Commons Sitting of 15 May 1980

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

PRIVATE BUSINESS
LONDON TRANSPORT (No. 2) BILL (By Order)
Order for Second Reading read.
To be read a Second time upon Tuesday 20 May.
BRITISH RAILWAYS BILL (By Order)
Order for Second Reading read.
To be read a Second time upon Thursday 22 May.

BILL PRESENTED
  PIER AND HARBOUR PROVISIONAL ORDER (GREAT YARMOUTH WELLINGTON PIER)
  Mr. Kenneth Clarke presented a Bill to confirm a Provisional Order made by the Minister of Transport under the General Pier and Harbour Act 1861 relating to Great Yarmouth Wellington Pier: And the same was read the First time; and referred to the Examiners of Petitions for Private Bills; to be printed [Bill 209].
ORAL ANSWERS TO QUESTIONS
  AGRICULTURE, FISHERIES AND FOOD

    Lamb Exports
    Mr. Goodladasked the Minister of Agriculture, Fisheries and Food what are the propects for an early resolution of the problem concerning the export of British lamb to France.
    The Minister of Agriculture, Fisheries and Food (Mr. Peter Walker): I will not agree to arrangements which do not meet our essential interests simply to enable France to comply with the Court ruling. Discussions are continuing in the Council of Agriculture Ministers.
    Mr. Goodlad: Does my right hon. Friend agree that in his discussions with the French it is desirable that the Community should move towards a support system that would not include export refunds?
    Mr. Walker: Yes, Sir. It would be very wrong, and certainly very bad for New Zealand as well as being disruptive of world markets, if there were a regime that included export refunds.
    Mr. John Home Robertson: What steps do the Government propose to take to inform French consumers of the enormous benefit that would flow to them from imports of British lamb into the French market?
    Mr. Walker: The hon. Gentleman may know that some weeks ago I attended the main French agricultural show. As a result, I had the rare opportunity, as a British Minister, to appear on French television and put forward arguments in support of the British case. I also gave a press conference. We have endeavoured to do all that we can to communicate the realistic facts to the French people.
    Mr. Geraint Howells: Is the Minister not aware that the majority of sheep producers in this country are not in favour of a sheepmeat regime, and are in favour of retaining the guaranteed deficiency payment for lamb? Will he give an assurance to those farmers that he will not abolish the guarantee deficiency payments

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    and that he will oppose the sheepmeat regime?
    Mr. Speaker: Order. The Minister is entitled to choose any one out of the four questions for a reply.
    Mr. Walker: I found all four attractive. I assure the hon. Gentleman that I would not change the current regime, which our sheep producers like and enjoy, unless it was to be replaced by something as good, if not better.

    Dairy Products (Self-Sufficiency)
    Mr. Knoxasked the Minister of Agriculture, Fisheries and Food what is the percentage self-sufficiency of the United Kingdom in butter, cheese and skimmed milk powder.
    The Minister of State, Mnistry of Agriculture, Fisheries and Food (Mr. Alick Buchanan-Smith): The latest estimates, which relate to 1979, are 42 per cent. for butter, 77 per cent. for cheese, and 119 per cent. for skimmed milk powder.
    Mr. Knox: Does my hon. Friend agree that those figures show considerable scope for expansion of the United Kingdom dairy industry?
    Mr. Buchanan-Smith: Yes, I agree. The United Kingdom dairy industry is one of the more efficient industries in the Community.
    Mr. Peter Mills: Does my hon. Friend agree that it is highly desirable that we should become more self-sufficient? This may well mean further encouragement and aid to British farmers, and may even mean—my hon. Friend may disagree with me—playing cricket by different rules, however repugnant that may seem.
    Mr. Buchanan-Smith: I am sure that my hon. Friend will acknowledge that the three green pound devaluations last year removed the main artificial hindrance to our dairy farmers competing properly. Now that they can compete without the MCAs, there is much greater opportunity for them to take an increased share of our markets and to export dairy products. The House may not appreciate that 50,000 tonnes of butter are sold overseas every year.
    Mr. Edwin Wainwright: Will the Minister bear in mind that if we make progress
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    towards self-sufficiency in milk, butter and cheese, any surplus of powdered or skimmed milk should go to the underdeveloped nations, where that type of food is in short supply, and not be sold to Russia at cheap prices?
    Mr. Buchanan-Smith: The hon. Gentleman will know of the Government's strong opposition to the sale of subsidised butter to Russia. We shall continue that opposition.

    Tenancy Succession
    Mr. Majorasked the Minister of Agriculture, Fisheries and Food if he is satisfied with the working of the Agriculture (Miscellaneous Provisions) Act 1976, so far as it relates to succession to tenancy.
    The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Jerry Wiggin): It is clear that the family succession provisions in the 1976 Act have not been in the interests of tenants or landowners. The procedure itself has been working as the Act intended, but, as I forecast during the passage of the Bill, it certainly does nothing to preserve the system.
    Mr. Major: Does my hon. Friend agree that amendments to the Act are necessary and that to be successful they must enjoy the support of the National Fanners Union and the Country Landowners Association? Will my hon. Friend invite them to a series of meetings under the auspices of the Ministry, to ensure agreement with a view to introducing the necessary legislation during this Parliament?
    Mr. Wiggin: I am satisfied that the presidents of both the organisations understand the implications. It is important that any alteration is acceptable, so that it is used.
    Mr. Buchan: Will the Minister please examine the workings of the Act in Scotland, where it has been operated since before 1976? Is he aware that it has worked satisfactorily, especially for the small tenant farmer? Does he accept that he must not listen to the big boys in the NFU or the Country Landowners' Association? The provisions should, and must, be maintained.
    Mr. Wiggin: I am not responsible for what happens in Scotland. However, as in England, few farms are to let in Scotland for new entrants to the industry.
    Mr. Colin Shepherd: Is my hon. Friend aware of the marked fall in the number of tenancies coming on to the market, and that that is causing great anxiety to young farmers, who cannot see their way ahead?
    Mr. Wiggin: Any change in the law should provide opportunities, which do not exist at present for young men to enter the industry.
    Mr. Strang: Does the hon. Gentleman appreciate that the answer that he gave earlier will cause dismay to the families of tenant farmers? Is he aware that the measure of security which the last Labour Government gave to the sons of tenant farmers was supported by the NFU, and was long overdue? Is he further aware that any attempt by the Government to undermine that legislation will be resisted ferociously by the Labour Party?
    Mr. Wiggin: As the hon. Gentleman was one of the authors of that dismay, it is strange that he should criticise us. There are no farms to let, and rents are soaring as a by-product of the previous Labour Government's legislation. There must be a new look at the position if young farmers are to be able to take over farms within their means.

    Common Fisheries Policy
    Mr. Peter Fraserasked the Minister of Agriculture, Fisheries and Food what is the present state of negotiations within the Council of Fisheries Ministers concerning a common fisheries policy.
    Mr. Robert Hughesasked the Minister of Agriculture, Fisheries and Food if he will make a statement on the progress of the renegotiation of the European Economic Community common fisheries policy.
    Mr. Beithasked the Minister of Agriculture, Fisheries and Food when he expects progress to be made in negotiations on the common fisheries policy.
    Mr. Buchanan-Smith: Since the statement which my right hon. Friend made
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    to the House following the last Council of Fisheries Ministers on 29 January we have had bilateral consultations with the fisheries Ministers of other countries of the Community and with the Commission.
    Mr. Fraser: I appreciate the considerable efforts that my hon. Friend is making to secure a properly renegotiated common fisheries policy, but will he bear in mind the forceful representations by the Scottish fishing industry in the last week about massive increases in fish imports? Will he work to secure within the EEC. before renegotiation, increases in the normal external import tariffs on both frozen and fresh fish?
    Mr. Buchanan-Smith: I acknowledge the great difficulties over imports. I assure my hon. Friend that reference prices and the question of tariffs being reduced are under review in the Commission, with the hope of changes coming into force at the beginning of July.
    Mr. Beith: Is it not apparent that little of the fishing industry will be left by the time the negotiations are concluded? Does not that fact, coupled with the blatant disregard by other countries of conservation regulations, strengthen the case for further unilateral action by the British Government?
    Mr. Buchanan-Smith: It strengthens the case for even more resolution to achieve a proper settlement of the common fisheries policy. Effective legal control over illegal fishing by any nation is lacking. Under a proper renegotiated common fisheries policy, that is what we can achieve.
    Mr. Hughes: Even if we achieve a properly negotiated common fisheries policy, how will the Minister ensure that the rules are kept, because under the present regime the rules are broken day after day?
    Mr. Buchanan-Smith: We enforce the rules in our waters up to 200 miles, without discrimination against ships of any nation. The problem is that it is up to the individual nation to apply the rules. Doubts are expressed about whether other nations apply the rules as vigorously as we do. Under a Community regime the regulations would have the force of Community law and would not be left to the individual nation to enforce.
    Mr. Sproat: Does my hon. Friend agree that, vital as it is to sort out the future common fisheries policy, it is equally vital to ensure that our EEC partners keep the present policy? Is it not disgraceful, and almost incredible, that herring illegally caught by French fishermen should be auctioned illegally by auctioneers who are employed by the French Government? What will my hon. Friend do to sort out that scandalous cheating under EEC regulations?
    Mr. Buchanan-Smith: My hon. Friend is basing his argument on a television programme. As he knows, the French authorities have undertaken prosecutions against some of their fishermen.
    Mr. James Johnson: Does the hon. Gentleman agree that it would be fatal for any Minister to come back empty handed after the next negotiations on the CFP? What are the basic terms on which we shall stand?
    Mr. Buchanan-Smith: We have made considerable progress on a number of issues in the last year, from a position where no progress whatever had been made. We have made clear that, among other things, a number of matters crucial to us, such as exclusive access, a proper share of quotas and effective conservation, must be agreed.
    Mr. Hicks: Will my hon. Friend confirm that he will resist any proposal, as suggested by the German Minister of Fisheries in the last week, that vessels from all States can come right up to our coastline?
    Mr. Buchanan-Smith: We have made it clear, as has the Labour Party, that we must have an adequate exclusive zone for our ships and a further degree of preference beyond that. We stand behind that, and we have made our position abundantly clear to our colleagues in Europe.
    Mr. Mason: Is the Minister aware that it appears that a common fisheries policy that is satisfactory to Britain is being delayed? Does he agree that the resistance of the French, the Dutch and the Danes is proving sufficient to ensure that during the delay many of our ports will close and our fleets sink? What prospects are there of further financial aid for the fishing industry until the CFP policy objectives are met?
    Mr. Buchanan-Smith: As the right hon. Gentleman knows, the common fisheries policy issues are complex and require a great deal of preparation. From the bilateral discussions, I believe that most of our European colleagues are prepared to work constructively towards a resolution. The industry is encountering problems, but only six weeks ago we introduced a scheme on the lines requested by the industry, and involving a sum of money of the size that was asked for by the industry and by the Labour Party.

    Ware Potato Crop
    Mr. Bill Walkerasked the Minister of Agriculture, Fisheries and Food what he anticipates will be the total hectarage of plantings for the 1980 ware potato crop.
    Mr. Buchanan-Smith: It is too early to give a reliable estimate, but it appears likely that plantings will be somewhat bigger than the target area of 168,000 hectares.
    Mr. Walker: I thank my hon. Friend for that reply. Does he agree that the major problem for farmers and industry this year will be imports of potatoes from the Continent? Does he agree that, unlike the French, who ignored the European Court's decision on sheepmeat, we have accepted the decision on potato imports?
    Mr. Buchanan-Smith: I am sure that my hon. Friend recognises that we have been open to the import of main crop potatoes for the past year. The quantity of potatoes that has arrived has not been enough to disrupt our market. I am sure that my hon. Friend's constituents recognise that there is a two-way trade in potatoes and that a large quantity of seed potatoes from his constituency are exported
    Mr. John Home Robertson: Is the Minister impressed, as I am, by the great faith shown by those farmers who have laid out vast amounts of money in planting their acreage of potatoes before they even know what this year's guarantee price will be? How soon will the Minister make an announcement on the guarantee price for the current yield crop?
    Mr. Buchanan-Smith: The announcement on the guarantee price has been delayed because we are still waiting to see

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    whether a potato regime is worked out for this year within Europe. We hope, in the absence of a regime, to make an announcement as soon as possible.

    Fisheries Policy
    Mr. Costainasked the Minister of Agriculture, Fisheries and Food what is the present state of negotiations within the European Economic Community with regard to reciprocal fishing rights with third countries.
    Mr. Buchanan-Smith: The Community has reached agreement on reciprocal fishing rights for 1980 with Norway, Sweden, the Faroe Islands and Spain.
    Mr. Costain: Is the Minister aware that we appreciate the way in which he has dealt with these negotiations? Will he publicise the results of his efforts so that the fishing industry is aware of how well we are proceeding?
    Mr. Buchanan-Smith: There is no doubt that some reciprocal negotiations—I refer particularly to Norway, and to a lesser extent to the Faroes—have afforded the opportunity for our fishermen to fish in other waters. I am glad to say that we have witnessed a reduction in fishing in our waters by Spanish vessels which better reflects the balance of advantage between the two nations. The issue of reciprocal rights is a difficult one, and I hope that, with patience, we shall see even more satisfactory arrangements in the future.
    Mr. Austin Mitchell: The only aspect of the problem of imports that can be affected by the Commission's negotiations is imports from third parties, yet a major part of these imports is from Common Market countries. We are speaking of our fish, caught in our waters, and dumped on our market. What proposal does the Minister have to impose an emergency levy on all imports and to act unilaterally by bringing aid to our fishing industry up to the level given to Common Market fishing fleets?
    Mr. Buchanan-Smith: If the hon. Gentleman has evidence of dumping—that was the word that he used—I hope that he will provide that evidence so that we can investigate it.
    Mrs. Kellert-Bowman: I appreciate my hon. Friend's efforts over reciprocal fishing
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    rights, but does he accept that reciprocal enforcement is infinitely more important? According to the film to which he referred, not only is France infringing rights, but it seems that other community countries should take much stricter enforcement action against their own fishermen.
    Mr. Buchanan-Smith: It is interesting to note—in contrast to the kind of incident that receives publicity on television and elsewhere—that recently two German trawlers fishing off Greenland, were fined, in one case £200,000, and in the other £175,000, and had their nets confiscated. I believe that that indicates that on a reciprocal basis—though incidents such as I have just quoted, do not, unfortunately, get the same publicity—efforts are being made by other countries to ensure that the regulations are observed

    Fisheries Conservation
    Mr. Mylesasked the Minister of Agriculture, Fisheries and Food what unilateral conservation measures are enforced by the United Kingdom so far as fishing in United Kingdom territorial waters is concerned.
    Mr. Buchanan-Smith: A comprehensive regime of national conservation measures is in force within United Kingdom fishery limits, including territorial waters.
    Mr. Myles: Following the question asked by my hon. Friend the Member for Aberdeen, South (Mr. Sproat), may I ask whether, now that the dust has settled, my hon. Friend will take action on the evidence that was produced in the World in Action film to stop illegal fishing in our waters by our Common Market partners?
    Mr. Buchanan-Smith: To be fair, the film did not say that there had been illegal fishing by our Common Market partners in our waters. We police our waters and apply the regulations regardless of the nations from which the fishing vessels come. The tape of the programme referred to by my hon. Friend has been submitted to the Commission in Brussels. I shall await with interest—as will my hon. Friend—the reaction of the Commission to the allegations that were made in the programme and if they are found to

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    be right, the action that is proposed by the Commission.
    Mr. Robert Hughes: Since the Minister has conceded that the fishing industry is in a perilous condition, and since he has referred to the Government's recent announcement of a subsidy, may I ask how much of that money has so far been disbursed?
    Mr. Buchanan-Smith: Money under the aid scheme to the fish producers' organisations is already going to those organisations. We are still considering tenders for exploratory voyages, and after discussion we hope in the near future to announce that some of the tenders have been accepted. I acknowledge the problems facing the fishing industry. One of the biggest problems is uncertainty about the future, which is the result of not knowing the outcome of the common fisheries policy negotiations. That is why we are pursuing these negotiations with resolution, and I trust that we shall receive the support of the Opposition.
    Mr. McQuarrie: The Minister has twice mentioned the film that was shown in France. The main part of the film deals with a large amount of herring caught in British waters anr re-exported to this country. What steps will the Government take to stop such fish coming into the country? Fishing for herring is banned in United Kingdom waters.
    Mr. Buchanan-Smith: If my hon. Friend has evidence that the fish were caught in British waters, I hope that he will supply it to me. I saw the film, but recall no evidence—not even an allegation—that the fish were caught in British waters. If my hon. Friend has evidence, I ask him to tell me about it. Hardly a week goes by without some vessel—sometimes our own, sometimes foreign—being caught and prosecuted for infringing regulations in our waters. Within our resources we shall continue to carry out effective policing.
    Mr. Strang: Have the Government taken up with the French Government the inadequacy of the supervision of landings of fish on French piers—a position quite different from that prevailing in the United Kingdom? Does the Minister deny that fish are being caught
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    illegally in British waters by Community fishermen and re-exported to this country?
    Mr. Buchanan-Smith: I wish that the hon. Gentleman would show more support for the efforts of the British Government to ensure that we get effective policing. At the moment it is up to individual nations to ensure policing within their own countries. We are seeking to get the force of international law applied across the Community in relation to the regulations. I am sorry that the hon. Gentleman did not hear my previous answer. I can only repeat that we enforce the regulations within our waters up to 200 miles. The system is not always perfect, but we apply the regulations on a totally non-discriminatory basis regardless of the nationality of a fishing vessel.

    Sheepmeat
    Mr. Marlandasked the Minister of Agriculture, Fisheries and Food what is the present state of negotiations concerning the establishment of a sheepmeat regime within the European Economic Community.
    Mr. Peter Walker: The Commission has put forward revised proposals which contain features on which we have lodged strong objections. The proposals have been referred for detailed examination and will then be further discussed by the Council of Agriculture Ministers.
    Mr. Marland: As my hon. Friend continues with these discussions, will he bear in mind the needs of the New Zealand economy, which is heavily dependent on the export of sheepmeat and other agricultural products?
    Mr. Walker: Yes, Sir. We have made it perfectly clear that we are in close consultation with the New Zealand Government on this matter. Tomorrow I shall discuss this issue in detail with the Deputy Prime Minister of New Zealand.
    Mr. Campbell-Savours: Is the Minister aware that some organisation—if not a sheepmeat regime—is needed in the market? Has he any evidence that New Zealand lamb is being diverted from Iran as a result of the crisis there, and from the French market as a result of the blockade? What action can be taken?
    Mr. Walker: I do not have any such evidence. Shipments of New Zealand lamb to this country are in accordance with the projections that we had previously received. Obviously, a disruption of the Iranian, or indeed the Iraqi, market for New Zealand lamb would cause difficulties for New Zealand and could have implications elsewhere. The Treaty of Accession to the Community stated that there should be a sheepmeat regime but I do not think that there is any necessity for a scheme of heavy intervention in the case of lamb.
    Mr. Lawrence: Is my right hon. Friend aware that the establishment of a sheep meat regime is becoming of less and less interest to Staffordshire farmers, who are being deterred from rearing sheep by the extraordinary high incidence of sheep worrying by dogs? Will my right hon. Friend speak to the Home Secretary and—
    Mr. Speaker: Order. Really, even to try it!
    Mr. Torney: In view of the fact that even were a sheepmeat regime to be introduced the French would not honour it unless it was 100 per cent. beneficial to them, will the Minister consider not establishing a sheepmeat regime at all? Whatever the French agree to will be bad for Britain.
    Mr. Walker: No Sir, because the previous Government, in their renegotiations, accepted a Treaty in which it was stated that there would be a sheepmeat regime.
    Mr. Peter Mills: In spite of the efforts that my right hon. Friend has made, and realising the serious problems, will he appreciate that in these matters time is not on our side? Will he bear in mind the fact that in the last week lamb prices in the South-West dropped by 20p a kilo? In the long run, that is not in the interests of producers or consumers.
    Mr. Walker: Yes, but, as my hon. Friend knows from announcements that I have made previously affecting the operation of the scheme as far as fat lambs are concerned, it has nevertheless meant that producers' returns have been maintained during this difficult period. However, I agree that it is of considerable
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    importance for British agriculture that we get a settlement in this sphere.
    Mr. Mason: If the Minister continues to object to a sheepmeat regime which necessitates intervention and an increase in United Kingdom costs, whether to the CAP or the United Kingdom Budget—and we back him on that—what sort of sheepmeat regime does he expect will come out in the end?
    Mr. Walker: It is important to have a common external policy—which so far as New Zealand is concerned is in operation at present, with a 20 per cent. tariff under the GATT, which I think can be changed if the New Zealand Government are willing freely to negotiate a change for the lowering of that tariff, and therefore voluntary agreements elsewhere—and a scheme that results in the free movement of sheepmeat across frontiers in Europe.

    Glasshouse Growers
    Mr. Stephen Rossasked the Minister of Agriculture, Fisheries and Food what progress has been made in establishing a common European Economic Community policy for subsidising fuel supplies to glasshouse growers.
    Mr. Wiggin: I am not aware of plans for a Community policy for subsidising fuel supplies to glasshouse growers.
    Mr. Ross: Why are Ministers dragging their feet on this issue? When will glasshouse growers go to the wall? If the Commission can approve subsidies to the Germans to the tune of £12½ million, and subsidies to the French, why cannot the Minister get together with his colleague in the Department of Energy and get a proper scheme for growers in this country, to save imminent bankruptcies?
    Mr. Wiggin: On a matter of detail, the French scheme has not been approved. The German scheme is for one year only, limited in quantity, for changing heating arrangements. The Government are fully aware of the difficulties created by the Dutch competition, but, as I have told the hon. Gentleman many times, there is no evidence that this is unfair in Community terms.
    Mr. Nelson: Will my hon. Friend accept that it is not good enough for the

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    Government just to be aware of the problem? Is he aware of the serious plight of growers of salad products, particularly small growers, in my constituency and elsewhere? Will he accept that unless the Dutch are prepared to raise their gas price to an oil equivalent price issued to our growers, there can be no alternative to introducing a subsidy system of the kind described by the hon. Member for Isle of Wight (Mr. Ross)?
    Mr. Wiggin: I understand that the Dutch are increasing their prices. The question of a subsidy for energy costs applies to many other industries, as well as the glasshouse industry.
    Mr. Newens: Does the Minister recognise, however, that British glasshouse growers have continually been fobbed off with the excuse that the disparity, which undoubtedly exists, between the price of fuel to Dutch growers and to British growers is disappearing? In those circumstances, will he recognise that the industry will disappear unless he takes some action very soon on this issue?
    Mr. Wiggin: The hon. Gentleman's Government faced this problem in exactly the same way. The truth is that the Dutch are supplying their glasshouse growers with gas at a profit, and this gives them an advantage over our growers.

    European Community Budget (United Kingdom Contribution)
    Mr. Canavanasked the Minister of Agriculture, Fisheries and Food what is his estimate of the effect of the common agricultural policy on Great Britain's contribution to the European Economic Community budget.
    Mr. Peter Walker: It is not possible to make these estimates, because the common agricultural prices for 1980–81 have not yet been decided; and the question of our contribution to the European Community budget is still being negotiated.
    Mr. Canavan: Will the Secretary of State resist the pressures from other Common Market countries for a farm price deal which would mean for us an additional £1 billion on the cost of the CAP? Does he agree that any decrease in our overall Common Market contribution will be a phoney decrease if the
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    British housewife has to pay for it by further increases in the price of food?
    Mr. Walker: With every respect to the hon. Gentleman, I think that he has got his figures rather mixed up. The proposal for the package would not mean an extra £1 billion on the cost to us. It would be I billion units of account for the Community as a whole, towards which we make a contribution. I assure the hon. Gentleman that both the CAP settlement and the budget settlement will be far better than was ever achieved by our predecessors.
    Mr. Bruce-Gardyne: My right hon. Friend is to be congratulated on the resistance that he has shown so far to the rather half-baked proposals which seem to have been esteemed by the Commission. However, does he agree that even a large budget settlement would be a dubious bargain if it were accompanied by a settlement on prices and on sheep-meat which led to a huge increase in unconsumable surpluses?
    Mr. Walker: Yes, Sir. It is important that we pursue a policy which, over a period of time, erodes the unnecessary surpluses that exist in Europe. Certainly the British Government will pursue policies to try to achieve that.
    Mr. J. Enoch Powell: Will the Minister confirm that Great Britain is not a member of the European Community at all, and does he agree that it is a pity that the United Kingdom is?
    Mr. Walker: No, Sir.
    Mr. Farr: Will my right hon. Friend confirm that, whatever negotiations may be taking place, his immediate priority will be to secure a revision of the CAP, which has worked so badly, which has led to so many surpluses and which could lead to a surplus in cereals and other commodities in the immediate future?
    Mr. Walker: Yes, Sir.

    Fishing Industry (Fleet Restructuring)
    Mr. McQuarrieasked the Minister of Agriculture, Fisheries and Food if, in view of the delay in obtaining a new common fisheries policy within the member States of the European Economic Community, he will now start discussions

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    with all sections of the fishing industry on the restructuring of the fleet.
    Mr. Buchanan-Smith: This issue must be considered in the context of the common fisheries policy and we shall discuss it with the industry as soon as developments permit.
    Mr. McQuarrie—
    Hon. Members: Hear, hear.
    Mr. Speaker: Order.
    Mr. McQuarrie: I am grateful for the support from the Opposition Benches on this question. It is certain that this question arises out of the common fisheries policy agreement, but only this week France has given—[Interruption.]
    Mr. Speaker: Order. Only today, it must be a question.
    Mr. McQuarrie: I apologise, Mr. Speaker. Is my hon. Friend aware that France has given the equivalent of £20 million to restructure its fleet, even before the CFP has been agreed? In these circumstances, is it not time that our Government made a similar move?
    Mr. Buchanan-Smith: Perhaps I might ask my hon. Friend whether he is aware that in 1980–81 the United Kingdom Government are giving about £22 million to its fishing industry? I accept the problems facing the industry. It was precisely for that reason that from the beginning of April we introduced a temporary scheme to assist the industry during the months ahead.
    Mr. Beith: Is not the fleet being restructured by the disappearance of the deep-water fleet? Does the Minister recognise that, nothwithstanding the aid that he has given, the time scale of renegotiation of the CFP simply will not allow us to have anything to replace that fleet in the future?
    Mr. Buchanan-Smith: I hope that the hon. Gentleman will be the first to admit that the United Kingdom fishing fleet has never been static in this respect. It has always been in a changing pattern. Anyone who has looked at its structure over the years will have seen how much it has changed and adapted to different situations. In this respect, the industry today is no different from what it was many
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    years ago, and no doubt it will face changes in the future. We hope that at the next Fisheries Ministers Council, which I hope will be in June, we can make progress on these major issues, which will then give us a proper basis for restructuring policies.
    Mr. James Johnson: Will the Minister and the Government accept that whatever they do to alter—for the better, I hope—the size and shape of our fleet, there are scores of magnificent modern vessels which are fit to catch fish in the Arctic lying doing nothing in Hull dock and will never catch fish again? Will he talk to his colleague the Under-Secretary of State for Defence for the Royal Navy and see about converting some of these boats into either minesweepers or possibly—this is much more important—fishery protection vessels to guard our shores and enforce conservation measures?
    Mr. Buchanan-Smith: I understand that that point was made in the House in the recent debate on the defence White Paper.
    Mr. Mason: Am I to understand from the Minister's recent reply that the next Fisheries Council meeting is expected to be held in June? Is he not aware that a date for the next meeting was fixed for 27 May? If it is not to be held on that date, does that mean that the common fisheries policy will be raked over in the summit Council meeting on 12 June?
    Mr. Buchanan-Smith: No date in May has been firmly fixed for a Fisheries Council meeting. A number of other Council meetings are taking place. A proper estimate for the Fisheries Council meeting could be the end of May. or possibly in June. I hope that it will be within the next four weeks.

    Common Fisheries Policy
    Mr. Sproatasked the Minister of Agriculture, Fisheries and Food if he is satisfied with the way in which other European Economic Community countries are operating under the common fisheries policy.
    Mr. Buchanan-Smith: We are concerned that all member States should honour their obligations under the common fisheries policy.
    Mr. Sproat: Does my hon. Friend share the deep concern of the fishing industry over the fact that in the first three months of this year fish imports rose by more than 50 per cent., and by 70 per cent. in value? Is he aware that fish imports are running at about £400 million a year? Is that not absolutely disastrous, not only for the fishing industry, but for our balance of trade?
    Mr. Buchanan-Smith: I share my hon. Friend's concern. Earlier this week my right hon. Friend and the Secretary of State for Scotland met representatives of the fishing industry. They agreed to meet again in July to assess the position.
    Mr. Robert Hughes: Is the Minister aware that the number of fishing vessels lost at sea more than doubled in 1970–80 compared with 1960 to 1970? Is he further aware that there has been an even greater loss of life? Is that due to pressure because of the way in which the fishing industry operates? Will he hold an inquiry into the industry?
    Mr. Buchanan-Smith: As the hon. Gentleman knows, questions on safety are not for my Department, but for the Department of Trade. What the hon. Gentleman has said is a view that has been expressed elsewhere, but it is difficult to assess precisely whether that view is correct.
    Mr. Kilfedder: Is it not scandalous that fishermen in other Common Market countries can, with impunity, evade many of the conservation measures introduced in the Common Market, yet under a nonsensical Common Market rule hard-pressed fishermen in my constituency are prevented from using a cover net for their nets, which is meant only to preserve them from damage? Will the Minister look into that important matter?
    Mr. Buchanan-Smith: I think that it is only in our waters that the hon. Gentleman's constituents fish. The rules in our waters are applied in exactly the same way to fishing boats from any nation. I shall consider the specific point made by the hon. Gentleman.
    Mr. Leighton: Does the Minister accept the truth of the television film to which he referred earlier, which showed Continental fishermen—not only the
    1740
    French—poaching herring freely and then selling them with impunity in Continental ports, without encountering any difficulties from the harbour authorities?
    Mr. Buchanan-Smith: Hon. Members should not exaggerate. The film showed pictures of boxes of fish, and verbal allegations were made about the type of fish and where they were caught. As I have said already, that film has been sent to the Commission. I hope that the Commission will answer the questions put to it by those who sent the film.

    Milk Marketing
    Mr. William Hamiltonasked the Minister of Agriculture, Fisheries and Food if he will make a statement on future policy on milk marketing.
    Mr. Peter Walker: My policy will continue to be the maintenance of the existing arrangements for the marketing of milk in the United Kingdom, based upon the Milk Marketing Boards and the doorstep delivery system for liquid milk.
    Mr. Hamilton: Will the Minister give an assurance that, whatever the future might hold, our market will not be flooded with French milk and that the interest of the consumer will be paramount?
    Mr. Walker: On the question of imports, the United Kingdom holds strongly to the view that the health regulations that we apply are justified and correct, and we shall continue with them. There are varying views about what is in the interest of the consumer. I hold the view that the retention of the doorstep service is of prime importance to the consumer.
    Mr. Gummer: Does my right hon. Friend agree that one way to retain the doorstep delivery service is to retain the link between the milk bottle and the milk inside it? Will he stop the dairy industry from forcing retailers to sell milk in cartons, simply to make matters more convenient for the industry?
    Mr. Walker: That is a topic on which consumers differ in their views. The tradition of the doorstep delivery service, be it in bottles or sometimes in cartons, is of prime importance to our overall milk consumption.
    Mr. John Home Robertson: Is the Minister aware that milk production in

    1741
    Britain will soon come to a halt unless there is rain? Will the Government appoint a Minister for drought?
    Mr. Walker: No, Sir. We have no intention of applying for the transfer of a Minister to occupy that position.
    Mr. Bruce-Gardyne: Doorstep deliveries are a great convenience to the consumer. However, will my right hon. Friend bear in mind that they have a great deal to do with the fact that the margin between the price paid to the producer and the price charged to the consumer is far wider than it is in any other Community country?
    Mr. Walker: I also have in mind that the consumption of liquid milk in Britain is far higher than it is in other European countries.

  PRIME MINISTER (ENGAGEMENTS)
  Mr. Geraint Howelkasked the Prime Minister if she will list her official engagements for Thursday 15 May.
  The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet. In addition to my duties in this House I shall be having further meetings with ministerial colleagues and others.
  Mr. Howells: Is the Prime Minister aware that the very high interest rate is having a disastrous effect on small businesses? Will she discuss the matter today with the Chancellor of the Exchequer and recommend that the bank rate should be lowered forthwith?
  The Prime Minister: As a matter of fact, I discussed that subject with the Chancellor of the Exchequer this morning. The banking figures published recently, and the money supply figures published today, indicate that there is still a very high demand for borrowing from manufacturing industry, and also some considerable demand from the personal sector. While that demand remains as high as it is, the interest rate cannot be reduced.
  Mr. Bulmer: Will my right hon. Friend confirm that pay increases not justified by productivity are the greatest avoidable source of unemployment and that to the
  1742
  extent that the TUC continues to promote them, yesterday's demonstration resembles the rage of Caliban at seeing his face in a glass?
  Will my right hon. Friend also confirm that she will be ready to talk to the TUC as soon as it has thought through policies that are more clearly in tune with the long-term aspirations of its members, who are taxpayers, consumers and wage-earners, than are the policies that were rejected yesterday?
  The Prune Minister: I agree with my hon. Friend that where there is a wide gap between high pay increases and increased output, that gap will lead to increased unemployment. I hope that everyone will take that fact into account. With regard to yesterday's events, I believe that the people of Britain gave their verdict. It was " Carry on Britain ", and it was right.
  Mr. Foulkes: Has the Prime Minister noted reports that the inflation rate is about to reach 21 per cent.? Is she aware that the pensions increase announced in the Budget will in no way keep pace with inflation? Will she arrange for an early announcement to the effect that pensions will be increased even further?
  The Prime Minister: On the earlier part of the question, it is expected that when the inflation rate is announced tomorrow it will be seen to have risen. There are, of course, technical reasons for that. The Budget was earlier this year than last year. There are also great reasons of substance, namely, very high pay increases not backed by productivity, and substantial increases in raw material prices over and above the increases in the price of oil.
  On the question of pensions, the requisite figure is from November to November, and it is too early to say what that will be.
  Mr. Foot—
  Mr. Speaker: I shall call the right hon. Gentleman in a moment..
  Mr. Colin Shepherdasked the Prime Minister if she will list her official engagements for Thursday 15 May.
  The Prime Minister: I refer my hon. Friend to the reply which I have just given.
  Mr. Shepherd: Will my right hon. Friend take time to study the difference in pay settlements between the private sector and the public services and public monopolies, especially the water authorities? Will she bear in mind that our constituents, especially mine, are increasingly unable to pay for the enormous cost of water and sewage treatment? Will she draw the appropriate conclusions?
  The Prime Minister: I confirm that the level of settlements in private manufacturing industry has, in general, been lower than the level of settlements in public monopolies, including those in water authorities. One water authority has already been referred to the Monopolies and Mergers Commission, and it is the intention to refer other water authorities to it. I hope that everyone will take note of the fact that competition keeps down prices far more than monopolies do.
  Mr. Foot: Will the right hon. Lady consider telling us now, or possibly publishing in the Official Report, which of the Government's failures she would describe as technical or economic? During her busy day, has she had the chance to read the excellent interview in the Evening Standard, given by the Secretary of State for Employment, who indicated that it was his view that he would not be held responsible for failures of the Government? Can the right hon. Lady say which failures she thinks the Government have had and why the right hon. Gentleman should be allowed to escape from his collective responsibility?
  The Prime Minister: I assure the right hon. Gentleman, in case he is seeking it, that the inflation figure to be announced tomorrow is not likely to go up to anything like the level that the Government of which he was a member achieved.
  Mr. Crouch: Is my right hon. Friend aware that in her first year of office it has come as a surprise to some—a very good surprise—that she has turned out to be such an outstanding leader—[Interruption.]—
  Mr. Speaker: Order. I cannot hear what the hon. Gentleman is saying.
  Mr. Crouch: Thank you, Mr. Speaker. I was saying that my right hon. Friend
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  has turned out to be an outstanding leader in international affairs. Having stopped a war in Rhodesia, will she now use her great influence in Washington and Europe to ensure that we do not slide into one in South-West Asia?
  The Prime Minister: I am always glad to receive compliments, even when they are a bit back-handed, as is sometimes the case. I am grateful to my hon. Friend. We shall use our good offices and influence wherever and whenever we can.
  Mr. Ennals: Now that the Prime Minister has confirmed that the rate of inflation to be announced tomorrow will go higher still, will she now answer the question about what action she proposes to take over pensioners, whose benefit will increase by only 16 per cent. in November, and others, such as invalidity pensioners, whose benefits will increase by only 11½ per cent. in November? What action will she take about that?
  The Prime Minister: The right hon. Gentleman must wait and see. The time for action is not now.
  Mr. Stephen Rossasked the Prime Minister if she will list her official engagements for 15 May.
  The Prime Minister: I refer the hon. Gentleman to the reply I gave earlier to the hon. Member for Cardigan (Mr. Howells).
  Mr. Ross: If the right hon. Lady plans to see her Ministers, will she make sure that she sees the Secretary of State for the Environment and asks him what is happening about homelessness in London, which is getting worse? Will she ask him to invite the Bishop of London and Cardinal Hume to see him as quickly as possible in order to do something about that situation, which his present policies are only making very much worse?
  The Prime Minister: I do not believe that the policies of my right hon. Friend are making matters worse at all. He and I are very concerned about the number of empty houses in London. If we could get those into occupation, things would be very much better. He is also improving the situation a great deal as a result of the shorthold provisions in the. Housing Bill.
  Mr. Porter: Is my right hon. Friend aware of the threat today—[HON. MEMBERS: " Reading."] Well, at least it shows that I can read. Is ray right hon. Friend aware of the threat of closure to the Daily Star—I emphasise that it is the Daily Star and not the Morning Star, whose closure would not disturb me at all—which is the direct result of the sulking of SOGAT at the legal right of Express Newspapers Ltd. to produce—[Interruption.]
  Mr. Speaker: Order. It is not fair to any hon. Member who is asking a question to have to fight to be heard.
  Mr. Porter: I am very much obliged, Mr. Speaker, for your consideration. I was asking my right hon. Friend whether she would point out to the officials of SOGAT that their activities today are likely to lead to unemployment in the newspaper industry, which, sadly, would involve the hon. Member for Bassetlaw (Mr. Ashton)?
  The Prime Minister: The Daily Star was started comparatively recently. It is always a great event when we get a new newspaper. I hope that it will continue to survive and that it will soon be back in print.
  Mr. Stan Thorne: Will the Prime Minister today find time personally to examine the case of Anwar Dittar, whose three children are held in Pakistan? She is a British subject. They should be allowed to enter the United Kingdom. Will she look at the case herself?
  The Prime Minister: I must respectfully ask that individual cases go to my right hon. Friend the Home Secretary, who is in charge of the Deparment, and I am sure that he will give his personal attention to them.
  Mr. David Atkinson: Does my right hon. Friend regard the announcement yesterday by TASS the Soviet news agency, that Afghanistan now wishes to discuss neutrality as a timely gimmick to influence next week's decision about sending teams to the Olympic Games? Will she now confirm that, to be acceptable to the West, any arrangements for the neutrality of Afghanistan must include the total withdrawal of Soviet influence from that country, the holding of free and fair elections and a respect
  1746
  for human rights and fundamental freedoms in Afghanistan?
  The Prime Minister: We observed that the current proposals about Afghanistan, which came out this morning, were not very different from those that were published on 17 April. Nevertheless, we shall look at them. We also noted that they did not make provision for the withdrawal of Soviet troops from Afghanistan, which is what most of us would regard as the minimum circumstance and condition before we could consider going to the Olympics in Moscow.
  Mr. Foot: Does the right hon. Lady think that there will be a convenient opportunity at the meeting of the Foreign Ministers at the weekend to consider carefully the proposal that has been made, to see whether a response could be made that could lead to further negotiations? The Foreign Secretary has often made that statement. Will the right hon. Lady answer in that sense?
  The Prime Minister: The Foreign Ministers are at present in Vienna in connection with the twenty-fifth anniversary of the Austrian Treaty. They are doubtless discussing the matter. When my right hon. Friend the Foreign Secretary arrived, he observed that the proposal did not seem very different from those that we had heard of previously. He will, of course, look at them. We also observe that they do not make provision for the withdrawal of Russian troops from Afghanistan.
  Mr. Gordon Wilsonasked the Prime Minister if she will list her official engagements for Thursday 15 May.
  The Prime Minister: I refer the hon. Gentleman to the reply I gave earlier today to the hon. Member for Cardigan (Mr. Howells).
  Mr. Wilson: Has the Prime Minister seen reports that Scottish teachers are outraged that their current wage offer is 14 per cent. for this year? As inflation is running at more than 20 per cent., and as senior civil servants have been offered about 24 or 25 per cent., why is it that the teachers of our children in Scotland have been held back to that figure?
  The Prune Minister: The negotiation of teachers' pay is a matter for the appropriate negotiating committee in Scotland.

  1747
  I very much deplore any strike action that has taken place. It is an extremely bad example to the children, especially at a time when they are approaching examinations.
  Mr. Haselhurst: Will my right hon. Friend acknowledge that the fact that so many people ignored the TUC's call yesterday owes quite a lot to the Government's judgment of employment legislation, which is about right? Does it not show that the Government have widespread support among trade unionists?
  The Prime Minister: That is absolutely right. Yesterday also showed that people will have no truck with political strikes. They would rather get on with the job.
  Mr. Pavitt: Will the Prime Minister find time today to send me a second letter amending the first one in which she resisted my plea to swap surgeries because our constituencies are close? Will she amend the point that she made before by giving me the figures for the homeless, those waiting for transfers and the numbers on the waiting list in Finchley, as compared with the numbers that I have in Brent, South.
  The Prime Minister: I am prepared to swap figures, but I really do not think that my constituents would think that the hon. Member's other suggestion was much of a swap.

BUSINESS OF THE HOUSE
Mr. Foot: Will the Leader of the House state the business for next week?
The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John-Stevas): The business for next week will be as follows:
MONDAY 19 MAY and TUESDAY 20 MAY—Progress on the remaining stages of the Housing Bill.
At the end on Monday, motion on the Dental Qualifications (EEC Recognition) Order.
At the end on Tuesday, motion on the Upholstered Furniture (Safety) Regulations.
WEDNESDAY 21 MAY—Remaining stages of the Social Security (No. 2) Bill.
THURSDAY 22 MAY—Completion of remaining stages of the Housing Bill, until 7 pm.
Afterwards, consideration of Lords Amendments to the Social Security Bill.
FRIDAY 23 MAY—The House will rise for the Spring Adjournment until Monday 2 June.
Mr. Foot: On the question of the Upholstered Furniture (Safety) Regulations, which will be debated on Tuesday night, will the right hon. Gentleman look at the possibility of giving extra time for this discussion in view of the significance of the subject and the desire of many hon. Members to speak on it? Will he recognise that his proposals for next week's business mean a further heavy dose of the indigestible legislation that he offers the House? Will he also recognise that we urgently desire debates on the Brandt Commission's report, which we hope will take place before the meeting on this matter in June; on the Civil Service statement that was made this week—we regard that statement as entirely inadequate in providing information about the proposals—and on prisons? The latter debate was promised, as were a number of others. I hope that when the Leader of the House brings forward the next lot of business he will try to satisfy us on many of these topics.
Mr. St. John-Stevas: I cannot promise an early debate on the Civil Service statement, but I hope to have a debate on the Brandt Commission's report and on the May report in the resonably foreseeable future.
On the request for extra time on the Upholstered Furniture (Safety) Regulations, I recognise that there is widespread interest in this important matter. I am sympathetic to that request and I will see that it is pursued through the usual channels, so that extra time can be given for the debate.
Mr. Foot: I thank the right hon. Gentleman for his statement. May I urge him afresh for an indication of the time of the Brandt Commission debate in his next business statement?
Mr. St. John-Stevas: That pertains to the next business, but I have given a reasonably firm assurance that we will have a debate as soon as I can arrange it in Government time.
Mr. David Steel: Will there be a statement early next week about the meeting of Foreign Ministers this weekend, and will the European budgetary question, which is still unresolved, be debated soon?
Mr. St. John-Stevas: It is customary for statements to be made when there are important developments. I shall convey the right hon. Gentleman's request to my right hon. Friend the Lord Privy Seal. I have not yet had a request for a statement.
Mr. Peter Bottomley: As the Government and the TUC are both set against an incomes policy, and therefore legislation is not required, may we have a debate on the increases in pay during the coming year, which will obviously have a great deal of influence on the levels of unemployment and rising prices? As most employers and trade unionists have now been given the right to influence the future level of unemployment and inflation, will my right hon. Friend arrange for this to be debated in the House?
Mr. St. John-Stevas: Clearly, the level of pay settlements has an important bearing on our general economic policy. I do not think that I can promise a special debate on that topic, separated from the debates that take place from time to time on economic matters.
Mr. Skinner: Will the Leader of the House arrange for a statement, preferably by the Prime Minister, early next week to make it quite clear that this Government will not allow the British Petroleum shares that were acquired from Burmah Oil for £178 million of the British taxpayer's money, and which have now accumulated to a worth of £1·1 billion, to be part of a compromise settlement with the action group? Members of that group did not mind playing at being entrepreneurs at the time they invested in Burmah Oil, but as soon as things went wrong they did not want to take any risks. In view of the sensitive nature of this matter and the fact that Burmah Oil was the company in which the Prime Minister's husband was involved, may we be assured that the Government will not give away any of the British taxpayers' money?
Mr. St. John-Stevas: I do not intend to rise to that remark, or sink to that level. I shall convey the hon. Member's remarks to the Prime Minister and I am
1750
sure that she will give them the attention that they deserve.
Mr. Marlow: Since it has been announced today that, on a vote of the German Olympic Committee, the Federal Republic will not send a team to Moscow, and since the Germans finished the last Olympic Games in fourth place behind the Americans, in terms of medals won, is it not now obvious that if the Olympics go ahead they will be a purely Eastern European festival, celebrating Soviet aggression in Afghanistan? Will my right hon. Friend provide time for the House to have another debate on the Olympic Games, so that we can change our decision?
Mr. St. John-Stevas: I do not think that one should tempt providence in these matters. The last debate on the Olympic Games was evidently highly successful, because since then three of the major competitors have indicated that they will not take part. I hope that this will be followed by other countries. I agree very much with my hon. Friend's earlier remarks but I do not think that we need another debate.
Mr. Stan Thorne: Will the Leader of the House arrange an early debate after the recess on the application of the immigration rules and the very backward and inhuman decisions that presently emanate from the Home Office?
Mr. St. John-Stevas: I do not think that I can promise an early debate. On the question of Home Office decisions, my experience with constituency cases has been that they have always been treated with the greatest consideration and justice by the Minister concerned.
Mr. Cormack: Will my right hon. Friend confirm that he still intends to arrange a debate on the Casson proposals before the House rises for the Summer Recess?
Mr. St. John-Stevas: I cannot confirm that. This matter will have to be decided by the Services Committee. The Prime Minister has already indicated that the chances of financing the buildings in the foreseeable future are not very high. In those circumstances I question the value of an early debate.
Mr. Sheerman: Will the Leader of the House find time to consider whether

1751
it is possible or proper to debate the relationship between the Government and the established and non-established Churches in this country, in the light of the recent attempt to gag Church leaders who involve themselves in the deplorable social conditions that are deteriorating every day?
Mr. St. John-Stevas: I do not believe that there has been any attempt by the Government to gag Church leaders, and it would not be successful if it were tried. The question has no relevance to our discussions.
Mr. Stanbrook: Is my right hon. Friend aware that Northern Ireland business was not reached until nearly 2 o'clock this morning? Is it right that the affairs of a most important part of the United Kingdom should always be the last item on our parliamentary agenda? Will my right hon. Friend look into the matter and give Northern Ireland the share of best parliamentary time that it deserves?
Mr. St. John-Stevas: I am aware of the importance of Northern Ireland debates in the House, particularly since the suspension of the legislature at Stormont. However, it is not true that Northern Ireland matters are always raised late. On yesterday's business it was a judgment that one had to make between having a debate at a late hour or postponing it for a considerable time. In those circumstances, we decided that the lesser of the two evils was to go ahead with the debate.
Mr. James Lamond: Will the Leader of the House arrange for a debate on the state of the British popular press, which is so one-sided and biased that it is a danger to democracy? The most recent example of its disgraceful conduct was the treatment meted out to the general secretary of the TUC.
Mr. St. John-Stevas: There is a wide range of opinions expressed in the popular press, and if one reads all the popular papers, including The Times and The Guardian, one gets a good picture of what is going on.
Mr. Eldon Griffiths: Will my right hon. Friend arrange for a statement to be made about the bombing of a police station in south-east London, in so far as it might
1752
involve terrorist action? Will he also go a little further in respect of a statement on the Foreign Ministers' meeting in Naples? The House passed a Bill on Iran specifically because the Government wanted it by 17 May. Now that the target date has been met, surely it must be right for there to be a report on the consequences of what the House did.
Mr. St. John-Stevas: I shall certainly pass on to my right hon. Friend the Home Secretary my hon. Friend's remarks about the extremely regrettable incident at the police station, which we all condemn.
It is only courteous for me, while indicating that there might be a statement on the Naples meeting, to wait until my right hon. Friend the Foreign Secretary has returned before committing him or my right hon. Friend the Lord Privy Seal without qualification.
Mr. Christopher Price: May we have an early statement about the allegations in the press today that senior officials of the Foreign Office employed by General Communications Headquarters in Hong Kong are involved in corruption, the control of prostitution, the leaking of secrets to other countries and the use of surveillance techniques to prevent British journalists finding out what is going on? Since the budget of GCHQ is not subject to the same sort of scrutiny in the House that other public expenditure receives, does the right hon. Gentleman agree that an early statement is necessary, in order to allay the real public concern on the issue?
Mr. St. John-Stevas: I do not believe that there is widespread public concern over the allegations.
Mr. Christopher Price: The right hon. Gentleman is not bothered about them?
Mr. St. John-Stevas: I am certainly not bothered about them. The allegations have been thoroughly investigated. They are old allegations which have been dragged up again for sensational purposes. It is an attempt by one section of the popular press to exploit a situation that has already been dealt with.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. I propose to call those hon. Members who have been trying to catch my eye since the start of business

1753
questions, but I hope that they will be brief—otherwise we shall be late again tonight.
Mr. Chapman: Will my right hon. Friend carefully consider the possibility of a general debate on the problems and opportunities facing the construction industry, bearing in mind that it is the greatest industry in this country, whether measured in terms of manpower or output?
Mr. St. John-Stevas: I know my hon. Friend's concern with the construction industry. He raised the point in the Whit-sun Adjournment debate yesterday. I cannot promise an early debate, but I repeat my promise that I shall draw my hon. Friend's remarks to the attention of my right hon. Friend.
Mr. Robert C. Brown: Reverting to the question of my hon. Friend the Member for Lewisham, West (Mr. Price), the Prime Minister has overall responsibility for national security and it is not good enough for the Leader of the House to say that the allegations referred to by my hon. Friend have already been deeply probed and proved to be unfounded. We are entitled to have from the person responsible for security a statement to the House and not to a cabal of Tory Cabinet Ministers.
Mr. St. John-Stevas: As the hon. Gentleman said, responsibility for the security forces rests with my right hon. Friend the Prime Minister. Therefore, if hon. Members wish to pursue the matter they must pursue it with her. I was giving the hon. Member for Lewisham, West (Mr. Price) an early indication of the Government's view and stating factually that these matters have already been investigated and found to be without foundation.
Mr. Foot: The right hon. Gentleman may be under a misapprehension about the matter raised by my hon. Friend the Member for Lewisham, West (Mr. Price). Will he look at it afresh? The allegations, together with considerable documentation, are appearing in the New Statesman and, I believe, the Daily Mirror tomorrow. I agree that that is not absolute proof of their validity, but before the right hon. Gentleman jumps in and says that they are old allegations it would be wiser of him to say that he will look at
1754
the matter and see whether we should have a statement next week.
Mr. St. John-Stevas: The right hon. Gentleman should not base his remarks on an inaccurate knowledge of the facts.
Mr. Kilroy-Silk: Have you read the New Statesman, Norman?
Mr. St. John-Stevas: I have not read the New Statesman, but the allegations have already appeared in the Daily Mirror today, and I have read that. The fact that they are in the Daily Mirror does not prove their veracity—as the right hon. Gentleman recognised—or their essential falsehood. The Daily Mirror occasionally lends itsef to a journalistic approach—we have seen it from a distinguished journalist in regard to the catering arrangements in the House—that is not always balanced. I am endeavouring to redress the balance by putting the allegations in their proper context. They are old allegations, and they have been investigated.
Sir Derek Walker-Smith: Will my right hon. Friend reconsider his negative and somewhat disappointing answer to my hon. Friend the Member for Staffordshire, South-West (Mr. Cormack), about a debate on the Casson proposals? Is it not a novel doctrine that the House does not debate long-term aspirations simply because of an immediate want of ready cash? Would it not greatly truncate our proceedings if that unorthodox principle were introduced?
Mr. St. John-Stevas: It is not so much a matter of principle, although my right hon. and learned Friend is good at drawing principles inductively out of pragmatic situations. It is a question whether it is worth while having an early debate about a new building when it is clear that the funds are not available for it and are unlikely to be available for some time.
Mr. John Home Robertson: Has the Leader of the House seen early-day motion 583, which has been signed by nearly 80 hon. Members of all parties and which calls for a European initiative with the object of establishing a national home for the Palestinian people in Palestine?
[That this House, recognising the right of the Palestinian people to self-determination and noting the peaceful and constructive objectives of the Palestine National Council, calls on Her Majesty's Government, and other European governments to take a major diplomatic initiative with the object of securing the withdrawal of all Israeli forces and settlements from the West Bank and Gaza, and the establishment of an independent Palestinian state in that territory.]
As the Camp David timetable will run out on 26 May—
Mr. Greville Janner: It will not. My hon. Friend is out of date.
Mr. Home Robertson:—will the Leader of the House provide time for an urgent debate on the Middle East?
Mr. St. John-Stevas: The Government are ready to help to achieve a comprehensive peace settlement. With our partners in the Nine we are discussing ways in which we might be able to make a constructive contribution. We must not undermine the current peace efforts, which we shall continue to support. We hope that they will succeed in producing further progress towards a settlement. My right hon. Friend the Prime Minister has outlined that policy.
Mr. Crouch: My right hon. Friend has promised a debate on the Brandt Commission's report. Is he aware that the House will be greatly dismayed if he offers less than a full day's debate?
Mr. St. John-Stevas: I note what my hon. Friend said. I attach great importance to the Brandt Commission's report. It deals with one of the world's greatest problems, and much depends on that problem's successful solution. In those circumstances, I am hardly likely to offer a half-day's debate.
Mr. Weetch: Will the Leader of the House find an early opportunity to debate the report of the Royal Commission on legal services?
Mr. St. John-Stevas: I cannot promise an early debate on that subject. However, I shall certainly consider the hon. Gentleman's representation.
Mr. Bill Walker: Will my right hon. Friend find time for an early debate on Scottish school teachers? They have
1756
been absent from schools, particularly on Tuesday, Wednesday and Thursday of this week.
Mr. St. John-Stevas: My right hon. Friend the Prime Minister has made clear the Government's attitude towards those teachers who go on strike. I have nothing to add to what she said. A further debate on the subject would not add anything to what she said.
Mr. Kilroy-Silk: Will the Leader of the House give an assurance that we shall have an early opportunity to debate the Expenditure Committee's report on reducing the numbers of those in prison, the May report, and the Home Secretary's statement? We could then have a full and adequate debate on the impending crisis in our prison service.
Mr. St. John-Stevas: I know that the hon. Gentleman takes an interest in prisons and prison reform. I hope that we shall be able to have an early debate on this very important subject.
Mr. Kilfedder: Is the Leader of the House aware that many taxpayers do not like to find that their money is being used to purchase nuclear weapons? Will he find time to debate this issue and to discuss whether taxes could be used for other purposes—such as helping the Third world—than for contributing towards nuclear warfare?
Mr. St. John-Stevas: I do not think that any Government have ever accepted the principle of the hypothecation of taxation to particular objectives. If people paid taxes only for those things that they approved of there would be an immeasurable loss to the Inland Revenue.
Mr. Arthur Davidson: Will the Leader of the House at least undertake to read the article that will appear in the New Statesman—distasteful as that may be—before deciding whether there is any truth in the allegations? If he feels that there is some truth in the allegations, will he arrange for the Prime Minister to make a statement about their validity. The right hon. Gentleman should not try to rub off this issue so lightly.
Mr. St. John-Stevas: The allegations appear in today's Daily Mirror. I was referring to those allegations. I accept that they will also appear in the New

1757
Statesman. We all know that the hon. Member for Lewisham, West (Mr. Price) has some connection with the New Statesman. As an act of supererogation, I shall read this week's New Statesman. It will not do me much good, nor do I imagine that it will do anyone else much good. I have no ministerial responsibility for such issues. If hon. Members wish to pursue the issue further, they must raise it with the Prime Minister.
Mr. Lawrence: Is my right hon. Friend aware that earlier this afternoon the rules of the House prevented my raising with the Minister of Agriculture, Fisheries and Food the question of dogs worrying sheep? I am not optimistic—
Mr. Speaker: Order. All that prevented the hon. Member from asking that question was the fact that he had not tabled a question on the Order Paper.
Mr. Lawrence: I am most obliged, Mr. Speaker. I am not optimistic that it would be in order for me to ask the Home Secretary about dogs worrying sheep.
Has my right hon. Friend seen early-day motion 553?
[That this House believes that early action is needed to reduce the large number of stray dogs and the nuisance they cause, namely, traffic accidents, fouling and livestock worrying; and calls upon Her Majesty's Government to encourage a more responsible attitude to dog ownership and to introduce legislation to reduce these problems by setting up a self-financing dog warden service on a national basis, run by local authorities, which would be paid for by an increase in the dog licence fee, and which would provide an information and education service to dog owners.]
It involves the important issue of stray dogs and their effect not only on the farming community but on urban areas. Perhaps my right hon. Friend will find an occasion to arrange for a debate on this subject, which affects the lives of many people and requires urgent consideration.
Mr. St. John-Stevas: I agree that stray dogs can be a nuisance. The problem goes far wider than worrying sheep. Stray dogs also affect urban communities. However,
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we have had an Adjournment debate on the subject. I shall take the subject up as a matter of urgency with my right hon. Friend the Home Secretary—who has general responsibility—in order to see how this intolerable nuisance can be substantially reduced.
Mr. Hill: I realise that the Government are making a policy shift towards those seaports under the control of the British Transport Docks Board, but is it not time that we had a full day's debate on the future of our seaports, and on their financing?
Mr. St. John-Stevas: Our seaports are of vital importance to us, because we are a trading nation. However, I cannot promise a debate on the subject next week.
Mr. Trippier: Has my right hon. Friend seen early-day motion 610?
[That this House urges the Government to take immediate action to restore confidence in the British textile industry by stating its support for a strengthened Multi-Fibre Arrangement to be renegotiated in 1981 and urges Her Majesty's Ministers to take the initiative within the Common Market in order that the Community view can be made clear to the next General Agreement on Tariffs and Trade textiles committee meeting in October.]
It stands in the name of hon. Members from all parties and concerns the restoration of confidence in the British textile industry. Will he confer with his right hon. Friend the Secretary of State for Trade and find time for an early debate on the serious pressures faced by the textile industry?
Mr. St. John-Stevas: Several hon. Members have expressed concern, and I am well aware of the importance that is attached to the problems that face the textile industry. The Government are determined to see that there are further effective restraints when the multi-fibre arrangement comes to an end at the end of 1981. The Community will be working out its position towards the GATT. The meeting in October represents only one stage. I assure my hon. Friend that the Government are extremely concerned about the future of the textile industry. We shall do all that we can to ensure that it gets a fair deal.
Mr. Speaker: I remind hon. Members that up to eight hon. Members may raise subjects of their own choice with Ministers on the motion for the Adjournment of the House on Friday 23 May. Applications should reach my office by 10 pm next Monday. A ballot will be held on Tuesday morning and the result will be made known as soon as possible.

NORTHERN IRELAND (TERRORIST ACTIVITIES)
Mr. Wm. Ross: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
" the deteriorating security situation on the United Kingdom frontier with County Donegal."
I have a specific reason for wishing to move the Adjournment of the House, and that reason was given impetus by the murder yesterday of a 23 year-old workman, who was working on a building site—Ballymagroarty—close to the border. Indeed, the building site is within a few hundred yards of the border. The young man had no connection with the security forces. He was working with his companions when he was shot by three armed men. They were armed with a hand gun, a rifle and a sub-machine gun. He was shot to death in front of his workmates. He was the second civilian to die
1760
in Northern Ireland at the hands of the IRA in the past few days.
The issue is important because there has been an apparent change in the IRA's tactics. In addition, it was one of a number of recent serious incidents in that area. It is important also because the Prime Minister will soon be meeting the Prime Minister of the Irish Republic. I think that it would do the Prime Minister a world of good if she heard the views of hon. Members, especially those representing Northern Ireland constituencies before that meeting.
Mr. Speaker: The hon. Member for Londonderry (Mr. Ross) gave me notice before noon today that he would seek to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
" the deteriorating security situation on the United Kingdom frontier with County Donegal."
I listened with concern to the hon. Gentleman, as did the whole House, about the continuing situation in Northern Ireland.
As the House knows, under Standing Order No. 9 I am directed to take account of the several factors set out in the order but to give no reason for my decision.
I have listened with anxious care to the hon. Gentleman's submission, but I must rule that it does not fall within the provisions of the Standing Order. Therefore, I cannot submit his application to the House.

ORDERS OF THE DAY

  HEALTH SERVICES BILL
  As amended (in the Standing Committee), considered.
  4.1 pm
  Mr. A. J. Beith: Before we consider the new clauses on the Notice Paper, will the House be given an explanation of what happened to new clause 1, which appeared in your selection, Mr. Speaker—
  Mr. Speaker: Order. We cannot pursue that now. It just disappeared. We can deal only with what is on the Notice Paper. We cannot have an argument now about the disappearance of a clause. There will be an opportunity when we discuss new clause 6—
  Mr. Beith Mr. Beith rose—
  Mr. Speaker: Order. I am surprised at the hon. Gentleman. When we discuss new clause 6, there will be an opportunity for reference to be made to the disappearance of new clause 1. We must discuss the business that is on the Notice Paper. There is no point of order for me to rule on.
  Mr. Stanley Orme: On a further point of order, Mr. Speaker. When I entered the House this morning, I obtained a copy of the selection list. It appeared that new clause 1 had been selected by yourself, Mr. Speaker. When I read the Notice Paper, it appeared that new clause 1 had been removed. Later in the day, Mr. Speaker, you issued a new selection list. I think that we are entitled to ask you what happened in the meantime.
  A large number of amendments were selected that were linked to new clause 1. Those amendments and other new clauses have fallen because the Government have removed new clause 1. I feel that the House is entitled to a statement on new clause 6 on the lines of the one that was leaked to the press last night. It seems that the Government do not have the courage to make that statement to the House.
  Mr. Speaker: I issued a provisional selection last night when new clause 1
  1762
  was on the Notice Paper. When I saw this morning that the new clause was not on the Notice Paper, I had to issue another provisional selection list. I could not select new clause 1, as it was not on the Notice Paper. Therefore, I have selected new clause 2. It was straightforward. I deal with the Notice Paper as it is produced. The Notice Paper yesterday was different from today's Notice Paper.
  Mr. Orme: I accept, Mr. Speaker, that you were put in an obvious difficulty. When you saw today's Notice Paper you had to make a fresh selection. However, this is not a technicality. This involves a major piece of Government policy. I realise that you are not responsible for that, Mr. Speaker, but the Secretary of State for Social Services has dealt with the House in a cavalier manner that is outrageous. It is not sufficient for the Minister of State to deal with the matter when we come to new clause 6. We shall not co-operate on that basis.
  Mr. Beith: I hope, Mr. Speaker, that you will be sympathetic to hon. Members who find themselves in genuine difficulty. I presume that yesterday's printing arrangements were affected by outside events. The printing of amendments yesterday was not quite perfect. We had reason to wonder whether we had a complete set of amendments in front of us. The marshalled list of amendments today did not contain new clause 1 and the provisional selection list which you had issued did. I do not think that you should be surprised that many of us thought that new clause 1 was still before us, or that the Government still intended to move it. When I rose at the beginning of these proceedings, all that I was seeking was a simple one-phrase indication from the Government that it was not their intention to move the new clause and that its disappearance was no accident but their deliberate intention.
  Mr. Speaker: I think that I owe the hon. Gentleman an apology for the volume with which I responded to him earlier. The hon. Gentleman was on his feet at the same time as myself and I thought that I would let him hear the message that I was trying to convey.
  Mr. William Hamilton Mr. William Hamilton (Fife, Central) rose—
  Mr. Speaker: Secondly, I have no doubt that hon. Members will wish to comment on the disappearance of the new clause. This is not the time to do that. No doubt the opportunity will come and they will be able to do so.
  Mr. Hamilton: Are you telling the House, Mr. Speaker, that in the debate on new clause 6, we shall be able to range much more widely as a consequence of the Government's removal of new clause 1? If so, I think that the House will be satisfied. New clause 6 refers to charges. If the debate is to be enlarged and we are able to refer to charges other than those specified in new clause 6, that will meet the requirements of the House.
  Mr. Speaker: I do not want to commit myself. I indicated that there could be side references. The new clause deals with charges and the partially-sighted. New clause 1 dealt with something very similar. It will be better to consider the scope of the debate when we come to it.
  Mr. Hamilton: New clause 1, which has been withdrawn, included a schedule referring to dental charges. As I understand it, the schedule will fall. Therefore, we shall not have an opportunity to cross-examine the Government on why the charges are being dropped, although we are glad that they are. We should like an explanation from the Government of why they are being dropped and whether they intend to reintroduce them at a later stage.
  Mr. Speaker: The hon. Gentleman has helped me a great deal. If new clause 1 was as wide as he says, it is clear that it will not be covered by new clause 6. We cannot have a debate on dental charges when new clause 6 is before the House. We must keep within the rules of order, although I know that hon. Members want to make their observations. They will have to find some other way of doing so.
  Mr. Orme: Futher to the point of order raised by my hon. Friend the Member for Fife, Central (Mr. Hamilton), Mr. Speaker. We are put in a serious dilemma because new clause 1 referred to dental charges as well as sight testing. We understand from the Government's leak that they will drop the sight-testing charges
  1764
  but will return on some future date to dental charges. The way in which the Government are operating is denying the Opposition a fair chance to debate the issue.
  As you rightly say, Mr. Speaker, new clause 6 deals with the partially-sighted. You could, Mr. Speaker, stretch a point to allow us to bring in sight testing for the non-disabled. However, I agree that to bring in dental charges would not be in order while discussing new clause 6. The Leader of the House and the Secretary of State are in the Chamber, and we are entitled to a statement from the Government that will clarify their policy. They should not treat the House in this cavalier manner.

  HEALTH SERVICES BILL
    New Clause 2

      CORRECTION OF MEANING OF " LOCAL AUTHORITY " IN PART IV OF THE NATIONAL ASSISTANCE ACT 1948
      "Section 195 of the Local Government Act 1972 (which amends existing enactments conferring social services functions, including the National Assistance Act 1948, so as to vest those functions in the authorities which are local authorities for the purposes of the Local Authority Social Services Act 1970) shall have effect, and be deemed always to have had effect, as if at the end of the section there were added the following subsection—
      '(7) In section 64(1) of the National Assistance Act 1948 (interpretation), in the definition of " local authority", the words " county borough" shall be omitted and, after the word " district", there shall be inserted the words " or London borough or the Common Council of the City of London ".' "—[Dr. Vaughan.]
      Brought up, and read the First time.
      The Minister for Health (Dr. Gerard Vaughan): I beg to move, that the clause be read a Second time.
      This is purely a technical clause to remedy a defect in the Local Government Act 1972. It was unintentional that that Act did not provide for references to the
      " London borough or the Common Council of the City of London "
      to continue to be included in the definition of a local authority in section 64(1) of the National Assistance Act 1948. The problem has come up now only as a result of consolidation of the 1948 Act, as amended in the Social Welfare (Local Services) Bill. I can give the House further details if hon. Members wish, but this

      1765
      short new clause will correct the position. I ask the House to accept it.
      Mr. Roland Moyle: This new clause would appear to be a purely technical drafting device to overcome an oversight in previous amending legislation. We shall therefore not oppose it, and hope that it will be included as part of the Bill.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 6

      AMENDMENT OF NATIONAL HEALTH SERVICE (SCOTLAND) ACT 1978
      ' The National Health Service (Scotland) Act 1978 shall be amended as follows:—

      (a) in section 70 by the insertion after sub section (1) of the following subsection:—
      "(1A) Regulations may provide for the exemption of persons registered with a local authority as partially sighted from charges for any of the optical appliances listed in Schedule 11 ".

      (b) by inserting in section 105(7) a reference to section 70.'.—[Mr. William Hamilton.]

      Brought up, and read the First time.
      Mr. Moyle: I beg to move, That the clause be read a Second time.
      A number of points arise on this new clause directly related to affairs in Scotland, which I am not directly seized of. No doubt one of my hon. Friends will later expound the problem with regard to bringing Scottish law in line with English and Welsh legislation.
      In regard to Mr. Speaker's ruling on the points of order, in so far as this clause relates also to charges for testing eyesight, it is an opportune moment—
      Mr. Deputy Speaker (Mr. Bryant Godman Irvine): New clause 6 has the names of six hon. Members appended to it. It will need to be moved by one of those hon. Members.
      Mr. Moyle: In that case, may I formally move it, and allow my hon. Friends to come in later?
      Mr. Deputy Speaker: The right hon. Gentleman is not able to do that.
      Mr. David Crouch: On a point of order, Mr. Deputy Speaker. I
      1766
      raised precisely that point the other night in a Committee of the whole House. I was assured by the Chair that an hon. Member can move an amendment, even though his name is not on the Amendment Paper. Are the circumstances different on Report?
      Mr. Deputy Speaker: I understand that on the occasion to which the hon. Gentleman refers, he was also advised that the same did not apply to a new clause. I believe that the difficulty is being resolved.
      4.15 pm
      Mr. William Hamilton: I beg to move, That the clause be read a Second time.
      I apologise. I was out of the Chamber for two or three minutes meeting teachers who are complaining about the cavalier way in which the Government are treating their wage claim. I was anxious to tell them that they could not expect anything better from the Government.
      Mr. Moyle: The matters contained in the clause are directly related to Scotland, an aspect of United Kingdom affairs with which I am not especially familiar. However, the new clause deals with charges for sight testing and the comprehensive treatment in Scotland of those with poor sight. Those people would therefore have come within the provisions of any clause that might have been laid before the House with regard to sight-test charges.
      Shortly before we began debating this new clause, the Government withdrew new clause 1, which also related to charges for optical tests. It dealt with a consultation charge, which is a totally new principle for charging within the Health Service and directly against what the Prime Minister promised during the election. We greet the withdrawal of new clause 1 with almost unalloyed joy. We are afraid only about the horrors that might replace it. We shall fight any charges that the Government attempt to introduce to replace the sight-test charge. There is more joy
      " in heaven over one sinner that repenteth "
      and so forth, and with 300 repenting the joy is considerable. That is the first evidence of a U-turn by the Government. We look forward to many more between now and the next election.

      1767
      I hope that the Minister for Health will tell us how a firm Government intention to legislate on sight testing was completely overturned in the latter part of yesterday evening. The hon. Gentleman is most anxious to contribute to the debate, so I shall sit down.
      Dr. Vaughan: I do not want to disappoint the right hon. Member for Lewisham, East (Mr. Moyle). However, I am distressed that any hon. Member should feel that he has been inconvenienced. That was not our intention. I sent an apology to Mr. Speaker this morning, hoping that no one would be inconvenienced. I also consulted the right hon. Member for Lewisham, East at a late hour last night. For reasons that he knows best, it was difficult to contact him earlier in the evening when I telephoned him from the House of Commons.
      Strong representations have been made that the way in which charges for sight testing were proposed was not necessarily in the best interests of patients. There was the fear that some patients might be deterred from seeking sight testing. We feel strongly that the needs of individual patients must always be considered most carefully. We therefore decided that it would not be right to proceed without further discussion. We hope to put down a modified clause in time for Report.
      Mrs. Jill Knight: Will my hon. Friend accept my congratulations and those of many hon. Members on the ready way in which he and his right hon. Friend listened to representations and, even at a late hour, accepted the possibility of changing plans?
      Dr. Vaughan: As usual, my hon. Friend has not only demonstrated her invariable charm but has understood the wider implications that Labour Members appear not to have understood. I appreciate her remarks.
      Mr. Beith: It might be easier to congratulate the Minister if we knew what he was doing. The reason for the agitation this afternoon is that we have been unable to find out. We shall not complain if the Government are merely getting rid of the obnoxious notion that people should be charged at the point
      1768
      where they first seek access to the Health Service—in this case the opthalmic service. I am delighted that the Government appear to be abandoning the idea that people should be charged for sight testing.
      In the brief remarks that the Minister addressed to us on the new clause he gave the impression that it was merely the arrangement of the charge for sight testing that the Government would modify and come back with at a later stage. It is in the interests of all hon. Members to have a clearer picture of what the Government intend, and at what stage they intend to move further. I am especially anxious about what now seems to be the possibility that when the Bill goes to another place there will be a new clause on sight testing that merely modifies the charge.
      The Minister said that he had received representations that suggested that the manner in which he would seek to obtain these moneys was not satisfactory. That is true. The complaints that have come to me from those who know most about it—those engaged in the ophthalmic services—have been of that kind. Those involved say that if—it is not a matter that they view with enthusiasm—further charges are to be imposed on the ophthalmic services, which already bear a heavy proportion of charging, they should be raised by increasing existing ophthalmic charges rather than by charging people for having their sight tested in the first place. That makes very clear the distinction between sight testing and charges, later on, for spectacles, lenses and similar items.
      In what he said this afternoon the Minister made no distinction. He seemed to imply that sight-testing charges were still with us and that there would be an improvement or tidying up of the form.
      Perhaps for the next few moments I may talk about another subject, so that what may be fruitful consultations may continue. Clearly, events are moving fast. Who am I to discourage what could be beneficial developments?
      I should like to summarise my views and those of my hon. Friends. We intensely dislike charges in the National Health Service. We do not want to see them increased. One of the worst points at which to place them is that at which people first seek aid, when diagnosis first

      1769
      takes place. The dangers that that imposes are already apparent in dentistry. We do not want to import them now into the care of the eye. I am particularly anxious that at a later stage sight-testing charges in a slightly modified form should not be smuggled back into the Bill.
      I do not seek to be carping or hostile to the Minister in making this plea. He owes it to the House to give us a slightly fuller explanation of what I hope are the good intentions of abandoning this principle. I am aware that he is working within financial constraints and that he is under orders to seek savings in various places. If he cannot give us an assurance this afternoon that sight testing will not become a chargeable item he will not have deserved the praise that the hon. Member for Birmingham, Edgbaston (Mrs. Knight) heaped upon him a moment ago. I should be most grateful to him if he would seek a further opportunity in the debate on this new clause to make the position a little clearer.
      Mr. Paul Dean: I am amazed at the mean and ungracious way in which the Opposition, in a typical way, reacted to Government policy and the speech made by my hon. Friend the Minister of State.
      I take the view, as I think do many Government supporters, that the Government have been wholly realistic and sensible in two regards. They said, first, that there would be no cuts in expenditure on the National Health Service. In spite of the difficult economic situation that the Government inherited, they said that they intended to retain the expenditure programmes, however swollen, which they inherited from the previous Administration. I welcome that as a correct allocation of priorities.
      The Government also said that to ensure the most vital services in the National Health Service should continue, there are areas in which additional resources can be raised through charges. I welcome the Government's intention to do that and to raise additional resources in that way. It will mean that some vital areas of the service which may otherwise have to be cut, possibly as a result of the ramifications of the Clegg Commission,
      1770
      may now be retained in their entirety. I welcome the Government's attitude.
      On the question of eye testing and examinations, many of us felt that here was a new principle that had not so far applied in the National Health Service. There have been charges for appliances and prescriptions and in a number of other areas. However, hitherto we said that the preventive area—going to see a general practitioner or to have an eye test—should be free of charge. That door should be open on the grounds that we should encourage people, wherever possible, to go at the earliest opportunity, on the principle that in the long run there would be a saving on National Health Service expenditure.
      I do not blame the Government for examining all the possible areas in which money may be raised to assist the National Health Service. The Conservative Party talks about open government. It is amazing that when we have spoken to the Government, or when various outside interests have put a case to them, all we received at first were complaints and groans. However, when the Government listened to the arguments they were eventually prepared to concede them. The right hon. Member for Lewisham, East (Mr. Moyle), if he had any grain of responsibility left in him, should have congratulated the Government. Having listened to the arguments, he should have conceded them.
      Mr. Frank Haynes: Will the hon. Gentleman give way?
      Mr. Dean: I should like to finish my point first.
      The Opposition demonstrated the height of irresponsibility. When a point is put forward and the Government, having listened to it, eventually agreed that the argument was worthy of recognition and that they were prepared to concede it, surely that is Parliament in action. That is Government listening to outside interests. There are on the Opposition Front Bench two ex-Ministers who held responsibility in this Department. They should have been the first to congratulate the Government on having conceded the point.
      Mr. Moyle: The hon. Gentleman is working hard to earn his keep in the Conservative Party, I agree. He says that

      1771
      all measures should be considered to raise money for the health service. Does he include those areas to which the Prime Minister referred, when she said, before the last election, that the Conservative Party had no plans to introduce any new charges for the National Health Service? That would be helpful to know, as then we should know that we must watch everything.
      Mr. Dean: The right hon. Gentleman is now trying to change the point. I suspect that if I pursued that point I might incur your displeasure, Mr. Deputy Speaker. If I may, I shall stick to the narrow but important point that I have been making.
      The Government deserve great credit for listening to the arguments that were put forward. I hope that it will be possible for my hon. Friend the Minister of State, before the debate is completed, to give a little more indication of what the Government have in mind.
      It is clear that the Opposition are not prepared to treat this extremely serious matter seriously. We are. We are resolved to try to get this matter right and to assist the Government in arriving at an economically sensible solution.
      4.30 pm
      I hope that before the debate is over my hon. Friend will be able to say a little more about the economics of the matter and about the Government's thinking. If, as I hope, the Government have decided, having listened to representations, that it is inappropriate to make charges for examinations, that must surely mean that certain revenue that would otherwise be raised—possibly amounting to £10 million or £11 million—will no longer be available. I should greatly regret seeing that amount of money sacrificed; it would not be available for other areas of the NHS. Therefore, I hope that my hon. Friend, having conceded the argument on eye examinations, will be able to tell us of other areas within the charging structure in which a similar or equivalent amount of money can be raised.
      I should be prepared to see more charges for appliances. There are what are called the hybrid prescriptions. The interests that argued the case strongly for no payment for examinations said—with their realistic approach to the matter, in contrast to that that of the Opposition—
      1772
      that if the Government had to raise money elsewhere they should look at the hybrid prescription or other areas. I should be ready to support the Government if they made proposals, now or later, to raise the equivalent sum on appliances rather than examinations.
      I contrast the Opposition's wholly irresponsible attitude to the matter with the attitude of the Government, who have been prepared to listen to the arguments. I hope that before the debate is over my hon. Friend will be able to give a little more indication as to what the Government have in mind for raising the additional revenue that I am sure we need in order to preserve the basic fabric of the National Health Service.
      Mr. George Robertson: I should like to return, even if temporarily, to the new clause and the precise reasons why it was tabled. It concerns a small but important number of people who suffer from severe visual handicap and who are expected to make full payment for assistance to their sight.
      My right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) persuaded the previous Government to make available the money that could have exempted people with severe visual handicap from payment of optical charges. At that stage an anomaly manifested itself as between the law in England and Wales and that in Scotland. In England and Wales such an exemption could have been effected simply by the laying of regulations under existing legislation in the National Health Service Acts. However, to give the equivalent measure of exemption in Scotland would have required primary legislation.
      In order not to upset the sensitivities of the time, the Government decided that primary legislation would be embarked upon for Scotland to allow the laying of regulations to occur at precisely the same time as in England and Wales. There would have been considerable inequity if the laying of regulations and the exemption in England and Wales had not been accompanied by similar regulations and exemptions in Scotland. Although, with the benefit of hindsight, some of us now wish that at least the first measure could have been carried out, it is clear that at the time the inequity would have

      1773
      been a source of major friction in the country at large.
      It was as a consequence of the outstanding commitment to those who suffered from severe visual handicap that my right hon. Friend the Member for Wythenshawe and a number of right hon. and hon. Members on both sides of the House tabled a Private Member's Bill, the Optical Charges (Exemption) (Scotland) Bill, which would have provided the primary legislation for the Secretary of State for Scotland to lay regulations similar to those in England and Wales. We intend in the clause to provide precisely the power that would have been given in that Bill. It would allow and, we would hope, encourage the Secretary of State for Scotland to introduce regulations allowing for the exemption of those with severe visual handicap.
      Mr. Robert Hughes: My hon. Friend will be lucky.
      Mr. Robertson: My hon. Friend is probably right if he is referring to the Government's laying the regulations and even making available the money to make the laying of regulations meaningful. I shall come on to that matter shortly.
      I should like to emphasise the great problems experienced by those with severe visual handicap who are not classified as being completely blind. My hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey) would have wished to take part in the debate, because he freely acknowledges the visual handicap from which he suffers, and the inordinate expense of the implements that can sometimes assist those in a similar position.
      The provision in the clause would not mean an increase in public expenditure. It is simply an enabling provision that would bring the law of Scotland into line with that in England and Wales. It would empower the Secretary of State for Scotland to exempt people with severe visual handicap.
      That is not to say that I do not believe that the Government should not implement such regulations. I know from a letter I received towards the end of last year that the Under-Secretary of State for Scotland, who looks as though he is to wind up the debate, will tell the House
      1774
      that paragraph 4 of schedule 5 will provide precisely the powers that we seek to introduce in the clause. If that is so, I give the Government due credit for taking the point about the Scottish Office commitments that existed when they took office.
      However, I believe that those in Scotland who suffer from the affliction in question will hope that this evening the Minister will not resort to tactical subterfuge in explaining that the complexities of paragraph 4 of schedule 5, simply providing the power to make regulations, take him off the hook. They will properly expect him to commit himself to laying regulations in the near future.
      We know the hon. Gentleman's commitment to the Health Service. Although we have often questioned his constant assertions that the NHS in Scotland is being protected from Government cuts, there is at least an argument that those in the community who suffer from the affliction should at this stage receive the small extra resources that would be needed to implement this provision.
      Mr. William Hamilton: I am interested to know that my hon. Friend has received a letter from the Under-Secretary of State giving assurances on schedule 5(4). Is he aware that the name of the Secretary of State for Scotland was attached to new clause 1, specifically providing for the new increased charges? Although the Government say that they are taking power to help these people, it is the case that the Secretary of State and the Scottish Office were committed to increasing these charges. It is, therefore, not likely that they will give any assurance tonight that sufficient funds will be provided for the purposes contained in this new clause.
      Mr. Robertson: My hon. Friend displays his normal realism. I dare say that I was being unduly optimistic in hoping for a commitment to any additional resources at a time when the Minister is supervising some major cutbacks in the real resources of the Health Service in Scotland.
      I hope that the Minister, a reasonable man, who has been persuaded to bring in powers to introduce legislation and who has served as chairman of the Scottish Conservative Party, will recognise the real case that can be put for people with severe visual handicap. I trust that he will

      1775
      throw off the chains of dogma that are tying him so closely to the cash limits of the national administration and make resources available.
      This is a simple provision to help those in the community whom no one in this House would dream of passing by. They must pay large sums of money for modern technical assistance to alleviate the lack of sight that the rest of us take for granted. Now that the Secretary of State for Scotland will have power to lay regulations, it is to be hoped that the use of these regulations will be made a matter of some priority.
      Mrs. Knight: I should like to preface my remarks by informing the House that I could be said to have an interest. My husband is an ophthalmic optician. However, he does not practice in Scotland. Nor would he be concerned with the sight test fee directly, since his job is mainly concerned with the provision, prescription and supply of contact lenses.
      It is important to attempt to clarify a mistake into which I believe the House may easily fall. There is all the difference in the world between levying a charge on an examination to see whether a need exists, or a condition exists, which must be treated, and actually charging for appliances. Throughout the National Health Service—the medical side, the dental side and the ophthalmic side—it has been a long-accepted principle that examinations should be free. The reason is that the early warning system that the eyes provide of the need for appliances or treatment is real and important.
      Examination will indicate whether a person has glaucoma. Without an early decision in such cases, sight can be lost. Examination can also indicate whether there is a detached retina. Again, if not treated immediately, this can lead to loss of sight of the eye. Other diseases, including sclerosis of the blood vessels, can show themselves first in the eyes. The importance of keeping the early warning system—the putting of a fence at the top of the cliff rather than an ambulance at the bottom—is immensely important. It saves the National Health Service much-needed funds. It would be absurd if people were not able to check on the need for a simple step, taken at once, rather than waiting until a stage when treatment was more difficult and perhaps even impossible.
      1776
      4.45 pm
      I want to make it crystal clear that I see a great deal of difference between the supplying of an appliance and an actual test. Those who need an appliance, an operation, a pair of glasses, or any other treatment under the Health Service should have that free if they are genuinely unable to afford to pay for the appliance. It is absurd for Opposition Members to cry " Tut, tut", because appliances do not fall free and fully formed out of the sky. They cost a great deal of money. The money has to be found from somewhere. That " somewhere " is the public purse. Those of us responsible for spending public money must see that the money goes to people who really need it.
      I could not support the totally free provision of appliances for many people who are able to afford to pay for them. I will go all the way to the barricades to ensure free treatment and appliances for those who genuinely cannot afford to pay. My understanding is that my right hon. and hon. Friends on the Government Front Bench feel the same about the need to supply appliances free to those who need them but cannot afford them. It is surely not so extraordinary to expect those who are well able to afford to pay for their treatment to do so. If that theory is not accepted, much-needed areas of the Health Service will be in dire trouble.
      1 am delighted, as I stated in an intervention, by the withdrawal of the plan for charging for sight tests. I believe firmly that the Government have seen that the principle being embarked upon was wrong. I am confident that the proposal will not re-surface later in debate on the Bill.
      It is clear that money must be raised for the Health Service in other ways—
      Mr. Moyle: Will the hon. Lady give way?
      Mrs. Knight: I wonder, while I do so, whether the right hon. Gentleman will reflect on the fact that he failed to allow me the same courtesy.
      Mr. Moyle: I apologise for not having done so. I thought that the hon. Lady was intending to make her speech. How does she know that the matter will not be raised in later debate on the Bill? There has been no indication of the Government's plans.
      Mrs. Knight: I am obviously putting forward my opinion, which I am entitled to hold. My right hon. and hon. Friends have listened to a great deal of argument. It is incomprehensible to me that, having listened to the arguments and taken the action that they have, they will now go back on that action. The matter seems perfectly clear.
      It is well understood in many quarters of this House that the Health Service cannot be free. The money is not available to enable it to be totally free at the point of distribution. There now arises the question of how to raise the money that is necessary. I have no doubt that we shall hear about that. My hon. Friend the Minister can have my support for charges that will overcome the financial difficulty in which this section and other sections of the Health Service find themselves so long as he does as he has indicated he is doing and leaves sight tests alone.
      I wish to make clear that the only reason why the ophthalmic service has been able to operate in this country is that ophthalmic opticians and others have earned their bread and butter and paid their rent, rates, their telephone bills, their staff and other costs because they are encouraged, and have been so encouraged by successive Governments, to charge for frames. There has never been any secret about that. Professional men with between five and seven years training, much of it in hospitals, find it a bone of contention that they are able to continue in practice not because of their expertise at conducting eye tests or for understanding the early warnings of eye trouble but because they earn their bread and butter from frames.
      It is important to remember that optical services cost less than any other part of the National Health Service. I beg my right hon. and hon. Friends to appreciate that there is real admiration for the way in which they have listened to the arguments. The. Government will have our support for the reasonable steps which I have no doubt will be taken to overcome this serious deficiency.
      Mr. Laurie Pavitt: If it proves necessary I shall have great pleasure in following the hon. Member for Birmingham, Edgbaston (Mrs. Knight) to the barricades. However, I hope that it
      1778
      will not be necessary. Much as I enjoy the hon. Lady's company, I shall resist the temptation to deal with her other arguments.
      I abominate and totally detest all charges on the sick and the disabled. Those who are healthy should remember that it is more a privilege not to wear glasses than to wear them. They should be prepared to pay for that privilege rather than that those with a disability should have to pay.
      The House is in a difficulty. The new clause is important to Scotland. The reply will come from the Scottish Minister. However, the debate began with one of the most unclear statements that I have heard from a Government Front Bench when we were told about the withdrawal of new clause 1. I echo the sentiments of the hon. Member for Berwick-upon-Tweed (Mr. Beith) and those expressed by the hon. Member for Somerset, North (Mr. Dean) in the last part of his speech. We must have a clear indication of the Government's intention rather than a vague suggestion that we shall have something at a later stage.
      The House must know whether the Government intend to impose for the first time a charge for early diagnosis which would prevent people from having the necessary treatment. Alternatively, are the Government planning another round of charges to make up the £11 million which will have to be found from elsewhere if they do not proceed with new clause 1?
      Mr. Beith: The hon. Gentleman said that the Scottish Office Minister was expected to reply to the Scottish points and that, therefore, the Minister for Health would not be making a further contribution to the debate. The Minister for Health has been paying careful attention and making notes. We hope that both Ministers will contribute.
      Mr. Pavitt: I am grateful to the hon. Gentleman.
      Mr. Robert Hughes: Will my hon. Friend take into account the fact that the Scottish Office Under-Secretary is a Minister in the Government and should be capable of replying on behalf of the Government? He is a Government Minister who happens to have responsibilities for Scottish matters. He should be able

      1779
      to reply competently and authoritatively on behalf of the Government.
      Mr. Pavitt: I do not care which Minister replies, provided that we have a clear explanation. New clause 1 is damaging to and undermines the principle of the NHS. I am grateful to the Minister for the fact that he apologised for any inconvenience caused, because hon. Members prepare their speeches. I shall keep in my pocket the brilliant speech that I should have made on the new clause in case I need it later.
      Sir Raymond Gower: Whatever the Minister did or did not say, he was clear that the proposal for charging for testing eyes had been withdrawn.
      Mr. Beith: He was not.
      Sir Raymond Gower: He was. He went further. He gave his reasons. He said that he had come to the conclusion that such a charge might deter people. That is fairly clear.
      Mr. Pavitt: I regret that I cannot agree with the hon. Gentleman. I was listening most carefully, because the Minister was discussing the item that concerns me most. The Minister gave the impression that he was more worried about the technicalities and the way in which the proposal was being implemented than about whether it was being implemented. It is easy for the Minister. All that he has to do is to stand up and tell us and then we shall be clear where we stand.
      New clause 6 is extremely important for Scotland. It involves the problem of preventing blindness. When a patient has low visual acuity, there is a need to change spectacles frequently. It is a pity that we must examine two Acts and that Scotland has to make its own amendments.
      The wording causes difficulty. For many years there has been a registered list of blind persons which is covered by an Act. After my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) did the House and the country a service by putting the Chronically Sick and Disabled Persons Act on the statute book local social services departments established a complete register of the disabled, including the blind.
      However, there is some reluctance by many blind persons to be included on the
      1780
      local authority register because they are already on one register for employment. They are anxious not to confuse the issue in case inclusion on one register prejudices them in relation to the other. The paraplegic person is able to move freely from sheltered employment to unsheltered employment and back, but the blind are not. Once they are in sheltered employment they must remain. One in 10 blind persons is unemployed.
      Mr. Jim Craigen: Is my hon. Friend aware that the National League of the Blind in Scotland is worried because the Scottish Office intends to drop the register of the blind?
      Mr. Pavitt: I have received representations from the National League of the Blind but not from the Scottish branch.
      The argument expressed by Scottish colleagues is important. It affects one of the most disadvantaged sections of our community. All disabilities are difficult to live with. People understand what it is like not to see and what it is like to miss some of the beauties of life. Sometimes, because of my deafness, people say " You can always turn off." Nobody says to a blind man " You do not need to look, because it is ugly." Everybody understands the difficulties of a blind person.
      5 pm
      Therefore, when the Minister replies I hope that, even if he does not accept the wording of the new clause, he will accept the principle that there should be no barrier to a person who suffers from failing eyesight. I sometimes think that this Government hate those in the 50–60 year age group. The Government are aware of the under-fives and the over-65s, but it seems that they are determined to put every barrier in the way of those who have not yet reached 65 and who need the Health Service. The Government appear to be prepared to allow free treatment to people only when they have reached the age of 65.
      Many problems arise in relation to low visual acuity. We are not just dealing with one disability. When we speak of eye trouble the problem can reflect the general health of a person and be an indication of other problems.
      Therefore, no barrier should be placed in the way of the people of Scotland, or anywhere else, when they need treatment. If a person needs to have an eye test every

      1781
      six months and that means that lenses must be changed every six months, that person should not have to pay for those new lenses because he suffers from a serious disability.
      Even though the Minister may not accept the precise words of the new clause, I hope that he will guarantee that the meaning and the principle of the new clause will be incorporated into the Bill before it reaches the statute book.
      Dr. Vaughan: I wish to say something more on the subject of charges for sight testing, since a number of hon. Members have raised the issue. I accept entirely the case which my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight) advanced so ably. I admire the courageous and forthright way in which she puts her views on this and other subjects. I also support the case made by my hon. Friend the Member for Somerset, North (Mr. Dean).
      This is an important matter. In no way do we wish to create a deterrent for people seeking eye testing who need treatment. Representations were made—in many cases strong representations—by my right hon. and hon. Friends and people outside the House, but I am not aware that strong representations were being made by Opposition Members.
      Mr. Robert Hughes Mr. Robert Hughes rose—
      Mr. William Hamilton Mr. William Hamilton rose—
      Dr. Vaughan: If I may say so—
      Mr. Hamilton: The Minister cannot get away with that.
      Mr. Deputy Speaker: Order.
      Dr. Vaughan: If I may say so—
      Mr. Hamilton Mr. Hamilton rose—
      Mr. Deputy Speaker: Order. The hon. Member for Fife, Central (Mr. Hamilton) knows that he must remain in his seat unless the Minister gives way.
      Mr. Hamilton: The Minister has made a charge that needs to be refuted.
      Mr. Robert Hughes: Will the Minister give way?
      Dr. Vaughan: No, I wish to answer the points made by hon. Members. If I may say so—
      Mr. Hamilton: The Minister is deceiving the House.
      Mr. Moyle: On a point of order, Mr. Deputy Speaker. If an hon. Member begins to mislead the House as to the facts of a situation, what remedy have I got to ensure that the record is correct? The Minister must be aware that the Opposition imposed a three-line Whip to vote against the charges and we would have voted against them. I do not know how he can say that he received no representations.
      Mr. Deputy Speaker: That is not a point of order.
      Dr. Vaughan: I am sorry if I have upset Opposition Members. I realise that they have strong views on this issue. I was merely stating what I thought to be a matter of fact. In this case I have not had any strong representations from Opposition Members. If hon. Gentlemen have strong views on the issue, I shall be glad to hear them.
      It is characteristic of this Government, and of our democratic process, that when strong representations are made to us we are only too willing to consider them carefully. The hon. Member for Berwick-upon-Tweed (Mr. Beith) was right to question what opportunities there will be for further debate. It is not our intention to proceed with charges for sight testing. I make that absolutely clear to hon. Members on both sides of the House.
      It is our intention to recover the amount that would have been raised by other charges in the optical service. We will consult further with the professions, and it is our hope that we will be able to bring forward a modified clause and schedules in time for a full debate when the Report stage is resumed.
      Mr. Reg Race: We have just heard the second stage of the Minister's statement. I wonder whether we shall have a third stage before the debate is concluded? The Minister is notorious for doing this, both in Committee and on the Floor of the House.
      I wish to refer the House to the representations made by the Association of

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      Optical Practitioners, which form the basis of the objections to which the Minister referred. When the Minister said that substantial representations were made about sight-testing he was right. The Minister knows that he walked into a political minefield on this issue.
      The Association of Optical Practitioners in its representations to all Members of Parliament said quite clearly:
      " To introduce a statutory charge of any kind payable by the patient for an examination, whether medical, detail or ophthalmic".
      The House will note the reference to medical and dental as well as ophthalmic examinations. We hope that there will not be a reintroduction of charges for dental assessment as was originally envisaged in the schedule. The Minister did not say anything about that just now. Can we assume—I mention this in passing—that the charges for dental assessment are still likely to be reintroduced? Perhaps that is something the Minister will tell us later?
      Mr. Deputy Speaker: Order. May I ask the Minister not to respond to that invitation, as Mr. Speaker has already made it quite clear that it would be out of order?
      Mr. Race: I am grateful for your ruling, Mr. Deputy Speaker, but I am suspicious of the intentions of the Government in this context. The Opposition have every right to be suspicious in view of the performance we have witnessed from the Minister today. The Association of Optical Practitioners went on to say that the introduction of statutory charges:
      " would breach a fundamental principle of the NHS which should be preserved, namely, 'examination without charge'."
      The association then went on to make an important point in its representations about charges for optical assessment. It said:
      " The public interest will not be best served by seeking an anticipated saving of £11 million on eye examinations. The General Ophthalmic Service already represents by far the lowest charge on the Exchequer of the primary health services (medical, dental, optical and pharmaceutical), and the highest contributor in terms of patients' charges."
      The association said that patients' charges currently amounted to 32 per cent. of the cost of the ophthalmic services, whereas the patients' charges in
      1784
      the dental service represented 21 per cent. and in the pharmaceutical service 4 per cent. We know that these figures may have been calculated before the Government increased prescription charges in two waves recently. Prescription charges were increased to 45p in April last year and were further increased to £1 in December. The percentage figures I have quoted, therefore, may be slightly out of date.
      Generally speaking, however, the figures are right. Charges in the ophthalmic service represent a far higher proportion of the total cost than is the case in the other services. That is an important point when the Government are arguing that they wish to see higher charges for spectacles, frames and lenses to National Health Service patients. Those patients are already contributing much more substantially to the cost of their appliances than people elsewhere in the NHS. I am not arguing that the charges that were to be made in the ophthalmic sector should be shifted to another sector of the NHS. I am saying that there is no need whatever for the reintroduction by the Government at the further Report stage, which I understand we are to have after Whitsun, of a new charge or of additional charges in the ophthalmic sector to recover that £11 million.
      I could not disagree more with Conservative Members who say that we must recover this money somehow. If the Government insist that the Chancellor has got it wrong—that is what is being said: as far as I can recall, this charge was referred to in the Budget Speech—and if the Minister is now saying that the Chancellor was wrong in principle when he said that the Government would be introducing that charge, it is the Chancellor's job to produce the money which would otherwise have been brought in by this tax. Therefore, I do not agree that the NHS should be asked to provide this £11 million. It should be found from the contingency reserve.
      Mr. William Hamilton: My hon. Friend will recollect that we both served on the Standing Committee which considered this Bill and the Standing Committee which considered the Social Security (No. 2) Bill. When we were talking about savings and this £11 million, I had my defence Blue Book with me—the

      1785
      defence White Paper—and I easily calculated that I could save the £11 million by not spending £10 million on five Tornado aircraft. It would be much better not to spend that money, and to allow people treatment under the ophthalmic or other services of the NHS.
      Mr. Race: I think that my hon. Friend means one Tornado aircraft for £10 million.
      Mr. William Hamilton: It was helicopters.
      Mr. Race: Yes, that is right.
      The point that my hon. Friend makes is absolutely right. This shows the Government's political priorities. That is what the new clause that we were to have debated this afternoon was to be all about.
      Clearly, if the Minister of State wants to make representations to the Chancellor of the Exchequer about the way in which he might recover this £11 million, if he does not want to load it on to patients in the NHS, he might refer the Chancellor to the contribution made on this issue by my hon. Friend the Member for Fife, Central (Mr. Hamilton).
      Mr. Pavitt: My hon. Friend and I both served on the Standing Committee. Does he agree that it would have been more appropriate for this kind of question, which is most important, to have been brought forward to the Standing Committee, when we could have gone thoroughly into the matter, rather than bringing it up on Report?
      Mr. Race: My view about that may be slightly different from that of my hon. Friend. As I understand it, this charge was to have been introduced in practice in April 1981. If the Government had wanted to introduce this charge in a proper fashion, with proper consultation with all those concerned, they could have done so by introducing legislation, if that was required, at a much later stage, in the next Session. But they chose not to do that.
      I make this point very seriously to the Ministers responsible for the Bill. When one brings together the expenditure and the revenue sides of the Budget equation on Budget day and publishes one's public expenditure White Paper and the assessment
      1786
      of the Chancellor as to the kind of taxation that he will be bringing forward, that telescopes any possibility of consultation on this kind of issue. We saw that on the Social Security (No. 2) Bill, precisely because the reductions in social security benefits were defined as Budget measures, financial measures. There was no consultation with any of the interested parties.
      With new clause 1 we have got ourselves into exactly the same situation. What the Government really said about new clause 1 was that it was a financial measure arising from the Budget. The Government really ought to take note about what has happened over this issue and the climb-down that they have had to make over it. If it means anything at all—I am sure that the Minister will understand this—it means that they did not consult the people who knew about the issue, and, because they did not consult them, they got their fingers badly burned with this political hot potato—and it serves them right.
      5.15 pm
      Therefore, I believe that what we need to see, if the Government are to bring forward expenditure measures and taxation measures at the same time, on Budget Day, is a situation in which new charges or reductions in benefits of the kind that we have seen from the present Government will be subject to proper consultations with the interested parties, even though they are Budget measures. In other words, before they are announced, there should be proper consultation about the way in which they are to be implemented and the character of the charges themselves.
      I think that the Minister will agree, on reflection, that this charge, which was foreshadowed in new clause 1, was a political hot potato which would have been avoided, without any political embarrassment to the Government, if such a procedure had been followed. I strongly advise the Minister to consult the Leader of the House and the Chancellor of the Exchequer about the way in which these sorts of measures are introduced. This is a very serious matter.
      We are very glad to have the opportunity of discussing new clause 6 and the putative new clause 1 together. In my view, the loading of charges on to other

      1787
      sections of the ophthalmic service, to which the Minister has just alluded, would be completely unacceptable to Opposition Members. We are opposed to charges in the NHS. We are certainly opposed to swingeing increases in charges for lenses and frames. If the Government want to increase those charges to the extent that they would have to increase them to obtain the £11 million saving in public expenditure, they will incur the wrath not only of those on the Opposition Benches but of a substantial section of the ophthalmic profession and of the people of this country.
      For that reason, I believe that the Government ought to ignore the views of the hawks on their own Back Benches and the hawks in the Cabinet and they ought to listen to the representations made to them by the ophthalmic profession. Without such consideration, we shall see a swingeing increase in charges which would not be justified.
      Mr. W. R. Rees-Davies: Given that there may well be an objection such as the hon. Gentleman is putting forward to increased optical charges of any kind, which is the less distasteful to the hon. Gentleman and his colleagues: a charge for sight testing, or an increase of the equivalent amount in the cost of either lenses or frames?
      Mr. Race: The simple answer to that is that we do not want any new charges and we do not want to see an increase in any of the existing charges. As I understand it, the Labour Party's policy is to abolish charges in the NHS. That statement has been made not only from the Opposition Back Benches but the Opposition Front Bench as well. The Minister would be well advised to listen to our representations. He is laughing his head off at the prospect of more people in the NHS being charged more money for the privilege of obtaining spectacles that they need in the ophthalmic sector. Is he laughing about that? Is he happy about people being forced to pay substantially increased amounts for the glasses that they need?
      What he is really saying to the House is this: " We shall not charge you for the privilege of having your eyes tested, but we shall charge you through the nose for the glasses that you need." There is little difference in principle between the
      1788
      new charge that was originally proposed and the vastly increased charges that will be proposed by the Government in the near future.
      Mr. J. W. Rooker: I do not wish to delay the House, but I wonder whether my hon. Friend would give a further opportunity to the hon. Member for Birmingham, Edgbaston (Mrs. Knight) to explain matters? I received two or three letters from opticians asking me, if all else failed, to vote for the hon. Lady's amendment. I do not think that she ever tabled an amendment. If she did, I am not aware that she was advocating any increase in charges for optical equipment. The House and the country deserve a greater degree of honesty and openness from the hon. Lady.
      Mr. Race: My hon. Friend has hit the nail on the head. I am absolutely certain that the hon. Member for Birmingham, Edgbaston (Mrs. Knight) did not table an amendment on that point. I carefully watched the Order Paper to see whether her amendment would appear. No doubt she will tell us what proposals she intended to introduce.
      Mrs. Knight: Certainly. I made it absolutely plain that I went to the Table Office for advice. I looked at the new clause tabled by my right hon. Friend the Secretary of State. I was quite clearly opposed to the amendment as it was drafted. The advice given to me was that it would be quite useless to table an amendment to an amendment, which would delete that amendment. As we were discussing the question of sight testing, and not appliances for optical needs, there was clearly no point in tabling an amendment about that.
      Mr. Race: Now we know the truth, which is that the hon. Member for Edgbaston would have had to vote against new clause 1. That is the point. The Minister has avoided the political embarrassment of the hon. Lady and some of her supporters voting against the Government. No doubt the Government have avoided a politically bruising defeat on this matter. The hon. Lady would have been voting against new clause 1, and she was not advocating—as I understand the matter—any increase in charges to replace the revenue—
      Mr. Andrew F. Bennett: Does not my hon. Friend agree that if the hon. Member for Birmingham, Edgbaston (Mrs. Knight) intended to oppose the whole of new clause 1, she was not only opposing charges for sight testing but charges for dental check-ups? Will she confirm that she intends to continue along that line, or will she differentiate between the two? That is extremely important. Some of us feel that she took an attitude on one matter which was coloured for various reasons other than simply her concern for the patient.
      Mr. Deputy Speaker: Order. We are discussing only one of those matters at present.
      Mr. Race: I understand your point, Mr. Deputy Speaker, but I have no doubt that my hon. Friend is correct. We hope that the hon. Member for Edgbaston will, in due course, oppose any possible re-introduction of charges for dental inspections.
      Mr. William Hamilton: Is my hon. Friend aware that it is the simplest thing in the world to go along to the Table Office and table an amendment to a new clause to delete the proposed charge on sight-testing? If the hon. Member for Birmingham, Edgbaston (Mrs. Knight), would care to come with me to the Table Office after the debate, I shall show her exactly how to do that. I do not believe that she tried.
      Mr. Race: My hon. Friend is absolutely right about that.
      Mrs. Elaine Kellett-Bowman: On a point of order, Mr. Deputy Speaker. I understood the hon. Member for Fife, Central (Mr. Hamilton) to doubt the word of my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight). I am sure that he would not wish to call her a liar.
      Mr. Hamilton: Further to that point of order, Mr. Deputy Speaker. I wish to repeat that I doubt the word of the hon. Member for Edgbaston.
      Mr. Race: No doubt the hon. Member for Edgbaston will tell us precisely to what extent she wishes dental charges to be increased.
      Mrs. Knight Mrs. Knight rose—
      Mr. Race: I shall give way in a minute. Perhaps the hon. Lady will make further representations about that. We do not know. Perhaps the Minister will tell us, when he replies, the extent to which charges for frames and spectacles need to be increased, to recoup the £11 million which this charge—
      Dr. Brian Mawhinney: On a point of order, Mr. Deputy Speaker. I have taken time to consider the statement made by the hon. Member for Fife, Central (Mr. Hamilton). It seems to me that, whatever way we interpret it, he is calling my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight) a liar with regard to her recent remarks. Will you, Mr. Deputy Speaker, give a ruling about whether that is in order?
      Mr. Deputy Speaker: If that is what the hon. Member for Fife, Central (Mr. Hamilton) intended to say, I am sure that he will withdrew his remark.
      Mr. Hamilton: Further to that point of order, Mr. Deputy Speaker. I am sure that it is within your recollection that I have twice used the words " I doubt the word of the hon. Member for Edgbaston ", and I so doubt it.
      Mr. Deputy Speaker: I find it difficult to distinguish between doubting someone's word and calling him a liar. I ask the hon. Gentleman to reconsider the matter.
      Mr. Hamilton: I am punctilious about the words that I use. When I say that I doubt somebody's word, it is far removed from calling him or her a liar. I know well that to call somebody a liar in the House is unparliamentary, which is precisely why I used the words that I did.
      Mrs. Knight: Further to that point of order, Mr. Deputy Speaker. I wish to clear up the whole matter. If the hon. Gentleman doubts my word, perhaps he would not doubt the word of the Clerks in the Table Office, who would, I am sure, be ready to confirm my statement. If the hon. Gentleman cares to visit the Table Office he will be able to check that I dealt with the matter. If he does not accept my word, perhaps he will accept the word of the Clerks.
      Mr. Hamilton: I invited the hon. Lady to come with me to the Table Office—
      Mrs. Knight: I would not go anywhere with the hon. Gentleman.
      Mr. Hamilton: I am relieved to hear that—
      Mr. Deputy Speaker: Order. The hon. Gentleman will be familiar with page 430 of " Erskine May", which states:
      "The suggestion that a Member is deliberately misleading the House is not parliamentary."
      I think that in the light of my statement the hon. Gentleman should reconsider his position.
      Mr. Hamilton: Further to that point of order, Mr. Deputy Speaker. The operative word is " deliberately". I said that I doubted the word of the hon. Member for Edgbaston. If she can prove me wrong, I shall withdraw my remark. At the moment I am doubting her word because I know the procedures of the House. I repeat that it is the easiest thing in the world to go to the Table Office and table an amendment to a new clause that is already on the Order Paner.
      Dr. Mawhinney: Further to that point of order, Mr. Deputy Speaker. The essence of the point made by the hon. Member for Fife, Central was that " Erskine May " referred to an hon. Member " deliberately " misleading the House. My hon. Friend the Member for Edgbaston has stood in her place and repeated the statement that she previously made. The hon. Member for Fife, Central suggested that perhaps, in my hon. Friend's first speech, and by a slip of the tongue she said something that she did not mean to say. She has now stood in her place and confirmed that she did mean to say it. In other words, she has twice deliberately made a statement to the House which has been doubted by the hon. Member for Fife, Central. I ask for a ruling on whether that is not tantamount to calling my hon. Friend a liar and therefore, in contravention of the Standing Orders of the House. If it is not, I should like an explanation of the difference between doubting someone's word and calling someone a liar, taking into account the two deliberate statements made by my hon. Friend, if that is acceptable to the Chair.
      Mr. Deputy Speaker: I have already made it clear to the hon. Member for Fife, Central that it appeared to me from what he said that he was indicating that the hon. Lady was deliberately misleading the House. In those circumstances, he is not in order.
      Hon. Members: Withdraw.
      5.30 pm
      Mr. Hamilton: I shall withdraw in my own way and in my own time. I repeat that I doubt the word of the hon. Lady about what happened when she went to the Table Office. However, if Mr. Deputy Speaker chooses to interpret the words which I used as meaning that I was calling the hon. Lady a liar, I of course, withdraw them. However, I have made very clear exactly what I mean.
      Mr. Race: I return to the debate. I want to come on to the important point about the alleged difference between consultation charges and charges for lenses and frames, which no doubt the Minister will increase substantially in due course. No doubt he will tell us later—I was asking this question when the points of order arose—how much those charges will have to be increased in order to recoup the £11 million.
      There is very little difference in practice between a consultation charge of say, £2 to have one's sight tested, and a 20 or 30 per cent. increase in the charge for replacing glasses or frames or for providing them for the first time. Both charges act as a disincentive. A charge for sight-testing is a disincentive which applies to all individuals who are not exempted from charges under the Bill. The increased charges which will be levied on frames and lenses will also affect everyone who is not exempted by the Bill. Therefore, there will be a strong disincentive to attend the optician's.
      The opticians whom I know believe that the average interval between eye examinations is at present too long, and that anything which increases that interval would be a very bad thing indeed. Therefore, I do not accept the distinction that has been made by some Conservative Members between the proposal to increase charges for frames and lenses and the consultation charge.
      With that, I welcome the removal of new clause 1, even if it is just for the

      1793
      time being. We shall watch like hawks to see whether there is any proposal to reintroduce that charge at a later stage, or, indeed, whether there is any proposal substantially to increase charges in other parts of the ophthalmic sector in order to recoup the £11 million.
      Mrs. Kellett-Bowman: I have considerable sympathy with those who are pleading on behalf of the partially sighted. It is precisely for that reason that I am delighted that the Minister has withdrawn the proposal to charge for sight testing. I am astounded at the grudging reception which the Minister's action has received, both from the Liberal and Labour Benches.
      To my mind, it is democracy at its best when representations are made to a Minister and he accedes to them.
      Mr. Beith Mr. Beith rose—
      Mrs. Kellett-Bowman: This would have been the only test in the whole of the NHS for which a charge would have been made. That may be serious with regard to spectacles, but what I am concerned about is the early detection of disease. There are so many diseases which can be detected through the eyes which, in a sense, are quite unrelated to the eyes. In addition, diseases of the eyes can be cured if attacked at an early stage. For that reason, I am particularly glad that the Minister listened to the representations and withdrew the charge, which both sides of the House would have found regrettable. I thank him very much.
      Sir Raymond Gower Sir Raymond Gower rose—
      Mr. Robert Hughes Mr. Robert Hughes rose—
      Mr. Deputy Speaker: Sir Raymond Gower.
      Sir Raymond Gower: I am not surprised that in a case such as this the reactions of the Opposition parties to the withdrawal of the new clause are rather strange. After all, that seemed to be a fruitful subject to attack. It seemed to be something which was so full of political overtones that it could be exaggerated. Perhaps Opposition Members are rather sorry that in some respects they now do not have the opportunity of hitting down the target.
      Mr. Beith: Both the hon. Gentleman
      1794
      and his hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) have suggested that I was grudging in my response to the Minister's decision. Far from it. I suggested that had the Minister come to the Dispatch Box at the beginning of our proceedings and made clear, as he later did, what he intended, he would at least have got a cheer from me, we would have saved a lot of business time this afternoon and we would have made rather faster progress.
      Sir R. Gower: I made no particular allegations against the hon. Gentleman. I think that all Oppositions are wrong in taking the view that it is a defeat for Ministers or a Government to change their minds.
      Dr. Roger Thomas: Will the hon. Gentleman give way?
      Sir R. Gower: In a moment. I have only just given way. It is not necessarily a defeat for a Minister or a Government to change their minds.
      Dr. Roger Thomas: Does the hon. Gentleman recall that just a week ago, in the Welsh Grand Committee, I made representations about these charges, to the Under-Secretary of State for Wales, who did not say a word against them?
      Sir R. Gower: I do not suppose that my hon. Friend the Under-Secretary would say anything off the cuff at that moment, and in the circumstances that is not surprising.
      What has happened today is gratifying. It is right and proper, especially if a Government or Ministers have made an error, and in this case I believe that there was an error. I agree with my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight). I believe that the error was probably made through a natural desire to study every possible method of readjusting and rearranging the costing of NHS as a whole.
      Nevertheless, I believe that that zeal induced that rather serious error. It is most undesirable, without more mature consideration for any Administration to branch off in such a new direction, because I believe that that is much more serious than has been suggested. It is undesirable to impose a charge when an eye patient comes into contact with the NHS for the first time. It would also be grossly

      1795
      inconsistent to impose such a charge only in respect of eye patients and not in regard to other branches of the NHS. Obviously, it would be grotesque if a neighbour of mine had a free examination for some obscure tropical disease, costing an infinite amount of money over a long period, whereas I had to pay quite a significant charge for a comparatively minor examination of the eyes.
      I echo what both my hon. Friends the Members for Edgbaston and for Lancaster (Mrs. Kellett-Bowman) said about the value of an early examination in all cases, not only in regard to incipient eye disease but also with regard to the possibility of some other illness or disease which might be revealed by a careful and competent examination of the eyes.
      I hope that this and future Administrations will stand back before they take any decision to embark on charges of this nature—whether they are for eye tests or any other areas of the National Health Service. There are far less objectionable ways of obtaining necessary revenue support for the Health Service.
      I wish that this country were richer and more successful economically and industrially so that we could afford much more spectacular advances, and we would not need to study methods of sustaining the work of the Health Service by charges. But if we wish to sustain and improve the quality of the social and the welfare services generally, we shall have to do so by charges until industry is much more buoyant and productive.
      I am glad that we have not taken the proposed undesirable step in the wrong direction. This is not in any way a defeat for the Minister or the Government. It is a kind of democracy in action, and Governments which are not prepared to take such steps are weaker rather than stronger.
      Mr. Robert Hughes: The hon. Member for Birmingham, Edgbaston (Mrs. Knight) began her speech by drawing attention to the fact that her husband is an ophthalmic specialist. I acquit her of any financial motive and I am sure that she is not influenced in any way by her husband's income. However, I am equally certain that she has been greatly influenced by her husband's optical knowledge as an ophthalmic specialist. She
      1796
      is a walking advertisement for polyandry. If she were married also to a gynaecologist, a dental surgeon and a general practitioner, she might bring knowledge of a much wider spectrum to our debates on the National Health Service. People are always prepared to come forward and say that they are opposed to particular charges, but they are not opposed to others. It is all a matter of where we draw the line.
      Mrs. Knight: I appreciate the courtesy of the hon. Member in giving way, I assure him that I have been married only once—to my husband—and if I were to confine my parliamentary contributions to those areas in which I have a matrimonial connection outside, they would be extremely limited.
      5.45 pm
      Mr. Hughes: I think that I had better draw a veil over the hon. Lady's matrimonial life.
      It is bit much to be chided by the hon. Members for Edgbaston and for Somerset, North (Mr. Dean), who has a distinguished record as a former Health Service Minister, for being churlish about the withdrawal of new clause 1 on optical charges.
      The Government tell us that as a result of the withdrawal, £11 million will be lost from the Health Service budget. We are also told that the Government are considering other ways of raising this £11 million. I am certain that at present the Health Service cannot absorb £11 million. Ministers travel the country telling people that the Health Service budget is growing and that there will be a 2½ per cent. increase this year. But that is not true. The Health Service budget is based on the proposition that inflation will run at 14 per cent. this year. That is the target set for the health boards, and Ministers have told them that they will not get a penny more. At that time inflation was running at 18½ to 19 per cent. and now it is widely forecast—and the Prime Minister did not deny it today—that tomorrow the RPI will show that inflation is running at an annual rate of 21 per cent. If we average out the 14 per cent. between now and the end of the financial year, it means that in 12 months inflation will need to be about 8 per cent. No one in his right mind in the Treasury or in this House can believe for one second

      1797
      that the annual inflation rate next year will be 8 per cent.
      If Ministers say that there is a 2½ per cent. growth rate in the NHS budget, based on 14 per cent. inflation, and the inflation rate is 50 per cent. higher than the figure that has been allowed for, how can there be any real growth at all? It means that there has been a deliberate cut in expenditure on the National Health Service. Ministers should not tell the health boards that 14 per cent. is their target figure unless they can say that the Government will make sure that general economic conditions are such that the NHS will be protected against inflation. In fact, they are now saying that the health boards will get 14 per cent. and not a halfpenny more. How can anyone claim that that is a growth in the Health Service budget?
      Ministers should make up their minds about where they stand. Ministers in virtually every other Department are going around the country saying that public expenditure will be cut. The Financial Secretary to the Treasury has predicted three years of misery. The Minister for Social Security has said that everyone will suffer and every area will take a cut, but not Health Ministers. For some curious reasons they are shamefaced about it. I would have much more time for them if they would stand up and tell the health boards that they will get less money. The Government will have to find the extra £11 million from somewhere else—certainly not the Health Service budget.
      I do not object to the Minister giving credit for the withdrawal of new clause 1 to his hon. Friends the Members for Somerset, North and for Edgbaston. They kicked up a fuss, went to him and persuaded him. It is right to give credit to Back Benchers, but it is unworthy of him and the traditions of Ministers of the Crown to suggest that there have been no objections from elsewhere on this matter. I did not know that the Minister intended to make this concession, otherwise I would have brought my correspondence with me. If he cares to check with the departmental files, he will find that I have raised this issue strongly by correspondence. I hope that he will give credit where it is due.
      I fear that the hon. Members for Somerset, North and Edgbaston will find that
      1798
      they have won a Pyrrhic victory. One set of charges has been withdrawn, but others may be imposed elsewhere. However, I admire hon. Members who stand up to their own Government and are prepared to carry their opposition into the Division Lobby. I give them credit, but let it not be said that there have been no objections from other hon. Members.
      Mr. Andrew F. Bennett: Like most of my hon. Friends, I welcome the fact that new clause 1 has been withdrawn, though the test of the Government's good intentions is their attitude to new clause 6. If they had care and concern, they should have indicated by now that they are prepared to accept that new clause.
      Why did the Government withdraw new clause 1 only last night, thereby presenting the House with considerable procedural difficulties? If pressure had been building up from a number of sources it would have been reasonable for the Government to withdraw the new clause at the beginning of the week and to have put its replacement on the Amendment Paper so that we could debate it.
      If the Government intended not to replace new clause 1 we should be happy, but the Minister has indicated that something else is to be inserted. Time was found to debate new clause 1 because it was being introduced on report and had not been in the Bill on Second Reading or in Committee. I assume that more time will be found to debate any new proposals that come before us in the form of a new clause taking back part of what has been removed by the withdrawal of new clause 1. It is important that we get an undertaking from the Government that they will find extra time if any of the obnoxious proposals contained in new clause 1 and schedule 15 are brought back in another form.
      It was discourteous to the House for the Government to act in this way, because it is difficult to debate any of the new clauses until we know the Govment's intentions. If we made progress today and got beyond the new clauses, we should be in difficulty, because we would not have an opportunity of debating the Government's proposals, and they would have to be introduced in another place, which would be unacceptable.

      1799
      I hope that the Minister will accept new clause 6. We all have constituency examples of the problems faced by the partially sighted. The new clause deals only with Scotland, but if the Government accepted it they would be saying that they would adopt the regulations for the rest of the United Kingdom.
      I hope that we shall have an indication that the Government are prepared to find time at a reasonable hour to debate any proposals that they intend to bring forward to replace new clause 1. That will be particularly important if the Government intend to introduce a differential principle between sight-testing and teeth inspections. Most of my hon. Friends would regard it as unacceptable if the Minister said that sight-testing was to be exempted but that dental inspections were not.
      The Under-Secretary of State for Scot land (Mr. Russell Fairgrieve): We have had an interesting two-hour debate, ranging from what were almost Second Reading speeches to contributions on a clause that has not been tabled. I hope that you, Mr. Speaker, will not rule me out of order if I speak about new clause 6, which, I am told, we are meant to be debating, but which, in the brevity to which it has been alluded—
      Mr. Speaker: Order. We want to be helpful to each other, but the Minister's remarks sounded like a dig at those of us who occupy the Chair.
      Mr. Fairgrieve: I apologise, Mr. Speaker. My remarks were not meant as a dig at the occupants of the Chair. Let me say that the speaking to new clause 6 was interesting in its brevity.
      The new clause does not deal with sight-testing; it deals with charges for optical appliances. It is right to get that on the record at the start.
      I do not want to stray too much into a Second Reading debate on erstwhile new clause 1, but there has been some talk of financial irresponsibility, and my problem is that Labour Members are forward in telling us how they would spend money but backward on how they would earn it.
      The jollity on the Government Frent Bench to which the hon. Member for Wood Green (Mr. Race) referred was
      1800
      caused not by his general remarks but by his comment that a future Labour Government would withdraw all NHS charges. Previous Labour Governments have introduced new charges and increased existing charges.
      Mr. Pavitt: Does the hon. Gentleman not recall that one of the first acts of Barbara Castle when she became Secretary of State was to withdraw prescription charges totalling £3 million?
      Mr. Fairgrieve: That was a small amount compared with what was put on in later years.
      Mr. Pavitt: The hon. Gentleman must know that the prescription charge was 20p when the Labour Government took office in 1974 and was still only 20p when they left office.
      Mr. Fairgrieve: Yes, but Labour Governments have a happy way of ignoring inflation.
      Mr. Race: We should thank the Minister. He has made our case for us.
      Mr. Fairgrieve: In the light of the way in which the debate was conducted by Labour Members it was not surprising that the hon. Member for Fife, Central (Mr. Hamilton) moved the new clause formally so that the speeches that were prepared yesterday could still be made.
      The hon. Member for Hamilton (Mr. Robertson) made a good speech about new clause 6. I appreciate some of the things that he said, particularly the fact that we have in the House the hon. Member for Coatbridge and Airdrie (Mr. Dempsey), who suffers from the affliction of being partially sighted. We know how difficult it is for him to carry on with the duties that he performs so well and we can therefore appreciate what it must be like for those outside in their careers.
      The hon. Member for Hamilton also anticipated, to some extent, the reply that I shall give. He knows, as he said, that I would never stoop to any tactical subterfuge. The hon. Gentleman referred to my commitment to the Health Service, and I shall come to that later.
      We had two interventions from the hon. Member for Aberdeen, North. (Mr. Hughes). The first was a tease, when he asked me to reply for the Government to the general debate. If I had done that

      1801
      he would have asked me to restrict myself to the Scottish aspect.
      Mr. Robert Hughes: The Under-Secretary should not think that I was teasing him. I was making a serious point. The hon. Gentleman is a Scottish Minister, but as a Minister of the Crown he is entitled and competent to reply to the general debate and not confine himself to Scottish matters.
      Mr. Fairgrieve: The rest of the debate was answered so adequately by my hon. Friend that I had already decided to limit myself to the Scottish aspect.
      Before turning to clause 6, I confirm what the hon. Member for Aberdeen, North said about my visiting health boards and pointing out that the increase of 2 per cent. this year' was based on a 14 per cent. rate of increase in both pay and inflation throughout the 12-month period. If that figure is not achieved, not just the NHS but the whole of Britain will be in trouble. This year we are spending £1,600 million more on the NHS than we did last year. That is no mean figure.
      I oppose new clause 6 on three grounds. First, now that the inclusion of schedule 5—has been agreed in Committee, the apparent intentions of those who support new clause 6 have already been met.
      Section 105(7) of the National Health Service (Scotland) Act 1978, as amended by paragraph 4 of schedule 5, provides that the Secretary of State may make regulations " with variable application" under virtually all the regulation-making powers conferred on him by the Act. That includes the power to prescribe optical charges under section 70. By variable application I mean regulations that apply in a specific way to specific cases or classes of case.
      6 pm
      Secondly, this extension of the regulation-making powers available to the Secretary of State in relation to charges for optical appliances would allow him to prescribe either a reduced level of charge, or no charge at all, to certain categories of patient. That category could include partially sighted patients as specified in the new clause. However, it could also include others who are blind in a technical, legal sense, but who have limited
      1802
      powers of vision, and who could sometimes benefit from optical appliances.
      Thirdly, it is wrong to use two nails where one will do. I therefore assure the Opposition that the new clause adds nothing to the effect of paragraph 4 of schedule 5. However, it draws particular attention to the cases of optical charges and partially sighted persons. If the new clause were inserted in the Bill, it might prove unhelpful. It could imply the early relaxation of optical charges.
      Mr. Robert Hughes: The Minister said that the new clause was unnecessary. Will he confirm that he will lay the regulations? That is important.
      Mr. Fairgrieve: I accept the hon. Gentleman's point and I shall look into that possibility. However, I still believe that the new clause is unnecessary, for the reasons that I have given.
      Mr. Hughes: Perhaps the Minister misunderstood me. I am not seeking a technical explanation. Having taken the power to lay regulations, will he lay them?
      Mr. Fairgrieve: I shall not give an answer off the top of my head. I shall look into that question and advise the hon. Gentleman accordingly.
      I can give no assurance that there is an early prospect of lower charges. As the Committee knows, the Government have carried out a review of the range of possibilities that exist for modifying the present arrangements for exemptions from health charges. In the light of this review the Government have decided that they cannot give priority to extending exemptions from optical charges, especially as help is already available for those in need and those on low incomes.
      I have explained fully why we consider that new clause 6 is unnecessary. I understand that Opposition Members still consider voting in favour of the new clause. I ask them to oppose it. If they vote in its favour they will be kicking at an open door.
      Mr. Alfred Morris: I wish to intervene only briefly from the Opposition Front Bench. I do so for two reasons. First, the new clause stems directly from my Optical Charges (Exemption) Scotland Bill, which I drafted and sponsored as a Private

      1803
      Member's Bill under Standing Order No. 37. My Bill is, in fact, still before the House.
      The second reason for my intervention is that I was the Minister with responsibility for the disabled in the previous Labour Government. I then secured approval to exempt the severely visually handicapped from paying optical charges. In England and Wales exemption could have been given by the laying of regulations. In the case of Scotland, primary legislation was needed and, but for the fall of the Labour Government, this would have become law by last summer. Pending the enactment of the Scottish Bill, it was agreed to delay the laying of the regulations for England and Wales in order to avoid creating any inequity between people with the same handicap in different parts of the United Kingdom.
      Following last May's change of Government, there was no indication that the Government intended to bring Scottish law into line with the law of England and Wales. I therefore introduced my Bill. The Government now say that the purpose of my Bill and the purpose of the new clause has been met by their Bill. If that is so, why did they block my Bill—which appeared before theirs—so sneakily and so repeatedly? My Bill could have been law by now if it had not been for the Government's ruthless blocking tactics. As the Minister knows, my Bill and the new clause seek to help those who suffer from a severe visual handicap short of blindness itself.
      I am pleased that my hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey) was among the sponsors of my Bill, along with many of my hon. Friends who have spoken tonight. We all listen with respect to the views of my hon. Friend the Member for Coatbridge and Airdrie on this important matter. When I last checked the figures, it was estimated that the reform proposed by my Bill would cost between £500,000 and £750,000. About 50,000 visually handicapped people were thought likely to benefit from the reform. These may be underestimates but, on any assessment, the cost and the number of beneficiaries cannot be greatly in excess of those figures. So it is only a modest step forward we have been seeking.
      After all, in their first Budget, the Government crammed £1,500 million into the
      1804
      pockets of the richest 7 per cent. of taxpayers. By contrast, we are seeking a modest reform indeed.
      Mr. James Dempsey: I am grateful to my right hon. Friend for his kind references to me. I have the distinct feeling that even the Minister does not understand the type of visual aids involved, their cost and the general problems involved. I have to go to the eye infirmary in Glasgow to obtain them. Few people could afford to pay for them. I do not think that that is understood. I am delighted that my right hon. Friend is stressing the importance of this subject.
      Mr. Morris: As I said, the House as a whole listens to my hon. Friend with great respect. He is eminently right to argue that a very heavy cost falls on those who are severely visually handicapped. I hope that the Minister has listened at least with some sympathy to our proposition. Not only should the necessary power be acquired, but also the exemption itself. Had the Labour Government remained in office, the exemption could have been given last summer. The Minister has said that he does not want to make any off-the-cuff decisions. Last October, my hon. Friend the Member for Hamilton (Mr. Robertson) was in touch with the Minister. My hon. Friend pointed out then that the exemption should be given at the earliest possible date. We are therefore asking him not only to acquire power but to give the exemption.
      The Minister spoke of our intentions towards the disabled. Between 1974 and 1979 the previous Labour Government increased spending on the chronically sick and disabled by £1,100 million. We are entitled to be judged on our record. The issue raised in new clause 6 is now very urgent. We shall show our feelings on this important subject by voting in the Lobby tonight.
      Mr. William Hamilton: I suppose that I should ask for the leave of the House to speak again. I moved the new clause formally because of certain technical difficulties.
      Mr. Speaker: The hon. Member for Fife, Central (Mr. Hamilton), as the mover of the new clause, is entitled to have the last word on Report.
      Mr. Hamilton: My right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) has argued the case much better than I could have done. He has been intimately concerned with these matters for a long time. In some ways it is a pity that he did not speak earlier in the debate.
      My right hon. Friend has put many facts before the House. I suspect that the Minister might not have been too well aware of some of them. However, he must have been aware that my right hon. Friend and others have been putting considerable pressure on the Department for months to give exemption. A relatively small sum is involved. It is no good the Minister saying that the powers exist in schedule 5. That is the equivalent of saying " Our intentions are good." Intentions cost nothing. If the Government are not prepared to supply the means to translate that intention into practical effect, it is a worthless intention.
      It is true that the debate has widened considerably from the fairly narrow confines of the clause. That was in the nature of events. The Government withdrew their new clause 1, which provided for new charges for various items, including optical tests. The withdrawal of that clause presented the House with a different ball game. Mr. Speaker said—in my view rightly—that wider issues could be raised while discussing new clause 6. Those issues have been properly raised, and the debate has ranged much more widely as a consequence.
      The Minister said that the clause deals with optical charges. It does, and such charges are extremely important for a small and very handicapped section of the community. The Minister made jibes about the previous Labour Government ignoring inflation. He well knows that inflation had been reduced to less than 10 per cent. when the Conservative Government took office. The Government have been so successful in tackling inflation that it has risen from 9 per cent. to 21 per cent., as will be declared tomorrow.
      On the basis of that argument, the Minister is not likely to translate his declared intentions into practical effect. On the contrary, the Minister of State went out of his way to say that while the proposed
      1806
      optical charges are being withdrawn other charges—no doubt equally indefensible ones—are to be substituted.
      My hon. Friend the Member for Stockport, North (Mr. Bennett) advanced the valid argument that such proposals make the Bill a completely different measure from that to which the House gave a Second Reading some months ago. If the Government are to introduce additional charges at a later stage, we are entitled to ask for additional time in which to debate the new proposals.
      If the Government are intent, as I hope they are, on consulting the proper authorities outside the House, it will be some time before they present the House with their proposals. Conservative Members have made great play of the value of the democratic process by which the Government's mind can be changed. If it can be changed overnight on the proposed charges in new clause 1, to such an extent that the Government see fit to withdraw that clause, they should tell us at an early stage precisely what they have in mind for new, substitute charges to raise £11 million. They should proceed to consult the appropriate professional and trade union organisations before they bring forward their proposals in the form of a new clause.
      If they produce their proposals without consultation and they receive the hostile reaction that met new clause 1, the House may witness the strange situation of the Government withdrawing a second new clause and saying " We shall forgo this new clause 1 the second time round in favour of a new clause the third time round, so that we may produce a clause that will eventually be approved by professional and other bodies outside the House."
      6.15 pm
      It is no good a Minister saying that new clause 6 is already provided for in schedule 5. As my hon. Friend the Member for Hamilton (Mr. Robertson) has said, schedule 5 is purely an enabling power. The Minister is giving himself an enabling power, but he was careful not to say that any group, either generally or specifically as in the new clause, will benefit by money being provided to translate a declaration of intent into practical effect. On the contrary, we have every

      1807
      cause to believe that no money will be made available and that the powers provided in the schedule will have no practical value.
      To show our contempt for the case that has been advanced by the Government against the new clause, I ask my right
      hon. and hon. Friends to vote against the Government.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 231, noes 272.

      Division No. 308]

      AYES

      [6.16 pm

      Abse, Leo

      Foulkes, George

      Mellish, Rt Hon Robert

      Adams, Allen

      Fraser, John (Lambeth, Norwood)

      Mikardo, Ian

      Allaun, Frank

      Freud, Clement

      Millan, Rt Hon Bruce

      Archer, Rt Hon Peter

      Garrett, John (Norwich S)

      Miller, Dr M. S. (East Kilbride)

      Armstrong, Rt Hon Ernest

      Gilbert, Rt Hon Dr John

      Mitchell, Austin (Grimsby)

      Ashley, Rt Hon Jack

      Ginsburg, David

      Mitchell, R. C. (Soton, Itchen)

      Ashton, Joe

      Golding, John

      Morris, Rt Hon Alfred (Wythenshawe)

      Bagier, Gordon A. T.

      Gourlay, Harry

      Morris, Rt Hon Charles (Openshaw)

      Barnett, Guy (Greenwich)

      Graham, Ted

      Morris, Rt Hon John (Aberavon)

      Barnett, Rt Hon Joel (Heywood)

      Grant, John (Islington C)

      Moyle, Rt Hon Roland

      Beith, A. J.

      Grimond, Rt Hon J.

      Newens, Stanley

      Bennett, Andrew (Stockport N)

      Hamilton, James (Bothwell)

      Oakes, Rt Hon Gordon

      Booth, Rt Hon Albert

      Hamilton, W. W. (Central Fife)

      Ogden, Eric

      Bottomley, Rt Hon Arthur (M'brough)

      Hardy, Peter

      O'Halloran, Michael

      Bradley, Tom

      Harrison, Rt Hon Walter

      O'Neill, Martin

      Bray, Dr Jeremy

      Hart, Rt Hon Dame Judith

      Orme, Rt Hon Stanley

      Brown, Hugh D. (Provan)

      Hattersley, Rt Hon Roy

      Owen, Rt Hon Dr David

      Brown, Robert C. (Newcastle W)

      Haynes, Frank

      Palmer, Arthur

      Brown, Ron (Edinburgh, Leith)

      Hogg, Norman (E Dunbartonshire)

      Park, George

      Buchan, Norman

      Holland, Stuart (L'beth, Vauxhall)

      Parker, John

      Callaghan, Jim (Middleton & P)

      Home Robertson John

      Parry, Robert

      Campbell, Ian

      Homewood, William

      Pavitt, Laurie

      Canavan, Dennis

      Hooley, Frank

      Pendry, Tom

      Cant, R. B.

      Horam, John

      Penhaligon, David

      Carmichael Neil

      Howell, Rt Hon Denis (B'ham. Sm H)

      Powell, Raymond (Ogmore)

      Carter-Jones, Lewis

      Howells, Geraint

      Price, Christopher (Lewisham West)

      Cartwright, John

      Hudson, Davies, Gwilym Ednyfed

      Race Reg

      Clark, Dr David (South Shields)

      Hughes, Mark (Durham)

      Radice, Giles

      Cocks, Rt Hon Michael (Bristol S)

      Hughes, Robert (Aberdeen North)

      Richardson, Jo

      Cohen, Stanley

      Hughes, Roy (Newport)

      Roberts, Allan (Bootle)

      Conlan, Bernard

      Janner, Hon Greville

      Roberts, Ernest (Hackney North)

      Cowans, Harry

      Jay, Rt Hon Douglas

      Roberts, Gwilym (Cannock)

      Craigen, J. M. (Glasgow, Maryhill)

      John, Brynmor

      Robertson, George

      Crowther, J. S.

      Johnson, James (Hull West)

      Robinson, Geoffrey (Coventry NW)

      Cryer, Bob

      Johnson, Walter (Derby South)

      Rodgers, Rt Hon William

      Cunliffe, Lawrence

      Johnston, Russell (Inverness)

      Rooker, J. W.

      Cunningham, George (Islington S)

      Jones, Rt Hon Alec (Rhondda)

      Roper, John

      Cunningham, Dr John (Whitehaven)

      Jones, Barry (East Flint)

      Ross, Ernest (Dundee West)

      Dalyell, Tam

      Jones, Dan (Burnley)

      Ross, Stephen (Isle of Wight)

      Davidson, Arthur

      Kaufman, Rt Hon Gerald

      Rowlands, Ted

      Davies, Rt Hon Denzll (Llanelli)

      Kerr, Russell

      Ryman, John

      Davies, Ifor (Gower)

      Kilfedder, James A.

      Sandelson, Neville

      Davis, Clinton, (Hackney Central)

      Kilroy-Silk, Robert

      Sever, John

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

      Kinnock, Nell

      Sheerman, Barry

      Deakins, Eric

      Lambie, David

      Sheldon, Rt Hon Robert (A'ton-u-L)

      Dean, Joseph (Leeds West)

      Lamborn, Harry

      Shore, Rt Hon Peter (Step and Pop)

      Dempsey, James

      Lamond, James

      Short, Mrs Renée

      Dewar, Donald

      Leadbitter, Ted

      Silkin, Rt Hon S. C. (Dulwich)

      Dixon, Donald

      Leighton, Ronald

      Silverman, Julius

      Dobson, Frank

      Lestor, Miss Joan (Eton & Slough)

      Skinner, Dennis

      Dormand, Jack

      Lewis, Arthur (Newham North West)

      Smith, Rt Hon J. (North Lanarkshire)

      Douglas, Dick

      Lewis, Ron (Carlisle)

      Snape, Peter

      Douglas-Mann, Bruce

      Litherland, Robert

      Soley, Clive

      Dubs, Alfred

      Lyon, Alexander (York)

      Spearing, Nigel

      Duffy, A. E. P.

      Lyons, Edward (Bradford West)

      Spriggs, Leslie

      Dunn, James A. (Liverpool, Kirkdale)

      McCartney, Hugh

      Stallard, A. W.

      Dunnett, Jack

      McDonald, Dr Oonagh

      Steel, Rt Hon David

      Dunwoody, Mrs. Gwyneth

      McElhone, Frank

      Stoddart, David

      Eastham, Ken

      McGuire, Michael (Ince)

      Strang, Gavin

      Ellis, Raymond (NE Derbyshire)

      McKay, Allen (Penistone)

      Summerskill, Hon Dr Shirley

      Ellis, Tom (Wrexham)

      McKelvey, William

      Taylor, Mrs Ann (Bolton West)

      English, Michael

      MacKenzie, Rt Hon Gregor

      Thomas, Jeffrey (Abertillery)

      Ennals, Rt Hon David

      Maclennan, Robert

      Thomas, Dr Roger (Carmarthen)

      Evans, John (Newton)

      McNamara, Kevin

      Thorne, Stan (Preston South)

      Ewing, Harry

      McWilliam, John

      Tilley, John

      Faulds, Andrew

      Magee, Bryan

      Torney, Tom

      Field, Frank

      Marks, Kenneth

      Urwin, Rt Hon Tom

      Flannery, Martin

      Marshall, David (Gl'sgow, Shettles'n)

      Varley, Rt Hon Eric G.

      Fletcher, Ted (Darlington)

      Marshall, Dr Edmund (Goole)

      Wainwright, Edwin (Dearne Valley)

      Foot, Rt Hon Michael

      Marshall, Jim (Leicester South)

      Walker, Rt Hon Harold (Doncaster)

      Forrester, John

      Mason, Rt Hon Roy

      Weetch, Ken

      Foster, Derek

      Maxton, John

      Wellbeloved, James

      Welsh, Michael

      Williams, Rt Hon Alan (Swansea W)

      Wrigglesworth, Ian

      White, Frank R. (Bury & Radcliffe)

      Williams, Sir Thomas (Warrington)

      Wright, Sheila

      White, James (Glasgow, Pollok)

      Wilson, Gordon (Dundee East)

      Whitehead, Phillip

      Wilson, William (Coventry SE)

      TELLERS FOR THE AYES:

      Whitlock, William

      Winnick, David

      Mr. George Morton and

      Willey, Rt Hon Frederick

      Woodall, Alec

      Mr. James Tinn.

      Woolmer, Kenneth

      NOES

      Adley, Robert

      Fell, Anthony

      MacGregor, John

      Aitken, Jonathan

      Fenner, Mrs Peggy

      MacKay, John (Argyll)

      Alexander, Richard

      Fisher, Sir Nigel

      Macmillan, Rt Hon M. (Farnham)

      Alison, Michael

      Fletcher, Alexander (Edinburgh N)

      McNair-Wilson, Michael (Newbury)

      Ancram, Michael

      Fletcher-Cooke, Charles

      McNair-Wilson, Patrick (New Forest)

      Arnold, Tom

      Fookes, Miss Janet

      McQuarrie, Albert

      Aspinwall, Jack

      Forman, Nigel

      Madel, David

      Atkins, Rt Hon H. (Spelthorne)

      Fowler, Rt Hon Norman

      Major, John

      Atkins, Robert (Preston North)

      Fox, Marcus

      Marland, Paul

      Atkinson, David (B'mouth, East)

      Fraser, Rt Hon H (Stafford & St)

      Marlow, Tony

      Baker, Kenneth (St. Marylebone)

      Fraser, Peter (South Angus)

      Marshall, Michael (Arundel)

      Baker, Nicholas (North Dorset)

      Fry. Peter

      Mates, Michael

      Beaumont-Dark, Anthony

      Galbraith Hon T. G. D

      Maude, Rt Hon Angus

      Bendall, Vivien

      Gardiner, George (Reigate)

      Mawby, Ray

      Bennett, Sir Frederic (Torbay)

      Gardner, Edward (South Fylde)

      Mawhinney, Dr Brian

      Benyon, Thomas (Abingdon)

      Garel-Jones, Tristan

      Maxwell-Hyslop, Robin

      Benyon, W. (Buckingham)

      Gilmour, Rt Hon Sir Ian

      Mayhew, Patrick

      Berry, Hon Anthony

      Glyn, Dr Alan

      Mellor, David

      Best, Keith

      Goodhart, Philip

      Miller, Hal (Bromsgrove & Redditch)

      Bevan, David Gilroy

      Goodhew, Victor

      Mills, lain (Meriden)

      Biggs-Davison, John

      Goodlad, Alastair

      Mills, Peter (West Devon)

      Blackburn, John

      Gow, Ian

      Miscampbell, Norman

      Blaker, Peter

      Gower, Sir Raymond

      Mitchell, David (Basingstoke)

      Body, Richard

      Gray, Hamish

      Moate, Roger

      Boscawen, Hon Robert

      Greenway, Harry

      Monro, Hector

      Bottomley, Peter (Woolwich West)

      Grieve, Percy

      Morris, Michael (Northampton, Sth)

      Bowden, Andrew

      Griffiths, Eldon (Bury St Edmunds)

      Morrison, Hon Charles (Devizes)

      Bright, Graham

      Griffiths, Peter (Portsmouth N)

      Morrison, Hon Peter (City of Chester]

      Brinton, Tim

      Grist, Ian

      Mudd, David

      Brittan, Leon

      Grylls, Michael

      Murphy, Christopher

      Brocklebank-Fowler, Christopher

      Gummer, John Selwyn

      Myles, David

      Brooke, Hon Peter

      Hamilton, Hon Archie (Eps'm&Ew'll)

      Needham, Richard

      Brown, Michael (Brigg & Sc'thorpe)

      Hamilton, Michael (Salisbury)

      Nelson, Anthony

      Browne, John (Winchester)

      Hampson, Dr Keith

      Neubert, Michael

      Bruce-Gardyne, John

      Hannam, John

      Newton, Tony

      Bryan, Sir Paul

      Haselhurst, Alan

      Normanton, Tom

      Buck, Antony

      Hawkins, Paul

      Onslow, Cranley

      Budgen, Nick

      Hawksley, Warren

      Oppenheim, Rt Hon Mrs Sally

      Bulmer, Esmond

      Heddle, John

      Page, John (Harrow, West)

      Burden, F. A.

      Henderson, Barry

      Page, Richard (SW Hertfordshire)

      Butcher, John

      Hicks, Robert

      Parkinson, Cecil

      Butler, Hon Adam

      Higgins, Rt Hon Terence L.

      Parris, Matthew

      Cadbury, Jocelyn

      Hill, James

      Patten, Christopher (Bath)

      Carlisle, Kenneth (Lincoln)

      Hogg, Hon Douglas (Grantham)

      Pattie, Geoffrey

      Carlisle, Rt Hon Mark (Runcorn)

      Holland, Philip (Carlton)

      Pawsey, James

      Chalker, Mrs. Lynda

      Hooson, Tom

      Peyton, Rt Hon John

      Channon, Paul

      Hordern, Peter

      Pollock, Alexander

      Chapman, Sydney

      Howell, Rt Hon David (Guildford)

      Porter, George

      Clark, Hon Alan (Plymouth, Sutton)

      Howell, Ralph (North Norfolk)

      Powell, Rt Hon J. Enoch (S Down)

      Clark, Sir William (Croydon South)

      Hunt, John (Ravensbourne)

      Prentice, Rt Hon Reg

      Clarke, Kenneth (Rushcliffe)

      Irving, Charles (Cheltenham)

      Price, David (Eastleigh)

      Clegg, Sir Walter

      Jenkin, Rt Hon Patrick

      Proctor, K. Harvey

      Cockeram, Eric

      Jessel, Toby

      Rathbone, Tim

      Colvin, Michael

      Johnson Smith, Geoffrey

      Rees, Peter (Dover and Deal)

      Corrie, John

      Jopling, Rt Hon Michael

      Renton, Tim

      Cormack, Patrick

      Kaberry, Sir Donald

      Rhodes James, Robert

      Corrie John

      Kellett-Bowman, Mrs Elaine

      Rhys Williams, Sir Brandon

      Costain, A. P.

      Kershaw, Anthony

      Rifkind, Malcolm

      Crouch, David

      Knight, Mrs Jill

      Roberts, Michael (Cardiff NW)

      Dean, Paul (North Somerset)

      Knox, David

      Roberts, Wyn (Conway)

      Dickens, Geoffrey

      Lamont, Norman

      Rossi, Hugh

      Dorrell, Stephen

      Lang, Ian

      Rost, Peter

      Dover, Denshore

      Latham, Michael

      Royle, Sir Anthony

      Dunn, Robert (Darttord)

      Lawrence, Ivan

      Sainsbury, Hon Timothy

      Durant, Tony

      Lawson, Nigel

      Scott, Nicholas

      Dykes, Hugh

      Lee, John

      Shaw, Michael (Scarborough)

      Eden, Rt Hon Sir John

      Le Marchant, Spencer

      Shelton, William (Streatham)

      Edwards, Rt Hon N. (Pembroke)

      Lennox-Boyd, Hon Mark

      Shepherd, Colin (Hereford)

      Elliott, Sir William

      Lewis, Kenneth (Rutland)

      Shersby, Michael

      Emery, Peter

      Lloyd, Ian (Havant & Waterloo)

      Skeet, T. H. H.

      Eyre, Reginald

      Lloyd, Peter (Fareham)

      Smith, Dudley (War. and Leam'ton)

      Fairbairn, Nicholas

      Loveridge, John

      Speed, Keith

      Fairgrieve, Russell

      Lyell, Nicholas

      Speller, Tony

      Faith, Mrs Sheila

      McCrindle, Robert

      Spence, John

      Farr, John

      Macfarlane, Nell

      Spicer, Michael (S Worcestershire)

      1810

      1811

      Sproat, lain

      Thorne, Neil (llford South)

      Watson, John

      Squire, Robin

      Thornton, Malcolm

      Wells, Bowen (Hert'rd & Stev'nage)

      Stainton Keith

      Townend, John (Bridlington)

      Wheeler, John

      Stanbrook, Ivor

      Townsend, Cyril D. (Bexleyheath)

      Whitelaw, Rt Hon William

      Stanley, John

      Trippler, David

      Whitney, Raymond

      Steen, Anthony

      van Straubenzee, W. R.

      Wickenden, Keith

      Stevens, Martin

      Vaughan, Dr Gerard

      Wiggin, Jerry

      Stewart, Ian (Hitchin)

      Viggers, Peter

      Wilkinson, John

      Stewart, John (East Renfrewshire)

      Waddington, David

      Williams, Delwyn (Montgomery)

      Stokes John

      Waldegrave, Hon William

      Winterton, Nicholas

      Stradling Thomas, J.

      Walker, Rt Hon Peter (Worcester)

      Wolfson, Mark

      Tapsell, Peter

      Walker, Bill (Perth & E Perthshire)

      Young, Sir George (Acton)

      Taylor, Robert (Croydon NW)

      Walker-Smith, Rt Hon Sir Derek

      Younger, Rt Hon George

      Taylor, Teddy (Southend East)

      Waller, Gary

      Tebbit, Norman

      Walters, Dennis

      TELLERS FOR THE NOES:

      Temple-Morris, Peter

      Ward, John

      Mr, John Wakeham and

      Thompson, Donald

      Warren, Kenneth

      Mr. Carol Mather.

      Question accordingly negatived.

    New Clause 8

      NURSING HOMES LEVY
      "Any person carrying on the business of a nursing home registered under the provisions of the Nursing Homes Act 1975 as amended by Section 15 of this Act (hereinafter in this section referred to as " an employer") and employing full time ten persons or their equivalent required by statute to be professionally qualified shall pay to the Secretary of State an annual levy in accordance with the provisions of this section.
      (2) The amount of the levy referred to in subsection (1) of this section shall be determined by the Secretary of State from time to time but shall not be less than four per centum of the cost to an employer of employing persons to carry out his business.
      (3) It shall be the duty of the Secretary of State to apply to proceeds of the levy referred to in subsection (1) of this section to defraying the costs incurred by the health authorities in training professionally qualified people in such manner as the Secretary of State thinks fit.
      (4) An employer may claim exemption from the levy referred to in subsection (1) of this section provided he can show that he provides sufficient training of a standard approved by the Secretary of State or a recognised professional body to meet his own requirements of professionally qualified persons.
      (5) It shall be an offence for an employer not exempt under subsection (4) of this section not to make payments of the levy referred to under subsection (1) of this section and such non-payment will be grounds for removing the name of an employer from the register under the Nursing Homes Act of 1975.".—[Mr. Moyle.]
      Brought up, and read the First time.
      Mr. Moyle: I beg to move, That the clause be read a Second time.
      One reason for moving this clause is that by this Bill the Government are abolishing the Health Services Board. The board, as well as having the function of phasing pay beds out of the Health Service, has the function of protecting it from the encroaching effects of
      1812
      the private sector, which, it seems to us, will be encouraged in its growth and development by the Government as part of their policy.
      6.30 pm
      The National Health Service provides care for the overwhelming mass of our population. Therefore, it must be carefully protected from the encroachments of the private sector. The private sector has two advantages in competing with the National Health Service. First, it has no overall responsibilities for the health care of the population. It can carefully select those aspects of human suffering which can be made commercially viable and can then proceed to exploit them. This means that there are many responsibilities to which it need pay no attention in the area of health care. The private sector has no substantial responsibility for training.
      The NHS, in fact and by comparison, is a vast training college. All the health authorities in England, Wales and Scotland carry out vast programmes of training. They bear the full cost and time of training, apart from sections of medical education that are supported by the University Grants Committee. However, even in the case of medical education a heavy proportion of the training of doctors is borne by the public sector, the NHS.
      When the NHS has carried out its training remit, the private sector has been in the habit of poaching the trained personnel—the doctors, the nurses, the supporting professions, the ancillary workers, craftsmen and others—away from the NHS and applying them to employment in the private sector.
      That problem affects all public bodies with large private sectors acting as satellites to them, or acting in competition with or working in parallel with them.

      1813
      For the past 15 years the broad solution has been the industrial training board solution, whereby a training board is set up to cover the entire industry concerned, both public and private, so that it can supervise the training for the whole industry and receive costs for defraying its expenses from everybody in the industry, whether public or private.
      Such an industrial training board as we propose setting up in this context would seem to commit the Opposition to the permanent extension and existence of the private sector of medicine. If an industrial training board were set up it would immediately start recruiting staff and organising training in the public and private sectors of health throughout the country. If ever we wished to abolish it, there would be the question of redundancy. It is our hope that we shall be in a position to abolish these arrangements upon the Labour Party's return to power.
      An industrial training board would be a quango within the meaning of the term applied by Government supporters. We decided that we would spare the Secretary of State the annoyance and anxiety of setting up a quango to cover the training of personnel in the public and private sectors of health. We urge him, under the new clause, to be his own quango, in fact.
      We suggest that anybody with a nursing home that is registered, with responsibility for the equivalent of 10 professionally qualified people in his employ, should pay a levy to the Secretary of State. The Secretary of State should use that levy to defray the costs of training in health authorities. If a private nursing home could show that it was carrying out its fair share of the training it need not pay the levy. If, on the other hand, it did not pay the levy, and was not carrying out its fair proportion of training, it would be struck from the register of nursing homes. That is the solution that we put forward.
      There is only one other point that requires explanation from me. We have set the levy on nursing homes at what we concede to be the high level of 4 per cent., compared with the minimum of the 1 per cent. levy that exists under the Employment and Training Act 1973. This is the reason for the 4 per cent. levy;
      1814
      medical education is the most expensive form of education. That justifies the substantial nature of the levy.
      It is interesting that the civil aviation training board at one time imposed a 3½ per cent. levy on payrolls on the grounds that it was training airline pilots, which was an expensive form of training. The training of nurses, and especially of doctors, is even more expensive and justifies the levy at the level we set.
      On the other hand, if the Minister can give us the details of the breakdown of training costs and can show us that the levy should be somewhat less than 4 per cent., we shall not stand by the 4 per cent. as a reason for opposing his advice to the House.
      The Government should accept that the private sector of medicine and health care should not poach trained people from the Health Service without making a full contribution to the costs of their training.
      On 25 March, in Committee, the Minister of State said that a substantial amount of training was being carried on by the private sector, in any case. From his enthusiastic description of the training carried out the Opposition do not fear that the private sector has anything to worry about in being called upon to pay a high levy to the Secretary of State for training purposes.
      Sir Raymond Gower: Has it occurred to the right hon. Gentleman that one of the ensuing strange results would be that nursing homes in the United Kingdom would have to pay this levy, although those in Jersey, Guernsey, Ireland, the Isle of Man, Canada, the United States and other countries could all benefit from this kind of trained personnel without any payment?
      Mr. Moyle: I have no doubt that that argument could be advanced against every industrial training board in this country. That has not stopped us from acting. Nor would it stop us from acting in this area.
      In Committee the Minister of State said that the private sector was carrying on substantial training. Our view is that it need have no fear of the levy that is imposed under the new clause. In the view of the Government it is carrying out such excellent training that very few private establishments would be called upon to pay the 4 per cent. On the other hand, if

      1815
      they are not carrying out their training obligations, there is no reason on earth why they should not contribute to the levy and help to defray the costs of training doctors, nurses and other Health Service professionals.
      Mr. Race: The principal justification—for me the only justification—for having a levy on the private sector is to make sure that it pays the full economic cost for the trained personnel that it uses, who overwhelmingly come from the National Health Service. The Minister of State revealed in Committee that two small private hospitals did some training.
      Dr. Vaughan: Five.
      Mr. Race: Those were the only ones that he could produce then, but I bow to his superior wisdom now. Even if there are five, the number of staff that they train cannot be substantial. We want to ensure that at the very least the private sector pays the full economic price of training its staff.
      The private sector does not pay the economic price for many other services rendered to it by the NHS. For example, in Committee we had a debate about the provision of blood to the private sector hospital services. No charge is made at present. It may be that we would not wish to charge for that item, but many of us believe that charges for other services provided by the NHS, such as ambulances and laboratory services for individual private patients, are not being properly collected and that the private sector is getting away with substantial amounts of money that it should be paying to the NHS for services now provided under the National Health Service Act.
      Mr. Nicholas Winterton: The hon. Gentleman is developing a very interesting argument, but is he not aware that people who take advantage of the private sector of medicine are paying twice, as they contribute through various insurances and taxation to the running costs of the NHS? Therefore, why should the private sector pay again for services for which those who are taking advantage of it have already paid?
      Mr. Race: The charges are laid down by statute at present; the charges for ambulance services and laboratory services are laid down by the House. While we still have a private sector I do not believe
      1816
      that there is any justification for removing them. I am anxious to ensure that individual private patients and the private sector as a whole pay properly, through the existing charges, for the services provided.
      As for paying twice, it is clear that people want to do that in order to gain an advantage over others. Those people are not entitled to jump the queue in the way that they wish by exercising the right to go to a private hospital or a pay bed in an NHS hospital.
      Mr. Haynes: In my area a well-known footballer who cost £1 million jumped the queue into a bed and beat an 85-year-old lady in desperate need of hip operations. I am convinced that that is the kind of point that my hon. Friend is trying to make.
      Mr. Race: We all—at any rate on the Labour Benches, if not on the Conservative Benches—deplore people jumping the queue, going ahead of others whose medical needs may be at least equal to theirs, if not greater.
      The representations that the Health Services Board received during its existence from the 1976 Act onwards make clear what was the principal problem that it discussed when it talked about whether it would give authorisation for hospitals to exceed the legal limit on the number of beds under the Act. That problem was whether those hospitals that requested authorisation would remove from the NHS substantial numbers of trained workers. One authorisation was rejected on the grounds that it would have removed a substantial number of NHS workers from NHS hospitals in the Sunningdale area of Surrey.
      If the clause has anything to commend it, it is that it would prevent the private sector doing that. The onus would be on the private sector to provide money for increasing the numbers of trained staff working in the Health Service generally.
      6.45 pm
      Dr. Vaughan: We are not at all opposed to the idea behind the clause, that of possibly having a levy. We have been discussing the matter with the private sector. There are problems, and I do not wish to commit us to such a proposition, but I want the House to know that we do not have a closed mind on the subject.

      1817
      I was asked about some of the training figures. I do not have them all available, but I have the current figures for the training of doctors and dentists, which now costs over £50,000 per student. Comparable figures are as follows: professions supplementary to medicine, £7,500; student nurses, £11,500; pupil nurses, £7,500; and administrative trainees, £9,000. That shows that large sums of money are invested by the State when the NHS trains members of staff.
      Mr. Pavitt: Can the hon. Gentleman tell us the number of establishments recognised for nurse training by the Royal College of Nursing?
      Dr. Vaughan: I cannot do so offhand, but I shall be glad to let the hon. Gentleman have that information if he gets in touch with me.
      There is also in the NHS a shortage of certain kinds of trained staff. For example, we have recently been looking particularly at staff available for, for example, renal dialysis units and body scanners. All in all, there is a strong argument that the private sector should play a part in training—and it wants to. The Government have been in regular touch with it. We have a liaison group with representatives of certain parts of the private sector, under the chairmanship of Sir Richard Bayliss. I pay tribute to his work in bringing together private sector groups and views so that we can have discussions.
      So far the discussions have concentrated almost exclusively on nurse training, but there is no reason why we should not go wider, and we should welcome that. I shall suggest that to the private sector.
      Straightforward nurse training is not the only aspect that we are examining. We have been discussing, for example, sponsorship of existing places in nurse training schools and in independent hospitals. Alternatively, students from independent hospitals might be seconded or sponsored to attend existing NHS training schools. We have also been looking at the possibilities of financial contributions given directly to support existing training facilities—again, in both the NHS and the private sector.
      We are short of time in this debate, so I shall not go further now. But I
      1818
      can say that there is a whole area that we are exploring.
      Finally, we are examining the possibilities in the universities, a number of which offer nursing degree courses. It has been put to us that sponsoring just one lecturer could lead to an annual increase of five or six nurses with degree qualifications in our annual intake.
      Those are some of the options that we are exploring. They are quite exciting. I quote them only as examples of what may be possible. As I have said, we are also considering the possibility of a voluntary levy, but I am not very enthusiastic about that. That is why I ask the House to reject the clause.
      First, the discussions are progressing extremely well. Inevitably, if we had such a clause it would undermine the progress that we are making.
      Secondly, I am not sure that the sponsors of the clause have thought through what would happen. The levy would be imposed on all private nursing homes and hospitals employing more than 10 professional staff. It would be completely non-selective. Have Opposition Members appreciated the implications? Would there be no exceptions? As it stands the clause would embrace such premises as homes looking after the terminally ill and would include voluntary and religious homes where many patients are admitted without charge. It would include hundreds of small nursing homes catering exclusively for long-stay, elderly patients. I am sure that this is not the intention of the sponsors of the clause.
      Nor can it be argued that the staff in these homes, even if they were trained in the National Health Service, are not doing jobs that are vital not only to the patients in the homes but also indirectly to the National Health Service. The services in these homes are supplementary to the National Health Service. If this private provision did not exist, the National Health Service would have to provide about 30,000 extra long-stay patient beds.
      The cost to the National Health Service of training staff in these homes is far smaller than the cost of providing for those patients. About 4,000 of these private beds are also used by National

      1819
      Health Service authorities on a contractual basis to provide a service for National Health Service patients. Would they have to pay? Would that not simply drive up the cost to the National Health Service? Without pursuing the argument further, in view of the time, I would indicate that we are sympathetic to the idea of a levy. We are looking into it. Discussions are taking place. I ask the House not to pursue the clause tonight.
      Mr. Moyle: We have had a brief debate on this subject. My hon. Friend the Member for Wood Green (Mr. Race) answered the hon. Member for Macclesfield (Mr. Winterton) accurately in saying that people are getting extra advantages for their extra expenditure and that there is, therefore, every reason why they should pay twice.
      Mr. Nicholas Winterton: Will the right hon. Gentleman answer the point, made pertinently by my hon. Friend from the Government Front Bench, about the cost to the National Health Service of catering for the terminally ill and the elderly in some of these homes if the homes—many of them providing free places—were to go out of existence because of the additional levy?
      Mr. Moyle: My object in speaking twice was to comment on the Minister's contribution, as I think those hon. Members who have been in the House for some years would probably have divined. The Opposition are somewhat encouraged to learn that the Minister is having discussions with the private sector on this subject. We are interested to learn some of the options for organising training that he is discussing with the private sector. But the real reason for considering the whole subject is not the organisation of training but the sheer cost of training. All our worst fears are borne out by the figures that the hon. Gentleman gave.
      We are surprised that although it costs £50,000 a year to train a doctor, the Government are apparently not talking to the private sector of health care about how that cost is to be met. The hon. Gentleman said that the discussions were primarily about nursing. That feeds our worst fears. It was interesting to learn that even a member of the professions supplementary to medicine, if one can use that shorthand term, costs about £7,500 a year to train. These are substantial figures. The private sector, apparently to be encouraged by the Government and, therefore, destined to grow, unless action is taken, will get the benefit of huge sums of money expended on the training of large numbers of people in the Health Service.
      About 75 per cent. of the £8,000 million cost this year of running the National Health Service is borne as a result of employment costs—wages, salaries, training and matters of that sort. The answer to the point made by the Minister, which was reinforced by the hon. Member for Macclesfield, is that what the National Health Service loses on the swings, it will gain on the roundabouts. There is obviously a vast outflow of money from the National Health Service to the private sector of medicine under the existing system. This allows the private sector to compete more effectively with the Health Service.
      Apart from general fairness, one of the reasons why we want the levy and why we are determined to press it on the Government is to encourage their somewhat feeble response and push them towards a solution of this problem that both sides of the House seem to want. I urge hon. Members to accept the new clause.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 234, Noes 281.

      Division No. 309]

      AYES

      [6.56 pm

      Abse, Leo

      Beith, A. J.

      Campbell, Ian

      Adams, Allen

      Bennett, Andrew (Stockport N)

      Canavan, Dennis

      Allaun, Frank

      Booth, Rt Hon Albert

      Cant, R. B.

      Anderson, Donald

      Bottomley, Rt Hon Arthur (M'brough)

      Carmichael, Nell

      Archer, Rt Hon Peter

      Bradley, Tom

      Carter-Jones, Lewis

      Armstrong, Rt Hon Ernest

      Bray, Or Jeremy

      Cartwright, John

      Ashley, Rt Hon Jack

      Brown, Hugh D. (Provan)

      Clark, Dr David (South Shields)

      Ashton, Joe

      Brown, Robert C. (Newcastle W)

      Cocks, Rt Hon Michael (Bristol S)

      Bagier, Gordon A. T.

      Brown, Ron (Edinburgh, Leith)

      Cohen, Stanley

      Barnett, Guy (Greenwich)

      Buchan, Norman

      Conlan, Bernard

      Barnett, Rt Hon Joel (Heywood)

      Callaghan, Jim (Middleton & P)

      Cowans, Harry

      Craigen, J. M. (Glasgow, Maryhill)

      Janner, Hon Greville

      Radice, Giles

      Crowther, J. S.

      Jay, Rt Hon Douglas

      Richardson, Jo

      Cryer, Bob

      John, Brynmor

      Roberts, Albert (Normanton)

      Cunliffe, Lawrence

      Johnson, James (Hull West)

      Roberts, Allan (Bootle)

      Cunningham, George (Islington S)

      Johnson, Walter (Derby South)

      Roberts, Ernest (Hackney North)

      Cunningham, Dr John (Whitehaven)

      Johnston, Russell (Inverness)

      Roberts, Gwilym (Cannock)

      Dalyell, Tam

      Jones, Rt Hon Alec (Rhondda)

      Robertson, George

      Davidson, Arthur

      Jones, Barry (East Flint)

      Robinson, Geoffrey (Coventry NW)

      Davies, Rt Hon Denzil (Llanelli)

      Jones, Dan (Burnley)

      Rodgers, Rt Hon William

      Davies, Ifor (Gower)

      Kaufman, Rt Hon Gerald

      Rooker, J. W.

      Davis, Clinton, (Hackney Central)

      Kerr, Russell

      Roper, John

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

      Kilfedder, James A.

      Ross, Ernest (Dundee West)

      Deakins, Eric

      Kilroy-Silk, Robert

      Ross, Stephen (Isle of Wight)

      Dean, Joseph (Leeds West)

      Kinnock, Neil

      Rowlands, Ted

      Dempsey, James

      Lambie, David

      Ryman, John

      Dewar, Donald

      Lamborn, Harry

      Sandelson, Neville

      Dixon, Donald

      Lamond, James

      Sever, John

      Dobson, Frank

      Leadbitter, Ted

      Sheerman, Barry

      Dormand, Jack

      Leighton, Ronald

      Sheldon, Rt Hon Robert (A'ton-u-L)

      Douglas, Dick

      Lestor, Miss Joan (Eton & Slough)

      Shore, Rt Hon Peter (Step and Pop)

      Douglas-Mann, Bruce

      Lewis, Arthur (Newham North West)

      Short, Mrs Renée

      Dubs, Alfred

      Lewis, Ron (Carlisle)

      Silkin, Rt Hon John (Deptford)

      Duffy, A. E. P.

      Litherland, Robert

      Silkin, Rt Hon S. C. (Dulwich)

      Dunn, James A. (Liverpool, Kirkdale)

      Lyons, Edward (Bradford West)

      Silverman, Julius

      Dunnett, Jack

      McCartney, Hugh

      Skinner, Dennis

      Dunwoody, Mrs. Gwyneth

      McDonald, Dr Oonagh

      Smith, Rt Hon J. (North Lanarkshire)

      Eastham, Ken

      McElhone, Frank

      Snape, Peter

      Ellis, Raymond (NE Derbyshire)

      McGuire, Michael (Ince)

      Soley, Clive

      Ellis, Tom (Wrexham)

      McKay, Allen (Penistone)

      Spearing, Nigel

      English, Michael

      McKelvey, William

      Spriggs, Leslie

      Ennals, Rt Hon David

      MacKenzie, Rt Hon Gregor

      Stallard, A. W.

      Ewing, Harry

      Maclennan, Robert

      Steel, Rt Hon David

      Faulds, Andrew

      McNamara, Kevin

      Stoddart, David

      Field, Frank

      McWilliam, John

      Strang, Gavin

      Flannery, Martin

      Magee, Bryan

      Summerskill, Hon Dr Shirley

      Fletcher, Ted (Darlington)

      Marks, Kenneth

      Thomas, Jeffrey (Abertillery)

      Foot, Rt Hon Michael

      Marshall, David (Gl'sgow, Shettles'n)

      Thomas, Dr Roger (Carmarthen)

      Forrester, John

      Marshall, Dr Edmund (Goole)

      Thorne, Stan (Preston South)

      Foster Derek

      Marshall, Jim (Leicester South)

      Tilley, John

      Foulkes, George

      Mason, Rt Hon Roy

      Tinn, James

      Fraser, John (Lambeth, Norwood)

      Maxton, John

      Torney, Tom

      Freeson, Rt Hon Reginald

      Mellish, Rt Hon Robert

      Urwin, Rt Hon Tom

      Freud, Clement

      Mikardo, Ian

      Garrett, John (Norwich S)

      Millan, Rt Hon Bruce

      Varley, Rt Hon Eric G.

      George, Bruce

      Miller, Dr M. S. (East Kilbride)

      Wainwright, Edwin (Dearne Valley)

      Gilbert, Rt Hon Dr John

      Mitchell, Austin (Grimsby)

      Walker, Rt Hon Harold (Doncaster)

      Ginsburg, David

      Mitchell, R. C. (Solon, Itchen)

      Weetch, Ken

      Wellbeloved, James

      Golding, John

      Morris, Rt Hon Alfred (Wythenshawe)

      Welsh, Michael

      Gourlay, Harry

      Morris, Rt Hon Charles (Openshaw)

      White, Frank R. (Bury & Radcliffe)

      Graham, Ted

      Morris, Rt Hon John (Aberavon)

      White, James (Glasgow, Pollok)

      Grant. John (Islington C)

      Morton, George

      Whitehead, Phillip

      Grimond, Rt Hon J.

      Moyle, Rt Hon Roland

      Whitlock, William

      Hamilton, W. W. (Central Fife)

      Newens, Stanley

      Hardy, Peter

      Oakes, Rt Hon Gordon

      Willey, Rt Hon Frederick

      Harrison, Rt Hon Walter

      Ogden, Eric

      Williams, Rt Hon Alan (Swansea W)

      Hart, Rt Hon Dame Judith

      O'Halloran, Michael

      Williams, Sir Thomas (Warrington)

      Haynes, Frank

      O'Neill, Martin

      Wilson, Gordon (Dundee East)

      Hogg, Norman (E Dunbartonshire)

      Orme, Rt Hon Stanley

      Wilson, Rt Hon Sir Harold (Huyton)

      Holland, Stuart (L'beth, Vauxhall)

      Owen, Rt Hon Dr David

      Wilson, William (Coventry SE)

      Home Robertson, John

      Palmer, Arthur

      Winnick, David

      Homewood, William

      Park, George

      Woodall, Alec

      Hooley, Frank

      Parker, John

      Woolmer, Kenneth

      Horam, John

      Parry, Robert

      Wrigglesworth, Ian

      Howell, Rt Hon Denis (B'ham, Sm H)

      Pavitt, Laurie

      Wright, Sheila

      Howells, Geraint

      Pendry, Tom

      Hudson, Davies, Gwilym Ednyfed

      Penhaligon, David

      TELLERS FOR THE AYES:

      Hughes, Mark (Durham)

      Powell, Raymond (Ogmore)

      Hughes, Robert (Aberdeen North)

      Price, Christopher (Lewisham West)

      Mr. James Hamilton and Mr. John Evans

      Hughes. Roy (Newport)

      Race, Reg

      NOES

      Adley, Robert

      Bendall, Vivien

      Bright, Graham

      Aitken, Jonathan

      Bennett, Sir Frederic (Torbay)

      Brinton, Tim

      Alexander, Richard

      Benyon, Thomas (Abingdon)

      Brittan, Leon

      Alison, Michael

      Benyon, W. (Buckingham)

      Brocklebank-Fowler, Christopher

      Amery, Rt Hon Julian

      Berry, Hon Anthony

      Brown, Michael (Brigg & Sc'thorpe)

      Ancram, Michael

      Best, Keith

      Browne, John (Winchester)

      Arnold, Tom

      Bevan, David Gilroy

      Bruce-Gardyne, John

      Aspinwall, Jack

      Biggs-Davison, John

      Bryan, Sir Paul

      Atkins, Rt Hon H. (Spelthorne)

      Blackburn, John

      Buchanan-Smith, Hon Alick

      Atkins, Robert (Preston North)

      Blaker, Peter

      Buck, Antony

      Atkinson, David (B'mouth, East)

      Body, Richard

      Budgen, Nick

      Baker, Kenneth (St. Marylebone)

      Boscawen, Hon Robert

      Bulmer, Esmond

      Baker, Nicholas (North Dorset)

      Bottomley, Peter (Woolwich Weal)

      Burden, F. A.

      Beaumont-Dark, Anthony

      Bowden, Andrew

      Butcher, John

      1822

      1823

      Butler, Hon Adam

      Howell, Ralph (North Norfolk)

      Proctor, K. Harvey

      Cadbury, Jocelyn

      Hunt, John (Ravensbourne)

      Rathbone, Tim

      Carlisle, John (Luton West)

      Hurd, Hon Douglas

      Re, Peter (Dover and Deal)

      Carlisle, Kenneth (Lincoln)

      Irving, Charles (Cheltenham)

      Rees-Davies, W. R.

      Carlisle, Rt Hon Mark (Runcorn)

      Jenkln, Rt Hon Patrick

      Renton, Tim

      Chalker, Mrs. Linda

      Jessel, Toby

      Rhodes James, Robert

      Channon, Paul

      Johnson Smith, Geoffrey

      Rhys Williams, Sir Brandon

      Chapman, Sydney

      Jopling, Rt Hon Michael

      Ridley, Hon Nicholas

      Clark, Hon Alan (Plymouth, Sutton)

      Kaberry, Sir Donald

      Rifkind, Malcolm

      Clark, Sir William (Croydon South)

      Kellett-Bowman, Mrs Elaine

      Roberts, Michael (Cardiff NW)

      Clarke, Kenneth (Rushcliffe)

      Kershaw, Anthony

      Roberts, Wyn (Conway)

      Clegg, Sir Walter

      Knight, Mrs Jill

      Rossi, Hugh

      Cockeram, Eric

      Knox, David

      Rost, Peter

      Colvin, Michael

      Lamont, Norman

      Royle, Sir Anthony

      Cope, John

      Lang, Ian

      Sainsbury, Hon Timothy

      Cormack, Patrick

      Latham, Michael

      Scott, Nicholas

      Corrie, John

      Lawrence, Ivan

      Shaw, Michael (Scarborough)

      Costain, A. P.

      Lawson, Nigel

      Shelton, William (Streatham)

      Crouch, David

      Lee, John

      Shepherd, Colin (Hereford)

      Dean, Paul (North Somerset)

      Le Marchant, Spencer

      Shepherd, Richard (Aldridge-Br hills)

      Dickens, Geoffrey

      Lennox-Boyd, Hon Mark

      Shersby, Michael

      Dorrell, Stephen

      Lewis, Kenneth (Rutland)

      Skeet, T. H. H.

      Dover, Denshore

      Lloyd, Ian (Havant & Waterloo)

      Smith, Dudley (War. and Leam'ton)

      Dunn, Robert (Dartford)

      Lloyd, Peter (Fareham)

      Speed, Keith

      Durant, Tony

      Loveridge, John

      Speller, Tony

      Dykes, Hugh

      Lyell, Nicholas

      Spence, John

      Eden, Rt Hon Sir John

      McCrindle, Robert

      Spicer, Michael (S Worcestershire)

      Edwards, Rt Hon N. (Pembroke)

      Macfarlane, Neil

      Sproat, lain

      Elliott, Sir William

      MacGregor, John

      Squire, Robin

      Emery, Peter

      MacKay, John (Argyll)

      Stainton, Keith

      Eyre, Reginald

      Macmillan, Rt Hon M. (Farnham)

      Stanbrook, Ivor

      Fairbairn, Nicholas

      McNair-Wilson, Michael (Newbury)

      Stanley, John

      Fairgrieve, Russell

      McNair-Wilson, Patrick (New Forest)

      Steen, Anthony

      Faith, Mrs Sheila

      McQuarrie, Albert

      Stevens, Martin

      Farr, John

      Madel, David

      Stewart, Ian (Hitchin)

      Fell, Anthony

      Major, John

      Stewart, John (East Renfrewshire)

      Fenner, Mrs Peggy

      Marland, Paul

      Stokes, John

      Fisher, Sir Nigel

      Marlow, Tony

      Stradling Thomas, J.

      Fletcher, Alexander (Edinburgh N)

      Mates, Michael

      Fletcher-Cooke, Charles

      Mathe, Carol

      Tapsell, Peter

      Fookes, Miss Janet

      Maude Rt Hon Angus

      Taylor, Robert (Croydon NW)

      Forman Nigel

      Mawby, Ray

      Taylor, Teddy (Southend East)

      Fowler, Rt Hon Norman

      Mawhinney, Dr Brian

      Tebbit, Norman

      Fox, Marcus

      Maxwell-Hyslop. Robin

      Temple-Morris, Peter

      Fraser, Rt Hon H. (Stafford & St)

      Mayhew, Patrick

      Thompson, Donald

      Fraser, Peter (South Angus)

      Mellor, David

      Thorne, Neil (llford South)

      Fry, Peter

      Miller, Hal (Bromsgrove & Redditch)

      Galbraith, Hon T. G. D.

      Mills, lain (Meriden)

      Thornton, Malcolm

      Gardiner, George (Reigate)

      Mills, Peter (West Devon)

      Townend, John (Bridlington)

      Gardner, Edward (South Fylde)

      Miscampbell, Norman

      Townsend, Cyril D. (Bexleyheath)

      Garel-Jones. Tristan

      Mitchell, David (Basingstoke)

      Trippier, David

      Gilmour, Rt Hon Sir Ian

      Moate, Roger

      van Straubenzee, W. R.

      Glyn, Dr Alan

      Molyneaux James

      Vaughan, Dr Gerard

      Goodhew, Victor

      Monro, Hector

      Viggers, Peter

      Goodlad, Alastair

      Moore, John

      Wakeham, John

      Gow, Ian

      Morris, Michael (Northampton, Sth)

      Waldegrave, Hon William

      Gower, Sir Raymond

      Morrison, Hon Charles (Devizes)

      Walker, Rt Hon Peter (Worcester)

      Gray, Hamish

      Morrison, Hon Peter (City of Chester)

      Walker, Bill (Perth & E Perthshire)

      Greenway, Harry

      Mudd, David

      Walker-Smith, Rt Hon Sir Derek

      Grieve, Percy

      Murphy, Christopher

      Walker, Gary

      Griffiths, Eldon (Bury St Edmunds)

      Myles, David

      Walters, Dennis

      Griffiths, Peter (Portsmouth N)

      Needham, Richard

      Ward, John

      Grist, Ian

      Nelson, Anthony

      Warren, Kenneth

      Grylls, Michael

      Neubert, Michael

      Watson, John

      Gummer, John Selwyn

      Newton, Tony

      Wells, Bowen (Hert'rd & Stev'nage)

      Hamilton, Hon Archie (Eps'm&Ew'll)

      Normanton, Tom

      Wheeler, John

      Hamilton, Michael (Salisbury)

      Onslow, Cranley

      Whitelaw, Rt Hon William

      Hampson, Dr Keith

      Oppenheim, Rt Hon Mrs Sally

      Hannam, John

      Osborn, John

      Whitney, Raymond

      Haselhurst, Alan

      Page, John (Harrow, West)

      Wickenden, Keith

      Hawkins, Paul

      Page, Richard (SW Hertfordshire)

      Wiggin, Jerry

      Hawksley, Warren

      Parkinson, Cecil

      Wilkinson, John

      Heddle, John

      Parris, Matthew

      Williams, Delwyn (Montgomery)

      Henderson, Barry

      Patten, Christopher (Bath)

      Winterton, Nicholas

      Hicks, Robert

      Pattie, Geoffrey

      Wolfson, Mark

      Higgins, Rt Hon Terence L.

      Pawsey, James

      Young, Sir George (Acton)

      Hill, James

      Peyton, Rt Hon John

      Younger, Rt Hon George

      Hogg, Hon Douglas (Grantham)

      Pollock, Alexander

      Holland, Philip (Carlton)

      Porter,

      TELLERS FOR THE NOES:

      Hooson, Tom

      Powell, R Hon J. Enoch (S Down)

      Hordern, Peter

      Price, David (Eastleigh)

      Mr. David Waddington and Mr. Peter Brooke

      Howell, Rt Hon David (Guildford)

      Question accordingly negatived.
      Further consideration of the Bill adjourned.—[Mr. Newton.]
      Bill, as amended (in the Standing Committee), to be further considered tomorrow.

  BRITISH STEEL CORPORATION (CHAIRMAN)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Newton.]
  Mr. Speaker: The debate will last for two hours and 51 minutes. Clearly it is impossible to call all right hon. and hon. Members who have indicated that they wish to speak. I say that now to avoid nervous tension later.
  7.8 pm
  The Secretary of Stale for Industry (Sir Keith Joseph): In addition to opening the debate, with the leave of the House I should like to reply to questions that arise during it.
  I begin with a statement on which all will agree. There cannot be many jobs of a difficulty or importance exceeding that which we are discussing tonight. The British Steel Corporation is a huge organisation which now disposes of a great deal of modern and good plant, some of it manned and working to international standards, but much of it, alas, overmanned and uncompetitive. The corporation serves what is now a weak home market, with three of its main using industries—the shipbuilding industry, the car industry and the mechanical engineering industry—in a relatively depressed state and the world supply of steel exceeding the demand. Therefore, steel is a fiercely competitive international trading commodity in a buyer's market.
  There has been heavy investment by the taxpayer of thousands of million of pounds over the last few years under Governments of both parties. As the House is aware, losses falling on the taxpayer have amounted to £1,250 million over the last four and a half years. I repeat that there is much good modern plant and I emphasise—I do not think that there is any disagreement—that the corporation contains a great deal of talent, skill and pride.
  It is as a result of this background—worth a great deal to the country and to those who work for or depend upon the British Steel Corporation and the taxpayer—that the present prospects of continuing losses can be reversed. To achieve a transformation in the corporation's affairs will require an enormous
  1826
  effort by all concerned, and in that effort top leadership can be decisive. Over many months, since the approach of the end of tenure by Sir Charles Villiers later this year, the Government have been seeking the right person to succeed him as chairman.
  A job specification was prepared which sought a combination of ability, experience, character and leadership. We considered many names, nearly all of them British. A number of very senior, and some less senior, people in industry were approached. I can tell the House that for my part I should have been happy to secure any one of a number of candidates who were approached. Each would have filled many, if not all, of the requirements of the job specification.
  The fact is that most of those who were approached declined either because they already occupied highly responsible positions and felt great obligations or because they did not feel that they wished to change career to take up such an exposed and daunting task in the British Steel Corporation.
  There were more or less prolonged discussions with three particularly suitable British men, but, after discussions, two decided that they could not leave their present heavy responsibilities. One of them decided that he would not take the job because he feared, for one reason or another—possibly ministerial interference—that he would not be free to carry out the policies that he thought would be necessary to transform the prospects for the corporation.
  I must tell the House emphatically that money was not a critical obstacle in a single case. I repeat that I should have been happy if any one of those three—and in fact some of the other candidates who were considered—had felt able to take on the task. However, without any imputation against any of those men, I believe that—except in the matter of age—Mr. Ian MacGregor meets the job specification at least as well as, if not better than any other person considered.
  Dr. Jeremy Bray: Before the Secretary of State leaves the question of the candidates, will he tell the House whether he approached anyone within the British Steel Corporation?
  Sir K. Joseph: A number of names within the corporation were considered. I did not consider anyone within the corporation up to the point of discussion, because in my judgment, and upon the advice I received, I did not feel that any of those under consideration were, in their present state, suitable for this enormously demanding task—or as suitable as those whom I had approached.
  Mr. Ian MacGregor—I want to convey this to the House—is not a man with a single, simple solution to the problems of the BSC. He is not dedicated to tackling overmanning and excessive productive capacity only. He is a man who has in mind a wide range of possibilities that will help the corporation and the country. He is an example of the type of man of whom I wish we had more in this country. He is a technologist—a metallurgist—who has become an extremely successful industrialist. He is able, experienced, determined and has a powerful and friendly character. He is willing to interrupt a career in which he is a great success, in which he has very high earnings indeed, and which he finds congenial, to take on a daunting task in an extremely exposed position.
  One of the reasons why he is willing, as far as I can see, to take a dramatic drop in earnings and take on this difficult task is a desire to serve the country in which he was born and brought up.
  Having identified the man, we then negotiated the terms necessary to secure him. There was a lengthy bargaining period. The terms that resulted are unorthodox. They reflect the circumstances, especially Mr. MacGregor's desire to remain a partner in Lazard Freres, of New York, in which he has invested much of his savings.
  Mr. Bob Cryer: Will the Secretary of State confirm that, apart from the salary for the chairman of BSC, he had no legal authority to negotiate any financial arrangement with Lazard Brothers, and that such an arrangement cannot be a binding legal contract unless, and until it receives the approval of the House of Commons?
  Sir K. Joseph: May I correct the hon. Member for Keighley (Mr. Cryer)? I have legal authority to negotiate. I have no legal authority to pay except from the
  1828
  Contingencies Fund, subject to the agreement of the House.
  Mr. Dennis Skinner Mr. Dennis Skinner (Bolsover) rose—
  Sir K. Joseph: I must get on. I intend, with the leave of the House, to answer questions during the debate. May I make progress now?
  The terms agreed were £675,000 down when Mr. MacGregor takes up his responsibilities. Two-thirds of that sum will be repayable, pro rata, if Mr. MacGregor does not complete his three-year term. The first payment to Lazard Freres is due on 1 July. It was a necessary part of the agreement to secure Mr. MacGregor's services that the first payment should be made to Lazard Freres on the day on which Mr. MacGregor took up his appointment as chairman of the British Steel Corporation and ceased to be a joint partner of Lazard Freres.
  Here I come to the point made by the hon. Member for Keighley, and I had better deal with it precisely. There is no statutory authority for the payment to Lazard Freres, but, as is usual when non-recurrent expenditure arises, authority will be sought under the Appropriation Act by means of a Supplementary Estimate to include a special sub-head in my Department's Vote. That will come forward for consideration as part of the Summer Supplementary Estimates in the normal way.
  Since this Estimate will not be approved by 1 July it is intended to use the Contingencies Fund to make the first payment to Lazard Freres. This is the usual procedure when a Government enter into a commitment of this kind.
  Mr. John Morris Mr. John Morris (Aberavon): May I ask the Minister on this point—
  Sir K. Joseph: No.
  Mr. Morris Mr. Morris rose—
  Mr. Deputy Speaker (Mr. Richard Crawshaw): Order. I remind the House that we are short of time, and any interventions will increase that difficulty.
  Mr. Morris Mr. Morris rose—
  Mr. Deputy Speaker: Order. The Minister is obviously not giving way. Sir Keith Joseph.
  Mr. Morris Mr. Morris rose—
  Sir K. Joseph: No. I am not giving way. I shall be specifically asking leave of the House to reply to questions raised during the debate.
  In addition to the first payment, which I have described, there will be a retrospective fee against performance of up to £1,150,000, which I shall go into in more detail shortly. These two payments together form the compensation, not to Mr. MacGregor, but to the Lazard Freres New York partnership for the loss of the services during three years of a very profitable and active partner now contributing to that company's revenue and profits. I repeat that these payments do not go to Mr. MacGregor direct. I shall come to the implications for Mr. MacGregor shortly.
  I repeat that nearly two-thirds of the payments are conditional upon the results that Mr. MacGregor achieves. The maximum payment may seem big. It is very small in comparison with the cost to the taxpayer, the country and the industry if present losses are not stemmed.
  I am not saying that no other manager in this country could have stemmed those losses, at least to some extent. I am saying that, for the various reasons that I have explained, no one that I approached was willing to take on the job. I judge, moreover, that Mr. MacGregor is at least as capable, if not more capable, of reversing the losses as anyone else. I remind the House that the losses are running at about £1 million a day. If the full compensation is earned and paid it will be a real bargain for the country and a real benefit to those who work in the nationalised steel industry.
  Could anyone else have done the job for less? I have tried to explain to the House that no one we judged as suitable as Mr. MacGregor was ready, for one good reason or another, to take the job.
  Mr. MacGregor himself will earn £48,500, the salary laid down by the Review Body on Top Salaries, for being chairman of BSC. He will keep some fees from other directorships. While he is chairman of British Steel, he will cease to be a full partner—that is, an active or general partner—of Lazard Freres New York and will become what is called a limited partner. As one of the class of limited partners who have been full partners,
  1830
  he will get a share of the profits of the partnership. The capital that he has built up during his career is to a large extent invested in the partnership, and of course, he takes the risk of bearing a share of any loss that the partnership experiences.
  If, after his chairmanship of British Steel, he returns to full partnership, he will get the larger share appropriate to full partners. The details of the share that goes to limited ex-general partners and to general partners or full partners are between Lazard Freres New York and Mr. MacGregor.
  Mr. Phillip Whitehead: Will the right hon. Gentleman give way?
  Sir K. Joseph: I think not. I shall do my best to answer questions later.
  To the extent that the compensation payments form part of the income and profit of Lazard Freres New York, Mr. MacGregor's benefit from them will derive solely from his position as a continuing partner, limited or full, in the firm.
  Mr. John Morris: Will the right hon. Gentleman give way?
  Sir K. Joseph: No, I am sorry.
  We have been assured that no direct payment is being made to Mr. MacGregor out of the money paid and payable from here to Lazard Freres New York. The normal tax rules will apply.
  I assert that in my view we could not have got this man for less, and I repeat that nearly two-thirds of the maximum payment that may be payable will be conditional upon results.
  I now want to describe the process by which the business and financial objectives of British Steel under Mr. MacGregor will be set. I shall go on to describe the quite separate process for assessing his performance in order to determine the amount of any performance-related final payments to Lazard Freres New York. The two processes of determining the objectives, on the one hand, and of appraising Mr. MacGregor's performance against those objectives, on the other hand, will be quite separate. It is important for the House to understand this.
  Mr. Leslie Spriggs: Will the right hon. Gentleman give way?
  Sir K. Joseph: I am sorry; I am not being discourteous. If it gives me leave, the House will have the opportunity to listen to my answers to questions at the end of the debate.
  The objectives of different nationalised industries vary with circumstances. They normally include a financial target. The targets are set in discussion between the Government and the management of each industry. When Mr. MacGregor has been able to take stock of British Steel's present circumstances, I shall discuss appropriate further targets with him. I have not changed the terms of the £450 million external financing limit for this year. Mr. MacGregor knows the importance that the Government attach to this limit.
  At the apt time, the question of a capital reconstruction will be decided by a similar process of discussion between Government and management. So will the BSC's future structure, including possible sales of plants to the private sectors or private participation in various works. But Lazard Freres will play no part whatsoever in any of these discussions about targets or structure for the BSC.
  I now turn to the quite separate process of assessing the performance criteria for Mr. MacGregor. The criteria are to be agreed by the end of October this year between Mr. MacGregor and me, in consultation with Lazard Freres.
  Mr. Cryer: What a cosy arrangement!
  Sir K. Joseph: They will be applied by a performance review committee—two members each, nominated by Lazard Freres and me, under a chairman acceptable to each of us. The committee will be asked to assess how far Mr. MacGregor establishes the health and strength of British Steel over three or four years from 1 March 1981.
  The criteria will include factors that are quantitative and factors that are qualitative. The criteria might include: the achievement of financial targets; the achievement of a specified level of results by British Steel in the year ending 31 March 1984; the share of the United Kingdom market being achieved by British Steel; the satisfactory establishment of a strong and healthy organisation through, for example, an effective corporate structure; management strength and stability; labour relations stability;
  1832
  and improved productivity. I repeat that some of these criteria are quantitative and some are qualitative.
  If, as I believe, Mr. MacGregor can put BSC on a healthy footing in all these respects, any payment by results will be worth every penny.
  Let me emphasis this: unless Mr. MacGregor is judged to have improved BSC's health and strength, as measured by each of the criteria, there need be no final payment. Only if he achieves total success will the final payment by results be at the maximum. The first instalment of the payment by results would not become due until April 1984, and any second instalment not until April 1985. So the BSC under Mr. MacGregor will need to have shown steady and lasting improvement.
  Only if Mr. MacGregor ceased for any reason to be chairman before the end of the three years would a recommendation about the payment by results be made sooner, and in that case against the maximum sum reduced in proportion to his period of service. It would be open to the review committee to recommend upwards or downwards in the light of the circumstances leading to any termination of the contract because of serious disagreement between Mr. MacGregor and the Secretary of State at the time.
  Mr. MacGregor must be allowed to tackle the task of leading the BSC to enduring profitability, subject to the exigencies of public finance and to the statutory duties laid upon the corporation and upon myself by the Iron and Steel Acts. I have assured him of as free a band as possible. I hope that the House, whatever its judgment of what I have thought fit to negotiate in the interests of British Steel and for the nation as a whole, will join me in wishing Mr. MacGregor great success in his daunting task.
  Mr. Skinner: On a point of order, Mr. Speaker. Is it not the practice of the House that interests must be declared in such matters? I wish to draw to your attention, Mr. Deputy Speaker, an important development regarding Lazard UK, which has a partnership with Lazard Freres. Lazard London is 79½ per cent. owned by S. Pearson and Son Limited, of which Lord Cowdray is chairman. That same firm gave £15,700 to the

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  Tory Party in 1979, and also gave £1,000 to the Secretary of State when he was in charge of the Conservative Party's Centre for Policy Studies. That money should be handed back. I ask for your ruling, Mr. Speaker.
  Sir K. Joseph: Further to that point of order, Mr. Speaker. There is no concealment of the fact that Lazard London is a limited partner in Lazard Freres New York. It is one of a considerable number of limited partners.
  Mr. Speaker: I have listened to the point of order. I do not think that it is a matter for the Chair at present.

ROYAL ASSENT
Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:

1. Import of Live Fish (England and Wales) Act 1980

2. Iran (Temporary Powers) Act 1980

3. Isle of Wight Act 1980

BRITISH STEEL CORPORATION (CHAIRMAN)
Question again proposed, That this House do now adjourn.
7.33 pm
Mr. John Silkin: In another place yesterday, my noble Friend Lord Bruce of Donnington raised the question which we are debating now. He asked a number of searching questions, which the Minister of State, Lord Trenchard, did not attempt to answer. Instead, Viscount Trenchard gave a blanket reply. He said of the Secretary of State:
" he sometimes follows a complicated path with very great clarity, and it sometimes takes time for the rest of us to absorb the process of his actions and his reasoning; so we fail, initially at least, to understand his correct conclusions, and they are very often correct.
In this case our minds were perhaps too encrusted in the framework of Britain, and perhaps in the perennial sickness of some of our nationalised industries. Perhaps we were too unimaginative to grasp the world dimension in which his mind had been working."—[Official Report, House of Lords, 14 May 1980; Vol. 409, c. 310–11.]
I understand that the text of that speech had been approved by the Secretary of State and, presumably, by the Prime Minister. Therefore, it represents definitive Government policy. If the Secretary of State reaches a decision, we must never challenge it—he is grasping the world dimension. It may be that we mere mortals are not able to exist in the rarefied atmosphere in which the Secretary of State exists. Unfortunately, as my hon. Friend the Member for Keighley (Mr. Cryer) pointed out, the House has the right and the duty to vote the money that is concerned in this matter. It is to that question that we must direct ourselves, and not to the grasp of the Secretary of State on world dimensions.
The Economist claimed that the final details of this somewhat complex arrangement were agreed over lunch in an Italian restaurant near Whitehall. To us mere mortals a meeting in such a venue would have been rather difficult—but not for the right hon. Gentleman. In between the minestrone and the zabaglione, the right hon. Gentleman satisfied himself that he had picked the right man, and on the right terms. Nevertheless,

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having listened to the right hon. Gentleman's speech this afternoon, and having read the speech of Viscount Trenchard yesterday, I find that none of the real questions has been answered. We are entitle to ask whether the Secretary of State asked those questions of himself during that pleasant Italian lunch, or at any time before.
The Secretary of State has kindly said that he will answer every question that we ask him. I have six questions. Perhaps a note can be taken of them. It is necessary to divide the somewhat complex arrangement into the three payments that are under consideration. The first payment will be £48,500—the normal terms for a chairman of a nationalised industry. The second payment works out at £225,000 a year over a three-year period, and will be paid to Lazard Freres. The third payment is a performance payment of up to £1·15 million.
My first question is: will the £225,000 a year, which is to be paid to Lazard Freres, be subject to United Kingdom tax, or is it free of tax? There is a rather important distinction between the two. If it is subject to United Kingdom tax, the net payment would amount to £122,588 a year—a considerable sum in any event, as I think the House would agree. If that payment is grossed up, it is equivalent to a figure of £546,575 a year.
Secondly, will the performance payment of £1·15 million be subject to United Kingdom tax, or is it free of tax? If it is subject to United Kingdom tax it is equivalent to a sum of £223,388 a year—a considerable sum indeed. If it is free of tax it is equivalent to a gross payment of £941,575 a year. The Secretary of State can work out those figures on his own computer.
All three payments together, if they are subject to tax amount to £369,765 a year. If they are free of tax, they are equivalent to a grossed-up payment of £1,577,075. When such sums of money are considered it is irrelevant whether the money is paid direct to an individual or to his partnership. His interest in that partnership, whether it be direct or indirect, still exists. Such sums of money as are received by the partnership must inevitably increase the goodwill of that partnership and, therefore, increase his stake in it.
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We heard from the Secretary of State that Mr. MacGregor sank his life savings into Lazard Freres. That is up to him. Inevitably, the value of those savings must grow if such payments are made. [HON. MEMBERS: " There is nothing wrong with that."] Conservative Members may not think that there is anything wrong with it, but I can assure them that that is not the view that will be taken throughout the country.
Thirdly, Mr. MacGregor is 67 years old. I make no point about that, except to say—[Interruption.]—I shall only detain the House longer if Conservative Members keep on. I am trying to put a rather important question to the Secretary of State, who said that he will answer my questions. Therefore, if Conservative Members will permit me, I shall ask the question. Mr. MacGregor is 67. Therefore, he is too old to participate in the normal pension plan. Has a special pension plan been arranged for him? If so, is it additional to the payments that have already been quoted? If so, what is the cost to the long-suffering taxpayer, if I may use a Homeric epithet which the right hon. Gentleman so often uses?
Fourthly, Mr. MacGregor starts his term of duty as chairman of BSC on 1 July. If, say, after one day, on 2 July, he should unfortunately die, or suppose he should chuck the job, will that £225,000 be immediately forfeit to Lazard Freres? It is not a financial impossibility that, at any rate, he may decide to chuck the job. Other nationalised industry chairmen who have had to deal with the right hon. Gentleman have not been slow in doing so. Therefore, will that sum be forfeit immediately?
Fifthly, we have heard about some of the criteria which the right hon. Gentleman hopes to agree with the performance review committee, when the time comes. As the right hon. Gentleman spoke a little quickly, I may have miscounted, but I counted about 10. However, I assume that Mr. MacGregor would get a mark for each. Therefore, it would seem that he would get £110,000 or so for every mark which he earned. That would seem to be the basis. But suppose there is disagreement. That is not fanciful either, because there are two Lazard Freres people on the committee, two Government people and an independent chairman—a committee of five

1837
—which as any lawyer knows is a recipe for disagreement. Can Lazard Freres sue the Government if they resist any claim, just as Mr. Hoppe, who was appointed by a previous Conservative Government to Harland and Wolff, did in his time?
My sixth question relates to Messrs. Russell Reynolds, the celebrated head-hunters. I noticed that Lord Trenchard, having been asked the question direct, did not reply to it. There seems to be some confusion as to what its remuneration is. This is a matter of which the House should be aware. I understand that Russell Reynolds is being remunerated according to a percentage of Mr. Mac-Gregor's salary. Perhaps we could be told what that percentage is. Will Russell Reynolds also be entitled to a percentage of Lazard Freres' fee, either of £675,000 or of the figure of up to £1·15 million? It might be of use if the House were informed. If the fee is not payable by the British Government, will it be paid by Lazard Freres, because that situation sometimes arises when agents are employed?
The arrangement itself seems to be a very strange compensation for loss of services. The right hon. Member for Orkney and Shetland (Mr. Grimond) perceptively and effectively pointed that out when the Secretary of State made his statement the other day. After all, loss of services means just that. Those services are lost whether Mr. MacGregor performs well or badly. I know very little about Lazard Freres, but I do not believe that its altruism is such that it would say "We are prepared to lose £1·15 million if MacGregor does not fit your criteria ". Therefore, this remains a very odd agreement indeed.
I turn again to Messrs Russell Reynolds. They are paid on a percentage of salary. I make no complaint about that; it must be so. Russell Reynolds are good businessmen, and the right hon. Gentleman is rightly interested in the question of profit. It must be in the company's interest to produce the more highly-paid candidates. That brings me to something which has bedevilled Governments of all sorts—the question of how people are chosen or appointed in respect of the chairmanship of quangos or nationalised industries.
As I think every hon. Member knows, they come by a list of the great and the
1838
good which the Civil Service Department—it used to be the Treasury—produces. The great and the good are rather rare in number, because in order to be great or good one must have existed in the favour of the Establishment for a rather long time, and there are not many of them. In addition, they get a bit aged as time goes by.
What happens to head-hunters? They also go immediately for their list of the great and the good. Indeed, I assume that some of the names are supplied by the Civil Service Department. They do what is called " a trawl ". In answer to a question from one of my hon. Friends, the right hon. Gentleman said that Russell Reynolds had considered 31 people—not much of a trawl; more a fish farm when one thinks of it. [HON. MEMBERS: " Did they ask you? "] No, and I would have had to consider the position carefully, because my ideas of shaping the BSC are, first, the right ones, and, secondly, very different from those of the Secretary of State. Therefore, 31 represents a very small section of those who perhaps would have been capable of doing the job, myself included.
I notice that Mr. MacGregor was quoted in the Financial Times as saying that he felt it was an honour to be asked to help to bring about a reverse of the decline in industrial Britain. Good for him. I make no cheap point about it. But others have felt the same. There must be more than 31 people in this country who have also felt the same thing. There is the example of Mr. Atkinson, the new chairman of British Shipbuilders. In his opening remarks, the right hon. Gentleman pointed out how similar the two industries were. Both are in a position of difficulty, both are facing monumental world competition and so on. Mr. Atkinson said:
"As far as I am concerned I am and always have been an intensely patriotic person. I have always said and always will say ' I will serve my country wherever and whenever required'."
Mr. Atkinson did not say " I am terribly sorry, but someone else ought to be paid for my loss of services." He accepted a salary cut of £7,000 a year in order to do the job.
Again I do not make a party point. But I think that here is an opportunity for a change. It is time that we got rid of the short trawl, paying head-hunters vast

1839
sums of money and taking the list from the great and the good. A number of my hon. Friends have come more and more to the conclusion—
Mr. Peter Viggers Mr. Peter Viggers (Gosport) rose—
Mr. Silkin: No, I shall not give way. A number of my hon. Friends have come more and more to the conclusion that these posts should be publicly advertised. That seems to be the right way of doing it.
In this case, a distinguished man has been brought across the water to take over British Steel, an industry about which he knows absolutely nothing.
What do people in middle management feel? What do people in that industry feel? During the general election campaign we heard a lot from the Conservative Members about the lack of incentive for middle management. All this was supposed to be cured the moment a Conservative Government came to power. What kind of an incentive is it that says " You may strive as hard as you will, but it does not matter because we shall bring in someone else over your head to the chair—someone who knows nothing about the business. Furthermore, just to rub it in, we shall pay the equivalent of £1,577,075 "—if I am right about it being tax-free—" for the privilege of doing so "? If this is intended to raise the morale of those in middle management, it will have exactly the opposite effect. British industry should be self-seeding, and it should give all those with ability within the industry the opportunity to rise from the shop floor or from management to the chairman's chair. That should be the basis on which we should work.
The damage has been done, subject to a vote of the House. Mr. MacGregor has been appointed, but he faces some rather critical judges in the job ahead. First, he will be judged by the work force. That is the same work force as the Secretary of State, in stark contrast to what he has offered Mr. MacGregor and his friends, thinks is worth only an additional 2 per cent., despite inflation at 21 per cent. I have heard it said—indeed the Minister of State said it yesterday—that we must not judge these payments by British standards, because they are very common in the United States. If such payments to chief executives are commonplace in the United States, perhaps it is about time the
1840
steel workers began to get United States wages too, because the United States steel industry is also in great difficulties.
Mr. MacGregor will also be judged by middle management, because it has the knowledge, the industry and the expertise. Middle management will know whether Mr. MacGregor is taking advantage of the opportunities that have been offered to him as chairman.
Finally, Mr. MacGregor will be judged by this House. I wish to re-echo the final words of the Secretary of State. Of course we wish Mr. MacGregor well in his job, provided that he does that job well. The truth of the matter is that Mr MacGregor will be in a position of great strength if he cares to use it. The Secretary of State has paid so much for him that he really cannot afford to treat him like Sir William Barlow or Sir Leslie Murphy of the NEB. He dare not do it. The Secretary of State is the prisoner of the new chair man and not the other way around. The question is, has the new chairman the courage, imagination and wisdom—
Mr. Skinner: He has the money.
Mr. Silkin: Yes, he has the money, but does he have the other qualities which are much more important? Has he the courage, wisdom and imagination to reverse the trend in the industry under the Secretary of State? Will he reverse the policy on redundancies? We shall all judge him by that. Will he tell the Secretary of State that he must cast aside his rigid and absurd timetable that was originally imposed upon the industry and from which it still suffers? Will he see that steel does not suffer from lack of investment? We do not know. We must suspend our judgment until we see what happens. We hope that Mr. MacGregor has that wisdom and courage. If he does not have it he will find that he has critics enough and that he must tread a thorny path. If he takes up the challenge, we shall wish him all the luck in the world. But in the meantime this staggering arrangement, entered into by the Secretary of State, who obviously has not the faintest idea of the sort of people with whom he is dealing, without the authority of the House, is something that we shall protest about in the Lobbies tonight.
7.55 pm
Mr. John H. Osborn: I speak as one who has been

1841
in the steel industry. I confess that I do not know Mr. MacGregor. When I was in the industry in 1950, and then again when I was in the House in 1970 I found that Conservative Ministers had to take responsibility for managing the corporate State, State Socialism, and the Socialist machine. I find that now, too. The very fact that we are having this debate today has made my right hon. Friend's task more difficult. He is in danger of being drawn into being a good Socialist caretaker of a Socialist legacy. The British Steel Corporation could be a monument to Socialist dogma if we do not look after it. There is a great temptation for my right hon. Friend to fall into a trap. He has resisted it so far, but I am conscious that he is having a difficult time in putting his case.
The right hon. Member for Deptford (Mr. Silkin) made one or two other suggestions. He said that we should publicly advertise these posts and publish the curricula vitae of the candidates. That would put many people off. Most appointments are made by selection from within, whether the company is from this country or anywhere else. The fact that we had a special form of selection for the new head of the BSC presented any person offering himself as a candidate with a challenge. Mr. MacGregor put his name forward and was chosen.
Before I entered the House in 1958 I took the view that politics were too all-embracing and the less that Governments took on the better. My right hon. Friend the Prime Minister has also said this time and time again. In 1958–59, I added the rider that the less politicians concerned themselves with, the better. This might have ruined my chances of the Conservative candidature for the Hallam constituency, but I felt that if my political opponents thought that the road to power was political, I, too, was prepared to go along it with a view to ensuring the maximum decentralisation and flexibility.
I regret that basic steel is still a State monopoly. In the debates that we had during the strike, I claimed that the corporation was inevitably a dinosaur and that unless it lost its imponderous characteristics it would destroy the jobs of many of its workers. The strike of
1842
the last three months has been expensive—expensive, too, to everyone who is not in the industry. It has been a bonanza for our competitors and it will take a long time and a lot of courage to overcome the dangers to job opportunities in a city such as mine.
Mr. Frank Hooley: The hon. Member is talking nonsense when he mentions dinosaurs. He knows perfectly well that in Sheffield we have the finest stainless steel complex in Europe, and nearby we have the best rolling and bar mills, which are producing up to Japanese standards. The hon. Member is talking rubbish.
Mr. Osborn: We must consider the fact that the British Steel Corporation has been losing almost £1 million a day. This is a great challenge to everyone in the industry.
In another place Lord Trenchard had to explain the virtues of Mr. MacGregor, after Lord Bruce of Donington had ridiculed the appointment. The right hon. Member for Deptford asked who had been approached and who had been turned down. I think that this is the most deplorable example of the difficulties of running any State industry. We have mentioned that the British Steel Corporation loses £1 million a day. In his statements on 1 May and subsequently the Secretary of State gave the terms of the appointment. Of course, there is the figure of £1,150,000. Depending on the outcome, one could call this a bonus payment for success, part of which is a transfer fee. Against that, hon. Members must look to the future of British Steel bulk steel, and to what is happening in the world.
There has been much press comment on my right hon. Friend's decision. In The Times on 12 May, Catherine Gunn pointed out that top industrial salaries in the United Kingdom could be £100,000 a year. The United States list of companies paying high salaries included Metro-Goldwyn-Mayer, Mobil, McGraw-Edison, Revlon and Hughes Tool. They all provide good salaries, with the chance of top directors participating in the capital structure of the companies.
Reference has been made to Mr. Robert Atkinson, who took a pay cut to become the head of a nationalised industry. Many people have claimed that my right hon.

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Friend's appointment of Mr. MacGregor was an extraordinary political decision, but a decision had to be made. I was in Sheffield when my right hon. Friend made his decision. It stunned those in both the public and the private sectors, because it was an unusual if not extraordinary decision. I found it difficult to defend the decision, but we have to bear in mind that the total sum involved is only two days' losses of the BSC. I do not resent reward, because whoever takes the job under my right hon. Friend will have a difficult and unenviable task.
I have spent two days this week at the annual meeting of the Metals Society, at a conference of metallurgists, managers and leaders of steel industries throughout the world. I spent more time there than usual because I wanted to sense what is going on in other countries. Last year's president was a Dutchman. The current president, an Australian, was a professor at Sheffield University and is Goldsmith Professor at the Department of Metallurgy, Cambridge, which is where I gained my degree. The department course at the metallurgical department taught me to look out for the sources of materials for all metal industries, including the steel industry, and I could well have gone into mining.
At the Metals Society I had conversations with the heads of steel industries in Japan, Hungary and Yugoslavia, and even with a delegation from China which visited Sheffield this week. There is a company called Climax Molybdenum, one of the biggest suppliers of molybdenum to British Steel. It is part of AMAX. Mr. MacGregor has done much to bring together Climax Molybdenum and the American Metals Company.
I took the precaution of speaking to those in the BSC, mainly the technological management. They realised that a decision had been made and I sensed that they wanted it to work and rather resented the fact that I, for example, had a right to question the decision. The message that I received was " The decision has been made, give it a chance." If hon. Members spoke to the managements in the steel factories in their constituencies they would find the same reaction.
If my right hon. Friend and Ian MacGregor can pull the BSC round and
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bring in some of the changes that are necessary, a sore for our country could become something of which we are proud.
The right hon. Member for Deptford spoke about the world-wide dimension and referred to Lord Trenchard's speech in another place. In the past two days I have learnt of new steel plants going up in Yugoslavia, Algeria, Mexico, Venezuela and Brazil. The iron ore and the cheap materials are to be found in some of the Latin American countries. I remember making a speech, as a Conservative candidate, saying " Wealth is where wealth is." I could go into the history of why the steel industry moved to Sheffield. The raw materials were there a century and a half ago, but that is not so true now.
I have been concerned with materials through the parliamentary and scientific committee. A number of members of that committee attended a meeting in November, organised by the Metals Society and the Institute of Mining Metallurgy to take a look at the resources for the metal and engineering industries, including the steel industry.
What could the future of the BSC be? It could be that more of the industry, particularly in Sheffield, will, as the hon. Member for Sheffield, Heeley (Mr. Hooley) suggested, move into stainless steel and special steel, but one of the great difficulties of the steel industry has been to secure supplies of raw materials. We have discussed cobalt. That has been dealt with by AMAX, as have molybdenum and tungsten.
There are huge operations throughout the world. I see that AMAX is even the owner of the Selibi-Phikwe mine in Botswana, which I, with one or two Labour Members, have visited.
Therefore, the perspective of the British steel industry and the individual units within it is to be aware of where the materials come from. Mr. MacGregor is one of those who have lived with that perspective.
The cost may be high and the reward for Mr. MacGregor, if he succeeds, may be heavy, but, in spite of criticism from many of my friends outside, I congratulate my right hon. Friend the Secretary of State for being courageous and taking a chance. I wish to back it.
8.6 pm
Mr. J. Grimond: The Government justify the conditions of Mr. MacGregor's appointment by arguing that British Steel is a commercial company and must, therefore, pay international commercial rates for top management. But British Steel is not a commercial company. It is a public institution supported by the taxpayer, as the Secretary of State is constantly pointing out. The BSC does not have to raise its own money or satisfy shareholders, its directors stand in no fear of bankruptcy and it has a Minister of the Crown looking over its shoulder all the time.
The pretence that nationalised industries are ordinary commercial undertakings lies at the root of many of our troubles. We are in danger of having the worst of all worlds. They are not ordinary commercial undertakings and are subject to none of the disciplines of such undertakings. On the other hand, we are in danger of killing any spirit of public service in those undertakings that are genuine public service undertakings. The only valid reason for putting any business directly under State control is that it should not be run solely on commercial motives, but, like the Armed Forces and the Post Office, should be run as a public service answerable to Parliament.
Governments are in the process of wrecking some of those services, including the Post Office, by trying to make them into bogus commercial businesses and are, in the process, throwing away all the esprit de corps that such organisations once enjoyed. Years ago, Mr. W. R. Williams used to sit near me on this Bench. He spent much of his life in the Post Office and was as proud of it as old General Jeffreys was of the Brigade of Guards. Why? Because he had a genuine sense of public service.
What would the Army think if the Government said that they were not pleased with the performance of the Brigade of Guards and had hired an excellent German mercenary and were paying him a lot of money to smarten up the Brigade? I do not think that the Army would respond well to that.
Of course, nationalised industries are not treated as commercial undertakings. The British Gas Corporation is ordered
1846
by the Government to put up its prices and is treated as a tax collector rather than as a commercial undertaking.
Steel making should never have been nationalised. It was not an appropriate industry for nationalisation. Does Mr. MacGregor's appointment mean that the Government have decided to keep British Steel as a large nationalised undertaking run very much as at present? Is that the significance of the appointment? If so, I believe that the Government are wrong. It will not work. If the Government do not intend to keep British Steel essentially as it is—perhaps pared down—has Mr. MacGregor been given a remit to suggest different forms of organisation? For example, are the Government contemplating splitting up the steel industry into smaller units?
Can we be told exactly what Mr. MacGregor's job will be? I have listened to the Secretary of State and I have read the speech of the noble Lord, but I remain confused as to the nature of his job. It is inconceivable that in three short years he will manage the unmanageable so brilliantly that it will be all right for all time. I do not believe that that is possible. During those three years he might suggest totally different methods. What will he do? How much independence will he be given? What directions will the Secretary of State give him? The terms of the contract would be peculiar even in football circles. Presumably the £225,000 a year is free of tax. Who will pay the head-hunters? How much? Why are they necessary?
We have been assured that Mr. MacGregor is known all over the world. The Prime Minister said that everyone recognised that Mr. MacGregor was one of the most outstanding industrialists, not only in America or Japan but in the world. Presumably the Secretary of State knew him. In that case, why did he have to go to Russell Reynolds and be told something that he already knew? I do not understand why the Government had to employ such people. The extraordinary arrangement involving £1·15 million appears to be a wager. The terms of the wager are that if Mr. MacGregor does well, Lazard Freres will win. If he does badly, it will not lose. Why was the bet made? Lazard Freres is being paid for the loss of Mr.

1847
MacGregor's services. Has British Leyland been paid for the loss of his services? He was deputy chairman of British Leyland. Is British Leyland being given a cut? What services did he perform at Lazard Freres? After all, he had 50 other directorships. He could not have worked full-time for Lazard Freres. If he did, he must have been working double time, because he was working part-time for 50 other firms as well as British Leyland.
This is not a direct incentive payment. In some ways I wish that it was. Part of the reason behind this method of payment was to get round taxation. If a direct incentive payment had been made, it would have been taxable. However, if a payment is made to Lazard Freres, it is not taxable. Mr. MacGregor is a partner in Lazard Freres, and presumably he will gain considerably. Lazard Freres will avoid paying tax. I can see no other reason for entering into that strange arrangement.
If Mr. MacGregor were to put his own money into British Steel and if he were to take a risk, it would be appropriate for him to receive a share of the profits if the firm did well. He is not doing that. Neither he nor Lazard Freres is putting money into British Steel. They would not dream of doing so. He is not an entrepreneur. He is risking neither his reputation nor his capital. He is as old as, or older than I am. At my age, one's reputation is finished.
Mr. MacGregor is a public servant. Other public servants should be treated in the same way. What is being done to Sir Michael Edwardes? He is doing a good job at British Leyland. What extra payments will he receive? If this example is set, what will happen to the other heads of nationalised industries? The arrangement will have a bad effect on wage restraint in the public sector. In a recent debate I pointed out that the fundamental cause of inflation was the repeated demands for more money by institutions and unions, regardless of output. Such demands must be stopped at the top. We cannot go on chasing our own inflationary tails. We must cut that vicious circle at the top. An American President is said to have had a notice on his desk saying, " The buck stops here ". Ministers and top public servants should have notices on their desks saying " Inflationary
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drive is reversed here. No more money at the top until inflation is under control."
I regard Mr. MacGregor's appointment as an affront to those in public service. Nurses do a skilled job. Public service jobs are often more boring than running a big firm such as Lazard Freres. I suspect that that firm has its interesting moments. Some public servants are badly paid. The Government are presuming on their dedication and patriotism. They are expected to go on struggling. A wealthy man is to be paid the going rate.
If one spends one million pounds here, and another million pounds there, what is that in the affairs of the BSC? It is a mere bagatelle. How does that rate appear to nurses and to those who work hard, with a sense of public dedication?
To quote a phrase once used in reply to a question that I asked, this is indeed the unacceptable face of socialist capitalism.
I wish Mr. MacGregor well. I accept that the nationalised industries pose great difficulties for the Secretary of State. I have every sympathy with him, but I believe that the terms of Mr. MacGregor's appointment are a mistake.
8.15 pm
Mr. Michael Brown: Having listened to hollow and bogus speeches from the Opposition, I must unreservedly congratulate my right hon. Friend on this inspired appointment. I represent a constituency in which 16,000 of British Steel's employees work. Their future welfare will depend upon the success of the man who leads the BSC. They have a vested interest in his success.
I place on record how impressed everyone at that plant in Scunthorpe was when Mr. MacGregor made a private visit to the constituency on Monday and Tuesday. He was received with enthusiasm by senior managers, middle managers and union representatives. I have since spoken to a cross-section of all three sectors, and I can assure my right hon. Friend that Mr. MacGregor very much impressed those who work in the BSC.
We had a knockabout turn from the right hon. Member for Deprford (Mr. Silkin). We have heard a lot of bogus questions about pension rights and other

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questions on similar side issues. However, no Opposition Member can question Mr. MacGregor's clear ability to take on this difficult appointment. He has an international track record, and is known throughout the world. Indeed, if Opposition Members had done their homework on Lazard Freres they would have known of that reputation. His reputation is clear and beyond all doubt. Those steel managers who will have to work with the gentleman have no doubt about his ability. They have no doubt that he is the best man available for the job. No one has questioned that fact.
My right hon. Friend is to be congratulated on having spared no effort to secure the services of Mr. MacGregor. It was an unenviable task. Not many people want the job. My right hon. Friend went to great pains to stress that he approached others, but that none of them wanted the job. One can understand why they do not want the chairmanship of the BSC.
We should pay tribute to the sense of public duty that Sir Charles Villiers has displayed. What thanks has he received? All hon. Members have criticised him. He has had to bear the brunt of a tremendous amount of criticism. Any man who took on such an appointment would have to bear such criticism. It is a thankless task, and we should be grateful to anyone who takes it on. However, we do not want just anyone to take on the job. It is important to get the right man for the job. The livelihood and welfare of many of my constituents depend on Mr. MacGregor's success.
I do not begrudge him his appointment. He is receiving only £48,500. It is the transfer fee that seems to cause Opposition Members the greatest unease. If that is the price that we have to pay, I say unreservedly that it is time that we started to get off our high-horses about the chairmanships of nationalised industries and to recognise that the type of person that we want to run nationalised industries is the best, and has to be the best. It may be that in future we shall have to pay for the best.
In the past we have always regarded the chairmanship of a nationalised industry as, in a sense, a reward. There was sometimes the prospect of a knighthood, or a peerage in another place. However, the nature of the job has changed in recent
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years. We should start to take a more realistic and twentieth-century approach to the chairman of our top nationalised industries.
We should not be spending three hours of parliamentary time merely talking about the pension arrangements and one or two other issues raised by the right hon. Member for Deptford (Mr. Silkin). The steel industry has recently been through a most damaging and self-inflicted dispute. It has little time if it is to survive in the increasingly tougher international world of surplus capacity, declining demand and increasing imports into Britain. If we have to pay the price for the best man, so be it.
If Mr. MacGregor is successful, it will mean relief and encouragement for steel workers, who need reassurance for the future. I understand that Mr. MacGregor has accepted the disciplines that the Government, as guardians of the taxpayer, have rightly imposed on the corporation. These are the same disciplines as those that were imposed by the right hon. Member for Chesterfield (Mr. Varley) when he was Secretary of State.
No man can wave a magic wand when he sits in the hot seat in Grosvenor Place. Mr. MacGregor will rely on the skills of the unions, of management and of the steel workers to assist him. No one imagines that the mere replacement of one man by another solves the problem. We are all alive to the realities. However, Mr. MacGregor's job immediately is to restore morale and confidence in a flagging industry. Within days of coming to the corporation he took the trouble to make a purely private visit to my constituency. He was received enthusiastically and he was most impressive in the way in which he acquitted himself before those who have been in the industry for a lifetime.
The managing director of the Scunthorpe division of the BSC, Mr. Don Ford, has been in the industry virtually since leaving school. He recognised immediately the skills of Mr. MacGregor. One is a metallurgist and the other is an international manager. From what I have read, Mr. MacGregor recognises that we must make full use of modern technology. In Scunthorpe and elsewhere we have some of the most modern plants in the steel industry.
Technology changes constantly. I hope that Mr. MacGregor will recognise that

1851
once manpower productivity is dealt with we shall have to continue with modern technology. For example, we shall have to continue to introduce continuous casting. I hope that my right hon. Friend will recognise that it is important for a man of Mr. MacGregor's managerial ability to have freedom within the corporation to invest as much as possible in new technology. In the first instance, it is essential that we deal with manpower requirements.
Scunthorpe has agreed the rationalisation programme. I pay an unreserved tribute to the local unions that have agreed to a rationalisation programme involving the loss of 2,800 jobs. It was a difficult decision for Scunthorpe. It is a problem that has been recognised by the unions during the past two or three months. I think that reality dawned on them during the steel strike. They have recognised that it is essential that the manpower issue should be settled as quickly as possible.
There was a difficult climate in the steel industry, but towards the end of the strike I noticed a healthy realism overtaking union leaders. That realism has been present among steel workers for many months. The appointment of Mr. MacGregor, coupled with the sense of realism, is a hint of distinct optimism. There is a hint that my right hon. Friend has taken a courageous decision.
People like to be led, and they like firm leadership. That is what has impressed the ordinary steel worker in my constituency. My right hon. Friend may rest assured that there is no opposition from management, unions and the work force on the shop floor. I suggest to Labour Members that they are misleading the House if they suggest that Mr. MacGregor's appointment will be opposed.
It is important for us all to recognise that the steel industry needs a fresh approach. Nevertheless, it needs to recognise the basic reality that my right hon. Friend recognised from the moment he took on his own position. I do not underestimate the difficulties before Mr. MacGregor. I believe that his appointment is now being recognised as inspired. I wish him success. Upon that success will depend the success of the BSC and the industrial success and future of my
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constituency. I congratulate my right hon. Friend upon this appointment, and I give it my enthusiastic endorsement.
8.26 pm
Mr. John Morris: I hope that what I have to say will not be seen as an attack on an individual in the person of Mr. MacGregor. It must be acknowledged that there was not a word of that vein in the speech of my right hon. Friend the Member for Deptford (Mr. Silkin).
Mr. MacGregor has had to carry the stigma of the Secretary of State's peculiar and idiosyncratic approach to the steel industry. For us mere mortals it is difficult to follow the Secretary of State's byzantine thought processes. A peculiar arrangement has been adopted whereby Mr. MacGregor's performance is to be judged. A super-quango is to adjudge a quango chairman. We are baffled. We know not how the arrangement will work. What weight will be given to the quantitative factors? What weight will be given to the qualitative factors? All that we know is that when Mr. MacGregor is about 73 years of age in 1985 the final evaluation will be made.
The Minister has tried as best he can to explain this peculiar arrangement. We shall judge Mr. MacGregor in due course. I wish Mr. MacGregor well. I hope that he will read the report of the debate when he has the opportunity to do so.
Although Mr. MacGregor is of British origin, he has spent 35 years mainly in American industry. That does not mean that he has a close awareness of the real problems of the great British steel industry. I believe that its financial problems can be resolved reasonably. The real problem of leadership of BSC in the next few years is that of human management and personal relationships. These are the problems that Alf Robens had to face in the coal industry many years ago. It is necessary for there to be a deep awareness if we are to ensure that this great industry comes through its present problems.
There is nothing necessarily wrong in appointing someone from abroad to a key job. Different people have different but honestly held views on who is the best man for the job. However, given the Minister's track record and general approach, what weight can we put on his judgment? I hope, therefore, that it was

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not the right hon. Gentleman's decision but was considered widely within the Government. For the sake of the industry, I hope that there has been wide discussion. The industry demands and deserves the best man, whoever he is.
We are concerned about the future. Mr. MacGregor is reported to have said that he wanted to " add 2,000 yards to the runway ". If that means that he wants to get rid of more jobs than the present management intends, that is serious. However, I read Lord Trenchard's speech in the Lords yesterday when he said that Mr. MacGregor had done nothing yet to request a change in the general course. In South Wales we are deeply dissatisfied with the general course and our share of the market. We should like a change. Deep injustice is felt throughout the industry, from top management in South Wales downwards.
We fear that under this peculiar byzantine performance arrangement devised by the Minister and his advisers the measurement of performance will lie basically in short-term profitability. We shall fight bitterly and deeply to the end if that involves more job losses. However, if Mr. MacGregor's remarks about 2,000 yards more runway mean that he wants more room to manoeuvre and leap out of the straitjacket imposed on the industry by the Government, he will have our support. The present time scale of cash limits cannot be achieved. The Minister has given Mr. MacGregor, or whoever is to be chairman, an unfair start.
The new chairman should look at certain problems immediately. First, he should press the Government for urgent capital reconstruction. Why should the workers have the albatross of previous investment decisions by Governments of both parties hang round their necks after this year? Why should they bear that burden alone? A considerable part of BSC's losses is due to servicing existing capital. We have experience of the grandiose plans for industry of the present Minister of Agriculture, Fisheries and Food in a previous Tory Government. I confess that I welcomed with open arms those that concerned my constituencies, although we are left without a new hot mill that is badly needed. However, in their totality those plans have proved
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wholly wrong, having regard to the share of the market that BSC professes that it can win.
Secondly, I hope that the new chairman will turn his beady eye on the forecasters in BSC, who have been proved to be wrong time after time. Incidentally, he might immediately give a golden handshake to the bright boy who conceived the idea of making steel at Port Talbot and sending it to Llanwern to be finished, which would have been the longest production line in the world. The best possible investment would be to give that man a large handshake to ensure that his services did not again militate against BSC's fortunes.
Thirdly, the new chairman should inquire into the entire management structure of BSC, starting at board level. There are too few independent board members, able, with adequate resources and research support, to give their independent views to the board, if necessary, through direct access to the Minister, as I experienced when I was a Minister at the Ministry of Power a long time ago. Where grave decisions of national importance have to be taken, no major national industry, whether publicly or privately owned, can afford industrially incestuous arrangements.
The next question that the new chairman should ask is whether he needs a chief executive at present. If so, should there be a chief executive's committee or whatever it is called to present uniform monolithic views before each board meeting? Another important question is what opportunity there is within the board to ensure that members of management are able to dissent and provide the board with alternative plans, as opposed to the present monolithic arrangement.
There is great concern about the prodigality in numbers of former United Steel men in BSC. In South Wales and other parts of the country they are known as " United Steel's mafia ". The arrangement is odd. Why are about a dozen former United Steel executives in key positions in BSC? They may be the best available. I know some of them very well and hold them in the highest regard. However, it is extremely odd that so many former executives of one firm are at one time in major positions right across the whole of BSC. Is it any wonder, therefore, that there is no uniformity of view

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in BSC? In contrast to this, there is no one from the Welsh steel industry in the top echelons of BSC. The same goes for many other parts of the country. Therefore I hope that very soon the chairman will examine—I can give him the names; they are well-known—the 10 or 12 people, right across industry, who are in high positions. If they are the best, certainly they should be kept and, if necessary, promoted and given wider responsibilities. However, it is odd that at one time there should be so many people from one stable. I know that that feeling is not confined to Wales.
The next matter that the chairman should examine is the over-centralised commercial structure of the board. I raised this matter in the December debate. It is not possible for this great industry to sell its products through one highly centralised commercial arrangement. There are six or seven businesses in the board. The centralised machinery should be broken up and tied much closer to the individual plants. The customer would then be able to complain directly to the plant. If there is any problem of double sourcing, if one buys Port Talbot or Llanwern steel, one may double source either for industrial or any other reason in any other part of BSC. That will be welcomed by the work force and the management. The Minister should consider that point rapidly.
A retrograde step was taken by transferring the Welsh tinplate industry from the sheet steel division to Sheffield. The Secretary of State for Wales lost another battle in that context—if he fought it at all, and I suspect that he did not. If that decision was taken ambiguously in the tinplate industry, may I warn him now that the greater the distance from those who provide supplies, the greater will be the jeopardy of the industry when problems of new investment arise in the future. Therefore, I hope that this matter can be examined speedily to ensure that the Government go back on the step taken only a few months ago, as they had to do in the past with so many of the other plants.
I wish the new chairman well. He has a very difficult task indeed. I hope that he has the room for manoeuvre that is necessary, that he is not kept in a
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straitjacket and that he is given the necessary capital reconstruction. I hope that he will speedily consider the board structure, and the structure immediately below it, because this industry, which provides the livelihood for the overwhelming number of my constituents, and of those of many of my right hon. and hon. Friends, should be given the chance to play a formidable and important part as a major part of British manufacturing industry.
8.39 pm
Mr. Archie Hamilton: One of the Government's tasks is to educate the British people in economic realities—realities which the previous Labour Government, all too often, pretended did not exist. One of those realities is that many of our nationalised industries are overmanned, unproductive and badly managed. It therefore follows that they need the best management that money can buy.
Another economic reality is that top managerial talent does not work for peanuts, I am afraid. It follows that we must match international rates if we are to persuade top people to work in the nationalised industries.
Another economic reality is that the nationalised industries are unattractive to international top managers, because they are always at risk from non-commercial pressures from Ministers and other politicians. Most nationalised industries are monopolies. Therefore, management must negotiate with monopoly unions. That encourages trade union irresponsibility, to put it mildly.
At the same time, the industries rely on the Government for funds and therefore their investment plans are liable to be affected by whether the Government wish to expand the economy or otherwise, rather than by the market forces affecting the industry.
It follows that it is not sufficient to match the top rates in the private sector. We must exceed them if we are to attract people into the nationalised industries.
A further economic reality is that, of all the nationalised industries, the British Steel Corporation is the least attractive to anyone who wants to work in them. First, it is bankrupt. Secondly, its markets

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have completely collapsed, and the chairman will inherit the problem of enormous redundancies, which will dog industrial relations for many years.
That suggests to me that the chairman must be paid even more than any other nationalised industry chairman. The point has been clearly made that the pay intended for Mr. MacGregor is negligible compared with the vast losses incurred by the corporation.
I should like to ask three questions about Mr. MacGregor's terms of reference. First, are they perhaps too narrow? They seem to me to be confined to managing the corporation and working within the existing structure. But another economic reality is that the steel workers who earn the best wages and have the highest productivity and the greatest job security are those in the private sector. It follows that the best thing that Mr. MacGregor can do in managing BSC—indeed, the best thing that he can do for the British steel industry as a whole—is to move as many steel workers as possible into the private sector.
Secondly, is Mr. MacGregor expected to work within the cash limits? I understand that he has ideas about financing expansion and going into different areas, moving towards finished products and so on. Will he be in a position to return to the House for new money to finance those developments; or will he be expected to do so by disposals within the corporation?
My third question is about the future of Shotton. Will Mr. MacGregor be free, and encouraged by the Government, to sell the whole complex there to the private sector? It is far more important that we worry about job security in the area than about whether selling the whole of Shotton fits in with a corporation master plan.
I believe that the British steel industry has a great future but that that future largely lies in the private sector.
8.43 pm
Mr. A. E. P. Duffy: Because of the time, I shall not take up the point raised by the hon. Member for Epsom and Ewell (Mr. Hamilton).
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I recall the earlier remarks of the hon. Member for Sheffield, Hallam (Mr. Osborn), who referred to the condition in which British Steel emerged from the recent dreadful strike. He knows, as I and some of my hon. Friends who are so close to the Sheffield scene know, the impact that the strike had on steel locally. We are all too well aware that as a result the industry is now weaker, that many of its foreign and home markets have been lost. The trade unions have, unhappily, little to show for that strike. They are expected to negotiate collectively in future—and that is a gain—but they are embittered, divided and weakened.
The chairman, if anybody, can pick up the pieces. That is why we are so concerned about the appointment of a new chairman, apart from the controversial circumstances of the present appointment.
Despite the assurances of the Secretary of State, I wonder whether he will be equal to this challenge. I am sceptical about his possessing the requisite qualities. I cannot see, given his record, impressive though it is, but in a different context and in a different scene, how he can have an understanding of trade union attitudes in Britain, especially in steel. He could not have got off to a worse start. The manner of his appointment has undone all the impression of non-intervention that the Government were so concerned to create during the steel strike.
As recently as February the Prime Minister told the House that she had total confidence in Sir Charles Villiers, the outgoing chairman. The events of the past week, with Sir Charles going three months before the end of his contract and the evidence that the Secretary of State, the Prime Minister and, presumably, a Cabinet Committee had long been acting as executive head-hunters, must have considerably undermined that public posture of the earlier weeks of this year.
All the more regrettable is the manner in which the appointment of Mr. MacGregor was arrived at, and then presented. The Secretary of State must surely agree. The right hon. Gentleman cannot be proud of the way in which the appointment has been presented, not merely to the House but also to the public. He must surely recognise that it has destroyed any lingering, positive

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impact that he might have been concerned to bring about as a result of the steel strike and his role in it.
It was insensitive in the extreme, especially at a time when the industry is striving to climb out of the wreckage of the strike, to announce a payment of this size, upon which the Secretary of State has again dwelt today, for the services of just one man. After the strike and the disappointment of workers in the steel industry, I do not know how the hon. Member for Brigg and Scunthorpe (Mr. Brown) could have been so uncritical of the Secretary of State's appointment and could so unreservedly have expressed approval of it, informing the House that this approval had the endorsement of many, though perhaps not most, of those who work in the Scunthorpe steel industry.
I am staggered that the hon. Gentleman could have made such a claim, if I understood his remarks correctly. I can only say that steel workers in Sheffield, a few miles away, take precisely the opposite view. As recently as yesterday, as well as last week, many have drawn to my attention the comparison of their pay with the cut that is to go to Lazards. The hon. Member for Hallam, who has now left the Chamber, said that those with whom he has contact in Sheffield had expressed themselves as stunned by the appointment. The impression of the hon. Member for Brigg and Scunthorpe of the reaction of steel workers in his constituency does not seem to make sense.
Mr. Michael Brown: The point that I made was that the reputation of Mr. MacGregor was enhanced as a result of his visit and the meeting that he held on Tuesday. I hope that the hon. Gentleman will judge differently after he and his colleagues have met Mr. MacGregor.
Mr. Daffy: The hon. Member might judge differently when he checks the text of his speech in Hansard later tonight or in the morning.
I was interested in the Secretary of State's reference to a gesture—although he did not use that word—of public service in the appointment. There is little evidence of that to people in Sheffield with whom I have discussed the appointment. It is regrettable that there is not more place for public service in such an appointment. Mr. MacGregor's appointment
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has got off to a resoundingly bad start. The overriding need of the industry is leadership in which the workers have confidence. The repercussions of the appointment will not be confined to steel, given the simultaneous appointment of Mr. Robert Atkinson to British Shipbuilders. Since the terms of the appointments are different, neither the Secretary of State nor the Prime Minister can claim that he is pursuing a coherent policy towards nationalised industries.
That is why we must now consider different ways of making such appointments. It is suggested that they should be advertised publicly. Of course they should. However, the decision will still rest with the Secretary of State and his successors. Select Committees are being developed in a positive and meaningful direction. Perhaps such appointments can be vetted by the appropriate Select Committee before confirmation. I have in mind the United States model.
Such a procedure would enable hon. Members from both sides of the House to question Mr. MacGregor on his attitude, in the late 1940s, towards steel nationalisation. He was antagonistic to that notion. Examination by a Select Committee would enable hon. Members to question him on his free enterprise views as well as on his scepticism about certain aspects of the Welfare State. Such a procedure would enable hon. Members to ask Mr. MacGregor how, if he still holds such views, he can reconcile them with his acceptance of such an appointment.
Such a procedure could also be employed by hon. Members to question the timetable for viabliity. It is not enough for questions to be asked of the Secretary of State, because we know that they will have no effect. We should be able to ask about the financial support that is necessary in the meantime. The Secretary of State has already affirmed the existing cash limit. It is right to anticipate an early capital reconstruction. The vetting of appointments by hon. Members would enable us to raise the all-important question of pricing policy. The BSC's recent experience has resulted in its reluctance to raise prices during 1980. We can understand why.
I speak on behalf of the east end of Sheffield. The BSC is the price leader

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for both the public and private sectors. That is always crucial. I understand why the BSC is reluctant to raise its prices. However, I hope that it appreciates that private steel companies are in danger of being forced out of business because increases in the prices of raw materials and public utilities due to inflation can no longer be absorbed by increased efficiency. In Sheffield the BSC's prices policy is of grave concern. The condition of some parts of private steel is near-desperate. The BSC will survive only by teamwork and co-operation.
We must therefore wish the chairman-elect well for the future. His future is obviously of vital importance, not only to the future of steel. His failure could only damage the national interest. If he merely acts as a trouble-shooter on a tough short-term assignment, that will only accelerate the move towards a nation divided into affluent Tories in the South-East, and the rest. It is significant that the hon. Member for Epsom and Ewell (Mr. Hamilton), who preceded me in the debate, comes from the South-East. My remarks have nothing to do with him personally.
I am concerned that if Mr. MacGregor does not approach his new assignment with the utmost care the present increasing division of our nation into an affluent South-East and millions of embittered have-nots elsewhere will be accelerated.
On the other hand, if Mr. MacGregor consults fully and regularly with the work force and draws up a programme that gives management the chance to steer the corporation through the present crisis, if he develops a longer-term strategy for steel to enable BSC to use its modern iron and steel-making facilities in an increasingly up-market direction, he will give BSC a much-needed boost in morale, and its workers may yet come to regard him as worthy of his hire.
8.58 pm
Mr. Patrick McNair-Wilson: I come from a south of England constituency, but I have spent much of my working life in the steel industry. I am in a part of the world which is a big steel user.
This debate has shown that there is common ground between both sides of the House in wanting to see the steel industry
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become successful. I believe that my right hon. Friend has taken a sensible gamble by trying to break out of the management straitjacket which the steel industry has experienced since it was nationalised.
The story of British Steel in the last 12 years has been an unhappy one and I hope that we do not fall into the trap into which the Opposition fell, of appointing chairmen and subsequently attacking them.
I pay personal tribute to Sir Charles Villiers. He is, perhaps, one of the most undervalued men in British industry. He picked up the legacy left by all the glowing over-optimistic forecasts which were made for the industry. He has had to do much of the dirty work which was essential if we were to get the industry into viable shape and I think that he has been, wrongly, much vilified.
The particular problem facing Mr MacGregor is a simple one in three main tasks. His first job is to sell British steel. Therefore, he must be a man with a strong market base. Following the steel strike it is now clear that the forecasts of a 10 per cent. loss in our markets are probably, and unfortunately, optimistic. We may be concerned with something a good deal worse. We know that many customers have now decided to buy abroad and in so doing they have had to enter into long contracts.
The historic problem is that many of the stockholding firms are, of course, in foreign hands. That being so, Mr. MacGregor has a major problem in seeking to sell the Corporation's products. The problem is to some extent less serious for him than for others because he is a metallurgist. He will be able to cure the significant shortcoming—which customers of BSC, unfortunately, identify—of poor quality. We have to face that problem.
That is not in any way a reflection on individuals in the industry; but the quality control has not been good enough. I think that Mr. MacGregor will be able to bring a refreshing new look to this particular sales problem.
Mr. MacGregor's second task is to be able to stand up to politicians. Coming from a different environment, and from the other side of the Atlantic, he is less likely to be browbeaten by politicians

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than some others who have commanded nationalised industries. I am delighted that we have a Secretary of State who keeps out of the day-to-day running of these industries and who showed in the steel strike that he was prepared to let the corporation and its employees work out their own agreement. But even with respect to my right hon. Friend, there is a temptation for Secretaries of State to take perhaps rather too much detailed interest in the affairs of the Department over which they have some authority. I hope, therefore, that Mr. MacGregor will be resolute in putting the interests of the British steel industry first and the concern of politicians second.
The third and last task which Mr. MacGregor has to face, as I see it, is that of restoring morale to an industry which, under the previous Government and under the present Government, has seen its market getting smaller and smaller and has had to face massive closure programmes, which are now available for us to study. Because Mr. MacGregor is coming fresh to the job, I hope that he will realise that the closure programmes could do with a second look. I should like him very much to take another look at Consett. I mean that. I see that the hon. Member for Consett (Mr. Watkins) is present this evening. I should like Mr. MacGregor to take another look at Hunterston and the direct reduction plant, because if the gas under the North Sea is going to be as plentiful as it appears, that reduction plant is a world beater. I understand that Mr. MacGregor is a Scot and has a home not too far away from Hunterston. I hope that he will take a serious look at that plant.
What we do not want is a man who goes back and studies the books all the time. We have done that. They have been examined ad nauseam. Indeed, I was delighted to see that Mr. MacGregor was reported on one occasion as saying " I do not care about the balance sheet."
In my estimation, Mr. MacGregor wants to get right the three priorities which I have described—sales, standing up to politicians, and building up the morale. But more important than any of those is that he has to recognise that this industry of ours, which just over 12 years ago was 14 separate companies, has had a miserably unhappy past. It
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is making a fraction of the steel it made at the time it was nationalised. I believe that the lowest ebb is the turn of the tide—and very good luck to Mr. MacGregor.
9.3 pm
Mr. Gregor MacKenzie: I make only one comment on the speech of the hon. Member for New Forest (Mr. McNair-Wilson). That is to say to him that if he believes that his right hon. Friend the Secretary of State for Industry does not interfere in a broad general way with the operation of the British steel industry, he would believe anything. I am not surprised, therefore, that he will be supporting his right hon. Friend in the Lobby tonight.
I realise that one of the most difficult tasks of the Secretary of State for Industry is in the making of appointments. I believe that the right hon. Gentleman is convinced that Mr. MacGregor is the right man for the job, but I believe that he has misjudged the attitude of the House of Commons and of the British steel industry. He has surprised and annoyed a great many people involved in it by this appointment.
The hon. Member for Brigg and Scunthorpe (Mr. Brown) said that there were few of us who really took exception to the appointment in itself. That surprised me, because this debate is taking place because we do take exception to Mr. MacGregor's appointment. I certainly do, and I take exception to the manner in which the appointment was made and to the financial conditions attached to it.
Having said that, I must say that I do not know Mr. MacGregor. I do not really know anything about him other than what I have read in the press and in his entry in the Directory of Directors. Therefore, it is difficult to make a judgment. However, I find it difficult to accept that the only man whom the Secretary of State can produce to do the job is a 67-year-old American—albeit Scots born. To do that following a difficult steel strike is to put a burden of responsibility on that gentleman—and it is a heavy burden indeed.
I do not take exception to the appointment of a 67-year-old man to industry. I do not take exception to the appointment of a 67-year-old man in politics.

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Many men of that age bring considerable experience and wisdom to our deliberations and to the process of industry. By the same token, I do not take exception to American management in Britain. It is good to intermingle American and British management. The Americans often bring new skills and innovation to our management.
However, the appointment reflects very badly on what the Government think about British management. What is the Secretary of State doing? He is saying that of the 100 or more professional managers in the public and private sectors of the steel industry, there is no one who can do that job. The hon. Member for Sheffield, Hallam (Mr. Osborn) has been in and around the steel industry for many years. Yet he was not able to suggest anybody for the job. That surprised me. I have an old-fashioned view, in that I believe in the adage that every soldier carries a field marshal's baton in his knapsack. It is good for young managers in the steel industry to know that one day, by doing a useful job, they may reach the top of the tree. It was a poor reflection on the management of the BSC and on private sector management when the Secretary of State indicated, in reply to a question from my hon. Friend the Member for Motherwell and Wishaw (Dr. Bray), that of all the hundreds of professional managers within industry he had not thought fit to approach any one of them to take on that important task.
I become cross with the Secretary of State when he goes even further, and says to the 55 million who live in these islands—many of whom make their living out of managing industry—" I do not think that any of you are good enough for the job". He, and many of his right hon. and hon. Friends, pay a great deal of lip service to the bright young men in British industry. But today he gave them a massive kick in the teeth. He said " We regret the brain drain, but perhaps there is something in it after all. Go to America, stay there for 25 years, come back when you are drawing your old age pension at 67, and we will find you a nice, comfortable, well-paid job in the BSC."
If there were ever any encouragement to anyone to join in the brain drain, it is the appointment of Mr. MacGregor.
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The appointment is remarkable. The terms of the appointment are bizarre. I shall not go over the details, but I wish to mention the transfer fee, which is massive. The contribution that Mr. MacGregor will receive is also massive. We all wish to know whether we will get back our money if Mr. MacGregor does not succeed.
My last concern is simple. I understand from the Secretary of State's statement that the chairman-designate will be allowed to continue to operate—albeit in a non-executive capacity—in a considerable number of other companies. Many hon. Members—I suspect on both sides—take exception to that. The task of the chairmanship of the BSC is massive. There is no doubt about that. It appears to be a 24-hours-a-day, seven days a week job. I cannot understand why the Secretary of State—anxious though he is to obtain Mr. MacGregor's services—should not only give him a masive transfer fee but allow him to continue to operate as a non-executive director, which will take him away from the headquarters of BSC on many occasions during the year.
If Mr. MacGregor succeeds in raising the productivity of the BSC, and if he succeeds in creating more jobs for the people whom I am privileged to represent in this House, I apologise for the speech that I have just made. On the other hand, if he indulges in one of these axe-swinging exercises, and if there are more closures and fewer jobs in the industry, the people of this country are entitled to get their money back.
9.10 pm
Mr. Kenneth Baker: The right hon. Member for Rutherglen (Mr. MacKenzie), who has had responsibility for the appointment of senior officials, recognised the difficulty faced by successive Governments in finding people of calibre to fill these posts. That was also a point which the right hon. Member for Deptford (Mr. Silkin) raised. We rather expected a devastating and trenchant attack on my right hon. Friend by the right hon. Member for Deptford. We were rather surprised by the low-key nature of his speech. We thought that he had an open goal but that he muffed it.
So far as I can recall, this is the first debate in which the appointment of the chairman of a nationalised industry has

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engaged the attention of the House. I remember a debate several years ago when the sacking of the chairman of a nationalised industry was the subject of a motion of censure on Christopher Chat-away, who sacked Lord Hall. That motion fully vindicated Christopher Chat-away's decision in that matter. However, this is the first occassion on which I can remember the House debating the appointment of the chairman of a nationalised industry, and I believe that it is valuable for the House to focus its attention upon the appointment of these important people.
As has been said, we do not have the right in our constitution—as the United States Senate does—to advise upon the appointment of Ministers or senior public officials and to consent. So far as I can see, we restrict our activities to attacking them as soon as they are appointed. I believe that the right hon. Member for Bristol, South-East (Mr. Benn) is at this moment making a speech in which he is advocating that the House of Commons, through Select Committees, should vet the appointment of the chairmen of nationalised industries and certain other important appointments. I think that we are some way away from that system. I hope that the Select Committees which shadow the Departments turn their attention to the rather humdrum, but in my view more important, task of examining the Estimates of those Departments before dealing with the rather glamorous task of vetting the appointment of the chairmen of the nationalised industries.
I think that Ministers in the previous Government and Ministers in this Government all recognise the fact that it is exceedingly difficult to get people of high calibre to accept these posts. That is because under successive Governments chairmen of nationalised industries are subject to ministerial interference of one sort or another. Back in the 1960s, I well remember the right hon. Member for Huyton (Sir H. Wilson), when Prime Minister, interfering incessantly in the activities of the Post Office in order to prevent the price of the postage stamp from going up from 2½p to 3p, and that seemed to be the touchstone of prime ministerial success. That particular goal is not now considered to be so important. None the less, Ministers interfere because they feel
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that in one way or another public policy is involved. That makes it exceedingly difficult for great industrialists to take on these tasks. Governments interfere with both pricing and investment policies. It is to the credit of my right hon. Friend that in respect of the nationalised industries for which he has ministerial responsibility, he has deliberately taken a back seat and has said that it is the job of the managers to manage after he has appointed them, as in this case.
The other interference comes from us as Members of Parliament. We are constantly badgering the chairmen of the nationalised industries to change their policies. There is always a lobby saying that this or that must be subsidised and the cries do not only come from the Labour Benches. One only has to attend a debate on rail policy to realise that considerable pressures are placed upon Conservative Ministers by Conservative Members—for example, in respect of suburban rail fares. There is pressure from hon. Members when the question of closures comes up, and that is right. Labour Members who represent steel towns have been vociferous in defence of the employment opportunities in their constituencies. These are the difficulties facing the chairmen of our nationalised industries.
I do not believe that the chairmen face unique trade union pressures. The chairman of any large organisation will have that sort of problem. Nor do I believe that chairmen should complain that they are in the goldfish bowl. They must accept that they are operating in a public arena, and that their decisions will be questioned in this House and by a wider audience.
There are real difficulties in finding people of calibre. It was a credit to the previous Government that they found people of the calibre of Peter Parker and Michael Edwardes to run parts of our great public sector. The case for the Government, in a nutshell, is that if they want a person with exceptional qualities they must be prepared to offer exceptional terms. The proof of the pudding is in the eating. If Mr. MacGregor succeeds in his task, the terms that the Secretary of State has agreed will be very modest.
Mr. MacGregor has been attacked for being an expatriate Scot. He has also

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been attacked for being 67 years old. I believe that the contribution of older people to national affairs grows greater every day. It does not lie in the mouths of the Opposition Front Bench to attack Mr. MacGregor for being 67, because the Leader of the Opposition and the Deputy Leader of the Opposition are both within spitting distance of that age. I wish them well for many years in their respective posts.
If this debate focuses attention on the real problem of making appointments of this nature, it has been worth while. I hope that Ministers will accept that they should have greater discretion, particularly as to the salaries that are offered. The salaries for these chairmanships seem to range from £40,000 to £50,000. Although this seems to be a large amount, everyone knows that it is exceptionally difficult to get people of first-class calibre to take these jobs. Perhaps we should look at comparable salaries. The chairman of BP, which is part State-owned, gets £120,000 a year. The chairman of ICI gets £124,000 a year. If one looks at the salaries paid to the executives of American steel companies, one realises the extent of the gap. A comparable company is Bethlehem Steel, which has an output of about 17·5 million tons a year—similar to the BSC—and the salary of that chairman is seven times what is being offered to Mr. MacGregor.
Mr. Viggers: Is my hon. Friend aware that the previous Labour Government set up an arrangement with Inmos whereby the three founders of that company will receive £6 million each on the investment of £15,000, if the company succeeds?
Mr. Baker: I believe that the previous Government recognised that if they wanted to attract people into these important posts and to take risks, they would have to make the rewards commensurate.
My right hon. Friend will soon make an appointment to the chairmanship of British Telecommunications. I feel that it will be very difficult for him to find someone suitable within the salary range that he has talked about.
Finally, I wish to say a few words about my right hon. Friend's involvement in this episode. The Opposition
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will continue—quite understandably—to attack the economic and industrial policy and philosophy of my right hon. Friend, and the decisions and judgments that derive from that. There have been some attacks outside this place indicating that some underhand deal has been done in this case. Innuendoes have been made by people who are more willing to wound than to strike. But those of us who have known my right hon. Friend over the years have no doubt about his personal honesty and integrity, which are beyond reproach.
9.19 pm
Mr. Stan Crowther: It is difficult to decide whether this bizarre incident is comedy, tragedy or farce. I find elements of all three in it. Certainly the Secretary of State has been behaving strangely for some time now and he has clearly moved into some fantasy world of his own. He is not living in the real world that my hon. Friends and I live in.
I do not intend to attack Mr. MacGregor. For all I know, he may be a splendid fellow, but it is clear that he knows nothing about the industry over which he is to preside. However, even that sort of ignorance has not been a bar to the chairmanship of nationalised industries, so the Secretary of State is following precedent in that respect. We feel it important that the chairman of a nationalised industry ought to have some sense of the ethos of public ownership. I know that that is foreign to Conservative Members.
Mr. Nick Budgen: What is the ethos?
Mr. Crowther: I understand why Conservative Members do not appreciate the ethos of public ownership. My hon. Friends and I have a different political philosophy from them.
There are far too many chairmen of nationalised industries to whom public accountability is irksome. They do not like what they call interference, but what I regard as proper accountability to the public. Mr. MacGregor's business career gives me no confidence that we shall get a different attitude from him, There is nothing to suggest that he will have that sense of the ethos to which I referred.
Mr. Archie Hamilton: How much money does the hon. Gentleman feel that a nationalised industry should lose to fit in with his ethos?
Mr. Crowther: I have not been discussing money. I shall come to that. I should like to think that Mr. MacGregor will understand that the industry over which he is to preside belongs to us, the public, and not to him, his board or the Secretary of State. That needs to be understood by those who run publicly-owned industries on our behalf. They are answerable to us, whether Conservative Membesr think so or not.
Mr. MacGregor will have a duty to act in the national interest.
Mr. Budgen: What is the national interest?
Mr. Crowther: The national interest requires that the steel industry should be expanded and not contracted.
The weirdest aspect of the affair has been adequately described by my right hon. Friend the Member for Deptford (Mr. Silkin). We are told that huge amounts may be paid, depending on whether Mr. MacGregor is successful. Even after the Secretary of State's speech, it is not clear how success is to be measured, but I suspect that the right hon. Gentleman has already made clear to Mr. MacGregor that the Government's policy is to wipe out a large part of the industry and to sell what little remains to private enterprise. That has come out time and again in steel debates.
I do not know why it should be necessary to pay £2 million for a gentleman of 67 to come from America to do the job. The Secretary of State has told us that no one in Britain was willing and able to take on the chairmanship at the price offered, though he assured us that the salary had nothing to do with it.
The recently retired chairman of Rolls-Royce told Now! magazine:
" I do not accept that there are not good younger men in Britain who would have been prepared to do the job for £100,000 to £150,000 a year."
What decent patriotic chaps they are who are willing to work for such a paltry salary! Those who speak in such terms are making comparisons between the chairmanship of a nationalised industry and a chairmanship in the private sector.
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What is wrong is not that we are paying too little to nationalised industry chairmen, but that some of those with whom they are being compared are getting far too much.
At a time when trade unionists are being urged to use all possible restraint and when thousands in the public sector are being put out of work because of the Government's cash limits, some of the salary levels of private sector chairmanships are a scandal. The greatest scandal is the farce that we are discussing. My right hon. Friend the Member for Deptford said that the most important job in the industry is to rebuild morale, which is at a low ebb—not just because of the strike, but because of the widespread belief, substantiated by a good deal of evidence, that the Government are putting considerable pressure on the BSC board to hive off some of its most important assets. I do not know how this appointment will improve morale. I do not believe the stuff that we heard from the hon. Member for Brigg and Scunthorpe (Mr. Brown). I think that most of my hon. Friends do not believe it.
Many of us suspect that Mr. MacGregor is being brought in as a hatchet man to carry out a surgical operation on the industry. I hope that that suspicion turns out to be misplaced. However, many of us feel that the corporation will be reduced to a tuppenny-ha'penny concern that will make a profit but not very much steel. I hope that he will do a decent job on the industry, but I have strong reservations.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: I call the hon. Member for Rutland and Stamford (Mr. Lewis). I advise the hon. Gentleman that it is hoped to begin the Front Bench speeches at 9.30 pm.
9.26 pm
Mr. Kenneth Lewis: I appreciate, Mr. Speaker, that what I have to say has to be compressed somewhat, and I shall endeavour to do so. I regret that I cannot be as enthusiastic about the appointment and the terms of it as my right hon. Friend the Secretary of State. I consider the terms of the arrangement and the fact that we have had to import from abroad to be mistaken in their conception.

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My right hon. Friend and the right hon. Member for Deptford (Mr. Silkin) have related the appointment to a football transfer fee. When All Souls and Trinity College, Cambridge try to be earthy in discussing football there is a tendency to get things wrong. There is no relationship between the fee that is being paid to Lazard Freres and a head-hunter, and the transfer fee.
I think that the highest transfer fee paid by a football club is between £1¼ million and £1½ million. A football club spending that sort of money usually buys a player in mid-career, so that it can sell him and get back half the transfer fee. My right hon. Friend will not get back any of the transfer fee from Mr. MacGregor. At the end of three years he will put him on a free transfer. He will be able to return to America to collect some of the transfer fee that has already been paid. The arrangement is not to be commended as a precedent for the appointment of anyone in a nationalised industry.
The Prince of Wales was hurt in a polo accident a few days before Mr. MacGregor's appointment. The Prince insisted on making a speech in the City. He said " I must go to make this speech because it is about buying British." Two days later my right hon. Friend bought an import from America. I refuse to believe that throughout the wide stretches of British industry no business man could be found to undertake the job.
If my right hon. Friend insists that no British business man was prepared or able to do the job, there is something wrong with his Ministry. If that is so, there is something wrong with the narrowness of the net of selection within the establishment of his Department. That can be afforded in the Foreign Office and in other Departments, but not in the Department of Industry, which is the Department by which Britain is made successful or otherwise. If the Department cannot find in Britain someone to take on this type of job, what is wrong? Are British business men short of patriotism or short of ability, or short of both?
My right hon. Friend should tell his departmental officials to look at their own head-hunting activities. We are told
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that the Minister had appointed head-hunters for this position. They came up with the name of someone who was already working for the British Government. Mr. MacGregor was already vice-chairman of a nationalised company—British Leyland. Why were head-hunters necessary at all? The Department of Industry should realise that it has a job to motivate those who work in the private sector, as well as to make them realise that they should assist the public sector. They should be prepared to use their talents in the public sector from a sense of patriotic duty.
If the Secretary of State felt that he must employ Mr. MacGregor, he should have appointed him as chairman only of British Steel. He could then have kept all his other jobs. There would have been no need to pay out such an enormous amount of money, a large proportion of which will finish up in Mr. MacGregor's pocket. The posts of chairman and executive managing directors should be separated. When Lord Melchett was chairman of British Steel he decided that he could not do the two jobs. He separated the post of chairman from that of chief executive. An article in this week's edition of the journal of the Institute of Directors states:
"To combine the duties of Chairman and Chief Executive is like asking a man to argue with himself."
9.32 pm
Mr. Michael Foot: I shall concentrate my brief remarks on the future of British Steel. That industry is of paramount importance to the future of our country. I accept the point made by the hon. Member for Rutland and Stamford (Mr. Lewis), when he referred to patriotism and the public service. The Prime Minister makes many speeches on the subject of patriotism. Some Opposition Members, including the right hon. Member for Orkney and Shetland (Mr. Grimond), have referred to the public service. Conservative Members sometimes seem to sneer at it. They talk as if such issues could be settled only by money. As a result of that spirit and approach, the Government have committed a grave mistake.
During the past week or two we have seen a contrast. My right hon. Friend the Member for Deptford (Mr. Silkin) referred to Mr. Robert Atkinson's

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appointment in the shipbuilding industry, and the way in which he took it up. Some of us may have seen the statement that he made on television. It was a remarkable statement. He underlined that he had been guided by a spirit of public service. There is a sharp contrast between the way in which he took up his appointment and the way in which Mr. MacGregor is taking up his.
It is partly Mr. MacGregor's fault. He cannot be absolved from responsibility. However, the Secretary of State is primarily responsible. What type of leadership will be given to the steel industry?
Let the market rate prevail. Grab all one can. Squeeze as much from the orange as possible, even hire special experts to do it for one. Ensure that one has the last penny out of the British Government or taxpayer. No one can deny that that has happened on a scale never before seen. As for the performance review, that is the greatest quango of all. By the way, will the chairman of the quango be paid; or will he step forward and do the job as a service to the public? Let us have the details.
The quango has been hedged round with arrangements which have not been properly explained to the House. I can hardly believe that that arrangement is advantageous to a new chairman of the British Steel Corporation. It is a form of productivity deal. I doubt whether it is convenient for the new chairman of BSC in the circumstances in which he will have to operate to have to act under the most bogus productivity agreement reached in the history of collective bargaining. That is the situation. None of the terms is known. None of the agreements is made. It is all settled later. Bill Sirs would never be allowed a productivity deal of that nature if he were arguing on behalf of his members. It would have to be much more cut and dried, and there would have to be a strike to get such agreement.
The right hon. Gentleman has altered the form in which appointments are made to the public service. The new chairman, Mr. MacGregor, has used his industrial clout to knock the right hon. Gentleman sideways and make him look not ridiculous but less of the philosopher-statesman, as the right hon. Lady sometimes thinks that he should be described.
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Mr. MacGregor has used his industrial clout to get every penny, pound, pension and arrangement for himself. If it is right for go-ahead men to do that, why not everyone else? The example has been set. No one will be able to complain, least of all the right hon. Gentleman, if steel workers and other sections of the community fight for their rights and pay in exactly the same way. If it is right for Mr. MacGregor to have such adulation and encomiums poured on his enterprise and skill in negotiating that deal with the Government, why should not everyone else do the same?
By that form of appointment the Government have helped undermine the credit of the public service in this country. Most people working in other great public industries, such as coal and the Post Office, will draw that deduction, especially those in the Steel Corporation. They are informed by the right hon. Gentleman that not only was it necessary to make that appointment but that the Government had searched for months, and doubtless gone through the entire Steel Corporation, to try to discover a person fit for the job. They could not find anyone. That is a fine way to treat the public service, not only the steel industry. The right hon. Gentleman—not even Mr. MacGregor—must bear the responsibility for degrading the rights and claims of our public service.
I come to what was said by Mr. MacGregor the day after his appointment. One would imagine that such a superman, such a world beater, would be careful about what he said within a day or two of his appointment. Having such knowledge of these matters, he must know of the sensitivity in the industry; but not at all. Mr. MacGregor made a statement on some of the matters that we have debated. He added that bulk steel did not bring big profits and that the corporation should look to exotic materials, saying he hoped that this was one of the areas in which to become pre-eminent.
One does not need Mr. MacGregor's high salary and the payments that he will receive over the coming decade to know that one can make bigger profits on special steels than on bulk steels. Everyone has known that for a long time. The question for the workers in the industry and for this country—the defence reason, if I can put it in such terms—is this: will

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we preserve a bulk steel industry in this country? That is the great question. The Opposition have made up their minds about it. However, according to the economics of the Minister there is no certainty that we shall preserve a bulk steel industry. According to the declarations of Mr. MacGregor, he is not, apparently, committed to it. Therefore, I hope that very soon there will be declarations by Mr. MacGregor and the Government repudiating the whole idea that we shall allow the British steel industry to be run down. It is bad enough to run it down to the 15 million tonnes that the Government talk about, but they will run it down even further, if the statement by Mr. MacGregor is to mean anything at all.
I do not claim or ask that the Government should consider these matters on grounds of public service to the community. We know that they do not care about that. But what about defence? I am no great military strategist—[HON. MEMBERS: " Oh."]—I thought that that would raise a cheer from Government supporters. I suggest to the Government—especially the right hon. Lady—that it might be better, for the defence of this country, for the bulk steel to be produced at Port Talbot and Llanwern rather than in Brazil. However, that is the policy.
Indeed, that may be said about the steel policy of the previous Tory Government—the Finniston-Peter Walker policy. It had many mistakes about it, but at least it was a patriotic policy. At least it enabled us to look to a future for the steel industry. I know that Government supporters do not like to stand up for it now. One member of that Government—the present Minister of State, Foreign and Commonwealth Office—at the time when the Finniston-Walker plan was before the House and the country, agreed to put it into operation on a great scale at that time. I forget whether the Minister of State was in the Government or out of it at that time. He said " Do not worry about the steel industry. If it does not make a profit, let it go. If bingo makes a profit, have the bingo rather than the steel."
Of course, the Secretary of State's policies are exactly the same. We may discover that the steel industry cannot make a profit on that basis and that it will be
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allowed to run down. We do not accept that argument. The Opposition have never accepted the 15 million tonne target or the drop to that figure. We say that that means devastation for Wales and for great parts of the country, mass unemployment and the destruction of parts of our coal industry. It is essential for this country to maintain an expanded steel industry.
Now we are told " Perhaps the brilliant Mr. MacGregor will come to the same conclusion as the Government." Let us suppose that he comes to the conclusion that they reached, on grounds of defence, of public interest and the requirements of the rest of our industry and trade over the next 10 years. What will be the position if in August, September, or whenever, Mr. MacGregor says " The policy laid down by the Government, the £450 million cash limit, in these circumstances means death for the steel industry? It means disaster for us "? What will Ministers say then? One of them will have to resign. I must say that that makes the picture more attractive.
If the right hon. Gentleman will give me an undertaking that he will waive the cash limit, and that if Mr. MacGregor wishes we can put forward a programme for a 20 million tonnes target for our steel industry which could sustain the jobs that would be lost otherwise, a different state of affairs would reign.
If Mr. MacGregor really wanted to serve the public he could tear up the agreement and say " I shall work for the people of this country that I left in 1945. I do not need the pension arrangements, the paying off of Lazard Freres and all the rest. I prefer to show that I am a patriot". If only Mr. Macgregor would say " I shall serve this country in the same spirit as Robert Atkinson will", it would be a benefit for the whole industry.
What the right hon. Gentleman has done is to ensure that Mr. MacGregor will start on his career in the worst possible circumstances. The right hon. Gentleman has done grave injury to the public service. He has insulted everyone working in the management of the steel industry, as well as the workers. He has refused to discuss the appointment with those who work in the industry.
That is why we move this vote of censure on the right hon. Gentleman. We ask the House to support it.
9.47 pm
Sir Keith Joseph: With the leave of the House, I should like to try to answer the questions that have been raised in this debate, which I remind the House is on a motion for the Adjournment.
Mr. MacGregor will find some most instructive comments in a number of speeches, particularly those of the right hon. and learned Member for Aberavon (Mr. Morris) and my hon. Friends the Members for Sheffield, Hallam (Mr. Osborn), for New Forest (Mr. McNair-Wilson) and for St. Marylebone (Mr. Baker).
Now I shall try to answer as many questions as I can in the time available. The right hon. Members for Deptford (Mr. Silkin) and for Orkney and Shetland (Mr. Grimond) asked me about tax. I am assured by the Inland Revenue that the normal tax rules are of course being applied in relation to both Lazard Freres and Mr. MacGregor. I must remind the House—if there is any dissatisfaction with the confidentiality that this Government must maintain about the tax affairs of those with whom the Inland Revenue has to deal—of what my hon. Friend the Member for Gosport (Mr. Viggers) interjected in the speech of my hon. Friend the Member for St. Marylebone. He said that when the last Government took the Inmos initiative—I commend them for their political courage in encouraging entrepreneurship—they absolutely refused to discuss the tax treatment of the two American citizens, who, under favourable circumstances, stood to gain large fortunes, and. say I, " Good luck to them ".
I come now to questions of structure raised by the right hon. Member for Orkney and Shetland, the right hon. and learned Member for Aberavon and my hon. Friend the Member for Epsom and Ewell (Mr. Hamilton). Mr MacGregor will be free to make or, where statutory obligations require my consent or other consultation, to propose whatever changes in the structure of the BSC he considers best suited to secure the enduring profitability and viability of the British steel industry. If he wishes to propose or to introduce more devolution of responsibility to the regions, or to introduce partnership with the private sector in certain plants or, indeed, to sell certain plants to the private sector
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—as my right hon. Friend the Prime Minister has already said we would welcome in the case of the sale of Consett—he is free so to act, subject to the statutory requirements to which I have referred. He is free to try to sell Shotton as a going concern to the private sector, but I cannot give him any encouragement that there would be a dowry from the taxpayer.
I come to the question of Mr. MacGregor's own equipment for carrying out this task. The hon. Member for Sheffield, Attercliffe (Mr. Duffy) and the right hon. Member for Rutherglen (Mr. MacKenzie) asked what he could possibly know about trade unions and labour relations in this country. He was considered good enough by the previous Labour Government to be made, first, a director and then deputy chairman of British Leyland. As for his relevant knowledge, he has been a director for some years of a great American metals and natural resources firm and of a great American steel company.
Mr. Eric G. Varley Mr. Eric G. Varley (Chesterfield) rose—
Sir K. Joseph: The right hon. Member for Ebbw Vale (Mr. Foot) did not give way.
Mr. Speaker: Order. I think that the Minister is not giving way.
Sir K. Joseph Sir K. Joseph rose—
Mr. Varley Mr. Varley rose—
Sir K. Joseph: I would like, as a courtesy, to give way to the right hon. Gentleman, but the right hon. Member for Ebbw Vale who wound up left me only 14 minutes and did not give way himself. I shall not give way after this one occasion.
Mr. Varley: The right hon. Gentleman should not misrepresent the policy of the previous Government. He said that Mr. MacGregor was appointed as deputy chairman of Leyland by the last Government. He was not. He was appointed by the National Enterprise Board. [HON. MEMBERS: "Oh."] That National Enterprise Board was the same National Enterprise Board that the right hon. Gentleman sacked.
Sir K. Joseph: In answer to the right hon. Member for Deptford, there is no pension provision for Mr. MacGregor's service. The right hon. Gentleman is correct in assuming that if Mr. MacGregor does not serve for the whole of the first year, the first payment of £225,000 is forfeit, even after one day, subject to his obligation to give notice.
I should like to point out, in answer to a number of comments by hon. Members, that there seems to be an emerging pattern that those people who have met Mr. MacGregor personally are far less critical of him, if they are critical at all, than those who have not met him.
The hon. Member for Attercliffe and the right hon. Member for Orkney and Shetland referred to the reactions of steel workers, on the one hand, and nurses, on the other, to the compensation to be paid. I must point out that the future of the steel workers depends a great deal on the competence and drive of the chairman of British Steel. It will be no comfort to them to have less than the best appointed to this vacancy.
Do nurses want to be taxed in order to meet the losses of British Steel? It is very much in their interests that the losses should cease. The right hon. Member for Orkney and Shetland asked why, when we knew of Ian MacGregor, we had needed to appoint head-hunters. We did not know, when we started, who would take this job. We needed to consider all the possible names. There was a joint recruiting effort by us and the head-hunters. The head-hunters will be paid the proper, but not excessive, fee. The details are subject to contractual confidentiality.
The right hon. Member for Deptford asked whether we were creating likely litigation in appointing a five-man committee. No, we have specifically provided that the committee's decision will be based on a simple majority in order to avoid deadlock. The answer to my hon. Friend the Member for Epsom and Ewell and the right hon. Member for Ebbw Vale is that the cash limit position remains unchanged.
I must answer three remaining and important points. A number of hon. Members, including the hon. Member for
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Attercliffe, my hon. Friend the Member for Rutland and Stamford (Mr. Lewis) and the right hon. Member for Ebbw Vale laid emphasis on public service. They asked why we could not count on people coming forward to do these daunting tasks from a sense of patriotism and public duty. I must make some comments. A number of the people whom we considered suitable did not feel free to accept or even to go into detail about the post because they had existing commitments to jobs which they felt that they had to honour. Some people found the task to difficult to contemplate.
Mr. Atkinson, for whom I have great respect, and who has sacrificed some income to take on the chairmanship of British Shipbuilders, has so far as I know, no obligations to partners, as has Mr. MacGregor.
The bulk of the payments that will be made—and two-thirds will depend upon performance—will go not to Mr. MacGregor but to the partnership to which he has obligations and in which he has invested the bulk of his life savings. I emphasise that Mr. MacGregor has accepted, as far as I can tell, a very steep fall in his personal earnings in order to take on a desperately challenging job and to subject himself to the criticism of the media, the newspapers and hon. Members in tackling a job that is in the national interest. The reason why he has done that is that, among other things, he feels a sense of obligation to the country in which he was born and brought up.
The right hon. Member for Ebbw Vale said that the performance payment was a bogus productivity deal. Seldom can there have been a productivity deal more monitored and policed than this.
I turn to a criticism that has been repeated time and again by the right hon. Members for Deptford, Ebbw Vale and Rutherglen. The criticism is of bringing in an outsider to chair a great British industry. Before I answer that criticism I must emphasise that I have heard from Mr. MacGregor that he regards it as his duty to identify and promote promising young managers in the British Steel Corporation. His performance in his previous jobs shows that he takes that task intensely seriously. Are we really to accept criticism for

1883
finding the best person that we can, even from outside the industry, from hon. Members whose Government did not—I make no criticism of the people that I shall mention—promote a manager from British Steel when they had to fill a vacancy? I make no criticism of Sir Charles Villiers, who served his country well in a difficult task. He was not drawn from inside the management and yet the Labour Government, after long search, promoted him to chairman.
What did the Labour Government do about British Rail? Did they promote a manager from inside British Rail? No; they sought Sir Peter Parker. I make no criticism of that choice. What about Cable and Wireless? [HON. MEMBERS:
" Yes, what about it?"] What about British Aerospace? Did the Labour Government seek to promote a manager from within British Aerospace? I do not criticise them for appointing Lord Beswick.
I believe that [have answered the questions put during the debate and I make no apology for appointing the man I think best suited to the task. I hope that, whatever the vote, the whole House can unite in wishing Mr. MacGregor and British Steel well.
Question put. That this House do now adjourn:—
The House divided: Ayes 243, Noes 303.

Division No. 310]

AYES

[10.00 pm

Abse, Leo

Douglas-Mann, Bruce

John, Brynmor

Adams, Allen

Dubs, Alfred

Johnson, James (Hull West)

Allaun, Frank

Duffy, A. E. P.

Johnson, Walter (Derby South)

Anderson, Donald

Dunn, James A. (Liverpool, Kirkdale)

Johnston, Russell (Inverness)

Archer, Rt Hon Peter

Dunnett, Jack

Jones, Rt Hon Alec (Rhondda)

Armstrong, Rt Hon Ernest

Dunwoody, Mrs. Gwyneth

Jones, Barry (East Flint)

Ashley, Rt Hon Jack

Eastham, Ken

Jones, Dan (Burnley)

Ashton, Joe

Ellis, Raymond (NE Derbyshire)

Kaufman, Rt Hon Gerald

Bagier, Gordon A. T.

Ellis, Tom (Wrexham)

Kerr, Russell

Barnett, Guy (Greenwich)

English, Michael

Kilfedder, James A.

Barnett, Rt Hon Joel (Heywood)

Ennals, Rt Hon David

Kilroy-Silk, Robert

Beith, A. J.

Evans, John (Newton)

Kinnock, Neil

Benn, Rt Hon Anthony Wedgwood

Ewing, Harry

Lambie, David

Bennett, Andrew (Stockport N)

Faulds, Andrew

Lamborn, Harry

Booth, Rt Hon Albert

Field, Frank

Lamond, James

Bottomley, Rt Hon Arthur (M'brough)

Flannery, Martin

Leadbitter, Ted

Bradley, Tom

Fletcher, L. R. (Ilkeston)

Leighton, Ronald

Bray, Dr Jeremy

Fletcher, Ted (Darlington)

Lestor, Miss Joan (Eton & Slough)

Brown, Hugh D. (Provan)

Foot, Rt Hon Michael

Lewis, Arthur (Newham North West)

Brown, Robert C. (Newcastle W)

Forrester, John

Lewis, Ron (Carlisle)

Brown, Ronald W. (Hackney S)

Foster, Derek

Litherland, Robert

Brown, Ron (Edinburgh, Leith)

Foulkes, George

Lyon, Alexander (York)

Buchan, Norman

Fraser, John (Lambeth, Norwood)

Lyons, Edward (Bradford West)

Callaghan, Jim (Middleton & P)

Freeson Rt Hon Reginald

McCartney, Hugh

Campbell, Ian

Garrett, John (Norwich S)

McDonald, Dr Oonagh

Campbell-Savours, Dale

George, Bruce

McElhone, Frank

Canavan, Dennis

Gilbert, Rt Hon Dr John

McGuire, Michael (Ince)

Cant, R. B.

Ginsburg, David

McKay, Allen (Penistone)

Carmichael, Neil

Golding, John

McKelvey, William

Carter-Jones, Lewis

Gourlay, Harry

MacKenzie, Rt Hon Gregor

Cartwright, John

Graham, Ted

Maclennan, Robert

Clark, Dr David (South Shields)

Grant, John (Islington C)

McNamara, Kevin

Cocks, Rt Hon Michael (Bristol S)

Grimond, Rt Hon J,

McWilliam, John

Cohen, Stanley

Hamilton, James (Bothwell)

Magee, Bryan

Conlan, Bernard

Hamilton, W. W. (Central Fife)

Marks, Kenneth

Cowans, Harry

Hardy, Peter

Marshall, David (Gl'sgow, Shettles'n)

Craigen, J. M. (Glasgow, Maryhill)

Harrison, Rt Hon Walter

Marshall, Dr Edmund (Goole)

Crowther, J. S.

Hart, Rt Hon Dame Judith

Marshall, Jim (Leicester South)

Cryer, Bob

Hattersley, Rt Hon Roy

Mason, Rt Hon Roy

Cunliffe, Lawrence

Haynes, Frank

Maxton, John

Cunningham, George (Islington S)

Heffer, Eric S.

Meacher, Michael

Cunningham, Dr John (Whitehaven)

Hogg, Norman (E Dunbartonshire)

Mellish, Rt Hon Robert

Dalyell, Tam

Holland, Stuart (L'beth, Vauxhall)

Mikardo, Ian

Davidson, Arthur

Home Robertson, John

Millan, Rt Hon Bruce

Davies, Rt Hon Denzil (Llanelli)

Homewood, William

Miller, Dr M. S. (East Kilbride)

Davies, Ifor (Gower)

Hooley, Frank

Mitchell, Austin (Grimsby)

Davis, Clinton, (Hackney Central)

Horam, John

Mitchell, R. C. (Solon, lichen)

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

Howell, Rt Hon Denis (B'ham, Sm H)

Morris, Rt Hon Alfred (Wythenshawe)

Deakins, Eric

Howells, Geraint

Morris, Rt Hon Charles (Openshaw)

Dean, Joseph (Leeds West)

Huckfield, Les

Morris, Rt Hon John (Aberavon)

Dempsey, James

Hudson, Davies, Gwilym Ednyfed

Moyle, Rt Hon Roland

Dewar, Donald

Hughes, Mark (Durham)

Newens, Stanley

Dixon, Donald

Hughes, Robert (Aberdeen North)

Oakes, Rt Hon Gordon

Dobson, Frank

Hughes, Roy (Newport)

Ogden, Eric

Dormand, Jack

Janner, Hon Greville

O'Halloran, Michael

Douglas, Dick

Jay, Rt Hon Douglas

O'Neill, Martin

Orme, Rt Hon Stanley

Sandelson, Neville

Urwin, Rt Hon Tom

Owen, Rt Hon Dr David

Sever, John

Varley, Rt Hon Eric G.

Palmer, Arthur

Sheerman, Barry

Wainwright, Edwin (Dearne Valley)

Park, George

Sheldon, Rt Hon Robert (A'ton-u-L)

Walker, Rt Hon Harold (Doncaster)

Parker, John

Shore, Rt Hon Peter (Step and Pop)

Watkins, David

Parry, Robert

Short, Mrs Renée

Weetch, Ken

Pavitt, Laurie

Silkin, Rt Hon John (Deptford)

Wellbeloved, James

Pendry, Tom

Silkin, Rt Hon S. C. (Dulwich)

Welsh, Michael

Penhaligon, David

Silverman, Julius

White, Frank R. (Bury & Radcliffe)

Powell, Raymond (Ogmore)

Skinner, Dennis

White, James (Glasgow, Pollok)

Price, Christopher (Lewisham West)

Smith, Rt Hon J. (North Lanarkshire)

Whitehead, Phillip

Race, Reg

Snape, Peter

Whitlock, William

Radice, Giles

Soley, Clive

Williams, Rt Hon Alan (Swansea W)

Richardson, Jo

Spearing, Nigel

Williams, Sir Thomas (Warrington)

Roberts, Albert (Normanton)

Spriggs, Leslie

Wilson, Gordon (Dundee East)

Roberts, Allan (Bootle)

Stallard, A. W.

Wilson, Rt Hon Sir Harold (Huyton)

Roberts, Ernest (Hackney North)

Steel, Rt Hon David

Wilson, William (Coventry SE)

Roberts, Gwilym (Cannock)

Stoddart, David

Winnick, David

Robertson, George

Strang, Gavin

Woodall, Alec

Robinson, Geoffrey (Coventry NW)

Summerskill, Hon Dr Shirley

Woolmer, Kenneth

Rodgers, Rt Hon William

Taylor, Mrs Ann (Bolton West)

Wrigglesworth, Ian

Rooker, J. W,

Thomas, Jeffrey (Abertillery)

Wright, Sheila

Roper, John

Taylor, Teddy (Southend East)

Ross, Ernest (Dundee West)

Thorne, Stan (Preston South)

TELLERS FOR THE AYES:

Ross, Stephen (Isle of Wight)

Tilley, John

Rowlands, Ted

Torney, Tom

Mr. George Morton and Mr. James Tinn.

Ryman, John

NOES

Alexander, Richard

Cockeram, Eric

Grylls, Michael

Alison, Michael

Colvin, Michael

Gummer, John Selwyn

Amery, Rt Hon Julian

Cope, John

Hamilton, Hon Archie (Eps'm&Ew'll)

Ancram, Michael

Cormack, Patrick

Hamilton, Michael (Salisbury)

Arnold, Tom

Corrie, John

Hampson, Dr Keith

Aspinwall, Jack

Costain, A. P.

Hannam, John

Atkins, Rt Hon H. (Spelthorne)

Crouch, David

Haselhurst, Alan

Atkins, Robert (Preston North)

Dean, Paul (North Somerset)

Hastings, Stephen

Atkinson, David (B'mouth, East)

Dickens, Geoffrey

Havers, Rt Hon Sir Michael

Baker, Kenneth (St. Marylebone)

Dorrell, Stephen

Hawkins, Paul

Baker, Nicholas (North Dorset)

du Cann, Rt Hon Edward

Hawksley, Warren

Beaumont-Dark, Anthony

Dunn, Robert (Dartford)

Heddle, John

Bendall, Vivien

Durant, Tony

Henderson, Barry

Bennett, Sir Frederic (Torbay)

Dykes, Hugh

Heseltine, Rt Hon Michael

Benyon, Thomas (Abingdon)

Eden, Rt Hon Sir John

Hicks, Robert

Benyon, W. (Buckingham)

Edwards, Rt Hon N. (Pembroke)

Higgins, Rt Hon Terence L.

Best, Keith

Eggar, Timothy

Hill, James

Bevan, David Gilroy

Elliott, Sir William

Hogg, Hon Douglas (Grantham)

Biffen, Rt Hon John

Emery, Peter

Holland, Philip (Carlton)

Biggs-Davison, John

Eyre, Reginald

Hooson, Tom

Blackburn, John

Fairbairn, Nicholas

Hordern, Peter

Blaker, Peter

Fairgrieve, Russell

Howe, Rt Hon Sir Geoffrey

Body, Richard

Faith, Mrs Sheila

Howell, Rt Hon David (Guildford)

Bonsor, Sir Nicholas

Farr, John

Howell, Ralph (North Norfolk)

Boscawen, Hon Robert

Fell, Anthony

Hunt, David (Wirral)

Bottomley, Peter (Woolwich West)

Fenner, Mrs Peggy

Hunt, John (Ravensbourne)

Bowden, Andrew

Finsberg, Geoffrey

Hurd, Hon Douglas

Bright, Graham

Fisher, Sir Nigel

Irving, Charles (Cheltenham)

Brinton, Tim

Fletcher, Alexander (Edinburgh N)

Jenkin, Rt Hon Patrick

Brittan, Leon

Fletcher-Cooke, Charles

Jessel, Toby

Brocklebank-Fowler, Christopher

Fookes, Miss Janet

Johnson Smith, Geoffrey

Brooke, Hon Peter

Forman Nigel

Jopling, Rt Hon Michael

Brown, Michael (Brigg & Sc'thorpe)

Fowler, Rt Hon Norman

Joseph, Rt Hon Sir Keith

Browne, John (Winchester)

Fox, Marcus

Kaberry, Sir Donald

Bruce-Gardyne, John

Fraser, Rt Hon H. (Stafford & St)

Kellett-Bowman, Mrs Elaine

Bryan, Sir Paul

Fraser, Peter (South Angus)

Kershaw, Anthony

Buchanan-Smith, Hon Alick

Fry, Peter

King, Rt Hon Tom

Buck, Antony

Galbraith, Hon T. G. D.

Knight, Mrs Jill

Budgen, Nick

Gardiner, George (Reigate)

Knox, David

Bulmer, Esmond

Gardner, Edward (South Fylde)

Lamont, Norman

Burden, F. A.

Garel-Jones, Tristan

Lang, Ian

Butcher, John

Gilmour, Rt Hon Sir Ian

Langford-Holt, Sir John

Butler, Hon Adam

Glyn, Dr Alan

Latham, Michael

Cadbury, Jocelyn

Goodhart, Philip

Lawrence, Ivan

Carlisle, John (Luton West)

Goodhew, Victor

Lawson, Nigel

Carlisle, Kenneth (Lincoln)

Goodlad, Alastair

Lee, John

Carlisle, Rt Hon Mark (Runcorn)

Gow, Ian

Lennox-Boyd, Hon Mark

Chalker, Mrs. Lynda

Gower, Sir Raymond

Lester, Jim (Beeston)

Channon, Paul

Grant, Anthony (Harrow C)

Lloyd, Ian (Havant & Waterloo)

Chapman, Sydney

Gray, Hamish

Lloyd, Peter (Fareham)

Churchill, W. S.

Greenway, Harry

Loveridge, John

Clark, Hon Alan (Plymouth, Sutton)

Grieve, Percy

Lyell, Nicholas

Clark, Sir William (Croydon South)

Griffiths, Eldon (Bury St Edmunds)

McCrindle, Robert

Clarke, Kenneth (Rushcliffe)

Griffiths, Peter (Portsmouth N)

Macfarlane, Neil

Clegg, Sir Walter

Grist, Ian

MacGregor, John

1886

1887

MacKay, John (Argyll)

Pawsey, James

Stewart, John (East Renfrewshire)

Macmillan, Rt Hon M. (Farnham)

Percival, Sir Ian

Stokes, John

McNair-Wilson, Michael (Newbury)

Peyton, Rt Hon John

Stradling Thomas, J.

McNair-Wilson, Patrick (New Forest)

Pink, R. Bonner

Tapsell, Peter

McQuarrie, Albert

Pollock, Alexander

Taylor, Robert (Croydon NW)

Madel, David

Porter, George

Taylor, Teddy (Southend East)

Major, John

Prentice, Rt Hon Reg

Tebbit, Norman

Marland, Paul

Price, David (Eastleigh)

Temple-Morris, Peter

Marlow, Tony

Proctor, K. Harvey

Thatcher, Rt Hon Mrs Margaret

Marshall, Michael (Arundel)

Pym, Rt Hon Francis

Thomas, Rt Hon Peter (Hendon S)

Marten, Neil (Banbury)

Rathbone, Tim

Thompson, Donald

Mates, Michael

Rees, Peter (Dover and Deal)

Thorne, Neil (llford South)

Mather, Carol

Rees-Davies, W. R.

Thornton, Malcolm

Maude, Rt Hon Angus

Renton, Tim

Townend, John (Bridlington)

Mawby Ray

Rhodes James, Robert

Trippier, David

Mawhinney, Dr Brian

Rhys Williams, Sir Brandon

Trotter, Neville

Maxwell-Hyslop, Robin

Ridley, Hon Nicholas

van Straubenzee, W. R.

Mayhew, Patrick

Ridsdale, Julian

Vaughan, Dr Gerard

Mellor, David

Rifkind, Malcolm

Viggers, Peter

Miller, Hal (Bromsgrove & Redditch)

Rippon, Rt Hon Geoffrey

Waddington, David

Mills, lain (Meriden)

Roberts, Michael (Cardiff NW)

Wakeham, John

Mills, Peter (West Devon)

Roberts, Wyn (Conway)

Waldegrave, Hon William

Miscampbell, Norman

Rossi, Hugh

Walker, Rt Hon Peter (Worcester)

Mitchell, David (Basingstoke)

Rost, Peter

Walker, Bill (Perth & E Perthshire)

Moate, Roger

Royle, Sir Anthony

Walker-Smith, Rt Hon Sir Derek

Monro, Hector

Sainsbury, Hon Timothy

Waller, Gary

Moore, John

St. John-Stevas, Rt Hon Norman

Walters, Dennis

Morgan, Geraint

Scott, Nicholas

Ward, John

Morris, Michael (Northampton, Sth)

Shaw, Michael (Scarborough)

Warren, Kenneth

Morrison, Hon Charles (Devizes)

Shelton, William (Streatham)

Watson, John

Morrison, Hon Peter (City of Chester)

Shepherd, Colin (Hereford)

Wells, John (Maidstone)

Mudd, David

Shersby, Michael

Wells, Bowen (Hert'rd & Stev'nage)

Murphy, Christopher

Skeet, T. H. H,

Wheeler, John

Myles, David

Smith, Dudley (War. and Leam'ton)

Whitelaw, Rt Hon William

Needham, Richard

Speed, Keith

Whitney, Raymond

Nelson, Anthony

Speller, Tony

Wickenden, Keith

Neubert, Michael

Spence, John

Wiggin, Jerry

Newton, Tony

Spicer, Jim (West Dorset)

Wilkinson, John

Normanton, Tom

Spicer, Michael (S Worcestershire)

Williams, Delwyn (Montgomery)

Onslow, Cranley

Sproat, lain

Winterton, Nicholas

Oppenheim, Rt Hon Mrs Sally

Squire, Robin

Wolfson, Mark

Osborn, John

Stainton, Keith

Young, Sir George (Acton)

Page, John (Harrow, West)

Stanbrook, Ivor

Younger, Rt Hon George

Page, Richard (SW Hertfordshire)

Stanley, John

Parkinson, Cecil

Steen, Anthony

TELLERS FOR THE NOES.

Parris, Matthew

Stevens, Martin

Patten, Christopher (Bath)

Stewart, Ian (Hitchin)

Mr. Spencer Le Marchant and Mr. Anthony Berry.

Pattie, Geoffrey

Question accordingly negatived.

IRON AND STEEL (BORROWING POWERS)
Resolved,
That the draft Iron and Steel (Borrowing Powers) Order 1980, which was laid before this House on 6 May, be approved.—[Sir K. Joseph.]

HOUSING [MONEY] (No. 2)
Queen's Recommendation having been signified—
Resolved,
That, for the purposes of any Act of the present Session to give security of tenure, and the right to buy their homes, to tenants of local authorities and other bodies; to make other provision with respect to those and other tenants; to restrict the discretion of the court in making orders for the possession of land and to amend the law about housing finance in the public sector, it is expedient to authorise—

(a) payments out of money provided by Parliament under schemes for contributions (not exceeding £5,000, or such greater amount as may be provided by order, for any one
1888
dwelling) towards the net cost to local authorities of disposing of dwellings after carrying out works of repair, improvement or conversion;

(b) any increase in the sums payable out of money provided by Parliament under section 29 of the Housing Act 1974 attributable to provisions enabling housing association grants under that section (of an amount not exceeding £5,000, or such greater amount as may be provided by order, for any one dwelling) to be paid to housing associations registered under section 13 of that Act in cases where an association disposes of dwellings after carrying out works of repair, improvement or conversion;

(c) any increase in the sums payable in any one year out of money provided by Parliament which is attributable to the commutation of transitional town development subsidy payable under section 5 of the Housing Rent and Subsidies Act 1975; and

(d) any increase in the sums payable out of money provided by Parliament under the Rent Act 1977 attributable to provision for the payment of pensions, allowances or gratuities to or in respect of any person nominated to act as president or vice-president of a panel formed under Schedule 10 to that Act in respect of rent assessment committees."—[Mr. MacGregor.]

HOUSING [MONEY] (No. 2)

  Treforest Skillcentre
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jopling.]
  Mr. Speaker: I shall time the debate from the moment the hon. Gentleman is called to speak.
  10.14 pm
  Mr. Brynmor John: I am grateful for the opportunity of raising a subject upon which I have already made written and oral representations to the Manpower Services Commission and to the Department, namely, the proposed closure of the Treforest skillcentre annexe. I hope that by focusing attention on this totally mistaken decision I shall, even at this late stage, obtain its reversal.
  The present Government have looked at retraining in two ways since they assumed office. The first was an exercise carried out by Sir Derek Rayner, upon whose business acumen the Government heavily rely, and his remit was to look at the efficiency of the skillcentre network. It was proposed to close five skillcentres and five annexes, as The Times reported last December. Treforest was reported last December. Treforest was not among those recommended for closure. Therefor, it passed its efficiency audit, which is significant in itself and throws a curious light on the Government's later attempts to discredit it.
  However, in December, in their theological fervour to save public expenditure regardless of the consequences, the Government told the Manpower Services Commission that it had to save 3,400 jobs, out of which the skillcentres had to save 520. Rayner had been abandoned in favour of Procrustes, and the Treforest annexe had to be included, quite literally, to make up the number.
  By now, some reasons had to be discovered, and they were encapsulated in the Minister's letter to me of 5 March 1980 as being a combination of poor performance and over-provision in the area.
  I should like to separate those two reasons and deal with them. First, what does "poor performance" mean? It certainly does not mean a shortage of applicants. The annexe had 72 places,
  1890
  and it was proposed to add another class of between 12 and 14 places, with the equipment already purchased and on site. Occupancy of places was always high and there was a waiting list. Surely the Minister cannot mean the quality of the training given by the staff. The pass rates were extremely high, and employers who took the graduates were very pleased with the quality they employed. Therefore, to attack their training would be an unwarranted slur upon the teaching staff. I think that what the Minister means by that clumsy phrase is the record of subsequent placings of the men in jobs having the requisite skill requirements.
  The exact placement record is a matter of dispute. The staff at the skillcentre have produced higher figures for placing than the chairman of the Manpower Services Commission. Indeed, even the chairman had to have two goes at it, and his latest letter to me not only contradicts the union figures but his own earlier letter to such a radical extent that I wonder whether someone ought to have another go at revising it.
  In the latest letter there is this memorable paragraph:
  " We now have the 100 per cent. local follow-up for the September 1979 quarter which shows that of the 48 per cent. of trainees who responded unfortunately only 31 per cent. were using the skills in which they had been trained for any part of the work ".
  Frankly, I am not at all certain what that means, and it might even tax many who spend their lives studying the meaning of words.
  My tentative conclusion is that it means that almost three-quarters of the trainees who responded to the inquiry have jobs calling for all or part of their skills. In any event, one cannot divorce this from the general economic climate which makes placements difficult—a difficulty compounded by the apparent friction between the employment services division and the training services division in Wales, which seems to have led to a less than wholehearted placement policy.
  Secondly, there is over-production of training places in the area. The implication is that the Cardiff centre will be able to cope with all the existing courses without its two annexes at Tremorfa and Treforest. That is not true. Of the courses being conducted at Treforest, only two are being redirected within the system,

  1891
  and neither of those will go to the Cardiff skillcentre. Three courses have been lost at Tremorfa and six at Treforest. These are being lost without replacement at any other centre. Since their occupancy is high, there is an obvious demand for them, which will now be unmet. Therefore, the second reason for closure seems to be quite unsound.
  It is rarely enough to demonstrate that the reasons given for closing something are not sound. Indeed, it would never be enough for this Government, whose every move seems to be based on unsound reasoning. Therefore, I shall put forward some positive reasons why the Treforest annexe should be retained. These reasons are nothing to do with sentiment, although I am grateful that a Government training scheme existed in Treforest more than 40 years ago because it enabled my father, an unemployed miner, to be retrained as a painter. Nor are they based on the strong local support for its retention., as evidenced both in the local newspapers and by the very strong support given to the fight by the Taff Ely borough council.
  The two reasons that I adduce are, first, the ostensible strategy of the Government, which says that job loss in obsolescent industry is inevitable and that we must switch to new industries. The Government counsel us not to be afraid of change, but how can that be unless men are given the opportunity to train in new skills? It would be cruel if the Government were to tolerate job loss without trying to create new job prospects.
  The second reason is that there is an increasing need in this area for men to -acquire new skills. The Government and the Manpower Services Commission have concentrated on likely steel and colliery closures and have modified their proposals for skillcentre closures to take account of these. I beg the Government not to be oblivious to the job loss that is occurring constantly in our area.
  This annexe is situated on the Treforest industrial estate, which is fast becoming an industrial desert. Since the beginning of this year nearly 1,000 jobs have been lost, either through whole factories closing or through existing employers shedding labour. By emptying this factory the
  1892
  Government will have added their direct contribution towards making this a ghost industrial estate. We cannot see an end to it, and without training facilities we will have no hope of taking advantage of whatever bright spots may occur in the future.
  If the Government believe in a strong industry, and if they believe that workpeople have the adaptability and resilience to change their industrial circumstances, they will retain the annexe. If not, it will be because dogma has blinded them to the economic consequences of wasted potential and to the human tragedy. Therefore, I hope that even at this late stage the Government will think again about what I profoundly believe to have been a mistaken decision.
  10.18 pm
  Mr. Ednyfed Hudson Davies: I am grateful for an opportunity to make a brief intervention. The Treforest skillcentre, in the constituency of my hon. Friend the Member for Pontypridd (Mr. John), is on the border of my constituency. Mine is a constituency of very high unemployment. Many members of the staff of the Treforest skillcentre, and certainly many of the trainees there, come from my constituency, and there is great concern that an institution that is performing such a useful function in difficult days should be closed. I hasten to add that these days are made more difficult by the policies of the Government. A great deal of benefit was being derived from the skillcentre.
  A Manpower Services Commission press release of 23 April pointed out in reference to cuts and redistribution that although skillcentre rationalisation would involve closures, the chairman had said that, overall, the needs of individuals and industry would be better served than before.
  That is abject nonsense. It is like a surgeon trying to comfort a patient by telling him that although he has to undergo the amputation of a leg, he will afterwards be able to hobble along more rapidly on crutches than he could when his legs were in good condition.
  I could understand the Government going in for cuts and saying that they were not really interested in the problems

  1893
  of unemployment and retraining, but trying to dress up cuts by saying that everyone will be better off is not only nonsense, but dishonest nonsense.
  10.25 pm
  The Under-Secretary of State for Employment (Mr. Jim Lester): I start by saying that I appreciate the concern and disappointment of the hon. Members for Pontypridd (Mr. John) and Caerphilly (Mr. Hudson Davies) at the Manpower Services Commission's decision to close the skillcentre annexe at Treforest. Loss of such a facility can never be welcome to local people.
  It is fair to say that that is something that has very much influenced the way in which the MSC has gone about taking its decisions on rationalising the skillcentre network. I hope that I can at least help the hon. Member for Pontypridd and others who may share his views to understand why the MSC has taken its decision.
  The decision to close the Treforest annexe is part of a much wider set of decisions on the future shape of the skill-centre network. It is the result of the review established by the previous Labour Government two years ago.
  The MSC's aims, which I entirely support, are to get a network of skillcentres located where industry can make most use of them and where a majority of individuals can easily get access to training. The rationalisation proposals are designed to achieve these aims while providing more training, but in fewer centres and therefore at less cost.
  The closures will also enable the commission to put more resources into offering direct training assistance to employers and their employees, through the direct training services. These services are especially valuable in helping new and developing industry, which is of particular importance to Wales.
  At a general level, these proposals must make good sense, but the MSC has rightly recognised that closures are bound to disappoint and inconvenience local people. It has paid a great deal of attention to the ways in which individuals will be affected—whether they will have access to alternative training, how difficult the transport arrangements are, whether specal transport needs to be provided, how
  1894
  many other people will benefit from new alternative centres opening and from classes being moved from closed centres, and so on. I believe that the commission has made an honest and successful attempt to decide on a future network that minimises inconvenience and maximises advantage.
  The commission has been at pains to consult widely and to take full account of local views. In one or two cases that process is still going on. Obviously, the commission has had to balance the views that it has heard against its aims in rationalising the network to provide a better and a stronger system overall, but as a result of the consultations there have been changes, shifts in emphasis and timetable, and consideration given to transport arrangements. Above all the MSC has taken a positive approach to the best means of ensuring, with the help of local input, that local training needs—of both employers and trainees—are met, whether through skillcentres or otherwise.
  The hon. Member for Pontypridd has made his own representations. I hope that he will agree that he has received a full and fair response, even if he cannot share the MSC's conclusions, though I gathered from his remarks that that is not the case.
  Perhaps I may now turn to the Treforest annexe, and why the MSC has decided that it should be closed. As the hon. Member will know, and has said, one of the main criteria used by the commission in selecting skillcentres or annexes for closure has been how successful they are in producing trainees who find and settle into jobs using the skills that they have learnt. Another important factor has been how well utilised are the skillcentre facilities, and those of other neighbouring centres. The Treforest annexe has 70 places operational at present. I freely concede that recently these have been well used, with over 90 per cent. of the possible capacity being used. This is partly the result of taking out classes with a poor occupancy record.
  Treforest is one of a number of centres within not very many miles of each other. There are a further 270 places at the main centre at Cardiff, an easy eight miles away. There are 250 places at Newport, 15 miles away, and another 160

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  places at West Gwent skillcentre, 12 miles away. Occupancy has certainly improved in all these centres, but there are unused places—130 in mid-March—and there is unused space. Classes have been shut for lack of an instructor, and they can be opened if staff become available from closing skillcentres.
  Overall, the area at present has twice the national average of skillcentre places per head. Even after closures it will still have substantially above average places. No one will quarrel with that, in view of high unemployment and the need to do what we can to regenerate industry. But there is spare capacity close by to take trainees who might otherwise have gone to Treforest.
  That is not the main reason why Treforest is to be closed. The commission has had to take account of the employment prospects for trainees. The simple and distressing facts are that of 158 trainees completing courses at the annexe in 1979, only 44–28 per cent.—were placed on completing their course. Of 32 trainees who completed courses in the quarter ending March, only two were placed on completion. And this is not for want of trying by the skillcentre staff. Thank goodness, the results of the regular 100 per cent. survey of trainees, which is taken three months after they finish training, tell a slightly happier story. They show that 58 per cent. of respondents in training used their skills for the quarter ending December last year. But these placing results give a most depressing picture.
  Of course the hon. Gentleman is right to stress the need to have facilities available to retrain those who will be made redundant in South Wales, if they want to be trained. However, Treforest is not ideally situated from that point of view. That is why the MSC has taken careful account of the alternative capacity available, and of the timing of other closures in South Wales.
  The MSC cannot just offer training with a blind and cynical disregard for whether trainees will get a job at the end. The training is long and arduous. It involves a considerable investment of effort by the individual and of money by the State. I regret that, by and large, employers on the Treforest trading estate
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  and others nearby do not take skillcentre trainees, and they do not use the annexe facilities for upgrading the skill of their own employees, but it is less than fair to trainees to offer them training with such dismal prospects of a job at the end of it. Moreover, their lack of success can give skillcentre training generally a bad name.
  The basic facts are that the placing results from Treforest cannot justify its continuance, and that alternative facilities exist reasonably close by.
  Mr. John: Does the Minister dispute my statement that six classes, including three welding classes, one motor mechanics class, one class in motor body work and one in radio and television work, are disappearing? Does he dispute that they are not being replaced in Cardiff or anywhere else?
  Mr. Lester: I was just about to come to that point. Treforest has six classes, all duplicated in neighbouring centres. There are motor vehicle body repair classes at Newport and Port Talbot; motor vehicle repair and maintenance classes at those two centres and West Gwent; electric are welding classes at all four of the neighbouring centres; a radio and television servicing class at Cardiff; and coded welding classes at Newport and Port Talbot. One coded welding class will move to Wrexham skillcentre, where it can help those made redundant from Shotton. Closing the radio and television class should mean that an important class in industrial electronics can open at Cardiff, using the same instructor.
  There are good prospects for redeploying the staff concerned, some to fill important vacancies. Between now and February 1981, when the annexe is due to shut, trainees will be gradually diverted elsewhere. None will be unable to finish the course.
  The advantages of rationalising the skillcentre network, and the case for closing Treforest as part of the exercise, seem to me to be irrefutable. I understand that the district manpower committee for Mid-Glamorgan and the MSC's Welsh committee have accepted the case for closure, whilst regretting the loss of a local facility. I hope that the hon. Gentleman can do likewise. I am sure

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  that he can look to the Manpower Services Commission, in concert with those concerned locally, to do all that can be done within the resources available to it to ensure that training needs of both
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  individuals and employers in the area are properly catered for.
  Question put and agreed to.
  Adjourned accordingly at twenty-six minutes to Eleven o'clock.