. However, the present Government made a share offer that resulted in Her Majesty's Government's percentage being reduced to about 46 per cent. It was claimed that the Government do not intend to sell any more of their present holding in the company. I, too, shall be interested to have that intention reiterated by the Financial Secretary—namely, that the Government do not intend to reduce still further national assets such as BP.
  When the Chancellor of the Exchequer made the original announcement he said that the Government were following a precedent. There were many of us inside and outside the then Labour Government who deeply regretted the decision to make the offer to the public for the purchase of BP shares. We thought that it was wrong. We warn future Labour Governments that they must develop a more democratic system of decision-making within the framework of government that has existed hitherto. In future the 24 or so members of the Cabinet will not be in a position merely to hand out decisions that go against the main thrust of Labour Party policy.
  It is clear that the previous Labour Government did not sell the nation's assets to such an extent that the Government became a minority holder. The Government are now in a minority of 46 per cent. The previous Government were careful to maintain a 51 per cent. holding, which made it clear beyond peradventure that the Government were still in control.
  1404
  Two of my concerns about the Government's reduced shareholding is whether they have sufficient control—they have little legislative provision—and whether the existing directors can alter the memorandum and articles of association in such a way that control may be further diminished. As my hon. Friend the Member for Kettering (Mr. Homewood) said, the sale of those shares cost £14 million, of which £7 million has been spent on stamp duty. That is an extraordinarily high sum. It cost £7 million to raise a relatively paltry sum and at the same time a precious national asset has been sold on a once-for-all basis. One is driven to the conclusion that that sum represents a return for the handsome contributions that the banking and financial community have made to the Tory Party.
  For example, in 1978 the banking and finance community donated £76,270 to the Tory Party. British United Industrialists received £20,375. The Economic League Ltd. received £30,625. Aims of Industry received £1,698. Other companies received £1,350. Those sums total £130,228. That represents a handsome donation to the Conservative Party. I do not have any list of the individual concerns that made such contributions. I should be interested to know whether S. G. Warburg & Co. Ltd., Robert Fleming & Co. Ltd., Lazard Bros. & Co. Ltd., Morgan Grenfell & Co. Ltd., Kleinwort, Benson Ltd., J. Henry Schroder Wagg & Co. Ltd., Mullens & Co., J. & A. Scrimgeour Ltd., Hoare Govett & Co. Ltd., Keyser Ullmann and Rowe & Pitman have made any contributions to the Conservative Party during the past few years. Perhaps they have not made any contributions. However, if they made such contributions, they have been handsomely repaid. They have reaped a rich windfall of £7 million from Government funds.
  They have received the taxpayers' money.
  Even closer links exist. S. G. Warburg & Co. Ltd was the principal bank involved in promoting the offer. It had the benefit of the present Secretary of State for Trade on its board of directors for many years prior to 1972. I do not suggest that there is a direct link. However, if the Government arrange payments that total £7 million to such organisations, they should

  1405
  have no connection with them. The links between Government and private enterprise are so intertwined that one could legitimately argue that the sum of £7 million represents a benefit that was anticipated by those organisations when making payments to the Conservative Party and its front organisations, such as British United Industrialists. Such front organisations pass on money to the Conservative Party year after year.
  The sale represents a paper transaction. I accept that it draws revenue. However, machinery is available to the Government for collecting that revenue without paying the extra £7 million. That machinery is called "the tax system" The Government are obsessed with giving tax concessions to the rich. If they were not so obsessed, they could use that system to gain at least £7 million. They could certainly gain more than was achieved by the sale of BP shares. The purpose of selling off that national asset was to provide tax concessions not to the average family man but to the rich. The average family man receives virtually no benefit, and the rate of interest has lessened any benefit that he might have had.
  The figures demonstrate beyond peradventure that only those in the higher income brackets receive a benefit that will place them above any erosion caused by the current level of inflation. The Government have paid £7 million in order to gain revenue. They have eroded a national asset. They already employ thousands of people to operate a tax system that gives generous benefits to industrialists and to all those who are able to make various claims in the form of tax allowances. Generally, that does not include PAYE workers.
  The sale has not produced any more oil. It has not produced any more cars or machines. It has not improved our exports. It has done nothing. It has provided a once-for-all revenue to the Government. The Government talk about the need to increase productivity. They are prepared to hand over £7 million for the sale of those shares. That has not been criticised by the press. The press usually fastens on to steel workers or car workers. It fastens on to those who turn out the goods and machines that are used by people every day. There has been little criticism of the amount of money that has gone into the pockets of those who
  1406
  raised the share issue on behalf of the Government.
  The Department of Employment produced an earnings survey for 1979. It is an annual publication. It may provide a clue as to where part of that money has gone. Normally emphasis is given to the high earnings of people such as steel workers. My hon. Friend the Member for Kettering knows that the Government attempt to emphasise the enormous earnings of steel workers and car workers. When mine workers put in a claim, it is said that they earn enormous sums of money.
  After medical practitioners and top managers in trading organisations, the survey lists finance, insurance and tax specialists. No doubt that includes S. G. Warburg & Co. Ltd., Lazard Bros. & Co. Ltd. and the other merchant banks. Such people apparently earn £162·70 a week. I understand that that figure represents the average figure and that it is subject to variation. However, it is an under-estimate not an over-estimate. Among the top 30, only three types of manual workers are included.
  When the Government sell shares they should bear in mind that those who benefit are among the top earners in the country. The Government could argue that other workers should improve their rates of productivity and thereby increase their earnings. Why not encourage the steel workers to reach that level of earnings by settling the steel dispute? Out of that top 30, only coal-mining deputies, face-trained coal miners, stevedores and dockers find a place. The Government show concern for wage levels and for productivity. It is strange that they have not investigated the rate of productivity of some of those who have received part of that £7 million.
  Many executives and managers are no doubt well paid in such companies as S. G. Warburg & Co. Ltd., Lazard Bros. & Co. Ltd., Robert Fleming & Co. Ltd., Morgan Grenfell & Co. Ltd. and others. A survey carried out by the Inbucon management consultants estimated the average basic salary of managing directors to be £19,321 per annum. Those are the people whom we are discussing. There are, of course, perquisites on top of that. The Government clearly did not take any precaution in assessing the position when they started selling shares at that

  1407
  enormous cost. Local authority expenditure is constantly being cut. We should consider what local authorities could do with £7 million.
  The House will be interested to know what investigation the Government made into the productivity and efficiency of the organisations that promoted the sale of BP shares? Was there any investigation? For £7 million the Government could have employed a fair number of management consultants and made a proper assessment.
  These people whom the Government have paid so lavishly are not involved in wealth creation. They are mere paper pushers. Many Government Members criticise paper pushers and administrators in local government. The constant theme is more social services and fewer people in offices. I have never heard the Government say the same about merchant bankers and stockbrokers.
  It is extraordinary to pay £7 million for a share issue. Most local authorities and Government Departments would not have needed half that sum to undertake the same exercise. I should be interested to know whether a comparison has been made. The people in these exalted organisations who receive these enormous sums of money are beyond the ken of ordinary people, who do not buy and sell shares, have stockbrokers, or ever come into contact with merchant banks.
  The Government claim that they want to promote ordinary jobs, such as engineering, and improve the status of engineers. Perhaps they should raise their status to that of merchant bankers or stockbrokers. The terms and conditions of employment of the engineer on the shop floor are frequently inferior to those of the typist and clerical worker in the same firm. Workers will wonder what is the point of putting on overalls and getting their hands dirty when they hear of these enormous sums being paid. They will want to get into administration. There are good windfalls in merchant banking and stockbroking.
  It is not by chance that the lusher pastures in Surrey are known as the stockbroker belt. We now know where the detached houses with Rolls-Royces and Bentleys parked outside come from. They come from handling such share
  1408
  issues, passed on to these people by the Conservative Government, who are grateful for their lavish donations.
  The Government fixed a price for the shares, but they made a loss. They must equate supply and demand if they wish to play the market and put a price on a share. I do not know whether the merchant banks and stockbrokers gave the Government advice, for which the Government paid handsomely, or whether the Government did it themselves. Did the Government, with their obsession for supply and demand and monetarist economics, fix the share price, bearing in mind the market? According to The Daily Telegraph on 10 November the shares sold for more than the price put on them. They sold for 364p as opposed to 362p, which is only 1 p difference, it is true. [Interruption.] The Financial Secretary may laugh. As he knows, they were oversubscribed one and a half times, and the Government fixed their price badly. I believe that the principle is bad in any case, but they did not maximise the revenue that they could have earned.
  I am also concerned that the list of directors in the share issue which was announced in the Financial Times on Monday, 5 November 1979, contained some seemingly eminent people—Sir David Steel, DSO, MC, TD, the chairman, and others such as Dr. J. Birks, CBE. This little group of people are operating in a remote clique, away from the ordinary shop floor, where the goods and services come from. The people there have to keep their wages down, be good and not organise into trade unions. They have legislation on their back to try to stop them organising into trade unions. They bear the burden of this Government. Then there are the people at the top—those who connived at this share issue.
  On behalf of the "law and order Government," the Attorney-General told us that new criteria would apply to that little group of people, who are advertised by the Government as being respectable. They headed the share issue prospectus and were there to enhance the prospects of selling shares. The prospectus notes that there was a little difficulty about BP, and that it was partly concerned in the Bingham report.
  They are a law and order Government for the trade unionists on the picket

  1409
  lines. The Attorney-General said at the Dispatch Box that, if the fraud was big enough and if those involved were retired, the Government would not take action. This Government have one rule for those in the board rooms of Shell and BP and another—
  Mr. Deputy Speaker (Mr. Richard Crawshaw): The hon. Gentleman has remained within the bounds of order until now. However, unless he is about to allege fraud against some of these people, I do not believe that the Rhodesian issue is relevant.
  Mr. Cryer: I am grateful to you, Mr. Deputy Speaker, for reminding me of that. We are discussing the cost of issuing these shares, and the prospectus is highly relevant. Paragraph 4(e) says:
  "A report to the Secretary of State for Foreign and Commonwealth Affairs (the Bingham Report) in respect of allegations of evasion of Rhodesia sanctions by major oil companies, including BP, was published in September 1978 and the Director of Public Prosecutions is investigating whether or not any action should be taken in respect of the matters dealt with in the report."
  My claim is that the share issue partly depended on the reputation of the people at the head of the share prospectus.
  Mr. Speaker allowed the general matter of principle to be discussed. The Government are setting two standards—one for BP and another for the remainder of the nation. The former can get away with breaking the laws made by this Parliament. Are those people suitable to maintain the company on behalf of the nation now the Government no longer have a majority shareholding?
  I have in my hand appendix 3 to the Bingham report. Sir David Steel, DSO, MC, TD is mentioned in that appendix. It says:
  "This Annex gives references to evidence which may be relevant when considering whether offences against the Sanctions Orders have been committed."
  The appendix was actually withheld from public view in case these people were criticised. The Government do not withhold the names of trade union members on picket lines. Indeed, they normally give them as much publicity as they can. I am concerned about the provisions now being made by the Government to ensure that the interests of the nation as a whole in the remaining 46 per cent.—a minority
  1410
  holding—are looked after by the Government-appointed directors. On the face of it, it looks as if potential lawbreakers are continuing as directors of BP. The whole thing is, in my view, a sorry mess.
  It is true that the Government can claim that a precedent was created by the previous Labour Government. I am sure that the Financial Secretary will make much of that. He must also know that the trade union movement and the Labour Party were deeply opposed to the sale of BP shares by the previous Government. I believe that the lesson has been learnt. We do not want to give precedents of that nature to any other possible Government. However, I believe that, after the next election, we shall have a Labour Government for many years because the lessons being learnt from this Government are so bitter that people are taking them to heart.
  Even so, the then Labour Government retained a 51 per cent. share, and it can be argued that the memorandum and articles of association can be altered only if the share is below 25 per cent. I am not entirely convinced about that and nor, I suspect, was the Minister who made that argument during the Standing Committee proceedings on the British Aerospace Bill. There are very few legislative provisions—although I accept that there are some—that act as safeguards for all companies. But this remains a very foolish effort by the Government to sell off a potentially appreciating national asset. As oil supplies become more scarce the value of BP is bound to increase, particularly judging by the evidence given in the prospectus, which was issued with the advice and consent of the Government. Certainly the Governor of the Bank of England gave his approval. It seems terrible that the Government should make this decision for such a short-term benefit to hand out tax concessions to the rich. They should not sell off companies in this way.
  Finally, the idea that the Government should sell off these shares at a cost of £7 million is quite extraordinary. Quite apart from the principle, which is fundamentally wrong, the idea of it costing so much seems to indicate a great degree of carelessness on the part of the Government and a lamentable trust in the financial institutions to which they are so close.
  I advise the Government to get as far away as possible from the financial

  1411
  institutions—the merchant banks, the clearing banks and stockbrokers. When they do this sort of deal they should apply the same rigid and somewhat venomous criteria to them as they apply to central and local government systems of organisation. On the basis of the evidence that has been provided so far this exercise is far too costly. At a time when the Government are cutting back on things that people want and need such as meals on wheels, the social services generally, education, nursery provision and school transport, they should not lavish money on this sort of expenditure. In fact, they could, by a fairer system of direct taxation, obtain the revenue much more easily. This is unjust, unfair and extremely unwise.
  7.35 pm
  Mr. Frank Dobson: I shall do my best to keep within the rules of order and, in view of Mr. Speaker's ruling earlier, it should be easier for me to do so on this item than it has been for certain other people. I shall not mention the sanctions-busting activities of BP, save to say that there is a rumour in the City that in an effort to export British expertise, BP, Shell, the Foreign Office and the Department of Energy are getting together to set up a British institute of practitioners in sanctions busting, the expertise of which they will sell around the world.
  Tonight we are talking about the transaction known as the sale of £290 million of BP shares. To get this in perspective we should run briefly through the history of the company and look at its scale. The company was incorporated in 1909 primarily to protect supplies to the Admiralty of fuel oil for the Fleet. The father of this first nationalised industry was Sir Winston Churchill—not a notorious Socialist—who established the company because he was suspicious of Dutch influence in Shell and United States influence over all other sources of oil supplies to this country. That was a reasonable suspicion then and it is still reasonable in relation to the United States.
  Since then BP has grown at a fairly ruthless pace. Originally it depended heavily on supplies from Persia—now Iran—and subsequently Nigeria. Both
  1412
  these resources are now nearly 100 per cent. nationalised and the current major assets of BP are the Alaskan fields and the North Sea oilfields, which guarantee roughly 65 per cent. of BP's current reserves. They are regarded in the oil trade as "politically insensitive crude". That might be applied to me at times, but it means that those reserves are safe from nationalisation. It is believed that the Americans will not nationalise assets in Alaska and that the British Government will not nationalise assets in the North Sea.
  Currently, BP is the biggest industrial concern in the United Kingdom and Europe; therefore it is Britain's and Europe's largest asset. Excluding companies in the United States, it is the largest industrial concern in the world. Traditionally, since 1909 the British Government have never held less than 51 per cent. of the share stock of BP which has ensured theoretical control of the company. I believe that there is a sort of concordat between the Government and the privately appointed directors of BP to the effect that a British Government would never actually control the company. There is an indication of this—perhaps it is part of a measure of reconciliation—in the appointment of Lord Barber, who is not an arch exponent of monetarism, as one of the Government directors on the board of BP. Incidentally, if the Prime Minister can forgive Lord Barber for his role as Chancellor of the Exchequer she can forgive anyone anything.
  In addition to the direct holding there is a 20 per cent. shareholding held by the Bank of England, which it acquired when it took over the assets of Burmah Oil. This was the holding which was part of the security in the Burmah Oil rescue bid, and presently it is the subject of litigation between Burmah Oil and the Bank of England. I do not think that that has been resolved yet.
  As recently as November this House was asked to approve some Supply Estimates. We were asked, in theory, to approve £1,000. What we were talking about, in fact, was an estimated expenditure of £14·2 million, the cost of selling ordinary shares in BP. Provision was to be made for the expense of the sale, including stamp duty and value added tax, amounting to about £6·6 million for the sale of 80 million BP ordinary shares, at

  1413
  25p each, and further expenses were to be included in the £14·2 million.
  We are now asked, in theory, for a further nominal £1,000 because the Estimate, of £14·2 million made as recently as November, has proved insufficient. It transpires that the Government now need £14·3 million to assist them in the sale of selling of shares in BP because
  "payments have been higher than expected".
  That must be the shortest and worst explanation ever provided by the Treasury. It is a remarkable statement. The Treasury would normally complain "like crazy" if anyone else said that he needed more money because payments had been higher than expected. When payments are higher than the Treasury expected it is presumably excused, and it asks the House for a Supplementary Estimate.
  The breakdown of the figures was provided for me in an answer by the Financial Secretary—the hon. Member for Blaby (Mr. Lawson). I am told that the estimate of the costs incurred in the 1979 offer of Government-owned BP shares to the public is not yet complete, but the latest estimate of the outcome is: on VAT and stamp duty, £6·8 million; underwriting, and allotment commissions £4·25 million; legal fees, £450,000; other professional fees, £360,000; preparation of documentation and distribution, £1,030,000; processing of applications and registration, £1,350,000; and registration fee with the Securities and Exchange Commission, £60,000. That brings the current total estimate to £14·3 million.
  The main payments, according to the answer given to me, were made to six underwriting banks, five brokers and four receiving banks. That is apparently a term of trade. I had always thought of receivers as people who dealt in bankrupt stock but, apparently, that is not the case in this instance. Payments were also made for printing, distribution, advertising and professional advice, and to the Post Office, the Bank of England and BP for their expenses in the issue. There were also payments to the Inland Revenue, and payments of VAT to Customs and Excise.
  I have checked further into these commissions paid to people in the City and the circumstances in which these arrangements were decided.
  1414
  The Financial Times on 1 November last year, said:
  "The sub-underwriting institutions will receive the normal fee of 1¼ per cent. of the value of shares to which they commit themselves over the next nine days, amounting to £3·63 million. The five brokers and six merchant banks will share the specially reduced underwriting fee of ⅛ per cent. or a total of £363,000."
  I am quoting from the Financial Times. It is not a description that I would use:
  "The slimness of this fee reflects the fact that the underwriting banks did not underwrite the deal until they had arranged sub-underwriting with investing institutions. S. G. Warburg, the lead underwriters, is receiving an additional fee of £160,000."
  We should be grateful for small mercies if this was a slim fee. When totalled, it still amounts to £4.25 million handed over to City institutions simply to sell these shares.
  The receiving banks mentioned in the reply and also in the quotation from the Financial Times were Barclays, Lloyds, Midland and National Westminster. The other companies involved in underwriting, according to the Financial Times, were Robert Fleming, Kleinwort Benson, Lazards, Morgan Grenfell, Schroders and Warburgs. The Financial Times added:
  "The brokers to the offer, which assembled the bulk of the sub-underwriting are Cazenove, Hoare Govett, Rowe and Pitman, Scrimgeour and the Government broker Mullens. The sub-underwriters include a substantial number of investing overseas institutions."
  It is interesting that no fewer than five of the companies whose names I have read out were recorded in 1978 as having given donations to Tory Party or Tory front organisations. These were the four receiving banks—Barclays, Lloyds, Midland and National Westminster—and Kleinwort Benson. We do not know—perhaps the hon. Member for Blaby will tell us—who were the famous sub-underwriters. I suspect that some of those institutions may well have found themselves giving donations to the Tory Party over the years.
  I should like to know why this supplementary sum of £100,000 beyond an Estimate made as recently as November is necessary. I would have hoped that the figure could be got right in November, and that there would have been no need to ask the House for more money so quickly. One of the reasons why extra

  1415
  money is needed was attributable to the special terms offered to BP staff. The hon. Member for Blaby said on 31 March 1979:
  "Applications from employees of BP and its United Kingdom subsidiaries for shares not exceeding £500 in value at the offer price as well as applications from the trustees of the BP group employee participating share scheme will be allocated in full. My right hon. and learned Friend the Chancellor of the Exchequer made clear in his Budget Statement that the Government's sales of State-owned assets would, besides serving the immediate purpose of helping reduce the borrowing requirement, be an essential part of the Government's longterm programme for promoting the widest possible participation by the people in the ownership of British industry.—[Official Report, 31 October 1979; Vol. 972, c. 523.]
  However, when BP set up its scheme it was not quite what might have been expected, according to those remarks of the hon. Member for Blaby. The scheme required that the staff of BP should have spent four years in the service of the BP group on 1 January 1980 to qualify to buy shares. In addition, employees wishing to participate in the scheme had to vest shares that they already held in BP, or that they were buying, in a scheme established by BP to be run by the trustees of that scheme and not by individual staff shareholders. When the initial shares put in by the employee are held by the trustees, the employees have to put in an equivalent amount, through a sort of membership fee each year, if they are to continue to qualify as members of the BP share ownership scheme.
  This seems a bit of a curiosity. Compared with the provisions of the 1978 Finance Act, on which the BP scheme is based, it would seem that the Act does not require a minimum service qualification from employees before they are entitled to this preferential treatment. Nor does it require employees to place their own shares with trustees in order to be allowed to participate, and it does not require an annually renewable membership fee, either.
  One of the effects of the three obligations imposed on employees by BP before they can benefit from the so-called preferential terms is that they all discriminate against the less well-paid members of BP's staff. That reduces the numbers who can take advantage of the sale of shares. The so-called preferential terms are mainly a perk for the higher-
  1416
  paid members of the company's staff. So much for the encouragement of wider share ownership to which the Financial Secretary referred.
  I have got no further in my efforts to find out why the increase of £100,000 is necessary. Indeed, the total of £14·3 million may not be the end of it. The answer to me gave only the "latest estimate" of the outcome.
  If the Estimates are wrong, it is not the first time that that has happened. When, lamentably, the previous Labour Government decided to sell shares in BP it was estimated in The Times at the outset that that operation would cost £8 million, but a special Supplementary Estimate showed a total of £25 million, of which £12 million represented stamp duty and VAT, leaving £13 million for the parasites in the City who are sucking the blood out of the current share issue. The Treasury and the Bank of England were just as incompetent on the previous occasion.
  The sale of BP shares is part of the Government's general attitude towards public sector assets. We have been promised massive sales of all assets of which the Government can manage to dispose. That will certainly be a bonanza for the parasites in the City. Until I looked more closely at the matter I thought of it as a bonanza for those who bought, but the biggest bonanza is for those handling the goods on the way. Anyone who can get in on one of the big share transactions that the Government are floating can make a lot of money for doing little.
  It is worth recollecting that the Government are committed to substantial sales in British Airways, where the assets total £830 million, British Aerospace—
  Mr. Deputy Speaker: Order. We have enough to deal with in this debate without going through a whole list of possible share disposals that are not relevant to the subject under discussion.
  Mr. Dobson: I do not wish to challenge your ruling, Mr. Deputy Speaker, but in view of what happened in 1977 and what has happened in the past year, we ought to draw the attention of the Financial Secretary to the problems that he, the Treasury and the Bank of England may encounter in the massive transactions that are proposed for the future.

  1417
  I hope that it will be in order to draw those problems to the Financial Secretary's attention and to emphasise the nature and scale of the problem.
  Mr. Deputy Speaker: The hon. Gentleman has drawn that to my attention quite forcefully. I am sure that the Financial Secretary heard what he said. I think that we should now continue with the debate.
  Mr. Dobson: Thank you, Mr. Deputy Speaker. We have had a £290 milion sale of shares, but it is nothing like the size of the sales that the Government are contemplating in other areas. An amazing amount of money has been made in the City out of this relatively limited transaction. I hope that the Treasury and the Bank of England will have learnt a lesson from what has happened, but I do not suppose that they will have learnt anything, because we are discussing the sort of system of which they thoroughly approve. They have lived with it—indeed, they practically invented it.
  The Government are cutting social security benefits and all sorts of projects that are useful to ordinary people, yet if they go through with these massive sales they will be establishing what amounts to a system of outdoor relief for the professional classes in the City. They will be greasing the palms and lining the pockets of City institutions, at little risk to those institutions, for the next few years. It may not be the same receiving banks that have helped Tory party funds. Perhaps it will be other banks and other merchant bankers who give advice and float shares.
  Was it necessary to involve merchant banks and others to whom I have referred? In view of the assets of BP, the extreme pressure on energy supplies and the virtual certainty that BP will wax fat and flourish, you and I, Mr. Deputy Speaker, could have sold BP shares from a stall in Petticoat Lane for as good a price as all the gents in the City achieved when they were shifting £4·25 million of public money into their own pockets.
  Another point of interest is that there is a note in the original and the Supplementary Estimates that
  "Expenditure borne on this Vote is not subject to Cash Limits."
  1418
  This is the Treasury's own expenditure and is therefore not subject to cash limits. It must be a relief to the Treasury mandarins that their activities are not subject to the limits that they impose on others. The two previous debates on the Bill concerned overseas aid and the prison service, both of which are subject to cash limits, which are causing great strain in those areas—as they are in the Health Service—among local authorities and major nationalised industries. The cash limit system is good enough for them, but apparently it is too harsh and wicked for the Treasury to cope with when dealing with transactions in the City.
  We have discovered one welcome aspect in the Supplementary Estimates and the sale of BP shares. Every cloud has a silver lining, and we have one here. The evidence shows that there is a significant Government U-turn on the sale of oil assets. The Chancellor of the Exchequer said, in his lamentable Budget Statement last year:
  "I intend to ensure that the proceeds of sales in the current financial year will amount to some £1 billion and I have taken account of this in the Budget arithmetic. The biggest contribution to this total will come from the sale of a further part of the Government's shareholding in British Petroleum".—[Official Report, 12 June 1979; Vol. 968, C. 249.]
  The Government originally intended to sell a substantial part of BP, possibly all of it, but there is good news, because in the offer for sale document to which my hon. Friend the Member for Keighley (Mr. B. Cryer) referred so effectively we find that
  "H.M. Government does not intend to sell any more of its present holding in the Company, nor is there any intention to sell, other than to HM Government, any of the shares in the Company representing the holding acquired by the Bank of England from The Burmah Oil Company, Limited and one of its subsidiaries…for the foreseeable future."
  So there is a final caveat—the silver lining gets a bit grey towards the end. Nevertheless, the Government have indicated that they do not intend to dispose of more of their BP shareholding than they have got rid of to date.
  I said that Churchill was the founder of this semi-nationalised industry and went on to explain that he founded it for strategic reasons. If there were strategic reasons then for the British Government to ensure that they controlled one of this country's major oil suppliers there are

  1419
  certainly strategic reasons today. There was no great shortage of energy supplies at that time but there certainly is now. I am glad that the Government are not to sell any more of our shareholding in BP and that they appear to have abandoned their intention to sell the British National Oil Corporation, although they are indulging in a bit of forward selling of the oil, thus mortgaging our assets.
  Nevertheless, it is good for the country that the Government have changed their minds and it is a triumph for the case made by the Opposition ever since the Government announced their intention of selling a substantial part of BP. It is bad news for the people in the City, though I regard that as good news. We often hear Conservative Members talking of jobs for the boys, but this debate has amply demonstrated that this sale means cash for the chaps in the City. With a bit of luck, if no further BP shares are sold there will be no bonanza for the City chaps.
  I also hope that there will not be a bonanza for the City from the sale of British Aerospace, the National Freight Corporation and British Airways. It is to be hoped that the Government will see the error of their ways before going further than they have done.
  8.2 pm
  The Financial Secretary to the Treasury (Mr. Nigel Lawson): The debate has ranged widely, and I will attempt to answer the points made by hon. Members who are present.
  I was slow in getting to my feet because I noticed that no fewer than eight hon. Members had indicated that they wished to speak in this debate. We have heard only three of them, so obviously this is not a matter of such great interest as might have been thought at first sight.
  The hon. Member for Kettering (Mr. Homewood) who opened the debate, was under the delusion that of the total sale proceeds £7 million went in the form of fees, underwriting and commissions to banks, merchant banks and stockbrokers in the City. Opposition Members have spoken against those institutions with obvious animus and the debate has been an amalgam of ignorance and prejudice. The hon. Member for Holborn and St.
  1420
  Pancras, South (Mr. Dobson) drew attention to the fact that that figure was not the true one, and that the banks, stockbrokers and others received only £4·25 million. I mention that because it is of interest to recall that at the time of the offer by the previous Administration in 1977 those same City institutions received rather more than £9 million.
  It is therefore taking the conspiracy theory of politics rather too far to assume that the present Government engineered this sale in order to hand commissions to their friends in the City. The previous Labour Government did precisely the same thing though on a larger scale.
  The arguments we have heard are scarcely worth the time of the House.
  The hon. Member for Keighley (Mr. Cryer) pointed out that a precedent was set by the previous Labour Government and that he was concerned about that. The right hon. Member for Plymouth, Devonport (Dr. Owen), who is sitting on the Opposition Front Bench, should perhaps take note. The hon. Member for Keighley made it quite clear that should a future Labour Cabinet try to do what we are doing it would not be allowed to do so. He pointed out that the constitution of the Labour Party would by that time be so altered that a Labour Cabinet would not be able to act without reference to a wider body of the party. Whether that would be the national executive committee or some other element I do not know.
  Mr. Cryer: The hon. Gentleman's remarks remind me of the time when Churchill wrote to Clem Attlee saying that he hoped that the national executive committee of the Labour Party would not have any influence on the Labour Government and Clem Attlee replied that, of course, it would not. I said that a future Labour Government must have a more democratic system of consultation with the people of the Labour movement as well as with people outside.
  Mr. Lawson: I am not sure that that takes us much further.
  The hon. Member for Kettering made a point of substance and asked for reaffirmation of the undertaking given in last year's prospectus of sale about the Government's intentions regarding further sale. I can reaffirm that there is no

  1421
  intention in the foreseeable future of selling any more of the Government's shareholding in. BP.
  The hon. Member for Keighley had the bizarre idea that when the present Government took office they faced no economic difficulties and that therefore, unlike the situation in 1977, there was no excuse or justification on those grounds for the sale of shares. On the contrary, the economic difficulties that we inherited were acute, particularly those caused by the grossly excessive size of the public sector borrowing requirement. It was essential to get that requirement down and that, though not the sole reason for selling BP shares, was one element in this objective.
  The hon. Gentleman also showed great concern about the State losing its holding. There was throughout the hon. Gentleman's speech a confusion—prevalent among the speeches of Labour Members—between the nation and the State. For an asset to be a national asset—as are great corporations such as BP—it is not necessary for the shares to be 100 per cent., or even 51 per cent. owned by the Government. It is significant that those nations that have flourished have had less rather than more of their business enterprises owned by the State.
  The hon. Member seemed to be concerned that now that the British Government would have a minority holding in BP all sorts of dreadful things would happen. He is wholly mistaken in that, as he is mistaken on a number of issues. The British Government have never exercised control over BP since the shares were originally bought by Winston Churchill. The articles of association do indeed lay down that the two Government directors have a power of veto irrespective of the size of the Government shareholding. But that veto has never been exercised. Nevertheless, its power remains unimpaired by the share sale.
  The articles of association can be altered only if the amendment is not prevented by a blocking minority of 25 per cent. The British Government shareholding of 46 per cent. is substantially in excess of 25 per cent. The whole basis of the relationship between the Government and the company is laid down in the Bradbury Bridges letters, to which I note Opposition Members did not
  1422
  refer. That is wholly unaffected by the sale of the shares.
  The hon. Member for Keighley could conceive of the sale only in the context of pork barrel politics. I assume that that is the only kind of politics that he understands. But there is nothing in the sale which warrants such an allegation.
  Mr. Cryer: Is the Minister saying that the veto will be exercised by the two directors and that there will be Government intervention if the Government believe that circumstances demand it?
  Mr. Lawson: I am saying that the position is unchanged as a result of the Government's sale of 5 per cent. of the holding.
  The hon. Member for Keighley—with his great expertise in financial matters—stated that the whole matter had been badly handled. He said that the issue was oversubscribed, that the revenue was not maximised and that the City institutions which were paid commissions got them for nothing. None of those statements bears any relation to the truth. The previous Government went to precisely the same institutions to get their issue underwritten and sub-underwritten the last time round.
  It would have been grossly irresponsible of the Government, needing to be sure of a particular sum of revenue which they had announced to the House of Commons they would achieve by disposals, to have taken the risk that there would be no buyers at the price set. The issue was one and a half times oversubscribed. That shows that there was fine judgment. In 1977 the issue was many, many times oversubscribed. The 1979 sale price of 363p compares with a closing price of 354p today.
  The hon. Member for Keighley and his hon. Friends who say that any fool could have seen that the price would go up and up and that there would be oversubscription are totally wrong. The institutions which underwrote the issue took a risk for which they were paid. They took the risk that the price would fall—it was a near thing in the event—and that they would be left holding the shares at the price that they had agreed in advance. They took the risk in order that the Government could avoid taking the risk that they might not receive the money

  1423
  that they needed. The payment for that risk represented the underwriting commissions. That is standard practice. The terms were fine and narrow. There was no overpayment to the institutions.
  I shall pass over the sleazy attack of the hon. Member for Keighley on BP directors. That was characteristic of him. The House has come to accept it, even though it is impossible to like or admire it.
  The hon. Member for Holborn and St. Pancras, South repeated a number of the points made by the hon. Member for Keighley. The only different point that he made was about his dissatisfaction with the employee share scheme. A substantial number—about £15 million worth—of shares were taken up by employees. I welcome that.
  The BP share scheme operates under the Finance Act 1978 which was passed by the Labour Administration with our support. The hon. Member for Holborn and St. Pancras, South is incorrect to say that there is no requirement that trustees retain the shares of the employee. On the contrary, that is built into the Act. There is a retention period of five years. During that period the employee is unable to dispose of the shares, whatever the reason.
  Mr. Dobson: I did not suggest otherwise. I said that under the 1978 Act there is neither a four-year employment requirement nor a requirement that people who keep their shares in the scheme pay a membership fee each year. Both those requirements apply to the BP scheme.
  Mr. Lawson: The hon. Member made those points, but he also argued the point that I rebutted a moment ago. I am glad that he agrees with me. Giving a slight preference for long-service employees is a matter for the company. It is a reasonable preference to give.
  We did not sell a small part of our BP holding for short-term reasons. As I said earlier, there was a major problem of excessive public expenditure and an excessive budget deficit and public sector borrowing requirement as a result. The country is still suffering from that, although we are gradually putting it right. A contribution from the sale of BP shares was an important part of the asset disposal programme.
  1424
  There was no sound reason for the Government and the Bank of England to hold the majority of BP's equity. Traditionally, successive Governments have not interfered in BP's commercial affairs. We have no intention of doing so. There is no magic about the figure of 51 per cent. Indeed, under a previous Labour Administration the holding went down to 48 per cent. I see that the hon. Member for Holborn and St. Pancras, South acknowledges that. It made no difference to the situation.
  Our sale had two objectives. In addition to helping to overcome the public sector borrowing requirement difficulties which we inherited, it gave the wider British public the opportunity to increase its stake in this important British oil company. The offer of the shares involved the City. I pay tribute to the City. I am glad that my hon. Friend the Member for City of London and Westminster, South (Mr. Brooke) is in the Chamber.
  The City was paid at a reasonable level for the services that it performed, but there were no excessive expenditures. A strict control was kept on costs. Competitive tenders were obtained wherever possible. Each commission was paid only after the need for it had been carefully scrutinised. As I have already demonstrated, the costs of the sale were no more excessive than the costs of the sale conducted by the previous Government. The figures are not substantially different. I do not wish to make much of the point, but, as a percentage of the total disposal realisations the amount that went in commissions to City institutions—£4,250,000 in 1979—was slightly lower than in 1977.
  The Bank of England, which was the Government's agency in this matter, had a strict remit to ensure that there was no unnecessary expenditure. Only a tiny minority of Labour hon. Members genuinely believe in their hearts and with their eyes open—looking at the experience of State-owned industries, who could possibly believe?—that public sector interference in BP, which is what the hon. Member for Keighley wants, could bring any benefits to this country. Most hon. Members will agree—and it is the view of previous Labour Governments as well as the present Government—that it would hamper BP and damage

  1425
  confidence here and abroad in this major British oil company, which is a great asset to the country.
  We firmly believe in the initiative and flexibility that private enterprise brings to the oil business, as it does to other sectors of the economy. Where Government checks and controls are necessary, they should be provided generally, as, for example, through the regulatory powers of my right hon. Friend the Secretary of State for Energy over North Sea developments. The dead hand of Government control over our major presence in the international oil business is no way to proceed in the best interests of the United Kingdom. The BP sale was an occasion to widen public ownership of British industry in the true sense, and not in the false sense in which the term is so often used by Labour hon. Members.

  NATIONAL ENTERPRISE BOARD
  8.21 pm
  Mr. Michael Colvin: I wish to draw attention to the section of the Supplementary Estimates on finance for the National Enterprise Board, on page 88. It relates to the provision of public dividend capital to the NEB to refinance loans to British Leyland. I shall be grateful if my hon. Friend the Minister will say something about this arrangement for a further £154 million of taxpayers' money to be pumped into British Leyland. Some of us on the Conservative Benches ask why this additional money is to be spent, especially when there are, perhaps, better investments for the Government to make through the NEB. I shall try to make clear what they may be.
  For example, this section of the Supplementary Estimates raises the topical question of the Government's commitment to the Inmos microprocessor project. Urgent questions need to be answered on Inmos, questions that have a direct bearing on the Supplementary Estimates and the continued funding of that competing recipient of Government funds, British Leyland. Only limited funds can be made available for NEB investment in industry, and the Government will no doubt consider most carefully where the money should go, bearing in mind the best interests of the taxpayer, who provides it.
  1426
  The matter is causing considerable concern in the Bristol area, where right hon. and hon. Members on both sides of the House have buried their party political differences and campaigned jointly on the NEB investment issue. We have done so because we appreciate the need to accept the commercial judgment of the Inmos management and the NEB as regards the siting of the first production units for Inmos.
  Hon. Members will no doubt view the Inmos project with mixed feelings, just as they do British Leyland. We are aware that the nation must establish a foothold in the new technology industries that Inmos represents, while being conscious of the constituency unemployment problems, the problems of companies such as British Leyland and the need to treat the spending of taxpayers' money in such large quantities with the utmost prudence.
  Some of those considerations conflict. It is now surely time for the Government to decide whether they will honour their commitment to fund the Inmos project. That is what we are asking for. We are not asking for more money but are merely asking that what has already been promised should now be made available. We are also asking my right hon. Friend the Secretary of State for Industry to decide whether to grant the necessary industrial development certificate to enable at any rate the first of the two production units to be built in Bristol.
  Perhaps I should explain why I say "the first". It is because Inmos, unlike British Leyland, believes that about 1,000 employees is the right number for one production unit. Nevertheless, because of economies of scale, it is siting two production units side by side on one site. It has chosen Bristol for the first. Then it may well choose another area—perhaps an assisted area—for the next two units.
  There can be few hon. Members who have not heard of Inmos, but may I remind the House, for the record, that this United Kingdom semiconductor company was set up to design and manufacture integrated circuits, concentrating on the fastest-growing and newest sector of the market, which is the high-density computer memories and microprocessors. They are, in fact, whole computers on a single silicon chip.

  1427
  In July 1978 the NEB agreed to finance Inmos. That followed approval of the founder's business plan by both the NEB and the then Secretary of State for Industry. The plan called for total equity funding of £50 million, the first £25 million of which has already been committed by the NEB. The splitting of the investment into two tranches of money is merely due to business prudence. The second instalment was to be paid provided Inmos achieved the initial objective and produced satisfactory plans. These management objectives have now been achieved, and therefore there is no reason why the second tranche should not now be sanctioned, thereby honouring the earlier commitment by the Government.
  As with British Leyland, a great deal of taxpayers' money is at stake in the project, and more still will be invested afterwards. Therefore, we have a duty to ensure that it is a commercial success. Inmos is operating in a very competitive industry, with rapidly developing technology. It is essential that it operates in a highly commercial manner if it is to be successful. If the Government ignore commercial criteria, they will put in jeopardy the substantial investment that is already being made on behalf of the nation, whether it be in Inmos or in British Leyland.
  Therefore, it may be worth mentioning what the Inmos project is not. It is not a job creation scheme, and neither is British Leyland. Neither company should be regarded merely as a means of providing jobs in areas of high unemployment. Those hon. Members who face unacceptable levels of unemployment in their constituencies should realise that the Inmos project, if successful, will—in a relatively short time—repay its initial investment. In addition, it will provide tens of millions of pounds every year through taxation, which can be used to generate further investment in much needed jobs, many of which will be in the assisted areas.
  Mr. Charles R. Morris rose—
  Mr. Colvin: I shall give way in a moment. I am the first to accept that those assisted areas require Government help. We should give further help, if necessary, to British Leyland.
  Mr. Morris: The hon. Gentleman referred to the location of Inmos at Bristol, and said that commercial criteria should be the determining factor of location. What commercial criteria does the hon. Gentleman believe determined the location of Bristol for the technology centre?
  Mr. Colvin: The answer to that question will become clear later in my speech. However, an important point to make is that it is not for the Government to decide the commercial criteria. The company and the NEB should decide the location, and the Government should accept their recommendation, as they have done in the case of British Leyland where they accepted the commercial judgment of the corporation. They should do that with the Inmos company and the NEB.
  I accept that the claims of the assisted areas have been loudest for the siting of this company, but even the previous Administration always made the point that a decision on siting was primarily one for the company and the NEB who, in this case, decided on Bristol.
  Although I am now a committed supporter of the Inmos project, I regret that it should have been necessary in the first place for the NEB to become involved. I regret that the economic climate of the country at that time was not such as to encourage the establishment of a high technology innovative industry without Government help. I regret that, because of the policies of successive Labour Governments which were so hostile to investors, we were compelled to adopt a Socialist solution to finance Inmos in order to enter the silicon chip race.
  Having staked £25 million of taxpayers' money on the project, I hope that the Government will stay with it and honour their obligation to provide the remainder of the money now required, in spite of their commitment to other companies such as British Leyland. It is my belief that the Government will agree to do that. I believe also that they will agree with the management of Inmos that its first production unit should be sited near its technology centre and headquarters in Bristol, in order to create what the company describe as an integrated capability. To split those functions would involve a quite unacceptable business risk.

  1429
  Bristol was chosen by the Inmos management following a survey by PA Management Consultants Limited of more than 200 alternative production sites. I believe that the consultants were asked not to recommend a site but merely to report the facts about the alternative sites and to give a genuine evaluation. In business, time is money. I ask my lion. Friend the Under-Secretary of State for Industry, when he replies, to tell the House first, whether there are any doubts regarding the second tranche of £25 million and, secondly, when the Government will grant the industrial development certificate for the first production site in Bristol at Coldharbour Lane.
  The delay over the start of building the Inmos production plant is reported to be costing the company about £20,000 a day in higher building costs, and a further £300,000 a day in lost future production. It is bad for business, especially a new business, when targets begin to slip. The credibility of the company is called into question. Recruitment suffers if the Government, as the main financial backers, are thought to be dithering. Potential customers begin to have doubts if they read press reports—no matter how ill informed—about the Government having second thoughts.
  Uncertainty is the bane of any business. The uncertainty over Inmos must be removed without delay, otherwise there is a danger that the prospects of the company may be damaged, and, therefore, the taxpayers' investment put at some risk. This is the sort of industry that we should encourage in Britain at the present time, as other industries—such as the motor car industry—face an inevitable decline. We are a nation with a shortage of raw materials, but we are rich in one vital resource, namely, that of skilled and intelligent workers.
  In Bristol we have a wealth of that particular resource. Selecting Bristol as a suitable location for the Inmos technology centre and headquarters has not been an easy task for the company's management. One of the company's objectives is to achieve the highest level of technical creativity. The opportunity to establish academic links and develop positive programmes with the universities of Bristol and Bath as well as with the Bristol polytechnic, which will be opposite Inmos at
  1430
  the Coldharbour Lane site, were factors in choosing our city which, with its superb communications and working environment is obviously just the sort of place to attract the staff required to advance the frontiers of technology.
  There is no doubt that Bristol is the best site for the first production unit. In backing Bristol, Inmos has backed a winner. I now look forward to the Government's decision to back winners—that is, to back Inmos with the second tranche of cash, and to back Bristol as the first production site.
  8.37 pm
  Mr. Alan Williams: I wish first to make it clear that we on the Opposition Benches obviously completely agree that it is essential that the second tranche of finance be provided for Inmos. Inmos will be our first major domestic-based capability in this area. We will not be dependent upon American technology. The NEB therefore deserves congratulations for bringing the project forward.
  I differ from the hon. Member for Bristol, North-West (Mr. Colvin) in his assessment of where the production unit should go. I trust that there is a slight confusion, which I should like to clear up before proceeding to my main argument. The hon. Member said that he thought that the plan was to have two production units side by side. I think that if he examines the project he will discover that there is the initial research project—the technology centre—which already exists, and that the company is asking that one production unit—the first—should go to assurance in the matter. Here I refer Bristol. The company has given a firm to a letter from the deputy chairman of the National Enterprise Board, in which he refers to the
  "publicly declared commitment by Inmos to locate the second UK production facility in a UK-Assisted Area."
  Mr. Colvin: I think that the right hon. Gentleman and I are talking at cross-purposes. I understand that there will be two bases for production, but I understood Inmos to say that there would be two production units at each base. That is beside the point, however. I think that we understand, between us, that there will be two production bases, that the first one

  1431
  will be in Bristol—we hope—and that the second may well be in an assisted area.
  Mr. Williams: Not "may well be", but must be. The question is whether the first must also be in an assisted area. I fully understand the hon. Gentleman's need to argue for his constituency. No one begrudges him that right.
  Mr. Colvin: Is not the right hon. Gentleman arguing for his?
  Mr. Williams: That is just what I am not doing. I expect that my constituents will not quite understand why, as a spokesman on Welsh affairs, I am arguing for a site outside my constituency. I am arguing for the site that was on the short-list that was under consideration by Inmos— a site in Cardiff. I am not advancing a constituency argument. The hon. Gentleman may not be aware—there is no reason why he should be—that in the last Administration I was the Minister to whom the original application for an industrial development certificate at Bristol was made. [An HON. MEMBER: "The right hon. Gentleman approved it."] I did not approve it.
  The reason for my intervention this evening is that I want to put certain facts clearly on the record. I believe that a decision is imminent. We shall be glad to have a decision, at least. I do not want Ministers to be in any doubt. I know the niceties and difficulties that confront incoming Ministers by which they are not allowed to see certain documents relating to the previous Administration. Therefore, I wish to state the background to our claim that there is already an absolute commitment that the first production unit will be sited in assisted areas, as will all production units.
  When the initial application for an industrial development certificate for Bristol appeared on my desk, I said that it was essentially a mobile project, and that the technology centre and the R and D project could be sited in an assisted area. I then received a deputation led by the deputy chairman of the National Enterprise Board, Mr. Dick Morris. We discussed sites in Manchester. The right hon. Member for Manchester, Openshaw (Mr. Morris) argued for sites there. I argued with the deputy chairman that if an industrial development certificate were
  1432
  given to Bristol—because of the American experience of the clustering of the micro-processing industry—the logical sequence would be that I would then be asked to provide an IDC for the manufacturing unit. That is important. At that stage it looked as though it was a logical link, and, therefore, I refused to grant an IDC.
  I was then offered art assurance by the NEB that in the event of a technology centre being sited in Bristol—because there was no such necessary technical link—all four production units, which would employ about 1,000 people each, would be situated in assisted areas.
  I invite the Under-Secretary of State to ask the Department to show him the press announcement that it issued, stating that the technology centre was to be sited in Bristol. It was stated in that announcement that Inmos "intends" to site production units in the assisted areas.
  The then Secretary of State, the Minister of State and I recently took the unusual step of writing to The Times establishing that that commitment had been given. I received deputations led by Mr. Dick Morris more than once There was a final meeting with the chairman of the NEB, accompanied by the deputy chairman and a number of other NEB representatives, with the Secretary of State, the Minister of State and myself. Again, we were given an undertaking that the production units would be sited in assisted areas. I emphasise that because there would have been no question of Department of Industry Ministers approving, or even recommending to ministerial colleagues the approval of the IDC for Bristol had it not been for the specific guarantee that the production units would be sited in assisted areas.
  The Under-Secretary of State for Industry (Mr. David Mitchell): The right hon. Member for Swansea, West (Mr. Williams) referred to a press release that stated that the NEB intended that the production units should be sited in development areas. Is the right hon. Gentleman trying to suggest to the douse that he hangs his argument on a press release that contained the word "intends" and to imply that that is a guarantee?
  Mr. Williams: I was trying to think of a document that showed the clear understanding of Department of Industry Ministers of the nature of the guarantee that we received from the National Enterprise Board.
  Mr. William Waldegrave: Towards the end of the period of the previous Administration, the hon. Member for Nuneaton (Mr. Huckfield), also a responsible Minister, on more than one occasion made statements such as:
  "I am very conscious of the benefits that an Inmos production facility could bring to the Welsh special development areas, and to the assisted areas in general, but the location of these facilities must be a matter for the NEB and the company."—[Official Report, 5 February 1979; Vol. 962, c. 30.]
  That seems to indicate unity between the NEB and the company. Therefore, I hang my argument on what was said by the hon. Member for Nuneaton.
  Mr. Williams: With respect, my hon. Friend the Member for Nuneaton (Mr. Huckfield) was not present at any of these meetings. We had three Privy Councillors, Ministers of State and the Secretary of State, present, all of whom have the same recollection. I suspect that the officials, in the advice that they are giving to the Minister, also have the same recollection.
  Mr. David Mitchell: Will the right hon. Gentleman tell the House whether the right hon. Member for Manchester, Ardwick (Mr. Kaufman) was one of the three? Was the Minister of State at that time one of the three Ministers to whom he referred? If the right hon. Gentleman's nod is an indication that he was one of those to whom he referred, I remind him that the then Minister of State said that Inmos's
  "location is a matter for the company and the NEB, subject to the NEB guidelines."—[Official Report, 29 November 1978; Vol. 959, c. 194.]
  That was what he stated in the House.
  Mr. Williams: I do not know the date of that statement. All I can say is that—
  Mr. Mitchell: 29 November 1978.
  Mr. Williams: By that time the IDC had not been given. At that stage it was still under consideration. It was my decision whether an IDC was given or not. The question of preferences was
  1434
  for Inmos. The question whether the Government endorsed those preferences was a matter for the Government, under their powers in relation to industrial development certificates. If my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) were present I am sure that he would confirm that he and I pressed the company to site within an assisted area. Indeed, both of us received the same guarantee—that the production units would be in an assisted area.
  Mr. Colvin: It is important to get clear whether the undertaking was given to the right hon. Gentleman by the National Enterprise Board or by the company. I have checked with the company and been told that no commitment was entered into by the Inmos management about siting in an assisted area.
  Mr. Williams: The undertaking was given by the NEB, because it was the parent company negotiating on behalf of Inmos. Having seen the documentation that was at that stage produced on behalf of Inmos, I can understand why it did not dare let the Inmos representative loose in the Department of Industry for me to interrogate. However, I shall come to that later.
  When the NEB came to see me—the NEB being the parent company that had to authorise the finance and approve the siting—it also brought along its director on the board of Inmos. I believe that he was a Mr. Dunbar. However, I have a terrible memory for names. We were given—not on one occasion, but on several occasions—a clear understanding of what the situation would be if it got the technology centre in Bristol.
  I am sure that the hon. Member for Bristol, North-West as a new Member, will accept that no one stands at the Dispatch Box or in the House and deliberately makes a categorical statement of the kind that I have made unless be genuinely believes it to be true. All who have respect for the House would not deliberately mislead it. I think that each of us should do the other that credit. I assure the hon. Gentleman that I am trying to be as straightforward and factual as I can about what happened at that time. It was supported by both my colleagues who were Ministers at that time.
  Mr. Gordon A. T. Bagier: Does my right hon. Friend also remember that at the time he was under great pressure from development areas such as mine to obtain a clear undertaking of this nature, especially when the original technology centre was to be based at Bristol? We required—indeed, demanded—from our Ministers a categorical assurance that the manufacturing units would go to a development or special development area. I distinctly recall that we were given that assurance by our Ministers at that time.
  Mr. Williams: I endorse entirely what my hon. Friend says. On several occasions he personally represented the interests of the Northern region. The Northern group of Members of Parliament also pressed the interests of their regions, as did many other hon. Members with constituencies in Wales, Yorkshire and Scotland. There was considerable pressure, and the understanding that we had received from the NEB was made clear in our discussions with our colleagues from the regional constituencies.
  I was sceptical about the arguments then being put forward. I am not suggesting that there may not be a sound argument amongst them, but we had to look very hard for the sound arguments at that time. We were told by the person acting as the spokesman for Inmos that the Severn Bridge might close permanently and that the great advantage of Bristol was that it did not have a faculty at its university. Therefore, we were told, Bristol would be uncluttered with preconceived ideas. I am glad to see that the hon. Member for Bristol, North West (Mr. Colvin) finds that as amusing as I did.
  That top research personnel would go to Bristol was said to be proven by the fact that a survey of school leavers, made in the mid 1950s—these must have been 15-year-olds—had revealed that those young people had shown a preference for living in the West Country as opposed to Wales, Scotland or the North of England. I must say that that document was hilarious. It will be seen why I was less than enthusiastic about the application of certain of the arguments that had been put forward. I am not saying that certain arguments were not sound, but the record shows that certain individuals involved in pressing the case for
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  Inmos will trump up any hairbrained argument, in the hope that it might persuade someone.
  What worries me is that none of us has been allowed to see the PA Management Consultants' report that has been put forward in support of the claims of Inmos.
  Mr. Charles R. Morris: My right hon. Friend has just made a profound statement. He said that as a responsible Minister of State in the Department of Industry in the previous Government he never had access to the PA Management Consultants' report on the siting of the technology centre financed by the NEB and Inmos. That statement provokes intense anxiety, because it was on that report that the siting of the centre was determined.
  Mr. Williams: The report was the result of a study to decide where the manufacturing unit should go and not where the original technology centre should go. Therefore, although it was initially started during the Labour Government's period of administration it was not completed until fairly recently. So we are not the people to whom one would have expected it to be shown. Again there is a story to tell there, but I shall come to that in correct sequence, if I am permitted to. Indeed, this is a good point at which to consider the PA Management Consultants' report.
  Last week, I went to see the chairman of the NEB about the decision on the production unit. I asked a categorical question—"Did the PA Management Consultants' report recommend Bristol?" The chairman's colleague on that occasion answered "I do not remember." Let us bear in mind that it was only in December that the NEB considered the recommendations about Bristol. The chairman said "If you do not remember, why do we not look at the report?", or words to that effect, to which his colleague said "I am afraid there is not a copy available." I then said "In that case, as there is not a copy available for you to consult now or for me to see now, why do you not put an annotated version—annotated so that confidential information has been removed—in the Library of the House of Commons so that all of the regional Members will have an opportunity to see it?" I was then told that this would not be a good

  1437
  idea, because the report might be "confusing" to Members of Parliament. When I said "By 'confusing', what is meant is that it would confuse because it does not agree with the recommendation that we are getting from Inmos," the answer was "I do not remember."
  I would be intrigued to know whether the Under-Secretary has ever seen or read the report. Is it not a fact that Inmos has flatly refused Ministers access to this report? Yet it is substantially on the basis of this report that the decision to allow the production to go to Bristol is allegedly to be made. I ask the Under-Secretary to clarify this matter. I am sure that he has not seen the report. He may need a little time, although I should welcome an answer now.
  Mr. Colvin: Whilst my hon. Friend the Under-Secretary is chewing over that point, perhaps I may try to clarify the right hon. Member's thoughts on the subject. I think that the reason why the report might be thought to be confusing for hon. Members if it were placed in the Library is that it does not make a recommendation. I am told that the PA Management Consultants' report—I question why it was necessary to call in PA Management Consultants to do such an evaluation survey—was purely an evaluation and did not make a specific recommendation: it put facts before the company and left it, as we are doing, to the company to make a decision on the basis of the facts provided.
  Mr. Williams: In that case is it not rather arrogant to presume that Members of Parliament are incapable of reading and studying such a report? Since there is £25 million of extra Government money, making a total of £50 million, to go to the project, is it not at least reasonable that we should have the right to judge where that money should go, against regional priorities, as well?
  Mr. Colvin: No.
  Mr. Williams: The hon. Gentleman says "No." That is his judgment, to which he is entirely entitled, but we must remember that this is NEB money and that the NEB guidelines include priority for regional employment wherever possible, where it is carrying out new investment. Therefore, it is essential
  1438
  that we have a chance to judge whether this project at Bristol is even in conformity with the NEB's guidelines. As Members of Parliament, that is not an unreasonable thing for which to ask.
  Even more so, I should have thought that Conservative Members would be indignant if they knew that their Minister had been refused permission to see the report. I understand that that is so, and that it is not just a matter of Ministers having not read it because they did not want to do so. I realise how full Ministers' red boxes are, and that there is no great wish to see unnecessary paper, but my understanding is that the report is not available to Ministers even if they want to see it.
  Mr. John Butcher: I was not a Member of the House when many of these discussions on the role of the NEB were taking place, but I read many of the reports and I know that there were heated debates on occasions. I seem to recall Labour Members often stating the case for the NEB to be able to behave as an entrepreneur. Listening to the tenor of the right hon. Gentleman's remarks, I would be most fearful of the capacity of Inmos to behave in an entrepreneurial way should his colleagues have been in power after the last general election. One cannot make commercial decisions on the ground that they are socially desirable, because one eventually ends up making penny-farthing bikes in the development areas because that is socially desirable.
  I ask my hon. Friend the Under-Secretary of State to accept that to break the link between the development and implementation of the software and the marketing of the first product at this early, delicate stage would be one of the most dangerous things to do to Inmos.
  Mr. Williams: The hon. Gentleman must be in an inconsistent position, bearing in mind his alliance with the Government Front Bench. If it is utterly wrong to pursue social objectives in promoting industrial policy, the hon. Gentleman must favour the complete abolition of industrial development certificates, which I do not. In fact, that is not favoured by the Government Front Bench. Industrial development certificates exist to add a social dimension to investment decisions.

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  We would have applied the normal regional criteria to the project. The hon. Gentleman said that it would be disastrous to introduce separation. There would have been no separation if Ministers had not been misled in the first place, or if Ministers were not being misled now. The technology centre was provided only because the undertaking was given that the centre could be separate from the production units. It was argued that there was no necessary link. If that argument had not been advanced, the technology centre would not be in Bristol now.
  I do not want to lecture the hon. Gentleman. I know that he is taking a serious interest in this subject. However, what would he feel if someone gave a pledge to a Conservative Minister, only to renege on it six months later? The pledge was given to a Minister. It does not matter whether it was a Labour Minister or a Conservative Minister. A pledge was given to a Minister to obtain a ministerial decision.
  The argument of proximity is fascinating. If proximity is so critical, how was the short list drawn up, which included Bristol, Cardiff and Washington new town. I recognise that it has a strong claim. However, if proximity is a criterion, it seems odd that the other assisted areas of Wales, the North-West, Yorkshire and Humberside could be bypassed and that all the requirements could be met 200 miles away in Washington new town. The argument of proximity does not stand any detailed analysis.
  Another argument presented to me by the chairman of the National Enterprise Board concerned the learning curve problem. It was said that because of new technology it would be essential for a close link to exist between those developing the new product and those about to produce it. If that is so, the commitment should not have been given in the first place. Secondly, it is a short-term link. On the other hand, the 1,000 jobs will be 1,000 long-term jobs. There would be a short-term inconvenience—it is only three-quarters of an hour away—that could easily be accommodated.
  The South Wales claims are strong, but I shall not go through all the arguments. One criterion is the availability of labour. With unemployment in Wales so massively higher than in Bristol, labour should
  1440
  certainly be available. Another argument is the academic infrastructure. South Wales has an academic background that in this instance surpasses that which has been available in Bristol.
  The pledge that has been given on the next production unit is open to question. In a letter to the secretary of the northern group of MPs Mr. Iann Barron, of Inmos, writes:
  "The characteristic of these key people is that they are the elite of high technology, with the most exciting jobs at the forefront of technology. As such, they can command the highest salaries and can chose where they wish to live."
  He adds:
  "This is true not only for now, when the company is new, but also for the future when lnmos has become mature and less exciting."
  How could he have made any promise about the second manufacturing project? The superficiality of analysis that appeared on the first submission is repeated. Within three sentences he contradicted himself by saying:
  "Inmos carried out various studies to establish the preferences of such individuals…We also considered sponsoring a survey of relevant professionals, but this was rejected because we were concerned that the results might offend or even have an adverse effect on some areas of the country."
  On the one hand he says that a study was carried out and on the other that a proper study was not carried out. It is nonsense and arrogance on the part of Mr. Barron to write in such terms to Members of Parliament who represent northern constituencies.
  I tabled a question to the Welsh Office. That question was within its ability. I asked whether, under section 7 of the Industry Act, any financial inducements had been offered to Inmos in order to encourage it to go to Wales. I received a most peculiar letter from the Welsh Office. It said that the question had been transferred to the Department of Industry. However, the Secretary of State for Wales is responsible. As the answer to my question is either "Yes" or "No", a reply should have been easy. However, on the due day—yesterday—I received a holding answer. It said that the Secretary of State would reply as soon as possible. I do not accept that an answer is not available. I believe that an answer

  1441
  is being deliberately held back. There will be another debate on Inmos tomorrow. The Government do not wish to reveal that no section 7 money or regional selective finance has been offered to Inmos in order to persuade it to go where jobs are most needed. I ask the Minister to answer that point.
  The Minister has the necessary powers. He has power, through the IDC system, to stop Inmos going to Bristol. He also has persuasive powers. He has to approve the sum of £25 million for Inmos. I have spoken at such length because this subject is relevant in many parts of the country. Jobs are needed in the North-West, in the North, in Scotland and in Wales. Ministers and Governments should not be treated with contempt by someone who appears to have misled them about his intentions.
  I hope that the Minister will reply fully to the questions that have been raised about Inmos. That might save us the experience of an Adjournment debate tomorrow. I hope that he will say whether Ministers have been allowed to see the report by PA Management Consultants. I asked the Secretary of State a question a fortnight ago to which I have received no reply. Will the Government ask the company to make that report available in the House of Commons? If someone says that such a report is not available but then produces it in support of his case, I become suspicious.
  9.8 pm
  Mr. William Waldegrave: The Supply Estimates refer to public dividend capital. That is the Government's form of equity financing for risk. Risk is the key word when discussing Inmos. I hesitate to differ to any great extent from the right hon. Member for Swansea, West (Mr. Williams). He is a man of great courtesy. However, he admitted that his memory for names was a little poor. My confidence in his understanding of the history of the Inmos project was shaken when he began to speak of "a certain Mr. Iann Barron". That is like speaking of "a certain Mr. Moses in the Old Testament. Mr. Iann Barron generated this project. He invented it and is a dominant figure. He, Richard Petritz and Paul Schroeder are the founding fathers. They brought the scheme to the NEB. The NEB did not invent it. They
  1442
  projected the scheme way back in 1976 and came to the NEB in 1978.
  My confidence was a little shaken in the right hon. Gentleman's memory of events. I accept that his understanding of the commitments was as he said. However, we must also accept the recollection of Mr. Barron and the company that they gave no commitment, and they have put that on paper. It is possible that the members of the old NEB, who resigned for one reason or another, gave such commitments. I align myself with the hon. Member for Nuneaton (Mr. Huck-field) and the right hon. Member for Manchester, Ardwick (Mr. Kaufman). If we are to have an NEB, these decisions must be for the NEB and the companies in it. Had the former NEB agreed, for reasons best known to itself, to site the production plant on the moon, that would not have been a very successful place for it.
  Inmos is facing the toughest competition imaginable. A list of microelectronics companies reads like a roll call of the best companies in the world—IBM, Texas Instruments, Motorola, the great Japanese companies, National, Bell Laboratories and all the rest. We have to compete with these companies.
  Many of us had grave doubts about the NEB venture. However, its objective was social and political—to give Britain the capability in this field to face the future. I do not disagree with the view that for regional and social reasons, in some instances it is right for the Government to have an influence over industry. The purpose here is not regional employment, which in other instances may be a reasonable political objectives. It was to equip Britain with a major new capacity in the big memories and microprocessor fields, which is sufficient of an objective to be going on with without adding other social objectives.
  The right hon. Member for Swansea, West, who unfortunately has had to leave the Chamber, perhaps remembers something of these matters from his experience. I must declare a reverse interest. I worked, and still work part-time, for a company that will be a competitor of Inmos, if Inmos succeeds, as I hope it will. I also have a constituency interest, because the present technology centre is in my constituency.

  1443
  It is an "Alice-in-Wonderland" industrial policy for Ministers, however worthy and well versed in the workings of parliamentary democracy, to burrow about in the files of companies, whether financed by the Government or not; drawing out bits and pieces of recommendations, whether commissioned by consultants or not.
  Those of us who have argued that there is a reason for keeping the NEB see its greatest strength as a protection between sponsored industries and politicians who bring their worthy and honourable political priorities to bear on the problems of industry. In the detailed running of industry, the combination of the two is nearly always disastrous.
  I have had experience of microelectronics in this country and abroad. These companies are perhaps rather more mobile than the right hon. Member for Swansea, West understands. If a dozen people left such a company, it would he a shell, of no further interest to anyone. If that happened to Inmos, £25 million would have gone straight down the plug-hole and we should have nothing left to show for it. If the people in such a company are messed about, they leave. The history of California and Texas is littered with shells of former microelectronics companies, that people have left, usually because the company is taken over by a large conglomerate that mishandles it. They go off and found their own companies. If we drive Mr. Schroeder out of this company because he thinks he is not in microelectronics any more, but that he has become part of the British Government's regional policy, we can say goodbye to the facility in Colorado Springs which is already producing materials for test very successfully and ahead of time.
  These people are mobile; they can go anywhere. We are not talking about the kind of people for whom this House has compassionate feelings—those who are losing their jobs in Wales, in the North-East and the North-West. We are talking about pursuading Mr. Schroeder and his friends to work for us, letting them run their own company in a sensible way in a highly competitive world.
  1444
  It is said that there are perhaps 1,000 senior microelectronics engineers of the first rank in the whole of this country. If it can get off the ground, Inmos will need about 300 or 400 of them. That means that competition will be very hot. It is not enough to mock people who say that it is all a matter of middle class values—whether one wants to live in the Cotswolds or the South-West. If that is what people feel, that is what they will do and there is nothing that we can do to stop them.
  I am not being unpleasant when I say that if we want to draw people from all over the country, and indeed from all over the world, we must realise that this is a seller's market, and find the nicest possible place in Britain to put them. The right hon. Member for Swansea, West, may have a rather more old-fashioned view of industry as something associated with smoke coming out of a chimney, but we are here talking about an advanced technology industry. If we want to attract the right people, we must think of the kind of schools that are available in the area, the universities the theatres and so on. Those are the things we should start thinking about if we want to persuade the Californians to move to this country. We might be able to persuade them to move to the valleys of Wales, but we have not found a way of doing so yet.
  Mr. Donald Thompson: My area, like many others, tried for Inmos. I agree with all that my hon. Friend says, but if he fails and Bristol fails, the Government will be seen to have failed. My area has within 40 miles of its boundaries the universities of Leeds, Sheffield, Manchester and Bradford, as well as many theatres and cultural activities. It also has beautiful countryside and a civilised way of life.
  In my area we have the shells of past industries. We have the shells of our mills from which the smoke came. But that has long gone. The other day I visited the shell of a brand new factory the day before the receiver came in. My hon. Friend and his constituents have a great responsibility. I do not begrudge him Inmos. But if there is a spread from it I hope that it will come to my area. I hope that my hon. Friend is aware of his great responsibility.
  Mr. Waldegrave: Of course. Even my own constituency pride, which is highly developed, would not drive me into saying that Bristol was the only pleasant place in the country.
  Mr. Charles R. Morris: The hon. Member referred to Mr. Schroeder and the desire of some Americans to live in the South-West. Will he confirm that Mr. Schroeder had not visited this country before he came with the Inmos team?
  Mr. WaldegraveMy point about Paul Schroeder is that he is absolutely crucial to the company. If we lose him because he considers that what he thought was an electronics company operating in a commercial way is being used by hon. Members, honourably as an instrument of social policy, he will think that he has come to the wrong shop.
  Of course, there are other places. The Inmos management looked at different places and no doubt had a difficult decision to make. That decision has been made. Some hair-raising comments were made by the right hon. Member for Swansea, West and his hon. Friends about the management of Inmos. I can assure the right hon. Gentleman that Mr. Barron is a crucial member of the team. If he is so incapable of taking a fundamental, commercial decision to do with the foundation of the company, this raises questions about the viability of the project as a whole. I do not believe that the right hon. Gentleman will want to pursue that argument. Hon. Members on the Government Benches, more hawkish than I, may begin to feel that, if these people are so incompetent, the whole project should be examined again.
  It is obvious from the remarks of the right hon. Member for Swansea, West that some kind of commitment was made by somebody, probably a member of the previous NEB, apparently orally, to some Ministers at some point. The intention was published in the NEB report and elsewhere. The word "intention" was used to indicate that the first production facility should go, all things being equal, to a development area.
  Times have moved on. The issue is a little behind schedule, the competition is getting even tougher. Many new developments are on the verge of coming through. Whatever those commitments, even if they were much stronger, we
  1446
  should now be asking whether there are any means by which the path of this company can be made easier, and the company released, if necessary, from obligations that may have been imposed on it, in order to make the survival of the whole show slightly more probable.
  I do not wish to be alarmist. I think that the company has a fifty-fifty chance of success. If used in the way that Opposition Members honourably wish to see, its chances will be much less. There can be no doubt that the company wants to go to Bristol. I have a letter dated 4 February from the secretary and deputy chief executive of the NEB saying:
  "In the view of the NEB Board it would have been indefensible to risk damaging the Inmos project by forcing upon the company's management a different site dictated by regional considerations".
  I cannot put the matter more succinctly. It would be indefensible. It would mean that large sums of taxpayers' money had been put at risk and that those Ministers who took the decision to use the company as an instrument of worthy social and regional policy would have to face the fact that if it failed they would stand accused of having added significantly to its chances of failure.
  9.24 pm
  Mr. Charles R. Morris: My right hon. Friend the Member for Swansea, West (Mr. Williams) has made a crucially important statement on the question of NEB-Inmos. What he has said indicates a breach of faith in the understanding between Ministers of the Labour Administration and the responsible officials of NEB-Inmos in regard to the location of the production units of the Inmos operation. The hon. Member for Bristol, West (Mr. Waldegrave) said that this is a commercial enterprise. No one argues its importance to the economic well-being of the nation. It is an important contribution. It is essential for Britain to have a microprocessor manufacturing capability. I wish NEB-Inmos all success in its efforts.
  I should like to refer to what successive Governments have already done to encourage the enterprise. The previous Government not only undertook to provide £50 million for the establishment of Inmos, but they told Mr. Schroeder, Mr. Barron and some of their colleagues that they would be given part of the

  1447
  financial equity of the company. That commitment was unique in public financing in this country.
  The members of the Inmos team have an undertaking for £50 million and a stake in the financial base of Inmos, but now they want to locate in Bristol not only the technology centre but the production unit. I am not revealing any confidences when I say that I argued in the Labour Government against the technology centre going to Bristol. I argued that it should go to the North-West, the area where there is a high level of technical creativity in the development of computers. That was not merely parochialism on my part. If one is talking of high level of technical creativity in computers, one is talking of the area where we established the National Computer Centre and the area with a unique academic combination of Manchester university, UMIST and Salford university producing 12,500 students with a facility in computer technology every year.
  Yet the technology centre went to Bristol, where the university did not even have a chair of microelectronics at the time. It has established such a chair in recent weeks because the technology centre of Inmos has been established at Bristol.
  I agree with the hon. Member for Bristol, West that there is a risk involved. Surely the location of the production units and the technology centre ought to have been decided on something more substantial than where a handful of technologists wish to live. The lion Gentleman said that that must be one of the determining factors but I was staggered to realise that Mr. Schroeder had no knowledge of the geography of Britain. He had never been here, so how could he conclude that Bristol, in the South-West, was the best site?
  There are graver issues at stake and they arise from what has been said by my right hon. Friend the Member for Swansea, West, who indicated that Ministers in the present Government had not had access to the report of PA Management Consultants. I hope that the Minister who is to reply to the debate will answer clearly and unequivocally that serious statement. Have Ministers seen the report.
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  Hon. Members have spoken about commercial criteria being the determining factor for the siting of the the production unit, but no one has identified those criteria. The companies with existing microprocessing capability are centred in the North-West where the academic expertise is located. It is not unreasonable that they should be there bearing in mind the fact that Manchester university invented the computer. The university invented the first digital storage base that was the forerunner of the Atlas computer—the first computer in the world.
  There is a convincing, logical and almost unanswerable case for the North-West to be considered as the site for one of these production units, but there are more serious arguments and greater anxieties than that. Conservative Members have asked why we should concern ourselves. They have said that this is a unique enterprise and that those concerned with it should be given the opportunity of doing precisely what they will. That attitude is a complete abrogation of political responsibility because this project is costing £50 million of public money.
  There is much use of the new word "de-industrialisation" these days. In the North-West we have seen de-industrialisation on a massive scale. We have seen the decimation of the textile industry, massive redundancies in the engineering and steel industries and contraction in the mining industry.
  A new industry now appears and the North-West is not seriously considered as a location for even a production unit involving 1,000 jobs as a means of bringing new industry to an area of industrial decline. It is not on. I hope that Ministers will face up to the fact that public money is involved, and that the taxpayers who have provided it are entitled to have at least a minimal say in where the production units should be sited. A thousand new jobs would benefit the North-West, particularly Greater Manchester.
  Mr. Bagier: It is clear from this debate that assurances were given to the previous Ministers on this issue. In the light of those assurances, it is now evident that Ministers of this Government are not prepared to use their muscle and

  1449
  their influence but are prepared only to use public money without ensuring that the very points made by my right hon. Friend are taken into consideration.
  Mr. Morris: I hope that the Minister will take up the points made by my hon. Friend the Member for Sunderland, South (Mr. Bagier) because I agree that there has been a breach of faith. The whole basis of the remarks of my right hon. Friend the Member for Swansea, West was that there had been a breach of faith. Public accountability demands that there ought to be a public investigation into the precise undertakings given when the location of these production units was under consideration by the last Administration and by this Government.
  Mr. Thompson: The right hon. Member for Manchester, Openshaw (Mr. Morris) is arguing logically. I attended a recent debate on the Northern region which I was not allowed to take part in because, apparently, I am not a Northerner. Many Labour Members made exactly the same case as that now being made by the right hon. Gentleman. They related the case to their local universities and their own areas in the same logical way. Surely, if decisions have now been made, after the Adjournment debate tomorrow night the House should wish the project god-speed. Whichever way we look at it, it means 1,000 more jobs for this country—
  Mr. Deputy Speaker: Order. I have allowed the hon. Member for Sowerby (Mr. Thompson) to intervene for longer than is normal. The fact that we can sit all night is no reason for not obeying the rules of the House.
  Mr. Morris: I understand the serious comment made by the hon. Member for Sowerby (Mr. Thompson) against the background of what is happening in his constituency. But the fact is that Manchester and Salford universities and UMIST produce 12,500 students a year—more than Edinburgh, and Birmingham universities. Each produces more than any other combination of universities or academic institutions. That is the argument for the North-West and the Greater Manchester area. I do not believe that the production units will go to Openshaw. I am not being that parochial. In the
  1450
  North-West there is an unusual combination of high technical creativity involving computers. That justifies at least some thought being given to its claims.
  I return to the question of the Bristol location. There is an argument for siting the research and development centre in a particular area. However, the development of computers and microprocessing must take place near to industry. I cannot see why Bristol was chosen on that basis. About 50 per cent. of Britain's industry is located within 75 miles of Manchester. That is yet another factor which should influence the location.
  Mr. Arthur Palmer: My right hon. Friend is doing the claims of Bristol an injustice. Bristol is a most important and modern industrial area. The aerospace industry originated in Bristol and Concorde was developed there.
  Mr. Morris: I can fully understand the reasons why my hon. Friend the Member for Bristol, North-East (Mr. Palmer) speaks so highly of Bristol. But, Bristol university had no microelectronic chair before the Inmos technology centre was established in Bristol. It did not produce technologists in anything like the number of those produced by other universities. We are faced with a fait accompli in connection with the technology centre, but the other regions should be given some consideration.
  I do not question the veracity of the statements made by my right hon. Friend the Member for Swansea, West because they were supported by the Secretary of State for Industry and other Ministers at the Department. Those statements and the siting of production units and the technology centre should be subject to a full investigation so that the public accountability is seen to be working.
  9.39 pm
  Mr. Arthur Palmer: I apologise to hon. Members on both sides of the House for not having been here at the beginning of the debate. I had a long-standing engagement outside the House, which I have cut short so that I might be present for the debate.
  I shall not enter into the much argued question of who gave promises to whom. It seems to me to be a tangled web and it is difficult to untangle it. I understand

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  the legitimate local interests of my right hon. and hon. Friends, but I want to say something on behalf of the Labour movement in Bristol, which has also a point of view on the matter.
  My right hon. Friend the Member for Swansea, West (Mr. Williams) argued very strongly against Bristol, but he was in no position to argue generally for the special or assisted areas, because he does not represent all those areas; he represents part of South Wales, and his case was a legitimate one for South Wales but not beyond. It is well known that there is an ancient rivalry between the Saxon and Celtic sides—
  Mr. Alan Williams: I have no constituency interest, because I am not seeking to obtain the project for my constituency. The site is 40 miles from it. I briefly dealt with the Welsh position, but I have tried, throughout the weeks for which I have been fighting the campaign, to fight for an assisted area site—not for a specific assisted area site.
  Mr. Palmer: I think that my right hon. Friend, who has understood interest, would not disagree that he would prefer, out of all the assisted areas, to see the project in South Wales and why not? That is my point: he speaks up for his area.
  I was saying that there had always been a rivalry—I hope not hostility—between the Saxon and Celtic sides of the Severn. That perhaps goes back to the days when the Romans provisioned their fleet in the Avon for the attack on South Wales, when the Silurians fought so bravely against the Roman invaders. The invaders were probably assisted by at least some of the forefathers of today's Bristolians even before the Saxons.
  In modern Bristol we are not a negligible part of the labour movement in this country. In spite of the reverses of the last general election, we still hold a majority of the city's seats. We also increased the Labour majority on the city council in the spring local elections of 1979. In putting the case for Bristol, I am not just expressing my own views or my constituency interests but echoing the views of the Labour movement as a whole in Bristol. Certainly, they are very much
  1452
  the views of the Labour majority on the city council.
  I know that there is a dilemma in these matters, perhaps particularly for Socialists, we recognise the employment claims of the special areas, although I am not so sure that that Labour policy as a whole, looked at historically, has worked out as well as it might have. So we are in some difficulty of principle in deciding our correct attitude but we felt that we had fearlessly to put the Bristol point of view as one of value to the country.
  When recently a deputation was arranged for the Bristol and district Members to talk to the Secretary of State for Industry about the matter, there were on it not only the hon. Members for Bristol, North-West (Mr. Colvin), Bristol, West (Mr. Waldegrave), Gloucestershire, South (Mr. Cope) and Kings-wood (Mr. Aspinwall)—all Conservative Members—but myself, my right hon. Friend the Opposition Chief Whip, who is the Member for Bristol, South (Mr. Cocks) and—very significant, and if anything most powerful of all—my right hon. Friend the Member for Bristol, South-East (Mr. Benn). Those on this side who went to see the Secretary of State represented a spectrum of Labour opinion. It is not for me to say who is to the Right and who is of the Centre, but I can say that the Left was stoutly represented.
  I understand it when other hon. Members plead a case. This is always so, because British Members of Parliament have an obligation not only to their parties and the country but to the people whom they represent locally. I shall not go into any special claim that Bristol may have technically or administratively, but I should have thought that once the administrative software centre had been concoded to Bristol, the argument for having one of the initial manfacturing concerns at least close to it was reasonably strong.
  I do not think that areas such as South Wales and those north of Bristol will necessarily lose. However, they will lose if Inmos does not succeed. When I and other Bristol Members met the Secretary of State for Industry, my worry was that, with his peculiar economic views and his dislike of State intervention, he would say "I am reversing the previous Labour

  1453
  Government's proposals altogether on the matter."
  I have noticed, incidentally, that as much Conservative Members may say in their manifestos and election speeches that they are against State intervention, when it comes to pleading the case for their constituencies they are in favour of State intervention. As we walked away from that meeting, the Labour Members for Bristol enjoyed a little private exchange on that point, as I am sure the House will understand.
  The Bristol case is not a Conservative point of view but a general Bristol point of view. I intend to sum up my opinion in the terms of an amendment to early-day motion No. 135 on the Order Paper, which is distinct from a Conservative amendment. I believe that Inmos should make a decision because it holds the responsibility. There will be intense international competition. It must make a decision about the best site for its industrial unit, certainly taking into account the claims of the assisted areas. It must take into account also the practical need to select an established area of high technology and Bristol can lay claim to that. Bristol is an expanding area, and it is good to have in Britain some areas which are expanding industrially, because they may infect the rest of British industry for the good in the future.
  Mr. Charles R. Morris: Will my hon. Friend address his mind to the problem of regenerating those areas and regions where industrial decline is proceeding? Have we to ignore these areas and accept his arguments that new industry should go to green field sites?
  Mr. Palmer: Bristol is not a green field site. It is obviously a much developed district industrially. My right hon. Friend should visit Bristol occasionally.
  Mr. Morris: I have done so.
  Mr. Palmer: I am glad to hear that. I do not wish to be too locally patriotic, but Bristol was once the second city of the kingdom and, in numbers, the second metropolis of the kingdom. It has remained a great commercial city, and has developed steadily as a modern industrial city.
  I am arguing that Inmos must take into account that part of the country
  1454
  which, in its commercial and technical judgment, suits its purposes. If there is too much outside interference Inmos will not succeed. If that happens not only will the Bristol area be the loser, but I suggest that the whole of the British economy—including industry located in Wales, Manchester and the North-East—will be the losers. The House should recognise that there will be a good deal of profitable subcontracting available everywhere if Inmos proves successful. I have tried, I hope with success, to keep the record straight on the view of Bristol Labour Members of Parliament.
  9.50 pm
  Mr. John Butcher: We shall be here for a long time tonight and therefore I rise simply to place a few sentences on the record. I think that there have been some fundamental misunderstandings of what we now call telematics—information technology—and the way in which investment decisions are made in this sphere. The hon. Member for Bristol, North-East (Mr. Palmer) accused Conservative Members of favouring an interventionist policy only when their constituencies were affected. I should like to declare my position on that. I do not like intervention, and particularly I do not like investment-push intervention. I much prefer the American style of doing things by way of demand pull and the placing of contracts rather than the sponsoring of individual projects.
  An alarming theme has run through the comments of Labour Members. It is that they were prepared to entertain a sophisticated and significant application for money from Mr. Iann Barron and his colleagues. It was risk money, money which perhaps the merchant bankers were not prepared to put up. They therefore came to the NEB. Labour Members must realise that, if they are prepared to trust those three gentlemen with £50 million drawn in two tranches, surely they must trust them to make the much smaller management decisions which will be for the good of the delicate chemistry of that company in its infant state.
  The right hon. Member for Manchester, Openshaw (Mr. Morris) completely misunderstands the nature of this business. Believe it or not, Mr. Speaker, it is a cottage industry. It will be a very large

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  cottage industry, particularly when it comes to software development. It will grow in towns like Norwich, and Newbury, as well as Bristol which is far more than a town, and I shall not insult its status by describing it as such. The software men live where they like and do what they like. They put themselves together in small teams. It so happens that this one will have a production facility grafted on to it in the Bristol area. Its significance is strategic. It does not matter that it is going to Bristol. The important factor is that it will be part of the British list of options in the manufacture of these devices. Other companies such as Plessey, Ferranti, Mullard and GEC are involved. The jobs that Labour Members are looking for will spill around the company in their own way, and that will be when these devices are applied and interfaced with other devices. They can then travel back to the West of Scotland, if need be, or to Manchester or to the area of my hon. Friend the Member for Sowerby (Mr. Thompson).
  We look forward with some interest to the reply of my hon. Friend the Minister.
  9.53 pm
  Mr. Gordon A. T. Bagier: I rise to tell the Conservative Members who have spoken in the debate what activates the thoughts of myself and my right hon. and hon. Friends on this matter. Nothing crystallises the mind more quickly than to know that male unemployment in one's constituency is running at 14 per cent. Nothing activates the mind of a thinking and caring Government—at least, nothing should—more quickly than facts such as that. Therefore, when a large new technological interest wants to establish itself particularly when it wants to use a fairly substantial amount of public money to do so—the Government should try at least to influence where that business should settle down.
  Areas such as mine in the North-East and the North-West are suffering a tremendous run-down of established traditional industries. The Conservatives are arguing the cases of their areas, and I fully understand that. That is natural and logical. However, the logic of their argument is that any new technology of this
  1456
  kind must settle in an area that already has that technology. That means that the run-down in the shipyards, in the mines, in the textile industries and in the various other industries that have been the mainstay of most of the areas that are suffering high unemployment would not be replaced by new industry.
  Mr. Waldegrave: That is not our argument. The right hon. Member for Manchester, Openshaw (Mr. Morris) can make a good case for a great deal of the technology going to the North-West. We are not saying that it must go to areas where there is similar technology, but that we must allow the people involved in the chemistry of creating a new company to make their own decisions.
  Mr. Bagier: I followed that argument well. My point is that the Government of the day—with a considerable investment in that industry—should try to influence decisions. My right hon. Friend tried to influence decisions. Indeed, he received certain undertakings, but they were reneged on. That is a matter that must worry the House. If a large industry of that nature is to be created, we are entitled to ask what the score is. We are entitled to say that we have a problem in the North-East, in Wales, and in the North-West, and to ask whether there is any way in which we can be helped. The Government have the responsibility for the social consequences of what is happening. The hon. Gentleman may wish to argue for a complete free-for-all, but it is not entirely within the licence of Inmos to make that decision. This was a joint concern with the NEB. The NEB, as the major partner, was negotiating with the Government on where the jobs could and would be created.
  Mr. Barron wrote to the North-East in derogatory terms. I take issue with him. I do not think that he can be called an expert on the North-East. However, I believe that Mr. Barron wrote in those terms because he knew that there would be a row. He changed his mind and ratted on a Government decision, and he used those terms in order to take some of the heat off his back. I cannot forgive him easily for doing that, because there is no measuring the damage that a man of such substantial standing in industry could have caused to other potential manufacturers.
  Mr. Colvin: We made the point specifically that Mr. Barron had never given a commitment, so he was not reneging on anything. I remind the hon. Gentleman of not one but seven answers to parliamentary questions given by the hon. Member for Nuneaton (Mr. Huckfield), when he was a Minister, on the specific question of the siting of the production unit. He said that it was a matter for the company and the National Enterprise Board. Mr. Barron may not be an expert on politics, on the North-East, or on South Wales, but he is an expert on microprocessors.
  Mr. Bagier: I accept that. However, Mr. Barron is not an expert on the geography of Britain and the language that he used in his letter inflamed Members representing the North-East. I have the highest regard for my hon. Friend the Member for Nuneaton (Mr. Huckfield), but, with the best respect in the world, he was a junior Minister in the previous Administration. He was not a Secretary of State or a Minister of State. He was not privy to the discussions about which my right hon. Friend has informed the House tonight.
  The Minister may smile, but I hope that he will at least accept the fact that my right hon. Friend said categorically that to his understanding an assurance was given by the NEB. If it had not been given an IDC would not have been granted for the original establishment in Bristol. If that was the understanding, not of a junior Minister—my hon. Friend the Member for Nuneaton—but of the Secretary of State and the Minister of State, it is fair to say that the Government are playing with words. They are trying to find a formula to excuse themselves for an inexcusable move away from the social responsibilities of any Government towards areas that are having a tough time at the moment.
  Mr. David Mitchell: If a Minister in the Department of Industry in the previous Labour Government gave the answers to parliamentary questions read out by my hon. Friend the Member for Bristol, West (Mr. Waldegrave) and those answers were at variance with the views of the other Ministers in the Department of Industry, is it not conceivable that there is some misunderstanding here?
  Mr. Bagier: No, I do not think so. I have not had the opportunity of examining the answers in detail. I believe that the hon. Member for Bristol, West (Mr. Waldegrave), in his short intervention, referred to its being the responsibility of Inmos and the NEB. The hon. Gentleman indicates that he agrees with me. Therefore, the NEB, which was acknowledged as the senior negotiating member of that group, had already given a commitment to my right hon. Friend the Member for Swansea, West (Mr. Williams). That is the point that we are trying to establish. The Minister may make play of the fact that a junior Minister put words in that form, but it still does not take away from the substance of my right hon. Friend's statement that the undertaking was clearly and categorically given by the NEB to get the IDC for the original establishment in Bristol.
  Having established that fact—at least, I hope that we have established it—I hope that the Minister will specifically refer to that matter. I have no disrespect for my hon. Friend the Member for Nuneaton. However, I hope that the Minister will not play on his words in that respect. Does he or does he not accept that, on the best information available to him, the previous Labour Government were given undertakings by the NEB that the establishment of the manufacturing units would be in development areas or in special development areas. If so, has the hon. Gentleman or the Secretary of State changed the direction of the NEB or, alternatively, given in to pressure from Inmos and the NEB combined?
  I hope that in replying to the debate the Minister will be able to justify the situation so that I can explain it to my constituents or to those who hoped to work in the Washington area had we been fortunate in getting the first manufacturing establishment in that area. At the moment, it looks as though the Minister and his colleagues are about to rat on a decision that had social undertones in the face of something that seems to have been determined by the whims of one or two senior executives in Inmos.
  10.3 pm
  The Under-Secretary of State for Industry (Mr. David Mitchell): I congratulate my hon. Friend the Member for Bristol, North-West (Mr. Colvin) on

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  having taken the opportunity that this debate has presented to raise issues of concern both within and beyond the House.
  I shall deal first with the question concerning the Supplementary Estimate. This provision covers the conversion to equity—that is, to public dividend capital—of National Loans Fund finance provided to British Leyland by the previous Administration. As most of the debate has been concerned with the alternative expenditure that the Government might have undertaken in the area of Inmos, I shall now move on to deal with that matter.
  I noted the presence of my hon. Friend the Member for Gloucestershire, South (Mr. Cope) throughout the debate. I know that he is deeply concerned, because the potential site is technically within his constituency.
  I listened carefuly to the points made by my hon. Friends the Members for Bristol, West (Mr. Waldegrave) and Bristol, North-West.
  The future of Inmos in general and the location of its production facilities in particular have attracted a good deal of speculation. I must say at once that I shall not be able this evening to announce any decision by the Government on either the further public funding of the company or the location of its first United Kingdom manufacturing unit.
  Mr. Charles R. Morris: I can understand that the Minister is not in a position to give that information tonight, but can he indicate when the decision is likely to be made?
  Mr. Mitchell: I will deal with that in the course of my speech because it is a matter that was raised by the right hon. Member for Swansea, West (Mr. Williams).
  The right hon. Member for Manchester, Openshaw (Mr. Morris) earlier pleaded the advantages of Manchester, and other hon. Members, including my hon. Friend the Member for Sowerby (Mr. Thompson), referred to the advantages of their areas. Hon. Members who come from areas of high unemployment naturally believe that they have a strong claim, but there are other aspects that have to be taken into account.
  I think that the House will sympathise with me in the task that I have in dealing
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  with conflicting views. I am reminded of the man who asked whether he should be represented by a one-armed solicitor because at least the solicitor would not be able to say "on the one hand" or "on the other hand". There has certainly been a good deal of representation from both sides of the House in respect of the siting of this centre.
  The right hon. Member for Openshaw specifically asked me about the report from PA Management Consultants Ltd. The report was commissioned by Inmos. It belongs to that company and does not belong to the Government. The contents of the report will no doubt arise in connection with the IDC. I will come to that point during my speech.
  Mr. Charles R. Morris: Is the Minister saying that he has not actually seen the report?
  Mr. Mitchell: If the right hon. Gentleman will wait, I shall come to that later in my speech.
  Inmos represents the most important green field investment by the NEB. My hon. Friend the Member for Bristol, North-West referred to it as being technical creativity, and I think that that is a phrase that encapsulates much of what is recognised about this siting. Whilst other plants have been established in the United Kingdom to manufacture standard integrated circuits in high volumes none of the companies concerned is British controlled. Inmos is the only such manufacturer, and I assume that this was the principal reason why the previous Administration considered that it was worthy of support.
  My hon. Friend the Member for Coventry, South-West (Mr. Butcher), who has considerable interest and experience in this area, also referred to the importance of the technological advance.
  Everyone has always recognised that the project is subject to an unusual degree of risk. While the original proposals envisaged a total of £50 million equity funding by the NEB, I understand that the previous Administration accepted the NEB's view that it was essential to review the project at the halfway stage and so decided to approve an NEB equity input of £25 million in the first instance.
  When we took office, we examined the Inmos project carefully in the context of

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  considering the future of the NEB as a whole. We decided that the NEB could perform a useful role in familiarising the capital market with the investment potential of high technology ventures. This was recognised in my right hon. Friend's statement of 19 July last setting out the Government's policy towards the NEB. On that occasion my right hon. Friend said that he would wish to subject the Inmos project to detailed review before agreeing to the second tranche of £25 million expenditure originally envisaged.
  I do not suppose that any right hon. or hon. Member will deny that Inmos is a high risk project. That has been stressed by a number of hon. Members, including the hon. Members on both sides of the House representing Bristol who, if the project receives further money, are anxious that it should he sited in that city.
  It is true that the market for standard integrated cicuits is increasing world-wide, but the company will be operating at the frontiers of the technology and the competition is fierce from well-established and wealthy rivals. Each is seeking to secure a substantial proportion of the world market and success or failure will depend on producing the right product at the right time. In particular, any company entering this field is vulnerable to delays in product development or in establishing production lines, or because of unforeseen technical difficulties or fluctuations in the market requirement.
  I believe that the NEB has studied the prospects for the company most carefully and the application for the second £25 million funding is an indication of the NEB's confidence in its ultimate success. It is significant that the total requirement for Government funding has been held at the figure of £50 million that was identified two and a half years ago when the project was first put to the Government of the day.
  Earlier this year, the NEB sought the Government's approval for the release of the second £25 million funding for the project. Since then, the Government have been giving careful consideration to the issues involved.
  The right hon. Member for Swansea, West referred to delay and indicated that he was anxious to see an early decision, and the right hon. Member for Manchester, Openshaw referred to the same matters. I make no apology for the fact
  1462
  that we have not yet taken a decision on the future funding of Inmos and the application for an industrial development certificate for the location of its first manufacturing unit at Bristol. It is a matter of critical importance for the NEB and the company, and the degree of parliamentary and public interest in the decision is a firm measure of the controversial nature of the issues involved.
  Inmos has not yet drawn about £10 million of its original £25 million of NEB funding, so there is no question of the company being embarrassed financially by the few weeks which we have taken so far in examining it. A decision on the company's application for an industrial development certificate cannot sensibly be taken separately from the decision about the second £25 million. The important thing is to ensure that the decisions—and there are two decisions—when taken, are in the best interests of the company and the country at large, and an announcement to this effect, dealing with both decisions, will be made as soon as possible.
  Mr. Alan Williams: Will the Minister have words with the Secretary of State to ensure that when the decision is taken we have a statement from the Dispatch Box, because there are two issues of great importance: on whether or not there should be the second public funding—we are in favour of it; some Conservative Members are not—and on the question of siting, which excites the attention of hon. Members in most parts of the House?
  Mr. Mitchell: Yes, I am very much aware of the keen interest which is felt by hon. Members on both sides of the House, and I shall convey the right hon. Gentleman's view to my right hon. Friend the Secretary of State.
  As is known, the company's choice of Bristol as the site for the first production plant, which had been endorsed by the NEB, has generated a good deal of discussion. My right hon. Friend has received the views, orally and in writing, of a large number of right hon. and hon. Members whose constituencies are in the assisted areas urging that the plant should be directed to one of those areas. As I have already indicated, the Government have not yet reached a decision on the issue.

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  Perhaps, however, I should deal tentatively—I can do no more—with the points made by the right hon. Member for Swansea, West, who referred to the letter published in The Times from himself and a number of his colleagues. I have to say to him—I am sure that he will appreciate the difficulties—that, of course, there is the accepted arrangement that the papers of a previous Government are not available to their successors. I am, therefore, in some difficulty about the situation.
  The hon. Members who wrote to The Times referred in their letter to wishing to place on record the commitment that they received from the NEB and Inmos. We can find no record of an unqualified commitment. The right hon. Gentleman will be able to help me by saying whether he and his colleagues entered into a commitment to spend £25 million of the taxpayers' money on this expansion without having secured a contract from the company to ensure that it went to an assisted area. The previous Secretary of State could have used the statutory powers of direction over the NEB had he sought to do so.
  Mr. Alan Williams: I think that the hon. Gentleman will appreciate that we had already authorised the £25 million prior to the location decision. We had a series of meetings with either the chairman or deputy chairman of the NEB. Clear assurances were given—this is the recollection of the two ex-Ministers and myself—that the subsequent production units that would arise at a different stage would be placed in assisted areas. That assurance was given to persuade us to grant the IDC that was required for Bristol.
  Mr. Mitchell: I am interested in what the right hon. Gentleman says. He will appreciate the difficulties that are faced by Ministers in the new Government. I cannot find any unqualified commitment of the sort to which the right hon. Gentleman refers. I am bound to say that I am somewhat surprised that a commitment to spend such a large sum was given without any formal contract being entered into on a matter of such enormous importance.
  There is not much that I can add to the delete save to say that the IDC appli-
  1464
  cation was received some weeks ago. Much of the processing is under way on a contingency basis before a decision is made on the second £25 million. The normal IDC application procedures are being followed. My noble Friend the Minister of State will be seeing Inmos shortly.
  Mr. Williams: I believe it is correct that Ministers have not yet seen the PA report. That means that they have not studied it. It is important that they have a chance to study the report before the meeting with Inmos takes place.
  Mr. Mitchell: I am grateful to the right hon. Gentleman, who was a Minister in the Department of Industry during the previous Labour Government, for drawing attention to the importance that he attaches to the examination of the report by my noble Friend. I shall convey the right hon. Gentleman's remarks to my noble Friend.
  The right hon. Gentleman referred to section 7 assistance under the Industry Act 1972. He asked me whether any section 7 assistance had been offered to Inmos. First, we must have an application. We do not go around offering money. As the right hon. Gentleman knows, the system is that applications for assistance are made. However, I can tell him that informal discussions by the Department with the company have ensured that the company has been made aware of the scale of assistance that might be available were it to apply for it.
  I take up the remarks of the hon. Member for Sunderland, South (Mr. Bagier). The Government are keenly aware of the immense social problems caused by unemployment and the deep concern that is present on both sides of the House regarding social problems in areas of structural weakness and high unemployment. We are not divided about that. While carrying out a review of the project, the Government will take full account of all the points that have been raised by the various interested parties.
  We need to take a long and careful look at the prospects and viability of the whole project. If we are satisfied on that point, we must decide how to apply our policy and ensure its greatest success.
  Mr. Williams: I have still not received an answer to the question that I asked about the report of PA Management Consultants. The report has been under discussion for some time. I am not asking

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  whether the Minister will convey my question to his noble Friend. Have any Ministers in the Department read or seen the report?
  Mr. Mitchell: I can speak only for myself. I cannot speak for other Ministers. I have not seen the report. However, that is not surprising as it is not my responsibility to consider the IDC.
  Mr. Williams rose—
  Mr. Charles R. Morris rose—
  Mr. Mitchell: I have been as generous as I can about interventions. No decision has yet been taken. The points that have been raised will be examined carefully by my noble Friend and other Ministers before any such decision. I therefore hope that the House will accept that we are lad that hon. Members have drawn attention to the importance that they attach to this report.
  Mr. Williams: I must press the hon. Gentleman on that point. Another Minister is sitting next to him. I can ad lib until they have finished discussing whether the report has been read. I want an answer, "Yes" or "No". Has the Minister had an opportunity to see or read that report?
  Mr. Morris: Will the Minister give an assurance—
  Mr. Speaker: Order. The first intervention must be answered before another can be made.
  Mr. Mitchell: When my right hon. Friend the Secretary of State makes an announcement to the House or conveys information about the decision, I am confident that he will ensure that an answer to that question is given. Indeed, I am certain that hon. Members will table questions that are designed to discover the answer to that question. I cannot give an answer before any decision has been taken and when full consideration has not yet been given to the IDC.
  Mr. Bagier: That recent exchange has underlined the need for the Secretary of State to make a statement. The Under-Secretary has said that he will convey our opinions to the Secretary of State. However, the Secretary of State will need to
  1466
  bear those factors in mind when making his decision. He should make a statement so that he can be cross-examined, should that prove necessary. I should like an assurance that it will not be made in the form of a press statement, for example, after tomorrow's Cabinet meeting.
  Mr. Morris: Am I—
  Mr. Speaker: Order. The same ruling still applies. An answer must be given to the first intervention before the right hon. Gentleman can intervene.
  Mr. Mitchell: I am trying to help the hon. Member for Sunderland, South. I appreciate the importance of his question and the widespread desire for a statement. I shall convey the exact points that have been made to the Secretary of State. No doubt he will consider them sympathetically.
  Mr. Morris: The Minister has been most forthcoming. I appreciate his indulgence in giving way. The report is vitally important. Will he convey to the Secretary of State the need to publish the report or to make it available in the Library?
  Mr. Mitchell: I take the right hon. Gentleman's point. When he looks at the record tomorrow, I believe that he will find that I have answered it already.
  PA Management Consultants Limited was invited to advise not only on the assisted area sites but on the suitability of those areas within the boundaries of local authorities that had written to the NEB pressing their claims. It does not follow that it was concerned only with the assisted areas; It was also concerned with the non-assisted areas. That is a factor that we have to bear in mind when examining the report and placing reliance on it.
  Our review of these matters has been somewhat lengthy and very detailed, and I make no apology for that. We cannot afford to make expensive mistakes with the sort of sums required for this project.
  I have noted with care the points raised in this short debate. I assure the House that they will not be overlooked and that I shall draw them to the attention of my colleagues.

  SUPPLEMENTARY ESTIMATES AND CASH LIMITS
  10.25 pm
  Mr. John McWilliam: I rise with temerity as a new hon. Member to tackle the broad problem of the reasons for the need for Supplementary Estimates and excess Votes and breaches of cash limits.
  I am a Member sponsored by the Post Office Engineering Union. Although I am not directly affected by the Votes, as a former public servant I am aware of the impact of cash limits on public sector pay and conditions, particularly when an unrealistic view is taken of the likely outcome of negotiations during the year.
  I am concerned about the level of supplementation asked for. Given the stated policy of the Government to keep expenditure under tight control, it is inordinately high. An increase of about 30 per cent. is indicated. It can be partly explained by policy changes, which are listed in Hansard, but much of it is inexplicable.
  It is also partly due to the inherent difficulty of applying cash limits in the way recommended by the Expenditure Committee—the difficulty of making the correct assumptions about the level of inflation. As is stated, if the assumptions are correct, the setting of cash limits merely keeps expenditure within the limit which has been set. If they are wrong, they squeeze the volume of resources within the area for which the Vote was granted. Inflation is running at 18–2 per cent., whch appears to be a reason for asking for that level of excess. The Government's chickens are coming home to roost. Inflation has soared under their management of the economy.
  I am surprised that in the Supplementary Estimates there is not a larger item under the general heading of the Treasury in Class XIII. It would seem reasonable to employ more staff, given the report in the Central Statistical Office's economic review, published last week. That report states that there is roughly £3·6 billion due to tax but not coming in tax receipts. I have searched diligently, and, although the moneys for the management of the economy are increased, those funds are
  1468
  not being directed towards the management of that area of the economy— or of the undisclosed economy. Indeed, the figure that I quote is, by admission of the person who wrote the paper, on the low side. If we believe the statements made by the last Controller of Inland Revenue, the figure that I quote is about half what it should be. Between 7 per cent. and 15 per cent. of public expenditure is outside the control of the Chief Secretary.
  I challenge the Minister to say what he intends to do to improve the way in which these Estimates are made so that such levels of supplementation are not needed in future. What will he do about those who fiddle, while the country burns, to the tune of £3·6 billion to £7·5 billion, so that we do not have to sit up through another late-night debate?
  10.30 pm
  Mr. Michael English: I am grateful to my colleague the hon. Member for Blaydon (Mr. McWilliam) for raising this subject. I am also grateful to the Chief Secretary for coming at this time of night to reply to it. Many Cabinet Ministers leave these matters to their juniors. We appreciate his presence on this occasion.
  I do not propose to go into the details of all the Supplementary Estimates, excess Votes and breaches of cash limits, in which last only two Departments are involved. I am, however, a little amused when in one Vote I see a Supplementary Estimate justified at item F1 on the ground that it was necessary because of faster progress and at N1 of the same Vote that it was necessary because of slower progress. That seems to me to be possibly extremely honest. It might be found somewhere in the region of the Ministry of Defence. Although it may be extremely honest, it does not seem to me that we should get very far by trying to probe into both reasons at the same time.
  I wish to raise the question of what happens if cash limits are broken. This concerns primarily the Ministry of Defence. As the right hon. Gentleman and I have reputations as purists, we should consider what happens if there are Supplementary Estimates at all. In fairness to Departments, it is true that on many occasions there are Supplementary Estimates and overspendings, in lay

  1469
  parlance, which are more than counterbalanced by other sections of a Department having underspent. Indeed, in the previous Parliament the Expenditure Committee tended to criticise Departments for underspending—or perhaps for overestimating—rather than for overspending.
  There was a time, which we all recollect, when public expenditure was very nearly, if not actually, out of control. That happened when the cash limits were introduced. Both the right hon. Gentleman and I wish to preserve the use of those cash limits and the intent behind them, which is basically to control public expenditure. I do not understand how that is to be done. I fail to see how control is being exercised at various levels. We must consider this matter in terms of levels.
  The other day the hon. Member for Knutsford (Mr. Bruce-Gardyne) and I protested at the parliamentary level about the fact that we were expected to vote on Supplementary Estimates without debating them. Those Estimates had been laid before the House for 11 days, and we were expected to vote on them without any discussion. The reasons for that are historic and understandable, but they should be changed. Today, on this Bill, we are allowed to talk about the matters we voted on two days ago. The discussion has come after the event. This would be regarded as very strange in any other legislature.
  Mr. Speaker: Order We are free to discard Treasury control over these excesses, but we cannot have a broad debate now on the House's control over them. That is not the issue before us.
  Mr. English: I accept that, Mr. Speaker; I was merely mentioning it in passing. I was pointing out that there are various levels of control.
  The Treasury and Civil Service Committee of this House, of which I am a member, will shortly wish to consider this issue in more detail, and it will come before the House in that way. I was merely trying to point out that there is more than one level of control. At the parliamentary level, I do not think that our procedures are satisfactory. This has been discussed on many occasions, and I am sure that it will come before us
  1470
  again. The same is true at the level of our new Select Committees. We have only just set them up—they were appointed late in November last year—so they have not really had time to consider this issue.
  We then come to the third and fourth levels—the ministerial and Civil Service levels. The Government have, rightly in my view, said that they wish to keep control of public expenditure. I am not making solely a party point when I say that the Government will not be able to preserve control over public expenditure if such control is exercised only over certain Departments of State and not others. It might be that if a Labour Government were in power they would be more ready to ensure control over defence than over social security. I do not think that it matters whether this would be so or not; it would be wrong to single out Departments. The trouble at present is that the breach of cash limits occurs primarily in the Ministry of Defence. It could be that people in that Department —members of the Armed Forces or the Civil Service or even Ministers—consider that by the very nature of the Department it is likely that a Conservative Cabinet will view sympathetically its requests for money. If that is so, those people should use the proper and authorised procedure. They should go to the Cabinet and ask for the appropriate sum of money.
  Political decisions should be made in the Cabinet. Once those decisions are made, it is the duty of everyone to obey them—certainly everyone in the Executive itself. In this case, the cash limit has been exceeded. I am sure that the Minister has briefed himself in great detail on the reasons for all these supplementary excesses, and I do not want to go into detail on them at this stage. No doubt they will be investigated at the proper time in the proper place. But I wonder what steps the right hon. Gentleman has been taking to make sure that in future the orders of the Cabinet are obeyed. I refer not simply to the technical Supplementary Estimates that may be almost justified and perhaps outweighed by underspendings but to the actual cash limits that are, in effect, the orders of the centre of the Government to all Departments and all sections of Departments. Those cash limits tell Departments what they should spend.

  1471
  Hon. Members debated yesterday the area health authority that was dismissed by the Secretary of State for Social Services. I do not wish to go into that issue. It will be discussed again tomorrow. What is important is that the right hon. Gentleman was justifying the principle behind his action on the ground that he had to enforce the cash limits. That is fine. I said so yesterday. What concerns me is whether there will be an equal measure of enforcement in respect of every Department of State and every subsection of every Department. This must be asked. One cannot have a system that is enforced on one hand and not on the other. If that happens, there soon ceases to be any system of enforcement at all.
  When there has been a breach of cash limits, I would have thought that the matter would be raised first, in this case, by the Secretary of State for Defence coming to the House and explaining whatever reasons existed for it. There may be good reasons, essential for the security of the country. No one came to the House. That was not done. So far as I know, the Ministry of Defence did not spontaneously write—I understand that it was asked, but that is not the same thing—to the Select Committee on Defence indicating the reasons for the breach of cash limits. The Ministry has certainly not approached the Select Committee on the Treasury and the Civil Service to explain why it broke the cash limits. I do not know whether the matter was mentioned to the Cabinet. Presumably the Treasury was aware of it.
  What happens when orders of the central Government are disobeyed? I know what happens in some countries. There was an illustration yesterday of a member of the Cabinet who, accoridng to a judicial decision, was misadvised. No one, so far as I am aware, has yet been proclaimed responsible. I am certain that if a member of the Executive in the United States was badly advised, or well advised, those giving both bad advice and good advice would be known to the public. In the United States, salaries would be increased or decreased according to whether people were efficient or less efficient.
  The Expenditure Committee, of which I was a member, in the last Parliament
  1472
  advocated that the Government should consider the United States system with its much longer salary scales for all levels of the Civil Service. People can be advanced in those scales on an accelerated basis if they are regarded by their superiors as efficient or retarded if regarded as inefficient. No one wishes to sack people. There is, however, no particular reason for paying the same amount to efficient and inefficient people. I know that this scheme is not regarded highly by some Civil Service trade unions. I think, however, that others would take a different view.
  The question remains about what should be done to enforce the orders of the Government in this case, the most important order of all. The basic order given by the Government in present circumstances is that there is a limited amount of taxpayers' money available.
  Taxpayers voted for the Conservative Party partly on the ground that they were paying too much in taxes. My colleagues and I might or might not agree with that decision. As democrats, we accept it. Once in power, the Conservative Government endeavour, naturally, to do something about cutting down public expenditure. They impose fairly severe cash limits on all Departments of State, and all the Departments bar two have adhered to those limits. One is only a marginal breach, the other is moderately substantial. I do not claim that it is immense in the context of total Government expenditure, but it is in eight figures and, as a matter of principle should be considered.
  The simple question that I wish to ask the Chief Secretary is how he intends to enforce the orders that he gives to the rest of the Government machine.
  10.45 pm
  The Chief Secretary to the Treasury (Mr. John Biffen): I welcome the debate and thank the hon. Member for Blaydon (Mr. McWilliam) for initiating it. For the hon. Gentleman to feel that he had temerity in raising the subject shows a becoming modesty, but, as the whole history of the House is about the control of spending and a highly sceptical regard for the Treasury Bench, the hon. Gentleman has demonstrated that, within a short time of his arrival here, he has settled in well.

  1473
  I have been asked about the nature of the spring Supplementary Estimates. They total £837 million. Of that figure, pay and price increases account for £450 million, of which £316 million is sought for pay, including pay awards arising from the Standing Commission on Pay Comparability. A further £110 million is required for transactions within the public sector, which are offsets to revenue, and the remaining £277 million relates to volume increases in certain programmes covered either by offsetting savings elsewhere or from the contingency reserve that is provided within the public expenditure plans.
  I am certain that the hon. Member is right in saying that any attempt to control public spending is seriously impeded by inflation. Inflation claims many victims, and effective control of public spending is certainly one of them.
  The hon. Member for Nottingham, West (Mr. English) apologised for making a party point. When one cannot make a party point in this place, we shall be reduced to a Jenkinsite consensus which I would not wish on anybody.
  If I have to choose a situation in which one could see danger writ large, it was when the previous Government set their cash limits for 1979–80 on the basis of a 5 per cent. pay policy when no one believed that there was much likelihood of that being sustained. Of course, Supplementary Estimates were an inevitable consequence, and all who wish to have discipline in public spending will wish to minimise the significance of Supplementary Estimates.
  The breaches of the cash limits are £64 million in respect of the Ministry of Defence and £6 million on assorted Scottish Votes, somewhat exotic in their character. In order to put the matter in perspective, we should remind ourselves that those figures represent 0·2 per cent. of cash-limited spending. In the 140 blocks that constitute the cash limit arrangements, there were two breaches in 1976–77, two in 1977–78 and four in 1978–79, which is the period that we are considering. In no sense do I wish to be complacent about that, but I think that we might as well register these points so that the debate can be informed rather than hysterical.
  1474
  The Government must react to the breaches of the cash limits, and there are three considerations that I wish to share with the House. The first is the effort that must be made to minimise the overspend that is forecast, because there is still some time to go before the final outturn. By policies of delayed recruitment and purchasing and the consequent operation upon stock levels, it is hoped that the actual breach may be somewhat less than the figures suggested in the Estimates.
  Secondly, there is the consideration of getting to know why all this has come about. The Scottish Estimates have not featured prominently in the debate, but heavy overtime working in the prison service and the aftermath of the disturbances at Peterhead prison had a serious effect upon that particular cash limit.
  The delightful situation of the Scottish roads was mentioned by the hon. Member for Nottingham, West (Mr. English). Because of the good weather, there was better progress than expected and consequently there was an acceleration in payment to contractors. As a consequence, there was an overspend.
  At this stage, there is normally a genera] dissolving into laughter by all and sundry at the absurd way in which the control of public spending is exercised. I do not, of course, refer to such a refined body as the membership of this House. I am talking of audiences outside the House. But that brings home to the House the difficulties of somehow or other finding the magical dividing line between demand-induced programmes and programmes over which the Government are thought to have almost limitless authority.
  Much the most serious breach, however, is that in the Ministry of Defence cash limits. There is a variety of causes for that. I cannot point to anything substantial which would overwhelmingly represent the reasons for such a breach, but the matter is now under discussion between the Treasury and the Ministry of Defence. One factor was the industrial action which affected the pattern of expenditure and receipts for the Ministry of Defence. However, we must acknowledge that this is not the first time that these difficulties have arisen in the Ministry of Defence. We are grateful for the studies and comments of the Public Accounts Committee, which

  1475
  has suggested that there must be ways of improving the estimating, monitoring and financial procedures in that Ministry.
  I think that that takes us on to the question of discipline, which is my third and final consideration. Here we propose that the overspend for 1979–80 will be deducted from the 1980–81 cash limit. That is consistent with the practice of all our predecessors when operating cash limits.
  Mr. English: As the Chief Secretary will realise, the effect of that as a sanction depends entirely on timing. If one deducts something from a cash limit after that limit has been fixed, that can be said to be a sanction. If one says in advance that one will deduct something before one has fixed the cash limit, it would be beyond the wit of man to determine whether that was a sanction.
  Mr. Biffen: Inasmuch as the wit of man is exercised in the Treasury, it will be exercised to try to make the deduction an effective deterrent against overspending.
  The hon. Member for Nottingham, West is perfectly right in saying that one is operating in a difficult area when trying to fashion a sanction that is truly effective. At the end of the day, it must to some extent depend upon a realisation throughout the public service that it is a major breach of one's duties to allow overspending to take place.
  The hon. Member for Nottingham, West said that there might be a two-tier system and privileged spending Departments in Whitehall. In the short debate on Monday, he said:
  "Above all, we ought not to say, as this Government are now saying, that cash limits apply to everybody except the Ministry of Defence and a few others and that no one will ever be allowed to discuss that exception."
  At the conclusion of that debate, my right hon. Friend the Leader of the House said:
  "I agree that the present procedures are not entirely satisfactory … I do not think that I can go beyond that".—[Official Report, 10 March 1980; Vol. 980, c. 930, 933.]
  I assure the hon. Gentleman that there are no privileged spending Departments in any quarter of Whitehall. Some have different problems in controlling their spending. Effective discipline must be secured in respect of each Department.
  Mr. English: The Leader of the House went on only to promise to consider setting up a new Procedure Committee to deal with the financial procedures of the House. It is essential that the Chief Secretary should lend his considerable weight to the proposal to reconsider our financial procedures, as well as those of the Government.
  Mr. Biffen: I am happy to put on record my anxiety that the House should be an ally to the Treasury in securing disciplined control over public spending. That is not a view from either the Right or the Left. Any effective use of the social and military spending priorities can be truly advantageous only if they are controlled. If they are without control, they are as hostile to one side of the House as they are to the other. However, the matter is for my right hon. Friend the Leader of the House. I have no doubt that it will be dealt with.
  I welcome the opportunity to make comments on the excess Vote and breaches of the cash limit.
  Dr. Jeremy Bray: There is a particular problem in the Supplementary Estimate coming under the defence procurement Vote. A large part of the increase must be due to the movement in the exchange rate, which will increase the cost of defence procurement from the United States. How are such eventualities to be safeguarded? Surely it is wrong, if there is a movement in the exchange rate which damages a major defence programme, to make it vulnerable in this way.
  Mr. Biffen: I cannot be precise about that comment. I assume that there must be consequences for the defence Vote from movements in the exchange rate. I speak without a shred of a brief on that topic. I am sure that my fluency is unsupported by evidence. Many other cash limit blocks are effected by volatility in exchange rates. That underlines that while being ambitious about cash limits as a system of controlling public spending we must be modest about exactly what we can achieve. The eternal, unchanging challenge of politics is to tread between the modest and the ambitious.
  From the Treasury's point of view, this evening's debate has been a welcome opportunity to say a little about the

  1477
  Supplementary Estimates. I thank the hon. Member for I3laydon for enabling it to take place.

  GENERAL PRACTIONERS (MEDICAL AND PHARMACEUTICAL SERVICES)
  Mr. Speaker: Before I call the hon. and learned Member for Leicester, West (Mr. Janner) for the next debate, I remind the House of the ruling that I gave earlier this afternoon, when some hon. Members now present may not have been here. That ruling applies to the three remaining debates that are likely to take place.
  The Supplementary Estimates under discussion merely, in the terms set out in "Erskine May",
  "provide additional funds of a relatively moderate amount required in the normal course of working of the services for which the original vote was demanded".
  Therefore,
  "only the reasons for the increase can be discussed and not the policy implied in the service which must he taken to have been settled by the original vote".
  11 pm
  Mr. Greville Janner: I am pleased to have the opportunity to raise the matter in the Vote in Class XI, 2:
  "General Medical Services
  Payments under arrangements made with medical practitioners, &c.
  Increased payments with effect from 1 April 1979 following the recommendation of the Review Body on Doctors' and Dentists' Renumeration"
  and the reasons therefor, and
  "Pharmaceutical Services
  Payments under arrangements made for the supply of drugs, &c."
  and the reasons therefor.
  Apart from reasons of inflation, which afflict all, these increases are due to the burden placed on the general practitioner in the exercise of his skill in his profession on behalf of those who need his help; the difficulties that arise because of the increased complications imposed upon the general practitioner by the increase in the weight of work that comes upon him; the difficulties that he encounters in assisting and working together with other bodies in the field and other agencies; and his difficulties in running his practice
  1478
  properly, having regard to the number of patients with whom he must cope.
  I submit that those reasons are entirely valid but that general practitioners who will benefit from the increase should he assisted to make the best use of the additional funds and of the facilities available to them and should be enabled to co-ordinate their work properly with other agencies in the field. If that is done, the reasons for the additional payment will have been met, the review body will no doubt be satisfied, and the public will have an improved service as a result of the revised provision and the increase thereto.
  If, however, the doctors do not rise to the challenge, if they are not now enabled to do their work better, the result will be not only added difficulty and public dissatisfaction but a series of tragedies of the nature of that of Carly Taylor in the city of Leicester. That is a case with which many hon. Members have been deeply concerned. It was brought to my attention some time ago by Carly's grandmother, who lives in my constituency, by the child minder and by people who had tried theoretically with the general practitioner's help to avoid the tragedy that occurred.
  That case is purely an illustration of the need for the increase that is being voted. It is the clearest illustration, being a clarion call of warning of the tragedy that lies in store if general practitioners do not use the services available and if they are not helped.
  The general practitioner concerned no doubt had a heavy case load. It is he, among others, who will benefit from the increase, one of the reasons for which is to enable such people to do their job properly.
  The report of an independent inquiry about the tragic case of the twin who was battered to death by his mother was published last month. It contains an indictment of the system used by a general practitioner, of which I hope the House will take careful note. I hope that the Minister will assure us that it will be dealt with when considering the increased provision.
  The practitioner saw fit to prescribe a drug called Tenuate Dospan, which is deliberately designed to take away the appetite and to help patients to reduce

  1479
  their weight. That drug was prescribed for the mother of the twins at weekly intervals for about a year. At the same time, the doctor saw fit to prescribe the same drug for the father, along with a barbiturate called Tuinal.
  I know the problems that doctors face with the weight of the burdens which lie upon them in their surgeries. Even so, to prescribe a slimming drug to a woman described in the report as slight, slender and weighing about seven stone is about as vigorous a denunciation of the system that requires more funds for better operation as anything that could happen.
  Somebody describing the continuous prescription of the drug to the inquiry gave—
  Mr. Speaker: Order. I have been generous to the hon. and learned Gentleman. However, his illustration should be brought to a conclusion soon, and he must turn his attention to the excess claim made for payment.
  Mr. Janner: I am much obliged to you, Mr. Speaker. The illustration will come to a close shortly. I am sure you will appreciate that it is a matter of the very greatest concern to the medical profession, to all who benefit from it and to all who are concerned with the revised and additional amounts to be paid to it.
  The problem is how a doctor, with a heavy case load, will be helped by the additional provision to make better arrangements for his patients. It is whether the revised provision is to be given in accordance with the recommendation of the review body, so that doctors will cease to churn out prescriptions for patients because they have no time to consider the consequences. It is whether those who provide the prescriptions for drugs, for which payments will be made in the next Vote, should continue to prescribe without care and without regard to the tragedy that could result, as it did in the case of a woman who weighed only seven stone and was addicted to drugs prescribed by a doctor who was, no doubt, overworked.
  The reason for the Vote is to improve the professional work of doctors and is based upon there being co-operation between the doctor and the health visitor, who is not covered by the Vote. One of the objects of the review body was to
  1480
  ensure that the work of doctors would be more satisfactorily integrated into the overall picture.
  Another reason for the increased payment is to enable doctors to employ appropriate staff. It is to enable them to co-operate—in a way that that doctor did not—with the health visitor, who also did not take note of the state of either the patient or the child. The contact was insufficient. This sort of additional fund must be made available so that it can be fed into a system that is working properly. We also need a full review of the effect that the spending of this public money will have on the service that the public receive in return. The Minister may feel it appropriate, for example, to consider whether some form of computerisation might not be appropriate. In that way, might not the money paid to the practitioner be better spent through the facts of cases such as that of Carly Taylor being properly available to all the agencies concerned?
  One cannot deal with the family practitioner in total isolation. The Review Body on Doctors' and Dentists' Remumeration did not. It recognised that the work of doctors in this area was a cooperative effort for the benefit of the public. In the Taylor case, the cooperation was with the probation officer, with the health visitor, with the housing department and with the Department of Health and Social Security. One possible cause of disaster in a case like this is that people move from one area to another and their doctors are under constant pressure, with which a £16·6 million increase cannot cope.
  The increased amount is aimed at ensuring that doctors are more efficient in their work, to ensure that family practitioners, represented as they were on the review body, will be able to work better in better circumstances. However, they cannot operate on their own. There must be a total review of the way in which the money is spent and the way in which practitioners deal with circumstances such as the persistent prescription of addictive drugs to patients, week after week, month after month and year after year. At the end of the day, those patients, if they do not harm themselves, are liable to cause death and destruction to others, as this unfortunate woman did to her child.
  Mr. Jim Marshall: I am sure that my hon. and learned Friend realises that my intervention arises because we share a common interest in the case he is discussing. I hope that my hon. and learned Friend will not go on to suggest that the addiction to the drug led to the death of the child to whom he has referred. As he knows, a great deal of attention has been drawn to the drug addiction of this individual. I fully accept the need to look into the prescription of the drug to the woman and the over-expenditure which might arise therefrom, but I do not believe that any individual has yet suggested that the death of this infant arose because of the mother's addiction to the drug.
  Mr. Speaker: Order. Before the hon. and learned Gentleman replies, may I say that I have no doubt that he and his hon. Friend are dealing with a very sad case which they both want to bring before the House. However, this is not the occasion for us to go into that case in depth. We must keep to the rules of order and discuss the excessive claims for payment of general practitioners' medical and pharmaceutical services. I know that the hon. and learned Gentleman will co-operate with that appeal.
  Mr. Janner: I am sure that you would not wish me to ignore totally what my hon. Friend has said, Mr. Speaker. I shall deal with it in one sentence, if I may.
  Mr. Speaker: One sentence, then.
  Mr. Janner: Before doing so, may I say how much I appreciate the way in which we colleague MPs in the city of Leicester work together on these matters.
  No tragedy occurs from one cause alone. It arises from a combination of circumstances. If one circumstance were withdrawn, the rest might not exist. The inquiry certainly gives clear indications that this unfortunate lady had not received from a general practitioner the sort of treatment she should have received. She was in a very bad state at the time she committed this awful crime. I do not think that we can separate the effect of drug addiction in an addict who commits an offence from the prescription of the drug at the time. I am grateful to you, Mr. Speaker, for allowing me to say that.
  1482
  The reasons for these increased payments are such that the Government should now institute a full inquiry not only into the sort of case of which the Carly Taylor disaster was merely an illustration but into the whole operation of the family practitioner system.
  I hope that, when explaining the reasons for the grant, the Minister will give the House the assurance that full inquiries will be carried out into the various matters that I have brought before the House and hope to bring before it again on a more suitable occasion—perhaps in an Adjournment debate. It will then be possible to go in more detail into this tragic case, which has worried people not only in my constituency but throughout the country who are concerned with the treatment by family practitioners of drug abuse, child abuse, baby battering and with the disasters that the family practitioner could and should help to avoid.
  Mr. Speaker: Order. The hon. and learned Gentleman did not hear my appeal.
  11.16 pm
  The Under-Secretary of State for Health and Social Security (Sir George Young): The hon. and learned Member for Leicester, West (Mr. Janner) has most ingeniously raised in the debate on the Consolidated Fund (No. 2) Bill a particularly tragic case in his constituency where drugs were a factor. I listened very carefully to what you said at the beginning, Mr. Speaker, and I realise that this is not the time for an extensive debate on the tragic case of Carly Taylor.
  I should like to concentrate on the specific aspects raised by the hon. and learned Gentleman which concern drugs. He explained at the beginning of his speech why, in his view, it was in order to deal with the drug aspects of this particular case. I can confirm that any Minister who reads a report about the death of a child is bound to treat it as a matter of the utmost concern and to wish to ensure that any lessons that can be learnt are learnt and that any necessary action should be taken.
  Putting it briefly in context, during Carly's life her family were visited frequently by health visitors, social workers and a probation officer. Her father and

  1483
  mother appeared to have been misusing drugs during most of the material time, and the home conditions varied from poor to squalid.
  As the hon. and learned Gentleman knows, there was an inquiry, and the report made six recommendations, one of which deals specifically with drugs. The fourth recommendation was that general practitioners should be encouraged to undergo training for professionals in the detection and handling of suspected child abuse and drug abuse.
  The hon. and learned Gentleman raised the question of liaison between the GP and the health visitor. The inquiry report reveals very poor communication between the health visitor and the GP. I can only regret this. Experience has shown that, where health visiting and district nursing staff have been attached to general practice, this has generally encouraged the development of co-operative patterns of working and making the best use of the special skills of the different disciplines. This has improved the quality of service to individual patients. No doubt this is a matter at which the Leicestershire area health authority is now looking.
  The hon. and learned Gentleman specifically mentioned the monitoring of general practitioners' prescribing, which falls under this broad heading. Family doctors in the National Health Service are required to prescribe whatever drugs or medicines they deem to be necessary for their patients, but they may be called upon to justify their prescribing decisions. I think that that is what the hon. and learned Gentleman is looking for in this case.
  The general practitioner services are administered by 90 family practitioner committees in England, each of which is concerned with the arrangements for providing general medical, dental and pharmaceutical and ophthalmic services to the population in its own area. Doctors, dentists, pharmacists and opticians in that area enter into a contract with the committee to provide their services and receive payments. It is the payments which are from the Consolidated Fund.
  In each family practitioner committee area there is a local medical committee, elected by the family doctors in the area and recognised by the Secretary of State under section 44 of the National Health
  1484
  Service Act 1977, which acts as adviser to the FPC about all matters affecting the provision of general medical services in the area and, specifically in this context, as a body to which the Secretary of State may refer any cases in which it appears that a doctor's prescribing costs are excessive.
  Prescriptions issued by every general practitioner in each FPC area during one particular month in each year are examined and costed. The prescription forms are sent by chemists to the prescription pricing authority and the prescribing data are collected from the prescription forms after the pricing function has been completed.
  The average cost per patient is calculated for each doctor and the figures are sent to him in simple summary form through his FPC together with the average cost per patient for the area as a whole. The figures for all the doctors in the area are examined in the Department and, where a doctor's costs are substantially above the average for the area, his prescribing for the month in question is analysed in detail.
  If appropriate, a copy of the analysis is provided to the doctor, who is then visited by a doctor of the Department's regional medical service. The GP's prescribing pattern is discussed in detail and advice is offered. Often a GP's prescribing costs then fall to an acceptable level. Formal procedures provide, where this does not happen, for the matter to be reported by the LMC, which may, if it finds that excess cost has been incurred, recommend, subject to the doctor's right of appeal, that part of his remuneration be withheld. Formal control of prescribing costs rests on these statutory powers.
  Apart from the monitoring of overall costs, as I have just described, the prescribing of individual drugs is also monitored and the prescribers concerned are visited by the regional medical service. The main contact between the Department and the GP is the regional medical service, and it is the attitude of the officers of that service to their tasks which is paramount in determining the nature of the response. The present approach is to eschew reference to the formal procedures and to concentrate rather on impressing the GP with the idea that the Department wishes to give as much support and

  1485
  encouragement as it can to doctors to improve the effectiveness and economy of their prescribing by extending to them the facilities for retrospective study of their prescribing habits and any other information on drugs and therapeutics which the Department is able to provide centrally. This has been done with the agreement of the representatives of the profession.
  I turn briefly to the case raised by the hon. and learned Gentleman to give him some assurance that appropriate action is being taken. It is worth reminding the House that the inquiry team which I mentioned earlier referred the prescribing of the family GP to the FPC.
  The FPC meets on 27 March to decide what more can be done in this case. I understand that the GP has been visited by the regional medical officer to check his prescribing, which was found to be above average but not remarkably so. A subsequent visit showed that prescribing had improved. No complaint has been made by a patient. The FPC has administrative powers to investigate, but it would need the Secretary of State's consent to proceed as this matter is outside the time limit of eight weeks.
  I must tell the hon. and learned Gentleman that it might be difficult now to establish some of the facts to which he referred—for example, the weight of the patient when the drug was first prescribed and whether the GP had broken his terms of service. We shall have to await the report of the FPC.
  The hon. and learned Gentleman raised one or two points about the drug itself. There are fairly strict procedures within the Department for ensuring that only appropriate drugs reach the market and adequate controls are imposed to ensure that those who receive the drugs are safeguarded.
  Under their terms of service, family doctors in the National Health Service have a duty to prescribe whatever drugs or medicines are needed for the treatment of their patients; but only the doctor concerned—who is not an NHS employee but an independent contractor—
  1486
  can decide what is necessary in the individual case. My right hon. Friend the Secretary of State has no authority to prohibit the use of any particular substance or drug.
  Apart from preparations which contain only cellulose or stercula as their active ingredient, all slimming pills are available on prescription only. In addition, most drugs for the treatment of obesity are controlled under the Misuse of Drugs Act 1971 and regulations made under that Act.
  Detailed questions about the application of that legislation fall to the Home Office, but briefly the effect of the Act is to limit authority to possess or supply controlled drugs to doctors and certain others acting in their professional capacity and to patients for whom they have been prescribed and to impose requirements as to record-keeping, prescription and destruction which are designed to prevent their illicit use. I understand that this drug is now under review and is to be controlled when the next Order in Council is made amending the scope of the Misuse of Drugs Act.
  Mr. Greville Janner: I am much obliged to the Minister for all that he has said and the way in which he said it. While we are awaiting the decision regarding this drug, will he take the opportunity to warn both practitioners and their patients of the grave danger of side effects from this slimming drug and from most others that do not consist, as he has said, mainly of cellulose?
  Sir G. Young: My right hon. Friend the Secretary of State has established specific professional committees which are to advise him on this matter. I should like to refer that remark to one of those committees so that we get the right response. Perhaps I may write to the hon. and learned Gentleman on that specific point.
  I hope that there will be another more appropriate occasion when we can have a full debate on the tragic case that the hon. and learned Gentleman has raised, because it deserves the attention of the House.

  SCOTLAND (NATIONAL HEALTH SERVICE)
  11.25 pm
  Mr. William Hamilton: I refer especially to the Supplementary Estimate of about £15½ million for the Health Service and other related matters in Scotland. It is not a large figure when compared with the total of £953 million. I guess that it is about 1½ per cent. However, it enables me to focus attention on one or two pressing problems of which I have given the Under-Secretary of State for Scotland notice. I shall be mentioning other matters while others I shall not mention at all.
  No doubt the National Health Service will be clobbered by the public expenditure cuts. I refer to the cuts already inflicted and those to come in a few weeks' time. We shall be able to discuss the forthcoming cuts in due course. There is a Bill in Committee that we can use as a peg on which to hang some of our criticisms of the Government.
  I draw the Minister's attention to what I regard as a major scandal. I am not making a party point, and I hope that the Minister will not do so. It is an issue that far transcends party politics. My criticism is directed as much to the previous Labour Government as to the present Government. The important thing is to put matters right and to ensure, as far as we can, that nothing of the sort happens again.
  The scandal of the Glasgow Royal hospital for sick children must be brought into the open. The hospital is in the constituency of my hon. Friend the Member for Glasgow, Kelvingrove (Mr. Carmichael). I hope that he will be able to catch your eye, Mr. Deputy Speaker, in due course. I hope that my hon. Friend will recognise that my justification for raising the matter is that it concerns a hospital of national importance and of international repute. It far transcends purely constituency considerations. However, there are other reasons that cause me to raise the issue that I shall disclose in due course.
  My hon. Friend has been active in seeking to expose what went wrong. No doubt he will put his own views on record. My attention was drawn to the matter when it hit the headlines in a two-
  1488
  page spread in the Glasgow Sunday Mail of 14 October 1979. The headline was "Hell Hospital". The hospital was opened by the Queen in 1971, about eight years ago. According to the article, it cost £5 million. At the time, it was supposed to be the most modern hospital in Europe for sick children. The main contractors were Richard Costain Ltd. of London.
  Within a short time of the hospital opening, serious deficiencies began to show. According to the article, the concrete floors in all 12 wards are breaking up and need to be replaced. The entire plumbing system has had to be or is being ripped out. Every window is to be or is being renewed because they cannot be opened wide enough to provide adequate ventilation. The whole roof is leaking and needs to be replaced. The outside walls leak and will be completely demolished and rebuilt. Defective fire walls inside every ward will have to be taken down. All the wards will have to be closed at the same time as the entire seven-storey building is ripped apart and rebuilt.
  In the article, the conditions were described by various doctors as "intolerable", "a shambles" and
  "like trying to run a hospital in the middle of a builder's yard".
  The building is falling apart. It was built by private enterprise at a cost of £5 million. Taxpayers' money has been used.
  I earlier described the story as a scandal. If half of that Sunday Mail story is true, it is a crime. Those responsible must be made to pay. It is estimated that the cost of repairs will be £4 million. We do not know when those repairs will be completed. Perhaps the Minister will confirm the date, given in that article, of 1981. Perhaps he will confirm also the final cost. I expect that it will cost more than £4 million if inflation continues at its current rate.
  Who will pay for the repairs? Costain apparently offered no comment when contacted by the Sunday Mail. I do not know whether that firm has since commented. However, it must make some comment. There is a strange reluctance to talk about this issue. I do not wish to prejudge the matter. However, a public inquiry has been demanded. That demand

  1489
  should be acceded to. The truth, the whole truth and nothing but the truth must be revealed.
  I do not know whether I should disclose the information that I wish to give. However, I shall take a chance. I am a member of the Select Committee on Public Accounts. When I had read the article, I took it to the Committee. I suggested that an investigation might be initiated by the Committee. It invited me to draw up a questionnaire and to submit it to the Scottish Home and Health Department. I drew up a list of 20 questions. They were sent to that Department in mid-January. I received a reply dated 21 January from Mr. Rennie, the chief accountant. He indicated that he would need some time in order to reply to those questions. He said that he hoped to reply within four weeks. I have not received any reply, although six weeks have passed. Perhaps the Minister can inform me when I may expect that reply.
  I understand that extensive costings were involved. I am sure that the Department is anxious to give accurate and full answers. However, I am prepared to suspend judgment until replies have been received and until the Committee has completed its work. The investigation will not end upon receipt of those answers. That is just the beginning of our investigation. The initiation of a public inquiry should not be precluded by the Department. I hope that the Minister will be forthright on those points.
  That hospital building programme is not the only one to give cause for concern, although it hit the headlines. I shall give two other examples. I have not given the Minister notice and I do not expect him to reply tonight. Perhaps he will give me a written reply or some other form of response.
  I refer first to the North Ayrshire district general hospital, where for new works, alterations and additions the pretender estimate was £1·963 million. The revised estimate for 1979–80 was £2·523 million. For the works in progress at that hospital before 1977–78, the pretender estimate was £8·3 million. The revised total cost for 1979–80 is £15·8 million. There may be good reasons for the difference. It may be due simply
  1490
  to inflation. I should be glad of a detailed answer at a later time.
  The second example concerns phase 1 of the Merchiston hospital. The pretender estimate was £3·34 million. The revised total cost for 1979–80 is £5·17 million. If the difference is merely due to inflation, it bodes ill for the future building programme, with the current rate at 20 per cent. Inflation is unlikely to come down in the short term. All the signs are that it will remain at that level for quite a time. That rate of inflation, plus cash limits, is bad news for the Health Service.
  I understand that my hon. Friend the Member for Dunfermline (Mr. Douglas) will touch on other aspects of the National Health Service, and I shall merely mention briefly two other problems that concern me—mental illness and handicap and geriatrics. The Minister knows that I have an amendment down in Committee on the Health Services Bill, which we shall be dealing with upstairs. Suffice it to say that in the next few years of financial stringency the most acute suffering will occur with regard to mental illness and geriatrics. I believe that the Minister accepts that.
  I can cite examples all over the United Kingdom of man's inhumanity to man. If we treated animals as we treat geriatrics and the mentally ill, there would be an uproar. If a donkey is flogged or there is cruelty to sea beasts in Japan, an early-day motion is put down. I wish that we could get as indignant about geriatric patients and the mentally handicapped in our hospitals.
  I received a reply today from the Minister on how much is spent per week per patient on food in psychiatric hospitals. On average it is £5·61 a week, which is 80p a day. Looking at the Minister, I doubt whether he would survive for more than a week on 80p a day. The situation is worse than that. The low figure that the hon. Gentleman gave me was £4·47 a week, which is 64p a day. I should like to know, and the House has a right to know, which hospitals provide for their psychiatric patients in that way. It is not a party point. The answer that I received from the previous Minister was similar. The provision for the inmates of Belsen could not have been much less.

  1491
  In the Daily Record on Thursday 14 February, a couple of weeks ago, there was the headline "Wards of Shame". The newspaper quotes from a report of the Scottish Hospital Advisory Service. It speaks of old men in some of these geriatric hospitals sharing a shaving brush, a bath towel, even underwear. It is difficult to know how they do that, but they do, according to this report. The report says:
  "It is still possible to find the open stall type of WC without a door and with a battery of WCs open to view."
  These are old men and women, eking out the last few days of their lives in the most indecent indignity. We all ought to be ashamed that we tolerate conditions of that kind.
  What do the Government intend to do about such a state of affairs? In a few weeks, they are to cut those services still further. There is a Bill before the House, to which I have referred. What are they doing in that Bill? They are to extend private practice. That will help the geriatrics an awful lot. That will help the mentally ill and mentally retarded an awful lot. They are to allow the area health boards and the local health councils to raise cash by organising bazaars, whist drives, bingo sessions and, perhaps, strip shows and flag days and God knows what. It is spelt out in clause 4 of the Bill. It would be laughable if it were not so idiotic, obscene and irrelevant to the great problems currently besetting the Health Service in Scotland and the rest of the United Kingdom.
  In the coming weeks, in the Budget and the public expenditure White Paper, there will undoubtedly be further vicious cuts in this supremely Christian service. More and heavier charges, perhaps new charges, are more than likely. I do not know how much longer our people will tolerate in silence the continuous onslaught on their standard of living at a time when the Government are talking about spending over the next few years thousands of millions of pounds on nuclear submarines, nuclear defence equipment and the rest. It is the most un-Christian, the most absurd sense of priorities I have ever met in a lifetime of political experience. I hope that the Government are thoroughly ashamed of what they are doing. The people will very soon rise in rebellion
  1492
  against it. It cannot be tolerated a day longer.
  11.43 pm
  Mr. Neil Carmichael: I am grateful to my hon Friend the Member for Fife, Central (Mr. Hamilton) for giving me the opportunity to say something about the Royal hospital for sick children, which lies within my constituency, outlining the problems that have beset this hospital over the years. I have not raised the matter officially with the Under-Secretary who now has charge of health matters in Scotland, the hon. Member for Aberdeenshire, West (Mr. Fairgrieve).
  I emphasise, as did my hon. Friend the Member for Fife, Central, that this is not a party political matter. I received extremely unsatisfactory answers on the issue from my hon. Friend the Member for Stirling, Falkirk and Grangemouth (Mr. Ewing), who was the Minister with health responsibilities in Scotland in the last Labour Government.
  I have visited this hospital frequently and have talked regularly to members of staff, many of whom I know on a personal basis. There is nothing I could say about this hospital, and the building work within it, which would be an exaggeration. The entire standard of building is appalling. I will say that the concept, the design of the hospital and the architectural layout are extremely good. I Dive full marks for that. It is a well-laid-out hospital. The concept is good. However, the building and construction work is absolutely unbelievable.
  Over the years, I put questions to the Ministers in charge. It is interesting to read some of the answers. As far back as May 1977, I received an answer from the then Under-Secretary of State, my hon. Friend the Member for Stirling, Falkirk and Grangemouth, which referred to
  "extensive remedial works which have still to be undertaken and for which the relevant tender documents are now being instructed or are in course of preparation."— [Official Report, 25 May 1977; Vol. 932, c. 1393.]
  I should like to know how far forward is this process and whether all the documents for remedial work have now been produced.
  The question of arbitration and litigation has bedevilled the repairs to the

  1493
  hospital. We have elevated the legal aspects of this matter beyond a joke. It is much more important that we find out what went wrong with this hospital and why there are so many defects than to discover who will pay for them. That can come later. I repeatedly asked for a public inquiry. There must be such an inquiry. I hope that my hon. Friend the Member for Fife, Central, having raised this matter tonight, will help to persuade the Department to hold a public inquiry.
  Until recently, nurses at the hospital were required to carry drinking water. The plumbing was so bad that when the taps were turned on black water came out. Drinking water had to be carried to the patients on the various floors. I saw the exposed drains. The relatively new clerk of works—he has been there a few years now—has pictures and a black museum illustrating what happened at the hospital. There are drains and soil pipes going nowhere. They run down to the ground but do not lead to the main sewer. That would be bad enough anywhere, but in a hospital it is terrible. The plumbing is appalling. The facing of the building is coming off. It was very badly done. It is dangerous and must be renewed.
  Anything that the Sunday Mail said about the hospital was true. This may sound surprising, as tabloid newspapers usually exaggerate. However, anything said by the Sunday Mail about the hospital and the workmanship was an understatement.
  When I asked questions about the matter, I continually received the same answer. The Under-Secretary of State said:
  "I am advised that a public inquiry held in advance of arbitration or litigation could prejudice the Board's chances of recovery."—[Official Report, 15 February 1978; Vol. 944, c. 252.]
  The Minister should examine this matter and say how much longer we must wait for a public inquiry. It is not sufficient merely to go to court. A complete examination of exactly what went wrong is required.
  I understand that the main buildings were accepted serially by the hoard during the period March to August 1971, enabling the first patients to be admitted in October 1971. Formal handing over of all the buildings was completed in
  1494
  March 1972. Surely, the Department did not accept those buildings without certification by the architects and quantity surveyors that they were built to specification, that their standards were up to scratch and that they were perfectly suitable for the work.
  Almost two years ago, I was told that since the hospital had been opened in 1972 48 beds had been out of use continually. Between February 1972 and February 1978, more than 15,000 bed weeks had been lost—and this in a part of the West of Scotland where beds are at a premium. Perhaps at a later date the Minister can tell me whether the number of bed weeks has been further reduced.
  This may be unparliamentary, but I am quite prepared to repeat it outside: there has been considerable neglect by the professional people involved. The architects' fees of £185,000 have been discharged in full, as have the quantity surveyors' fees of £130,000 for work on this hospital. The specific jobs of these people were to see that the client was given full value for money and that the building was properly equipped to do the job it was commissioned for. What were the architects and quantity surveyors doing for the £325,000 they got between them? They were supposed to supervise and see that the job was properly done. I believe that we need a public inquiry.
  I have some knowledge of building work, and I have spoken to many people who were involved in this hospital. I have said repeatedly in the House that every tradesman and every professional man who had anything to do with this hospital had some responsibility for the result. The workmanship was appalling and the supervision was appalling—and that applies to departmental supervision as well. I am sure that the Property Services Agency must have had overall control of this, and it, too, has been negligent in its job.
  I do not know whether the Minister has visited the hospital. Its story is one of utter horror. I hope that the Minister will be stimulated by the debate into taking a look at the hospital and seeing just how bad it is. I raise this matter tonight because we must not let such a thing happen again. Everyone who was involved in this job bears a responsibility

  1495
  —and it is an appalling one. Rather than hide behind the law and say that we cannot have an investigation because it would breach the legal process. I think we should admit that things have gone well beyond that stage.
  Rather than worry about who is to repay the State for the deficiencies in this hospital, there is need for nothing other than a full, public inquiry. This would be for the good of the building industry and for the good of professional organisations in Scotland. I have seen the black museum. There is plenty of evidence to show how appalling was this job.
  I hope that the Minister will forget about trying to recover relatively small sums of money and get on with the job of trying to find out what went wrong. This would perhaps help when costlier jobs are undertaken in the future. While it may be painful at this stage, we could be proud of the fact that we had been honest, had examined the matter without fear or favour and had produced a report that would be a guide to the building industry and to the professional industries in Scotland for many years to come.
  Mr. Deputy Speaker (Mr. Richard Crawshaw): Before calling the next hon. Member, I should explain that not everyone present was in the Chamber when Mr. Speaker indicated that debates on items Nos. 13 and 14 were limited in scope. As the extra money is only a small amount in relation to what was originally granted, the debate does not extend to the whole of the Service. It should be related only to the purpose for which the extra grant is asked. I have allowed hon. Members to mention specific hospitals. I have no knowledge of whether those hospitals fall within the grant. This is not a general debate on the National Health Service in Scotland. I recognise that it is difficult to keep the matter within those confines. I hope that hon. Members will realise that the House is not debating the previous money that was given. The debate relates only to the extra money now being given.
  Mr. William Hamilton: On a point of order, Mr. Deputy Speaker. I have taken part in many of these debates. I looked carefully at Class XI, Vote 4. You are right, Mr. Deputy Speaker. It is a matter
  1496
  of £5½ million, as I indicated. But it covers a multitude of activities. It covers the capital expenditure of the health boards, which affects all hospitals. We could speak on all hospitals in Scotland. We do not know which particular hospitals are concerned with the global sum.
  Anyone, in my humble submission, would be in order in referring to any hospital, because all are controlled by the health boards. There is a specific sum—an increase of about £3 million—for the health boards. Similarly, there are references to other parts of the National Health Service, including research and charges, and the supply of artificial limbs and hearing aids. It is a very wide debate.
  Mr. Deputy Speaker: The hon. Member for Fife, Central (Mr. Hamilton) is quite right. It is difficult to know exactly what is specified. The hon. Gentleman made an attack on the general Health Service more related to the original Estimates. These are additional Estimates. It is difficult to keep within those confines. I think, however, that the matter should be brought to the attention of hon. Members.
  11.58 pm
  Mr. Dennis Canavan: There should be no fear on your part, Mr. Deputy Speaker, about having to call me to order on this matter. I should like to endorse briefly what my hon. Friends have said. I hope that the Minister will say specifically how these extra moneys, if they can be called extra moneys, given to the health boards will affect the Government's plans to increase fee-paying opportunities within the Health Service.
  As the Minister knows, he and I served on the Standing Committee that dealt with the Education (No. 2) Bill, setting out the Government's plans for an assisted places scheme. As the Minister responsible for health matters in Scotland, can the hon. Gentleman tell us whether the Government have plans to introduce a similar scheme of assisted places for pay beds and what effect that would have on patients who cannot afford pay beds? The Minister and the Prime Minister are on record as saying that the Government are not cutting public expenditure on the NHS. They are playing with words.

  1497
  They may argue that they are not decreasing expenditure, but they are certainly reducing the planned growth in the NHS that they inherited from the previous Labour Government.
  When detailed plans are published in the White Paper, we shall see a further decrease in expenditure on the Health Service and on other essential services.
  The Government are not just cutting public expenditure but are redistributing expenditure and the opportunities for social services so that those who benefit most will be those with money to pay for the services. One of the basic principles of the NHS when it was set up more than 30 years ago was that health services should be available to all, irrespective of the money that the patient had in his pocket. It was agreed then that the only criterion for deciding a person's place in the queue was his health priority. The person most in need on health grounds should be at the head of the queue. The Government are undermining those principles in their public spending programmes.
  Mr. Iain Sproat: The hon. Gentleman is being ridiculous.
  Mr. Canavan: The hon. Member for Aberdeen, South (Mr. Sproat) is the biggest witch-hunter An Scottish politics and is probably creating a great deal of fear, not just among the poor people who are claiming benefits but among those at the end of the NHS queues, which are far too long.
  Mr. Sproat: Does not the hon. Gentleman realise that under the system operated by his Government three-quarters of a million people in this country were waiting for operations that they could not get? That is how the NHS deteriorated under his Government, and that is what the present Government are trying to put right.
  Mr. Canavan: I have never been a member of a Government or been in a position to form a Government.
  Mr. Sproat: Thank God.
  Mr. Canavan: I was constructively critical of various aspects of the NHS under the previous Government, but the present Government are making things worse. We should be extending opportunities to people irrespective of their
  1498
  ability to pay. The hon. Gentleman's Government are turning the clock back to an elitist two-tier health service where those with the ability and willingness to pay will get priority of access to treatment and the vast mass who do not have the inclination or the ability to pay will have to wait in a long queue. The queues will get longer, not shorter, and that is completely alien to the principles and traditions of the National Health Service.
  That alienation will be felt even more strongly in Scotland because, whatever the merits or otherwise of the pay bed system in the United Kingdom as a whole, the number of pay beds in Scotland has been very low. It now appears that the Government are trying to increase the number of pay beds, thereby decreasing the opportunities for the vast mass of the population of access to an adequate health service. That is obscene and it discriminates against the people who are most in need. No Government, irrespective of party, can justify that.
  12.6 am
  Mr. George Robertson: This has been a valuable debate, and I commend my hon. Friends the Members for Fife, Central (Mr. Hamilton) and for Glasgow, Kelvingrove (Mr. Carmichael) for bringing the matter to the attention of the House.
  My hon. Friends have concentrated on the problems of the Royal hospital for sick children in Glasgow, and I would not seek to minimise them. I hope that some solution of the problems being experienced there by patients and staff will soon be found.
  Since we are considering the Supplementary Estimates and the money necessary for this part of the public sector, it is all the more relevant that we should highlight the statements of the Minister that the National Health Service is being protected from the swingeing attacks on the public sector that we have experienced in so many other areas of public spending under his Government.
  The Minister and the Government are saying that this protection is something in which they can take pride. The reality is very different. On the surface, the figures suggest an increase in expenditure in the Service this year as compared with last year. That is merely an apparent protection of the NHS not afforded to other public services. However, in the

  1499
  hospitals and in the ambulance service, where it really matters, inflation, encouraged and supervised by the Government, means that the gross amount of money available has decreased.
  The Minister knows that one of the first acts of his right hon. and learned Friend the Chancellor of the Exchequer was to increase VAT. In the short time that it took him to present his first Budget, the Chancellor almost doubled VAT and drove the first nail into the coffin of the NHS by placing an enormous burden on a service faced with existing cash limits.
  Cash limits are now being used to cut back the services to the public, and the Minister can rely on the fact that the wider public do not yet understand the full impact of the cash limits on the National Health Service in Scotland. If the public understood the situation, the Minister's assertion that the National Health Service was somehow being protected from the effects of public expenditure cuts would sound very empty. Administrators in the Service are now experiencing grave difficulties because cash limits have not been increased to keep pace with the inflation that the Government are so recklessly supervising.
  Some health boards are considering solutions that they would not have considered before. The Inverclyde hospital has about 70 beds which are no longer available as a direct result of expenditure pressures. There is open talk in Scotland that some of the beds, abandoned because the health boards do not have the money to use them, will be used as pay beds. That is happening in a part of the country which has not had much experience of private medicine within the National Health Service.
  The Minister will say "Oh, no", but the Health Services Bill gives more than simple encouragement to pay beds in the National Health Service. It is an open invitation to use spare resources to encourage private medicine. The Government are encouraging, openly or surreptitiously, the use by private medicine of such resources as are unused because of cash limits.
  A researcher in the Library asked some of the administrators of the health boards how cash limits were affecting them this
  1500
  year. He spoke to the treasurer of the Highland health board, who said that the health boards were requisitioning cash on a daily basis from the Scottish Home and Health Department about two months ahead. He said:
  "On February 6th the Highland board requisitioned the cash it needed for the remainder of the year up to March 31st. There are some indications that all this money may not be forthcoming."
  That experience is not confined to the Highland health board. It is the experience of many Scottish health boards. The direct consequence is that services are being curtailed and patients are not being treated in the way that medical authorities would wish. The Government are conducting a policy which on the surface appears to protect expenditure but which is cutting the money available to treat patients in medical need. If the National Health Service is weakened, the Government will have a heavy burden to carry when they are finally cast out of office.
  12.13 am
  The Under-Secretary of State for Scotland (Mr. Russell Fairgrieve): We are grateful to the hon. Member for Fife, Central (Mr. Hamilton) for raising the problems of the Health Service in Scotland. We are also grateful to the hon. Members for Glasgow, Kelvingrove (Mr. Carmichael), West Stirlingshire (Mr. Canavan) and Hamilton (Mr. Robertson) for taking part in the debate. It may have gone a little wider than we envisaged, but we are pleased to have had the opportunity to debate the subject.
  The hon. Member for Fife, Central advised me that he wished to mention the Royal hospital for sick children. That part of my reply will be formal for the sake of the record. The hon. Member and his colleagues went a little wider than that in parts of their speeches, and I shall have to comment more politically on those aspects.
  The constant talk about the National Health Service being clobbered goes a little over the score. The hon. Member for Fife, Central knows the history of the Health Service as well as I do. The idea that it is being clobbered is ridiculous. I shall return later to the clobbering that took place under the hon. Gentleman's Government and the lack of clobbering that is taking place under the present Government.

  1501
  There have been references to the remedial work that is having to be carried out at the Royal hospital for sick children, Glasgow, which was rebuilt between 1968 and 1971 to replace the earlier hospital on the same site. As hon. Members know, the subject is at present engaging the attention of the Public Accounts Committee, and my Department is about to submit to the Committee detailed answers to some 20 questions that the Committee has posed.
  The first point that I should make is that the Greater Glasgow health board has now embarked on arbitration proceedings with a view to obtaining restitution of the large amount of expenditure —I regret to say that it is far more than the hon. Gentleman mentioned—that must be undertaken at the hospital. To this end, an arbiter was approved last July, and the present position is that the board's legal advisers are just completing a formal statement of claim. This is subject to extensive consultations between the board and its advisers. The sum being claimed has now been fixed at £7·25 million.
  The cost of remedial work is being met in the first instance from Exchequer funds by way of capital allocations from the Scottish Home and Health Department to the health board. The House may be assured that the public interest is uppermost in my Department's approach to the claim, though the necessary action is primarily for the health board.
  To pursue these matters by means of a public inquiry, as the hon. Gentleman suggested, would serve no useful purpose at this stage, as ii: could prejudice the attempt to obtain restitution by legal means from the parties held to be liable for defects that must now be remedied.
  Mr. Carmichael: I can see the point. I have heard this answer a number of times. The hon Gentleman said "at this stage". We spend much more on public works in Scotland than the £7·25 million. We need more than that; we need to find out what happened and why. Important though the return of the money is, without a public inquiry it is not sufficient. I hope that the hon. Gentleman will accept that.
  Mr. Fairgrieve: I accept it up to a point. When the present arbitration has taken place and the legal position is remedied, when—as we hope—we win our case and obtain restitution, the lessons must be gone into very seriously. But the main point now, for the sake of the public purse, is to obtain the return of the money that has been disgracefully spent in this way. That is the exercise in which we are involved. Thereafter, we must look at the lessons.
  I need say no more about that matter, because it is virtually sub judice. The Department is watching it very closely. We shall look at the whole question of supervision of building materials, quality control and all the other matters that this unfortunate circumstance raises.
  The hon. Member for Fife, Central went on to refer to the description "Hell Hospital". At least, he was honest enough to say that this was under both Governments. He said that it was built by private enterprise. I do not know whether there is any significant point there, but it was put out to public tender, so let us be fair about that. We hope that those responsible will be made to pay. I have already given the figures involved and have spoken about the public inquiry and what we do in the Public Accounts Committee.
  The hon. Gentleman also mentioned other problems with hospitals—for example, the North Ayrshire district general hospital and Merchiston, phase 1. I shall write to him about the questions that he posed.
  In many ways, we have over-democratised our method of building hospitals. When you think—
  Mr. Canavan indicated dissent.
  Mr. Fairgrieve: When you think, if you can think—
  Mr. Canavan: On a point of order, Mr. Speaker. Is it in order for the Minister to ask the person in the Chair if he can think?
  Mr. Speaker: The Minister used the word "you", but I do not think that he was referring to me.
  Mr. Fairgrieve: I shall be more careful of my response in future. Some of the hospitals that are coming on stream could have been started 16 or 17 years

  1503
  ago, when, under another Government, there was a growth in the economy and there was the advantage of lower fuel costs. We expected a continuing higher standard of living and a prosperous country, and the hospitals were designed with that in mind.
  When I said "over-democracy", I meant that our planning procedures for hospitals take much longer than those in other countries in Western Europe and North America. At one time we reached a stage where, before we built a broom cupboard, the cleaners had to be asked whether it was the right size. As a result, many years passed between the conception of a hospital and its commissioning.
  That has happened in hospitals in North Ayrshire, where, if we were planning them today, the design would be quite different from the point of view of fuel consumption, meals service and privacy given to patients. The hospitals would be very different if considered in the current economic climate.
  I turn to the questions of mental illness—raised by the hon. Member for Fife, Central—geriatrics, financial stringency and man's inhumanity to man. The hon. Member raised the emotive question of whether I could live on 80p per day for meals. Could he live on that? I assume that he included himself in his figures. He tabled a question today about the weekly cost of food per patient in psychiatric hospitals and the comparable figure for other hospitals. My answer was quite clear. The latest figures available show that the average provision in a psychiatric hospital is £5·61 per patient per week and £6·62 per week in other hospitals. The averages conceal a wide range of costs to individual hospitals, from £4·47 to £7·49 for a psychiatric hospital and £3·94 to £11·92 for other hospitals.
  The hon. Gentleman knows perfectly well that, when an organisation is catering for many people, to divide the costs and pretend that the result is true for one person is ridiculous, irrelevant and unnecessary. To use the emotive question of whether anybody in the House could feed on 80p per day is a total distortion of the facts. We are talking of the costs of feeding people in hospitals. The hon. Gentleman knows that patients in our hospitals in Scotland are not suffering
  1504
  from lack of food, which is the inverted inference of his remarks.
  I do not think that the hon. Gentleman expects me to talk about wards of shame. He knows of the terrible, frightening, looming picture of the geriatric problem facing this country. It is a problem with which none of us knows how to deal. On balance, we prefer to deal with the geriatric problem in the community rather than in hospital. We are short of the necessary resources. How wonderful it would have been to have come into Government last May as the Minister of Health in West Germany or France, countries which, because of their productive efficiency, have a higher standard of living and can spend more money per head on health and pensions and on longer holidays and better benefits than are available in Britain. But that is the lot with which we currently have to deal. The Government hope and intend to get us out of that.
  Mr. Canavan: They are taking a long time about it.
  Mr. Fairgrieve: Ten months is a better record than the hon. Gentleman's Government's five years, which saw unemployment doubled and the value of money halved, with inflation brought to new and greater levels. Of course, we do not wish to tolerate such conditions and we shall do all we can to change them.
  The hon. Member for Fife, Central, started again on the old theme of the bingo clause—clause 4 of the Health Services Bill, in the Standing Committee on which we are both members—with flag days, the rattling of tin boxes and all that. Is there anything wrong with letting people who want to help their local community do so? It is a permissive, not a mandatory, clause. We are allowing people who so wish to contribute to their hospital or to other causes. The sinister suggestion by the hon. Member that we were clawing away at the principles of Aneurin Bevan's Health Service is baseless, and I think that he knows that. There has been no question of new Health Service charges being introduced.
  In education, housing and health, Labour Members do not seem to be concerned to hit at the rich, the people who can buy their own homes and can pay for their health care and for their children to be educated. They hit at the people

  1505
  who want to make a contribution, at the person who wants to get an aunt into a private ward, to send his child to a school for which he can make a contribution, or to get a mortgage to buy a house. It is Labour Members who are divisive. It is they who want to create two nations—the rich and the poor. They do not like the bridge or the ladder.
  Mr. Canavan: Does not the Minister realise that most people make a contribution to the Health Service? But for the taxes people pay and the contributions that are made through national insurance, the Health Service would not exist.
  Mr. Fairgrieve: I am aware of what the taxpayer pays. I am merely saying that if a person, after having paid his taxes, rent and rates, decides that rather than have a holiday in Majorca he would like to spend his money on health or education, he should be entitled to do so.
  Mr. Canavan: He can buy a place in the hospital queue.
  Mr. Fairgrieve: Consider what is being done by the trade union movement in other countries—in Europe and America. Consider what Frank Chapple has done for his members by taking them into BUPA. If matters such as these were considered by trade union leaders rather than politicking on behalf of their members, which does not necessarily get them very far, wage earners and everybody else in the country would benefit.
  Mr. Canavan: Buying privilege.
  Mr. Sproat: What about you?
  Mr. Fairgrieve: Before I leave the hon. Member for—[Interruption.]
  Mr. Deputy Speaker: Order. We cannot have this conversation going on across the Chamber. The Minister is addressing the House. I hope that hon. Members will pay attention to him.
  Mr. Fairgrieve: I am sorry that I was slow to sit down, Mr. Deputy Speaker. I realise that you had a problem with sedentary interjections on my right and on my left. But I note that, with your usual aplomb, you have the House well under control again.
  I do not propose to comment, in a debate on health, on the final remarks by the hon. Member for Fife, Central about
  1506
  spending on health rather than on nuclear defence equipment. I would make to him the comment that was made to me in reply to a question that I put to the Labour Government when we were in Opposition. If this country would spend the same proportion of its GNP on defence as Russia, I should ask no more, no less. I leave it at that. There is no need to argue that point any further.
  I turn now to the remarks made by the hon. Member for Kelvingrove. I realise that he was concerned basically with the hospital statement. I have not given as long a reply as I might have done on the Glasgow sick children's hospital, but perhaps I may write to him about that matter in more detail, and the hon. Member for Fife. Central, will, of course, get a copy. I am grateful that he made some complimentary remarks about planning under both Labour and Conservative Governments.
  The hon. Member for Fife, Central gave me notice of the matter that he was going to raise, but, as I have explained, we are not dealing with the question of a public inquiry. I have visited many hospitals in Scotland and I shall continue to do so. Apart from my personal interest, if I thought that it would serve a useful purpose—I am in Glasgow fairly often—I should certainly visit the hospital.
  The hon. Member for Hamilton made a political speech—
  Mr. Canavan: Disgraceful!
  Mr. Fairgrieve:—which he is entitled to do, and I am entitled to reply in similar vein. [Hon. Members: "Hear, hear."]
  As regards protection from cuts, the hon Gentleman knows as well as I do that in the current year spending on the Health Service has been maintained but that it has been eroded by three factors. The first is inflation, which is half the Labour Administration's legacy and half ours. The second is the Clegg award, which the previous Administration did not build into this year's financing. The third is VAT under this Government. Therefore, I am being absolutely fair in saying that the present stringency in the economic position of the health boards in Scotland this year is basically the result of the policies of both Administrations, and we have been in office for only 10 months.

  1507
  As the hon. Member for Hamilton knows, we have built in a 2:6 per cent. increase in real terms for next year. Therefore, he must wait to see whether we do what we have said we will do before putting forth any ideas about cuts. The Labour Party, when in office, doubled unemployment, halved the value of money and caused the greatest inflation in the history of this country. So it comes ill from the hon. Member for Hamilton to talk in the way that he did about this Government when we have been in office only 10 months.
  Mr. Canavan: This Government are making things worse.
  Mr. Fairgrieve: As regards the Inverclyde hospital and the Argyll and Clyde health board, we have again heard emotive remarks about the closing of a ward. I remind hon. Members that the withdrawal of that ward merely brings the hospital beds under the control of the board to the same level as the national figure for the rest of Scotland, which is 2.5 beds per thousand population. Therefore, this area now has the same proportion of hospital beds as a result of the withdrawal of this ward as the rest of Scotland.
  A point was made about encouraging private medicine. Is there anything wrong in doing that when people are prepared to contribute, if it takes the weight off the National Health Service, cuts down the waiting lists and makes beds available more quickly? Is there anything wrong in that?
  Mr. Canavan: Does the Minister realise that it does not cut the waiting lists? Introducing an element of fee-paying into the Health Service does not provide one extra doctor or nurse. It merely enables a privileged minority to jump the queue. That is what is so disgusting and obscene about it.
  Mr. Fairgrieve: That is absolute rubbish. When people are taken out of the queue, they do not jump it. The queue is shortened. The hon. Member for West Stirlingshire will not accept that, because he does not like practical facts. He is too taken up with dogma. I do not believe that there is much that I can conclude from the kind of contribution that we have come to expect from him. He again went on about extra moneys and—
  Mr. Canavan: The Minister should go to the House of Lords.
  Mr. Fairgrieve: I do not think that that would be a suitable place for either myself or the hon. Member for West Stirlingshire. There is no question of this Government cutting back on expenditure or of the redistribution of expenditure. The hon. Gentleman knows that.
  During the five years when I was in Opposition, I heard many speeches from Labour Members and never once did I hear anything about the creation of wealth. They continually talked about spending and the distribution of wealth. I only wish that we had the wealth that there is in West Germany or France. In those countries, pensions and wages are higher and the amount per head spent on health is higher. The reason for that is that productivity is higher. I would love to be able to stand at this Dispatch Box and say that the Government will spend more on health, but that cannot be done. Unfortunately, the people of this country do not realise that until we increase our productivity such matters must go by the board.
  As I said earlier, if those within the trade union movement would come out of the political arena and go into the industrial arena, half our problems would be cured.
  Mr. Canavan: Like the miners.
  Mr. Fairgrieve: I have tried to the best of my ability to answer some—
  Mr. Canavan: Which is not very much.
  Mr. Fairgrieve: From a sedentary position, the hon. Member for West Stirlingshire says that my ability is not very much. That may be so. But my ability is a little better that the hon. Gentleman's continued blinkered dogma. He sees nothing more than his own case and he understands nothing other than his own pathetic beliefs about what he thinks is correct. He knows that it is he and people like him who have dragged this country down from the position we were in 15 years ago when we had the highest standard of living in Western Europe. Today, we have about the lowest standard of living in Western Europe.
  I shall be replying in more detail to the question about the Royal hospital for sick

  1509
  children in Glasgow, but I thank the hon. Member for Fife, Central, who has been in the House a good deal longer than others who have taken part in the debate. For the past few minutes he has had his hand under his chin wondering whether we have elevated the debate to the level he would have wished.

  SCOTLAND (MENTAL DISABILITY SERVICE)
  12.40 am
  Mr. Dick Douglas: At this early hour of the morning I refer to the phrase of Dylan Thomas on the death of his father. He said:
  "Do not go gentle into that good night,
  Rage, rage against the passing of the light."
  I do not wish to debate the whole range of expenditure on the Health Service. I shall refer to a relatively small but important item. I plead in aid the report on services for the elderly with mental disability in Scotland, the Timbury report, which was submitted initially in 1978. I think that it first saw the light of day in mid-1979.
  The Minister has sought previously to sustain a case in rather contradictory terms. He has sought to argue that expenditure, in real terms, in 1980–81 will increase. Yet he said that the value of money allocated to the Health Service in total has been eroded by inflation, by under-provision for the Clegg awards and by items such as the increase in value added tax. If that is so, and if expenditure is to be squeezed, we must consider in total terms how priorities will be affected within the service.
  I am discussing a Supplementary Estimate that is small in relation to the total expenditure of £15·7 million. However, it must be considered in terms of the way in which it might effect an element of priority within the Health Service—namely, provision for the elderly, and specifically those with mental disability. The Minister must indicate his thinking on the Timbury report.
  I turn to the touchstone of the report in 1976, "The Health Service in Scotland: The Way Ahead." Paragraph 4.10 states:
  "In view of the increasing number of old people and the many deficiencies in existing arrangements, the Secretary of State believes
  1510
  that this sector must be given high priority for Health Service expenditure over the period immediately ahead."
  I turn to the broad compass of the Tim-bury report. I think that I shall take the House with me when I say that there can be little doubt that the problem of the elderly with mental disability is of major concern in a civilised society.
  I have great respect for the Under-Secretary of State for Scotland. I know that he is a humane and understanding man. However, I hope that to me he will not present any market analysis arguments. That will not be good enough. There is no question of standing in the queue and thinking that provision will be made for this severe problem within our society. Some have a sense of shame and others seek to hide the problem.
  I have had many private conversations with Professor Timbury during the past few months. His sub-committee reported in July 1978 and indicated both the extent of the problem and the method and approach that could be followed in order to meet the growing demand on society. I am sure that the whole House will wish to express thanks to Professor Timbury and his colleagues for their searching and thoughtful report.
  We are dealing with advanced societies in which the proportion of those living longer increases. The mobility of labour in national and international terms places strains on what might be called the extended family. While the population projections of those aged 60 and over in Scotland show a relative stability, at around 19 per cent. or 20 per cent. into the twenty-first century, the breakdown and secular trend of this category can give a better picture of the areas of concern.
  As Timbury points out in paragraph 2.16:
  "At the beginning of the 20th century 4.8 per cent. of the Scottish population was age 65 and over: in 1976 the proportion had increased to 13.4 per cent".
  He adds that during that period:
  "the absolute number in the 65 and over age group had increased more than three-fold from about 215,00 in 1901 to about 698,000 in 1976".
  The projections indicate a rise of only 5 per cent. in those aged 65 and over to 1991. However, within that broad category, the increase will be among those aged 75 and over; the numbers of those

  1511
  aged 65–74 being expected to fall by 6 per cent. in 1991. The numbers in the age group 75–84 are expected to rise by 22 per cent. in that period and those over 85 by 49 per cent.
  Within that overall picture there are differences in the sex ratio. It is relevant to note that of those aged 75 years and over the present sex ratio of 100 males to 214 females in the 75–84 age group will change in favour of males to 100 to 193 by 1991. However, in the 85 and over age group the ratio of females to 100 males will change from 310 in 1976 to 335 by 1991. So much for the equality of the sexes in life expectancy terms.
  I apologise for dealing so much in statistics. I desire to emphasise that we are not dealing with mere statistics and numbers in a report; we are dealing with human beings. Within the broad category of growth in numbers there is a concomitant growth in human problems and suffering.
  When we speak of people in these advanced age groups there is little point in suggesting that when they fall mentally or physically ill their immediate families should step in. We cannot rely on such factors as we did in the past. Life expectancy in those days was relatively short. If someone is 75, or in his eighties, his children may be approaching old age. They may also be ill.
  I shall turn now to the specific areas of the Timbury report and pose certain questions to the Minister. The report says that the major conclusion arising from the sub-committee's considerations
  "is that much of the accommodation and service provided for the group of persons with a diagnosis of senile or arteriosclerotic dementia is unsuitable for present day requirements".
  That is a condemnation of all Governments, not just this one.
  Of the total of almost 7,000 elderly persons with mental disability who require hospital care, about 3,000 who suffer from dementia are currently in mental illness hospitals in accommodation that is overcrowded and of a quality unsuited to the type of care required. Another group of 750 such persons is inappropriately located in acute or geriatric hospitals, mainly because no places are available in psychiatric hospitals. An estimated 1,250 persons who require considerable medical and nursing care are in homes for the
  1512
  elderly, provided by local authorities and voluntary organisations. In addition, a sizeable number of elderly people have unmet needs and probably require additional care.
  We are seeing a misuse of resources, because society at large has failed to appreciate the pressure of this problem. When we are in our constituencies I am sure that many of us visit local authority old folks homes and geriatric hospitals. There we see people in those establishments who ought not to be there. Society in general must deal pertinently and quickly with the problem.
  In examining the 32 recommendations and conclusions of the Timbury report, I am struck by the inadequacy of current provisions. We are dealing with a section of the population who, by their very nature, cannot speak for themselves. I stress to the Minister that there is no point in talking to these people about the ladder or about using resources. By the nature of their illness or disability they are inarticulate. Another voice has to speak for them. Sometimes voluntary organisations do so, but, more appropriately, what can perhaps be called the hard political elements in society must speak for them.
  It is not the glamorous area of the medical profession, which hits the headlines with heart and kidney transplants. It is the hard working, physically and mentally demanding area of the profession, which society avoids.
  The examination by Timbury shows that there are people in local authority homes who ought not to be there, there are old people in local authority homes who should be under closer medical attention in psychiatric hospitals, and there are a large number of people in the wrong mental illness hospitals.
  In paragraph 3.7 the report clearly spells out the requirements and I hope that the Minister will address his mind particularly to this: It says:
  "Having considered four possible solutions for accommodating the elderly with mental disability our view is that only two should be accepted for future planning. The first being the continued provision by local authorities of residential accommodation for the elderly, some of whom, during their period of residence, may become mildly mentally disabled but still be capable of living within the home and not need nursing care. For the elderly with mental

  1513
  impairment (e.g. severe dementia) which would prevent them looking after themselves or being looked after in their own homes or being admitted to residential accommodation, or which required that they be transferred from residential accommodation, continuing care units should be provided both as replacement and as additional facilities for the psychiatric service."
  Within the compass of the report it explains exactly what is meant by "continuing care", although there may be modifications in respect of detailed planning.
  Do the Government accept the strictures of that paragraph? Within the 10 months, how far has the Minister transmitted the recommendations into the future planning policy of the Health Service? That is a fair question. If the Minister says "We have not done so" the House will be able to make a judgment.
  The immediate area of attention is that of identification and assessment. The range of domiciliary services also has to be extended. I hope that I can be contradicted by the Minister when I say that I detect in the body of the Timbury report a lack of liaison between the health services and the social work and housing departments. We have often debated the practicability of splitting housing and social work on a district and council basis. However, the need to plan jointly for the needs of the elderly with mental disability should invoke no petty bureaucratic divisions or empire building. Empire building here should not be tolerated. As Timbury says:
  "closer links between these services and voluntary organisations are essential and different financial arrangements between these services should not be permitted to obstruct reform."
  That is an important consideration.
  I am not in favour of co-ordination purely for its own sake. Co-ordination often involves us in creating another tier of bureaucracy. I do not think that that is what Timbury envisaged. There is a need to ensure effective liaison between a social work department and the health services. I had a pertinent example of the lack of such liaison only today. It is a personal matter and I shall not detain the House with it. It relates to an individual very close to me, who suffers, in my view, from dementia.
  1514
  The personnel involved in these areas have to possess a greater sense of devotion than is normal in the public service if they are to cater for the needs of this section of the population. As well as the nurses, doctors, administrators and volunteers, the general public need to have a greater understanding of the mental and physical conditions of the elderly. This ought to be an aim of community education. We have just had the Year of the Child. I urge the Minister, if he has not already thought of this, to inaugurate in Scotland a week in every year when attention is focused on the elderly section of the population, particularly those with mental disabilities.
  Last but not least I turn to the vexed question of costs. In an earlier reply some allusion was made by the Minister to accepting the general provisions of the report, but it was added that the costs would be astronomical. The ministerial view seems to be that "Timbury is all very well; we should like to carry out its recommendations, but the costs are considerable." The report suggests an urgent start on a major building programme for day hospital places, assessment beds and National Health Service continuing care units for the elderly confused, at a total capital expenditure cost of approximately £44.65 million, mainly in the period 1980–81 to 1984–85, overlapping into the following five years. I have no doubt that these figures have increased since the estimates were made. Perhaps the Minister could tell us at some time—he might write to me—what the situation is in terms of current estimated costs. The important thing is to know how far we have gone in making this urgent start.
  The Government are fond of telling us that we should get our priorities right. The Minister lectured us on how we should be like the French, the Germans, the Americans or the Japanese. We are not like them. I could not get the boys in the Rosyth dockyard to do callisthenics in the mornings. I do not think that the Minister could, either. We do not evoke the correct response by a lecture. We must consider the individuals, who cannot, by their very nature, be self-reliant. If we do not cut expenditure in the Health Service we must secure that in this area, where the need is manifest and growing, we cover that need adequately.

  1515
  Perhaps the most revealing aspect of the Prime Minister's posture was her reinterpretation of the parable of the Good Samaritan. She averred that the Samaritan would not have got very far without the money with which to pay the innkeeper. As a Christian, I reject that interpretation. The innkeeper went much further than mere money service, and so did the Samaritan. If we acknowledge the true meaning of the parable, answering the question "Who is my neighbour?" in relation to the subject raised this evening, society at large has to show mercy and understanding to this section of our population. It is not good enough for the Minister to say that we cannot afford it or that we should allow the market mechanism to work. The cost of that attitude will be unwarranted human suffering—not the less so because it will be relatively silent and non-protesting. The Minister has a report before him pointing the way. I ask him to say how far he is prepared to follow.
  1.2 am
  The Under-Secretary of State for Scotland (Mr. Russell Fairgrieve): With the leave of the House, I shall reply to this debate on the Consolidated Fund Bill.
  I am most grateful to the hon. Member for Dunfermline (Mr. Douglas) for his thoughtful speech. On a previous occasion when you, Mr. Deputy Speaker, had the privilege—or the lack of it—to preside over a similar debate, Scots Members from both sides of the House spoke. The debate had its moments of acrimony. We had one debate, before you took the Chair, when we strayed from the subject and followed devious political routes. Thanks to the thoughtful speech by the hon. Gentleman we may keep on safer ground in this reply. The hon. Member for Fife, Central (Mr. Hamilton), who proposed the previous subject, made his speech, but other hon. Members spoke and I was diverted.
  I should like to comment on what the hon. Member for Dunfermline said. I am grateful to him for raising this topic tonight, as it gives me the opportunity to assure him that he is not alone in his concern for the needs of this particularly vulnerable group within our community. We are conscious of the fact that many of the elderly with mental disability are accommodated in unsatisfactory condi-
  1516
  tions or are in need of a higher level of services than is currently available. We are also aware, as the hon. Gentleman said, that the numbers of people in the upper age groups who are most at risk are increasing rapidly and will continue to increase for some time.
  The problem of geriatrics, with or without mental disability, is like a dark cloud overhanging the future of the mental health service. The Government appreciate that health boards and local authorities have a major task before them in securing the improvement and development of services for the elderly in general and for those with mental disability in particular.
  When the report on services for the elderly with mental disability in Scotland—the Timbury report, to which the hon. Member referred—was circulated in July last year it was made clear that we were not committed to accepting its recommendations and would take no decisions on it until we had fully considered the comments of the various organisations consulted. In the preface to the report the Secretary of State said that he was not committed to accepting the recommendations in the report and would take no decisions on it until he had considered fully the comments from the various organisations. Although we are still awaiting the views of some of these organisations, I may say that nearly all the comments received so far have supported the conclusions and the main recommendations in the report.
  I do not wish at this stage to pre-empt our full consideration of the report's recommendations in the light of the views expressed by Health Service, local authority and other interests, nor do I wish to anticipate what the Government's decisions will be, but we are bound to have regard not only to the importance of the recommendations and the comments that are received but to the wider economic implications of the heavy expenditure that would be involved.
  Of course, as the hon. Member for Dunfermline implied, financial resources will be the critical factor in deciding how far and how quickly these recommendations can be implemented. The financial implications are considerable. Capital expenditure would be about £80 million, spread between the health boards and

  1517
  the local authorities over the next six or seven years and additional revenue expenditure would eventually amount to about £30 million a year at current price levels. When one considers the total spending of about £900 million on health in Scotland and puts the figures into perspective one sees that we are dealing with figures of a fair size.
  There is perhaps no need for me to reiterate the Government's determination to restore order to our economy and, as an essential means to this end, to reduce the overall level of public expenditure. We have also stressed how important it is that services for the most vulnerable groups within the community should be protected and should continue to develop as far as possible.
  The elderly with mental disability form one of several such groups, as hon. Members well know. The hon. Member for Dunfermline pointed out that such people do not have the voice or the strength to make their predicament known, and it is up to others to bring to our notice the problems and disadvantages that they suffer. It is simply not possible for the Government to provide additional finance for the rapid development of all the various services for these groups, much as we would all wish that this could be done.
  The provision and development of these services is the responsibility of health boards and local authorities and I am sure that whatever difficulties they have to overcome they will do their best within the available resources to give priority where the need is greatest.
  There were certain other points that the hon. Member made in his speech. I accept the inadequacy of current provisions. The hon. Member is right to say that this is an unglamorous area, in which we have difficulty in recruiting nursing and other staff. There is a need for residential accommodation, as it is present thinking in health and social work circles that wherever possible such people should be treated within the community.
  1518
  The hon. Member mentioned the possibility of continuing care units. The liaison with which we are dealing in the Health Services Bill, which is at present going through its Committee stage, tries to achieve a closer working in joint or support financing between social work departments and health boards in order to bring this grey area of care more to the attention of all concerned.
  The hon. Member for Dunfermline mentioned possibilities on the lines of the Year of the Child. This is a year for the disabled. The hon. Gentleman is right to suggest that at some time there should be a year for the elderly.
  I have given the cost in local government and Health Service expenditure. I do not wish to refer to the acrimony of the previous debate. As the hon. Gentleman knows, the Government do not have the money available for what they would like to achieve in this sphere. There would have to be an increase in taxes or a transfer of resources. Alternatively, our country has to become wealthier.
  The hon. Gentleman asks how far the Government have proceeded. We have not proceeded yet to implement the Tim-bury report. Comments have been received. It is the wish of the Government as, I believe, of the previous Government, to implement the conclusions of the report as far as possible within the sources available.
  Question put and agreed to.
  Bill accordingly read a Second time and committed to a Committee of the whole House; immediately considered in Committee, pursuant to the Order of the House this day; reported, without amendment.
  Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 93 (Consolidated Fund Bills), and agreed to.
  Bill accordingly read the Third time and passed.

  WATER SUPPLY AND DRAINAGE (NORTH DEVON)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Le Marchant].
  1.12 am
  Mr. Tony Speller: The last occasion on which I had the privilege of addressing the House was on the motion of my hon. Friend for Rossendale (Mr. Trippier) on the financial problems of widows. On that occasion, as now, there was not one member of any Opposition party to be seen on the Opposition Benches. Once again, I must become reconciled to addressing the green Benches across the Chamber as I would the green fields of North Devon.
  No doubt every hon. Member has a different set of priorities when seeking to describe his or her activities and duties as a Member. There are those who are so community-activated that they are said to send "Get well" cards to cracked paving stones. There are those who are so busy with global activities that they have little time for their own constituencies. For my part, representing the beautiful stretch of land that extends from the Somerset border to the Cornwall border and back into some of the most valuable farmland in the country, I see my job as seeking to provide a framework within which the people of my constituency can work, grow and develop as they wish and not as I or my peers seek to tell them.
  The security of law and order and the defence of our land are the duties of this House. The provision of worthwhile utilities and their financing is also properly a duty for the House.
  Some months ago, when I was successful in the ballot, I chose as my subject communications—roads, railways and airways—in my constituency. I continue seeking to provide the framework by talking about mains and drains, the works that provide the veins and arteries of a constituency that, with only one mile of dual carriageway in 650 square miles and a tenuous railway link, needs all the help that we can give it in order to retain its pleasant prosperity.
  I refer first to the law. The general duty to provide water is to be found in
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  section 11 of the Water Act 1973, which provides:
  "It shall be the duty of a water authority to supply water within their area."
  The duty to provide drainage is set out in section 14 of the Act, which provides:
  "It shall be the duty of every water authority to provide … such public sewers as may be necessary."
  The water authorities are obliged to comply with valid requisitions, and when capital expenditure is limited that can be done only at the expense of other schemes. To assist in the proper use of resources, any water authority must maintain a close liaison with planning authorities, since where development requires considerable expenditure and the money is not available there must be embargoes on development—and that is the case throughout North Devon at present.
  We have already outgrown our existing capacity for mains drainage and land drainage in our part of the world. As a result, anything more than the standard rainfall, which can be quite heavy in North Devon, becomes a damaging flood. We have had several examples of that even within the past few months.
  We are also running out of water. It is an incredible situation that during the winter months we have a great deal of water and during the summer we often have none. It is good for the tourists but bad for the area as a whole, because we must never go back to the standpipes of a few years ago.
  Over the 20 years from 1957 to what we call the year of the great drought1976—there was only one year when there was not some form of water restriction or regulation along the North Devon coastline. That is unique in the United Kingdom. It culminated in the standpipes of 1976 and conditions that we thought would never be allowed to exist again. Yet by 1983 we shall be short of water for summer requirements and by 1985 we shall be short for our normal requirements. Of course, in the summer the population at least doubles and the water requirement increases accordingly. A reservoir takes not five minutes but five years to complete and involves planning permissions, consents and purchases.
  The Government are responsible for remedial works resulting from flood and

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  similar damage. The local authority has to pay only a fairly small sum, and the cost to the Government is often greater than the loan charges on an amount that would have paid for the remedial works for ever instead of on the present hand-to-mouth basis.
  Mr. D. A. Trippier: Is my hon. Friend aware that water authorities throughout the country own vast tracts of land, some of which could be sold in order to finance the schemes that he is suggesting?
  Mr. Speller: I am grateful to my hon. Friend. He is correct. Many nationalised industries, including water undertakings and the railways, own vast tracts of land. It would be sensible to tell them to finance developments from the sale of assets, as any normal business has to do. I am grateful for my hon. Friend's comments.
  In 1970 a Select Committee decided that an area called Swincombe, on Dartmoor, should not be used as a reservoir site. I believe that this was a mistake, because Swincombe-on-the-Moor was a logical site to cater for the water needs of South-West Devon and, in particular, the city of Plymouth. This is not the area that I refer to now, but because the Select Committee turned Swincombe down it was assumed by the water authority and its successor, the South West water authority, rightly or wrongly—because the Select Committee was not and is not required to give details of the reasons why it disposes—that national parks and moorland were not to be further considered for reservoir sites.
  So a site at Roadford was chosen. Roadford was selected out of 39 sites as the best alternative. It is north of Swincombe and would provide water from one source as a reserve both for South Devon—which is not my problem—and for North Devon, which is my problem.
  Inevitably, whenever one suggests a site for anything there are many objections. In the case of Roadford the objectors have included the Torridge district council, even though in that area water is at present in shortest supply and development is embargoed. Other objectors included the West Devon district council, the National Farmers Union and the Country Landowners Association. The objections were logical, because the
  1522
  site would use relatively good agricultural land.
  I must ask the Minister whether, if we are to say "No" to national parks and moorland and then say "No" to agricultural land in Devon, it rules out the entire county except, perhaps, for the foreshore. That is the problem faced by the water authority. First, it will seek to have the reservoir built at Roadford—I support that—because it is essential that we have water. But there is no chance of completing the reservoir even by 1985.
  None the less, if we had the Roadford site—and the inquiry ended more than two years ago—at least the water authority could go ahead with its plans. If the Government say that we cannot have that site, that is fair enough. I would regret it, but, having said that, at least, again, the authority could seek, plan and suggest alternatives. It would mean one site for the north and one for the south. The Roadford site would be between those areas.
  The essence of this problem is the uncertainty, and I appeal to my hon. Friend the Minister to tell us what we may expect by way of an answer, or, rather when we may expect an answer. I do not wish to see standpipes back in North Devon in a few years' time and to have to tell people that the Government have been making their minds up for a long time. Successive Governments have taken two years over this.
  I turn from water supply to the problem of land drainage. This is the other and equally important side of the same coin.
  In the last few months we have had floods at Bideford, Barnstaple and Ilfracombe. That is because the existing land drains cannot take away the water that falls so bountifully in the season when the tourists are not with us. That is no satisfaction to us. It is incredible that after so long a time we have no way of storing the precious commodity that falls to us from Heaven.
  The South West water authority—a good authority—had planned to spend money on three areas in particular, Bideford-Northam, Colliford and Ilfracombe. Because of floods, some of these funds had to be used elsewhere. I do not blame the authority, and I respect it

  1523
  for the speed with which it was able to switch resources. We must protect the coast, and the same authority must use the same money whether to provide water or to protect the coast.
  We seek tonight not an affirmative answer but the certainty of an answer, "Yea" or "Nay", fairly soon. Without it, we shall not be able to store the vital water that comes from Heaven.
  When I entered the House not many months ago, I was told of the great success and prosperity of North Devon in the past 20 years. That has a hollow ring when I see an area with bad roads, poor and tenuous rail communications, a shortage of water at one time of the year and no way of coping with it at other times. I look to the Minister to reassure us and to indicate how we may make everything better for the next 20 years.
  1.25 am
  The Under-Secretary of State for the Environment (Mr. Marcus Fox): I am grateful to my hon. Friend the Member for Devon, North (Mr. Speller) for raising this matter. Even though the green Opposition Benches are somewhat empty, he has the consolation of knowing that he has an hon. Friend behind him. I was not present on the last occasion on which he addressed the House, so I am not sure whether that is a 50 per cent. improvement on the attendance.
  Regional water authorities were set up in 1974 to be strong, semi-autonomous bodies, with boundaries corresponding to river catchments. They were charged with the duty to manage the water resources in their areas, to supply water and to provide drainage, sewage treatment and all other matters, including control of pollution arising from the control of the water cycle. My hon. Friend is right to say that the problems have existed for many years.
  About 1,400 public bodies had the responsibility before 1974. In the last six years we have made some progress in welding the previously fragmented units into effective bodies. Had the water authorities not existed, I am convinced that the effects of the 1976 drought—which was particularly serious in my hon. Friend's constituency— would have been much more severe.
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  In 1974 the South West water authority inherited particularly acute problems of insufficient water resources which had been recognised by its predecessors, who had taken steps to deal with them but which had not reached fruition. For example, in the 1969–70 Session a scheme was promoted to build a reservoir at Swincombe, on Dartmoor. The Private Bill that gave rise to environmental objections was considered by a Select Committee. Prior to that, the House voted in favour of it. Subsequently the Select Committee concluded that the promoters had not made out their case. I take note of my hon. Friend's views on that.
  Since 1974 the South West water authority has completed its Wimbleball reservoir, which now provides a direct supply to the neighbouring Wessex water authority and regulates the River Exe, thereby ensuring reliable supplies to the Tiverton and Exeter areas. All necessary powers have been granted to permit the construction of a reservoir at Colliford, which, when completed by the middle of the 1980s, will make secure supplies to the whole of Cornwall.
  My hon. Friend referred to the South West water authority scheme for a reservoir at Roadford, at a site located between Okehampton and Launceston. The scheme is designed to augment water supplies over an extensive area of Devon, which includes my hon. Friend's constituency and the city of Plymouth. The scheme was subject to a public local inquiry, which was substantially completed in April 1978 but was reopened in September 1978 to deal with questions on the possibility of reservoir-induced earthquakes.
  There were many objections to the water authority's proposals. The inquiry dealt with them and related matters, including appeals by the South West water authority against the refusal of the West Devon and Torridge district councils to grant planning permission for the reservoir and ancillary works.
  The proposal raises a number of difficult issues. My hon. Friend will know that there are strong objections, particularly on agricultural grounds. He, of all people, will know that these are not matters to be dismissed lightly, particularly in a county like Devon.

  1525
  I have been considering the case for some time now. As my hon. Friend will know from my answer to his question last week, we hope to issue a decision very shortly. I can assure him that we are considering every aspect of the case most carefully, but as the matter is still sub judice he will understand that I can make no comment on the scheme now.
  My hon. Friend is right in thinking that the South West water authority has a particular problem, common to some others but probably the most acute of all —the requirement to cater for large influxes of summer visitors, who, of course, impact heavily on demands for water supplies and drainage facilities. At the height of the season they are estimated to reach at least 500,000—an addition of nearly 40 per cent. to the resident population. About 70,000 of them go to the water authority's North Devon area, which includes the Devon, North constituency and parts of the Devon, West, Cornwall, North and Tiverton constituencies.
  The House should remember that water conservation must also be a factor in considering any future policies. In my hon. Friend's constituency, water supplies have long been derived from several small impounding reservoirs, and these have now been augmented from Meldon reservoir, further south, and by some lesser, more local works. But, generally, resources are not adequate, as my hon. Friend said, to meet summer demands without restrictions.
  I understand that in the water authority's North Devon operations area there have been only four years between 1957 and 1979 when it has not imposed local bans on the use of private hosepipes. The authority is about to bring into service a small new intake on the River Torridge, which, in normal years, will allow some conservation of water in impounding reservoirs against summer demands.
  In the 1976 drought year there was a complete ban throughout the region on the use of water for non-essential purposes, and at the height of the drought the authority obtained five orders under section 2 of the Drought Act 1976, which empowered it to supply water through standpipes. As is well known, and as my hon. Friend reminded the House, standpipes were erected throughout the North Devon and Torridge district coun-
  1526
  cil areas and were in use in some parts for a short period. But this is not a new phenomenon in the area. That points to the particularly serious problem.
  I fear that the water authority inherited many sewerage systems and sewage disposal works that were inadequate and overloaded. I shall deal with restrictions on development in a moment.
  A particular problem area in my hon. Friend's constituency is that of BidefordAppeldore-Northam and Westward Ho!, from which sewage is discharged direct to the Taw-Torridge estuary. The water authority's predecessors were not successful in obtaining powers to construct a long sea outfall. The water authority now plans, as a first stage of a substitute scheme, to re-sewer parts of Bideford and to treat the sewage by primary settlement only for discharge to the estuary. Even this part-scheme is estimated to cost £4 million and is not expected to be commissioned until 1995.
  The expressions of the water authorities' immediate past activities are contained in their annual reports and their future proposals in their annual corporate plans, which are central to the relationship between the Government and the authorities. These plans incorporate their capital expenditure proposals, which are the subject of discussion with officials of my Department and the totals of which form an input to the annual public expenditure survey.
  In drawing up these plans, authorities are expected to pay regard to Govern- ment guidance and policies. Government priorities include the protection of public health and the provision of infrastructure for new housing and industrial development. Additionally, water authorities are required to have regard to structure and local plans and to consult local planning authorities. But there are severe constraints. Not only is it not physically impossible to do everything at once; the House will be well aware of this Government's determination to control and reduce the public sector borrowing requirement and public expenditure in general. To this end, the capital expenditure that each authority is permitted to incur is constrained and, in addition, tight cash limits have been imposed on their external financing. The authorities' internal constraints relate to the levels of charges that they consider their consumers

  1527
  can reasonably be asked to bear and to manpower levels, about which this Government are particularly concerned in the public sector.
  Thus, in the assembly of programmes of work, the determination of needs and relative priorities is vital if the greatest benefit is to be derived from the expenditure of the limited funds available.
  I confirm what has been said by my hon. Friend the Member for Rossendale that it is important that all water authorities, not only the South West authority, should be aware of any assets, especially in the shape of land, that are not necessary for their own use, that they should be disposed of, and that the financial resources created should be used in other ways.
  The assessment of relative priorities and the compilation of a capital programme are matters that only the water authority can determine, and it is the authority's responsibility to do so.
  At the current levels of expenditure, I am assured by the National Water Council that, in general, Government priorities are being met. In particular areas, however, that may not be possible. That is undoubtedly so in the South-West, where the water authority has in some places advised the local planning authorities that water and drainage services have insufficient capacity to cater for additional development. I ask my hon. Friend to recognise the constraints under which the authority is working in its attempts to reconcile these competing claims for limited resources.
  In his constituency, except for the Bideford-Northam area, where, however, the water authority encourages temporary drainage arrangements, and parts of Barnstaple and South Molton, I believe that it is in villages and hamlets that new housing is constrained because of inadequate main drainage, and, these being in rural areas, it is probable that private drainage arrangements would be acceptable. Moreover, in the towns that I have
  1528
  mentioned and in the constituency generally, there are 300 or 400 acres with planning permission on which, as far as water services are concerned, housing could go ahead.
  Industrial development is more difficult. Here the water authority's general advice to the planning authorities is that what are known as dry industries should be encouraged. In using the word "dry" I am not referring to non-brewing activities; I am referring to industries that use a restricted amount of water.
  Mr. Speller: It is worth bearing in mind that the growth of fire regulations in factories has created a dangerous position in the Ilfracombe area of North Devon, where there is a shortage of water and a dry industry but one that requires a sprinkler system. The industry may be doing the right things, but it is not able to meet the required fire precautions.
  Mr. Fox: I take my hon. Friend's point. In terms of fire precaution, that is a serious matter. As soon as it is possible to meet those needs we shall be happy to do so, not only in the South-West but throughout the country.
  My advice to my hon. Friend and to prospective developers is to consult the authority closely and at an early stage. I am sure that it will give the sort of advice necessary.
  In the Government we shall continue to exercise close control over the expenditure of the water authorities and to encourage measures to increase efficiency, leaving the day-to-day management to the authorities, which are the best qualified and able to do so.
  In conclusion, I return to the central point raised by my hon. Friend. The answer that he requested from me about Roadford will be given at the earliest possible opportunity.
  Question put and agreed to.
  Adjourned accordingly at twenty-one minutes to Two o'clock.