Commons Sitting of 22 May 1980

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

PRIVATE BUSINESS
TYNE AND WEAR BILL [Lords] (By Order)
SOUTH YORKSHIRE BILL [Lords] (By Order)
BRITISH RAILWAYS BILL (By Order)
LONDON TRANSPORT (NO. 2) BILL (By Order)
Orders for Second Reading read.
To be read a Second time upon Thursday 5 June.

ORAL ANSWERS TO QUESTIONS
  NATIONAL FINANCE

    Building Societies
    Mr. Budgenasked the Chancellor of the Exchequer whether he has any plans to change the law concerning the building societies.
    The Financial Secretary to the Treasury (Mr. Nigel Lawson): I refer my hon. Friend to the answer that I gave to the hon. Member for Thurrock (Dr. McDonald) on 15 November.
    Mr. Budgen: Does not my hon. Friend agree that building societies operate a cartel on interest rates and that that cartel has two main effects? First, does he not agree that it denies a proper market return on investment? Secondly, does he not accept that it encourages the growth of very large building societies? Will he give an undertaking that the Government will not introduce any legislation that is designed to continue that cartel?
    Mr. Lawson: I am not sure that my hon. Friend was right when he said that the existence of a cartel would encourage the growth of large building societies. The cartel maintains mortgage interest rates at lower rates than might otherwise be expected. I shall bear in mind my hon. Friend's remarks concerning legislation.
    Mr. Grimond: As buildings societies collect money in areas that include my constituency, is it not reasonable that they should undertake to lend money also? At present, a lot of money is taken out of Shetland and Orkney by building societies that will not lend money for building in those areas.
    Mr. Lawson: One must commend the thrift of the people of Orkney and Shetland. It is for building societies and their customers to decide where they lend and borrow. It is not an issue for the Government to decide.
    Mr. Hal Miller: Should not greater protection be given to those who invest in building societies and to those who receive loans? Does not my hon. Friend accept that the present craze for building

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    society mergers seems designed to further the interests of the managers of those societies, not those of the depositors or those taking out mortgages? Will he reconsider his reply to the right hon. Member for Orkney and Shetland (Mr. Grimond) concerning the relationship between the deposits that are made and the advances that are given?
    Mr. Lawson: My hon. Friend is a robust interventionist in many ways. Protection is important. The issue concerns the Registry of Friendly Societies and the registrar. Legislation may be needed. We shall have to apply the EEC directive on credit institutions to building societies, just as that directive was applied last year to those operating under the Banking Act. Other changes may be necessary if we are to follow up the report of the inspectors on the collapse of Grays Building Society and to tidy up existing legislation. Consultations on all those issues are taking place.
    Mr. Weetch: Does the Financial Secretary realise that we need legislation to control some of the wasteful practices of building societies? Does he not accept that the streets of Ipswich—like many other towns—are wastefully littered with expensive and prestigious offices? Does he not further accept that many of those offices do nothing for many weeks of the year? Should not some of those wasteful activities be curtailed?
    Mr. Lawson: I am not sufficiently familiar with the town of Ipswich to be able to comment on the hon. Gentleman's specific remarks, but there is a great deal of waste in many areas of the country. However, I am not sure that that necessarily calls for legislation.

    Money Supply
    Mr. Lathamasked the Chancellor of the Exchequer whether he will make a statement on the progress of his programme to bring the money supply under control.
    The Chancellor of the Exchequer (Sir Geoffrey Howe): Since the measures of last November there has been a marked slowing down in the rate of monetary growth. In the last six months sterling M3 has grown at an annual rate of 6½ per cent.
    Mr. Latham: That is welcome progress. However, does my right hon. and learned Friend accept that, although the timing must be for his judgment, it should be an urgent and substantial priority of Ministers to bring down the level of interest rates?
    Sir G. Howe: I recognise the point that my hon. Friend makes. Indeed, I have made it myself on a number of occasions. However, we do not wish to see a move in that direction which cannot be justified by a movement of all the other factors in the monetary market.
    Mr. Healey: Can the right hon. and learned Gentleman answer the question put to him by the president of the CBI on Tuesday, namely: if the right hon. and learned Gentleman boasts that he has the money supply under control, why is he keeping interest rates at this punitive level, particularly as they are having little or no effect on bank lending to private companies but a disastrous effect on the value of the pound, which rose 4 cents yesterday purely in response to relative interest rates between ourselves and the United States?
    Sir G. Howe: The right hon. Gentleman should surely acknowledge that a far more significant factor in yesterday's movement of the exchange rate of the pound sterling was the movement in oil prices. I need no reminding from the right hon. Gentleman of the case that was made to me on Tuesday night for a reduction in interest rates as soon as possible. Interest rates are only one of the factors affecting bank lending. The increase in bank lending is still being sustained. We wish to see firm evidence of a reduction on that front before we can be entirely confident about the timing of interest rates.
    Mr. Healey: Does the right hon. and learned Gentleman agree that those enormous and punitive interest rates are having little effect on the volume of bank lending but a disastrous effect on business liquidity and the value of the pound? Why is the right hon. and learned Gentleman sticking to the fetish that we must keep very high interest rates, when he boasts, rightly or wrongly, that he has the money supply under control?
    Sir G. Howe: The right hon. Gentleman characteristically overstates almost

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    every aspect of the argument. Interest rates are having an effect on bank lending. Bank lending is one of the facts about which one needs to have more confidence before one can be sure about the movement of the money supply. Interest rates will be coming down in due course.

    Balance of Payments
    Mr. Knoxasked the Chancellor of the Exchequer by how much the current account of the balance of payments was in deficit for the most recent 12-month period for which figures are available.
    Sir Geoffrey Howe: The most recent figures indicate a current account deficit of £1,923 million in the 12 months up to 30 April 1980.
    Mr. Knox: Does my right hon. and learned Friend agree that that figure would have been much more satisfactory had the exchange rate been at a more sensible level? When will the Government take steps to get the exchange rate to a more realistic level in relation to manufacturing costs?
    Sir G. Howe: My hon. Friend may claim to have insight into what is either a sensible or a more realistic level for the exchange rate. However, the exchange rate is determined primarily by market factors. The influence that we can have on it over a sustained period is limited. If we attempted to achieve more than would make sense we would be repeating the experience of the right hon. Member for Leeds, East (Mr. Healey) and finding ourselves losing control of the money supply.
    Mr. Dubs: Will the Chancellor put the figures that he has given the House into more realistic perspective by indicating what the non-oil deficit has been?
    Sir G. Howe: The non-oil deficit would be a misleading factor. If we sought to unwind the clock of history as if oil did not exist, we should not have had an inflow of investment to oil and an outflow of revenue in respect of investment in oil, and many other factors would have been different. I agree with the hon. Gentleman that the availability of North Sea oil has made and is making a substantial contribution to the position of this country.
    Mr. Dorrell: Does my right hon. and
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    learned Friend agree that it may be more sensible to regard oil revenues to some extent as a capital inflow, and to intervene as a Government, through the institutions, to create a balance in capital outflow, so that the manufacturing sector would be dealing with an exchange rate against which background it could better compete?
    Sir G. Howe: My hon. Friend's analysis was part of the background and justification for the speed and completeness with which we abolished exchange control.
    Mr. Stoddart: Does the right hon. and learned Gentleman agree that our total non-oil deficit is £10,000 million and our non-oil deficit with the EEC is £5,000 million, and that the measures that he is taking are making our non-oil deficit worse than it need be?
    Sir G. Howe: I urge the hon. Gentleman not to indulge in a too over-simplified breakdown between oil and non-oil deficit. However, I repeat that, if oil were not there, the factors leading to a greater deficit would be substantial. As a result of the availability of oil revenue, we are in a stronger position to reduce the borrowing requirement and so reduce interest rates, which is a sensible linkage policy.

    Value Added Tax
    Mr. Michael McNair-Wilsonasked the Chancellor of the Exchequer if he will seek to zero-rate babies' feeding bottles for value added tax.
    Mr. Lawson: No, Sir.
    Mr. McNair-Wilson: Is my hon. Friend aware that by that answer he is perpetuating the concept of taxation from the cradle to the grave? Will he accept that these bottles are a necessity for families who have babies, and that to increase VAT on them, as was done in last year's Budget, is to fly in the face of our manifesto commitment not to impose VAT on family necessities?
    Mr. Lawson: I thought for a moment that my hon. Friend was about to refer to taxation from the womb to the tomb. The imposition of VAT on these bottles is not an innovation. In our manifesto commitment we said that we would not remove existing exemptions, and we have not done so.
    Mr. Horam: With regard to manifesto commitments, do the Government now regret increasing VAT to 15 per cent.?
    Mr. Lawson: No.

    Interest Rates
    Mr. Cryerasked the Chancellor of the Exchequer what representations he has received from the Confederation or British Industry and other employers' organisations regarding a reduction in the rate of interest.
    The Chief Secretary to the Treasury (Mr. John Biffen): We have received a number of representations from employers' organisations, individual business men and industrialists regarding a reduction in the rate of interest.
    Mr. Cryer: Will the right hon. Gen-man confirm that the CBI is making strenuous efforts to get the Government to change their lunatic economic policy of high interest rates, which are ruining, in particular, small firms? Does the right hon. Gentleman accept that many organisations want the Government to take measures with regard to the massive profits that the banks are creaming off? If the Government cannot help to increase the number of jobs and extend industry instead of wreck it, will the right hon. Gentleman and his cronies resign from office?
    Mr. Biffen: We do not intend to resign from office. We are not quitters. We are determined to pursue a monetary policy which, of necessity, includes the current level of interest rates until we see tangible signs of success that a reduction in the lending rate can be embarked on with wisdom and prudence. Premature action would be foolish.
    Mr. Bruce-Gardyne: Does my right hon. Friend agree that, as an advocate of the CBI, the hon. Member for Keighley (Mr. Cryer) is like a gourmet at a health farm? Will my right hon. Friend point out to the CBI and other bodies that make representations on the level of interest rates that the rate is still negative against the rate of inflation? Will he further point out that a recrudescence of inflationary pressures, resulting from a premature cut in interest rates, would be far more damaging to industry in the long term than a reduction in interest rates?
    Mr. Biffen: The answer to all three parts of that constructive question is "Yes, Sir".
    Mr. Denzil Davies: Is not the real reason why the Government cannot reduce interest rates not the reason given by the Chancellor, that bank lending was too high, but that inflation is so high? As we are to have an inflation rate of probably 20 per cent. at the end of the year, does the right hon. Gentleman accept that there is no way in which interest rates can fall before then?
    Mr. Biffen: The right hon. Gentleman has made that point on a number of occasions.
    Mr. Jay: It is still right.
    Mr. Biffen: In the past, and during the lifetime of the Government of whom the right hon. Gentleman was a member, minimum lending rate tended to be a lead indicator and a move ahead of the rate of inflation.
    Mr. Dykes: As we have had peak interest rates for a longer continuous period than before, and as inflation is still increasing, will my right hon. Friend spell out precisely why there would be such dire consequences from even a moderate reduction in MLR of one or two points now?
    Mr. Biffen: We believe that a fall in interest rates at this moment, unless it were clearly indicated by market conditions, would have a serious impact upon the Government's monetary target.

    North Sea Oil Revenue
    Mr. William Hamiltonasked the Chancellor of the Exchequer what are the latest estimates of the revenue expected from North Sea oil over the next five years, broken down between the relevant revenue elements.
    Sir Geoffrey Howe: I have nothing to add to my replies to the hon. Member for Batley and Morley (Mr. Woolmer) of 14 April and 22 April 1980.
    Mr. Hamilton: Will the right hon. and learned Gentleman tell the House why the Government seem deliberately to have under-estimated the revenues from this source? Does he agree with the assumptions made by Phillips and Drew and Wood Mackenzie & Co.—namely, that

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    revenues from this source will be at least four times what he has estimated for 1983–84? From where do those firms get their figures and from where does he get his?
    Sir G. Howe: One of the more obviously conspicuous reasons for variation is that a number of other forecasters are forecasting on their projection of current price terms several years ahead, which immediately produces scope for a wide difference. Beyond that, the hon. Gentleman will remember that this is an area in which there is notoriously scope for over-estimating and over-optimism. It will be apparent that most of the forecasts made in previous years of the volume of output have exaggerated what actually happened. The fact remains that the figures for North Sea revenues contained in our medium-term financial strategy provide our best assessment of the reality.
    Mr. Forman: Whatever the totals and eventual breakdown of these windfall North Sea oil revenues, will my right hon. Friend assure the House that suitable priority will be given in using those revenues to necessary capital expenditure, to infrastructure projects, to reducing public debt and preferably to investment in replacement sources of energy?
    Sir. G. Howe: That is a substantial catalogue of possibilities. I think that my hon. Friend recognises that the medium-term financial strategy attaches prime importance to the value of North Sea revenues and securing a progressive reduction in Government borrowing.
    Mr. John Garrett: Does the right hon. and learned Gentleman agree that Britain has the most benevolent oil tax regime in the world outside the United States for oil companies? What does he think of the proposal in the Norwegian Government's white paper that in future oil companies should be reduced to the status of consultants and paid agents of the State and should merely receive a fee for the cost of exploration and production?
    Sir G. Howe: The hon. Gentleman's last suggestion seems to be a prescription for disaster. If one thing is beyond doubt, it is that Britain owes a great deal to the skill and managerial competence of the oil companies in exploiting North Sea
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    oil. I do not agree that our oil tax regime is the most benevolent in the world. It produces a substantial yield and one that is likely to grow.

    Money Supply
    Mr. Nicholas Wintertonasked the Chancellor of the Exchequer if he will set up a unit to monitor the issue of new money.
    Mr. Lawson: No, Sir.
    Mr. Winterton: I hardly heard that brief reply. Does my hon. Friend agree that it would be of great benefit to Britain if a unit were set up completely apart from any British Government to monitor the issue of new money, so that British Governments of either party could not print new money close to an election time to build up their election promises to the electorate, which would in the long term do great damage to the economy, and could not print post-dated cheques, an activity which was so typical of the previous Government at the general election?
    Mr. Lawson: I fully understand what has prompted my hon. Friend to make that suggestion. However, I think that it would be wrong to take monetary control out of the hands of the elected Government and Parliament. Nevertheless, it is incumbent upon Governments to be responsible in monetary matters; and this Government are responsible.
    Mr. Skinner: If the Government will not set up a unit to monitor the issue of new money, will the hon. Gentleman explain to the House why it was that a few weeks ago the Treasury formed a unit or consortium which represented the form of a lifeboat for Stone-Piatt to bail it out and provide it with new money? I think that he has a duty to tell the House why he intervened on that occasion.
    Mr. Lawson: The hon. Gentleman is misinformed. The Treasury had nothing to do with Stone-Piatt.
    Mr. Skinner: The Governor of the Bank of England was there.
    Mr. Lawson: The Governor intervened, but that is a different matter.
    Mr. Neubert: As it is nearly 10 years since decimalisation, is it not ironic that new money continues to be denominated

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    in new pence? Is it not time for changes in our currency? Would not at least the removal of the misnomer "new" be a modest start?
    Mr. Lawson: My hon. Friend has a good point. However, legislation would be required to make the change. Legislative priorities will decide when such a measure should find its place in the queue.
    Mr. Denzil Davies: I revert to the question of my hon. Friend the Member for Bolsover (Mr. Skinner) on the Stone Platt issue, which was interesting and important. Will the hon. Gentleman con firm or deny that Treasury Ministers approved—
    Mr. Skinner: They did.
    Mr. Davies:—the rescue operation taken by the Bank of England?
    Mr. Lawson: I think that the right hon. Gentleman has been in this place long enough to know that he should table a question on the Order Paper when he wishes to raise such a matter. His supplementary question has nothing to do with the question of my hon. Friend the Member for Macclesfield (Mr. Winterton). [HON. MEMBERS: "Answer".] However, from my knowledge it appears to me that the Governor of the Bank of England behaved in a constructive manner.

    Monetary Policy
    Mr. Bruce-Gardyneasked the Chancellor of the Exchequer what was the aggregate percentage increase in domestic credit expansion over the latest period of six months at an annualised rate; and whether this was in conformity with the monetary policy of Her Majesty's Government.
    Mr. Lawson: Since no stock figure corresponding to domestic credit expansion is available a percentage growth figure cannot be given. Domestic credit expansion was £3·7 billion seasonally adjusted in the six banking months to mid-April. This compares with £5·8 billion in the previous six months. These figures are consistent with our monetary policy, which is formulated in terms of a target range for sterling M3 growth.
    Mr. Bruce-Gardyne: I am grateful to my hon. Friend for that reply. I am
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    sure that we all welcome—certainly all my right hon. and hon. Friends—the way in which monetary aggregates are coming back on target. However, will he and the Treasury team take care to note that at a time of continuing balance of payments deficit domestic credit expansion statistics are vital to indicate the scale of liquidity growth in the economy?
    Mr. Lawson: My hon. Friend is right. Domestic credit expansion needs to be monitored, and we monitor it. If he is suggesting, as I think he may be, that monetary policy should be even tighter than at present, I must disagree with him. We are pursuing a tight monetary policy, as the growth rate of sterling M3 of 6½ per cent. as an annual rate over the past six months testifies.
    Mr. Jay: If, as the Prime Minister told the House last week, the rise in the RPI to 21 per cent. is largely due to higher pay settlements, how can it be checked without an incomes policy?
    Mr. Lawson: It can and will be checked by monetary policy.

    North Sea Oil Revenue
    Mr. Edwin Wainwrightasked the Chancellor of the Exchequer what revenue has been obtained from North Sea oil during each of the past four years; and what is the estimated figure for the current year.
    Sir Geoffrey Howe: Total revenues from royalties, petroleum revenue tax and corporation tax from North Sea oil and gas over the last four years were:

    1976–77

    £81 million

    1977–78

    £238 million

    1978–79

    £521 million

    1979–80

    £2,229 million

    The estimate for the current year is about £4.1 billion. These figures are at out-turn prices.
    Mr. Wainwright: Does the right hon. and learned Gentleman understand that those figures, according to many experts, seem very low? Will he bear in mind that this proves that the Government are not planning too wisely and are failing to build up manufacturing inudustry and investment in production? If he considers that such steps cannot be afforded on present income from oil revenues, will he take into account the fact that, according to many experts, the oil companies are

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    getting away with over £1,000 million a year that ought to be going into the coffers of the Government? Will he take some action?
    Sir G. Howe: The hon. Gentleman may have founded his first question about comparison with outside calculators on a misunderstanding of what I described. I was not dealing with forecasts but reporting a state of fact. On the use of oil revenues for building up industry, the hon. Gentleman must surely recognise that the revenues I have recounted are playing a crucial part, alongside the public expenditure reductions upon which we have embarked, in merely reducing public sector borrowing to a manageable figure. His suggestion that the Government are neglecting substantial profit by the oil companies is wide of the mark. The hon. Gentleman must take account of the extent to which oil company profits are earned world-wide. We are making a substantial take from those profits earned in this country.
    Mr. Eggar: Will my right hon. and learned Friend confirm that the present level of PRT and other taxes paid by oil companies on the average oilfields is well over 85 per cent.?
    Sir G. Howe: I would not like to be precise about an average figure without notice. My hon. Friend is right in identifying the extent to which the average take from profits of North Sea oilfields is very substantial.
    Mr. Robert Sheldon: In view of recent further increases in the world price of oil, will the right hon. and learned Gentleman be revising his estimate for the revenue from North Sea oil?
    Sir G. Howe: That is one of the factors to be taken into account. The right hon. Gentleman will have seen that, almost at the same time, there have been revisions in the estimates for likely production of North Sea oil. There are constantly varying factors on both sides of the equation. When prices tend to go upwards, production tends to fall short of forecasts.

    Property Sales (Stamp Duty)
    Mr. Moateasked the Chancellor of the Exchequer what is the expected yield from stamp duties on conveying of
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    domestic properties in the current financial year.
    Mr. Biffen: The duty from residential property is expected to yield £240 million this year.
    Mr. Moate: Can my right hon. Friend offer any defence for the existence of this tax on home ownership? Does he not agree that it should be phased out?
    Mr. Biffen: No. I cannot agree that the duty should be phased out, given the Government's necessity for substantial revenues. The yield of this tax of £240 million a year indicates its importance to the revenue.
    Sir Ronald Bell: Will my right hon. Friend bear in mind that stamp duty, estate agents' and solicitors' charges, and value added tax, mean that the cost of moving house now must be very substantial?
    Mr. Biffen: I note and accept that point.

    Inflation
    Mr. Robert Hughesasked the Chancellor of the Exchequer what is the latest inflation rate.
    Mr. Canavanasked the Chancellor of the Exchequer what is the present rate of inflation.
    Sir Geoffrey Howe: The retail price index rose by 21·8 per cent. over the 12 months up to April 1980. A better indication of the underlying rate will appear when the once-and-for-all effects of last year's VAT increase drops out of the arithmetic in July.
    Mr. Hughes: Will the Chancellor of the Exchequer say how public services such as the National Health Service and local government can possibly be expected to meet the cash limits set by the Government on a basis of 14 per cent. inflation since, to average that figure over the year, inflation at this time next year will have to be as low as 7 per cent.? Does the right hon. and learned Gentleman believe that there will be a 7 per cent. inflation rate at this time next year? If not, will he guarantee to protect these public services against the ravages of inflation created deliberately by the Government?
    Sir G. Howe: It is not possible to guarantee protection for this, that or any other sector of the economy, or the community, against the ravages of inflation. It is crucial to continue to achieve a reduction in the cash expansion of public expenditure. It is worth noting that one of the contributory factors to the substantial cost of the Health Service is the very substantial increase in salaries payable in that service.
    Mr. Canavan: Now that the Government's insane monetarist policies have succeeded in doubling inflation over the past 12 months, why do they not do the logical thing and try a prices freeze? Does the Chancellor seriously expect public sector workers to accept wage rises less than the rate of inflation, especially after Government attempts and press attempts to disparage the trade union movement?
    Sir G. Howe: The hon. Gentleman should notice that we are almost the only industrial country that has not accepted a rate of pay increase several percentage points below the rate of price increase. It is inevitable that there should be that relationship between prices and earnings growth, particularly in this country where, over the past three years, pay has risen 12 per cent. more than prices at a time when output has grown by only 5 per cent. One has to face the realities of economic life.
    Mr. Tapsell: Has my right hon. and learned Friend given consideration to the possibility of strengthening the purely qualitative advice to banks and other institutions on their lending decisions?
    Sir G. Howe: I have given consideration to that. The lesson of places where it has been tried and of times when it has been tried in this country is that it tends, in due course, to produce distortions and lead to alterations in the pattern of bank lending that are not sustained. There is, in the end, no escape from the discipline of price in controlling the availability of money.
    Mr. Healey: Does not the Chancellor agree that it argues disgraceful incompetence that a Minister who has made his main purpose the bringing down of the rate of inflation should have seen it more than double in his first 12 months in office to the highest level in the industrial world, higher than Italy? Does he not agree
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    that it would be 3 per cent. or 4 per cent. higher still were it not for the 18 per cent. increase in the real value of the pound that is crippling British business?
    Sir G. Howe: One of the misfortunes of the right hon. Gentleman is that while holding his present shadow office, he has to live down his record in real office. I cannot understand how he is able to make that kind of assertion. He knows better than anyone the extent to which monetary policies over the 12 months before we came to office are the main cause of our problems.
    Mr. Richard Wainwright: Will the Chancellor accept that further persistence of this rate of inflation will consolidate public expectations of continuing inflation? It is, therefore, of urgent importance to introduce an incomes policy with the authority of this House.
    Sir G. Howe: I accept fully that it is important to secure, as steadily and swiftly as possibly, a reduction in the rate of inflation and a reduction in such expectations. I have pointed out previously that the first step in that direction is likely to take place between July and August. I am afraid that the hon. Gentleman will find only a modest degree of support on both sides of the House for the proposition that an incomes policy is likely to be a long-lasting step in that direction.
    Mr. Latham: Is it the collective view of Treasury Ministers that in the next wage round in the public sector a good example must be set by the Government.
    Sir G. Howe: It is the collective view of everyone who has given serious consideration to the subject that, as an essential part of reducing inflation, the public sector must play a role in securing progressively lower rates of pay settlements. It is most important, as my hon. Friend says, that this should be achieved.
    Mr. Heffer: In view of rising inflation, rising unemployment, the fact that the balance of payments is as bad as ever and that interest rates are as high as ever and not likely to go down, will not the right hon. and learned Gentleman consider that the monetarist policies of the Government might be wrong?
    Sir G. Howe: I will consider any suggestion made by the hon. Gentleman with the respect to which it is entitled. It must be clear by now that the impact of monetary policies on inflation and the state of the economy is bound, as the right hon. Member for Leeds, East (Mr. Healey) has frequently pointed out, to take time.

    Income Tax
    Sir Brandon Rhys Williamsasked the Chancellor of the Exchequer if he will take steps to simplify the income tax system before proceeding with the transfer of Pay-As-You-Earn to computers; and if he will seek to put personal taxation on a unisex basis.
    Mr. Lawson: The Inland Revenue's plans for computerising PAYE envisage automation of, broadly, the existing system, but of course we are always seeking to simplify this where possible. My right hon. and learned Friend announced in his Budget Statement that we would be issuing a Green Paper on the taxation of husband and wife later this year.
    Sir B. Rhys Williams: Will my hon. Friend give an undertaking that putting PAYE on to a computer will not place obstacles in the future to reforms of the income tax system, with a view to simplifying it and removing its disincentive effects? Can my hon. Friend say, in particular, that computerisation will not obstruct the recognition of social changes such as the fact that women are entitled to be treated as independent and equal persons both as to their property and their income?
    Mr. Lawson: As with any large computer project, computerisation of PAYE implies some constraints on changes in the personal tax system during the implementation period. I hope that the conclusions that are reached as a result of the consultations which follow the publication of the Green Paper to which I referred will not be impeded by those constraints.
    Mr. James A. Dunn: Will the Minister take an opportunity to describe the procedures in which the individual contributor to the tax system will be involved? These are complex matters. Will the Minister also ensure that the computer and equipment to be used will be British?
    Mr. Lawson: The hon. Gentleman is right. These are complex matters upon which I do not feel professionally competent to pronounce. Certainly all these considerations will be gone into very carefully.
    Mr. Henderson: Will my hon. Friend ensure that he is not bamboozled by civil servants into believing that a computer system necessarily makes it more rigid and that provision can be made not only to amend the system in future, if need be, but that it will be easier to do so if appropriate steps are taken at an early enough stage?
    Mr. Lawson: My hon. Friend has slightly misunderstood the position. Once the computer system is fully operational there will be much greater flexibility, not greater rigidity. The constraints appear only during the period when the changeover takes place.
    Mr. Denzil Davies: Will the Financial Secretary give a clear assurance to the House that the computer system will not be so inflexible as to prevent any future Government from changing the PAYE system to a non-cumulative system or bringing in a system of self-assessment?
    Mr. Lawson: I hope that when the system is fully operational—we hope that that will be by 1986–87—there will be that degree of flexibility.

    North Sea Oil and Gas Revenues
    Mr. Woolmerasked the Chancellor of the Exchequer what views were expressed by the Trades Union Congress and the Confederation of British Industry to the May meeting of the National Economic Development Council on how North Sea oil and gas revenues could best be used to benefit the economy; and what is his policy on the matter.
    Sir Geoffrey Howe: Use of the North Sea revenues was not discussed in detail during the May meeting. These revenues will constitute an increasingly important part of the Government's income, permitting lower levels of Government borrowing and of taxation than would otherwise have been needed. This will help to achieve a lower level of interest rates and encourage a higher level of investment.
    Mr. Woolmer: Does the Chancellor agree with the Director General of the National Economic Development office that North Sea oil revenues should be the basis of a positive industrial policy? Does the Chancellor further agree that North Sea oil revenues are currently being spent on consumption instead of on investment? When will the Government bring forward a proposal to the House to show the use of North Sea oil revenues as strengthening British industry instead of destroying it as at present?
    Sir G. Howe: One of the principal arguments advanced earlier this afternoon was that the most significant contribution one could make to strengthening British industry would be to achieve lower interest rates. One of the most formidable contributions now being made by North Sea oil revenues is to help reduce public borrowing to precisely that end.
    Mr. Healey: Is it not the case that the £4,000 million of tax revenue which the Chancellor told us he expects this year from North Sea oil will be spent entirely on financing a rise in unemployment and making good the loss of revenue due to the recession produced largely by the policies of the present Government?
    Sir G. Howe: That question represents the most curiously perverse and naive analysis of economic facts.
    Mr. Douglas: Will the Chancellor inform the NEDC of the effects of our having a petro-currency, an over-valued pound, high interest rates and high unemployment and will he indicate to the NEDC where we would be if we did not have these revenues?
    Sir G. Howe: In that question the hon. Gentleman has succeeded in aptly summarising the argument that the possession of North Sea oil contributes advantages and disadvantages. It contributes advantages in the way of higher revenue which would not otherwise be available. On the other hand, it does have the effect upon our currency about which several hon. Members have complained.

    Taxation System
    Mr. Ralph Howellasked the Chancellor of the Exchequer whether he has
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    any further plans to reform the tax system to provide sufficient incentives to those who at present can obtain without working benefits equivalent to the take-home pay which they would be likely to earn in employment.
    Mr. Bifften: The Government's objective is to reduce the burden of direct taxation for all members of the community, including the lower paid. The present imbalance between in-work and out-of-work income will also be reduced by taxing the short-term social security benefits available to those not working.
    Mr. Howell: Does my hon. Friend agree that it is neither reasonable nor acceptable to deduct income tax and national insurance contributions from low-paid workers in such a way that they are little better off—in some cases they are worse off—than they would be if they relied entirely on State benefits?
    Mr. Biffen: That clearly is a factor in Government thinking and one of the reasons why my right hon. and learned Friend was so anxious to increase the tax thresholds in his recent Budget.

  PRIME MINISTER (ENGAGEMENTS)
  Mr. Butcherasked the Prime Minister if she will list her official engagements for 22 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. This evening I shall leave for a visit to the North-East of England.
  Mr. Butcher: Will my right hon. Friend find time today to remind trade union leaders that pay has risen by 12 per cent. more than prices in the last three years while output has risen by a mere 5 per cent.? In expressing the hope that we are about to enter the post-Clegg era may I ask my right hon. Friend whether she agrees that a closer link between increases in wages and efficiency may, of necessity, mean an acceptance of pay increases less than the current rate of inflation?
  The Prime Minister: I agree with my hon. Friend that it is vital to achieve a closer link between increased pay and increased efficiency. For that purpose it may be necessary, for a time, for some firms to accept a rate of increase below the level of inflation. After all, the rate of increase that one is entitled to have is the rate of increase that is earned. Otherwise the extra goes into increased prices.
  Mr. Foot: In the light of that reply will the right hon. Lady, either today or very soon, make arrangements to meet representatives of the nurses? Does the Prime Minister regard herself as being bound by the commitment which she herself made to the nurses just over a year ago? Will she tell the House and the country how she proposes to carry out that promise?
  The Prime Minister: If the right hon. Gentleman looks at the increases afforded to the nurses he will find that they have been of the same order—about 65 per cent. or 66 per cent.—as have been afforded to doctors, in view of the latest award of the review body, since 1978.
  Mr. Foot: Does the right hon. Lady think that that is a fulfilment of the pledge she gave to the nurses? Is she aware that the nurses do not think that it is a fulfilment of that pledge? Will the Prime Minister have an early meeting with the nurses to discuss the matter before she puts into operation the arrangements for the doctors, the dentists or the nurses?
  The Prime Minister: I hope that the nurses would go to see my right hon. Friend the Secretary of State for Social Services. As the right hon. Gentleman will remember, we are pledged to put into effect the report of the review body on the doctors. It is the third stage, begun by the previous Labour Government, which we have honoured and will continue to honour. It is a good thing that we have taken over that pledge. When the doctors have received that amount they will have had the same as nurses will have had since 1978 assuming that the nurses take the 14 per cent. increase this year.
  Mr. David Steel: Will the Prime Minister tell the House whether the Chancellor of the Exchequer's invitation to the trade
  710
  unions to discuss pay is the first step towards recognising the need for a pay policy? If it is not, will the Prime Minister explain how she expects the Scottish teachers, for example, to accept a pay rise of 14 per cent. which is 8 per cent. below the going rate of inflation unless that is to become a general rule fairly applied to everybody?
  The Prime Minister: There is no general rule that can be applied to everyone, because circumstances are very different. The right hon. Gentleman would perhaps accept that a policy that tried to close the gap between increased pay and increased efficiency could in some ways be called a pay policy—the only sound pay policy that there is.
  Mr. Kilfedder: Yesterday, when, despite her assurance last week, the Prime Minister had secret talks about Northern Ireland with the Prime Minister of the Irish Republic, a former gun-runner, whose brazen and hostile claim to the territory of Ulster acts as an incentive to the Provisional IRA, did the right hon. Lady make it absolutely clear to Mr. Haughey that the Ulster people, despite Provisional IRA atrocities, and whether or not the British guarantee remains, will never capitulate and be swallowed up by the most theocratic country in Western Europe, which still refuses to extradite IRA terrorists from the Republic and which still allows IRA Provisionals to operate from the Republic?
  The Prime Minister: If the hon. Gentleman reads the communique, he will find what he seeks, in that I made it perfectly clear that the pledge that we have always given to Northern Ireland stands, that there will be no change in Northern Ireland's constitutional status unless a majority of the people of Northern Ireland wish it; and until they do Northern Ireland stays firmly within the United Kingdom.

  "WHY WORK?" SYNDROME
  Mr. Ralph Howellasked the Prime Minister if she will make a statement on the steps being taken or proposed to deal with the "Why work?" syndrome.
  The Prime Minister: The Government have sympathy with the views expressed

  711
  by my hon. Friend. Policies which en courage effort and improve the balance between income in work and out of work are central to our approach. The measures announced in my right hon. and learned Friend's Budget to bring short-term benefits into tax, and meanwhile to increase the uprating of these benefits by less than the rate of inflation, to improve substantially the family income supplement for lower-income families in work, and to withdraw the earnings-related supplement are examples of this policy in action.
  Mr. Howell: I thank my right hon. Friend for that reply. Whilst I appreciate the great efforts that the Government have made to remedy the "Why work?" problem, does she not agree that incentives will be restored only when tax thresholds are raised considerably and the basic rate is considerably reduced?
  The Prime Minister: I agree that we should like to do both those things, and that both would go quite a long way to deal with the problem on which my hon. Friend has taken such an excellent lead. But to raise the thresholds for single and married people would cost more than £700 million for each £100 by which they were raised. To reduce the standard rate of tax by 1p also costs about £700 million, so it is a very expensive policy.
  Mr. Ioan Evans: Will the right hon. Lady get her priorities right? Rather than worrying about the "Why work?" syndrome, why does she not worry about the "Right to work demand"? With 1½ million unemployed and massive redundancies in the steel and coal industries, why do not the Government change their economic policies?
  The Prime Minister: I entirely agree with the hon. Gentleman in that I look forward to the day when everyone can have a good job. I hope that he also put that point cogently to his own Front Bench when they were in government and had even more people out of work than we have now.

  PRIME MINISTER (ENGAGEMENTS)
  Mr. Neubertasked the Prime Minister whether she will list her official engagements for 22 May.
  The Prime Minister: I refer my hon. Friend to the reply which I gave earlier.
  Mr. Neubert: Is my right hon. Friend aware that today is Professor Clegg's sixtieth birthday? Will she be wishing him many happy returns, or does she think that both his age and his recent decisions eminently qualify him and his commission for early retirement?
  The Prime Minister: It so happens that Professor Clegg let me know a few weeks ago that it was his intention to retire in September. My hon. Friend will also have heard that the terms of reference of the Clegg Commission are such that they have never been carried into operation. They were to study the feasibility of comparability, but in fact most of the referencesto the commission have asked it to make a recommendation. There is a question about whether one can establish genuine comparability between certain jobs.
  Mr. McNamara: I revert to the Prime Minister's reply earlier to the hon. Member for Down, North (Mr. Kilfedder). Does she agree that if the continuing disturbances in Northern Ireland [HON. MEMBERS: "Disturbances?"]—indeed, the murder in Northern Ireland—place a great strain upon the economy of the Republic of Ireland, and enormous pressures upon its internal cohesion, the Prime Minister and people of the Republic have an interest in the settlement that is made within the Six Counties and have a right to be consulted about it as well?
  The Prime Minister: Of course, the situation in Northern Ireland and the terrorism put a great burden upon that country and upon the people of Northern Ireland, not only in economic terms but in very human terms. But I must stress that we are getting very good co-operation on security matters across the border. Any change in the constitutional status of Northern Ireland is a matter for the people of Northern Ireland, this Government and this House.
  Mr. Myles: Will my right hon. Friend take time, despite her busy schedule today, to say a word of reassurance to our fishermen, because hers is a word that they know they can trust?
  The Prime Minister: I shall gladly respond to my hon. Friend's invitation. The Government made a grant of £3 million to the fishing industry because of the serious and grave conditions that it faced. We keep constantly in touch with fishermen. I understand that my right hon. Friend the Secretary of State for Scotland expects to visit my hon. Friend's constituency a week on Saturday, when he will doubtless have a chance to talk with local skippers and hear their views firsthand.
  Mr. Fitt: May I revert to the meeting that the Prime Minister had yesterday afternoon with the Taioseach of the Irish Republic. Did she find any significant or specific difference of approach to the problems of Northern Ireland between the present Taioseach and that of his immediate predecessor? Was one more militant that the other—the present one or his predecessor?
  The Prime Minister: The hon. Gentleman is inviting me to stray into dangerous paths. I must reject his invitation.
  Mr. Trippierasked the Prime Minister if she will list her official engagements on Thursday 22 May.
  The Prime Minister: I refer my hon. Friend to the reply which I gave earlier.
  Mr. Trippier: Does my right hon. Friend welcome the speech made earlier this week by Mr. Frank Chappie, emphasising the failure of trade union militancy in recent years and condemning sectionalism, selfishness and intimidation as well as unfair and undemocratic processes within the trade union movement?
  The Prime Minister: I thought that it was an extremely interesting speech. Any selfishness on pay claims means that other people suffer through increased prices. We all know of the difficulties of intimidation and the problems it causes when people want to exercise their right to go to work. I thought that it was a speech to which we might all, including those in the trade union movement, give close attention.
  Mrs. Renée Short: Has the Prime Minister had a look at the latest unemployment figures, published two days ago? Is she aware that the present unemployment level in the West Midlands is now higher than the national average and that GKN Sankey is about to sack hundreds of workers in Wolverhampton, Telford and elsewhere? What does the right hon. Lady intend to do to reverse this trend, to give those who want to work a chance to have a job?
  The Prime Minister: I am afraid that levels of unemployment will continue to rise over the coming months, as there are some necessary rationalisations and reductions in over-manning to be made. We must go through with them in order to increase productivity and to get the rest of our industries into an efficient condition in which they can compete in the real world.
  Mr. McQuarrie: I accept what my right hon. Friend said to my hon. Friend the Member for Banff (Mr. Myles), but does she realise that in spite of the injection of £3 million into the fishing industry—which I welcome—there has been a serious deterioration in the industry? Can the Prime Minister find time urgently to meet the Secretary of State for Scotland and the Minister of Agriculture, Fisheries and Food to try to assist the fishermen? Does she accept that because time is not on their side they will go under unless something is done urgently?
  The Prime Minister: I meet the Minister of Agriculture, Fisheries and Food and the Secretary of State for Scotland comparatively frequently. We consider and discuss the problems in the Common Market of trying to achieve a suitable fisheries policy. We recognise the urgency. My right hon. Friends are in constant touch with the fishing industry.

  SPECIAL CONTROL UNITS
  Mr. Meacher: On a point of order, Mr. Speaker. I wish to raise the question of the special control units which were devised under the previous Conservative Government to provide a regime of psychological and social deprivation—
  Mr. Speaker: Order. Is the hon. Gentleman making an application under Standing Order No. 9?
  Mr. Meacher: No, Mr. Speaker. The special control units were devised under the last Conservative Government to pro vide a regime of deprivation for intractable prisoners. Documents relating to that experiment which show clearly that the House and the public were deliberately kept in the dark were recently handed over in court to the National Council for Civil Liberties. They have been impounded by a gagging writ served on the NCCL legal officer—
  Mr. Speaker: Order. I am afraid that I am not able to help the hon. Gentleman. It is clear that he is not referring to anything which breaks our Standing Orders. This is not a point of order. The hon. Member should pursue the matter in some other way.
  Mr. Meacher: Further to that point of order, Mr. Speaker——
  Mr. Speaker: Order. Very exceptionally, when there is no point of order, I accept the phrase "further to that point of order"—but only for a brief time.
  Mr. Meacher: I am grateful to you, Mr. Speaker. I have already written to the Prime Minister on this matter—
  Mr. Speaker: Order. That settles the matter.

BUSINESS OF THE HOUSE
Mr. Foot: Will the Leader of the House state the business for the week after we return from the recess?
The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John-Stevas): The business for the first week after recess will be as follows:
MONDAY 2 JUNE, TUESDAY 3 JUNE and WEDNESDAY 4 JUNE—Finance (No. 2) Bill, consideration in Committee.
THURSDAY 5 June—Supply [17th Alloted Day]: Until about 7 o'clock there will be a debate on the unfair and arbitrary decision to charge "full cost" fees to overseas students, and afterwards on the offence of loitering with intent under the Vagrancy Act 1824. Both will arise on Opposition motions.
FRIDAY 6 JUNE—Remaining stages of the Films Bill and of the New Towns Bill.
MONDAY 9 JUNE—Completion of remaining stages of the Health Services Bill.
Mr. Foot: In view of the assistance which the Opposition have given to the Government in the choice of two urgent subjects in Supply time, will the right hon. Gentleman note that the time left for debate on the Brandt Commission, which he has promised, is becoming short? Will he say when we shall have that debate? I trust that he will make an announcement in his next Business Statement.
Mr. St. John-Stevas: I also attach great importance to the report of the Brandt Commission. I can give an undertaking that we shall have a debate on the subject before the Venice summit.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: I remind the House that questions on the Business Statement will take time from the debates on the Housing Bill which, under the timetable motion, must be concluded at 7 o'clock. Therefore, I propose to take considerably fewer questions today in order to be fair to the House.
Mr. Forman: Will my right hon. Friend find time soon after the House

717
returns from the recess for a debate on the Government's policy on public sector pay? Will the Government take the opportunity of such an occasion to set out how they propose to deal with that serious problem, which is such an engine to inflation?
Mr. St. John-Stevas: As my right hon. Friend the Prime Minister made clear, public sector pay policy, indeed all pay policies, must rest on a connection between pay and efficiency, pay and productivity. I shall certainly bear in mind the request for a debate in due course.
Mr. Skinner: Is the Leader of the House aware that during questions to Treasury Ministers a request was made for information about the consortium that was set up under the guidance and approval of Treasury Ministers to bail out Stone-Piatt Industries? Because the House has been refused further information on a matter which is a direct contravention of Government policy on intervention, will the right hon. Gentleman make it clear to Treasury Ministers that a statement must be made on the full details of what took place a few weeks ago?
Mr. St. John-Stevas: I shall pass that message to the Chancellor of the Exchequer. If the matter was raised during questions to the Treasury, I should imagine that there is nothing to add.
Mr. Kenneth Lewis: Are the Government discussing the question of the amount of legislation with which the House will have to deal when it returns after the Summer Recess? Will my right hon. Friend bear in mind the promise that in the next Session there will be much less legislation than there has been in this Session?
Mr. St. John-Stevas: I cannot anticipate the Gracious Speech that will open the next Session. I can assure my hon. Friend that I share his sentiments to the full. I trust that, having implemented much of our manifesto commitment in record time, we shall have a lighter legislative Session next year.
Mr. Ennals: Will the Leader of the House give further consideration to the possibility of a debate on the Flowers report on the future of medical education, and, in particular, the future of
718
Westminster hospital, which causes great consternation throughout the House? Is he aware that in a previous reply he said that it would be best if the House debated the matter after the University of London had taken its decision? Does he realise that the House is becoming more and more reluctant to debate issues after decisions have been taken?
Mr. St. John-Stevas: I share the right hon. Gentleman's anxiety about the future of Westminster hospital and related matters. However, the responsibility is for the University of London and the London area health authority. We must wait until they have given an indication of their views.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. I propose to take three more questions from each side. That will take us to about 3.45 and will leave only 3¼ hours for consideration of the Bill under the timetable motion.
Mr. Farr: Can my right hon. Friend comment on the unhappy situation in relation to the Social Security (No. 2) Bill? Is he aware that under present plans we shall not have a chance to debate clause 2, which refers to pensioners' rights and the earnings rule? In view of our commitment during the general election campaign to abolish the earnings rule, is there a chance of the House debating that matter?
Mr. St. John-Stevas: I am afraid that the Bill is subject to the guillotine motion, which was introduced as a last resort. I would have much preferred a voluntary timetable, but, unfortunately, it could not be agreed.
Mr. Charles R. Morris: Is the Leader of the House aware that it is now almost four weeks since 146 British holiday-makers lost their lives in the tragic air disaster in Tenerife? Does he recall that the Secretary of State for Trade was commendably quick in making a statement to the House about it? We have now waited four weeks for a statement about why it happened. Will he bear in mind that thousands of British holidaymakers have booked charter flights that will land at Los Rodeos airport? Will he give an undertaking that the Secretary of State for Trade will make an early and urgent statement about that tragic event?
Mr. St. John-Stevas: The right hon. Gentleman is quite right to say that it was a most tragic event. It has caused great anxiety among thousands of holiday-makers and potential holidaymakers. I shall urgently convey the right hon. Gentleman's remarks to my right hon. Friend the Secretary of State.
Mr. du Cann: Since there will not be an opportunity to ask my right hon. Friend a question about the conditions of service for Members of Parliament until a bare week before adjustments in remuneration are due on 13 June, will he make an announcement about giving effect to resolutions that the House has already passed in respect of secretarial and research allowances, secretarial pensions, travel for Members of Parliament, and the updating that Lord Boyle has undertaken on remuneration for Members of Parliament? I dare say that I express the view of the House in saying that I hope that that information will be available well before 13 June.
Mr. St. John-Stevas: With regard to the various resolutions passed by the House on secretarial pay and research allowances, my right hon. Friend knows that I have made arrangements for such allowances to be paid to hon. Members. In respect of the arrangements for extended travel, secretarial pensions and other matters, I have been in continual conversation with hon. Members and with officials. I hope to be in a position to put forward any decision on those matters shortly after we return from the Whitsun Recess.
With regard to the report of Lord Boyle on the second instalment of Members' pay, I entirely share my right hon. Friend's wish that we obtain that report in good time for 13 June. I have not yet received it, and I am investigating the question when we are likely to receive it. Of course, the report will be made not to myself but to my right hon. Friend the Prime Minister.
Mr. Ashley: Does the Leader of the House know that Ministers at the Department of Health and Social Security insult and abuse hon. Members who seek improvements in the scheme for the safety of medical drugs, although they admit that those improvements are desirable? May we have an opportunity for a full
720
discussion on that subject so that we may expose the insolence, arrogance and hypocrisy of the Ministers concerned?
Mr. St. John-Stevas: I am surprised to hear such strong language coming from the right hon. Gentleman. That has certainly not been my experience when dealing with the Secretary of State or other Ministers in the Department of Health and Social Security. They have always treated myself and, as far as I know, other hon. Members with the utmost consideration and courtesy. I know of the right hon. Gentleman's concern about the drugs to which he referred. I shall approach my right hon. Friend the Secretary of State and ask him to look into the matter.
Mr. Stokes: Will my right hon. Friend allow time in the near future for hon. Members who are members of the European Parliament to give an account of what they have been doing over the past year, and to say what they believe their role to be?
Mr. St. John-Stevas: I am sure that there will be an opportunity for what, I imagine, would be a fairly short debate.
Mr. Palmer: When the House resumes after the recess, will the Leader of the House arrange, as a matter of urgency, a debate on the location of the first Inmos production unit in Britain? Ministers could then give an explanation about the present prolonged and dangerous delay.
Mr. St. John-Stevas: That is a most important subject. I shall convey the concern of the hon. Gentleman to my right hon. Friend the Secretary of State for Industry.
Mr. Crouch: On a point of order, Mr. Speaker. I am concerned that you should seek to terminate early one of the most important events that takes place in the parliamentary week, namely, the determination by the House of what can be discussed in the coming week. One of the disadvantages of the House is that we work from week to week and not from month to month, or longer. I know that you, Mr. Speaker, are rightly concerned with the progress of business in the House, if not with the business itself—that is the business of the Government Front Bench. I am concerned that you should terminate the rights of Back

721
Benchers to raise matters with the Government—
Mr. Speaker: Order. The hon. Gentleman knows of the discretion that has been given to me by the House. I shall not sit here and listen to criticism of the way in which I exercise that discretion. If the hon. Gentleman disagrees with what I have done, he knows what to do.
Mr. Foot: Further to that point of order, Mr. Speaker. There is some inconvenience caused to the House if, on a Thursday when the business statement is made, the time for asking questions is abbreviated. We are not criticising your judgment, Mr. Speaker, but there is, by implication, a severe criticism of the Government for putting down on a Thursday Bills subject to guillotine motions which may eat into the time allowed for business questions. May we hope that, in the light of the matter having been raised, the Government will not on any future occasion put down such business on a Thursday, which curtails the rights of hon. Members? [Interruption.]
Mr. Speaker: Order. Let us reduce the temperature. The right hon. Gentleman's point was directed elsewhere than at me. I am much obliged to him for not directing it at this quarter.
Mr. Cryer: Further to that point of order, Mr. Speaker. I am in no way making a criticism of you because I accept your rulings. At the same time, I feel that there is some element of dialogue between hon. Members and Mr. Speaker. I emphasise that, for many Back Benchers, it is important to have the opportunity to raise business questions. I realise that you are in a difficult position because you have to make a judgment between competing priorities.
I am concerned that when the Government put down business of today's nature it pressurises and manoeuvres you, Mr. Speaker, into defending the Government's position. It is for the Government to ensure that you are not placed in such an invidious position. They must allow
722
Back Benchers sufficient time to raise issues so that you do not have to call on Back Benchers to sacrifice an important and hard-won right.
Mr. Speaker: The points of order have cost another five minutes, during which we could have had two or three more questions. I accept what the hon. Gentleman says, but I hope that the House has now registered its feeling—it has registered with me, at least. I was trying to be fair to those who feel deeply about the business that we are to discuss later and which is timetabled. If hon. Members share my feeling of concern for their colleagues, no doubt they will co-operate with me.

IRAN (SANCTIONS)
Mr. Winnick: On a point of order, Mr. Speaker. I am sorry to delay the business, but yesterday I tried to table a question asking when the Leader of the House would provide time for us to debate sanctions orders against Iran. I was told that I was not allowed to table such questions; that they could be raised only during business questions—namely, today. Since it has not been possible for me to be called, this presents a difficult and delicate situation. I shall be as brief as possible. Sanctions can still be applied against Iran when the House is not sitting as long as any order is debated within 28 days. Surely the Leader of the House should have told us whether any orders are to be applied while the House is in recess.
Mr. Speaker: I have allowed the hon. Gentleman to make his point.

BUSINESS OF THE HOUSE
Ordered,
That, at this day's sitting, Standing Order No. 3 (Exempted business) shall apply to the Motion relating to the draft Upholstered Furniture (Safety) Regulations 1980 with the substitution of Twelve o'clock or two hours after it has been entered upon, whichever is the later, for the provisions in paragraph 1(b) of the Standing Order.—[Mr. Wakeham].

ORDERS OF THE DAY

  HOUSING BILL
  [3rd ALLOTTED DAY]
  As amended (in the Standing Committee), further considered.

  HOUSING BILL
    Clause 128

      AMENDMENTS OF LEASEHOLD REFORM ACT 1967 etc.
      3.51 pm
      Mr. Alec Jones: I beg to move amendment No. 140, in page 85, line 1, after ' 3 ', insert ' 4, 9 '.
      Mr. Speaker: With this it will be convenient to take the following amendments:
      Government Nos. 85 and 106.
      No. 141, in schedule 19, page 135, line 33, at end insert—
      '1A. In section 1(1)(b) of the 1967 Act for "five years" in both places where it occurs substitute "three years".'.
      No. 133, in page 135, line 33, at end insert—
      ' 1B. In section 9(3)(b) of the 1967 Act delete the words "five years" and insert the word "year".'.
      No. 134, in page 135, line 33, at end insert—
      ' 1C. In section 9(3)(b) of the 1967 Act delete the words "five years" and insert the words "three years".'.
      No. 138, in page 135, line 33, at end insert—
      '1D. In section 4(1) of the 1967 Act for the word "⅔" substitute the words "4/3 or such fraction as the Secretary of State may specify by order ".'.
      No. 139, in page 135, line 33, at end insert—
      ' 1E. In section 1(1)(b) of the 1967 Act for "five years" in both places where it occurs substitute "one year".'.
      No. 133a, in page 135, line 33, at end insert—
      '1F. In section 9 of the 1976 Act for subsections (1) and (2) substitute:—
      " 9(1) The price payable for a house and premises on a conveyance under section 8 above shall be calculated (except where it has been determined by agreement or otherwise before this section comes into force) by applying the formula set out in subsection (2)
      724
      (2) the formula is—

      R

      R

      k.V

      P=£

      −

      +

      Y

      Y(1+Y)n

      Y(1+Y)n

      where
      P = price payable;
      R=ground rent payable for the house and premises at a yearly rate;
      Y=the yield (expressed as a decimal fraction) from 2½ per cent. Consolidated Stock;
      k=the appropriate constant (expressed as a decimal fraction);
      V=the rateable value of the house and premises on the appropriate day;
      n = the period, expressed in years (taking any part of a year as a whole year), which the tenancy would have to run if it were not extinguished by enfranchisement."
      (3) In subsection (2) above—

      (a) "Rent" shall have the meaning assigned to it in section 4 above.

      (b) "The appropriate constant" shall be 0·3 or such other amount as the Secretary of State may by order specify.

      (c) "The appropriate day" shall have the meaning assigned to it in section 1 above.

      (d) In calculating the yield from 2½ per cent. Consolidated Stock, the price of that stock shall be taken to be the middle market price at the close of business on the last trading day in the week before the tenant gives notice in accordance with this Act of his desire to have the freehold.

      (4) In the Leasehold Reform Act, 1967, in Section 15, for subsection (2) substitute—
      " (2) The new tenancy shall provide that as from the original term date the rent payable for the house and premises shall be a ground rent calculated or to be calculated by multiplying the rateable value of the house and premises for the time being by the appropriate constant (as defined in section 9 of this Act) for the time being ".'.
      No. 132, in page 135, line 33, at end insert—
      ' 1G. In section 9 of the 1967 Act for subsection (1) subsection (2) substitute—
      ' The price payable for a house and premises on a conveyance under subsection 8 above shall be calculated (except where it has been determined by agreement or otherwise before this section comes into force) by applying such a formula as the Secretary of State may by order determine.'.
      No. 135, in page 135, line 38, after ' tenancies) ', insert
      ' in subsection (1) omit paragraph (a) (leaseholders who have extended their leases) and in subsection (2) after the words "subsection (1)" omit" (a) or "and.'.
      No. 136, in page 136, leave out lines 24 and 25.
      Mr. Jones: These amendments concern the operation of the Leasehold Reform Act 1967. Amendment No. 140 and

      725
      Government amendment No. 85 are paving amendments which will allow amendments to that Act if the House so wishes.
      My view, which is shared by many of my hon. Friends, is that the 1967 Act has brought considerable relief and benefit to many leaseholders in different parts of the country. But, in the 13 years since the Act was passed, deficiencies have turned up.
      In 1967, the House was moving into new realms of leasehold reform, so there was a tendency to make the Act somewhat over-cautious. This whole string of amendments—some from the Government, some from the official Opposition and others from individual Members—confirm that there are defects in the 1967 Act. I believe that now is an excellent opportunity to correct some of those defects. That is the purpose of the amendments.
      Attention has been drawn to defects in the working of the 1967 Act by individuals and organisations representing housing interests throughout the country. I have had letters mainly from Wales. However, the leasehold problem is not exclusively Welsh. A glance at the statistics will clearly show that the problem is to be found in all parts of the United Kingdom. The criticisms are twofold. They deal with people who are excluded from exercising the right to enfranchise under the 1967 Act and the method of calculation of the price of the freehold.
      Amendment No. 141 deals with one such exclusion. The 1967 Act included a residential qualification of five years before a person could become entitled either to acquire the freehold or to a 50-year extension of his lease. When that five-year ban was introduced, it was claimed that it was necessary to have such a lengthy residential qualification to prevent the abuse which would occur by people buying up what were then described as fag end leases. I have not seen any evidence of that. None has come my way or the way of many of my hon. Friends. When we discussed this matter in Committee, the Under-Secretary of State for Wales—the hon. Member for Conway (Mr. Roberts)—was unable to indicate that there was any evidence of profiteering by owner-occupiers buying up these fag end leases.
      Five years is an arbitrary period. I can find no justification for it. In Committee I sought to remove this residential qualification altogether. The Government said that they would consider it. Indeed, the Minister said:
      " I see the force of the argument that a modification could help some people who bought leases which had not long to run. Precisely what that modification should be I am not certain, but I agree that the term should be reduced if possible and, as I implied earlier, I am prepared to consider the position further and to come back to it later."—[Official Report, Standing Committee F, 17 April 1980; c. 2169–70.]
      The Minister has certainly lived up to his word. He has considered the matter and come back to it. But this time he has come back with a three-year residential qualification. I can find no more logic in three years than I could in five years. The only possible argument for the three-year period is that it is somewhat in line with the right-to-buy provision in the Bill. Even if one is driven to accept the reduction from five years to three years, one still has to accept that it will cause considerable hardship.
      It is difficult to sell leasehold houses. People frequently need to move to find new jobs, to accept promotion or even retirement. People with leasehold houses find it difficult to sell them. Therefore, they cannot move and their prospects become that much worse.
      I hope that, even at this very late hour in considering the Bill, the Government will seriously consider accepting amendment No. 139 which would reduce the residential qualification to one year. I think that one year is an adequate period of residence to qualify for enfranchisement.
      I turn now to amendments Nos. 134 and 133. The second exclusion in the 1967 Act relates to an owner occupier serving a notice of intention to buy the freehold or to extend the lease and then being forced or obliged to withdraw his notice. If the notice is withdrawn, such an owner-occupier cannot serve a fresh notice within five years.
      Why does someone withdraw such a notice? It is obviously to his advantage to acquire the freehold. A notice is withdrawn because a person's circumstances may be such that he cannot afford to buy the freehold at that time. Until he serves a notice, there is little prospect of

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      getting any idea of the price of the enfranchisement.
      Government Amendment No. 106 would reduce the gap between applications to three years. I concede that is better than five years. If the justification for bringing down the residential qualification from five years to three years is to bring it in line with the right to buy provision, the fresh or second application should likewise be brought into line with that right to buy provision.
      We treat people in two different ways. The council tenant, under the provisions of the Bill, can make a second application to buy his house—that includes the freehold—one year after withdrawing his first application. Under the 1967 Act, even with the Government's amendment, the owner-occupier will not be able to make a second application with three years. What is sauce for the goose should be sauce for the gander. We should seek to treat council tenants and owner-occupiers in the same way by giving both the right to make a fresh application one year after the first application has been withdrawn.
      4 pm
      Government amendment No. 106 goes some way towards meeting the five-year qualification period, and in that respect it is preferable to the existing Act. But it would be a mistake to let this opportunity go by when, by accepting my amendments, we could have extended the scope of the Act to allow more people to benefit from the enfranchisement provisions.
      Amendment No. 135 is identical to an amendment which we moved in Committee. At that time, the Under-Secretary of State for Wales indicated that the Government were still considering the substance of the amendment, but that he could not promise to return with a firm proposal. As we expected no firm proposal has been put forward.
      Who are these people who have extended their leases and wish to exercise their right to buy the freehold? At present, most owner-occupiers who have already extended their leases are denied the right to enfranchisement for all time. They are often driven into accepting extensions because they cannot afford the purchase price of the freehold at the time that the
      728
      offer is made. They take the extension as an easy way out. Later, if their circumstances improve, they find that they are completely banned from exercising their right to enfranchisement because of the provisions of the 1967 Act. But not only those people are affected. Under the 1967 Act, if a person buys a house from an owner who has extended the lease for 50 years, the new purchaser is banned for all time from buying the freehold of that property. That is an anomaly which should be changed.
      Mr. Ian Grist: I have much sympathy with the right hon. Gentleman's point, but in my constituency—where this situation has started to arise—freeholders are willing to sell on the basis of the same valuation as under the existing Act.
      Mr. Jones: If that is so, it is a strong argument in favour of allowing people to do that as of right. I accept that there may be such individual cases, and that what the hon. Gentleman says is true, but, in the main, people—certainly people in Cardiff—are running up against a problem. In Committee we quoted a number of examples of owner-occupiers in Cardiff who extended their leases because they could not afford anything better at the time, and who, under the 1967 Act, are now being denied the opportunity to buy the freehold for all time. If we give council tenants the right to buy the freehold of their council houses—which have been paid for out of public funds—we should give the right to these people to have a second bite at the cherry.
      I turn to amendment No. 138. Again, under section 4(1) of the 1967 Act, the right to enfranchisement or the right to extend the lease is available only when the rent is low. A low rent is defined as a rent which is not
      " more than two-thirds of the rateable value."
      That acts as a block on certain groups of people being allowed to exercise their rights under the 1967 Act. Throughout the country people are being prevented from buying the freehold of their properties by this restriction in section 4(1) of the Act.
      In Committee I said that I had not encountered this problem in my constituency. But the problem exists in London, and I have received many letters on the matter. I received a letter from

      729
      the De Beavoir Town Leasehold Reform Association, drawing my attention not only to the difficulties of that but to cases where landlords were using this provision in the 1967 Act as a loophole to avoid compliance with that Act. Landlords were setting ground rents in excess of two-thirds of the rateable value, and thereby denying these people the right to buy their freehold. I hope that this amendment will be accepted by the Government, because we are seeking to substitute for a figure of two-thirds a figure of four-thirds, or such fraction as the Secretary of State may specify by order.
      I turn to amendment No. 136. The Government are proposing a price formula for intermediary leases with a profit rent of not more than £5 per annum. Yet examples flow in from leaseholders who are suffering hardship from intermediary leases with profit rents of not more than £5. They are suffering hardship because they are being denied the right to buy the freehold. In Committee the Under-Secretary of State for Wales said that, in his view, the limit of £5 should cover cases that arise in practice but that the Government would consider a higher figure if there was evidence that it was needed.
      I ask the Under-Secretary of State whether the Government have been looking for evidence to suggest that the figure of £5 is wrong. Organisations dealing with housing problems—certainly organisations in the Birmingham and Cardiff areas—have drawn my attention to many cases where the £5 figure is too low. By amendment No. 136 we seek to allow the price formula to be used for all intermediary leases. That would be a simpler solution to the problem that this section of the Act creates.
      Amendments Nos. 132 and 133 suggest that a formula should be adopted for the calculation of the cost of enfranchisement. Many hon. Members will realise that the suggestion of a formula for the calculation of the terms of freehold was always considered to be advantageous—certainly in South Wales—but which, for a variety of reasons, was never regarded favourably by Governments. The Government are now introducing a formula for the intermediary lease, and we should consider a formula for leases in general.
      Under the present system, a leaseholder who wishes to buy the freehold of his property has no idea of the price, and in most cases he cannot get that figure until he serves the official notice. When the official notice is served and the price is produced, a person who finds the price too high is therefore forced to withdraw, and he loses his right to apply again for five years. It would be an advantage if a formula could be introduced so that there could be a calculation of the price beforehand.
      Often the high cost of the valuation process is a deterrent. In Committee, I mentioned the case of a Mr. Thomas of Cardiff who was paying £190 for the freehold of his property, but the valuation and solicitors' costs were £250. There is something askew there. For that reason, I again put forward the suggestion of the formula because we need a simpler, cheaper, valuation procedure.
      All the groups of organisations which have written to me on the question of leasehold have pressed this point about a formula. Cardiff city council passed a motion on it, which was supported by all members of the council from both major political parties. It called on the Government to introduce a formula so that leaseholders could acquire the freehold of their houses at a fair price and without undue delay or cost.
      Similarly, the Welsh Consumer Council made the point in a document which it sent to the Secretary of State for the Environment that the adoption of a specific formula for calculating the price of the freehold and the offer of a price for the freehold by the freeholder before the leaseholder becomes committed in any way was something about which it felt very strongly.
      In the particular formula in the first of the two amendments, No. 133, we have chosen a formula which has been acceptable to large groups of people throughout the country who are concerned with leasehold problems. It is a formula similar to that proposed in the Bill for dealing with intermediate leases, and it is, I understand, largely a codification of the present rent tribunals practice of valuing the site itself. But one thing is a certainty: if we had a formula, it would eliminate the need for expensive valuation, certainly when leaseholders are buying cheaper freeholds.
      As the Leasehold Reform Act 1967 already excludes any leasehold with a rateable value of over £200, or over £400 in London, full valuation procedures would still apply in buying those more valuable properties. However, the present ridiculous situation where the cost of the valuation of and of solicitors' fees is greater than that of the freehold would be ended if these amendments were accepted.
      If the Government say that this formula is not acceptable, I commend to them the second amendment in the group, No. 132, which says that the price shall be calculated
      " by applying such a formula as the Secretary of State may by order determine."
      In the Bill one finds on so many occasions that the Secretary of State is taking powers to do things by order or other means. I should have thought that this was a very suitable matter for the exercise of the Secretary of State's powers. I commend that amendment to the House. I hope that most, if not all, of these amendments will find favour with the Government.
      Mr. W. Benyon: First, I declare my interest as an owner of a leasehold property. I do not know the position in Wales, but I know something about the position in London. I should like to put the other side of the picture in a moderate and, I hope, reasoned way.
      I deal first with Government amendment No. 106, together with amendments Nos. 141, 134 and 139—although the last one deals only with bringing the period down to one year. There is no justification in the change which is proposed. The only effect which it would have, certainly in this capital city, would be to improve the position of the speculator, who would be able to buy in the tail ends of such leases much easier in order to make tax-free capital gains on the eventual sale. He would be able to realise the assets very much sooner than he does at present.
      Five years can be supported. It is not unreasonable to say that it should be five years, because that is the sort of average period over which genuine occupation can be established. The genuine occupier would not suffer with a period of five years. Perhaps one may compare this with other things. The right hon.
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      Member for Rhondda (Mr. Jones) mentioned the position of council houses tenants under the Bill, but he could also have cited the case of improvement grants. The recipient of such grants has to live in the relevant property for five years if no part of the grant is to be repayable. On the point about the council tenant who can buy after three years' occupation, it should be borne in mind that if the discount applies, and if he does not remain for five years after that, he must pay back some of the discount.
      Therefore, there is a strong argument for saying that five years is a reasonable period to establish permanent occupation, and not to allow for purely speculative buying, which would certainly take place in London if the amendments were accepted.
      4.15 pm
      In addition, of course, and reverting again to the public sector argument which the right hon. Gentleman used, public sector housing is allocated on the basis of housing need, whereas in the private sector that does not apply. There is no need to establish this concerning the public sector tenant because his council has decided that he is the occupier and is in need of that occupation, or the council would not have given him the tenancy in the first place. In the private sector, that does not apply and we have to have a longer period to establish that someone is a genuine occupier who can buy under the terms of the 1967 Act. That was the basis that was laid down when that Act was passed, which was for people who were in established occupation.
      Reducing the period to three years would produce considerable speculative buying of tail-end leases, which has already happened in relation to the five-year pediod, and it would certainly happen more if the period were reduced to three years.
      Amendment No. 133a seeks to establish an alternative formula for deciding the value at which property can be purchased under the Bill. Here I submit, in contrast to the right hon. Gentleman, that it is entirely wrong to bring in an arbitrary formula totally unrelated to accepted valuation procedures, which are well known and accepted. The accepted valuation basis has worked only against the landlord. It has never worked against the tenant. The whole basis of the 1967

      733
      Act was that the house belonged to the tenant and the land belonged to the landlord.
      Mr. D. E. Thomas: The hon. Gentleman referred to the valuation procedure as being objective. Would he care to comment on the remarks of Mr. Walmsley, presiding in Cardiff in January 1975, who said:
      " The valuation exercise under section 9 of the 1967 Act is not only hypothetical, it is also artificial."
      Mr. Benyon: It is based on valuation principles, whereas this is an arbitrary formula not based on valuation principles at all. I would need time to study a technical opinion such as that. But the formula, certainly as far as London is concerned, has stood the test of time. It is on an established valuation basis and it has worked on the basis which the 1967 Act laid down—that the bricks and mortar were the tenant's and the land was the landlord's. But, obviously, the valuation has to alter as the lease gets shorter.
      The point that I was making was that this formula was laid down for the benefit of the tenant and not the landlord. The formula which is now being suggested in the amendment would be even more biased in favour of the tenant and against the landlord. It would result again in purchases at prices so favourable that speculation would become commonplace, particularly if allied with the reduction in the period which the previous amendments sought to apply.
      I am advised by technical experts that the tax-free capital gains on the basis of this formula would be even higher in percentage terms than those already made under the 1967 Act and, indeed, more latterly, under the Housing Act 1974.
      Amendment No. 138 seeks to raise the rateable value limit from two-thirds to four-thirds. I do not know whether the right hon. Gentleman has realised that this would bring into legislation properties which were totally outside the intentions of the 1967 Act and the 1974 Act. Not only would ground rent be taken into account—which was the basis of the 1967 Act—but higher rents as well, which include not only the value of the land but the value of the property as well. I wonder whether that point has been realised.
      This provision does not cover the majority of properties that were orginally envisaged to be enfranchised under the 1967 Act. By definition, these must be new properties and new occupations. Therefore, they are buildings which have been either built or renovated by their owners and subsequently let on lease. They do not fall into the category of the origins of the 1967 Act, which was the provision of a green field by the landlord on which the ground lessee built a house.
      The properties referred to are not like that. In this case, the landlord has either built or renovated a house and then subsequently let it. Therefore, the proposal will widen the principle of the 1967 and 1974 Acts. Parliament did not intend that then: nor, I hope, is that the intention of this Parliament.
      Amendment No. 135 seeks to allow leaseholders who have extended their leases and taken the choice of an extended lease, as opposed to enfranchisement, subsequently to enfranchise themselves. This would cause total uncertainty in what, until now, certainly in London, has been a perfectly recognised situation.
      The amendments that have been grouped together would result in no properties ever again being let on long leases, certainly in London, within the valuation limits. Have hon. Members considered what could happen? In the urban situation there would be owner-occupation on the one hand and council or rack renting on the other. There would be nothing in between. In a period when house and land prices are rising—we are always hearing criticism of that—this form of leasehold tenure has a considerable amount to recommend it. If the amendments are passed, there will be no further leasing. No further properties will be let in that way. The House must consider carefully whether that is to the advantage of those who seek greater security of tenure, which is not available if they do not have the money with which to buy a house.
      I hope that the amendments will not be accepted.
      Mr. Edward Rowlands: The hon. Member for Buckingham (Mr. Benyon) spoke sensibly about a number of aspects of the proceedings of the House. However, I do not think that he fully appreciates the emotion felt by

      735
      leaseholders in South Wales. Otherwise, he would not use terms such as "tenant ". We are not talking about tenants. We are talking about home owners, householders, people who bought their homes, who might have built them and who certainly have renovated and improved them. In many cases in South Wales they own old homes. They do not see themselves as, and should not be described as, tenants. They are home owners and householders who have been deprived of the right to and the total assurance of the ownership of their properties or who were affected by the leasehold system that prevailed before the 1967 Act.
      I wish now to refer to the five-year and three-year periods. I am one of the few remaining members of the Committee that considered the Leasehold Reform Act 1967, and I remember that we debated at length the five-year residential qualification and the fear that there would be exploitation or utilisation of fag-end leases. It was said that the five-year period would ensure that a person was a bona fide residential owner-occupier leaseholder. I find it difficult to believe that a landlord would race around living in a property for three years, become enfranchised and then move on to another property. There is a residential leasehold qualification. The occupier must live in the property for three years, even under the Government amendments put down as a result of representations made by hon. Members in Committee. The occupier must be a residential leaseholder. It is difficult to envisage large-scale exploitation of fag-end leases when a person must go through the process of living in the property before qualifying under the Act.
      The central issue is the question of the formula. It is sad that we must now go back over the ground covered in 1967. I do not think that we should dismiss the original Leasehold Reform Act 1967. It removed from thousands of householders the fear of blackmail and inability to obtain freeholds, because they were at the whim of the freeholder. In those days I represented the Cardiff, North constituency. I remember the letters sent out to leaseholders—who, with, in some cases, their parents before them, had owned a property for 80 or 90 years—which dashed their hopes of obtaining freeholds at a fair price. Those letters blackmailed
      736
      or forced leaseholders to pay an extortionate price or accept an extension of a lease on extortionate terms. For a large number of people, the 1967 Act removed from ground landlords the right to conduct that blackmail. It gave many householders and owner-occupiers the chance to enfranchise themselves. Those of us from Cardiff, North, the Rhondda and Merthyr Tydfil can testify to the fact that whole streets were successfully enfranchised.
      Nevertheless, from the start, the problem of the 1967 Act was the valuation. I do not know in which world the hon. Gentleman is living when he says that everyone knows clearly how valuations take place and that the 1967 Act formula is clear and understood by the valuers. He should remind himself of the history attached to that Act. Within 12 months of the passing of the 1967 legislation, the House had to reform it and amend it further. The Lands Tribunal drove a coach and horses through what we thought to be the meaning of "valuation" in that Act. We spent hour upon hour in Committee and on the Floor of the House debating exactly what was a valuation. Therefore, the hon. Gentleman cannot talk about the valuation being clear and well understood. It was obviously understood by the ground landlords and misunderstood by the Lands Tribunal decision, which transformed the whole basis of valuation as we thought we passed it in 1967. Within 12 months the legislation had to be amended so that the original intention of the 1967 Act could be established.
      A large number of people managed to use the powers of the 1967 Act to prevent blackmail by ground landlords and to become enfranchised. In my constituency, the majority of those in that position were able to do so by organising themselves on a street basis or through local residents' action groups. If they had to go to the Lands Tribunal they were able to do so as a group. However, many individuals have not done so. In Cardiff many leases have now expired and householders who were home owner-occupiers have become tenants. Some ground landlords are either using the vagueness, ambiguity and difficulties of the valuation procedures under the 1967 Act to demand a higher price than the Act intended or to thwart genuine requests by

      737
      owner-occupiers for a reasonable price, or people have made higher offers than should prevail under the 1967 Act. The poor individual owner-occupier is faced with the prospect of going to the Lands Tribunal and incurring considerable expense in fighting his or her case.
      It is sad that we have to return to amending the 1967 Act, not because it did not do quite a good job but because there are still a number of ground landlords who are using the ambiguity, vagueness and difficulties of the valuation process to obstruct the right of a leaseholder to obtain his freehold at the price that we believed we were incorporating in the 1967 Act.
      4.30 pm
      We have had some cranky and curious ground landlords in South Wales, but the saddest aspect is that the most rapacious ground landlord, Western Ground Rents, has been bought by the BP pension fund, which is behaving in the same rapacious and, at times, unfeeling and uncaring way in handling the genuine requests of householders.
      Such ground landlords are prompting the growing demand for further amendments to the 1967 Act. I should like to think that if the many pensioners in the BP fund realised that it was using its power to drive harsh bargains with householders and to act tough and without feeling or care, they would not want such actions to be taken in their name. It is regrettable that a distinguished company, which is half owned by the Government, should behave in that way.
      Sir Raymond Gower: I do not dissent from what the hon. Gentleman has said about that company, but is he aware that some of my constituents are discontented with the prices quoted to them by a major county council in South Wales? It is unfair to mention only the company. The council is also asking high prices. Of course, councillors and the managers of the pension fund feel responsible for managing properly the money that is entrusted to them.
      Mr. Rowlands: I do not know which county council the hon. Gentleman is referring to, but any authority behaving in such a manner deserves the same strictures as we apply to private ground landlords. The way out of the problem is a
      738
      reasonable, clear cut formula. I hope that we can count on the hon. Gentleman's support in the Lobby. He can give us the help that we need to carry the amendments.
      One amendment sets out detailed proposals, and I appreciate the problems of that formula. We do not want to stick to it totally, and amendment No. 132 will allow the Government to think during later stages of the Bill about the possibility of an alternative formula to satisfy the legitimate demands and wishes of leaseholders who have been owner-occupiers for a long time.
      A formula would remove the final obstacle to enfranchisement. The leaseholder will know what it will cost and a ground landlord will not be able to obstruct enfranchisement because of the ambiguity, uncertainty and difficulty of the valuation system in the 1967 Act.
      Conservative Members make powerful speeches about home ownership and the property-owning democracy, and I hope that they will support us on this straightforward case of enfranchisement to ensure that householders living in properties that their parents may have owned and which they worship as little palaces-remarkable improvements have been made to many older properties—will ultimately achieve their greatest goal of complete ownership through enfranchisement.
      The best way of removing the obstacles is to search for a clear cut formula to insert in an amendment of the 1967 Act.
      Sir Raymond Gower: I supported the original Act, the amending Act and various Private Members' Bills and I also introduced my own Bills on this subject before the passing of the 1967 Act.
      Strangely, it seems that both my hon. Friend the Member for Buckingham (Mr. Benyon) and the hon. Member for Merthyr Tydfil (Mr. Rowlands) are right. The problem is that what is needed in a limited area of South Wales would create an unfair advantage in parts of London. That is why I sought some years ago to bring in a Bill that was limited to Wales, where we have special problems.
      My hon. Friend the Member for Buckingham was right to say that the leasehold system is a useful addition to other forms of tenure in most of the great

      739
      cities of England. However, he may not realise that in a significant, heavily populated area of South Wales that form of tenure is a social evil.
      The original Act and the amending Act undoubtedly conferred significant benefits. In the early months of the operation of the 1967 Act, there was a steady enfranchisement of many dwellings. I know from my contacts with most of the solicitors and estate agents involved that matters were going along reasonably well. Recently there has been a change.
      I gathered that one hon. Member was suggesting that the amendments should apply to someone who had bought a property within three years of the end of a lease.
      Mr. Rowlands: No. Three years' residence was referred to.
      Sir R. Gower: In that case, I withdraw what I said. Obviously, someone who bought a property during the last three years of the lease would get it at a very low price.
      The problem that has arisen in recent months can be appreciated by anyone who has dealings in these matters. The local tribunals are an important improvement and the most significant change. Many people have been deterred from resorting to the Lands Tribunal because of the possible cost involved. That was a great deterrent in cases where the outcome was uncertain.
      I am not sure about the methods that have been suggested. I have some doubts about them. Before the Bill is enacted. I hope that every effort will be made to improve the present practice. Some change should be made. The right hon. Member for Rhondda (Mr. Jones) confessed that there was great difficulty in framing a satisfactory provision. He suggested that a formula might have to be evolved and that the Secretary of State might have to bring forward an order. That reflects the difficulties involved.
      The systems of valuation in a defined area of South Wales are inadequate. Within that area there are towns in which 80 per cent. of the properties are held on leasehold. Long before leases terminate, they become unmortgageable. If there is only 20 years left on the leasehold, it is impossible to get a mortgage.
      740
      Indeed, even if the lease has another 35 years to run, it is difficult to get a mortgage. Someone may get a mortgage on a house that has a 42-year lease. However, after a few years it is impossible to sell the house.
      Mr. W. Benyon: I appreciate that South Wales has a special problem. However, a case has been quoted in which the solicitor's fees were about £500. The price of the leasehold was £250. I do not know how much the house was worth. Is my hon. Friend saying that those people could not get any form of finance to pay £250 on, for example, a £6,000 house?
      Sir R. Gower: One needs to know the circumstances and the ages of those involved. Indeed, age is probably a vital factor. A person in his late fifties may desperately need a mortgage, but he may find great difficulty in raising that sort of money. One cannot generalise. I am convinced that the system is not right. It needs to be adjusted. I do not wish to make a massive adjustment, nor do I wish to make it easy for a person to acquire a freehold and then make a lot of money.
      Mr. Ioan Evans: People feel that a great injustice has occurred because some properties were bought at a low price several years ago. There is now a trend towards acquiring land as an investment. As a result, rates have gone up.
      4.45 pm
      Sir R. Gower: I am not sure what the hon. Gentleman means. As a lease gets shorter, the reversion becomes more valuable. Perhaps the hon. Gentleman was referring to that.
      I am glad that the tribunal is being changed. That is an important step. However, there should be some re-examination of the valuation formula method. I do not believe that we should support the easy formula—20 times the ground rent—that earlier writers have prescribed. If we were to do that, we would be using too heavy a weapon. It would be grossly unfair. However, we need a better system. I hope that the system will be modified before the Bill is enacted.
      Mr. David Alton: I support the amendments to which

      741
      I have put my name. Having heard the arguments that have been deployed, I am particularly pleased to support the amendment. It is ironic that the Government rejected the arguments of Opposition Members when they were deployed in a different way. For instance, we argue that, in housing, local housing problems require local solutions. The hon. Member for Buckingham (Mr. Benyon) used that argument when he spoke about the compulsory sale of council houses. He rightly said that different circumstances pertain in different parts of the United Kingdom. This debate is a classic example of that. Particular circumstances pertain to areas of South Wales, parts of the Midlands and other towns and cities. Those circumstances do not apply, for example, to London.
      When the Bill is discussed in the other place, I hope that the Minister will consider incorporating in it some of the sentiments expressed in the amendments. I hope that he will apply those sentiments to South Wales. It was interesting to hear enthusiasm from Opposition Members for the concept of home ownership. In our other debates on the Bill, Conservative Members expressed enthusiasm for the provisions concerning council tenants. That is right. I should like to see as many people owning their homes as possible. Leaseholders are already owners, but they do not own the property completely. They are being caused great distress. They face acute problems.
      I am pleased to be able to support the aims of the Welsh leasehold reform campaign by putting my name to these amendments. They have been tabled on behalf of that campaign. Recently I visited Cardiff and met representatives of the campaign. We discussed the acute problems being experienced in parts of South Wales. Those problems have arisen as a direct result of this feudal system. I fully appreciate that other areas of Britain contain leasehold property, but South Wales is greatly affected by the problems it causes.
      Several thousand houses—it is difficult to ascertain exactly how many—were built at the time of the great expansion of the Cardiff docks at the end of the last century. They were let on 99-year leases. Those leases are now coming to an end. Some landlords are being most
      742
      unreasonable about selling the freeholds to present occupiers at a reasonable price. Some of those landlords are greedy and are motivated by profit. However, they are within the law. Leasehold can be compared to a time bomb that is ticking away in the hearts of our cities. Its detonation could destroy the Government's plan to extend owner-occupation and to improve older properties.
      It is worth considering the type of hardship that is being caused. It has become the accepted policy for landlords to charge approximately 30 per cent. of the market value of the house as the purchase price of the freehold. As house prices are soaring, the freehold price can shoot up £1,000 in the time that it takes to complete the necessary legal work. Indeed, that happened in one case that was brought to my attention. In addition, the freehold price bears no relation to the ground rent that the occupier has been paying or to the rateable value of the house. The latter must be a more reliable indicator of the value of a property than the cash value on the ever variable market at one point in time.
      Two things should be done. First, we should extend the right to buy. Under the Leasehold Reform Act 1967, only leaseholders who have been living in their homes for five years are entitled to buy their freehold. That can cause hardship. Shelter brought one example to my attention. A couple in their sixties live in Craddock Street, Cardiff. They recently brough the leasehold of the house in which they had lived for 40 years. However, they were not qualified to buy the freehold for another two years. Meanwhile, it is not financially viable for them to improve the property.
      Secondly, there is the question of a need for a price formula. The Government have accepted the case for a price formula for intermediary leases in order to eliminate expensive valuations, but the Bill should include a similar price formula for all leaseholders buying their freehold. Valuation is too complex, time-consuming and costly. Another resident, aged 86, of Beauchamp Street, Cardiff, had to pay £250 in valuers' and solicitors' fees when the freehold was only £190.
      Two other cases have come to my notice that are typical of the problem. The first concerns a pensioner who is in a bad state of health and virtually unable

      743
      to climb stairs. He requires constant access to an oxygen bottle. The property that he rents is exceedingly damp, has no bathroom or hot running water and has collapsing floorboards and rotting window frames. It has two years remaining on the lease and, as a tenanted property, has no real market value. The leaseholder is eager to purchase the freehold in order to sell the property to a housing association that would renovate the property, but he cannot possibly afford the £4,500 that the ground landlord is asking. The other case also concerns a pensioner, who in this case has a heart condition. Her house has a leaking roof and dangerous electrical wiring. Her landlord went bankrupt. Although the Official Receiver is willing to sell and a local housing association is willing to buy, the freehold price is £4,500, which the local district valuer says is well above the price that he is willing to agree.
      I received a letter only yesterday from a member of the Cathays and Roath Leaseholders Association, who said that
      " many householders cannot afford the new prices at present being stated by the landlords ".
      In a recent letter to my hon. Friend the Member for Cardigan (Mr. Howells), the Welsh Leasehold Reform Campaign stated:
      " The leasehold situation in Wales is now approaching crisis point as an increasing number of leases reach expiration This is resulting in freeholders demanding sums of money from leaseholders that they do not have, cannot borrow and have not thought they would be asked for. There is undeniable evidence that the 1967 Leasehold Reform Act is not protecting the interests of the leaseholders ".
      Time and again during debates on the Bill, it has become obvious that housing problems cannot be solved by blanket nationwide solutions. Most problems are local, and leasehold is no exception. As local problems, they need local solutions. It is therefore appropriate to confine examination of the problem to a specific area where it is particularly relevant. For the same reason, there was a long debate two nights ago on an issue of relevance only to London—service charges.
      Last November, I brought the matter to the attention of the Minister for Hous-
      744
      ing and Construction. I asked him whether he would
      " amend the Leasehold Reform Act 1967 to enable the relaxation of the five-year rule of occupation which would permit a relative to buy the freehold, re-examine the formula used to determine the price of the freehold, consider direct assistance to pay the legal fees wishing to buy the freehold, establish local appeals tribunals to replace the London based lands tribunal and release funds to local authorities to permit home owners to borrow the money necessary to purchase their freeholds."—[Official Report, 26 November 1979; Vol. 974, c. 545.]
      I am glad the Government have gone some way towards accepting those points, but I wish that they had gone further. I ask them to examine the amendments to see whether there are any points that they can accept, which can be incorporated in the Bill in another place. The Bill goes a long way to extending the rights of many people to buy their own homes, but people living in leasehold properties should be given the same opportunities.
      Mr. Grist: In the contribution of the hon. Member for Liverpool, Edge Hill (Mr. Alton) we heard the genuine voice of a populist politician. The next time that the hon. Gentleman wishes to bring up cases in my constituency, perhaps he will have the courtesy to let me know.
      Mr. Alton: I did not know that the cases were in the hon. Gentleman's constituency. I was not aware which constituency they were in. They were brought to my attention by Shelter and by individuals who wrote to me. I intended no offence to the hon. Gentleman. There is nothing wrong in trying to be popular. However, when the occasion arises, one also has to take unpopular decisions. I have also been on the receiving end. I hope that the hon. Gentleman will accept that I put the cases with sincerity and will withdraw the imputation.
      Mr. Grist: I am afraid that I do not withdraw my remarks. There are certain courtesies in this House, which also involve visiting other Members' constituencies. Perhaps I may tell the hon. Gentleman about them after the debate.
      I welcome amendment No. 106, as do most people who have made representations to me and other hon. Members representing South Wales constituencies, where, as has been pointed out, there is probably a greater concentration of leasehold property than elsewhere in the

      745
      country, although not necessarily a greater number of leasehold properties.
      I liked the look of the formula in amendment No. 133a when I first saw it some time ago, but I never believed that it was workable. I notice that it is put forward not on the basis that it is workable but that we should just think about the idea. Amendment No. 132 is included as a fall-back. Both amendments are highly capricious. One of them pays no attention to the fact that rateable values do not change over considerable periods. Therefore, at a time of inflation, the figure would get out of kilter. The amount of ground rent peyabel becomes ludicrous after 99 years.
      The formula is designed to obtain cheaper freeholds. That is reasonable, and I would not argue against it. However, I wish that people would be honest enough to say what the intention is. It is not to provide greater clarity. Many factors are variable, including the yield on consolidated stock, which would provide changeability from time to time anyway. The formula would not bring the certainty that people like to imagine.
      We should all beware, as politicians, of handing the power contained in the other amendment to Ministers to introduce and determine their own formula. That would be wide open to exploitation for political reasons.
      I did not agree with my hon. Friend the Member for Buckingham (Mr. Benyon) that the cut in the number of years' residence from five to three would encourage speculation, for the reasons put forward by the hon. Member for Merthyr Tyfil (Mr. Rowlands). It is unlikely that someone would choose to live in a house for three years for speculative reasons. We are dealing with genuine residents—people who live in their own houses. I do not believe that the reduced period will encourage speculation.
      Mr. W. Benyon: This is the difficulty with the blanket idea that every part of the country is the same. I assure my hon. Friend that, even on the five-year basis, that is happening in London.
      Mr. Grist: I cannot believe that in most areas that is so.
      The hon. Member for Edge Hill suggested, I believe on the basis of my hon. Friend's contribution, that we
      746
      should have different law in different parts of the country. I do not find that argument convincing. It would require not only different land law but different trusteeship law. As the hon. Member for Merthyr Tydfil pointed out, a great many properties are held by trusts which have to meet the requirements of the trusteeship legislation in favour of beneficiaries. People who urge otherwise endanger those who administer trusts under the present law. I wish that when people make populist claims and denunciations, they would bear that in mind.
      The hon. Member for Merthyr Tydfil and my hon. Friend the Member for Barry (Sir R. Gower) rightly praised the introduction of the 1967 Act, which was a great breakthrough for South Wales. All of us who were there at the time remember the welcome expressed for the security and freedom that the Act would give people. There is the 50-year extension if the tenant does not buy the freehold or the option to remain as a tenant during the term of the lease. In 1967, the newspapers said that no one now would be thrown out of his home at the end of the lease.
      The amendments cutting the period from five to three years for residence and reapplication for buying freeholds are not earth-shattering. They do not represent as; much as I ask my right hon. and hon. Friends at the Welsh Office and the Department of the Environment for, but they introduce a welcome degree of flexibility into the operation of the 1967 Act.
      5 pm
      Many more people will now be able to purchase their freeholds. There are many terraced properties in my constituency. I live in one myself. They are often bought by young people as their first house. They do not always stay in such properties for very long. The terraced properties will be much easier to buy and sell.
      The availability of freehold means that those properties will be able to attract mortgage money. Mortgages for properties with leases shorter than 21 years are almost impossible to obtain. Now that there is the possibility of buying freeholds in a shorter period, it will be easier to obtain mortgages and young people will find it easier to buy and sell terraced properties.

      747
      Many people become involved in what I call the daisy chain process. We are all aware of it. It means buying and selling in a long row of owners. If one person breaks the link, the person who is obliged to purchase his freehold as a condition of selling to the individual who is prepared to buy the house suddenly finds that he cannot go ahead and cannot complete the purchase of the freehold.
      People in that position will have been held up for five years. In effect, they have been locked into their houses for five years. After five years, the cost of purchasing the freehold has risen considerably. One has only to consider what has happened to house prices over the past five years to realise what a difference that can make. At any rate, there is to be a reduction from five years to three years.
      The amendment will be welcomed by all those in South Wales who have been coming to see me and other hon. Members. These are the amendments for which they have been calling in all then-talk and representations. The amendments will not encourage speculation. They will increase flexibility. They will allow the tenant to purchase his property on a slightly longer lease—instead of it being five years nearer the conclusion of his lease, it will be three years nearer—and to purchase it at a marginally cheaper price.
      These provisions, together with the new leasehold valuation tribunals, mean that the Government have done more for thousands of my constituents than any Government since 1967. There are those who makes populist noises when in Opposition—others were in quasi-coalition during the latter period of the previous Labour Government—but they did nothing when in Government, when they had the opportunity to make changes. I am glad that the Government are taking the opportunity.
      Mr. D. E. Thomas: I look forward to reading the memoirs of the hon. Member for Cardiff, North (Mr. Grist) so that I can discover what he asked his right hon. and hon. Friends for in the Welsh Office. No doubt "The Memoirs of a Parliamentary Private Secretary" will be selling very well in Lear's, Bookshop 108 and many other bookshops in Cardiff.
      748
      The hon. Gentleman suggested that the amendment is a major breakthrough in the leasehold system.
      Mr. Grist: I did not.
      Mr. Thomas: He said that it is a breakthrough that has not been equalled since 1967.
      Mr. Grist: I said that the amendments are not earth-shattering.
      Mr. Thomas: It is a matter of semantics whether what is not earth-shattering may be a breakthrough.
      Despite our extended debates on leasehold, in Committe and outside the House, I have yet to hear a rational defence of the leasehold system and its contribution to the housing policy. I see that the hon. Member for Lichfield and Tamworth (Mr. Heddle) is in his place. We have exchanged remarks on the issue in Committee. I fail to understand how the operation of the system in South Wales as I know it—I have a limited knowledge of its operation in London—has made a specific contribution to tenure. It does not make more property available.
      Conservative Members have argued for shorthold. However, leasehold does not make for property to be transferred in a meaningful way. It does not make the housing stock any more variable or useful. The system is related to the ownership of land. In that sense it is right to describe it, as I did in Committee and as the hon. Member for Liverpool, Edge Hill (Mr. Alton) has done today, as a relic of the feudal system.
      Mr. John Heddle: The hon. Gentleman should not be allowed to get away with such irresponsible remarks. The leasehold system started in South Wales about 99 years ago. The land was bought by builders, such as Thomas Cubitt. They developed houses cheaply to house those who would otherwise have been unable to buy their own house. The great landowners of those days, by developing the leasehold system in South Wales, Birmingham, London and elsewhere, performed a great function. By no means were their intentions feudal. They were, to an extent, charitable.
      Mr. Rowlands: Lord Bute?
      Mr. Thomas: The hon. Gentleman will forgive me for not repeating the formulation that I set out in Committee. However, I described the leasehold system as a relic of feudalism. It continued through the period of capitalism, and it is now becoming a form of corporatism. That sums up how the system has operated. An example is the BP pension fund.
      The form of the system as it applies to leaseholders in Cardiff, other parts of Wales and other parts of Britain is related to the continued ownership of land, interest in land and remuneration from land. It is not related to the needs of householders or potential householders. For that reason, I have always favoured the abolition of the leasehold system, which distinguishes me from the official Opposition.
      I know, Mr. Deputy Speaker, that I should be out of order if I were to speak in detail on my magic formula, which we debated in Committee when discussing one of my amendments. That formula would result in a leasehold not being conveyed at more than 1 per cent. of the total value of the property. I do not consider that the Government's concessions, especially on amendment No. 106, are moves to tackle the problems that are bound to face the leaseholder as he attempts to purchase the freehold. I itemised the problems in Committee, and I do not want to repeat them.
      The householder faces a risk in seeking to obtain a valuation. If I wanted to sell my "ancestral" home in the national park of Dolgellau, I should ask the local estate agent to provide me with a valuation. Obviously, I should have to pay something for that service. If I were the owner of a leasehold property in Cardiff or in London and I wanted to obtain a valuation for the purchase of a freehold, I should not be able to do so. I should be required to serve notice under the terms of the Act and go through the costly motion of attempting to obtain the purchase of the freehold. If I decided at any stage to withdraw from the purchase, on finding that the price would be exorbitant or that it could not be afforded, I should be disfranchised even under the amendment, though for three years, not for five.
      The Government may seek to dress up their amendments in response to the
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      justified agitation and protests of many groups in Cardiff who, on a number of occasions, have taken their protests to the ancestral home of the Secretary of State for Wales, where they were offered cups of tea, for which I am sure they were grateful. Those protests arose because of the extent of feeling on this subject. I want to ask the Minister not to close the door on the issue and not to reject out of hand the possibility of looking again at the formula. I hope that he will examine the difficulty facing leaseholders who want to purchase the freehold but are not able to ascertain objectively what is likely to be the cost of the freehold.
      I ask the Minister to look again also at the excessive cost of conveying the freehold. I trust that he will examine in more detail the manner in which the new valuation tribunal that he has set up operates. At the risk of provoking another response from the hon. Member for Lichfield and Tamworth, I refer again to the problem of the vested interest and the material interest of chartered surveyors in the matter of negotiation.
      I draw the Minister's attention to what seems to be the incredible and irrational difference between the cost of the freehold being conveyed by the local authority, in this case the city council, and the district valuer's valuation of £300 and £500—the two examples of which I am aware. I hope that these are not in the constituency of the hon. Member for Cardiff, North.
      Mr. Grist: I should be grateful if the hon. Gentleman would at some time indicate the houses on which it is claimed the district valuer put a price. My investigation did not reveal them. The district valuer does not normally value freeholds.
      Mr. Thomas: I have had long correspondence with the office of the district valuer in Cardiff. I shall see that the hon. Gentleman has a copy of the correspondence so that he can study it at his leisure.
      There is a difference between the valuation that is obtained when the city council, with the consent of the district valuer, is disposing of the lease to the leaseholder and the level of valuation that obtains when there is a private disposal. The most scandalous case that I have quoted previously is a £3,000 transaction

      751
      for the lease of a terraced property valued at £10,000. It seems to me that the level of valuation and the process of valuation undertaken by firms of chartered surveyors in Cardiff represent an upping of the market value on the basis of one part of the valuation procedure of the spot value of the site in question.
      It is extremely suspect, to say the least, that firms of chartered surveyors find themselves representing all parties to the transaction. I hope that the deep anxieties that have been conveyed to me by leaseholders in Cardiff and other areas will be investigated by the Welsh Office. These were put to the Minister by the group that he graciously met after they had recently been to tea in Cardiff with the Secretary of State. I hope that his reply to the debate will not merely be a statement that appears to close the door on future Government reform on this matter.
      I am opposed to the system. I am unable to find any rational justification for its continuance. I was not moved by the arguments of the hon. Member for Buckingham (Mr. Benyon). The system makes no contribution to housing policy. It creates substantial insecurity in the minds of householders, and that insecurity has been demonstrated clearly in Cardiff in recent weeks as these leases have matured. I hope that the House will be more sensitive to these anxieties.
      5.15 pm
      Mr. A. P. Costain: The hon. Member for Merioneth (Mr. Thomas) asks for justification of the leasehold system and claims that it does not work correctly. My hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle) caused laughter when he said that the system was often used for charitable purposes. The response of hon. Members to my hon. Friend's remark shows little realisation of what the leasehold system has done and is continuing to do.
      Mr. Donald Anderson: In South Wales?
      Mr. Costain: I am talking about the system generally.
      Many hon. Members would not have a flat in Dolphin Square if the leasehold system did not exist. At the time of
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      building Dolphin Square, it was necessary to buy the land freehold. Because money was cheaper on leasehold property due to its greater security, and, therefore, one could borrow at a lower rate of interest, it was possible to sell the freehold at double the price by creating a new leasehold. That gave the company concerned enough money to build the block of flats. Without the leasehold system, the flats would never have been built. The proposal had been turned down by two firms, including a great American syndicate.
      Mr. W. Benyon: My hon. Friend's argument is relevant, but no such blocks would ever be built in the future if these amendments were passed.
      Mr. Costain: No flats of that sort will be built in the future in this country so long as the Rent Acts continue to operate.
      Mr. Anderson: The hon. Gentleman is saying that, as a result of the leasehold system, the builder was able to make a more substantial profit. That cannot be described as charitable, in the words of the hon. Member for Lichfield and Tamworth (Mr. Heddle).
      Mr. Costain: The hon. Gentleman should bide his time. The leasehold system did not allow the builder to make a greater profit. Socialists always get their housing policy wrong. The system allowed finance to be secured so that the flats could be built. They provide about 100 Members of Parliament with comfortable accommodation at a very reasonable rent. The profit, in fact, is made by the Members of Parliament who live in those flats at a reasonable rent.
      The subject of charities has been mentioned. A well-known housebuilder, whose name escapes me, from Morpeth wanted to build houses and sell them cheaply and, therefore, created a leasehold. He did not want to make a bigger profit. He wanted to employ more people on building houses. When he created the leasehold, he gave it to a charity because he considered that that was the right way to run the leasehold system.
      Mr. Rowlands: I am following the hon. Gentleman's historical description of how, in some circumstances, leasehold has been charitable. Will he address himself to the problems of the origins of the leasehold system in South Wales? It

      753
      began when the illegitimate son of Charles II was granted land because Charles II wanted to get rid of him as far away as possible in what he considered was a misty, miserable land. After 150 years, that family makes an enormous killing and still, through successor companies, visits the problems that have been described. What is charitable or sensible about that system?
      Mr. Costain: One thing that I have learnt in my days in the House is that it is a fool who starts to make a speech on a subject that he does not know enough about. I know nothing about the leasehold system in South Wales, but I do know about the leasehold system in my constituency, and that is why I have intervened in the debate.
      We have a similar problem in Folkestone, because the town was built when the railway arrived there nearly 100 years ago and the majority of house owners were given 99-year leases, which are now beginning to come up for renewal. A number of constituents have come to see me about the problem. When the orginal leaseholds were created they were for large houses, which were then fashionable but now have been turned into residential, high-class hotels, which I recommend.
      The original ground rents were extremely low, even relative to the value of money at that time. By today's standards they were stupid. Now, we have to create new ones, and the problem is how to assess them. The Minister must take a completely new look at the matter and introduce a formula that allows up-to-date values, so that there is fairness on all sides. When one wants to borrow money, leasehold is the most attractive way. The problem is that when the lease is running out it is the most unattractive way. We must sort out the matter.
      The Under-Secretary of State for Wales (Mr. Wyn Roberts): We have had a very interesting debate. The hon. Member for Merthyr Tydfil (Mr. Rowlands) referred to the Bute family, who were descendants of Charles II. He questioned their charity. I have no knowledge of the family, except through history, but I remind the hon. Gentleman that they gave the land known as Cathays Park and the castle to Cardiff city council.
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      I do not wish to prolong our excursion into history. I would rather return to the present and to the amendments, which would make a number of radical changes to the Leasehold Reform Act 1967. This is not the first time such changes have been suggested. In March last year, when the Leasehold Reform Bill was before the House, the hon. Member for Bed-wellty (Mr. Kinnock) made an impassioned plea for such changes. He said:
      " a reforming Government, such as the one we have the good fortune to have at the moment, should be responsible enough to make legislative provision so that these anomalies and difficulties are removed."—[Official Report, 7 March 1979; Vol. 963, c. 1303.]
      The hon. Gentleman was told by the then Under-Secretary of State for the Environment, the right hon. Member for Durham, North-West (Mr. Armstrong), that his detailed points had been carefully noted and he was advised to await publication of the Labour Government's Housing Bill.
      That Bill, which appeared later that month, contained provision to establish leasehold valuation tribunals. That was a helpful provision, which we have included in the present Bill. But I assure my hon. Friends the Members for Cardiff, North (Mr. Grist) and Barry (Sir R. Gower), among others, that there was nothing in the Labour Bill about a formula for valuing freehold or to enable a leaseholder who had opted for a 50-year extension instead of enfranchisement to have a further opportunity to purchase his freehold. That was the position when the Labour Government left office last year.
      I do not criticise the right hon. Member for Rhondda (Mr. Jones) for introducing amendments which were suggested to his own Government and, as far as we can tell, rejected by them. The reasons why they were not incorporated in Labour's Bill last year are just as valid today.
      It is difficult to change the Leasehold Reform Act without undermining its principles, which seek to provide a basis for fair dealing between ground landlord and leaseholder. There are some, such as the hon. Member for Merioneth (Mr. Thomas), who would like to abolish the leasehold system altogether, for commercial as well as domestic property. The hon. Gentleman told us as much in Committee and he told us so again today.

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      But leasehold is a recognised and legitimate form of tenure, established by law, and it cannot be abolished without confiscation of the ground landlord's interest. If that were contemplated, there would have to be compensation. In any case, it is clear from remarks made by my hon. Friends the Members for Buckingham (Mr. Benyon) and for Folkestone and Hythe (Mr. Costain) that there would be considerable opposition to any such suggestion, because the leasehold system still has its value.
      The present Government fully appreciate the current position in Wales, where many 99-year leases are coming to an end. We have given full consideration to the representations made to us. As the hon. Member for Merioneth said, my right hon. Friend the Secretary of State for Wales has twice seen representatives of the various reform groups when they have turned up, somewhat unfairly, at his home at weekends. I have seen those representatives officially at the Welsh Office. The more I listened to them, the more convinced I became that the new leasehold valuation tribunals were the best answer to their problems.
      My sentiment was echoed by the right hon. Member for Rhondda when, in his opening speech, he called for a simpler, cheaper valuation procedure. I sincerely hope that when the tribunals are set up the leaseholders' representative groups and those who represent the ground landlords will take full advantage of them.
      The hon. Member for Merioneth spoke about the membership of the tribunals. The members are to be drawn from the rent assessment panels. My best assurance to the hon. Gentleman is that I have heard no complaint of bias against those panels. I hope, as I am sure the House will, that there will be no bias but complete impartiality by the tribunals.
      Mr. D. E. Thomas: In view of the hon. Gentleman's emphasis on the work of the panels as a solution to the problems as perceived by the groups in Cardiff and other areas, can he give the House an assurance that after the panels have been operating for, say, two years his Department will review their work and indicate how successful they have been in dealing with the problems?
      Mr. Roberts: I am sure that we can keep a constant eye on the workings of the panels.
      In this connection, I welcome the support given to us by the hon. Member for Liverpool, Edge Hill (Mr. Alton), who welcomed our moves towards increased home ownership. Therefore, we shall expect his support on Third Reading.
      The hon. Member for Merthyr Tydfil reminded the House that ground landlords these days were often pension funds, such as the British Petroleum pension fund, which has an interest in many of the properties in Cardiff. The law must be equitable and deal fairly with all the interests involved. We must be as just to the BP worker whose pension contributions are invested in freeholds as we are to the leaseholder whose house stands on ground owned by the pension fund. We cannot favour one at the expense of the other. That is the back-ground to the present debate.
      5.30 pm
      As the right hon. Member for Rhondda said, I told the Committee that the Government were prepared to examine the various existing limitations on eligibility under the Leasehold Reform Act and that the two five-year requirements are matters of judgment. I gave an undertaking to come back to the issue on Report, and I am now doing that.
      In order to qualify under the 1967 Act, a leaseholder must be occupying his house under the lease and have done so either for the last five years or for a total of five years out of the last 10 years. The reason for that requirement in the 1967 Act was that the Act was intended to benefit genuine long leaseholders who had lived for an appreciable time in the house which they owned. I do not think that it would be right to abolish this requirement. On the other hand, I think that its purpose could be served by a three-year period. I assure my hon. Friend the Member for Buckingham that in our view a three-year period would comprise what he called genuine occupation.
      The first part of our amendment No. 106 reduces the residential period from five to three years or, alternatively, three years out of the last 10 years. The effect of Opposition amendment No. 141 is the same, and clearly there is a measure of

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      agreement between us. I hope, therefore, that the right hon. Gentleman will not press amendment No. 141.
      Amendment No. 139 would further reduce the residence requirement to one year. That might well open the field to speculators, and I shall ask the House to reject the amendment. The change from five years to three years in the residential qualification will help leaseholders who bought at the tail end of a lease, with only a few years to run, either by giving them the chance to enfranchise, which they would otherwise not have had if the lease had less than five years to run, or by enabling them to do so sooner, and more cheaply, if it had more than five years to run.
      The second part of Government amendment No. 106 relates to the provision in the 1967 Act which provides that where a leaseholder withdraws an application to enfranchise he may not make a second application for another five years. When a leaseholder serves a notice of enfranchisement, he is effectively entering into a contract which immediately binds the landlord but from which the leaseholder only may withdraw.
      That rule is to discourage the leaseholder from playing fast and loose with any landlord by making claims that he is not in a position to follow up. I think that the House will agree that such a provision is reasonable. Nevertheless, it can give rise to hardship when a leaseholder, for reasons beyond his control, is unable to proceed with his intention to enfranchise where the lease has not very long to run because he might never get another chance. Again, we think that a three-year period would be a sufficient interval for a leaseholder to wait before submitting another claim.
      Opposition amendment No. 134—which is, incidentally, incomplete—would have the same effect. Here again, we have a measure of agreement. Amendment No. 133 would reduce the period to one year. Once more, our judgment is that this is too short a time. The right hon. Member for Rhondda raised the question of the right to buy, but we would take the line that there is not an exact parallel between what we are discussing now and the right-to-buy provisions, and, of course, there is a difference between public and private bodies.
      Both parts of amendment No. 106 will benefit leaseholders who have already bought the tail end of a lease, provided that the original term of the lease has not expired when it comes into effect. I recommend this amendment to the House.
      Amendment No. 138 seeks to change the definition of low rent. We considered an identical amendment in Committee and there is nothing to add to what I said then. I do not think that the right hon. Gentleman had very much to add either, because he confessed in his opening speech that he did not know of any case. Even if we accepted—
      Mr. Alec Jones: May I put the record straight? I did not say that I did not know of any cases. I said that I knew of no cases in my constituency but that my attention had been drawn to cases in London, which were the ones I quoted.
      Mr. Roberts: I am grateful to the right hon. Gentleman. Even if we accepted that the two-thirds rateable value test was no longer right for the Leasehold Reform Act, one could not simply adopt four-thirds because the two-thirds limit applies in the case of the Rent Act 1977. Though there is a lower limit here, the result would be to create a substantial area of overlap where two separate codes would apply simultaneously. Once the ground rent for a long tenancy rises above the limit, the Rent Act applies, with the result that the restrictions on charging a premium on an assignment will bite on long leases which were previously freely marketable.
      There is, therefore, a double problem. We are seeking solutions, but it is a complex area of the law and any change could produce adverse effects on some individuals. One difficulty is that the effect of raising the limits in the two Acts would remove the protection of the Rent Act from some existing tenants, and I imagine, Opposition Members would agree that such a result is not desirable.
      I hope, therefore, that Opposition Members will feel able to withdraw the amendment on the understanding that we are considering the wider problem. I hope that it will be possible to come forward with an acceptable solution but I cannot promise at this stage that we shall do so.
      I turn to the amendments proposing that there should be a mathematical

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      formula for calculating the price payable for the freehold under the Leasehold Reform Act. I explained in Committee that it had not been possible to devise a mathematical formula to produce the price without the need for individual assessment. I gave the reasons why the particular formula suggested in amendment No. 133a would not be acceptable. I refer to what I said during the fortieth sitting of the Committee:
      " This particular formula, put forward as a replacement for the valuation basis under section 9(1) of the Leasehold Reform Act as amended by the Housing Act 1969, makes the arbitrary assumption that a modern ground rent can be taken as some fixed proportion of the rateable value, but this would not be the case in practice. By using a rate of interest that is appropriate to transactions in the money market, it would substantially reduce the price below what the Lands Tribunal would at present determine."—[Official Report, Standing Committee F, 22 April 1980; col. 2178.]
      I think that it was the arbitary nature of this kind of formula to which my hon. Friend the Member for Buckingham objected.
      The requirement as regards the price was, I think, put extremely well in the debate on 7 March. The right hon. Member for Brent, East (Mr. Freeson) said succinctly:
      " the price to be paid by a leaseholder has three elements. The first is the present capital value of the existing ground rent for the remainder of the original term of the lease. The second is the present capital value of the new rent for the 50-year extension. The third element … is the present value of the landlord's reversion at the end of the 50-year extension."—[Official Report, 7 March 1979; Vol. 963, col. 1288–9.]
      If anybody can work that out in terms of a formula, we shall be happy to consider it. That is the answer to the hon. Member for Merthyr Tydfil.
      If hon. Members wonder why the Bill contains a formula for the price of minor intermediate leasehold interests, they must remember that the situation is different. No question of valuing land arises. It is merely a matter of paying a person a capital sum to compensate for the loss of a known payment of a few pounds a year payable for a known number of years.
      Like the previous Government, we are providing for local leasehold valuation tribunals to settle disputes. They will take over from the present Lands Tribunal, and an appeal to the Lands Tribu-
      760
      nal will be held in reserve. That will be an important contribution to helping people who are enfranchised, without undue delay and costs. The leaseholder will not be liable to pay any cost incurred by the landlord in relation to a reference to the new tribunals. The local valuation tribunals should quickly establish a pattern of values and thus remove the need for cases to go to them. We are not providing a formula for establishing the price of freeholds. I invite the House to reject the amendment.
      Sir Raymond Gower: Does my hon. Friend agree that the biggest advantage is that local tribunals will not award costs? In the past, references to the Lands Tribunal have been deterred because of the cost.
      Mr. Roberts: My hon. Friend is right. The leasehold valuation tribunal system will have a number of significant advantages.
      Amendment No. 135 would allow a leaseholder who has extended his lease to enfranchise after the original lease has expired. I said in Committee that I was not persuaded that that was right. The 1967 Act gives a qualified leaseholder the choice of buying his freehold or extending his lease by 50 years. Nevertheless, a leaseholder who decides to extend his lease may still enfranchise as long as the original lease has not expired. When he extends his lease, he still has a valuable, saleable asset. It is fair that once the term of the original lease expires the landlord knows that the position is no longer subject to change. Therefore, the uncertainty referred to by my hon. Friend the Member for Buckingham is removed. It is unlikely that many leaseholders who are unable to enfranchise during the original term of the lease will be able to do so later when the cost could be much higher in real terms, apart from increases in house prices. I ask the House to reject that amendment.
      5.45 pm
      Amendment No. 136 deals with the formula for determining the price payable on enfranchisement for a minor superior interest. The profit rent represents the difference between what the man in the middle receives from the man below him in the chain and what he pays to the man above him. The £5 limit should cover all cases.
      The right hon. Member for Rhondda said that he had some evidence relating to Birmingham. We shall consider a higher figure if there is evidence that it is needed. Nobody has sent us evidence since I dealt with the matter in Committee. If the right hon. Gentleman has evidence, I hope that he will send it to us. I advise the House to reject the amendment if it is not withdrawn.
      I hope that I have dealt satisfactorily with the extended batch of amendments. The Government have gone as far as their predecessors in establishing leasehold valuation tribunals which, we believe, will assist greatly in resolving disputes about leasehold valuation. We have gone further than the previous
      Government in reducing the residential qualification period for enfranchisement from five years to three years. We have also gone further in reducing the period between applications from five years to three years.
      I assure my hon. Friends the Members for Cardiff, North and Barry, who have been particularly concerned with the problem, that we have done all that we can to ease the situation. At the same time, we are being just.
      Question put, That the amendment be made:—
      The House divided: Ayes 236, Noes 283.

      Division No. 325]

      AYES

      [5.47 pm

      Abse, Leo

      Douglas-Mann, Bruce

      Johnson, James (Hull West)

      Adams, Allen

      Dubs, Alfred

      Johnson, Walter (Derby South)

      Allaun, Frank

      Duffy, A. E. P.

      Jones, Rt Hon Alec (Rhondda)

      Alton, David

      Dunn, James A. (Liverpool, Kirkdale)

      Jones, Barry (East Flint)

      Anderson, Donald

      Dunnett, Jack

      Jones, Dan (Burnley)

      Archer, Rt Hon Peter

      Dunwoody, Mrs Gwyneth

      Kaufman, Rt Hon Gerald

      Ashley, Rt Hon Jack

      Eastham, Ken

      Kilfedder, James A.

      Ashton, Joe

      Ellis, Raymond (NE Derbyshire)

      Kilroy-Silk, Robert

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

      English, Michael

      Kinnock, Neil

      Bagier, Gordon A. T.

      Ennals, Rt Hon David

      Lamble, David

      Barnett, Guy (Greenwich)

      Evans, loan (Aberdare)

      Lamborn, Harry

      Barnett, Rt Hon Joel (Heywood)

      Evans, John (Newton)

      Lamond, James

      Beith A. J.

      Ewing, Harry

      Leadbitter, Ted

      Bennett, Andrew (Stockport N)

      Faulds, Andrew

      Leighton, Ronald

      Bidwell, Sydney

      Field, Frank

      Lestor, Miss Joan (Eton & Slough)

      Booth, Rt Hon Albert

      Fitch, Alan

      Lewis, Arthur (Newham Norh West)

      Bottomley, Rt Hon Arthur (M'brough)

      Flannery, Martin

      Lewis, Ron (Carlisle)

      Bradley, Tom

      Fletcher, Ted (Darlington)

      Litherland, Robert

      Brown. Hugh D. (Provan)

      Foot, Rt Hon Michael

      Lofthouse, Geoffrey

      Brown, Robert C. (Newcastle W)

      Ford, Ben

      Mabon, Rt Hon Dr J. Dickson

      Brown, Ronald W. (Hackney S)

      Forrester, John

      McCartney, Hugh

      Brown, Ron (Edinburgh, Leith)

      Foster, Derek

      McDonald, Dr Oonagh

      Buchan, Norman

      Fraser, John (Lambeth, Norwood)

      McElhone, Frank

      Callaghan, Jim (Middleton & P)

      Freeson, Rt Hon Reginald

      McGuire, Michael (Ince)

      Campbell, Ian

      Garrett, John (Norwich S)

      McKay, Allen (Penistone)

      Campbell-Savours, Dale

      Garrett, W. E. (Wallsend)

      McKelvey, William

      Canavan, Dennis

      George, Bruce

      MacKenzie, Rt Hon Gregor

      Cant, R. B.

      Gourlay, Harry

      Maclennan, Robert

      Carmichael, Neil

      Graham, Ted

      McNamara, Kevin

      Carter-Jones, Lewis

      Grant, George (Morpeth)

      McWilllam, John

      Cartwright, John

      Grant, John (Islington C)

      Magee, Bryan

      Clark, Dr David (South Shields)

      Grimond, Rt Hon J.

      Marks, Kenneth

      Cocks, Rt Hon Michael (Bristol S)

      Hamilton, W. W. (Central Fife)

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

      Cohen, Stanley

      Hardy, Peter

      Marshall, Dr Edmund (Goole)

      Concannon, Rt Hon J. D.

      Harrison, Rt Hon Walter

      Marshall, Jim (Leicester South)

      Conlan, Bernard

      Hart, Rt Hon Dame Judith

      Mason, Rt Hon Roy

      Cook, Robin F.

      Hattersley, Rt Hon Roy

      Maxton, John

      Cowans, Harry

      Haynes, Frank

      Maynard, Miss Joan

      Craigen, J. M. (Glasgow, Maryhill)

      Healey, Rt Hon Denis

      Meacher, Michael

      Cryer, Bob

      Heffer, Eric S.

      Mellish, Rt Hon Robert

      Cunliffe, Lawrence

      Millan, Rt Hon Bruce

      Cunningham, George (Islington S)

      Hogg, Norman (E Dunbartonshire)

      Miller, Dr M. S. (East Kilbride)

      Holland, Stuart (L'beth, Vauxhall)

      Mitchell, Austin (Grimsby)

      Dalyeil, Tam

      Home Robertson, John

      Mitchell R. C. (Soton Itchen)

      Davidson, Arthur

      Davies, Rt Hon Denzil (Lianelli)

      Homewood, William

      Morris, Rt Hon Alfred (Wythenshawe)

      Davies, lfor (Gower)

      Hooley, Frank

      Morris, Rt Hon Charles (Openshaw)

      Davis, Clinton (Hackney Central)

      Horam, John

      Morris, Rt Hon John (Aberavon)

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

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

      Morton, George

      Deakins, Eric

      Howells, Geraint

      Moyle, Rt Hon Roland

      Dean, Joseph (Leeds West)

      Huckfield, Les

      Newens, Stanley

      Dempsey, James

      Hughes, Mark (Durham)

      Oakes, Rt Hon Gordon

      Dewar, Donald

      Hughes, Robert (Aberdeen North)

      Ogden, Eric

      Dixon, Donald

      Hughes, Roy (Newport)

      O'Halloran, Michael

      Dobson, Frank

      Janner, Hon Greville

      O'Neill, Martin

      Dormand, Jack

      Jay, Rt Hon Douglas

      Orme, Rt Hon Stanley

      Douglas, Dick

      John, Brynmor

      Owen, Rt Hon Dr David

      Palmer, Arthur

      Short, Mrs Renée

      Wainwright, Richard (Colne Valley)

      Park, George

      Silkin, Rt Hon John (Deptford)

      Watkins, David

      Parker, John

      Silkin, Rt Hon S. C. (Dulwich)

      Weetch, Ken

      Pendry, Tom

      Silverman, Julius

      Wellbeloved, James

      Penhaligon, David

      Skinner, Dennis

      Welsh, Michael

      Powell, Raymond (Ogmore)

      Smith, Rt Hon J. (North Lanarkshire)

      White, Frank R. (Bury & Radcliffe)

      Prescott, John

      Soley, Clive

      Whitehead, Phillip

      Price, Chrstopher (Lewisham West)

      Spearing, Nigel

      Whitlock, William

      Race, Reg

      Spriggs, Leslie

      Wigley, Dafydd

      Radice, Giles

      Stallard, A. W.

      Willey, Rt Hon Frederick

      Roberts, Albert (Normanton)

      Steel, Rt Hon David

      Williams, Rt Hon Alan (Swansea W)

      Roberts, Allan (Bootle)

      Stoddard, David

      Williams, Sir Thomas (Warrington)

      Roberts, Ernest (Hackney North)

      Strang, Gavin

      Wilson, Rt Hon Sir Harold (Huyton)

      Roberts, Gwilym (Cannock)

      Straw, Jack

      Wilson, William (Coventry E)

      Robertson, George

      Summerskill, Hon Dr Shirley

      Winnick, David

      Rodgers, Rt Hon William

      Taylor, Mrs Ann (Bolton West)

      Woodall, Alec

      Rooker, J. W.

      Thomas, Dafydd (Merioneth)

      Woolmer, Kenneth

      Ross, Ernest (Dundee West)

      Thomas, Jeffrey (Abertillery)

      Wrigglesworth, lan

      Ross, Stephen (Isle of Wight)

      Thomas, Dr Roger (Carmarthen)

      Wright, Sheila

      Rowlands, Ted

      Tilley, John

      Young, David (Bolton East)

      Sandelson, Neville

      Tinn, James

      Sever, John

      Torney, Tom

      TELLERS FOR THE AYES:

      Sheerman, Barry

      Urwin, Rt Hon Tom

      Mr. James Hamilton and

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

      Varley, Rt Hon Eric G.

      Mr. Donald Coleman.

      Shore, Rt Hon Peter (Step and Pop)

      Wainwright, Edwin (Dearne Valley)

      NOES

      Aitken, Jonathan

      Cope, John

      Heddle, John

      Alexander, Richard

      Cormack, Patrick

      Henderson, Barry

      Alison, Michael

      Corrie, John

      Heseltine, Rt Hon Michael

      Amery, Rt Hon Julian

      Costain, A. P.

      Hicks, Robert

      Ancram, Michael

      Critchley, Julian

      Hogg, Hon Douglas (Grantham)

      Arnold, Tom

      Crouch, David

      Holland, Philip (Carlton)

      Aspinwall, Jack

      Dickens, Geoffrey

      Hooson, Tom

      Atkins, Rt Hon H. (Spelthorne)

      Dorrell, Stephen

      Hordern, Peter

      Atkins, Robert (Preston North)

      Douglas-Hamilton, Lord James

      Howe, Rt Hon Sir Geoffrey

      Atkinson, David (B'mouth, East)

      Dover, Denshore

      Howell, Ralph (North Norfolk)

      Baker, Nicholas (North Dorset)

      du Cann, Rt Hon Edward

      Hunt, David (Wirral)

      Banks, Robert

      Dunn, Robert (Dartford)

      Irving, Charles (Cheltenham)

      Bell, Sir Ronald

      Durant, Tony

      Jenkln, Rt Hon Patrick

      Bendall, Vivian

      Dykes, Hugh

      Johnson Smith, Geoffrey

      Benyon, Thomas (Abingdon)

      Eden, Rt Hon Sir John

      Jopling, Rt Hon Michael

      Benyon, W. (Buckingham)

      Edwards, Rt Hon N. (Pembroke)

      Joseph, Rt Hon Sir Keith

      Best, Keith

      Eggar, Timothy

      Kitson, Sir Timothy

      Bevan, David Gilroy

      Fairgrieve, Russell

      Knox, David

      Biffen, Rt Hon John

      Faith, Mrs Sheila

      Lamont, Norman

      Biggs-Davison, John

      Farr, John

      Lang, Ian

      Blackburn, John

      Fell, Anthony

      Langford-Holt, Sir John

      Blaker, Peter

      Fenner, Mrs Peggy

      Latham, Michael

      Body, Richard

      Finsberg, Geoffrey

      Lawrence, Ivan

      Bonsor, Sir Nicholas

      Fisher, Sir Nigel

      Lawson, Nigel

      Boscawen, Hon Robert

      Fletcher, Alexander (Edinburgh N)

      Lee, John

      Bottomley, Peter (Woolwich West)

      Fletcher-Cooke, Charles

      Lennox-Boyd, Hon Mark

      Bowden, Andrew

      Forman, Nigel

      Lester, Jim (Beeston)

      Boyson, Dr Rhodes

      Fowler, Rt Hon Norman

      Lewis, Kenneth (Rutland)

      Braine, Sir Bernard

      Fox, Marcus

      Lloyd, Ian (Havant & Waterloo)

      Bright, Graham

      Fraser, Rt Hon H. (Stafford & St)

      Lloyd, Peter (Fareham)

      Brinton, Tim

      Fraser, Peter (South Angus)

      Loverldge, John

      Brittan, Leon

      Fry, Peter

      Luce, Richard

      Brocklebank-Fowler, Christopher

      Gardner, Edward (South Fylde)

      Lyell, Nicholas

      Brooke, Hon Peter

      Garel-Jones, Tristan

      McCrindle, Robert

      Brotherton, Michael

      Brown, Michael (Brigg & Sc'thorpe)

      Gilmour, Rt Hon Sir Ian

      Macfarlane, Neil

      Bruce-Gardyne, John

      Glyn, Dr Alan

      MacGregor, John

      Goodhew, Victor

      MacKay, John (Argyll)

      Bryan, Sir Paul

      Goodlad, Alastair

      Macmillan, Rt Hon M. (Farnham)

      Buchanan-Smith, Hon Alick

      Gorst, John

      McNair-Wilson, Michael (Newbury)

      Buck, Antony

      Gower, Sir Raymond

      McNair-Wilson, Patrick (New Forest)

      Budgen, Nick

      Grant, Anthony (Harrow C)

      McQuarrie, Albert

      Bulmer, Esmond

      Greenway, Harry

      Madel, David

      Burden, F. A.

      Grieve, Percy

      Major, John

      Butcher, John

      Griffiths, Peter (Portsmouth N)

      Marlow, Tony

      Butler, Hon Adam

      Grist, Ian

      Marshall, Michael (Arundel)

      Cadbury, Jocelyn

      Marten, Neil (Banbury)

      Carlisle, John (Luton West)

      Grylls, Michael

      Mates, Michael

      Carlisle, Rt Hon Mark (Runcorn)

      Gummer, John Selwyn

      Mather, Carol

      Chalker, Mrs. Lynda

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

      Maude, Rt Hon Angus

      Channon, Paul

      Hamilton, Michael (Salisbury)

      Mawby, Ray

      Chapman, Sydney

      Hampson, Dr Keith

      Mawhinney, Dr Brian

      Churchill, W. S.

      Hannam, John

      Mayhew, Patrick

      Clark, Hon Alan (Plymouth, Sutton)

      Haselhurst, Alan

      Mellor, David

      Clark, Sir William (Croydon South)

      Hastings, Stephen

      Meyer, Sir Anthony

      Clarke, Kenneth (Rushcliffe)

      Havers, Rt Hon Sir Michael

      Miller, Hal (Bromsgrove & Redditch)

      Clegg, Sir Walter

      Hawkins, Paul

      Mills, lain (Meriden)

      Colvin, Michael

      Hawksley, Warren

      Miscampbell, Norman

      764

      765

      Mitchell, David (Basingstoke)

      Rees-Davies, W. R.

      Stradling Thomas, J.

      Moate, Roger

      Renton, Tim

      Tapsell, Peter

      Monro, Hector

      Rhodes James, Robert

      Taylor, Robert (Croydon NW)

      Montgomery, Fergus

      Rhys Williams, Sir Brandon

      Taylor, Teddy (Southend East)

      Moore, John

      Ridley, Hon Nicholas

      Tebbit, Norman

      Morris, Michael (Northampton, Sth)

      Ridsdale, Julian

      Temple-Morris, Peter

      Morrison, Hon Charles (Devizes)

      Rifkind, Malcolm

      Thomas, Rt Hon Peter (Hendon S)

      Morrison, Hon Peter (City of Chester)

      Rippon, Rt Hon Geoffrey

      Thornton, Malcolm

      Mudd, David

      Roberts, Michael (Cardiff NW)

      Townend, John (Bridlington)

      Murphy, Christopher

      Roberts, Wyn (Conway)

      Townsend, Cyril D. (Bexleyheath)

      Myles, David

      Rossi, Hugh

      Trippier, David

      Needham, Richard

      Rost, Peter

      Trotter, Neville

      Nelson, Anthony

      Royle, Sir Anthony

      van Straubenzee, W. R.

      Neubert, Michael

      Salsebury, Hon Timothy

      Vaughan, Dr Gerard

      Newton, Tony

      St. John-Stevas, Rt Hon Norman

      Viggers, Peter

      Nott, Rt Hon John

      Scott, Nicholas

      Waddington, David

      Onslow, Cranley

      Shaw, Michael (Scarborough)

      Wakeham, John

      Oppenheim, Rt Hon Mrs Sally

      Shelton, William (Streatham)

      Waldegrave, Hon William

      Osborn, John

      Shepherd, Colin (Hereford)

      Walker, Bill (Perth & E Perthshire)

      Page, John (Harrow, West)

      Shepherd, Richard (Aldridge-Br'hills)

      Walker-Smith, Rt Hon Sir Derek

      Page, Rt Hon Sir R. Graham

      Shersby, Michael

      Waller, Gary

      Page, Richard (SW Hertfordshire)

      Silvester, Fred

      Walters, Dennis

      Parris, Matthew

      Sims, Roger

      Ward, John

      Patten, Christopher (Bath)

      Skeet, T. H. H.

      Warren, Kenneth

      Patton, John (Oxford)

      Speed, Keith

      Watson, John

      Pattie, Geoffrey

      Speller, Tony

      Wells, Bowen (Hert rd & Stev'nage)

      Pawsey, James

      Spence, John

      Whitelaw, Rt Hon William

      Percival, Sir Ian

      Spicer, Jim (West Dorset)

      Whitney, Raymond

      Pink, R. Bonner

      Spicer, Michael (S Worcestershire)

      Wickenden, Keith

      Pollock, Alexander

      Sproat, lain

      Wiggin, Jerry

      Porter, George

      Squire, Robin

      Wilkinson, John

      Prentice, Rt Hon Reg

      Stainton, Keith

      Williams, Delwyn (Montgomery)

      Price, David (Eastleigh)

      Stanbrook, Ivor

      Winterton, Nicholas

      Prior, Rt Hon James

      Stanley, John

      Wolfson, Mark

      Proctor, K. Harvey

      Steen, Anthony

      Young, Sir George (Acton)

      Pym, Rt Hon Francis

      Stevens, Martin

      Raison, Timothy

      Stewart, Ian (Hitchin)

      TELLERS FOR THE NOES:

      Rathbone, Tim

      Stewart, John (East Renfrewshire)

      Mr. Spencer Le Marchant and

      Rees, Peter (Dover and Deal)

      Stokes, John

      Mr. Anthony Berry.

      Question accordingly negatived.
      6 pm
      Mr. Deputy Speaker (Mr. Bryant Godman Irvine): I am now required, under the terms of the resolution to which the House agreed on Monday last, to put the Question on the remaining Government amendments.
      Amendment made: No. 85, in page 85, line 1, leave out ' 16 ' and insert ' 9, 16, 23'.—[Mr. Stanley.]

    Schedule 19

      ACT 1967 (c.88) AND HOUSING ACT 1974 (c.44), SCHEDULE 8
      Amendment made: No. 106, in page 135, line 27, at end insert—
      '.—(1) In section 1(1)(b) of the 1967 Act (period during which tenant must have occupied the premises as his residence) for "five years", in both places, substitute "three years".
      (2) In sections 9(3)(b) and 23(2)(b) of the 1967 Act (application for enfranchisement or extension of lease not to be made within five years of previous application) for "five years" substitute, in each case. "three years".'.—[Mr. Stanley.]

    Schedule 21

      AMENDMENTS: TRANSITIONAL PROVISIONS AND SAVINGS
      Amendments made: No. 146, in page 140, line 31, leave out paragraph 5 and insert—
      '5. In section 96 of the 1957 Act, in paragraph (d) the words "by them ", and paragraph (e), are hereby repealed.'.
      No. 112, in page 150, line 46, leave out ' Schedule 8 to '.—[Mr. Stanley.]

    Schedule 22

      REPEALS
      Amendments made: No. 147, in page 151, line 18, after '105', insert '(1), (2) and (5) '.
      No. 201, in page 151, line 32, at end insert—
      ' 1961 c. 65. The Housing Act 1961. Section 20.'
      No. 202, in page 151, line 33, column 3, at beginning insert—' Section 66 '.
      No. 124, in page 152, line 9, leave out Sections 17 to 19'.
      No. 203, in page 152, line 27, column 3, at end insert—' Section 61(6) '.
      No. 125, in page 152, leave out line 33.
      No. 205, in page 153, line 7, after ' below "', insert
      'and the words ' after such consultation"'.
      No. 113, in page 153, line 8, at end insert ' Section 30(5).'.
      No. 129, in page 153, line 8, at end insert—
      ' In section 19(1) the words from "(who "to" staff)".'.
      No. 114, in page 153, line 32, at end insert
      'In section 62(3) the words from "and different limits" to the end.'.
      No. 204, in page 156, line 55, column 3, at end insert—
      ' In Schedule 6, the entries relating to sections 65(1) of the Housing Act 1964 and 61 of the Housing Act 1969 '.—[Mr. Stanley.]

    New Schedule

      ' HOUSES IN MULTIPLE OCCUPATION: REVISED PENALTIES FOR CERTAIN OFFENCES
      1.—(1) In section 90 of the 1957 Act (overcrowding in houses let in lodgings) after subsection (4) there is inserted the following subsection—
      " (4A) A person committing an offence under this section shall be liable, on summary conviction, to a fine not exceeding £500.".
      (2) Sections 20 of the Housing Act 1961 and 61(6) of the 1969 Act are hereby repealed.
      2. In section 13(4) of the Housing Act 1961 (contravention of, or failure to comply with, regulations prescribing management code) for paragraphs (a) and (b) there are substituted the words "to a fine not exceeding £200".
      3. In section 19 of the Act of 1961 (directions to prevent or reduce overcrowding in houses in multiple occupation)—

      (a) in subsection (9) (penalty for making false statement) for the words "twenty pounds" there is substituted "£50 "; and

      (b) for subsection (11) (penalty for failing to comply with requirements of subsection (10)) there is substituted the following subsection—

      "(11) A person committting an offence under subsection (10) above shall be liable, on summary conviction, to a fine not exceeding £500.".
      4. In section 22(4) of the Act of 1961 (penalty for failing to provide information to local authority) for the words "ten pounds" there is substituted "£50".
      5.—(1) In part II of the Act of 1961, after section 26, there is inserted the following section—
      768
      " Execution of works under Part II
      26A. If any person, after receiving notice of the intended action—

      (b) being the owner or occupier of any premises, prevents the owner thereof or his officers, agents, servants or workmen, from carrying into effect with respect to those premises any of the provisions of this Part of this Act; or

      (b) being the owner or occupier of any premises, prevents any officer, agent, servant or workman of the local authority, from so doing;

      a magistrates' court may order him to permit to be done on the premises all things requisite for carrying into effect those provisions and if he fails to comply with the order he shall be liable, on summary conviction, to a fine not exceeding £200 and to a further fine of £20 for every day or part of a day during which the failure continues.". (2) Section 66 of the Housing Act 1964 is hereby repealed.
      6.—(1) In section 65(1) of the Housing Act 1964 (penalty for failure to execute works in respect of houses in multiple occupation) for paragraphs (a) and (b) there are substituted the words "to a fine not exceeding £500 ".
      (2) In Schedule 6 to the Criminal Law Act 1977 the entry relating to section 55(1) of the Act of 1964 is hereby repealed.
      7. In section 75(6) of the Act of 1964 (penalty for failure to comply with magistrates' court order) for the words from "in respect of each day" to the end there are substituted the words "be liable, on summary conviction, to a fine not exceeding £200 and to a further fine of £20 for every day or part of a day during which the failure continues ".
      8. In section 60 of the 1969 Act (means of escape from fire), in subsection (3), for "£20" there is substituted "£50".
      9.—(1) In section 61 of the Housing Act 1969 (offences and penalties) for "£100" (as originally enacted) there is substituted "£500".
      (2) In Schedule 6 to the Criminal Law Act 1977 the entry relating to section 61 of the 1969 Act is hereby repealed.
      10. In section 64(7) of the 1969 Act (offence to contravene or fail to comply with scheme for registering houses in multiple occupation) for paragraphs (a) to (c) there are substituted the following paragraphs—
      " (a) if the offence is a contravention of so much of the control provisions as relate—

      (i) to occupation, to a greater extent than permitted thereunder, of a house not registered in pursuance of those provisions; or

      (ii) to the occupation of a house registered in pursuance of those provisions by more households or persons than the registration permits;

      to a fine not exceeding £500; and
      (b) in any other case to a fine not exceeding £50.".'.—[Mr. Stanley.]
      Brought up, read the First and Second time, and added to the Bill.

    New Schedule

      ' APPLICATIONS FOR REGISTRATION OF RENT
      1. Schedule 11 to the 1977 Act (applications for registration of rent) is amended as follows.
      2. For paragraphs 2 and 3 there are inserted the following paragraphs—
      "2.—(1) Where the application is made jointly by the landlord and the tenant and it appears to the rent officer, after making such inquiry, if any, as he thinks fit and considering any information supplied to him in pursuance of paragraph 1 above, that the rent specified in the application is a fair rent, he may register that rent without further proceedings.
      (2) Where the rent officer registers a rent under this paragraph he shall notify the landlord and tenant accordingly.
      3. In the case of an application which does not fall within paragraph 2 above, the officer shall serve on the landlord and on the tenant a notice—

      (a) stating the rent specified in the application; and

      (b) inviting the person on whom the notice is served to state, within a period of not less than seven days after the service of the notice, whether he wishes the rent officer to consider, in consulta-tation with the landlord and the tenant, what rent ought to be registered for the dwelling-house.

      3A. If, after service of a notice by the rent officer under paragraph 3 above, no request is made within the period specified in the notice for the rent to be considered as mentioned in paragraph 3(b) above, the rent officer after considering what rent ought to be registered, or as the case my be, whether a different rent ought to be registered, may—

      (a) determine a fair rent and register it as the rent for the dwelling-house; or

      (b) confirm the rent for the time being registered and not the confirmation in the register; or

      (c) serve a notice under paragraph 4(2) below."

      3. For sub-paragraph (1) of paragraph 4 there is substituted the folowing sub-paragraph—
      " (1) Where, in response to a notice served by the rent officer under paragraph 3 above, the landlord or the tenant asks for the rent to be considered as mentioned in paragraph 3(b), the rent officer shall serve a notice under this paragraph.".
      4. After sub-paragraph (3) of paragraph 4 there is inserted the following sub-paragraph—
      " (4) The rent officer may, where he considers it appropriate, arrange for consultations in respect of one dwelling-house to be held together with consultations in respect of one or more other dwelling-houses."
      770
      5. In paragraph 5, for the words "and shall", immediately after sub-paragraph (b), there is substituted—
      " 5A. Where a rent has been registered or confirmed by the rent officer under paragraph 3A or 5 above, he shall ".
      6. In paragraph 6(1) for "5" there is substituted "5A".'.—[Mr. Stanley.]
      Brought up, read the First and Second time, and added to the Bill.
      Order for Third Reading read.—[Queen's Consent, on behalf of the Crown, and Prince of Wales's Consent, on behalf of the Duchy of Cornwall, signified.]
      Motion made, and question proposed, That the Bill be now read the Third time.—[Mr. Stanley.]
      6.3 pm
      Mr. Selwyn Gummer: The Bill has been hard fought and has become almost a badge of courage on one side to attack a number of its key provisions on behalf, it seemed, of the homeless in London.
      Many of us welcome the Bill because it will, for the first time, provide a chink in the urban monopoly which has been a feature of our housing legislation for a long time. It seems to be an essential change of attitude that we see in the Bill in that localities which differ one from another—areas which have different problems—are now able to have a wider range of choices. District councils, in particular, are able to apply the Bill in ways which benefit their communities instead of constantly being within the straitjacket dictated by the demands of urban Members. I unashamedly emphasise the welcome which certain provisions will be accorded in rural areas.
      The only reason for any sadness is that the crucial change on shorthold has been opposed root and branch by the Labour Party. The statement by the right hon. Member for Manchester, Ardwick (Mr. Kaufman) was the most severe blow that has been dealt to the homeless on party political grounds and for sordid and unpleasant reasons for many years. I shall tell every homeless person who comes to my surgery that one of the major reasons why I cannot find him a home is the party political ambition of the Labour Party, and I shall mention the right hon. Member for Ardwick on every occasion.

      771
      It is sad that the first major change which could give families in the countryside the opportunity to live in homes which are at the moment vacant should have been turned down for what can only be called dogmatic reasons. Not one real answer was given to the simple question: is it better to have a short tenancy than no tenancy at all?
      The right hon. Member for Ardwick, in dismissing that part of the Bill, suggested that he would prefer to deprive tenants of the chance of having a roof over their heads to giving them the opportunity of a shorthold tenancy. That is so grave and grievous and disgraceful a position that I am making it the kind of personal statement that I would rarely make in the House. I hope that the right hon. Gentleman—who again, when anything uncomfortable is mentioned, talks to his neighbour—realises his personal responsibility towards those who will now continue to be homeless.
      In my constituency, it will mean that homes which would willingly have been opened to constituents will go on being let as summer lets or to Americans. I hope that most people will realise that the chance of the Labour Party gaining power is now remote, because of its assiduous concern with internal politics, that they need not be afraid of the threat to landlords and tenants contained in the speech by the right hon. Member for Ardwick. I hope that is so. I have no doubt that it would have been better had this been a mutually agreed Bill.
      We shall not get the changes in our housing legislation that we desperately need to be as effective as they ought to be unless both sides of the House put the needs of people first and historic party political differences last. I had hoped that the Bill would be the beginning of that process. I believe that shorthold could and will to a large extent—although not to the extent I had hoped—be the beginning of an attitude towards housing in which many of the historic concerns about wicked landlords or unpleasant tenants can be put aside and we can seek to meet the real needs of our time.
      Too much of our legislation is based upon the experience only of urban and suburban Members. The Bill gives a wide range of opportunity and, therefore, begins to right the balance for those parts of the
      772
      country, such as the one that I represent, where problems are different and where people want more local action and choice. I ask my right hon. Friend the Secretary of State to take an early opportunity to use to the full the powers that he has taken to give localities the chance to make radical experiments in rent control and in the control of tenancies.
      In my constituency there is no housing shortage, but there is a shortage of houses to let—even though the houses are there to let. I hope that we can try to give district councils the opportunity to be radical about the way in which they implement rent and tenancy control in this area and deal with these problems. Therefore, I ask the Secretary of State to take the opportunity of the passing of the Bill to give that choice to rural communities who have been corralled and trammelled by urban decisions for too long.
      Mr. Speaker: The House can see how many hon. Members wish to catch my eye. This debate must end at 7 o'clock. I have no authority to request five-minute speeches, but if speeches were kept to five minutes it would be a great help.
      6.10 pm
      Mr. Jack Straw: I shall set my stopwatch and watch it with care.
      The hon. Member for Eye (Mr. Gummer) said that we should put the needs of people first and set aside party political dogma. I agree with his first sentiments. But if he is concerned about why the Labour Party has been so united in its opposition to the shorthold provisions, he should consider not only the speech on this matter by my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) on Tuesday but also the speeches of his hon. Friends later that evening on the matter of service charges. If he and his colleagues wish to know why we are so suspicious about what will happen when the shorthold provisions come into force, he should read with care the speeches made by his hon. Friends the Members for Chelsea (Mr. Scott) and for Paddington (Mr. Wheeler). The hon. Member for Chelsea said:
      " There are some landlords, both in the rented and the leasehold sector, who are behaving illegally and are fiddling service charges."

      773
      He continued:
      " Blocks in my constituency elsewhere in central London are being sold off to companies which have their basis in Liechtenstein, Monte Carlo, Saudi Arabia and so on, and are able to avoid their responsibility for fulfilling the landlord's side of the covenant between landlord and tenant…
      I know that there are difficult tenants. But there is also an increasing number of difficult landlords in central London who exploit these situations."
      He also said:
      " Anyone who knows what is happening in central London at present will know that the balance should be redressed in favour of the tenant."
      That sentiment—that the balance should be redressed in favour of the tenants—was echoed by his hon. Friend the Member for Paddington, who said:
      " It is no exaggeration to say that many tenants, especially the elderly, in inner London are in a state of fear."—[Official Report, 20 May 1980; Vol. 985, col. 423–34.]
      We utterly oppose the provisions for shorthold tenancies, because many tenants in central London and elsewhere are in a state of fear, and we believe passionately—our view is shared by many Conservative Members—that the balance should be redressed in favour of the tenants.
      The idea of shorthold may be unexceptionable. When the hon. Member for Kensington (Sir B. Rhys Williams) put forward that idea in his original Bills between 1976 and 1979, he went out of his way to provide a series of safeguards to ensure that that form of tenure would not be open to abuse. When his proposals were opposed by Labour Members, including my hon. Friend the Member for Salford, East (Mr. Allaun), we pointed out that we were disputing not the intention of the hon. Gentleman but merely the effect of his proposals. We were concerned about the efficiency of the safeguards.
      However, these proposals do not represent in any sense what was suggested by the hon. Member for Kensington in Opposition. They are shorn of all the safeguards, and they amount to a new form of tenure which, in the words of the Law Society, will render the existing forms of regulated and protected tenure obsolete. Far from redressing the balance in favour of the tenant, they push the balance very much in favour of the landlord. Labour Members cannot look on that with equanimity.
      774
      Although we may lose the battle on Third Reading tonight, in many ways this is a war which has only just begun. When we prepare our explanations in the country as to why we feel so strongly, we shall quote the speeches of Conservative Members who have explained so often about the abuses of landlords. We shall also quote from an article in The Observer, headed:
      " Top Tory tenants fight housing Bill ".
      A Mr. Hugh Redfern, described by The Observer as a retired business man and lifelong Tory, was said to be
      " In the forefront of a campaign to persuade Britain's three million private tenants to vote Labour at the next General Election unless the Government changes its Housing Bill."
      Mr. Redfern continued:
      " London's homes have not been in such peril since the Nazis. But the spirit which sustained us then will see us through now."
      That is the view not of some wild members of the militant tendency but of a respectable Conservative business man in central London. Because of the iniquities in the Bill, millions of tenants will fight it—with Labour support—and will show their concern during the elections that lie ahead.
      6.16 pm
      Mr. K. Harvey Proctor: The hon. Member for Blackburn (Mr. Straw) talks of wars, battles and Nazis. He should be aware that the main battle on the Bill was fought and won in May last year. It is refreshing that we have a Government who are honouring their election pledges so rapidly.
      I support the Bill because it marks the beginning of the withdrawal of Government interference—both local and national—from the sphere of housing. Government interference has bedevilled the housing market since the Second World War.
      The Bill gives a statutory right to council and development corporation tenants to buy and own their homes. That is important in my constituency and in many other parts of the country. As my right hon. Friend the Secretary of State and my hon. Friend the Minister are well aware, many of my constituents are already buying their homes. The Conservative resident-controlled Basildon district council, which took office last May, has already received over 1,000 inquiries from people who are interested in buying their own home—out of a housing stock of

      775
      6,000. Following the ministerial consent of last May, the Basildon development corporation has received over 6,000 inquiries, out of a total housing stock of 18,000—one-third of the housing stock. To date, the total number of sales is over 1,300. I expect that figure to increase soon to between 2,500 and 3,000 sales in the first round. Basildon was in the fore front—
      Mr. Alton: Will the hon. Gentleman give way?
      Mr. Proctor: No, I shall not give way, because I have very little time.
      Basildon was in the forefront under previous sales policies of a Conservative Government. It sold 5,000 houses then. I believe that, after the first round of sales, the rate will continue at about 500 or 750 a year.
      That demonstrates the popularity of sales and the fact that what we are doing is right. However, the Bill is vital to a number of my constituents. They cannot buy their homes, despite the election of a Conservative Government, despite a Conservative resident-controlled local authority and despite a Conservative Member of Parliament who was elected—if I may say so—on one of the largest swings to the Conservatives in the country last May. They are the tenants of the London borough of Waltham Forest, who live in my constituency on the Barn Hall estate in Wickford and the Out-wood Common estate in Billericay. There is a total of 599 dwellings. This Labour-controlled council has consistently refused to allow tenants to buy their own homes.
      These tenants, my constituents, see their neighbours in Billericay and Wick-ford, tenants of the district council, buying their own homes. They see the tenants of the Basildon development corporation buying their own homes in the new town. All that they see is the market value of their home increasing while Waltham Forest vacillates. These Waltham Forest tenants living in my constituency look on with great frustration. They cannot even register their opposition to Labour councillors in local elections. They cannot vote for the Waltham Forest council. That is not right. It is not fair. The Bill is their only hope of buying their homes. I am sure that many will wish to do so.
      776
      Finally, I urge the Minister to indicate the timetable for the exercise of the right-to-buy legislation and what action my constituents should take now or in the near future so that their dream of home ownership can be realised at the earliest opportunity.
      I also urge my right hon. and hon. Friends to give the fullest publicity to the right-to-buy provisions of the Bill. We should spell them out clearly and very loudly.
      The Bill's provisions to establish a tenants' charter are excellent. Not to have added the right for tenants to buy their own homes would have been like setting up a public house and then not selling beer inside it.
      The Bill has the overwhelming support of my constituents—tenants, home owners, home seekers, ratepayers and taxpayers. It will benefit all of them.
      6.21 pm
      Mr. Allan Roberts: The hon. Member for Basildon (Mr. Proctor) said that the battle was fought and won in May of last year. In Standing Committee. F, on 30 April this year, on the eve of a battle which took place this May, my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) said:
      " We on this side were anxious to complete our proceedings tonight so that we could go to our constituencies tomorrow and be active in the local elections on that day. We are going from this Committee Room to take our case to the people, and we shall return for Report stage, buttressed in our arguments by the support of the people."—[Official Report, Standing Committee F, 30 April 1980; c. 2638.]
      Conservative Members forget that there has been another battle since the general election and that the mandate is now with the Opposition Benches against the sale of council houses, as the local election results this month proved.
      I move from the question of the right-to-buy provisions, which will be repealed by the next Labour Government, to comment on the Bill's intention to legalise once again the building of back-to-back houses. How any Government can contemplate allowing such houses to be built once again, with only one outside wall, beggars description. When that measure was defended in the legislation, one thought that the Government would not be successful in persuading private builders or

      777
      Councils to build back-to-back houses, to take the country back to the 1930s and the conditions that were described in Engel's "Conditions of the Working Class ". But then we see in the Bill a provision to allow assured tenancies to be created where any new house or any new unit of accommodation is built. After the Bill becomes an Act, the owner will be able to let that accommodation to a tenant without any rent restrictions or rent controls.
      Taken together, allowing the building of cheap back-to-back houses, with only one outside wall—to standards that have not been contemplated since the Industrial Revolution—and permitting them to be let on assured tenancies without any rent control under the Rent Acts, epitomises the Conservative Government's attitude to housing.
      The Government's refusal to include in the Bill statutory mobility schemes, which were included in Labour's Bill before the general election caused that Bill to fall, also shows that the present Government are concerned not about mobility but about selling council houses, not to create more mobility but to attack the public rented sector. The beginning of the voluntary national mobility scheme announced by the Minister in Committee has been ignominious. As I understand it, if this scheme works, it should enable local authority tenants and applicants for local authority housing from one local authority to transfer to another more easily. That is the idea. But this scheme is under continuing negotiation and at present it consists of no more than two sides of a piece of paper circulated by the Association of Metropolitan Authorities. Only two out of 43 counties have submitted any plans for county schemes. This voluntary scheme will obviously fail. The Government should reconsider introducing in another place the legislation to give statutory backing for the scheme.
      Finally, how can any Conservative Member suggest that the Labour Party's policy and statements from the Opposition Benches would, if implemented under the next Labour Government, make the housing situation worse? Under the present Government, we have witnessed the most unprecedented cut in the finance available for council house building and
      778
      for every other aspect of house building. In November, £5,078 million was allowed by the present Government for housing in 1980–81—nearly £300 million less than for the previous year. However, by March the Government had cut the allocation again to £4,700 million. The cut was then £672 million.
      That was calamitous, but what is planned to follow in the expenditure White Paper beggars description. In the next three years the totals will be £3,840 million, £3,250 million and £2,790 million—bringing virtually to an end any local authority activity in housing except on the margins, and sacrificing those in housing need to the whims of the free market and the private landlord.
      Several Hon. Members Several Hon. Members rose—
      Mr. Speaker: Order. I am obliged to hon. Members for co-operating. I can tell hon. Members now that it is hoped that the winding-up speeches will begin at 6.40 pm.
      6.27 pm
      Mr. Nicholas Scott: The hon. Member for Bootle (Mr. Roberts) has been a Member of the House only during this Parliament I wonder what sort of speech he would have made had he been sitting on the Government Back Benches when the Labour Government presided over the reductions in the rate of council house building from the level that they inherited down to that which existed when they left office. [Interruption.] I shall not give way to the right hon. Gentleman. He is always self-indulgent in his speeches.
      Mr. Gerald Kaufman: The hon. Gentleman is mis-misleading the House.
      Mr. Scott: The right hon. Member for Brent, East (Mr. Freeson) was the worst Minister for Housing and Construction that this country has ever had.
      I was flattered that the hon. Member for Blackburn (Mr. Straw) devoted some of his speech to quoting remarks that I and my colleagues in inner London had made about the Bill and the present housing situation. In a sentence or two, I want to pick up a remark made by my hon. Friend the Member for Eye (Mr. Gummer). Over the 15 years during which I have been a Member of the

      779
      House, I have wished that we could have a housing policy based on some sort of consensus. I have regretted it when my own party has broken that consensus. I have regretted it when the Labour Party has broken that consensus. As regards council house sales, I believe that at present the Labour Party is breaking the consensus in a reckless and irresponsible way.
      I regret the fact that in introducing the concept of shortholds my right hon. and hon. Friends on the Front Bench have not built into their system the sort of protections that were proposed in the Private Member's Bill of my hon. Friend the Member for Kensington (Sir B. Rhys Williams), because I think that that would have brought empty properties on to the market without wrecking the whole system of rent controls.
      I wish that there were some way in which we could get together and form a policy under which councils, private landlords and tenants would know for a term of years—five or 10 years ahead—exactly what the rules would be. As long as people are doubtful and feel that the rules are being queried or are likely to be threatened, there will not be a development of housing policy, whether for the public or the private sector, which all of us who want to see our people better housed wish to see.
      I wish the Bill well. I wish that I could vote for it. However, I shall not do so as it ignores the interests of a substantial number of my constituents. I wish it well because I think that the provisions for council house sales are right. I wish it had been possible to have them on the basis that local authorities should have discretion about the properties that they wanted to sell. I accept the point made by my right hon. Friend the Secretary of State. Had there been any discretion, it would have been sabotaged by the irresponsible attitude of Opposition Front Bench members and Labour councils. The Government had to give the absolute right to buy. I regret the fact that it was necessary, but the responsibility rests on the shoulders of the Opposition.
      I wish that I could look forward to shortholds becoming an important part of privately rented acommodation in the
      780
      immediate future, but again that concept was sabotaged by the Opposition.
      Despite my good wishes for the Bill, I cannot vote for it. I respect the efforts made by my right hon. and hon. Friends to meet the requirements that we put forward on behalf of our constituents in central London. Still, in terms of service charges, we still have to see the amendments that the Government will produce in another place. I hope that when the amendments come to the House of Commons they will meet our requirements.
      My hon. Friend the Member for Kensington was unable to move his amendments because of the guillotine. Ultimately, we shall solve the problem in central London only if those tenants who live in flats are able to buy, and to manage in their own interests, the blocks in which they live. Therefore, I shall not be able to vote for the Bill on Third Reading.
      6.32 pm
      Mr. Alton: I echo the sentiments which have just been expressed.
      I start by reiterating the Liberal Party's great regret that its members were excluded from the Committee when the Bill was discussed. If people want a bipartisan approach and genuine co-operation on these matters, the Liberal Party should not be treated in this contemptuous and arrogant way. Liberal Members of Parliament have tried during the debates to make constructive criticisms. One Liberal amendment was accepted.
      I also regret that time is too limited this evening to go into the important points of the Bill, because of the guillotine placed on it by the Government. That is the hallmark of the arrogance shown by the Secretary of State in dealing with the entire proceedings on the Bill.
      I am sorry to say this, but that arrogance is contained in the Bill. For instance, the Bill deals with the question of how council house sales will be enforced by injunction, not by the special use of court procedures to ensure that where sales are not carried out the clerk of the court might make them but by injunction. That will take the Government and local government into a head-on confrontation. There will be more Clay Crosses and martyrs. That again arises from the arrogance of the Secretary of State in his belief that there are blanket

      781
      solutions to our housing problems. I reject that. He will turn housing into a battleground or cockpit where central and local government will be locked in a remorseless battle of confrontation.
      I refer the Secretary of State to the views of local authorities. The Convention of Scottish Local Authorities alleges that there are significant differences between this Bill and the provisions for Scotland. At its recent meeting it said:
      " The…English Bill says ' Where the dwelling house was first let…after 31 March 1974…the discount shall not reduce the price below the cost…of providing the house.'
      On the other hand the Scottish Bill is worded differently. It reads:
      ' Where the dwelling house was first let…after 15 May 1975 the price…shall not be less than (a) the outstanding debt incurred in providing the dwelling house, or (b) the market value of the dwelling house whichever is the lesser.'
      The key words are ' whichever is the lesser.' COSLA argues that the conservative valuations put on council houses by the district valuer can mean that prices fall below the cost of provision. Thus a local authority may well find that it is forced by the tenant to sell a relatively new house at less than it cost them to build it."
      I do not believe that that argument has been properly explored in the discussions on the Bill. I echo the sentiments of the hon. Member for Bootle (Mr. Roberts), who was worried about back-to-back housing. That is a good idea. It is worth trying on an experimental and limited basis to see how it works, but we should not allow it to happen all over the country without knowing what the implications may be.
      The same is true of shorthold. The Government justify the creation of short-hold tenancies by reference to the need to reverse the decline in the private rented sector, which they blame largely on the level of security which private tenants presently enjoy. In a letter to the Campaign for Single Homeless People, dated 30 July 1979, the Minister for Housing and Construction wrote:
      " The Government is confident that, by restoring a fairer balance between landlord and tenant, shorthold will encourage landlords to keep on letting and to bring back rented accommodation onto the market. Shorthold should be of particular benefit to young single people and others whose need is for relatively short term accommodation."
      Leaving aside the issue of whether the Government's analysis of the causes of decline of the private sector is accurate
      782
      and whether their prescription will revive it, shorthold tenancies can do nothing to increase the supply of secure, good standard, low-cost housing which single people need. On the contrary, shorthold tenancies will provide only temporary accommodation and will increase involuntary mobility and homelessness. I am not against the principles of shorthold, but I should like to see them experimented with on a sensitive basis and not see the undermining of all the safeguards that are contained in the present Rent Acts.
      I refer the Secretary of State to a letter which I wrote to his hon. Friend the Minister for Housing and Construction yesterday on the question of housing association rents under clause 58(6) and (7). I should like him to give an assurance before we vote on the Bill that he will introduce a maximum limit on annual increases in weekly rents to housing association tenants. I suggest a limit of £3.
      The Bill will accelerate the decline of British housing. The provision in the Bill for house improvements and repairs is thoroughly inadequate. Even the Secretary of State within his own firm—Haymarket Press—accepted the principle of reinvestment. Of the £3·7 million profits made by his firm in 1978, only £230,000 was distributed to shareholders. Nearly £1·5 million was ploughed back into the business. I advise him that he should do the same for private and public sector housing. Otherwise, we shall be left with houses that will rot and go into decline and which will be fit for nothing but the bulldozer which his predecessor pensioned off.
      6.38 pm
      Sir Brandon Rhys Williams: The Bill contains many provisions that are urgently needed and right. I congratulate my right hon. and hon. Friends on hastening forward to complete so many of their electoral promises.
      Naturally, I welcome the inclusion of the shorthold provisions in the Bill. However, I regret that the proposal has given rise to so much controversy. I understand the attitude of the Labour Party in thinking it necessary to include safeguards. However, I am disappointed that its leadership did not seek to compromise with the Government spokesmen. The Labour Party's attitude over shorthold will be an electoral millstone, because

      783
      it will have done so much damage to people who need precisely this type of accommodation.
      We hope that when the Bill comes back from the other place it will include significantly better safeguards for service charges. Clause 125 is not sufficient. We must give tenants the right of challenge.
      The problem I have about the Bill is a Kensington issue. It creates a class of second-rate citizens in our property-owning democracy, namely, those who live in mansion blocks which are in private ownership. This is a problem to which the Government must return. I hope that they will do so soon. For the present, however, I must express the anxiety and deep disappointment of my own electors who live in privately owned flats. I shall abstain from voting on Third Reading.
      6.39 pm
      Mr. Kaufman: Afte nearly 170 hours of debate, we shall in a few minutes take our leave of the Bill. The Government have made clear that the Bill is a cornerstone of their housing policy. It is, therefore, right that we should examine how the Bill, as the House will pass it, will advance the Government's housing policy.
      So that the Opposition may be seen to be absolutely fair, I ask the House to judge the Government's housing policy and the Bill according to the tests laid down by the Secretary of State himself and to consider how his achievement measures up to that.
      I start with the sale of council houses, regarded by many as the main measure in the Bill. The Secretary of State's test is:
      " One of the most important social ' revolutions ' of this century is now being achieved by this Conservative Government. This is the sale of council houses. This ' revolution ' is typically Conservative ".
      Indeed, it is typically Conservative. Let us look at the achievement. In the first two full quarters of the Government's period in office, the latest period for which figures are available, no more council houses—and probably fewer—were sold than in the final two full quarters of the Labour Government.
      In 11 new towns, including Basildon,
      784
      where discounts of up to 50 per cent., as in the Bill, have been available since May, only about 2 per cent. of the houses have been sold; 98 per cent. of tenants have contracted out of the Secretary of State's "social revolution ".
      The second test is the alleged benefits to the community of the Bill's compulsory council house sales policy. The Secretary of State said:
      " the sale of council houses should bring appreciable benefits, not only to council tenants, but to the community as a whole."
      Today, the Comptroller and Auditor General has issued a memorandum commenting on the document on the financial effects of council house sales which was published by the Department of the Environment in January and which led the Secretary of State to claim that council house sales were financially beneficial to public funds. Among the comments made in the memorandum are the following:
      " In particular, the faster that council rents are expected to rise in the future, the less advantageous it is to sell ".
      That is less advantageous to the public purse. The Department's document on which the Comptroller and Auditor General comments assumed rent rises of between 3 per cent. and 11 per cent. This year, rents are due to rise, on the Government's own orders, by 28 per cent. The Comptroller and Auditor General says:
      " In my view, some of the assumptions most favourable to public funds are clearly less probable than those least favourable…and the assumptions do not take account of all the considerations which could have an adverse effect on the overall balance…If the ranges shown for the 50 year assessment were adjusted to take account of these points, the possible net gain to public funds would be somewhat reduced and the possible net loss somewhat increased."
      So much for the document that the Secretary of State boasted about. In the gentlest possible way, the Comptroller and Auditor General has torpedoed the right hon. Gentleman's claims.
      Those claims are further undermined by some recently published official Government figures. Estimates show that for every 200 council houses sold this year, at an average price after discount of £9,000, councils would be permitted under the Bill to spend £270,000 in building replacement houses.
      The cost of building an average new council house is £19,250, which means that £270,000 would build 14 new houses.

      785
      For every 200 council houses lost to the community—which paid for them through its rates and taxes—because of the policy of compulsory sales, only 14 houses would be replaced. There would be a net loss of 186 houses—93 per cent.—to the community's housing stock.
      What about the rest of the council house building programme? The Secretary of State's test, in his own words, is:
      " Our…objective is…enough new house building…to meet essential needs in the public sector "
      and:
      " We must build new council houses."
      But the Bill massively slashes subsidies for building council houses. The latest official figures, published two days ago by the Secretary of State's own Department, show that in the first quarter of this year new orders for council house building were down, compared with a year ago, by a catastrophic 31 per cent.
      The Secretary of State will say that local authorities are not the only public sector house builders and that there are also housing associations, which feature prominently in the Bill. The right hon. Gentleman has spoken eloquently of their activities. He told a housing association audience:
      " I certainly see a major role for the housing association movement…I shall foster and support the contribution that you are making to opportunity and choice in housing."
      How has the Secretary of State kept that promise? How does the Bill help? The right hon. Gentleman has imposed vicious cuts in this year's housing associations' activities—the contribution that he promised to foster and support. He has slashed their house-building programme by more than one-third.
      The chairman of the Housing Corporation described the Secretary of State's action as a "painful operation" and added:
      " Even more unfortunate is the effect of a reduction in the voluntary endeavour so painstakingly nurtured and sustained over the years."
      If Government policy, as embodied in the Bill, is preventing the public sector from building sufficient dwellings to meet housing needs, home ownership becomes more important than ever. The Secretary of State said of that:
      " For the vast majority of people there is a desire to own their own homes, their own property. Our party has long recognised and
      786
      encouraged this desire because it leads to the most economic provision of housing."
      How has the right hon. Gentleman's stewardship helped, and how will the Bill help, to encourage that desire? In the first four months of last year—the final four months of the Labour Government—the building societies made 246,000 home loans. In the first four months of this year, they made 203,000 home loans—a reduction of 17 per cent. The Building Societies Association tells us that in the past three months the number of builders reporting that potential buyers could not afford mortgage repayments has risen from 21 per cent. to 69 per cent. and the number of buyers complaining of difficulties in accumulating a deposit has also risen.
      What about first-time buyers? The Secretary of State has offered them warm words of sympathy:
      "To help young couples, we must find imaginative schemes to get them on to the first rung of the ladder of home ownership."
      How is that sympathy translated into action? The BSA says that, in terms of numbers of loans granted, lending to new buyers is down from just under 400,000 in the boom years of 1971–72 to 324,000 during 1979. In percentage terms, that means that 51 per cent. of all loans granted in 1973 were to first-time buyers, compared with 45 per cent. in 1979. The clauses in the Bill that push up local authority mortgage rates will make that plight even worse.
      What effect have all those developments had, and what effect will the Bill have, on the building industry? The Secretary of State is firm on the industry's importance. He has said:
      " The…necessary requirement is that builders should have the confidence to build."—[Official Report, 26 November 1976; Vol. 921, c. 366–70.]
      What is the state of confidence in the industry? Sir Peter Trench, chairman of the National House Building Council, says that the slump in new house building this year is expected to be the worst for more than half a century. This year, the number of housing starts in the private sector is unlikely to be more than 105,000, compared with 140,000 last year. Total housing production could be the lowest, war years apart, for more than 50 years.
      I shall let the Secretary of State sum up our case. When the Labour Party was

      787
      in office, it built more houses than the Bill will provide. At that time, the Secretary of State said:
      " housing is the most important of the social services…A nation well housed will be happier, healthier, better educated and more orderly than one that is not.
      It is not possible to overestimate, therefore, the tragedy of the collapse of the house building programme."—[Official Report, 26 November 1976; Vol. 921, c. 365.]
      That indictment devastatingly condemns the Secretary of State's policy and the Bill. That is why we shall vote against it.
      6.51 pm
      The Minister for Housing and Construction (Mr. John Stanley): With the leave of the House, I shall reply. The right hon. Member for Manchester, Ard-wick (Mr. Kaufman) quoted from the report of the Comptroller and Auditor General. I quote from the conclusions of that report:
      " It provides a valuable and basically sound analysis of the assumptions which have to be made in order to calculate the financial consequences of a typical council house sale."
      The Housing Bill 1980 is the most far-reaching and fundamental piece of housing legislation of the post-war period. It would not have been possible to produce such a major piece of legislation so early in the lifetime of this Parliament if it had not been for the highly demanding and dedicated work over many months of parliamentary counsel and of the Department's officials. Most of the attention has focused on the Bill's controversial parts. Far too little attention has been directed towards those parts that are non-contentious yet highly significant and desirable.
      For example, the tenants' charter, the steps that we are taking to establish a national mobility scheme, the widening of the rent rebate and rent allowance scheme, the comprehensive reform of the existing improvement legislation and the fact that we have enabled housing associations to provide low-cost homes for sale for the first time represent profoundly important provisions for the future. Inevitably, the controversies have tended to focus on shorthold and on the right to buy. As my hon. Friend the Member for Eye (Mr. Gummer) rightly said, Conservative Members who heard last Tuesday's statement by the
      788
      right hon. Member for Ardwick thought that it was as irresponsible a statement on housing as they had ever heard.
      I very much regret that instead of waiting to see how the shorthold provisions would work out in practice—as my hon. Friend the Member for Kensington (Sir B. Rhys Williams) implored—and instead of waiting to see what contribution it could make to meeting housing needs, the Labour Party rushed out a commitment to repeal the provisions before the Bill had left the Committee. That repeal commitment was profoundly misguided. I regard it as totally reprehensible that the right hon. Member for Ardwick should go well beyond a repeal commitment. He has not merely said that a Labour Government would repeal the shorthold provisions. He has gone further than that. He has made the repeal commitment retrospective. In a completely irresponsible manner, he has threatened to tear up all existing short-hold contracts. I presume that that is what he meant when he said:
      " Those landlords who consider using shorthold tenancies should bear in mind that the next Labour Government will give all shorthold tenants and shorthold successor tenants full security of tenure and protection under the Rent Act."—[Official Report, 20 May 1980; Vol. 985, c. 379.]
      As the right hon. Gentleman knows, that utterly irresponsible statement will have one certain and totally predictable result. As this Parliament draws to a close, not a single shorthtold tenancy is likely to be renewed. Every shorthold tenant is likely to be evicted. The responsibility for those evictions will lie solely with the Labour Party.
      The right hon. Gentleman made an extraordinary statement in Committee. We thought it extraordinary at the time. He said that he would rather see dwellings left empty than let on shorthold. That speaks volumes for the Labour Party. Its official spokesman on housing would rather see dwellings left empty than let on shorthold. I am afraid that he will have his way. Every shorthold dwelling will be empty by the end of this Parliament. The right hon. Member for Ardwick will have emptied them.
      I hope that the right hon. Gentleman is in no doubt about the consequences of that statement for individuals and of their families. I hope that he is in no

      789
      doubt that there will be real losers. Those losers will be the overcrowded, the sharers, those on waiting lists and those wanting short-term accommodation, for whatever reason. It is they who will have to pay the price for the right hon. Gentleman's statement.
      In recent months, we have heard a great deal from the Labour Party on the subject of housing cuts, insufficient HIP allocations, the shortage of rented accommodation and the problems of the homeless. Everything that the Labour Party has said on those subjects and everything that it may say in future will look mighty sick alongside its deliberate and calculated decision to wreck shorthold.
      I turn now to the right to buy. I appreciate that the right to buy may be controversial among the serried ranks of home owners on the Opposition Benches. However, among the would-be home owners on council estates in Labour areas, the only point of controversy about the right to buy concerns why on earth they have not got that right already.
      I noticed the recent comments of Mr. Rose, a 60-year-old Labour supporter, who has been prevented from buying his council house in Birmingham. He has lived in that house since 1944. I thought that he echoed the feelings of a great many people when he said:
      " I have supported Labour since I was old enough to vote but now I am disgusted with the party. I feel totally let down…There is nothing wrong with a working man owning his own house."
      Mr. Rose is absolutely right. There is nothing wrong with a working man owning his house. What is wrong is the Labour Party's policy of denying people the opportunity to do so. Nothing demonstrates more clearly the case for the right to buy than the rate at which tenants have been buying houses in the areas in which they have been allowed to do so since we came into office.
      I am glad to have the opportunity to correct the statistics given earlier by the right hon. Member for Ardwick. He expressed a great deal of interest in the statistics on new towns. No doubt he hoped that no new town houses would be sold. As my hon. Friend the Member for Basildon (Mr. Proctor) pointed out, he must be pretty disappointed with the results. Since we came into office, the
      790
      number of new town tenants who have either bought their homes or who are negotiating to do so is some 7,000. That represents one in 12 of all new town tenants.
      A few weeks ago, I noticed the Leader of the, Opposition—like the right hon. Member for Ardwick—proudly proclaiming that under his Government more sales had taken place than under the Government of my right hon. Friend the Prime Minister. I thought that that was a fascinating boast from the leader of a party which is committed to repealing the right to buy. I have a deep disappointment for the Leader of the Opposition and for the right hon. Member for Ardwick. According to the latest estimate available, in the first year of this Government the number of council tenants who will have bought their homes will be some 50,000. That is far more than in any year under the previous Labour Government.
      The case for the right to buy has never been put more succinctly or cogently than in a pamphlet published a few years ago. It stated:
      " There seem to me to be three immensely important advantages. In the first place it would be a massive redistribution of wealth in our community. Secondly, it would extend the new dimensions of individual freedom to a large number of people: freedom from the petty rules and restrictions imposed by bureaucracy, and also freedom in the ability to move around the country. Thirdly … this approach would be a direct attack on the cycle of poverty in that we would for the first time be giving many poor people that crucial thing they lack—and that is access to wealth."
      That was not said by a Conservative Member. It was written by a Member of the Labour Party, namely, the hon. Member for Birkenhead (Mr. Field). In those few words, he spoke more sense on the sale of council houses than we have heard from the Labour Party throughout our proceedings.
      The Bill is indeed a historic measure. It provides the springboard for the biggest single extension of home ownership the country has ever seen. It will bring home ownership within reach of thousands of tenants for whom at the moment it is only a dream. It will provide them with a new security and a new mobility. It will open up entirely new opportunities for thousands of parents and their children.

      791
      The right to buy and the tenants' charter are among the most important social advances that have been made this century. On this side of the House, we are proud that these profoundly important
      rights are being placed on the statute book by a Conservative Government.
      Question put, That the Bill be now read the Third time:—
      The House divided: Ayes 286, Noes 238.

      Division No. 326]

      AYES

      [7 pm

      Aitken, Jonathan

      Edwards, Rt Hon N. (Pembroke)

      Loveridge, John

      Alexander, Richard

      Eggar, Timothy

      Luce, Richard

      Allson, Michael

      Fairgrieve, Russell

      Lyell, Nicholas

      Amery, Rt Hon Julian

      Faith, Mrs Sheila

      McCrindle, Robert

      Ancram, Michael

      Farr, John

      Macfarlane, Neil

      Arnold, Tom

      Fell, Anthony

      MacGregor, John

      Aspinwall, Jack

      Fenner, Mrs Peggy

      MacKay, John (Argyll)

      Atkins, Rt Hon H. (Spelthorne)

      Finsberg, Geoffrey

      Macmillan Rt Hon M. (Farnham)

      Atkins, Robert (Preston North)

      Fisher, Sir Nigel

      McNair-Wilson, Michael (Newbury)

      Atkinson, David (B'moulh, East)

      Fletcher, Alexander (Edinburgh N)

      McNair-Wilson, Patrick (New Forest)

      Baker, Nicholas (North Dorset)

      Fletcher-Cooke, Charles

      McQuarrie, Albert

      Banks, Robert

      Forman, Nigel

      Madel, David

      Bell, Sir Ronald

      Fowler, Rt Hon Norman

      Major, John

      Bendall, Vivian

      Fox, Marcus

      Marlow, Tony

      Benyon, Thomas (Abingdon)

      Fraser, Rt Hon H. (Stafford & St)

      Marshall, Michael (Arundel)

      Best, Keith

      Fraser, Peter (South Angus)

      Marten, Neil (Banbury)

      Bevan, David Gilroy

      Fry, Peter

      Mates, Michael

      Biffen, Rt Hon John

      Gardner, Edward (South Fylde)

      Mather, Carol

      Biggs-Davison, John

      Garel-Jones, Tristan

      Maude, Rt Hon Angus

      Blackburn, John

      Gilmour, Rt Hon Sir Ian

      Mawby, Ray

      Blaker, Peter

      Glyn, Dr Alan

      Mawhinney, Dr Brian

      Body, Richard

      Goodhew, Victor

      Mayhew, Patrick

      Bonsor, Sir Nicholas

      Goodlad, Alastair

      Mellor, David

      Boscawen, Hon Robert

      Gorst, John

      Meyer, Sir Anthony

      Bottomley, Peter (Woolwich West)

      Gower, Sir Raymond

      Miller, Hal (Bromsgroye & Redditch)

      Bowden, Andrew

      Grant, Anthony (Harrow C)

      Mills, Iain (Meriden)

      Boyson, Dr Rhodes

      Greenway, Harry

      Miscampbell, Norman

      Braine, Sir Bernard

      Grieve, Percy

      Mitchell, David (Basingstoke)

      Bright, Graham

      Griffiths, Peter (Portsmouth N)

      Moate, Roger

      Brinton, Tim

      Grist, Ian

      Monro, Hector

      Brittan, Leon

      Grylls, Michael

      Montgomery, Fergus

      Brocklebank-Fowler, Christopher

      Gummer, John Selwyn

      Moore, John

      Brooke, Hon Peter

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

      Morris, Michael (Northampton, Sth)

      Brotherton, Michael

      Hamilton, Michael (Salisbury)

      Morrison, Hon Charles (Devizes)

      Brown, Michael (Brigg & Sc'thorpe)

      Hampson, Dr Keith

      Morrison, Hon Peter (City of Chester)

      Bruce-Gardyne, John

      Hannam, John

      Mudd, David

      Bryan, Sir Paul

      Haselhurst, Alan

      Murphy, Christopher

      Buchanan-Smith, Hon Alick

      Hastings, Stephen

      Myles, David

      Buck, Antony

      Havers, Rt Hon Sir Michael

      Needham, Richard

      Budgen, Nick

      Hawkins, Paul

      Nelson, Anthony

      Bulmer, Esmond

      Hawksley, Warren

      Neubert, Michael

      Burden, F. A.

      Heddle, John

      Newton, Tony

      Butcher, John

      Henderson, Barry

      Normanton, Tom

      Butler, Hon Adam

      Heseltine, Rt Hon Michael

      Nott, Rt Hon John

      Cadbury, Jocelyn

      Hicks, Robert

      Onslow, Cranley

      Carlisle, John (Luton West)

      Hogg, Hon Douglas (Grantham)

      Oppenheim, Rt Hon Mrs Sally

      Carlisle, Kenneth (Lincoln)

      Holland, Philip (Carlton)

      Osborn, John

      Carlisle, Rt Hon Mark (Runcorn)

      Hooson, Tom

      Page, John (Harrow, West)

      Chalker, Mrs. Lynda

      Hordern, Peter

      Page, Rt Hon Sir R. Graham

      Page, Richard (SW Hertfordshire)

      Channon, Paul

      Howe, Rt Hon Sir Geoffrey

      Parris, Matthew

      Chapman, Sydney

      Howell, Ralph (North Norfolk)

      Patten, Christopher (Bath)

      Churchill, W. S.

      Hunt, David (Wirral)

      Patton, John (Oxford)

      Clark, Hon Alan (Plymouth, Sutton)

      Hurd, Hon Douglas

      Pattie, Geoffrey

      Clark, Sir William (Croydon South)

      Irving, Charles (Cheltenham)

      Pawsey, James

      Clarke, Kenneth (Rushcliffe)

      Jenkin, Rt Hon Patrick

      Percival, Sir Ian

      Clegg, Sir Walter

      Johnson Smith, Geoffrey

      Pink, R, Bonner

      Cockeram, Eric

      Colvin, Michael

      Jopling, Rt Hon Michael

      Pollock, Alexander

      Cope, John

      Joseph, Rt Hon Sir Keith

      Porter, George

      Cormack, Patrick

      Kitson, Sir Timothy

      Prentice, Rt Hon Reg

      Corrle, John

      Knox, David

      Price, David (Eastleigh)

      Costaln, A. P.

      Lamont, Norman

      Prior, Rt Hon James

      Critchley, Julian

      Lang, Ian

      Proctor, K. Harvey

      Crouch, David

      Langford-Holt, Sir John

      Pym, Rt Hon Francis

      Dickens, Geoffrey

      Latham, Michael

      Raison, Timothy

      Dorrell, Stephen

      Lawrence, Ivan

      Rathbone, Tim

      Douglas-Hamilton, Lord James

      Lawson, Nigel

      Rees, Peter (Dover and Deal)

      Dover, Denshore

      Lee, John

      Rees-Davies, W. R.

      du Cann, Rt Hon Edward

      Lennox-Boyd, Hon Mark

      Renton, Tim

      Dunn, Robert (Dartford)

      Lester, Jim (Beeston)

      Rhodes James, Robert

      Durant, Tony

      Lewis, Kenneth (Rutland)

      Ridley, Hon Nicholas

      Dykes, Hugh

      Lloyd, Ian (Havant & Waterloo)

      Ridsdale, Julian

      Eden, Rt Hon Sir John

      Lloyd, Peter (Fareham)

      Rifkind, Malcolm

      Rippon, Rt Hon Geoffrey

      Stainton, Keith

      Waldegrave, Hon William

      Roberts, Michael (Cardiff NW)

      Stanbrook, Ivor

      Walker, Rt Hon Peter (Worcester)

      Roberts, Wyn (Conway)

      Stanley, John

      Walker, Bill (Perth & E Perthshire)

      Rossi, Hugh

      Steen, Anthony

      Walker-Smith, Rt Hon Sir Derek

      Rost, Peter

      Stewart, Ian (Hitchin)

      Waller, Gary

      Royle, Sir Anthony

      Stewart, John (East Renfrewshire)

      Walters, Dennis

      Sainsbury, Hon Timothy

      Stokes, John

      Ward, John

      St. John-Stevas, Rt Hon Norman

      Stradling Thomas, J.

      Warren, Kenneth

      Shaw, Michael (Scarborough)

      Tapsell, Peter

      Watson, John

      Shelton, William (Streatham)

      Taylor, Robert (Croydon NW)

      Wells, John (Maidstone)

      Shepherd, Colin (Hereford)

      Taylor, Teddy (Southend East)

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

      Shepherd, Richard (Aldridge-Br'hills)

      Temple-Morris, Peter

      Whitelaw, Rt Hon William

      Shersby, Michael

      Thomas, Rt Hon Peter (Hendon S)

      Whitney, Raymond

      Silvester, Fred

      Thompson, Donald

      Wickenden, Keith

      Sims, Roger

      Thorne, Neil (llford South)

      Wiggin, Jerry

      Skeet, T. H. H.

      Thornton, Malcolm

      Wilkinson, John

      Smith, Dudley (War. and Leam'ton)

      Townend, John (Bridlington)

      Williams, Delwyn (Montgomery)

      Speed, Keith

      Townsend, Cyril D. (Bexleyheath)

      Winterton, Nicholas

      Speller, Tony

      Trippier, David

      Wolfson, Mark

      Spence, John

      van Straubenzee, W. R.

      Young, Sir George (Acton)

      Spicer, Jim (West Dorset)

      Vaughan, Dr Gerard

      Spicer, Michael (S Worcestershire)

      Viggers, Peter

      TELLERS FOR THE AYES:

      Sproat, lain

      Waddington, David

      Mr. Spencer Le Marchant and

      Squire, Robin

      Wakeham, John

      Mr. Anthony Berry.

      NOES

      Abse, Leo

      Douglas, Dick

      Jones, Barry (East Flint)

      Adams, Allen

      Douglas-Mann, Bruce

      Jones, Dan (Burnley)

      Allaun, Frank

      Dubs, Alfred

      Kaufman, Rt Hon Gerald

      Alton, David

      Duffy, A. E. P.

      Kilfedder, James A.

      Anderson, Donald

      Dunn, James A. (Liverpool, Kirkdale)

      Kilroy-Silk, Robert

      Archer, Rt Hon Peter

      Dunnett, Jack

      Kinnock, Neil

      Ashley, Rt Hon Jack

      Dunwoody, Mrs Gwyneth

      Lambie, David

      Ashton, Joe

      Eastham, Ken

      Lamborn, Harry

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

      Ellis, Raymond (NE Derbyshire)

      Lamond, James

      Bagier, Gordon A. T.

      English, Michael

      Leadbitter, Ted

      Barnett, Guy (Greenwich)

      Ennals, Rt Hon David

      Leighton, Ronald

      Barnett, Rt Hon Joel (Heywood)

      Evans, loan (Aberdare)

      Lestor, Miss Joan (Eton & Slough)

      Beith, A. J.

      Ewing, Harry

      Lewis, Arthur (Newham North West)

      Bennett, Andrew (Stockport N)

      Faulds, Andrew

      Lewis, Ron (Carlisle)

      Benyon, W. (Buckingham)

      Field, Frank

      Litherland, Robert

      Bidwell, Sydney

      Fitch, Alan

      Lofthouse, Geoffrey

      Booth, Rt Hon Albert

      Flannery, Martin

      Mabon, Rt Hon Dr J. Dickson

      Bottomley, Rt Hon Arthur (M'brough)

      Fletcher, Ted (Darlington)

      McCartney, Hugh

      Bradley, Tom

      Foot, Rt Hon Michael

      McDonald, Dr Oonagh

      Brown, Hugh D. (Provan)

      Ford, Ben

      McEthone, Frank

      Brown, Robert C. (Newcastle W)

      Forrester, John

      McGuire, Michael (Ince)

      Brown, Ronald W. (Hackney S)

      Foster, Derek

      McKay, Allen (Penistone)

      Brown, Ron (Edinburgh, Leith)

      Fraser, John (Lambeth, Norwood)

      McKelvey, William

      Buchan, Norman

      Freeson, Rt Hon Reginald

      MacKenzie, Rt Hon Gregor

      Callaghan, Jim (Middleton & P)

      Garrett, John (Norwich S)

      Maclennan, Robert

      Campbell, Ian

      Garrett, W. E. (Wallsend)

      McNally, Thomas

      Campbell-Savours, Dale

      George, Bruce

      McNamara, Kevin

      Canavan, Dennis

      Gourlay, Harry

      McWilliam, John

      Cant, R. B.

      Grant, George (Morpeth)

      Magee, Bryan

      Carmichael, Neil

      Grant, John (Islington C)

      Marks, Kenneth

      Carter-Jones, Lewis

      Hamilton, James (Bothwell)

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

      Cartwright, John

      Hamilton, W. W. (Central Fife)

      Marshall, Dr Edmund (Goole)

      Clark, Dr David (South Shields)

      Hardy, Peter

      Marshall, Jim (Leicester South)

      Cocks, Rt Hon Michael (Bristol S)

      Harrison, Rt Hon Walter

      Mason, Rt Hon Roy

      Cohen, Stanley

      Hart, Rt Hon Dame Judith

      Maxton, John

      Coleman, Donald

      Hattersley, Rt Hon Roy

      Maynard, Miss Joan

      Concannon, Rt Hon J. D.

      Haynes, Frank

      Meacher, Michael

      Conlan, Bernard

      Healey, Rt Hon Denis

      Mellish, Rt Hon Robert

      Cook, Robin F.

      Heffer, Eric S.

      Millan, Rt Hon Bruce

      Cowans, Harry

      Hogg, Norman (E Dunbartonshire)

      Miller, Dr M. S. (East Kilbride)

      Craigen, J. M. (Glasgow, Maryhill)

      Holland, Stuart (L'beth, Vauxhall)

      Mitchell, Austin (Grimsby)

      Cryer, Bob

      Home Robertson, John

      Mitchell, R. C. (Soton, Itchen)

      Cunliffe, Lawrence

      Homewood, William

      Morris, Rt Hon Alfred (Wythenshawe)

      Cunningham, George (Islington S)

      Hooley, Frank

      Morris, Rt Hon Charles (Openshaw)

      Cunningham, Dr John (Whitehaven)

      Horam, John

      Morris, Rt Hon John (Aberavon)

      Dalyell, Tam

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

      Morton, George

      Davidson, Arthur

      Howells, Geraint

      Moyle, Rt Hon Roland

      Davies, Rt Hon Denzil (Llaneill)

      Huckfield, Les

      Newens, Stanley

      Oakes, Rt Hon Gordon

      Davies, Ifor (Gower)

      Hughes, Mark (Durham)

      Ogden, Eric

      Davis, Clinton (Hackney Central)

      Hughes, Robert (Aberdeen North)

      O'Halloran, Michael

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

      Hughes, Roy (Newport)

      O'Neill, Martin

      Deakins, Eric

      Dean, Joseph (Leeds West)

      Janner, Hon Greville

      Orme, Rt Hon Stanley

      Dempsey, James

      Jay, Rt Hon Douglas

      Owen, Rt Hon Dr David

      Dewar, Donald

      John, Brynmor

      Palmer, Arthur

      Dixon, Donald

      Johnson, James (Hull West)

      Park, George

      Dobson, Frank

      Johnson, Walter (Derby South)

      Parker, John

      Dormand, Jack

      Jones, Rt Hon Alec (Rhondda)

      Pendry, Tom

      Penhaligon, David

      Silkin, Rt Hon John (Deptford)

      Watkins, David

      Powell, Raymond (Ogmore)

      Silkin, Rt Hon S. C. (Dulwich)

      Weetch, Ken

      Prescott, John

      Silverman, Julius

      Wellbeloved, James

      Price, Chrstopher (Lewisham West)

      Skinner, Dennis

      Welsh, Michael

      Race, Reg

      Smith, Rt Hon J. (North Lanarkshire)

      White, Frank R. (Bury & Radcliffe)

      Radice, Giles

      Soley, Clive

      Whitehead, Phillip

      Roberts, Albert (Normanton)

      Spearing, Nigel

      Whitlock, William

      Roberts, Allan (Bootle)

      Spriggs, Leslie

      Wigley, Dafydd

      Roberts, Ernest (Hackney North)

      Stallard, A. W.

      Willey, Rt Hon Frederick

      Roberts, Gwilym (Cannock)

      Stoddard, David

      Williams, Rt Hon Alan (Swansea W)

      Robertson, George

      Strang, Gavin

      Williams, Sir Thomas (Warrington)

      Robinson, Geoffrey (Coventry NW)

      Straw, Jack

      Wilson, Rt Hon Sir Harold (Huyton)

      Rodgers, Rt Hon William

      Summerskill, Hon Dr Shirley

      Wilson, William (Coventry SE)

      Rooker, J. W.

      Taylor, Mrs Ann (Bolton West)

      Winnick, David

      Ross, Ernest (Dundee West)

      Thomas, Dafydd (Merioneth)

      Woodall, Alec

      Rowlands, Ted

      Thomas, Jeffrey (Abertillery)

      Woolmer, Kenneth

      Ryman, John

      Thomas, Dr Roger (Carmarthen)

      Wrigglesworth, lan

      Sandelson, Neville

      Tilley, John

      Wright, Sheila

      Sever, John

      Torney, Tom

      Young, David (Bolton East)

      Sheerman, Barry

      Urwin, Rt Hon Tom

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

      Varley, Rt Hon Eric G.

      TELLERS FOR THE NOES:

      Shore, Rt Hon Peter (Step and Pop)

      Wainwright, Edwin (Dearne Valley)

      Mr. James Tinn and

      Short, Mrs. Renée

      Wainwright, Richard (Colne Valley)

      Mr. Ted Graham.

      Question accordingly agreed to.
      Bill read the Third time and passed.

  SOCIAL SECURITY BILL (ALLOCATION OF TIME)
  Motion made, and Question proposed,
  That the Order of the House [25th February] be supplemented as follows:—
  1.—(1) The proceedings on Consideration of Lords Amendments shall be completed at this day's sitting and shall be brought to a conclusion not later than at the expiration of the period of three hours beginning with the commencement of the proceedings on this Order.
  (2) Paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the proceedings on Consideration of Lords Amendments.
  2. If at the expiration of the period mentioned in paragraph 1(1) above the proceedings on Consideration of Lords Amendments have not been completed, then, for the purpose of bringing those proceedings to a conclusion—

  (a) Mr. Speaker shall put forthwith any Question which has already been proposed from the Chair and not yet decided and, if that Question is for the amendment of a Lords Amendment, shall then put forthwith the Question on any Motion made by a Minister of the Crown. That this House doth agree with the Lords in the said Lords Amendment or, as the case may be, in the said Lords Amendment as amended;

  (b) Mr. Speaker shall then put forthwith the Question, That this House doth agree with the Lords in all the remaining Lords Amendments.—[Mr. Prentice.]

  7.12 pm
  Mr. Reginald Freeson: It is interesting to note that the motion has not even been spoken to on its being presented to the House. That is because it is nonsense. The business before us
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  cannot possibly justify the motion, and the Government are making fools of themselves in introducing it. I do not mind that, but they should not thereby make a fool of the House.
  How can the Lords amendments possibly require a guillotine motion? It is necessary only to read them to answer that question. Of course, important issues were raised in another place when the Bill was discussed, but those issues were not raised by Government spokesmen. In trying to improve the Bill, Opposition peers ranged over much of the ground of reform that Labour Members had covered in this place. Opposition peers tried to restore the earnings link for pension increases, to increase maternity and death grants, to improve child benefits, to increase retirement pensions, to abolish the earnings rule for pensioners and to improve invalidity benefits. Those were some of the changes that Labour peers sought, as Labour Members had done in this place. Every one of their amendments was defeated by the Government.
  All that we have from another place is six amendments that cannot possibly explain the motion before us. Amendment No. 1 seeks safeguards against overpayment of benefit into bank accounts and repayment by automated credit transfer. Amendment No. 2 provides that maintenance payments should be included when assessing supplementary benefit. Amendments Nos. 3, 4, 5 and 6 are merely technical.
  That is the measure of the great issues which the Government have put before us. Such is their potential for major debate that the Government have introduced a timetable motion. It will be

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  debated for anything up to one hour—probably longer than it would take to consider all six amendments.
  The Government have gone guillotine mad. When we sought in Committee to expose the attacks on pensioners and others that the Bill represents, the Government guillotined debate. Soon after that, the Social Security (No. 2) Bill, representing a crude and far-reaching assault on the basic principles of the Welfare State, was introduced. That, too, was quickly guillotined.
  On Second Reading I recall asking:
  " do the Government intend to abandon statutory uprating of benefits…in relation to prices as well as earnings? "—[Official Report, 20 December 1979; Vol. 976, c. 997.]
  I received my answer two months later. With hindsight, one can see that it was a shifty, dishonest answer. That was when the Government first put a guillotine on the Bill. The Secretary of State said:
  " in order to "—
  mark the words—
  " allay anxiety, I should say that the Government have no plans to introduce new clauses in Committee or on Report that would represent major new departures of policy."—[Official Report, 25 February 1980; Vol. 979, c. 1037.]
  Four weeks later, the Secretary of State presented the Social Security (No. 2) Bill, which did exactly what I had feared and what the Government had denied. It broke the link with prices. It reduced and abolished benefits for the unemployed, the industrially injured, the disabled, pregnant mothers and others.
  The Secretary of State, the Minister for Social Security and the Under-Secretary of State must each one of them have known the contents of the Bill. They must even have contemplated incorporating the clauses in the Bill that is again before us. The Bill must have been in draft at the moment when assurances to the contrary were being given in the previous guillotine debate.
  When we reflect on the conduct of Ministers over the Bill and over the Social Security (No. 2) Bill, we start to understand why, in this its last stage, the Bill is guillotined yet again. There is no rational reason, hence no speech from the Minister for Social Security in presenting the motion to the House. However, there is an irrational reason.
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  The Government are running scared of open debate. They have the votes. Liberal "wets" are included as well as Tory hardliners. However, they know that they have lost the arguments on the Bill, just as they have lost them on the even more crude Social Security (No. 2) Bill.
  With the help of an uninformative press, some of which has begun to wake up too late to what the Government are up to, Ministers have sought to railroad both Bills through Parliament, in the hope that public awareness of their demolition job on our welfare system would remain unaroused.
  Even now, the full impact of their legislation on the poor, the elderly, the disabled and others in greatest need has not been felt. And are not the Government pleased about that! The Minister for Social Security constantly boasts of how few letters he receives on the pension cuts that he is introducing. I imagine that the Under-Secretary of State, reputedly a liberal Tory, does not have so many penfriends these days. However, to try to ensure that their intentions get the least possible exposure, down comes the bloody guillotine blade again. That is being done for no reason, bearing in mind the business that is before the House.
  The guillotine motion is about fear. The Government fear that we shall once more expose their intention to reduce retirement pensions and to make 1¼ million people on supplementary benefit worse off under the Bill. They fear that we shall expose their intention to swindle elderly people out of two weeks' increased pensions by delaying the uprating date in November. They fear that we shall expose again their denial of the full increase due to pensioners—a loss of 50p a week—last November. They fear that we shall expose the purpose of clause 1, which is to cut invalidity pensions, disablement pensions, attendance allowances, invalid care allowances and war pensions. Its purpose is to cut all these benefits for 1½ million people and their families, as well as to cut retirement pensions for 10 million people.
  We should remind ourselves that on Second Reading the Secretary of State promised to protect the pensioner against price increases. The Under-Secretary of

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  State repeated that promise several times in Committee on 7 February 1980. She said that
  " The Government have given a firm pledge that pensioners will be protected against increasing prices. "
  Later, in somewhat heavier prose, the hon. Lady said that
  " the Government had given a firm pledge of their firm intention to protect pensioners against price increases and to let them share in the increasing prosperity of the country."—[Official Report, Standing Committee E, 7 February 1980; c. 263–4.]
  The Minister for Social Security joined in on 5 February by giving
  " a guarantee to the pensioner in terms of prices."—[Official Report, Standing Committee E, 5 February 1980; c. 212.]
  One should note the word "guarantee". Before the guillotine comes down again, I should like to ask whether those pledges can be confirmed. I have given only one or two examples. Such statements were made many times. Can they be confirmed by an assurance that the rate of inflation, now running at 21·8 per cent., not the 16·5 per cent. that was forecast two months ago, will be covered by the uprating of retirement, invalidity, disability and war pensions next November?
  Before we leave the Bill, with or without a guillotine, we are entitled to an answer to a question that is crucial to millions of our constituents. Inflation is running at 5 per cent. above the figure forecast by the Government for the pensions increase next November. If pensioners are not covered for the increase in inflation, they will lose nearly £2 a week. They will lose in real terms nearly £2 a week if the pension uprating decision to be announced by way of a draft order to be presented to the House—I think, in July—does not include figures that cover the rate of inflation now being experienced and expected to run for the next few months.
  I realise that it is not possible to predict accurately the increase in prices in the year to November 1980. I realise that this cannot be done even now. However, if the indices continue to rise at the same rate as they have done since November 1979, the price increase between the pension uprating last November and the forthcoming one in November will be 24 to 25 per cent. On that basis, the 16·5 per cent. increase for long-term benefits
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  announced in the Budget will result in an 8 per cent. shortfall in real value as measured by retail prices.
  The Government have proposed a new weekly pension rate from November of £27·15 for a single person and £43·45 for a married couple. Even allowing for inflation at the present rate of 21·8 per cent. rather than the 24 to 25 per cent. figure that present indices suggest will be the case, the new pension rates necessary to maintain real value should be £28·35 and £45·35 respectively for single persons and married couples.
  I shall gladly give way to enable the Minister to endorse those figures and to repeat previous undertakings, firm pledges and guarantees in specific cash terms. That is what we are entitled to expect on behalf of retirement pensioners and others to whom I have referred. We are entitled to know now that the Government intend to cover the full rate of inflation. If we get no response, no guillotine motion or series of guillotine motions on this or the Social Security (No. 2) Bill will stop us from declaring, loudly and clearly until the press wake up and publish what we are telling the country, that the Government are knowingly, not accidentally, cheating millions of the poorest people in our community. That is what the Social Security Bills are really about. They attack the very people in need of the greatest protection, especially at this time of economic difficulty.
  It is a matter for consideration whether the Government's conduct should be referred to the Parliamentary Commissioner or even be subject to action in the courts. This is a shameful period. We are becoming a less generous people. The posture and policies of the Government are encouraging a campaign of hostility against poor people and the welfare services. Such hostility is being elevated to a political virtue as the Government put their anti-warfare legislation through with a series of guillotines.
  The phoney liberalism of the Secretary of State and the Under-Secretary of State is over. If they wish to maintain the reputation with which they presented themselves to the country until they took ministerial office, they should resign and leave the Government. We shall vote against the guillotine motion. It is nonsense. There is no need for it. It represents a policy and legislation that are a

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  disgrace to the House. We shall oppose it for as long as we can.
  7.28 pm
  Mr. Andrew F. Bennett: Like my right hon. Friend the Member for Brent, East (Mr. Freeson), I feel that we should oppose the guillotine motion. This is a bad Bill. We should do everything possible to prevent its further progress. Ministers have not answered a series of questions which have been posed on this Bill and on the Social Security (No. 2) Bill. If we have no right, as an Opposition, to stop the Bill from going through the House, we have a right to hear answers to our questions.
  My right hon. Friend has already asked what action the Government will take if their figure for inflation in November is wrong. In the Standing Committee on the No. 2 Bill, the Secretary of State has admitted that the figure of 16½ per cent. is probably wrong. But there has been no indication of what course the Government will take if the estimate given in the Budget is inaccurate. The House and the country have a right to know whether the pensioners, the unemployed, the sick and the disabled will be cheated this autumn of the increases necessary to keep pace with inflation.
  Due to the passage of the two Bills through the House, no effective work has been carried out on the uprating of the benefits in November. It is, therefore, possible for the Minister to change the figures that are to be used. A decision could be made that the estimate of 16½ per cent. inflation was wrong and that it should be replaced by a higher figure which is now much more likely, as the Secretary of State admitted. The shortfall could be made good before it occurs. As far as one can judge, the shortfall will be much bigger than last year. I suggest that the Government should make good the shortfall in the uprating straight away.
  Mr. Stanley Orme: My hon. Friend said that the Government had not started on the uprating. I do not know what evidence he has of that. During our debates on the No. 2 Bill, I produced a leaflet commenting on this Bill before it had returned to the House from the other place. That was an official Government leaflet, so my hon. Friend might like to ask the Minister whether any work has yet started on this Bill.
  Mr. Bennett: I am certain, on the basis of what we discovered about the No. 2 Bill, that a great deal of work has been done, but I understand that the Department has not yet got round to issuing the books with the figures in them. Therefore, it is still possible for the Government to change them if they wish. They should take into account the fact that the Secretary of State now admits that the forecast level of inflation of 16½ per cent. is probably wrong. But, if the Government want to continue with that, they should make clear to the House and the country what they will do this year if the figure is wrong. The levels of inflation being experienced now mean that people need the extra money urgently. It should not be a matter of their waiting until next January and then the Government saying "We do not think we should bother." The Government should give us a clear undertaking now about what will happen if the 16½ per cent. is wrong.
  Why did the Government put off the November uprating this year by two weeks? They have never answered that question. The Opposition have said that it has been done in order to save enough money to pay for the Christmas bonus. The Government deny that and say that we are being unfair, but they still have not given us a reason. There is possibly a reason for putting it off by six days. The Government can claim that the date has been creeping forward by one day each year, and by two days in leap years, but they have given us no clear reason for putting it off this year. They should tell us the reason. If they do not, we and the country will believe that it is simply a way of saving money and of paying for the Christmas bonus. There could be few things meaner than asking pensioners to pay for their own Christmas bonus, which is the clear implication of our receiving no answer.
  Then there is the whole question of the regulations. Those of us who sat through most of the Committee proceedings know that a large part of the Bill depends on regulations. The Minister should tell us how soon the regulations will be available and to what extent outside bodies that are particularly interested in them will have a chance to make representations before they are laid before the House, with no opportunity for them to be amended.

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  There is also the question of the long-term unemployed. Almost every time the Opposition proposed in Committee that the regulations should be altered or that a little extra money should be spent here or there, Ministers said that they were very sorry but there was no extra money. They almost implied that if they could squeeze out that little bit of extra money their main priority would be the long-term unemployed. But, at the very moment they were expressing concern about the long-term unemployed, the Chancellor of the Exchequer and the Secretary of State were plotting to make sure that the long-term unemployed took a cut, with the so-called abatement of their benefit to take tax into account
  We all know that the long-term unemployed who are on benefit are close to the tax threshold anyway, and if they were subject to tax they would not have a 5 per cent. cut. This autumn, the long-term unemployed will have a phoney rate of inflation applied to them, which will result in one cut, and they will suffer 5 per cent. abatement, so-called, which is basically a cut. Yet Ministers expressed great concern in Committee about their plight
  The Government seem to be committed to increasing not only unemployment but the number of people subjected to long-term unemployment. Therefore, we should have a clear statement of what they will do about the long-term unemployed.
  The Minister told us repeatedly in Committee that it was necessary for the whole country to tighten its belt, but he never said what sacrifice he, other Ministers or people with the same levels of income would make. They are the fat cats of this land. The right hon. Gentleman should tell us what sacrifices he expects the better-off to make if he expects sacrifices to be made by pensioners, the unemployed, the sick and the others who are least able to cope with the problems of inflation. I challenge him to tell us tonight whether he has made any sacrifice. Many people seem to think that he is one of those who sail from one success to another, at least financially, with never a concern for the least well-off. I hope that tonight we can hold up the Bill a little longer and that at long last we shall receive some
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  answers to our questions before the Bill is passed.
  7.36 pm
  Mr. A. W. Stallard: I, too, oppose the motion, as I have opposed previous guillotine motions on other Government measures. I have heard it argued that there is some merit in timetable motions for all Bills and all procedures. I think that it was the Minister for Social Security who suggested that that might be a useful innovation. But there are arguments the other way. While it may appear attractive to have timetables for everything, there are no argument and no support for introducing that procedure by stealth, by simply applying it on every Bill and crashing legislation through with the Government's majority. That may become standard procedure if we are not careful.
  It seems that even before a Bill goes into Committee the Government are asking themselves at what stage they should introduce a guillotine. They have a guillotine at the back of their minds before the Committee discussion even begins. I shall not support that approach or the approach outlined by the Minister when he advocated timetables as a general rule. We certainly do not want them introduced by stealth, with the Government saying that they should use their obscene majority to crash legislation through the House every time.
  My right hon. Friend the Member for Brent, East (Mr. Freeson) said that the amendments still to be discussed were important. Neither Social Security Bill has been adequately discussed. Certainly this one has not. We only began to discuss it, and we did not get down to the nitty-gritty and the detail as we should wish to have done if we had had a more leisurely discussion and more time to consult the voluntary organisations, which are still in the throes of discussing it, or the trade union movement, some of whose members have not even heard of it. Had the normal time been allowed for discussion, the necessary process of consultation between an Opposition and all the interested bodies would have gone on. It would have been much more fruitful, and better legislation would have resulted.
  This Bill was still in Committee, still being amended, when the second Bill,

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  repealing parts of this one, was introduced. Both had guillotines on them. We were guillotining one Bill in Committee while we were discussing another and put a guillotine on that as well. That repealed bits of it, and the Government put a guillotine on that as well. That must be crazy.
  With my simple mind, I thought at one stage that part of the reason for the awful rush was to enable the Prime Minister to receive a standing ovation at this year's party conference. She will need something. By then even the "wets" will be getting fed up. The Government are beginning to look too extreme even for some of their own followers.
  The two Social Security Bills may well be what the Prime Minister needs. Therefore, the Government had to take no chances that they would be left over. They had to be got through so that the right hon. Lady could announce how tough she had been with the unions, with the scroungers, the work-shy, the malingerers, the cheats and the thieves—and all the other names that the Tories have for ordinary working people. We would call them people, beneficiaries, pensioners. The Tories have their own terms. They call the unemployed work-shy, the sick scroungers and those on disability or invalidity pension malingerers. I can see the Tory women at that conference, in their salad bowl hats, screaming their standing ovations to high heaven when these announcements are made.
  There was never any justification for the guillotine. Here I should like to correct something that was said by my hon. Friend the Member for Stockport, North (Mr. Bennett). I am aware that not only has something been done about the up-rating, but that the new pension books were being printed before the Social Security Bill had ended its Committee stage. Those books were being printed and contained figures mentioned in the Social Security (No. 2) Bill before we had even begun to discuss that measure.
  Some of us have seen those books and handouts. A circular was prepared by the Department containing the relevant figures while they were still being discussed, and the discussion has not finished yet. Those books were prepared in an arrogant and conceited way and with a contempt for parliamentary procedure. The Government seem to have said" We
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  will get this through. Do not worry. Get on with the printing, because nothing can stop us."
  My hon. Friend the Member for Stockport, North will find that a great deal has been done to implement the provisions of the Bills before they have even completed their passage through Parliament. If that is not contempt for our parliamentary set-up, nothing is. There is no way in which the Opposition can condone such conduct, because it brings parliamentary procedure into disrepute. If we allow that kind of conduct to become the norm, we are in trouble.
  Mr. Orme: Is it not extraordinary that tonight the Bill will be passed and go on to become law, yet clause 1 contains a measure to change long-term benefits that will be altered in the House of Lords today or tomorrow? That means that we are debating a Bill the provisions of which are to be changed, and yet it will be passed tonight. Does my hon. Friend not find that extraordinary?
  Mr. Stallard: Of course I do, and I am grateful to my right hon. Friend the Member for Salford, West (Mr. Orme) for making the position clear. Perhaps I was somewhat confused, just as are most people outside the House. Most people outside are still discussing the original Social Security Bill. Many people do not realise that parts of that original have already been repealed by the Social Security (No. 2) Bill, and neither Bill has yet completed its parliamentary progress. That must be the craziest situation that we have ever seen.
  We were threatened with a number of precedents for the present situation, but none was found that was exactly analogous. Had the Government been able to find relevant precedents, they would have trotted them out and we would have seen them in the Tory press, which ignored the whole process until we reached clause 6 of the Social Security (No. 2) Bill. There are no acceptable precedents for this kind of conduct by any Government. When people outside realise and recognise the extent of the contempt with which the Government have treated our parliamentary procedures, they will realise the nature of the Government.
  Conservatives complain of our harping on the theme of the class issue. There is no greater example of the class-conscious approach of the Government

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  than these two Bills and the contempt with which the Government have treated the passage of both measures. That is class arrogance. The Conservatives appear to be saying "We can do as we like. We are the ruling class and we are in charge. There is no way that we will allow the Labour mob to interfere with our power."
  Mr. Dennis Skinner: My hon. Friend makes an important point when he speaks of class and the approach of the Tory Party to class interests once it is in power. I hope that my hon. Friend will say that the Labour Party will not take kindly to criticism from the Tories when the next Labour Government look at issues objectively, and in the round, in an attempt to suit everybody's interests. What we should learn from the Government's treatment of these two Bills is that when we are next in power we must look after our own class, from the first day to the last. If we do that, the Tories will never get back to power.
  Mr. Stallard: I am grateful for the timely intervention of my hon. Friend. I was about to say that these Bills make it possible for the Government to pay for the gifts which they gave to their own class in their first two Budgets. The Government have given big tax reliefs to their friends but nothing to the people with whom these Bills are chiefly concerned.
  The Government have done nothing for those people. They have made matters worse for them. Not only does the Social Security (No. 2) Bill intend that some benefits should be liable to tax even though the people concerned would not have been liable to tax anyway, but the Government have abolished the 25 per cent. tax band. If many of the people affected by these Bills had been paying tax, they would have been taxed at that rate. Not only have the Government brought those people within the income tax system; they have decided to tax benefits. If that is not a class measure I do not know what is, because while they were planning to do that they were handing out millions of pounds in tax rebates to the people who put them where they are.
  Mr. William Hamilton: My hon. Friend has mentioned the delay in paying the increase to pensioners in November. The Minister said during the Committee stage of the Social Security
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  (No. 2) Bill that that delay would save £125 million. I looked up the Defence Estimates and found that a nuclear submarine costs £140 million. Therefore, the £125 million saving, which is the result of robbing old-age pensioners—and the pensioners must be feeling very patriotic about it—is helping to build another nuclear submarine. The pensioners must be glad about that.
  Mr. Stallard: I agree, and we could all find examples of millions of pounds being spent on obsolete equipment while at the same time millions of pounds are being taken from those who need it. That, of course, is the difference between the two major parties. We would have a different approach.
  When the Government were accused of adopting a class approach to this legislation, we were told that the legislation was fair. It was said yesterday that this legislation would introduce an element of fairness into our society. What is fair about handing out millions of pounds to those who already have enough, while a sick man is taxed? This legislation will force many thousands of people into being means-tested in order to be eligible for supplementary benefit to which they were formerly entitled.
  When we asked about that, we were told that there were some rough edges to the legislation. The Government call 110,000 people "rough edges". When we probed further, we were told that the proposed legislation was necessary to solve the country's economic plight, that there must be even sacrifices and that there must be sacrifices all round.
  That evenness is demonstrated by the Government's nicking two weeks' pension increase from old people and refusing to make up the shortfall. The pensioners have been fiddled by an offer of a 16½ per cent. increase when inflation is running at 22 per cent. In four or five different ways, the Government have cheated the pensioners while giving big handouts at the other end of the scale.
  Who can see fairness in that? Where is the even sacrifice? I ask the Minister to tell us what he has sacrificed. Let him compare his sacrifice with that being made by the unemployed, who will now be taxed on their benefits.
  Mr. Freeson: Have not Ministers given a firm pledge that pensioners will

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  be protected against increasing prices'? Does it follow that they will receive 16½ per cent.? Perhaps we shall hear tonight that there will be a cut-off point at 20 or 22 per cent.
  Mr. Stallard: If I have misjudged the Government I shall apologise but, God help us, there is no fear of that. Does the Minister have anything to say about pensioners and the link with the cost of living?
  A number of questions must be answered and debated. Much more time is needed for the Bill. The Bill rests upon regulations, and we have not seen one. The Supplementary Benefits Commission is to be abolished. It is crucial that we understand what will take its place and what regulations will be introduced. I shall oppose the guillotine motion.
  7.52 pm
  Mr. Alfred Dubs: I oppose the motion. This is the last stage in a shabby saga. The Government have yet again cut the time for discussing important issues. I was not a member of the Standing Committee on this Bill or the Social Security (No. 2) Bill. However, I must try to explain what the Government are seeking to do. Those who are affected by the Bill want to know what is going on, what is to happen to them and why. If ever there was a need for the fullest possible debate, it is on social security measures.
  At the best of times, our social security system is complicated and confusing. In addition to the inevitable confusion caused by changes in the system, pensioners and many others affected by the measures are suspicious and angry. They have asked hon. Members "Why pick on us? We are not the best-off but the most disadvanaged. Why are we being picked upon by the Government?" The anger is possibly why the Government are anxious to cut debating time. They are anxious to escape the full wrath of those who are affected. There could be another reason. Perhaps Ministers have been forced by the Treasury to introduce the measures.
  The provisions penalised pensioners in the shabbiest of ways. Many pensioners believe that the two weeks' delay in up-rating the pension before Christmas is a trick to stop them from realising what is happening. The same can be said about breaking the link with earnings.
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  The Government assume that the rate of inflation this autumn will be 16½ per cent. They are using inflation to achieve further cuts in the social security budget. They are taking advantage of the high rate of inflation to bring about even larger cuts in benefits. If the Government are wrong in the 16½ per cent. estimate—as I am sure they are—what will they do to put things right? They could introduce further legislation in the autumn and increase the Christmas bonus to pensioners. That would be a quick way to make an adjustment. In the long term, they must sort out the problem on a more satisfactory basis.
  In spite of the guillotines on the Bills, many people are aware of what is going on. They are aware that the Government are using the economic situation as an excuse to cut social security benefits to disadvantaged people. The people will remember the Tory Government for giving money to the rich and better off and for using Bill after Bill to make the poorest and most disadvantaged people pay the price.
  7.55 pm
  Mr. Reg Race: The Minister asked why the Opposition would vote against the guillotine motion. I laughed my socks off at that. If he does not understand why the Opposition are violently opposed to this Bill and the No. 2 Bill, he has not been educated much. We are opposed to the Bills because they are class measures designed to undermine the benefits of ordinary people in order to pay for massive assistance to the rich. That is the name of the game. The Bills will pay for defence spending and the madness of additional provision to blow us all up with new nuclear submarines and cruise missiles.
  My right hon. Friend the Member for Brent, East (Mr. Freeson) referred to the rate of inflation. That is crucial to the upratings. I suspect that the Government do not believe that the inflation rate will fall to anything like 16½ per cent. in the foreseeable future. Why else should they want to talk to the TUC about wage restraint? That gives the game away. They know damned well that the rate of inflation will not drop to anything like 16½ per cent. in the foreseeable future. That is why they must push the Bill through and ensure that there is as little uprating as possible.
  Mr. Skinner: The Government want to start a type of concordat with the TUC and to talk about wages rather than anything else. What really bothers the Government about wages is the problem which is staring them in the face. They do not know how to get round it. It is that the pay increases to the police and the Armed Forces have been eroded by increases of, for example, 32 per cent. to the doctors. The police and the Armed Forces now want to step up their increases this year. The Government will have to use the money saved by the Bill to pay for such increases.
  Mr. Race: I am sure that my hon. Friend is right. The Government are trying to buy off, head off—or decapitate before it raises its ugly head—the prospect of a rebellion in the next wages round. They will not succeed. Such measures as this will defeat them in the end. The TUC will not accept any quid pro quo on wages when Bills such as this are being introduced. No sane TUC general secretary will even begin to have discussions with the Government when such Bills are going through the House.
  The Secretary of State made an interesting comment in Committee on the No. 2 Bill. He justified that Bill by saying that we needed to make financial savings and that those savings, together with the cuts in the social security budget, were necessary to restore incentive and dynamism. What connection has the Bill with incentives? The Oxford English Dictionary broadly defines the word "incentive" as persuading someone to produce more goods, to increase production and thereby to gain an advantage from doing so. What connection has the word "incentive" with cutting the rate of the old-age pension or, in the No. 2 Bill, cutting other benefits? It has no connection at all.
  The Government are concerned with making financial savings at the expense of the poorest and weakest section of the community and with giving vast amounts of money to their rich friends. A single person earning £30,000 a year received more than £4,300 in tax concessions from the Chancellor of the Exchequer in the first Tory Budget in June last year and an additional £650 in the second Budget this year. That is
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  the sort of incentive that is being given to the Tories' rich friends.
  The incentive and the dynamism that are supposedly being given to the old-age pensioners in our society is the incentive of having their benefits taken away, torn up and nullified. If the Minister wants one very good reason why we shall oppose the guillotine motion tonight, it is the reason that I have given
  8.2 pm
  The Minister for Social Security (Mr. Reg Prentice): If there were any reason to oppose the guillotine motion, it would have to be based on an argument that there was insufficient time allowed to debate the Lords amendments to the Bill. In fact, ample time has been allocated, and no one has argued to the contrary.
  For almost an hour we have listened to a debate on this Bill, the Social Security (No. 2) Bill, the Finance Act 1979, the Finance Bill 1980, the Defence Estimates and the class war but no word of argument about the guillotine motion itself.
  There are seven amendments from the other place, of which two are consequential. Of the remaining five amendments, three are drafting amendments, and two are substantive. To the best of my knowledge, even the two substantive amendments are not controversial. We allocated ample time for debate, and I moved the motion formally because I thought that it would be accepted formally. If there was an argument that two hours were insufficient for the debate, we could have spent the past hour debating the issue, thereby allowing three hours for debate. We needed the motion as a long-stop defence against the sort of speeches to which we have listened for the past hour. While Opposition Members pursue those tactics, we must safeguard the timing of the legislation.
  Mr. William Hamilton: Because it is no good.
  Mr. Prentice: We are looking forward to the Royal Assent tomorrow of this Bill. Our objective of a date in this half of May was put to the House, and was put several times in Committee, because of the tremendous operational conseqeunces of bringing the changes into effect in time for the uprating in November.

  813
  The right hon. Member for Brent, East (Mr. Freeson) said that we were afraid of debate, but I would welcome a real debate on this issue.
  Mr. Freeson: Exposure.
  Mr. Prentice: But we are not getting debate. With great respect to Opposition Members, there has not been a word of debate in the past 50 minutes, any more than there was in the whole dreary charade yesterday. We are getting a constant strategy from the Opposition of talking their heads off, wasting time and trying to find as many permutations as possible on the words "outrageous", "vindictive", "indefensible" and "vicious".
  Mr. Andrew F. Bennett: Robbery.
  Mr. Prentice: Then they complain that the country is not listening to them. They blame the press for not reporting them. But their hon. Friends do not come to listen to them either. The present picture being given by the Parliamentary Labour Party to the country is that of half a dozen hon. Members making angry speeches to each other in a largely empty House.
  Mr. Stallard: Where are the right hon. Gentleman's supporters?
  Mr. Prentice: My hon. Friends have more sense than to take part in this sort of operation.
  I wish to take up one or two of the points raised. The figure of 16½ per cent. was the Government's best estimate of the likely rate of inflation from November 1979 to November 1980. It was worked out in a way that has become—
  Mr. Freeson: On that point—
  Mr. Prentice: No, I shall not give way at all.. I am trying to answer the point, such as it was, made by the right hon. Member for Brent, East in his offensive speech. [Interruption.] He is still being offensive, rude and unparliamentary from a sedentary position.
  The normal procedure for many years has been to make the best possible estimate, and then uprate—[Interruption.]
  Mr. Deputy Speaker (Mr. Richard Crawshaw): It is not fair that hon. Members who are sitting down should be continually shouting. The right hon.
  814
  Member for Brent, East (Mr. Freeson) knows that that is not parliamentary practice.
  Mr. Skinner: On a point of order, Mr. Deputy Speaker. Your ruling is almost certainly correct, but I draw your attention to the fact that during the course of the past few minutes the Minister has been talking about the debate from the Opposition Benches. He implied that you, Mr. Deputy Speaker, did not call us to order because we were speaking out of order. I think that it would have been your duty to explain—
  Mr. Deputy Speaker: Order. The hon. Gentleman is on dangerous ground when he makes those suggestions. I shall decide whether hon. Members are in order. I did not intervene.
  Mr. Prentice: If it needs to be said, Mr. Deputy Speaker, I was implying no criticism of the Chair. I was making considerable criticism of the speeches to which we have listened—although I listened to them quietly and courteously. Unfortunately, that is not a habit that applies to the Labour Party at present.
  I have been trying to answer a question for the past one and a half minutes. The procedure this year is as it has always been, namely, that a calculation is made of the likely rate of inflation from November to November. Plans are then made and the regulations are brought before the House. The pension books are printed and the decision is implemented, as it has been in the past. Sometimes the figures have been correct and sometimes they have not been correct. That applied under successive Governments. There has never been a process by which, month by month, amending statements and regulations are brought before the House because of details of arithmetic.
  I must put one point on the record about the present rate of inflation. The present rate judged this month, as against 12 months ago, includes the effects of the VAT increase in the 1979 Budget. That figure will no longer be included in the comparison from July onwards. That is a well-known fact, which Opposition Members constantly ignore in their attempts to create a scare on this subject.
  Mr. Andrew F. Bennett: Will the Minister give way on this point?
  Mr. Prentice: No, I shall not give way.
  Several Opposition Members returned over and over again to the language of the class war. I wish to say to the hon. Members for St. Pancras, North (Mr. Stallard) and for Wood Green (Mr. Race) that, if we have to talk in those terms, my working-class credentials are as good as theirs and as good as those of any hon. Member in the House. Like most people in Britain in 1980, Conservative Members want to turn their backs on that antediluvian nonsense. We want to see the nation working together to solve our problems. The number one problem is inflation. The reductions in public spending, be they in the social security budget or in any other budget, are part of a strategy to fight inflation.
  Mr. Freeson: Hit the poor.
  Mr. Prentice: The right hon. Gentleman says "Hit the poor." The poorest members of our community are the hardest-hit victims of inflation. Because they are living on lower incomes, the impact of rising prices is proportionately greater on them than upon those of us who are fortunate enough to be better off. Equally, it has an effect on their savings, the value of which is continually eroded by inflation. It also has an effect upon the support services that they may be getting from local authorities or voluntary bodies in the help that they need. Therefore, when we put the fight against inflation as our top priority, we are doing it, above all, on behalf of the pensioners, the widows, the chronic sick and others in greatest need.
  8.10 pm
  Mr. Stanley Orme: We have heard a lot of nonsense from the Minister tonight. My right hon. and
  hon. Friends have been talking about class problems. The Government are enacting class issues by the type of Bill that is before the House.
  The right hon. Gentleman did not address himself to the straight question: if there is a shortfall and the rate of inflation is above 16½ per cent., will the Government make it good to the pensioners? The previous Labour Government made good the shortfall. This Government have already reneged on the pensioners on the earnings factor, which is taken out of the calculation by clause 1.
  Mr. Prentice: The right hon. Gentleman knows that this point has been dealt with over and over again. It was dealt with several times in Committee and on Report yesterday by my right hon. Friend. The procedures this year are the same as in previous years. There never has been any statutory obligation to make good a shortfall. There has never been a pledge in advance in a situation of this kind. The shortfall has been made good in the past. A shortfall was made good by the Government in the 1979 uprating when the statutory obligation was an up-rating of 17½ per cent. and the actual uprating was effectively about 19½ per cent. We do not need lectures on this subject by Opposition Members.
  Mr. Orme Mr. Orme rose—
  It being one hour after the commencement of proceedings on the motion, Mr. DEPUTY SPEAKER proceeded, pursuant to the Order [25th February] to put forthwith the Question necessary to dispose of them.
  The House divided: Ayes 125, Noes 58.

  Division No. 327]

  AYES

  [8.12 p.m.

  Alexander, Richard

  Bright, Graham

  Costain, A. P.

  Ancram, Michael

  Brinton, Tim

  Critchley, Julian

  Aspinwall, Jack

  Brown, Michael (Brigg & Sc'thorpe)

  Douglas-Hamilton, Lord James

  Atkins, Rt Hon H. (Spelthorne)

  Buchanan-Smith, Hon Alick

  Dover, Denshore

  Atkins, Robert (Preston North)

  Buck, Antony

  Dunn, Robert (Dartford)

  Baker, Nicholas (North Dorset)

  Cadbury, Jocelyn

  Faith, Mrs Sheila

  Benyon, Thomas (Abingdon)

  Carlisle, John (Luton West)

  Fenner, Mrs Peggy

  Berry, Hon Anthony

  Carlisle, Kenneth (Lincoln)

  Fletcher-Cooke, Charles

  Best, Keith

  Carlisle, Rt Hon Mark (Runcorn)

  Forman, Nigel

  Bevan, David Gilroy

  Chalker, Mrs. Lynda

  Fraser, Peter (South Angus)

  Biffen, Rt Hon John

  Clark, Hon Alan (Plymouth, Sutton)

  Gorst, John

  Biggs-Davison, John

  Clark, Sir William (Croydon South)

  Grant, Anthony (Harrow C)

  Blackburn, John

  Clarke, Kenneth (Rushcliffe)

  Greenway, Harry

  Boscawen, Hon Robert

  Clegg, Sir Walter

  Griffiths, Peter (Portsmouth N)

  Bottomley, Peter (Woolwich West)

  Cockeram, Eric

  Grist, Ian

  Bowden, Andrew

  Colvin, Michael

  Haselhurst, Alan

  Braine, Sir Bernard

  Cope, John

  Hawkins, Paul

  Hawksley, Warren

  Myles, David

  Stanley, John

  Heddle, John

  Needham, Richard

  Stevens, Martin

  Hogg, Hon Douglas (Grantham)

  Nelson, Anthony

  Stewart, Ian (Hitchin)

  Howell, Ralph (North Norfolk)

  Neubert, Michael

  Stewart, John (East Renfrewshire)

  Jenkin, Rt Hon Patrick

  Newton, Tony

  Stradling Thomas, J.

  Jopling, Rt Hon Michael

  Normanton, Tom

  Tebbit, Norman

  Lee, John

  Page, Rt Hon Sir R. Graham

  Thomas, Rt Hon Peter (Hendon S)

  Lennox-Boyd, Hon Mark

  Page, Richard (SW Hertfordshire)

  Thompson, Donald

  Lester, Jim (Beeston)

  Parris, Matthew

  Thorne, Neil (llford South)

  Lloyd, Peter (Fareham)

  Patton, John (Oxford)

  Townend, John (Bridlington)

  Loveridge, John

  Pollock, Alexander

  Townsend, Cyril D. (Bexleyheath)

  Lyell, Nicholas

  Prentice, Rt Hon Reg

  Trotter, Neville

  McCrindle, Robert

  Price, David (Eastleigh)

  Waddington, David

  Macfarlane, Neil

  Proctor, K. Harvey

  Wakeham, John

  MacGregor, John

  Rees, Peter (Dover and Deal)

  Waldegrave, Hon William

  Macmillan, Rt Hon M. (Farnham)

  Renton, Tim

  Walker, Bill (Perth & E Perthshire)

  McNair-Wilson, Michael (Newbury)

  Rhodes James, Robert

  Walker-Smith, Rt Hon Sir Derek

  McQuarrie, Albert

  Rhys Williams, Sir Brandon

  Waller, Gary

  Major, John

  Sainsbury, Hon Timothy

  Watson, John

  Maude, Rt Hon Angus

  Shepherd, Colin (Hereford)

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

  Mellor, David

  Silvester, Fred

  Wickenden, Keith

  Meyer, Sir Anthony

  Sims, Roger

  Wolfson, Mark

  Miller, Hal (Bromsgrove & Redditch)

  Speed, Keith

  Moate, Roger

  Speller, Tony

  TELLERS FOR THE AYES:

  Morrison, Hon Peter (City of Chester)

  Spicer, Jim (West Dorset)

  Mr. Carol Mather and

  Murphy, Christopher

  Spicer, Michael (S Worcestershire)

  Mr. Peter Brooke.

  NOES

  Alton, David

  Hamilton, W. W. (Central Fife)

  Powell, Raymond (Ogmore)

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

  Harrison, Rt Hon Walter

  Price, Christopher (Lewisham West)

  Beith, A. J.

  Haynes, Frank

  Race, Reg

  Bennett, Andrew (Stockport N)

  Heffer, Eric S.

  Robinson, Geoffrey (Coventry NW)

  Booth, Rt Hon Albert

  Hogg, Norman (E Dunbartonshire)

  Rooker, J. W.

  Brown, Ronald W. (Hackney S)

  Holland, Stuart (L'beth, Vauxhall)

  Ross, Stephen (Isle of Wight)

  Campbell-Savours, Dale

  Home Robertson, John

  Silverman, Julius

  Cocks, Rt Hon Michael (Bristol S)

  Homewood, William

  Skinner, Dennis

  Cunningham, George (Islington S)

  Hooley, Frank

  Soley, Clive

  Davies, Rt Hon Denzil (Llanelli)

  Horam, John

  Spearing, Nigel

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

  Hughes, Robert (Aberdeen North)

  Spriggs, Leslie

  Dewar, Donald

  Johnson, James (Hull West)

  Stallard, A. W.

  Dixon, Donald

  Mabon, Rt Hon Dr J. Dickson

  Welsh, Michael

  Dormand, Jack

  McKay, Allen (Penistone)

  Winnick, David

  Dubs, Alfred

  McNally, Thomas

  Woolmer, Kenneth

  Freeson, Rt Hon Reginald

  Maxton, John

  Young, David (Bolton East)

  Garrett, John (Norwich S)

  Millan, Rt Hon Bruce

  George, Bruce

  Morris, Rt Hon Alfred (Wythenshawe)

  TELLERS FOR THE NOES:

  Gourlay, Harry

  O'Neill, Martin

  Mr. George Morton and

  Grant, George (Morpeth)

  Orme, Rt Hon Stanley

  Mr. James Tinn.

  Grant, John (Islington C)

  Parker, John

  Question accordingly agreed to.
  Ordered,
  That the Order of the House [25th February] be supplemented as follows:—
  1.—(1) The proceedings on Consideration of Lords Amendments shall be completed at this day's sitting and shall be brought to a conclusion not later than at the expiration of the period of three hours beginning with the commencement of the proceedings on this Order.
  (2) Paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the proceedings on Consideration of Lords Amendments.
  2. If at the expiration of the period mentioned in paragraph 1(1) above the proceedings on Consideration of Lords Amendments have not been completed, then, for the purpose of bringing those proceedings to a conclusion—

  (a) Mr. Speaker shall put forthwith any Question which has already been proposed from the Chair and not yet decided and. if that Question is for the amendment of a Lords Amendment, shall then put forthwith the Question on any Motion made by a
  818
  Minister of the Crown, That this House doth agree with the Lords in the said Lords Amendment or, as the case may be, in the said Lords Amendment as amended;

  (b) Mr. Speaker shall then put forthwith the Question, That this House doth agree with the Lords in all the remaining Amendments.

  SOCIAL SECURITY BILL
  Lords amendments considered.
  SOCIAL SECURITY BILL
    Clause 4

      MISCELLANEOUS AMENDMENTS
      Lords amendment No. 1, in page 8, leave out lines 31 to 34 and insert
      " such modifications as are prescribed by the regulations; but any modifications so prescribed shall not apply in relation to any payment of benefit unless notice of the effect of the modifications was given to the beneficiary in accordance with the regulations before he agreed to the arrangements.

      819
      In this subsection ' modifications ' includes additions, omissions and amendments."
      8.23 pm
      The Minister for Social Security (Mr. Reg Prentice): I beg to move, That this House doth agree with the Lords in the said amendment.
      Clause 4(4) deals with the recovery of any overpayment in cases where automated credit transfer has been used for the payment of a benefit. May I say, by way of background, that at present benefits are not paid by this method. They are paid by way of the order book or by Girocheque. There is no procedure in operation by which benefits are payable into a bank account or into any other kind of account. It is well known that the Government are considering the possibility of changes along those lines. Such changes have been discussed for some time, and they were under consideration by the previous Government.
      Proposals were contained in the recent study that was carried out by our Department with the co-operation of Sir Derek Rayner which covered this and other points. Those proposals are still under consideration. In principle, we wish these changes to be brought into operation provided that we are satisfied in terms of the financial costs and administrative problems and then we can make them in a feasible way.
      Undoubtedly, many people would prefer their pensions or benefit to be paid in this way. About 50 per cent. of adult people now have a current bank account, and approximately another 25 per cent. have some other kind of account, such as a Co-op account or a building society account, which could be used for this purpose if they so wish.
      A recent market research exercise showed that about 2 million mothers drawing child benefit would prefer the payment to be made in this way. Approximately 1 million retirement pensioners would also prefer the payment to be made in this way. They were asked whether they would prefer a monthly payment or, in the case of retirement pensioners, a quarterly payment. Clearly, we would be meeting the wishes of a number of pensioners and beneficiaries if we were able to introduce this change.
      I turn to the problems which would be created by the clause if an overpayment of benefit occurred. There is a problem of recovery. In Committee, the clause in its original form was criticised on the ground that it provided inadequate safeguards in the arrangements for recovery of overpayments to beneficiaries paid by an ACT, if I may so abbreviate the term automated credit transfer. An ACT would involve a greater risk of overpayment, because there would be less routine contact between beneficiaries and the Department, and more beneficiaries may overlook the need to report changes of circumstances that would affect their benefit entitlement. If benefit was credited by computer to a beneficiary's account, he would be unable to prevent overpayment in the way that a person with an order book can, by simply not cashing it.
      Dealing with overpayments under existing law is a time-consuming process. Overpayments are not recoverable if the beneficiary shows due care and diligence. Consequently, there has to be a procedure for obtaining the beneficiary's written observations before the matter is formally referred to the insurance officer for a decision. Any appreciable increase in the number of overpayments as a result of ACT would involve extra cost and work and would jeopardise the acceptability of the system from the point of view of the responsible use of taxpayers' money. If a service that many beneficiaries want is to be provided, it is essential that it should be possible to operate it without undue expense.
      The object of clause 4(4) is to provide, for the purposes of ACT, a method of recovering overpayments that would be inexpensive and efficient but, at the same time, reasonable from the beneficiary's point of view. It enables the due care and diligence rule, which is contained in section 119 of the Social Security Act, to be suspended if a person chooses payment by ACT.
      Beneficiaries will have a free choice as to whether they want benefits paid by this method, and they will be able to change if they later decide that they do not like the new system. Those who choose ACT will, in their own interests, have voluntarily chosen the system under

      821
      which they will not receive normal reminders to report changes of circumstances. Nor will they have the normal facilities for preventing payment.
      The amended version of clause 4(4) seeks to meet objections that were raised in Committee by strengthening the sale-guards for beneficiaries. The main safeguard now introduced underlines the voluntary nature of ACT by ensuring that arrangements for suspending the due care and diligence test cannot, as a matter of law, apply to a beneficiary unless he is given due notice of their effect before he agrees to payment by ACT. He will be informed in writing that overpayments will be recoverable, whether or not he is personally to blame. If he is not prepared to accept this condition, he will not accept payment by ACT and he will be subject to the ordinary rules for recovery of overpayments.
      The amended version of clause 4(4) also provides wider regulation-making powers, which will be used to enable other features of ACT to be spelt out. For instance, it is proposed that the beneficiary under ACT will be told, when an overpayment comes to light, of the circumstances of the overpayment, the amount and the Department's intention to recover it—which, if possible, will be done by reducing any future sums to be credited to his account.
      These procedures will also be explained to him before he decides whether to opt for ACT, and, in particular, before he decides he will also have to be advised of the maximum amounts that may be compulsorily recovered by deduction from future payments.
      A very important safeguard is that the clause does not remove the beneficiary's right to ask for a decision of the insurance officer if he disputes that there has been an overpayment or if he challenges the amount, and he will be informed of this right whenever an overpayment occurs. He will then have the normal right of appeal to a local tribunal and thence to a commissioner.
      Finally, regulations made under this amended clause will have to be referred to the National Insurance Advisory Committee or, after its abolition, the new Social Security Advisory Committee which will be created under the Bill.
      For the reasons I have given, I hope that the House will agree that the amended clause meets the criticisms levelled at the original version and that it will support the Lords in this amendment.
      8.30 pm
      Mr. Stanley Orme: I am a little disturbed and more than a little perplexed by the emphasis which the Minister has again put on paying benefits through the banks and his reference to the report of the Rayner committee. He will remember the great consternation that was created because it was felt at that time that pressure would be put not only on pensioners but on people entitled to child benefit to accept the payments on a fortnightly or a monthly basis and have them made through bank accounts, and the perhaps misplaced feeling that this might be on a compulsory basis.
      The Minister will remember that there was a great deal of argument and a debate in the House on this issue. After a little equivocation by the Secretary of State for Social Services, we had a very clear statement from the Prime Minister to the effect that the Government would not proceed with the Rayner recommendations. I should like some clarification. From what the Minister has said, it appears that the Government have an open mind on the matter. I am sure that the Minister does not want to reawaken all the problems and difficulties expressed by sub-postmasters, whose fears were raised in relation to the payment of benefits.
      This is a very important issue. It concerns the payment of benefits to millions of beneficiaries. How they receive the payments is very important. Pensioners in particular feel very strongly about any change. The vast majority of them like to obtain their benefits weekly in cash. In consequence, they were very fearful—[Interruption.] Perhaps the Under-Secretary will listen to what I am saying. If she is to reply to the debate, she will do so. If not, I should be obliged if she would listen.
      Although it was made clear that there would be no compulsion, that it would be done on a voluntary basis and that transfers would not take place except on that basis, nevertheless pensioners' fears

      823
      were raised and the feeling got abroad that there was an element of pressure in the idea. We had to have a major debate in the House, and finally we had a statement from the Prime Minister. My hon. Friends will be aware of the lobby that we had from sub-postmasters, and we all remember our postbags at the time.
      I hope that the Minister will be more forthcoming. The Rayner proposals were based on saving public expenditure. They were not made for the convenience of the recipients. I hope that the Minister will say that the proposals are dead and that the Government will not pursue them. Beneficiaries are now of the opinion that the Government have backed away from the proposal to have fortnightly or monthly payments and to put pressure on people to have payments made through bank accounts. I should like the Minister to refer to that. I do not know whether any of my hon. Friends wish to speak on that issue.
      My second question is about overpayment and the special powers of recovery which the Minister is taking but which are not applicable to the normal payments through the post office. Will the Minister give us an estimate of the overpayments by his Department? Are they extensive? Does he have any figures calculated on a yearly basis? We are entitled to know the scale of the problem. If he is taking powers under the automated credit transfer system to recover money, we assume that there is a considerable number of errors. We should like to know the scale of them.
      There was a full debate in the other place on this amendment. We are entitled to ask two questions of the Minister. What are the Government's intentions? Will the emphasis be on banks rather than on post offices for payments? If the Minister says that that is so, he is going back on the assurances given to the House, not least by the Prime Minister. In answering that question, perhaps he will give us some figures of the estimated number of cases and the amounts involved. I appreciate that the payment of benefits to a large number of beneficiaries is a big exercise. We should like to know the scope of the exercise and what it entails.
      Mr. Andrew F. Bennett: In Committee, we pressed the
      824
      Government fairly hard to make some changes in the clause. It is disappointing that the Lords proposals do not go very far to meet our objections.
      It is ironic that the Government brought in Sir Derek Rayner, supposedly to bring some more efficiency to the Government. It is noticeable that since he has been away from Marks and Spencer that firm has not done particularly well. Perhaps it would be better if he went back and helped it to solve its problems. He allowed himself to be associated with a scheme to introduce direct payments into the banks by the ACT method, which the Government now say will be less efficient and less accurate than the previous system of payments. If the Government are to introduce a new system, they should at least start off with confidence that the payments will be more rather than less accurate. It is unfortunate if they admit that the system to be introduced could be more inefficient and that there may be more errors and mistakes.
      In Committee, the Opposition asked for assurances—we still want them—that people would not suffer hardship as a result of the direct right to reclaim overpayment. This is the kind of mistake that is likely to occur. Where a payment should be for £7, it may well be paid out for a substantial time at £70. That kind of mistake can fairly easily occur with computer payments.
      If the extra 63p was paid for a couple of years before the mistake was discovered, a substantial sum would be involved. The right to take back that money without going carefully into the circumstances of the individual householder and whether taking the money back would cause hardship should be exercised rarely.
      We want categorical assurances from the Government that if they intend to use the automatic right to reclaim money, it will be done only if the individual concerned gives permission for the money to be taken back and that the Government will ensure that no hardship is created. So far, we have not been given that assurance, and the amendment does not provide it.
      The amendment provides that in the small print of an agreement to have money paid by the new method individuals will waive some of their present

      825
      rights. That is not satisfactory. Many people do not read the small print, and they will be aggrieved when they have money taken back from them.
      Instead of taking the big business attitude of putting in a line of small print saying "Beware, this is what could happen if you go over to a new method of payment ", the Government should give us a clear assurance that the money will not be taken back if that will cause hardship and that money will be taken back only with the agreement of the person concerned.
      Mr. Prentice: By leave of the House, I shall reply to the debate. The right hon. Member for Salford, West (Mr. Orme) said that he was worried because we were apparently putting renewed emphasis on payment through the banks. In fact, provided that the remaining administrative problems can be sorted out, we shall seek to give people a right to choose to have payments made into a bank account.
      I think that the right hon. Gentleman was quoted in Committee as saying that he saw that proposal as desirable in principle. As I said earlier, a research survey has shown that about 1 million retirement pensioners and 2 million mothers drawing child benefit would prefer to receive benefits through a bank account. What is wrong with enlarging choice, provided that it is voluntary?
      Mr. Orme: In principle, I am not opposed to the payment of benefits into bank accounts. The problem arose because the Government got that involved with other Rayner proposals affecting child benefits and retirement pensions that led to speculation that they would be paid fortnightly or monthly. That put in jeopardy the role of sub-post offices, because it appeared that the numbers would be severely depleted because of the transfer of business. That is where the problem arose.
      Mr. Prentice: Exactly, but, as the right hon. Gentleman reminded us, we debated the matter on the Floor of the House and the subject has been raised on many occasions at Question Time, including Prime Minister's Question Time. Specific guarantees have been given that no compulsion will be applied to any group in respect of changes in the method by which pensions are paid.
      826
      There was anxiety about whether retirement pensioners would be forced to receive their pensions at fortnightly or longer intervals instead of weekly. It has been stated specifically that that will not be pursued. The idea was opposed by many retirement pensioners and other beneficiaries who are accustomed to weekly budgeting and want to keep it that way. It also caused anxiety among sub-postmasters. That is why a clear and specific guarantee has been given that those possibilities will not be pursued.
      8.45 pm
      The report covered a wide range of topics. It is still being studied. We have isolated certain aspects about which anxiety has been expressed. We have said that we will not do those things. I should have thought that it would be superfluous for me to repeat that commitment. We do not intend to make the type of decisions that have aroused anxiety. We shall not put pressure on people to use a different method of receiving their benefits and pensions. It is a question of enlarging their choice. I should have thought that hon. Members from all parties would welcome that.
      I was asked whether I had an estimate of the amount of overpayments. I have a figure for irrecoverable overpayments for 1978–79. Those overpayments amounted to approximately £18 million. I do not have a figure for the amounts that were recovered. If automated credit transfer is introduced, and if many people use it, there is a strong possibility that overpayments will go undetected for longer periods. If an honest recipient saw that his pension book was wrong, he would immediately say something. However, he might not be aware for some time that excessive amounts were being paid into his account. A new approach was needed. The clause provides it.
      In Committee, it was suggested that we were not providing enough safeguards for the claimant. However, amendments passed in the other place have given the guarantee that hon. Members sought. I thought that the hon. Member for Stockport, North (Mr. Bennett) went too far when he said that the repayment of overpayments should always be voluntary. I think not. He should recognise that when anybody receives an overpayment from the State, or from anyone else, there is an obligation to repay it

      827
      The hon. Member asked for a reassurance about hardship cases. I gladly give him that assurance. It has always been the policy that recovery action should not be pursued if it would cause undue hardship. If a beneficiary's response to an overpayment notification suggests that severe hardship might follow, the full facts will be ascertained. Recovery will not be pressed if it causes hardship. The rule applying to existing procedures will apply to these cases.
      I do not accept that automated credit transfers will be less efficient. As I have said, many beneficiaries would prefer that method. The Department might make some small administrative savings. This system will be more efficient. Indeed, the only sense in which it may be marginally less efficient is that there is a slightly greater chance that overpayment will remain undetected for longer periods. That is the point that we are trying to meet. I believe that we are doing so as fairly as possible.
      Question put and agreed to.

    Clause 6

      AMENDMENTS OF SUPPLEMENTARY BENEFITS ACT 1976
      Lords amendment: No. 2, in page 10, line 33, at end insert—
      " (4) Until the coming into force of subsection (1) of this section and Part I of Schedule 2 to this Act, section 34 of the said Act of 1976 (which provides for the interpretation of that Act) shall have effect as if after subsection (2) of that section there were inserted the following subsection—
      ' (3) In determining for the purposes of this Act whether a person (in this subsection referred to as "the provider") has to provide for, or for the requirements of, another person to or in respect of whom any payments are made otherwise than by the provider, the other person shall not by reason only of the payments or the amount of them be treated as a person who is, or whose requirements are, provided for otherwise than by the provider.'."
      Mr. Prentice: I beg to move, That the House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker (Mr. Richard Crawshaw): With this we may take Lords amendment No. 3, in clause 21, page 25, line 33, leave out "sections 6" and insert
      828
      " section 6 (except subsection (4)) and sections 7 ".
      Mr. Prentice: The two amendments were introduced and passed in the other place in the light of a recent High Court judgment in Supplementary Benefits Commission v Jull. That judgment, which was reported in The Times of 21 March 1980, decided against the commission's interpretation of the existing legislation in aggregating maintenance payments made to a child with the resources of the mother in determining her entitlement to supplementary benefit. A subsequent High Court judgment in Young v Supplementary Benefits Commission, reported in The Times on 18 April 1980, has gone further and decided that even maintenance payments made to the mother for the child are not the mother's resources for the purposes of the Act.
      Paragraph 3(2) of schedule 1 to the Supplementary Benefits Act, as presently enacted, enables the commission to aggregate with those of the claimant the requirements and resources of a person who is a member of the same household and for whose requirement the claimant has to provide. The Bill at present provides beyond doubt in new paragraph 3(2) of schedule 1 that where a person is responsible for, and is a member of, the same household as a child, that child's requirements and resources shall be aggregated with those of the claimant. That provision will be operative from November of this year. The effect of the amendments passed in the other place is to enshrine in legislation from the date of Royal Assent the commission's interpretation of that paragraph.
      It has always been the intention behind the legislation that a child's resources and requirements should be aggregated with those of the claimant, and before 1976 maintenance payments paid direct to a child were taken fully into account as a resource of the family. In late 1974 the Court of Appeal decided, in the case of K and Others v JMP Company Limited, that an award of damages to a child would not affect its mother's entitlement to supplementary benefit, because, once benefits were awarded to cover the child's requirements, the mother would not be a person who has to provide for those requirements.
      In 1976, on legal advice, the commission changed its policy to follow that

      829
      ruling. It decided that, where a maintenance order made payable to a child exceeded the child's requirements, the child's requirements and resources would not be aggregated with those of the parent. That resulted in more benefit becoming payable to the parent. Relatively few cases were affected at first, and there was no evidence of abuse. The Supplementary Benefits Commission continued to regard maintenance and affiliation payments paid direct to the mother, as opposed to being paid to the child, as a resource of the mother.
      More recently, however, there has been a growing realisation among those advising parents that the commission's policy following the case of K and Others v JMP Company Limited permitted a substantial increase in the amount of supplementary benefit payable if a court could be persuaded to load the maintenance order in favour of the children with nothing, or only a nominal amount, for the mother. An extreme example was the registrar who made an order for £15 weekly to the youngest of four children, with nominal amounts for the other three.
      Eventually, the commission, on legal advice and with the full and public support of Ministers, decided to revert in June 1979 to its previous policy of taking children's resources into account, including any maintenance, and it is that current policy that has been the subject of the two recent High Court decisions. The Young case, for the first time, cast doubt on the commission's interpretation of the law that maintenance payments made to the mother for a child counted as a resource of the mother. That decision has even wider implications than that in Jull, and many millions of pounds of public money are at stake. The estimate is about £500,000 a week.
      Apart from the financial aspects, we believe that a fundamental principle of the supplementary benefits scheme is involved. Payment of maintenance enables the parent having custody of the child to maintain it and discharge the duty of custody. If that payment were disregarded for supplementary benefit purposes, certain families would be maintained at a level higher than that contemplated by the supplementary benefits scheme, which is intended as a scheme of last resort.
      830
      Finally, I put to the House the main reason why we feel that we should make the change sooner rather than later. It is that it will make for sensible administration of the supplementary benefit scheme if the staff operating it are enabled, by the amendment, to continue to follow the commission's existing interpretation of the law by taking all maintenance payments into account.
      If the amendment is not made, staff throughout the commission's offices, at a time when they are more than fully occupied preparing for the new scheme, will have to learn a completely new set of rules and apply it for an interim period of a few months, only to revert to current practice when the new scheme comes into effect in November. That cannot make for prudent administration, and it is bound to lead to errors.
      Mr. Orme: There are considerations that flow from what the right hon. Gentleman said that will lead to a major change in procedure. As he is taking powers to implement the change immediately, I think that the House will want to be kept informed of developments and any problems that arise. The amendment will enable all payments made on behalf of a child to be aggregated as part of the family's resources. That is especially relevant to the payment of maintenance allowances.
      We are talking about the level of resources allocated to children. The right hon. Gentleman gave an example of one child being the subject of an allocation considerably in excess of other children's allocations. Difficulties might arise if maintenance allowance is assumed to have been paid to the family but has not been received. It is possible that direct payment to the child will profit a family.
      As I have said—the Minister's attention was distracted at the time—the right hon. Gentleman gave the example of an allocation being made to one child considerably in excess of allocations to other children within the family unit. We are not in a position fully to debate these issues, and we want more time to examine the implications.
      Is the Minister able to confirm that the purpose of the change is to protect the benefit to the child and that the allocation will not be widened? Will he give

      831
      an undertaking that he will keep the House informed of future developments? Obviously, the Department will monitor developments.
      Mr. Andrew F. Bennett: The courts have to decide maintenance payments. They often decide that no maintenance payments will be made to the mother and that payments will be made to the child. The courts are supposed to make those decisions after taking into account the particular circumstances. It appears that the amendment is proposing that the Supplementary Benefits Commission should be able to say "Let us forget about the particular circumstances and let us treat the money as if it were being paid to both the mother and the child."
      It will be unfortunate if a statutory body is able to go against the decision that a court has arrived at. This seems to be a rather worrying principle. Although the courts sometimes make odd decisions on the allocation of maintenance, they usually do so for special reasons. The commission should be able to say that it intends to disregard what the courts have done and treat the issue as if the money were being paid to the family in total. It seems a worrying principle, although I can understand that the Government want, administratively, to have a situation that is clear. They do not want one set of rules to apply from now until the November changes and then have to revert back to a different set of rules. They should consider whether, as a matter of principle, they want to say that no notice should be taken of the judge's decision and that "We know better than the judge." That seems an unfortunate principle for the Government to put forward.
      9 pm
      Mr. Prentice: With permission, Mr. Deputy Speaker, I wish to inform hon. Members that we shall keep a close watch on how policy operates in this sensitive area. There is no question of the Supplementary Benefits Commission being able to set itself above the law or seeking to do so. I referred to two recent decisions in the High Court, one in March and the other in April. The Supplementary Benefits Commission applied to the House of Lords for leave to appeal. Leave to appeal has been granted. It is hoped
      832
      that both appeals will be heard on 16 and 17 June. There is no question of the commission setting itself above the law. It is going through the due processes of law in order to put to the test a principle that had, after all, stood for many years.
      Mr. Bennett: I did not suggest that the commission was setting itself against the law or the rules about supplementary benefit. I suggested that the commission was going against the judge's opinion in setting out, if one likes, a completely different set of court rules. It is the commission claiming that it knows best how the money should be treated rather than the court that was involved in the settlement of the money about which I was making the point.
      Mr. Prentice: The Supplementary Benefits Commission has confidence in the merits of its position. That position has had the backing of the Government and, I understood, the general support of the House. All that we are aiming to do—we are legislating for the future—is to legislate in such a way that these cases will be determined as traditionally they were determined, the basic principle being that a family being assessed for supplementary benefit should be assessed as a family unit. The income of children within that family is taken into account, if they have a separate income, and their needs are taken into account. This has been the principle supported by successive Governments. It is a principle that has been eroded in the last few years because of the legal history that I have outlined.
      We are now seeking to legislate for the future, so that the original principles of the supplementary benefit scheme should be reimposed. I gave reasons why I considered it was important that this should be done immediately. Otherwise, there would have to be a considerable change of rules now and a change back in November.
      The Bill, as drafted, already provides for our purposes to be fulfilled from November, but, because of these recent court decisions, it was decided in another place, and we are asking this House to confirm, that the amendment should take effect from Royal Assent.
      Question put and agreed to.
      Lords amendment No. 3 agreed to.

    Schedule 2

      AMENDMENTS OF SUPPLEMENTARY BENEFITS ACT 1976
      Lords amendment: No 4, in page 35, line 22, leave out "of the Economic Community".
      Mr. Prentice: I beg to move, That this House doth agree with the Lords in the said amandment.
      Mr. Deputy Speaker: With this it will be convenient to take Lords amendment No. 6, in page 51, line 9, leave out "of the Economic Community"
      Mr. Prentice: These two amendments, one to part I of schedule 2 and the other to part II, the "Keeling schedule", are entirely technical. They were introduced in the Lords following legal advice that, by virtue of the Interpretation Act 1978, the expression "member State" is construed as meaning a member State of the EEC and that, therefore, the words "of the Economic Community" in schedule 2 are unnecessary. I hope that the House will support the amendments.
      Question put and agreed to.
      Lords amendments Nos. 5 to 7 agreed to.

    UPHOLSTERED FURNITURE (SAFETY)
    9.6 pm
    The Minister for Consumer Affairs (Mrs. Sally Oppenheim): I beg to move,
    That the draft Upholstered Furniture (Safety) Regulations 1980, which were laid before this House on 2 April be approved.
    The regulations that I commend to the House will undoubtedly put this country far ahead of the rest of the world—which has as yet no such comparable measures—in recognition of the fire hazards presented by some modern furniture and in providing warnings and protection in relation to a substantial proportion of those hazards.
    When the regulations are fully implemented, the performance of furniture with regulation coverings will be the same as the behaviour of furniture with traditional methods of filling before polyurethane foam was invented. This, then, will be, in relation to ignitability from cigarettes and matches, the equivalent of a ban on the foam itself. Furniture will be very much safer, and consumers will be adequately warned of the dangers in the meantime.
    The regulations are designed to ensure that furniture available for supply is reasonably resistant to ignition in everyday use in the home. They are not, contrary to widely and mistakenly expressed views, designed to deal with fire hazards which may arise when furniture is stored or displayed, often in large quantities—for example, in retail stores, as was the case in the Woolworth tragedy.
    The need for action to be taken in relation to the storage of such furniture is the concern of my right hon. Friend the Home Secretary, who has announced his intention to introduce appropriate regulations under the Fire Precautions Act 1971. Quite apart from this, I have no powers under the Consumer Safety Act to impose requirements dealing with the safe storage of goods. I hope that this clears up any confusion on this issue.
    I am sure that all hon. Members will be aware of the many tragedies that have occurred in recent years as a result of fires in homes and public places which have originated from the ignition of modern furniture. While the number of

    835
    fires in the United Kingdom in which upholstered furniture is first ignited has not increased over the past 25 years, deaths in such fires have unfortunately increased threefold since the early 1960s to around 90 a year, while non-fatal injuries have more than doubled over the same period.
    The regulations themselves, however, have proved to be highly controversial—the controversy ranging from complaints on the one hand that they do not go far enough to equally vehement complaints on the other that they go much too far.
    I cannot believe that any Minister has ever carried out more widespread or thorough consultations than I have done in this case. My interest in the matter is simple. It is to provide reasonable protection of consumers against avoidable hazards, as well as against an unreasonable limitation of choice and an unacceptable rise in the price of furniture. So a fine balance has had to be struck which is compatible with those three objectives. In the production of all consumer protection legislation, similar balances have always had to be taken into account, and wherever possible achieved.
    I do not welcome the need to have to add to the price of furniture. I do not welcome the need to have to impose burdens on the furniture industry at a difficult time, but I am satisfied that the need exists and that the burdens imposed have been minimised as far as is compatible with the urgent need to reduce the risk of the ghastly tragedies that can arise from furniture fires in the home.
    Notwithstanding the care I have taken to consider all reasonable objections, a number of groups representing one interest or another have made a number of widely advertised and equally widely conflicting representations which in turn have led to some misleading and inaccurate press reports which have quoted various assertions and figures that we do not support.
    It might, I think, be for the convenience of the House if I deal with the conflicting objections of some of the opponents of the regulations to which I have referred before I describe the regulations themselves. A number of hon. Members on both sides of the House represent these interests and I can per-
    836
    haps thus save them the time and trouble of putting their case.
    First and foremost, the furniture manufacturers and retailers objected because they did not want any regulations at all. They offered a voluntary positive labelling scheme similar to the one widely used in the greater part of the United States. I was not prepared to accept that. While taking account of the fact that some extra costs will be occasioned by the regulations, I do not accept that the costs will be as great as has been represented, particularly as approximately 80 per cent. of available covering materials for furniture in conjunction with polyurethane foam will meet the cigarette test without further treatment or modification and there are various other ways of modifying the furniture without either treating or modifying the covering material.
    I recognise, however, that there will be some problems inherent in the structure of the industry's ordering schedules, which involve ordering some time in advance of manufacture from available swatches, so I have agreed to allow the alternative of warning labels to be carried in the case of the cigarette test until a date in 1982 instead of 1981.
    I have not—and I emphasise this strongly—as has been reported incorrectly in some newspapers, abandoned the match test. It is still in the regulations now as it was in the original draft laid last year, unchanged with no cut-off date as yet stipulated. This is because the technology is not at present available to cover a sufficiently wide range of upholstery fabrics without either significantly altering the character and durability of these fabrics or adding to costs considerably, thus drastically reducing consumer choice.
    My second reason for regarding the imposition of a cut-off date for the match test as less urgent than that of the cigarette test is because, whereas there are no precise figures available in this country, it appears that the dangers of fires resulting from smouldering cigarettes are far greater than from matches.
    Apart from the fact that very many more cigarettes than matches are sold, such fires are likely to occur after a considerable smouldering period and after families have retired for the night, so that people are asleep when the conflagration occurs and are overcome by smoke and

    837
    fumes before their escape route has become impassable. A conflagration resulting from a naked flame is very rapid and highly unlikely to pass unnoticed.
    This decision has led a well-known chemical company with a considerable commercial interest in the matter and its parliamentary consultant with a similar commercial interest to criticise the regulations. My response to them is, first, to question why it has taken so long for them to circulate this criticism when the circumstances concerning the match test have not changed since the draft order was first laid last year.
    Although the treatment of cellulosic covers to make them resistant to the flame test is possible with their product, it is not possible to treat the vast majority of non-cellulosic fabrics with this particular treatment. As the vast majority of furniture sold—particularly at the lower end of the market—is covered by non-cellulosic fabric, they have not got a widespread treatment against the match test.
    The sooner they produce a flame-resistant treatment suitable not just for some cellulosic but also for non-cellulosic fabrics that meets the British standard match test without significantly affecting the character and durability of these fabrics, the sooner a cut-off date for the match test can be introduced. Equally, the sooner weavers extend the range of flameproof fabrics available, the easier this will be.
    To have set a final date by which mandatory compliance with the match standard is required would have created great difficulties both for the furniture industry and for consumers. The former needs time to develop an adequate range of materials capable of complying and the latter need reasonable choice. It will not help consumers to provide safe furniture which they cannot afford, safe furniture the durability of the covering fabric of which has been eroded, or safe furniture which relies on choice being severely restricted.
    I undertake that the matter will be kept under close review. As soon as I am satisfied that it is possible to set a date, it will be set quickly in an amending order. If the preconditions are satisfied, it could be set to coincide with the mandatory compliance with the cigarette test. That might prove to be the case.
    838
    Other critics include the furniture retailers, who believe that the warning labels that we proposed were too frightening and would lead people who had started to buy furniture to pay instead for a package holiday. I rejected that argument. I argued that the more effective the warning, the more happy I should be. I am pleased to say that the retail trade came up with a suggestion, which was subsequently accepted by the manufacturers, for a three-colour warning label. This provides as effective and more noticeable a warning which is far more expensive than the two-colour label that I had thought of imposing. It is also more in line with international warning symbols. Subject to minor alterations, I was pleased to accept the alternative.
    We have also had opposition from the Fire Brigades Union. The regulations were endorsed from the start by one of the most senior and respected chief fire officers in the country. The Fire Brigades Union wants an entirely different approach from that which we have adopted. Like the hon. Member for Hackney, South and Shoreditch (Mr. Brown), who has pursued this matter, and the right hon. Member for Manchester, Wythenshawe (Mr. Morris), the union wants a complete ban on polyurethane foam—a step not taken or contemplated in relation to furniture by any other country. The union has produced some figures which purport to show that relatively few fires start from smokers' materials.
    We have rejected the solution of a ban on the foam because it is simply not practical at this stage in the technical development. Research has shown that polyurethane foam on its own will not be ignited by a smouldering cigarette. Only when it is combined with a smouldering or burning fabric will it ignite.
    Alternative fillings would lead to soaring costs in the production of furniture and steep price increases and might be as potentially dangerous in their differing ways as polyurethane foam.
    I emphasise that the ease of ignition and burning behaviour associated with polyurethane foam is determined not by any one component but by a combination of components. In November 1978, the report of a sub-committee of the

    839
    Central Fire Brigades Advisory Council stated:
    " Upholstered furniture has the largest single potential for contributing to fire and toxicity hazard."
    The sub-committee recommended that if the behaviour in a fire of any combination of fabrics or components was found to be unacceptably hazardous, appropriate action should be taken to prevent the sale of goods made from such materials. The regulations are aimed at such combinations of materials.
    The Fire Brigades Union was represented on the sub-committee and did not dissent from the report which said that there was no case for a ban on any particular material. Paragraph 7.B of the report makes it absolutely clear that the top priority in any regulations is to reduce the ignitability from small ignition sources—that is, cigarettes and matches.
    That brings me to the claim of the Fire Brigades Union to which I referred. It is not correct to claim, as it has, that a substantial number of furniture fires are not caused by smokers' materials. It is important to note that 23 per cent. of deaths from fires in dwellings in 1977 occurred in fires where smokers' materials or matches were the source of ignition. In 1978, fires in dwellings started by smokers' materials or matches were three times as likely to prove fatal than the average dwelling fire and twice as likely to lead to non-fatal casualties.
    Mr. Ronald W. Brown: I am sure that the Minister does not wish to mislead the House. The report never states the cause. It uses words such as "it is thought that "or" it might be ".
    Mrs. Oppenheim: It is not possible to determine the precise cause. In many cases it is possible to determine, by process of elimination, what has not caused the fire. The figures that I have quoted are very conservative figures, as I am sure the hon. Gentleman will agree.
    Because the intention of the regulations is to make furniture resistant to ignition by smokers' materials and because, in 1978, 3,636 fires in occupied buildings started in upholstery, it can be stated confidently that the regulations will make
    840
    upholstered furniture safer. No conceivable Government measure could make it absolutely safe. Many other fillings that would be used if polyurethane foam were banned would be likely to give rise to considerable hazards. Although the development of fire might not be as rapid as it is with foam-filled material, the hazard of toxic fumes could be as great.
    There would continue to be the need to test the covering material and the filling in combination, and the advantages gained, whether in terms of safety or in other ways, would not necessarily be significant. A return to what might be described as traditional methods of manufacture, involving expensive production costs, would place undue financial burdens on consumers.
    Research and development to try to find a suitable alternative are being carried out on a fairly substantial scale both in this country and elsewhere. The impetus to do so is obviously considerable, given that any safe and reasonably priced filling is likely to be in significant demand in any market. The regulations will add to that impetus.
    So much for the opponents of the regulations, who are far outnumbered by the many thousands who welcome them, who will be adequately warned, or who will have very much safer furniture in their homes than they would otherwise have had. I believe that the regulations will play an important part in reducing the number of tragedies resulting from fires in which furniture is ignited first by cigarettes and later by matches.
    We shall be keeping the matter under review and watching for indications that there is a reduction in the number of fires starting from cigarettes. Given the amount of old furniture and the life of furniture in existence, that cannot be achieved quickly. We will be the only country with any such regulations. It is hoped that the regulations will encourage other countries, especially those wishing to export to Britain, to introduce similar regulations.
    I welcome the initiative of the EEC programme on consumer protection and the Commission's intention to prepare a directive on the flammability of upholstered furniture. I hope that our regulations will provide an ideal basis for that undertaking.

    841
    I shall now describe the regulations. They will apply to all upholstered furniture designed or suitable for domestic use, subject to the exclusions set out in regulation 3. The exempted categories include secondhand furniture, furniture intended for use wholly or mainly as a bed, small furniture with no back or arms—such as stools, music stools and something described as "pouffes stuffed under pressure", furniture for use out of doors or intended for export, and upholstered furniture that might be described as bespoke furniture.
    The regulations do not apply either to furniture that is reupholstered on behalf of the owner—because no supply of furniture then takes place—or to stretch covers bought separately.
    Regulations 4 and 5 lie at the heart of the regulations. The effect of the former, together with regulation 5(2), is that furniture first supplied on or after 1 October 1980 and also furniture supplied before that date to own brand dealers must either satisfy the tests for resistance to ignition by smouldering cigarettes and by a simulated match flame set out in British Standard 5852, part I, or bear warning labels.
    From 31 December 1982, regulation 5(1) will prohibit manufacturers, importers and own brand dealers from supplying, offering to supply, and so on, furniture which does not satisfy the smouldering cigarette test.
    There will be two labels: one for display, which must be fully visible at all times when the furniture is exposed for supply by retail, and the other a permanent and durable label which can be on the base of the furniture or become visible when a detachable cushion is removed, or it can be under a cushion. The purpose of the display label is, of course, to warn that careless use of cigarettes or matches can ignite the furniture. Nevertheless, if consumers buy such furniture and this label is removed, there will be a permanent label to continue to remind them.
    It has been said that furniture manufacturers, including those in other EEC member States, who export to the United Kingdom may experience difficulty in complying with the mandatory cigarette test by December 1982. In my view, this ought to be possible. I have therefore resisted pressure to leave this date open to review.
    842
    One problem, which was brought to my attention by the hon. Member for Stockport, North (Mr. Bennett), is that braids and trimmings made from cellulosic fibres—as most of them are—cannot at present be successfully treated with flame retardants. Therefore, I have decided that braids and trimmings should be excluded from the scope of the regulations—at least initially.
    However, the British Federation of Trimmings and Braids Manufacturers has assured me that it will do its best to encourage and press for the development of upholstery trimmings which are resistant to ignition by a smouldering cigarette and, in the longer term, by a match. I am grateful for the federation's cooperation in this matter, and I am encouraged to learn that it is already making significant headway.
    I do not attempt to disguise the fact that, where modification of upholstered furniture is necessary, the cost will increase, but I have endeavoured to ensure that the increase is kept within reasonable proportions. That is the balance to which I referred earlier. In any case, the increased costs involved are far outweighed by the toll in human terms and the financial cost to the State and individuals when these fires occur.
    I am unwilling to undermine the objectives of the regulations, as I have been urged to do in a public relations lobby of all hon. Members by one sector of the furniture industry, which I very much regret. I feel that this use of public relations media is not appropriate in matters associated with safety. I shall not allow the objectives of the regulations to be undermined to a point which would be prejudicial to the interests of consumers or to an extent which would in any way lessen my absolute determination to reduce the numbers of these tragedies.
    The draft regulations represent an important first step towards making upholstered furniture safer. As new technological developments occur, they can be strengthened if necessary. Meanwhile, the regulations, as they stand, put us well ahead of the rest of the world. I commend them to the House.
    9.29 pm
    Mr. John Fraser: The problem to which these regulations address

    843
    themselves is now more widely understood than it was two or three years ago. That is partly as a result of the terrible tragedies which have occurred and partly as a result of the efforts of my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown). When I became a Minister with responsibility for consumer protection, one of my first duties was to listen to my hon. Friend, and I was grateful for his advice and the course of action which he urged me to take.
    Put simply, the first problem, as described by the Minister, is that the use of synthetic materials in upholstered furniture poses an increasing fire hazard in relation not only to the ignitability but to the burning characteristics of new materials.
    The second problem is that once these new materials—we have to generalise in a debate such as this—have caught fire there are added problems of smoke, toxicity and the emission of gases such as carbon monoxide and hydrogen cyanide.
    The risks vary depending on the material used and on the combination of materials. A press notice issued by the Department of Trade in May 1979 stated:
    " It was likely in mere terms of volume that upholstered furniture has ' the largest single potential for contributing to fire and toxicity hazards '."
    That point was made with tragic force by the fire at Woolworth's in Manchester. I agree with the right hon. Lady the Minister for Consumer Affairs that attention must be given not only in terms of consumer safety legislation but by the Health and Safety Executive, the Home Office and other Departments concerned. That is being done, and it would not be right to say that these regulations are lacking in any way because they do not deal with the wider matters of workshops and storage.
    In the Woolworth's fire 10 people died, not from burning but from the inhalation of fumes. The report that followed that fire illustrates the problem in two sentences. It spoke of
    " the dense smoke and hot gases which ignite away from the seat of the fire and are likely to spread the fire."
    The report then described an experiment with an item of upholstered furniture
    844
    similar to that involved in the Wool-worth's fire. It said:
    " A settee ignited by a match "—
    I emphasise the word "match"—
    " burned rapidly in half a minute and increased the temperature to 800°C, a very high temperature for a household fire."
    So the difficulty and dangers were illus-treated in that report.
    The Central Fire Brigades Advisory Council report in 1978, which the right hon. Lady also quoted, put the matter clearly. I quote from paragraph 317:
    " ' Modern ' furniture, which mostly consists of polymeric materials other than frames, burned rapidly with localised high temperatures. Clear evidence was obtained that a lighted match dropped at the back of a seat cushion could readily lead to a rapid growth of fire with intense burning of the upholstery and production of dense smoke."
    Even in 1978, that report emphasised the dangers of a rapid break-out of fire from ignition by a match.
    Mr. Ronald W. Brown: Will my hon. Friend bear in mind that the 1971 factory inspector's report described the same phenomenon in the first three pages?
    Mr. Fraser: I shall not follow up that case, because I wish to be brief, as I know that many other hon. Members wish to speak.
    The 1978 report also dealt with toxicity hazards. That report—which led to the beginning of the making of these regulations—made a number of recommendations. It said that we needed to improve the first resistance of upholstered furniture and that manufacturers and research organisations should give top priority to reducing ignitability from all ignition sources—not simply smouldering cigarettes—and to reducing the rate of fire development and the rate of production of smoke and toxic products. It said that materials that smouldered should be discarded as soon as possible.
    The report showed that the number of fatalities caused by burning upholstered furniture was rising rapidly. The Minister gave the figures. The ratio of fatalities to accidents not causing death is growing, whereas the relationship between fatalities and non-fatalities in most fires remains constant. In upholstered furniture fires, the ratio of deaths has increased. There was masses of evidence in that report of the growing danger.

    845
    So much for the problem. It is now clearly understood, and there is no dispute that the Government must act on it.
    Having identified the problem, however, there are, and there have been, admittedly, difficulties. The first difficulty is the difficulty about identifying one single danger that one has to eliminate. It may be that if one increases the fire resistance of a product, one may then finish up with a product which, although it takes a lot of heat to ignite, has very serious burning characteristics once it has caught fire. That is one of the difficulties. It is not easy to solve.
    A second difficulty is whether one can ban a single item. I agree with the right hon. Lady, from my examination of the matter, that it is not practicable at present to ban polyurethane foam. A lot of research needs to be done to reduce the fire and toxicity risk, but I agree that it is not a practicable proposition to ban the substance.
    There is a third difficulty that one faces. It is the legislative difficulty that, until one can legislate by reference to standards, with such a variety of items as with upholstered furniture it is almost impossible to construct a law that anyone would understand and be able to operate. That was a problem which was solved with the help of the hon. Member for Tynemouth (Mr. Trotter), who took through Parliament the Consumer Safety Act.
    We now have that Act and we have a British standard by reference to which we can legislate. The standard provides a test not merely for smouldering cigarettes but for ignition by lighted match—the butane test. I believe that there is a very strong case for banning the production and sale of upholstered furniture which cannot pass both tests. The evidence that it is necessary that furniture should comply with both tests is overwhelming.
    I am very sorry that the right hon. Lady in these regulations refuses to place any limit on the time within which upholstered furniture must comply with the lighted match test which is set out in the British standard. I do not like to attribute motives, but I think that the right hon. Lady has veered on the side of trade rather than on the side of the consumer. I am sorry to have to say
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    that, but I think that to some extent—she talked about choice tonight—she has been the victim of some of her past propaganda, and that of her Secretary of State, about rampant consumerism and about the law and practice in this country veering too far in favour of the consumer. It is a pity that she has not brought herself to widen the regulations to such an extent that they include the lighted match test as well.
    I agree that it might be necessary to have a longer period. I understand that. I understand that there are difficulties about transition. But the only way of approaching the matter is to put a terminal date in regulations, because once that terminal date goes into regulations there will be a great deal more ingenuity and research into finding a solution to the problem than if the date is omitted altogether. Experience has shown that relying on the mere initiative of the industry and on voluntary standards simply does not work. On this matter the Government must take a lead.
    This operation has, incidentally, been delayed by six months as a result of the right hon. Lady's amendments to the Consumer Safety Act. She could have made the regulations last December but for the amendments which she proposed in Committee about the use of the negative and affirmative procedures. I do not think that she would dispute that.
    Let us turn to the right hon. Lady's press release of last May. It said:
    "The Minister of State for Consumer Affairs, Mrs. Sally Oppenheim, announced in Parliament on 23 May…her intention to make regulations under the Consumer Safety Act 1978 as soon as possible, requiring all upholstered furniture…to be resistant to ignition from smokers' materials (cigarettes and matches). She indicated that, in order to give the manufacturers time to modify their furniture where necessary, the regulations would, for a limited period, permit the supply of furniture not complying with this requirement ".
    It is clear from the press release which was issued a year ago that the Minister intended to limit the time in which furniture might not comply in repect of smouldering cigarettes and lighted matches. She has gone back on that. She has done the least that it would be possible to do. It would be impossible to defend doing less than is done by these regulations. My complaint is that the regulations do not go far enough.

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    In a sense, they almost give permission for the sale of furniture which does not comply with the lighted cigarette test.
    What is the case for including the lighted match test? In 1978 we received the Home Office report of the Central Fire Brigade's Advisory Council, from which the beginnings of the regulations flowed. There was a development standard in 1978–79. That is now being converted to a full British standard which provides for the smouldering cigarette and lighted match tests. The existence of those standards provides part of the case for making the standards obligatory.
    There is a Department of Trade requirement that the upholstery on British aircraft must comply with the smouldering cigarette and lighted match tests. For a considerable time there has been a requirement, in terms of Government purchasing, that upholstered furniture which is supplied for Government use should comply with the smouldering cigarette and lighted match tests. The Government are applying the standards to their own employees.
    I can pray in aid my own words. When I consulted the industry about the making of regulations, I said that I supposed that both those tests should apply and that it was only a question of how much time would elapse between the making of the regulation and its full operation. Its response was that it merely wanted a labelling system. Some firms did not even want that. It was made clear to them some time ago that that was the ultimate objective of Government.
    According to the press release, a year ago the Minister thought that there should be a limited time in the regulations. Now, that limit has been removed It is not good enough. The right hon. Lady has been swayed by the trade and perhaps by representations from her colleagues. The regulations represent the least that she might have done.
    I am sorry to complain about this, but in one sense even the label is misleading. First, oddly enough, in the regulations there is a label for furniture which does not comply with the cigarette and match tests. That shows the symbols for a match and a cigarette. However, for furniture which does not comply with the lighted match test there is simply
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    an exclamation mark. Within the context of the scheme of labels, it seems odd to have that sign but not the lighted match.
    The label is slightly misleading—not deliberately so. The written temporary and permanent label says:
    " Careless use of matches could set fire to this furniture."
    Anybody who has taken a suit to be invisibly mended and or used a match knows that even the careful use of matches can easily set fire to things. Many hon. Members must have struck a match from time to time, especially when driving a car, and found that the match head has parted company from the match stick. Even with the careful use of matches a fire may still take place, or a match may be broken during ignition. Therefore, the label is misleading.
    Even the careful use of matches and other small sources of ignition, perhaps lighters, may start a fire. It is clear from scientific evidence that once the fire starts it will spread extremely rapidly.
    The problem is identified. However, not nearly enough has been done about it in these regulations. I understand there is a possibility that if one applied only the smouldering cigarette test it could lead to the development of materials which might be resistant to smouldering cigarettes but less resistant to lighted matches.
    I am sorry to be critical of the regulations. Of course, I shall support them because they are a step in the right direction—the first step that has been taken, as the right hon. Lady says. However, they do not go far enough. They do not hold the correct balance between the interests of the consumer and those of the trade. I hope that the right hon. Lady will return to the Dispatch Box within a reasonably short period to present us with tougher regulations which will have a greater safety factor within them.
    9.45 pm
    Mr. Bill Walker: I am delighted to have caught your eye, Mr. Deputy Speaker, so early in the debate, which is so important to the industry with which I am associated. I have to declare an interest.

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    Early in the 1960s, I was the training and education officer of the National Association of Retail Furnishers, I was director and chief executive of multiple retail, wholesale and manufacturing groups and I am currently the managing director of a contract furnishing company. I shall refer later to contract furnishings, because some of the remarks of the hon. Member for Norwood (Mr. Fraser) were misleading.
    I should like to draw attention to my early-day motion which was signed by a number of my hon. Friends last year. I tabled the motion because I was genuinely concerned on three counts. The first was the stringent test standards, the second was the time scale proposed for implementing the proposals and the effect that it would have on the industry during these difficult and trying economic times, and the third was the type and design of the proposed ticket, which had not, at that time, been discussed in detail with furnishing retailers.
    I was delighted when the draft proposals were withdrawn and further discussions were entered into with the respective sectors of the industry. I should like to place on record my thanks for the many meetings, letters and discussions that have taken place between my right hon. Friend the Minister, myself and representatives of the industry.
    Flammability of upholstery is a highly emotive topic. It has produced a substantial number of inadequately researched speeches and articles. I do not impugn the motives of the authors, but if they had given as much time and space to other factors involved in accidental deaths I should accept that the views expressed were nearer the truth.
    Every accidental death, however caused, is one death too many. It is interesting that the regulations are concerned with deaths and injury caused, in the main, by fires started by smokers' materials. I should like to consider some of the statistics. The Royal Society for the Prevention of Accidents said in its 1977 report that 632 people died in England and Wales and 136 died in Scotland in private houses and residential institutions from fire and flames. The insurance companies advise me that in 1978 there were 946 deaths and 8,231 injuries from fires in the United Kingdom.
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    The Royal Society for the Prevention of Accidents reported that in 1977 a total of 3,163 people died in their homes as a result of falls and 666 died as a result of accidental poisoning. The number who died as a result of fires was lower than the number who died from poisoning and about one-quarter of those who died from falls.
    Mr. Douglas Hogg: There is little that we can do to stop people dying from falls, but there is something that we can do to stop them dying from fire. I have some difficulty in understanding the point that my hon. Friend is making.
    Mr. Walker: I hope that I shall persuade my hon. Friend that there is some relevance in what I am saying, because some falls are related to another matter that I shall take up later.
    Let me deal first with the 632 deaths. I understand that 113 were caused by ignition from clothing, 70 resulted from what are described as controlled fires, 169 from unspecified causes and 238 from conflagration. Hot substances, corrosive liquids and steam caused 42 deaths. Those are assessments made as the result of investigations.
    If the figures are further broken down, one finds that flammable liquids caused 27 deaths, matches, cigarettes and pipes 118 deaths, solid fuel 47 deaths, gas appliances 40 deaths, electricity appliances 142 deaths, fat and candles nine deaths, and bedding and furniture—where not otherwise specified—21 deaths. Those figures show that accidental deaths in the domestic and residential environs usually result from causes other than the flammability of upholstery.
    Ticketing is included in the regulations. Public education will be a by-product of them. Those two aspects are more essential than a form of legislation that seeks to ban a particular modern material. Why pick on one material? If one agrees to ban polyurethane foam, one must logically agree to ban other materials and products. The Royal College of Physicians in Edinburgh stated that more than 30,000 people died every year in the United Kingdom as a direct result of using tobacco. That is 50 times the number of deaths caused by fire. Should we ban tobacco?

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    Many of Scotland's problems are directly linked to alcohol. I have already mentioned accidental falls. However, I doubt whether many Scots would be prepared to ban whisky.
    A study of fire fatalities was carried out by Glasgow university. It concluded that alcohol could be found in the blood of many fire victims. It said that 59 per cent. of adults would have failed the tests for drink prescribed by law. In simple language, those adults were drunk. I doubt whether many Scots people would accept those figures as a justification for banning whisky.
    Mr. Douglas Hogg: Surely this issue concerns the question of choice. A person can choose whether to get drunk. However, if there is no protection against dangerous furnishing substances, there is no choice. Products are put on the market and people have no choice in the matter.
    Mr. Walker: As a teetotaller, I believe that one can choose whether to consume whisky. I know that whisky is a dangerous liquid if it is consumed incorrectly and improperly. However, it is still on the market. Few people in Scotland would wish to ban it. I do not wish to do so.
    According to insurance companies, there were 6,832 deaths in 1978 from road accidents in the United Kingdom. That is the equivalent to the number of deaths that would be caused if a jumbo jet crashed every month. It is 10 times the number of deaths caused by fire and flames. In addition, there were 82,518 serious injuries as a result of road accidents, 10 times the number of injuries resulting from fire and flame. Furthermore, 260,446 people suffered slight injuries, 43 times the number of people injured by fire. I accept that there is a choice. However, should we ban the use of roads? I think not.
    We need to make a logical assessment of the risk ratio. Insurance companies do that. For example, they use five rating categories when assessing accidents at work. The jobs that are considered to involve the most serious risks include North Sea diving and demolition contracting. Agricultural workers are considered
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    a medium risk, and office workers are included in the lowest category.
    The Building Research Establishment published a fires in dwellings report in December 1978. Table 7 shows that in 1974 the causes of fires in living rooms, dining rooms or dwellings in the United Kingdom were as follows: 28·6 per cent. space heating, 25·5 per cent. televisions and radios, 15·4 per cent. smokers' materials, 6·6 per cent. children with matches, other electrical causes 5·7 per cent., other causes 12·5 per cent., and unknown causes 5·7 per cent. That demonstrates that a programme of education should be coupled with sensible legislation. The proposed legislation is sensible.
    The House should recognise that the market is split into two clearly defined parts. The first is the contract market referred to by the hon. Member for Norwood. That market should never be confused with the private consumer market. It is not concerned primarily with design and price. The contract market is primarily concerned with construction and end use. I speak as one who runs a contract furnishing company. The pressures in the private sector are quite different. The domestic market depends on style and quantity production to realise adequate margins in competition with other consumer spending.
    It is interesting to note that in the United Kingdom we spend more on drinking, smoking and gambling than on domestic furnishing. Against that background, we must realise that in relative terms furniture is better value today than it was 20 years ago.
    Mr. John Fraser: Can the hon. Gentleman explain why furniture comes at the top of consumer complaints every year?
    Mr. Walker: I do not pretend to know why consumers are motivated to complain. I know of reasons why they spend money, as I have spent some time running businesses. One way to promote sales is by adequate, sensible ticketing. In these regulations the ticketing has been much more carefully thought out than the Opposition allow.
    Modern materials and production techniques make it possible to produce designs that sell at prices that the public are prepared to pay. Polyurethane foam

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    has made it possible to manufacture opulent and modern styles of furniture that the housewife will readily accept at a price that she is prepared to pay.
    The total investment in the United Kingdom by chemical firms in the furniture industry in polyurethane foam is over £1,000 million. Many jobs are involved. If cushions made from polyurethane foam in any one year were placed on Wembley football pitch, they would cover it and stand five miles high. It is, therefore, nonsense to suggest that the material should be banned, just as it is nonsense to talk of banning road use, whisky or tobacco.
    The only other country in which legislation has been tried is the United States. Mr. Gordon Durant of the Department of Consumer Affairs in the Bureau of Home Furnishing is responsible for, and his Department introduced, the Californian legislation. He believes that the British proposals are the most severe in the world and will penalise and damage the United Kingdom industry if an attempt is made to introduce them in too short a period. The Californian standard of testing is not nearly as high or as difficult to meet as the proposed United Kingdom standard. That is important. Mr. Durant expressed his concern over the severity of British tests. He does not believe that the industry has the technology to meet the time scale first suggested. We must remember that people's jobs depend on getting it right. They will not thank us for legislation that destroys their jobs.
    For the past 11 years the industry has collaborated with Government Departments in expensive research into the problems. We should acknowledge that the top priority is to reduce ignitability from small ignition sources. Then comes the need to reduce the rate of fire development, followed by the need to reduce production of smoke and toxic products. Almost any material will burn when heat of the right temperature is applied. There are other materials that ignite as easily as foam. All materials
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    used in my early days as an apprentice in the upholstery business burnt beautifully. We used to see it for ourselves. The problem of furniture upholstery burning is not new.
    I caution hon. Members not to expect a dramatic drop in fire fatalities merely because we are introducing regulations. Over 60 per cent. of those who die in domestic fires are under 10 years or over 60 years. I remind hon. Members that 59 per cent. of adults examined in a fire fatality study were found to be intoxicated. The majority of domestic fires occur in the homes of people in the lower income group—council houses, council flats or private rented accommodation. That is why it is important that we do not introduce legislation that will dramatically increase the price of manufacturers' products beyond what those who live in the accommodation that I have mentioned can afford.
    I give a cautious welcome to the regulations. What is proposed about tickets is a great improvement on the original proposals. Some retailers may not be completely happy with the regulations, but I can tell my right hon. Friend that the majority of retailers accept that the ticketing of upholstery will make a positive contribution to consumer awareness and, as has happened with cigarettes, will in time change public buying habits.
    On behalf of the many sections of the industry, I thank my right hon. Friend for listening to and acting on a number of suggestions. Not all the suggestions were accepted. My right hon. Friend turned down a number of the suggestions and proposals. She has produced balanced proposals.
    British furniture manufacturers tell me that in the 30 years that some of their leading members have been involved in discussions with Ministers they have never received such courtesy, interest and time as they have had from my right hon. Friend during the many months that the draft regulations have been discussed. I am delighted to welcome the regulations.
    10.2 pm
    Mr. Alfred Morris: This is a deeply important debate. At the outset, I acknowledge the sustained and expert interest taken by my hon. Friend the Member for Hackney, South and Shore-ditch (Mr. Brown) in all the deliberations that led to the laying of the regulations before the House. My hon. Friend has been consistently and passionately concerned to ensure strong protection against the dangers of polyurethane foam. I am sure he will argue that the regulations should go further, but the fact that there are to be any statutory provisions at all is not unrelated to his work.
    In a week when it has been demonstrated again just how lethal Polyurethane foam can be, with the publication of the report on the Woolworth's fire in Manchester, I find it very disturbing that the Government are not proposing to introduce much tougher regulations than those before the House.
    The Woolworth's report is about fire hazards arising from the display and storage of foam-filled furniture in retail stores. However, the Minister must be seriously concerned by the report's findings. She must accept, as the report does, that the fire could have been started not by a smouldering cigarette but by a dropped lighted match. That is but one reason why she must restore the flame test to the regulations immediately.
    The right hon. Lady has been persuaded—some might say misled—by the upholstery trade to believe that it cannot meet the requirements of the flame test at present. Journalists who write on the subject tell me that they have been inundated with letters and telephone calls from manufacturers assuring them that fire-retardant materials are available. Indeed, they have been sent samples, as I also have been. Neither they nor I find these materials as harsh to the touch as the Department claims. I am sure that it would not be imposible or even dauntingly difficult for the industry to comply with the flame test standard.
    How much does the right hon. Lady's Department rely on the plastics and furniture
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    industries to produce a less flammable alternative to polyurethane, which is so badly needed? What attempts are being made by Government Department to find the solution? How much is research costing? The Minister insists that she has not "dropped"—I put the word in quotation marks—the flame test but has merely decided that there should not yet be a date fixed for the industry to comply with that important test. When does she expect the date will be? Is she waiting for the industry to say "Yes, we now have the material to pass the flame test"? Or is she making sure that Government research provides the answer and forces the industry to accept it?
    The recommendations of the Wool-worth's report were rightly addressed, as the right hon. Lady said, to the Home Secretary. I congratulate him on accepting the recommendations in their entirety in the parliamentary reply he gave me on 20 May. They are, however, limited to ensuring that a similar tragedy does not recur in a department store. They may prevent a tragedy like that at Woolworth's, which took the lives of 10 people, including two of my constituents, and injured 48 others, from happening again. But they do not refer to the more than 100 people a year who die in their own homes from the same polyurethane foam.
    One is tempted to conclude from the Woolworth's report's total preoccupation with the lethal nature of polyurethane foam that, if the expert committee's brief had been widened to include consideration of the foam's continued use, it would almost certainly have called for further sales of the foam for domestic use to be banned. How else can one interpret the recommendations that foam-filled furniture should be put into fire-separated compartments to which the public have no access?
    The recommendation of the sub-committee which investigated the Woolworth's fire stated:
    " Furniture made of polyurethane foam should be displayed and stored either in fire-separated compartments or sprinklered areas and regarded in both cases as areas of high fire risk ".

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    That is a step forward, but the House must accept that the average family is not able to place its three-piece suite and other furniture in a flame-proof compartment with sprinklers installed—at least, not the kind of people I represent. There is a need for much tougher action than is proposed in the regulations, which, in my view and the view of many people outside the House, are dilatory as well as inadequate.
    Is the right hon. Lady aware of the deeply tragic case of two-year-old Stephen Andrew Goodwin, of Wallasey, who died through inhaling toxic fumes from a smouldering foam-filled pillow on 13 March? This is an extremely important case. The coroner, Mr. Rex Taylor, called for strict regulations covering the sale of plastic filling foam, yet these regulations are anything but strict.
    Commenting on the case, a spokesman for the Merseyside fire brigade said that what seemed like a small fire in a chair could be lethal because burning polyurethane foam often produced gases such as cyanide and carbon monoxide. That also concerned the coroner, who found that the child had died because his foam-filled pillow had come into indirect contact not with a smouldering cigarette but with a bedside electric light. Mr. Stephen Goodwin, the boy's father, told the inquest that at about 11 pm on 13 March he could smell smoke. When he went upstairs to the bedroom, it was filled with smoke.
    He pulled his son from the cot and took him outside. All attempts to revive the child failed. Mr. Goodwin said that he and his wife Jennifer left an electric light on all night in the boy's room. The coroner recorded a verdict of accidental death.
    That fire was caused not by a smouldering cigarette but by an electric light bulb, What relevance, therefore, have these regulations to a case that the coroner said called for strict new regulations?
    Mr. Greville Janner: Has my right hon. Friend's attention been drawn to regulation 3(1)(f)—the exclusion of
    " furniture that is so designed and constructed that it would normally be considered suitable for use only by young children "?
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    It seems strange that there should be this exclusion in regulations designed to protect people who, like my right hon. Friend's constituent, the very unfortunate baby, was killed through inhaling fumes from a pillow.
    Mr. Morris: My hon. and learned Friend is on an important point. I hope that he will be able to develop it later.
    The child to whom I was referring was not the child of my constituents; he was from Wallasey. However, the case is very important. The coroner made it clear that it called for much stricter regulations than those before the House.
    I turn to another, more recent, case involving the death of a young child. On Monday of this week, a three-year-old boy died when fire swept through his home at Stirling in Scotland. A report of the tragedy says:
    " Kevin Pearson was at home in Culverhove Crescent with his mother, Margaret, and brother, Trevor, when fire broke out in the three-storey block of flats.
    Mrs Pearson managed to throw Trevor to safety from the first floor flat and jumped herself, but neighbours who raised the alarm could not reach Kevin.
    An upstairs neighbour…broke down the door of the Pearsons' flat but was beaten back by the flames.
    His wife…said she heard Mrs. Pearson scream when she looked out of the window she saw smoke coming from the flat.
    ' Margaret's door was locked and I couldn't get in. Margaret said she had been in the bathroom when the fire started. The whole place caught light in next to no time.' "
    That was just three days ago. Today, the senior fire prevention officer in charge of investigating the Stirling fire said that it was now certain that the child died from the inhalation of smoke and fumes from the burning foam-filled furniture in the living room. The child had been in an adjacent bedroom at the time, and it is now known that the cause of the fire was his four-year-old brother playing with matches—I emphasise that—in the living room while their mother was in the bathroom. The fire is a typical example of the great danger of polyurethane foam and a prime example of why the lighted match test is so vital.
    That is why my hon. Friend the Member for Norwood (Mr. Fraser) was eminently right to press the Minister tonight on the importance of including the lighted match test as well as the smouldering cigarette test.
    Mr. Tim Sainsbury: In the way in which the right hon. Gentleman described that unhappy incident, we have no evidence that the lighted match to which he referred was applied to the Polyurethane foam-filled furniture. It is much more probable that it fell on a carpet, curtain or anything else and that the flames which he described, which enveloped the whole flat, then ignited the polyurethane-filled furniture. Surely, the risk to which we are addressing ourselves is that that sort of material, because it gives off dense and toxic smoke, makes any fire that much more dangerous to people who are near it or living in the home where it is stored or used. It is not necessarily that the fire is started directly with that material but that it makes any fire more dangerous.
    Mr. Morris: I am basing myself on information supplied today by the senior fire prevention officer. So far as I am aware, the information has not been published. I am making it available to the House because I regard the case as extremely important.
    I said that we knew that the dead boy's brother was playing with matches. Many people will believe that whether the fatal match ignited polurethane foam directly or indirectly is beside the point. The fact that the dead boy's brother was playing with matches that was the extremly important consideration.
    Mr. Bill Walker: Will the right hon. Gentleman give way?
    Mr. Morris: No, I cannot. I shall come to the hon. Gentleman later. Tonight we witnessed in his speech one of the most blatant examples I have ever heard in this Hosue of an hon. Member arguing for a vested interest. I shall reply to the hon. Gentleman as I proceed.
    Here, a young child played with matches and dropped one on to a foam cushion which rapidly burnt. The child cried out and his mother, who was in the bathroom, dashed out to find dense smoke. She was able to save her elder son, who had accidentally started the fire and run out of the room, but her three-year-old son—now dead—was asleep in a bedroom as the smoke from the living room rapidly became thicker. Two attempts to reach the boy, within seconds
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    of each other, failed because of the increasing heat and smoke.
    The mother dropped the older child out of the window of their first-floor flat and followed him. Neighbours tried to reach the boy in the bedroom, but by then it was impossible.
    It is deeply ironic that this tragedy occurred within 24 hours of the Minister for Consumer Affairs defending, on BBC radio, her decision not to press for the lighted match test on upholstered furniture. That test shows that flame-retardant coverings are crucial. Such coverings would at least give a few vital extra seconds after a match was accidentally dropped and a parent in another room discovered what had happened.
    How many more little children have to die before the consumer affairs Minister decides that perhaps the flame test should be enforced after all, and quickly? Or will she stick rigidly to her brief and continue to insist, as she has done tonight, that flame-resistant covers are not yet available in the quality demanded by the consumer?
    The Sunday Times—and particularly Roger Ratcliffe of that newspaper—should be warmly congratulated for the lead it has given in alerting people to what the report on the Woolworth's fire now bluntly condemns as a major and continuing threat to public safety.
    That is the source to which the Minister should look for information. She should not look to slick public relations men acting on behalf of those who oppose stiffer tests for reasons of their own. The regulations were drawn up a year ago, and it was seen fit to include the flame test and the smouldering cigarette test side by side. What has happened to make the Minister have second thoughts about the cut-off date for the flame test? She has not given a satisfactory answer to that question.
    Whatever the answer, no account has been taken in the regulations of what happened in the Woolworth's tragedy. The report reveals that a possible cause of the fire was a match dropped on to foam furniture. Now, following the death of the young child in Scotland, the Minister should admit, with the benefit of what the fire prevention officer in charge of the Stirling case said today, that the

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    flame test should be enforced and the necessary amendment made to the regulations.
    After the Woolworth's fire, the Manchester coroner said that if polyurethane foam catches fire one has only two minutes to get out of the building. The coroner said, in effect, that one should run like hell. Unfortunately, there are millions of people who cannot run like hell. They include the elderly, the disabled and very young children, all of whom are extremely vulnerable if they are exposed to the danger we are discussing.
    Regardless of any action that is taken by the Minister or by her right hon. Friend the Home Secretary on the report of the Woolworth's fire, there is now a need for a massive public information campaign to alert everyone to the undoubted threat to human life that exists in almost every home in Britain.
    The Minister has made it clear that she accepts the danger as much as I do. The responsibility rests with her and the Government to let everybody know the dangers that people face. If the Government fail to promote such a campaign, I hope that the media, not least the BBC because of its public service broadcasting role, will do so.
    The hon. Member for Perth and East Perthshire (Mr. Walker) made a speech which was one of the most blatant examples of a vested interest. Towards the end of his speech, I thought that he would invite us to sing the first verse of "All things bright and beautiful" in praise of the people whom he represents.
    Mr. Bill Walker: Will the right hon. Gentleman give way?
    Mr. Morris: The hon. Gentleman made it clear that he was arguing for a vested interest. I declare my interest as a Member of Parliament two of whose constituents perished in the Woolworth fire, which spread with devastating speed and disastrous effect. The bravery of the firemen who fought that fire is widely admired. Their courage should also be acknowledged in the debate. The central issue is public safety. Many of us want stronger regulations than are proposed by the Government.
    Mr. Bill Walker: On a point of order, Mr. Deputy Speaker. I should like to clarify a fundamental point. I have no financial interest whatever. I said that I was managing director of my own contracting furnishing company, which does not sell any of the furniture that we have been discussing. I have no financial interest.
    Mr. Morris: Further to that point of order, Mr. Deputy Speaker. It was clear to hon. Members on both sides of the House that the hon. Member for Perth and East Perthshire had a brief from the industry. I have a brief from the bereaved in Manchester.
    Mr. Deputy Speaker (Mr. Richard Crawshaw): The point has been clarified. There is nothing wrong with an hon. Member having a brief. The hon. Member for Perth and East Perthshire (Mr. Walker) declared his interest. Honour is satisfied.
    10.22 pm
    Mr. John Lee: I declare three interests. First, I am parliamentary consultant to the National Bedding Federation, which is a related industry in the context of the debate. Secondly, my constituency is involved in furniture manufacturing. It contains a major G-Plan—E. Gomme plant, and Silentnight has its headquarters in East Lancashire. Thirdly, I was in Piccadilly, Manchester, at the time of the Wool-worth horror. I saw the tragedy of the fire and I can understand the rather emotional speech of the right hon. Member for Manchester, Wythenshawe (Mr. Morris). We share and understand the grief which was felt in Manchester at the time of the horrific Woolworth fire.
    There is no realistic financial alternative to polyurethane. The furniture industry in all its forms has spent vast amounts of money endeavouring to find a substitute.
    Mr. Sainsbury: Does my hon. Friend agree that it is more likely that the furniture industry throughout the world will find a substitute rather than Government research which some hon. Members seem to think is the panacea for all our ills? Government have no knowledge, experience, technique or motivation.
    Mr. Lee: I accept that. I could not care less who finds the alternative,

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    whether it be Government or industry. The alternative must be found at some stage.
    An alternative filling would add substantially to the costs of manufacture of furniture, to the detriment of the consumer. It would result in a substantial loss of volume to the industry, which in turn would clearly affect employment both in the industry and in the retail sector. The furniture industry is in an extremely delicate state. The G-Plan factory in my constituency is on a three-day week. In the industry generally, there are worrying signs of import penetration. I suspect that in the years to come we shall discuss that matter rather more often.
    I am sure that all hon. Members agree that it is absolutely vital to find a cheap alternative to polyurethane—whoever finds it—sooner or later. Until we find that alternative, the regulations strike a realistic and fair balance between the interests of the consumer and the industry. I congratulate my right hon. Friend the Minister on the regulations and on listening to the various representations made from both sides of the House. I commend the regulations to the House.
    10.27 pm
    Mr. Greville Janner: We appreciate that the Minister is attempting to promote a remedy for a dangerous evil. However, we have differing views about whether she has gone far enough. I hope that she wishes to go further, and intends to do so as soon as possible. Meanwhile, we must all be grateful for regulations that, we trust, will produce even a limited mercy.
    The hon. Member for Perth and East Perthshire (Mr. Walker) referred to the dangers on roads, in business and in factories. We are all contesting danger wherever we find it. But for him to suggest that we should not be promoting the most active form of consumer legislation is ridiculous. That argument would not commend itself to the relatives of those who were asphyxiated in the Wool-worth fire. I do not think that he promotes his case, or that of the furniture trade industry, by putting forward that sort of argument. We are all attempting to solve safety problems wherever we find them.
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    I ask the Minister to consider two additional matters. Regulation 3(1)(f) excludes
    " furniture that is so designed and constructed that it would normally be considered suitable for use only by young children ".
    I cannot understand why there should be such an exclusion when young children are among the most vulnerable. They cause fires not through smoking but with matches. When they are in a room that contains furniture upholstered in a dangerous way, they may die through fires created by others. I wonder whether that is one of the temporary items that the Minister is hoping to exclude at a future date.
    Second, I draw attention to the parent Act, to the Consumer Safety Act 1978, under which the regulations were made. I commend to the Minister section 6, on civil liability, as an indication of an advance towards product liability—a step in the direction in which I hope the Minister proposes to move. In Britain we do not have the strict liability rules that exist in the United States, in France or in the Federal Republic of Germany which enable people who suffer personal injury or loss, or the relatives of those who are killed, to obtain damages, even where there is no contractual relationship, or where they cannot prove that the person who circulated the goods was at fault.
    The Royal Commission on civil liability—the Pearson Commission—and the English, Welsh and Scottish Law Commissions recommended that legislation should be introduced not merely to protect people through the creation of criminal liability, as the regulations do, but to enable ordinary people to claim a remedy without having to take legal proceedings which they cannot conceivably afford.
    The regulations are valuable in themselves so far as they go. They are also valuable because, under section 6 of the enabling statute, failure to comply with the duty under the regulations enables a sufferer from a breach of duty to claim damages without proof of fault. Those who are concerned in this area of law should welcome yet another advance towards giving consumers protection by a side wind.
    I hope that the Government will introduce legislation shortly in accordance with the revised draft EEC regulations and

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    the recommendations of the Pearson Commission and of the various Law Commissions to ensure that ordinary people who suffer through dangers should have rights in civil law, irrespective of fault. Meanwhile, it should be appreciated that these regulations create not only criminal liabilities rendering those who offend liable to prosecution but also civil rights for people who suffer—rights to bring their claims through the courts and to obtain justice in a way that is often not available to people who suffer through defects in consumer products.
    10.32 pm
    Mr. Eric Cockeram: I, too, must declare an interest. As a retailer, though not of furniture, I advise a number of retail organisations, including the National Association of Retail Furnishers.
    The retail trade has been in the forefront in expressing concern about the dangers from the sale of polyurethane foam and has for a long time been advising customers of them. Therefore, the association was pleased when the Minister invited consultations on her proposal, and I was pleased to hear her acknowledge the co-operation that she had had from the retail trade.
    However, I feel that it is wrong to blame the shopkeeper for selling such material. It is sought by the public and there is no adequate substitute for it at a comparable price. Many homes would not be as comfortable for the occupants if this merchandise were not available to the public. To blame the retailer for selling this material is as wrong as it would be to blame British Leyland for a road accident or to blame an electricity board for a fire started by electricity.
    It is worth adding that of all the fires started in homes, those caused by electricity are the greatest in number. The right hon. Member for Manchester, Wythenshawe (Mr. Morris) referred to a tragic death in Wallasey. I am familiar with the details of that tragedy because I live near there. But the right hon. Gentleman fairly pointed out that the fire was started by electricity, but it developed into a conflagration with tragic results. Electricity is the greatest cause of fires in the home, many of them in kitchens, in ovens and frying pans and with fat.
    I hope that my right hon. Friend the
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    Minister will not regard this measure as the end of the road. Like other hon. Members who have spoken, I believe that it is important to mount a campaign pointing out the dangers of fire in the home from all sources, of which this type of furniture is but one and statistically one of the smaller sources. I hope that my right hon. Friend will use her considerable influence to back such a campaign.
    The retail trade is anxious to cooperate. The first part of this measure comes into effect in four months. In consequence, all furniture in the trade will have to be so marked. The House does not need to be reminded that the country is going through a recession, that sales of furniture, like other items in this industry today, are on the low side, that stock-turn is slow and that there is a lot of furniture in the pipeline. In consequence, the task of marking and fixing labels to the furniture will be considerable. The retail trade will undertake that task as soon as the measure comes into effect, and much of the furniture will be marked well ahead of 1 October.
    I wish to make a few points about the application of the regulations. Retailers are at the sharp end of consumer protection legislation. The foam and fabric for the furniture and the making up of the furniture are handled by the trade, but the measure has a real effect only when it reaches the retailers. I hope, therefore, that my right hon. Friend will issue guidance to trading standards officers, because, clearly, due diligence on the part of a retailer should be a defence which he can use in court. It is not possible to test to destruction every suite of furniture that is on sale; there would be none left to sell. Therefore, tests have to be conducted by sample. I suggest to my right hon. Friend that a retailer should be able to use the defence that the sample of the furniture in question had satisfied the test of British Standard 5852.
    Equally, it is important that the retailer should be able to show that he took all reasonable steps to ensure that the foam and the fabric and the combination of the two could reasonably have been expected to satisfy the test according to data available in the foam and fabric industry.
    I turn to another aspect which will lead to problems at the retail stage. A high proportion of sales arise from a customer

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    going into a shop, choosing a piece of furniture but then saying that he—or, more often, his wife—does not like the colour or the fabric. In consequence, the retailer is asked whether he can supply samples of other covers, which he proceeds to do. Likewise, those covers must meet a test. If the retailer is to be held responsible for the combination of every conceivable cover in a host of different pattern books and every underlying polyurethane foam, he has a difficult task. Nevertheless, it is his public duty to attempt not merely to comply with the regulations but to warn the customer.
    I should like an assurance from my right hon. Friend that due diligence on the part of a retailer, backed by adequate indication that samples of the foam or fabric have been tested and have met the British standard, will be an adequate defence for that retailer. I hope that she can give that assurance.
    10.38 pm
    Mr. Ronald W. Brown: I, too, declare an interest as parliamentary adviser to the Furniture, Timber and Allied Trades Union. With that union, I have been fighting over this issue for about 12 years. I was very sad to hear the speech of the hon. Member for Perth and East Perthshire (Mr. Walker). It was the first time that I had heard him speak on this subject. His background preceded him. I was told how dynamic he was, how he had been chasing the Minister, and how he claimed paternity for forcing her to give up the draft regulations in December. I looked forward with interest to his speech, but it was a sad performance. I hope his constituents will have the opportunity to hear about or read what he said. His speech was totally outrageous and showed a total disregard for the facts. I can only say to the hon. Gentleman that I am very sad that I was not impressed.
    I support the regulations. They will be important. For me, this is an important step forward, because the Government have at long last—I refer to all recent British Governments—recognised the problems of people who have to use polyurethane foam. These regulations establish for the first time the dangers of
    868
    this foam. I shall be pressing very hard to get them enlarged and improved.
    We have to be grateful for small mercies, but these regulations do not go far enough. My right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) is absolutely right. We have to ask whether the regulations are sufficient and whether they will fulfil the task. I do not believe that they are or will and I hope to show why.
    I can have some sympathy with the textile manufacturers, who have been pressing me very hard over the past 12 months. They have asked why they should have to do all this work upon all their textiles when the textiles are not the problem. The problem is the polyurethane foam. They saw no reason why they should have to spend money, time and effort in order to conform to regulations which they felt were not of importance to them.
    I said to them, and I say publicly tonight, that I do not believe that any manufacturer should produce material that is not flame-resistant. They, we and the consumers are entitled to know that flame-resistant materials are being used in homes. Therefore, whilst I appreciated that they felt aggrieved that they had been made fall guys, I still believe that they should produce materials that are flame-resistant.
    The real bodies that people should have been going for were the foam manufacturers. The textile manufacturers cannot get at them because they are a very powerful body indeed. It is the seven sisters—the petroleum and chemical companies. They are on a gravy train. This polyurethane foam comes for free. They have already got their petrol and its by-products. They have made enough money on all that. The chemicals for the purposes of polyurethane foam are purely the byproduct, and they will not give that up.
    Mr. Donald Thompson: The hon. Member keeps referring to polyurethane foam. If he knows much about polyurethane foam, he must know that its uses cover a very wide spectrum. Life belts and life buoys are made of polyurethane foam that will not burn, but it will not do for furniture because it is too hard. The hon. Gentleman should

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    be specific, otherwise he will cost lives by turning people against this substance, which in other circumstances saves lives.
    Mr. Brown: I am very grateful for that intervention, but I am talking about Polyurethane foam, about flexible foam and all such foam products. If that helps the hon. Gentleman, I am happy to put it to him.
    Mr. Thompson: No.
    Mr. Brown: The hon. Gentleman is taking me away from what I want to say, but I must tell him that I object to rigid foam for use in television cabinets. It is no good the hon. Gentleman shouting "No", because one is also putting a very grave risk into the home with the use of foam in television cabinets.
    What I really wanted to talk about were the powerful interests of the foam lobby. The regulation should have focused on them, because if we get rid of the foam, we get rid of the major problem. It has involved 12 years' hard labour to get that accepted. One has to fight for a long time in this House to get one's view accepted. I have been everything but a Christian for 12 years. Tonight I am made legitimate. I am really kosher, as one of my hon. Friends would say.
    I have read the furniture industry's handout, in which it now accepts that, once set alight, polyurethane foam builds up heat and flame very quickly. That was not admitted for a very long time. The industry has never admitted that previously. Tonight we know that it is so. But these regulations do not cover the matter. We must repeat time and again that the other combustibles in furniture are not like foam.
    It is often said—the right hon. Lady said so again tonight—that there is no difference between foam and other substances. There is a difference. Foam has certain characteristics. It has a high burning temperature and rate. It gives off dense, toxic fumes, which are superheated to 1,000 deg. centigrade in three minutes. No other combustible material used in furniture possesses all those properties together.
    The right hon. Lady keeps on repeating that there is no difference in the ways
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    that different materials burn. Of course, other substances burn, but they do not burn like foam. I beg of her to get this into her head. She cannot equate burning wool, hair and coir fibre with foam. They individually burn and give off fumes but when they are put together they do not produce the same issue as foam does. That is the difference she must understand. She misleads herself and everyone else if she pretends that there is no difference between foam and other combustibles.
    Foam produces an inferno. The argument we must face tonight is whether these regulations will allow people to get out of that inferno. The answer is "No". The fire spreads too rapidly. Within 30 seconds the temperature of the flames is 650 deg. centigrade. The significance of that fact is that it is not possible to pass the flames. In other fires it is at least possible to edge one's way round and get away from them. A foam fire is so hot that one cannot get by it. Within three minutes the whole place is covered with smoke and superheated fumes. One is dead. That has nothing to do with the fire burning the people. The smoke will have killed them.
    When the fire has ended there is no foam left. When the firemen went to look at the Manchester fire there was no foam left. It was totally consumed. Since 1968 I have in parliamentary questions asked for the foam figures to be included in the fire statistics. The answer has been that the Government did not do that. Therefore, to quote foam figures is a fraud, anyway. The one element that caused the fire—the foam—is not there.
    In my intervention I pointed out that none of the coroners' reports said that fires were started by cigarettes, matches or electricity. A report contains the subjective judgment of a fire officer going round after the event, using his skills of looking, observing and investigating, to see where the fire could have started. However, he cannot see the foam as it is no longer there. It has been totally consumed.
    Mr. Alfred Morris: An important point is that Woolworth—a large retailer—decided not to sell this kind of commodity. Is not that an important fact for the House to take account of tonight?
    Mr. Brown: That is correct. Wool-worth made a sensible, intelligent judgment on that matter. I shall come to that later.
    The existing fire regulations are totally inadequate for foam fires. When the complaint was made about the Manchester fire, the regulations were discussed. It was said that there should be time to ring a bell, for the people to get out of the building and to telephone for the fire brigade. However, in a foam fire the people inside the building are dead in three minutes. People want to get out as quickly as they can, because the normal regulations will not take care of them. The Woolworth fire report illustrates that. It is a pity that we do not have the report so that we can read it in full. It is an important document.
    The report states in paragraphs 92 and 93 that furniture made of polyurethane foam should be displayed and stored in separated or sprinklered areas and that that would have helped in the fire in Woolworth. I am in favour of that. I am in favour of the biggest possible sign saying "Danger. Don't come in here. This furniture is filled with polyurethane foam." That would be marvellous. The result would be that people would not buy such furniture.
    The report also claims that sprinklers would have helped and that people would not have died. Let us have a package deal: if a person buys a polyurethane foam-filled suite, he gets a set of sprinklers to install in his own home. If sprinklers are needed in a shop, what about a council flat 15 storeys up in my constituency? Are not those who live in such flats also entitled to sprinklers?
    Paragraphs 117 and 118 of the report recommend that there should be fire drills and routines to emphasise the benefit of good training. I beg those who say such things to understand that there is no way that a person can get out of a polyurethane foam fire. If a chair covering a door in a council flat 15 storeys up catches fire, the tenants may as well lie down. They will not get out.
    The Minister must understand those problems and I do not think that she will find that the regulations cover them.
    The Woolworth fire report also recommended that keys should no longer be kept in glass-fronted boxes. That is irrelevant,
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    because people do not have a chance to get to the keys when a polyurethane foam fire breaks out. They found in Manchester that people died even before they got out of the restaurant. They did not get near the fire.
    The report stated that the cause of the fire could not be established with any certainty. I do not wonder why. I have explained to the House many times why there can be no certainty. There is no evidence that it was caused by matches or cigarettes. There is not even any evidence for the fall-back position of claiming that there must have been an insulation fault in the electric wiring.
    The House must some day understand and listen to me. When polyurethane foam begins its life, it is unstable. It self-combusts. Anyone watching it being produced can see it catch fire. In 1971, the House demanded action, which was taken in factories. All the evidence is in technical data note No. 29 and the revised note laying down the procedures that must be followed in factories because polyurethane foam self-combusts. The scientists have said that that is the case for only 48 hours. God did not say 48 hours; the scientists said that because the manufacturer wants it out of the way quickly. It takes up so much room. The sooner that he can move it the better.
    As the fire at Woolworth was not caused by matches, cigarettes or an electrical fault, it is possible that a piece of foam self-combusted. That scenario would answer a lot of questions that still remain unanswered. That solution would fit many of the fires that have occurred. If no other reason for the fire can be found, it must be accepted that my solution is as good as any. The fire officer cannot say what the cause is. He can only say what he subjectively thinks caused the fire. Foam is not included because it is not there. Foam may become unstable.
    Both the Home Office and Department of Trade have argued that there is no evidence. I have been told that they have tried—unsuccessfully—to simulate the conditions in a laboratory. However, that does not mean that such conditions cannot occur. It means only that there is an enormous gap in our knowledge. If we do not have sufficient information,

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    we must ask whether foam should be produced. I do not need to be told that the conditions cannot be reproduced in the laboratory. Hon. Members should not cast aside my suggestion that self-combustion should be understood and considered. It cannot be dismissed as unimportant.
    Sir Bernard Braine: As the hon. Gentleman knows, I have supported his inquiries into this important matter for many years. Inquests and discussions with fire officers have shown that there are grounds for grave doubt. Is the hon. Gentleman—who has spent much time and energy probing this issue—advising us that the foam is so dangerous that it should not be used in the manufacture of furniture? We must face that question.
    Mr. Brown: I am grateful to the hon. Gentleman for his support. I was about to come to that point. Unless foam manufacturers can give a guarantee of its safety, they should not be allowed to purvey it.
    When thalidomide went wrong, no one said that it was bad luck. No one argued that as 6,000 people died on the roads there was no point in worrying about the drug. My God, the people of Britain demanded action. Only the foam-manufacturing lobby has the arrogance to continue to promote the material. I have been trying to educate foam manufacturers for 12 years. We now have all the evidence we need to show that it is a killer material. What prescriptive right have they got to produce something that they know is a killer?
    The regulations go some way towards ensuring the consumer's safety. It is said that I wish to ban foam. I have never said that. However, responsibility for its safety does not rest with the House, or with my trade union; it rests with the foam manufacturers. I want the regulations to apply to foam. Producers must be aware of product liability. They may have won tonight because the regulations are weak. However, I shall support the EEC directive, just as I supported it in the European Parliament. I shall immediately hammer that directive on to the doors of foam manufacturers. They know what they are producing
    I am on occasion sickened by the
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    argument about costs. I have raised the matter every year for the past 12 years. During that time there have been 1,500 deaths, and they are only the ones that we know of. Many deaths may be attributed to other causes, such as the drunken two-year-old who was smoking, according to the hon. Member for Perth and East Perthshire. When will we decide that enough is enough?
    People argue that the cost would be impossible, and that there are few alternatives. A piece of furniture may cost £67 to manufacture, including all the on costs, but the housewife will pay £127 in a shop. Why does it cost as much or more to retail that piece of furniture as to manufacture it? It does not make sense.
    Mr. Cockeram: Has the hon. Gentle man forgotten—
    Mr. Brown: I have not forgotten anything. I have had enough rows with the retailers' association over the past 12 years to last me a lifetime. I have argued on television and radio, and I am prepared to do so at any time.
    This is the only industry in which the retailer has been allowed to mark up tax. Purchase tax and SET have been marked up. When VAT was introduced the retailers met the right hon. Gentleman who is now Minister of Agriculture, Fisheries and Food and persuaded him to allow them to add the 11⅓ per cent. purchase tax and the 2 per cent. SET to the wholesale price, and then mark up by 100 per cent. VAT was put on the total figure.
    As we were paying a total of 13⅓ per cent. tax when VAT was introduced at 10 per cent., being a simple chap, I thought that the price of furniture would go down. In April of that year, when the Government published a list of items that would increase in price, those that would stay at the same price and those that would come down, furniture was among the prices that increased. That is not surprising in view of the way that the price was rigged by retailers. The price is still up today.
    Mr. Cockeram: The hon. Gentleman is harking back some years, and is wrong about what applied in years past. Will he at least acknowledge that today VAT is 15 per cent. of the selling price? In

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    consequence his quotation of the difference between the manufacturer's price, which does not include VAT, and the retail selling price, which does, could be misleading to those who do not appreciate that.
    Mr. Brown: I have underestimated the mark-up. The hon. Gentleman is perhaps proving that it is even greater. Perhaps the retailers are even more greedy than I thought.
    The hon. Gentleman should reflect on the cost. He argues that we cannot afford the cost. If we could ask the 1,500 people who have died whether they believe it worth while to have a safe foam, I am sure that they would say "Yes". I hope that, if there are costs to produce a safe foam, they will come from that 100 per cent. mark-up. I want the right hon. Lady to give me the assurance that if the industry faces an increase in costs following the introduction of the regulations there will not be a mark-up by the retailers and it will not be subject to 15 per cent. VAT. It would be monstrous if to achieve a safety factor that the Minister thinks is good we allowed further profit-taking by retailers and the Chancellor of the Exchequer in the form of VAT.
    The approach of the furniture industry is the exact opposite of the effect of resale price maintenance. The manufacturer says to the retailer "You will sell at the price that we are recommending." That is resale price maintenance. In the furniture industry, the retailer says to the manufacturer "You will recommend the price that we say. If you do not, we will cut your outlets and you will have nowhere to go." One of the greatest problems is to try to persuade furniture manufacturers to come clean and to say publicly that that is what happens. They say it privately, but the time has come for the public to understand that there is a racket. That is why we see retailers advertising 20 per cent. off or 50 per cent. off. That is 20 per cent. or 50 per cent. off what? It is not off the price of the furniture.
    We should aim for safety without adding to the price that poor married couples and poor people generally have to pay. I shed tears tonight—
    Mr. Bill Walker Mr. Bill Walker rose—
    Mr. Brown:—about the poor people who want to buy furniture. If we did not have a 100 per cent. mark-up, if we did not have a rip-off, manufacturers could sell their products much more cheaply to nice married couples.
    We have heard that the furniture industry is on a three-day week. I am pleased that there is an awareness of that fact. The industry is on a three-day week for about nine months of the year. It goes on to a four or five-day week only in November, January and February, and possibly March. After that, the workers are on short time. I have not heard Conservative Members shouting about MFI and the GDR furniture that is coming into this country in a flood. It seems that the Government are not doing anything to stop that happening. There is a flood of imports from Czechoslovakia, Hungary and Poland. There is plenty to be said about import controls. I am glad that Conservative Members have woken up and are now aware of the problem.
    Mr. Lee Mr. Lee rose—
    Mr. Brown: No. I do not want to go on for too long.
    We have the finest furniture manufacturers and furniture workers in the world. The industry is exporting. Ercol, G Plan and a range of others are exporting first class furniture and doing well. Of course, the retailers are on their backs.
    I support the regulations. They are a first step. The EEC directive will help us to pin back the foam manufacturers. I hope that the right hon. Lady will take on board my arguments on resale markups. That is an important element that should be dealt with. The regulations are only a small step forward, but we are on the road that will lead to the saving of lives. I shall always support that approach.
    I am dedicated to obtaining a safe filling for the furniture industry. There are those who say that there is no alternative. I can reel off the options. I can recite as many different forms of filling as they want to hear about. Such fillings are available throughout the country. There is an available product in Glasgow. I recognise that that is not Perth—I give that assurance to the hon. Member for Perth and East Perthshire—but it is not

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    far away. A firm there is doing a first class job.
    These fillings include coir fibre, fibre mat, cotton felt, pig's hair, hog's hair, webbing, and also springs, which would not be a bad idea to help give work to the unemployed in the steel industry. All can be brought into production. The right hon. Lady should strike a blow for British furniture by making sure that it is safe and giving those in the industry the chance to do their job. This would improve the industry and safety. We would not then be recalling next year that another 100 people had died.
    11.10 pm
    Mr. Alan Haselhurst: It is an intrepid person who steps into the cauldron of this debate. I must go through what has become the ritualistic incantation: I have an interest to declare. I am connected with a company which manufactures flame-retardant chemicals. All my working life has been spent in the plastics or chemicals industry. At one time, I was employed by a company which had a substantial interest in the manufacture of polyurethane foams. I would claim to know a little about the subject that the House is discussing.
    It is a difficult matter on which to make judgments to find the right balance. We are peering into the unknown in trying to determine the cause of fires and accidents. It is not wise to be dogmatic about the cause of a particular tragedy. My right hon. Friend the Minister, who may regard the compliment as a surprise, has struck the balance extraordinarily well in the present situation. She has to take account of furniture manufacturers, fabrics manufacturers, retailers, consumer choice and, above all, safety. Trying to get this complex equation right is difficult.
    It is not straightforward simply to centre on one type of risk or accident and blow it up into the most ghastly issue to come before the House, out of all proportion to other incidents and substances. It is legitimate for my hon. Friend the Member for Perth and East Perthshire (Mr. Walker) to explain that accident rates are variable in different sectors of life. As a father, I am conscious all the time that an appalling accident could befall my 17-month-old child. I wonder whether he will try to reach up and grab
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    a pan off the stove. Does one conclude that cookers must be manufactured with a built-in guard?
    I would not be able to support fully my hon. Friend in arguing that no action should be taken in one area because it might be less dangerous statistically than another. That would be an argument for bringing back, or making more freely available, some of the substances on which restrictions have been placed in the past.
    A substantial number of hon. Members are, I believe, seeking moves in the same direction. No great issue of principle divides my right hon. Friend and me on the regulations. I merely ask whether any moves towards greater restrictions on materials used in upholstery should not be made more rapidly.
    I well understand why my right hon. Friend has not felt it right to announce a date when the flame test should apply. But, human nature being what it is. without it there may not be the research and effort devoted to finding the right infill and cover materials and the designs of furniture that can improve standards of safety.
    My right hon. Friend was criticised, unfairly, by the hon. Member for Norwood (Mr. Fraser) for taking time off to listen to representations. But no one would make representations if he did not think that he had a chance of swaying the person to whom he was making them. If people see no date in prospect—whether 5 years, 10 or even 15—their-minds are not concentrated. They say "It is a threat that will never come about. We can ward it off. We do not have to worry about it now."
    The House must judge when we should tell people to worry a little more. In the interests of those whom my right hon. Friend is seeking to protect, is it not worth while going that little bit further or giving us a better insight into when she may make a move?
    The arguments that we shall face are those that we heard in 31 pulsating minutes from the hon. Member for Hackney, South and Shoreditch (Mr. Brown). If we are not careful, after one more harrowing incident we shall be bulldozed, knocked sideways. The balance that my right hon. Friend is trying to achieve will be sent flying, because great emotion will

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    be centred on one substance, which might not be the danger that it has tonight been so vividly portrayed to be. There will be a demand, fuelled by irrational but understandable emotion, that we go in one highly prohibitive direction.
    Therefore, it would be wise if we saw a date when the open flame test might apply. The regulations would be improved, or people's reaction to them would be improved. If my right hon. Friend cannot give a date, it will help the House if she can indicate when a review will be carried out and when she may announce her further thoughts on the subject.
    Greater certainty would help everyone—retailers, manufacturers and the chemical companies. Assurances on the matter would lead to a greater feeling of confidence, not least among consumers, who, understandably, have been at the centre of the attention of the House tonight.
    11.18 pm
    Mr. Tom McNally: As the hon. Member for Saffron Walden (Mr. Haselhurst) has just said, there is broad agreement with, and a broad welcome for, the Minister's proposals, with doubts about whether implementation is too fast or too slow.
    However, I have been a trifle disappointed by some of the responses of the representatives of the retail trade. I shall not hammer any more nails into the coffin of the hon. Member for Perth and East Perthshire (Mr. Walker), but I do not think that his approach matches up to public concern. The retail industry would do itself a better service if instead of making debating points it recognised that there is genuine public concern. As my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown) pointed out, we are dealing with a substance that seems to produce effects that are not common to other furniture fillers.
    The Minister mentioned that I had been one of a number of lobbyists. That lobbying was done without any personal interest. It was a constituency interest in that British Trimmings operates in Stockport and the managing director wrote to me and to my hon. Friend the Member for Stockport, North (Mr. Bennett). My initial response to the managing director's letter saying that the industry would be
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    hard hit by the regulations was to write back and tell him that I believed in safety and that manufacturers should be interested in safety. I also said that I was not interested in exemptions.
    The managing director invited us to his factory and explained to us the special problems of the trimming industry in producing an attractive finish. He said that if trimmings were not provided they might well be left off the finished article by the manufacturers. The argument and the issue of fireproofing impressed my hon. Friend and me sufficiently to persuade us to ask to see the Minister. She was also impressed by the argument we had heard, and I thank her for giving a lot of time to the problem.
    My hon. Friend and I both impressed on our local industry that we wished to see rapid progress in research, and I am pleased to hear from the Minister that she has had asssurance from the national manufacturers. This is a reprieve for the trimmings side of the industry. I hope that it is a short reprieve and that the industry will press ahead with research and that it will eventually be able to offer fully fireproofed trimmings.
    The firm of Sykes, old-established dyers and bleachers in Stockport, had branched out into fireproofing and is investing a lot of money in research and development of fireproofing. I visited Sykes and was impressed by two points that the firm made about the regulations. The first was that the means already exist to fireproof up to the standards specified in the regulations, including the flame test. The hon. Member for Perth and East Perthshire tended to say that public purchasing was different from other purchasing, but I am not sure that it is as different as he suggested.
    The standards demanded by the Property Services Agency are higher than those stipulated in the regulations. I saw evidence at the firm of Sykes that the kind of products being made there were not of the utility mark quality that the hon. Member suggested. My experience of the quality and standard demanded by the PSA in its public purchasing suggests to me that the gap that the hon. Member spoke of is not so great.
    Mr. Bill Walker Mr. Bill Walker rose—
    Mr. McNally: No, I shall not give way to the hon. Gentleman. He has had a good night. The gap is not so great as to be unbridgeable. Sykes' managers informed me that costings had been exaggerated. The costing for the treatment on which they are working adds only 10 per cent. to wholesale costs, which does not seem too high a price to pay for fire resistance.
    I wished to make those points and thank the Minister for the breathing space she has given to the trimmings industry. I hope that she will convey to the industry generally that this is not the end of the road. The message that has emerged clearly from the debate is that the House wants action from the industry. If the manufacture of polyurethane is a £1,000 million industry within the furniture industry, the manufacturers have a grave responsibility to undertake research. I hope that the Minister will take that message to the manufacturers. The House is impatient for action and is committed to safety.
    11.24 pm
    Mr. Peter Griffiths: I shall be brief. I welcome the regulations, which are a matter of particular interest to me since the first issue that I took up with any Government Department after my election last May—it was the Home Department—concerned the problem of fire prevention. That was an issue allied to the matter under discussion tonight. I regret that the regulations do not give the protection that would have been given had the naked flame test been included.
    I signed the early-day motion which sought to give a longer period to the manufacturers of furniture covers to carry out research and to implement a change in manufacturing methods. I understood that that might enable both tests to be included in the regulations. I am disappointed that it is not possible.
    The flame test is in many ways more important than the cigarette test. The great danger from the cigarette is in beds and bedding, which are specifically excluded from the regulations. In the furniture which we are discussing, the great danger is from the naked flame which might originate from a cigarette. The source of a flame must be a smouldering cigarette or an electrical short circuit. It
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    can set fire to a second item, which then sets fire to furniture which might contain one of the types of polyurethane foam to which reference has been made.
    I take strong exception to the suggestion by my hon. Friend the Member for Saffron Walden (Mr. Haselhurst) that polyurethane foam is not a killer. Polyurethane foam is a killer. It is quite different from other furniture fillings. It is the only one which gives off hydrogen cyanide gas. That distinguishes it from the other fillings.
    It is common to put loose covers on furniture. New furniture is often protected by loose covers, which, sadly, are not included in the regulations. I can think of no reason why the regulations should not apply to them. If loose covers flame, the original material will give no protection against the flame reaching dangerous filling. That is one reason why the flame test should be included.
    Chemical cleaners are used widely. Many cleaners are flammable and change the chemical composition of a material. A material might be made less safe after it has been cleaned. Modern house design also causes problems. In traditional houses built of brick with stout doors dividing one room from another, a fire can be confined to a relatively small part of a dwelling. However, over a number of years in my constituency a number of tragic fires have spread rapidly because they occurred in prefabricated permanent dwellings with open-plan designs. In such a house, a relatively small smouldering fire, when given a draught, is turned into a flame. Once again we are faced with the fact that what may have been only a smouldering cigarette or a spark from a fire when it fell on to the carpet or furnishings becomes a dangerous flame that affects the furniture and leads to the horrific results that hon. Members have so graphically described.
    I do not wish to be churlish about the regulations. I welcome them on behalf of the many people who, over a period of time, will be protected by this small step. I ask my right hon. Friend the Minister to give a firm commitment tonight to introduce regulations which include the flame test at the earliest possible moment. Will she give some indication of when it will be possible to bring such regulations forward?
    11.31 pm
    Mr. Andrew F. Bennett: Having spent some time during the past month arguing with the hon. Member for Portsmouth, North (Mr. Griffiths) about the Social Security Bill, and disagreeing with him over almost every line, it is pleasant to find myself agreeing with almost all that he said in his speech.
    Like my hon. Friend the Member for Stockport, South (Mr. McNally), I have considerable constituency interest in the regulations. Far too often I see items of furniture thrown out and tipped on odd corners in my constituency. I wish that people would take the trouble to take them to the tip rather than put them on any spare piece of land. It is sad that the industry has persuaded people to throw out serviceable old sofas made out of traditional materials and to replace them with something that amounts to a potential bomb in their homes. It would have been better if those items of furniture had been preserved and reupholstered rather than replaced with new sofas.
    Some people are beginning to throw away new sofas. That causes a hazard to which no one has yet drawn attention. One of the traditional means to throw away old furniture is to give it to the kids for the bonfire. The old traditional sofas probably made the bonfire burn well. But having listened to the way in which foam-filled furniture burns in the house, I suggest that it would be crazy to give it to children to put on their bonfire. It could do a great deal of damage, and spoil any pleasure derived from the bonfire.
    I have received many representations from the Fire Brigades Union in my constituency. Many of its members were involved in the Woolworth fire disaster. Time and again they have been to households where, in their view, the presence of a foam-filled item of furniture turned a nasty incident into a tragedy.
    I do not think that the Minister was fair in her opening remarks when she criticised the Fire Brigades Union because it said that the foam should be treated as a special item. It said that the presence of the foam in a household creates a problem because, very often, it is not the item of furniture that catches fire,
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    but the curtains, carpets or something else in the room. By the time the item of furniture becomes involved, the fire is established. It is at that point that the foam adds an extra dimension of hazard rather than the foam and the material around it being the original cause. Once a fire is established in a room, the foam makes the situation extremely dangerous.
    The Minister said that representations had been made on behalf of British Trimmings. We were pleased to hear her progress report on that company's efforts to fire-proof trimmings. I hope that, in the near future, it will be able to fire-proof not only trimmings for furniture but all trimmings. In that way the hazard from curtains and other trimmings can be reduced. I welcome the exemption, but I hope that it will be necessary for a short period only.
    Like my hon. Friend the Member for Stockport, South, I am concerned about Sykes & Co., a firm in my area, which has been working hard to fire-proof fabrics. It makes the point that a barrier cloth has to be incorporated into all items of furniture supplied to the Government. This is one of the most effective ways of cutting down the fire risk. We saw demonstrations of the way in which a barrier cloth that had been fire-proofed, when used round foam, greatly reduced the hazards. It certainly increased the time available for people to get out of the danger area.
    The regulations do not deal with the re-upholstering of old furniture. Most of the old furniture is made of traditional materials, but as the years go by more and more foam-filled furniture will need to be re-upholstered. That is exempted from the regulations, and I ask the Minister to say that when foam-filled furniture is being re-upholstered a barrier fabric should be used if the fabric that is being put on cannot meet the flame test. It seems to me that we ought to be concerned about re-upholstering as well as with new furniture.
    This country should lead the world in furniture safety standards. If these regulations stop some of the imports that we have seen in recent years we ought to be pleased, because it is clear that much of British industry, when it tries to sell abroad, suffers from all sorts of regulations—some of them suggested by other

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    countries for safety reasons. There is no reason why we should suffer from imports of a lower standard than we have a right to expect.
    I hope that the Minister will make sure that these regulations are only a start and that they will be tightened up as soon as possible so that we can look forward to the time when foam is no longer a major hazard in households in this country.
    11.37 pm
    Mr. Donald Thompson: It would be wrong for me to speak for more than a couple of minutes, because most of the points have been covered by others, but I must deal for a moment with the speech of the hon. Member for Hackney, South and Shoreditch (Mr. Brown). He stretched his great knowledge of flexible foam very thinly over all uses of foam, and he was wrong when he strayed from the narrow matter on which he has exercised his mind for many years.
    I can bring the hon. Gentleman certificates from the Manchester chamber of commerce and from the Department of Trade to show that life belts have been subjected to every possible test. I hope that when he is on a ship he does not have to grab the nearest life belt, because he will reject it, as it will very likely be made of polyurethane foam, which has saved many lives, and will continue to do so. I hope that the hon. Gentleman will do his homework more thoroughly before he speaks again.
    Many constituency points have been made, and there is only one left on my list. It relates to the materials and fluids used in making materials non-burnable. Is my right hon. Friend sure that these fluids are safe? Children like to suck the corner of a pillow. Some sit for hours sucking the end of a piece of material. Is my right hon. Friend sure that the chemical used in flame-retarding materials is safe in that respect?
    11.39 pm
    Mr. Raymond Whitney: At the end of what has clearly been a long and interesting debate, I speak for what I claim to be the furniture capital of Great Britain—the place where some of the finest furniture in the world is produced.
    I believe that my right hon. Friend
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    the Minister has achieved something on which she must be congratulated. It has been a difficult balance to strike. Clearly, everyone connected with the furniture industry is well aware of the immense problems created by polyurethane foam and accepts that changes must take place.
    Against that, we clearly must go carefully. Polyurethane foam has been used for 15 years or more. It has become an integral part of an important industry for many parts of the country. We would do great harm to our export trade if we moved precipitately. Therefore, the balance must be struck very carefully.
    I particularly urge caution about the naked flame test, although I appreciate the point made by my hon. Friend the Member for Portsmouth, North (Mr. Griffiths). We must be careful about approving regulations which cannot be met. I hope that my hon. Friends will take that point to heart. We are not in the market for approving regulations which become meaningless. If no material passes the naked flame test, the choice is either to flout the regulations or virtually to destroy or do serious damage to an important industry.
    I repeat that the balance is right. The furniture industry knows that the pressure is on and that the material manufacturers will work with it to find an answer to the problem. But that must be for the future. For the time being, the situation is correct as set out in the regulations.
    11.42 pm
    Mrs. Sally Oppenheim: We have had an interesting and important debate. I am glad that we have had it. Even if it had not been the occasion of the introduction of the regulations, it would still have been an important debate. The debate has been interesting in many ways, not least because many of the speeches have had all the characteristics of polyurethane foam. They have been explosive, quick to ignite and slow to extinguish.
    I am puzzled by the sudden conversion of the hon. Member for Norwood (Mr. Fraser) to the cause of bringing in the naked flame test at the same time as the cigarette test. As far as I can ascertain, it was his intention, as a Minister, to bring in the tests in two stages with the match test coming second. If there

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    is an about-turn, it is his, not mine. I made it clear that there woud be a limited time for the match test. There will be a limited time, and there is an implied limit in the regulations. As I have clearly said, given the right precondition it will be imposed at the earliest possible date. I hope that it will be possible at the same time as the cigarette test. If it is possible, I shall be delighted.
    The hon. Gentleman made the point that aircraft seats are resistant to the naked flame. Of course they are. So is the Royal box at Covent Garden. But that does not mean that either can be afforded by the average consumer, let alone the poorer consumer. Only a relatively small proportion of available coverings meet the test or can be treated to do so. As soon as this range is reasonably increased, a date will be set.
    I believe that the impetus will come from, among other things, the commercial advantage to whatever company produces a treatment which will meet the flame test over a widespread range of fabrics. If, however, I am not satisfied that reasonable progress is being made towards this end, I shall give added impetus by introducing a time limit even though an entirely adequate range may not at that time be available. The test is open-dated for the time being only.
    I assure my hon. Friends that this matter will be kept under review not at a given moment but continually, so that I may be aware of what progress is being made in the industries concerned and can take action when it is appropriate to do so, because I appreciate the strength of feeling that there is about this matter.
    I repeat to hon. Members who have expressed concern about the timing of the flame test that I am convinced that the numbers of fires originating from naked flames are fewer than fires from smouldering cigarettes. They are also far less dangerous because they are immediately noticeable when they occur, whereas the smouldering cigarette may go unnoticed for a considerable time.
    Mr. Alfred Morris: Does the Minister agree that the fire that occurred in Stirling—which I mentioned in my speech—is one of which she should take particular note tonight?
    Mrs. Oppenheim: I shall deal with that in a moment, when I comment on the remarks of the right hon. Member for Manchester, Wythenshawe (Mr. Morris).
    My hon. Friend the Member for Perth and East Perthshire (Mr. Walker) was right to bring to the attention of the House the fact that the regulations are far more rigorous than any other regulations in the world, and in particular far more rigorous than those in the State of California. The reason why it has been possible to make them more rigorous is the existence of the relevant British standard. If that British standard existed in the United States that country's regulations would be as stringent as ours. I congratulate the British Standards Institution on producing this standard. I understand that Irish regulations will soon be based on the same standard.
    The hon. Member for Wythenshawe—
    Mr. Morris: The right hon. Member.
    Mrs. Oppenheim: I apologise. The right hon. Member for Wythenshawe made a forceful speech. I understand and sympathise with his strong feelings on this matter after having recently experienced a considerable tragedy in his constituency. I express my sympathies to all his constituents and to everyone else concerned.
    A great deal of what the right hon. Gentleman said, though naturally emotional, was based on at least two, and probably three, fallacies. The report of the committee on the Woolworth fire did not impute the cause to a lighted match. It clearly said that the cause of the fire could not be established with any certainty.
    Mr. Morris: Did not the report allow the possibility that the fire was caused by a dropped lighted match?
    Mrs. Oppenheim: No; it said that that was unlikely. It said that the cause could not be clearly established.
    The report also made clear the distinction between the hazards generated by large dense quantities of polyurethane foam stored in public places and the dangers of single units of furniture made from polyurethane foam used in the home. Obviously, the problems of storage

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    of large quantities of polyurethane furniture are serious, even though the furniture is probably wrapped in wax paper. That is why my right hon. Friend the Home Secretary has taken prompt action. It does not necessarily mean that homes should be equipped with the same safeguards as are required in public premises.
    The right hon. Member for Wythenshawe spoke of a number of tragedies concerning children. Of course, one has the greatest sympathy with the parents involved. I wonder, however, whether the right hon. Gentleman has placed as much emphasis on warnings to parents not to leave matches and lighted cigarettes about as he has placed on the dangers of polyurethane foam. People need warnings about that, and they will be warned after October this year.
    Mr. Morris: I called in my speech for a massive public information campaign to warn the British people of the danger in their homes, and that should be part of the campaign.
    Mrs. Oppenheim: The regulations are the first part of the campaign. Every piece of furniture will have to carry such a warning, and it will be a permanent warning.
    When we are discussing an emotive subject it is important that we should recognise that any Government can do just so much to protect people and that they should do as much as possible to protect them. But there always has to be an element of personal responsibility, and that should be encouraged as much as possible. That is why the warning element in the regulations is so important.
    The hon. and learned Member for Leicester, West (Mr. Janner) made a valid-sounding point about children's furniture. The reason why this has been exempted from the regulations is that the kind of furniture that was envisaged in the exemptions was furniture such as high chairs and other items such as rocking horses with seats, which contain little or no polyurethane foam. If there were evidence of the production of children's furniture containing large quantities of polyurethane foam, one would want to withdraw that exemption.
    Mr. Greville Janner: Will the Minister be good enough to say that if such evidence is brought before her she will withdraw this exemption? There is quite a lot of upholstered furniture with this sort of foam, such as tiny couches and chairs, specially made for small children.
    Mrs. Oppenheim: I can reassure the hon. and learned Gentleman that, as the debate has shown, I would always be prepared to consider any reasonable representations.
    My hon. Friend the Member for Ludlow (Mr. Cockeram) spoke with expertise in his field. His views were very valuable. He made a valuable contribution to the debate on the whole issue. I reassure him that if he reads the regulations carefully he will see that the points on which he sought assurances are already fully covered.
    The hon. Member for Hackney, South and Shoreditch (Mr. Brown) made the predictable speech. I do not in any way wish to denigrate what he said, because he has long fought a worthy campaign. He and I do not agree. He has also made his representations to me with members of his union. I think he would agree that I listened to those and gave them fair consideration. He deserves credit for putting forcefully something about which he feels very strongly. However, his hon. Friend the Member for Norwood has already said, with knowledge of the background of this problem in my Department, that it is simply not practical to ban polyurethane foam. There is no practical alternative.
    The hon. Member for Hackney, South and Shoreditch has suggested in previous debates that we should go back to the old-fashioned types of upholstery. That would certainly provide a great deal more work for the members of the union that he represents, but it would also result in very much more expensive furniture for the consumer. I ask the hon. Gentleman to go out in his constituency and ask his constituents who are consumers, and not necessarily members of his union, whether they are prepared to pay double or treble the present price for furniture of that nature, or, indeed, whether they would be able to afford to do so.
    If this were a practical solution, surely one of the working parties or one of the fire prevention committees which have

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    been set up to look into this very vexed problem would have made such a recommendation. No committee has made such a recommendation. After having considered all the dangers involved, the hon. Gentleman's own Government, quite rightly, did not propose such a ban. If it were practical, of course it would be an ideal solution. Also, there is the impetus among manufacturers of fillings for furniture to find a safe and cheap foam, because the sooner they can do that the sooner they could scoop the market by helping people to comply with the regulations far more economically than they could otherwise comply with them.
    Mr. Ronald W. Brown: Will the right hon. Lady give way?
    Mrs. Oppenheim: No, I cannot give way. The hon. Gentleman made a very long speech.
    The hon. Gentleman referred also to self-combustion. Again, I must tell him, as I have told him previously, that there is no conclusive evidence of self-combustion. He has told me stories about cushions that he keeps in his garage, which keep getting hotter all the time. But, as I have not read of any events in the newspaper, although he says that they have been there for a considerable time, I presume that they have not yet exploded. Indeed, I hope that they will never explode, because that would mean a great loss to the House.
    My hon. Friend the Member for Saffron Walden (Mr. Haselhurst) made a very reasonable and helpful contribution. I give him the undertaking which he sought that the flame test will be introduced as soon as possible. It is possible that it could coincide with the cigarette test if the technology is available to enable this to be done.
    The hon. Member for Stockport, South (Mr. McNally) recognised the importance of the sensible and practical balance for which I have striven. My hon. Friend the Member for Portsmouth, North (Mr. Griffiths) also called for the flame test. I hope that the reassurances that I have given will satisfy him.
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    The hon. Member for Stockport, North (Mr. Bennett), although he was responsible for causing us to debate this measure far later at night than any of us would have wished, nevertheless made a valid point about children being given old furniture to throw on bonfires. When I give my annual warning before bonfire night about safety measures, I shall make that point, which is genuine and valid.
    Mr. Andrew F. Bennett: Although the right hon. Lady blames me for causing this debate to be held now, does she agree that it was fully justified in being taken on the Floor of the House and not stuck in a Committee room upstairs?
    Mrs. Oppenheim: I am not blaming the hon. Gentleman for having the debate. I am glad that we are having it. I thought that I was the instigator of it. However, I think that a number of people would have enjoyed debating the measure at a different time of day at greater leisure.
    Claims were made by the Opposition that I had succumbed to the furniture lobby. No doubt they will have gathered during the debate from the expressions of disquiet of a number of my hon. Friends that that is far from being the case.
    A number of hon. Members on both sides of the House declared, correctly, one interest or another in this matter. I have only one interest to declare, and that is the interest of the consumer, in every sense—as to safety, choice and cost. The regulations represent an important first step that goes further than any Government have gone before—further than the previous Government went and further than any Government in the world has yet gone. I am proud to introduce the regulations. I wish that the support from the Opposition had been less grudging. I think that that does them no credit. I am proud to commend the regulations to the House.
    Question put and agreed to.
    Resolved,
    That the draft Upholstered Furniture (Safety) Regulations 1980, which were laid before this House on 2nd April, be approved.

    DUDLEY SKILLCENTRE
    Motion made, and Question proposed,
    That this House do now adjourn.—[Mr. Boscawen.]
    11.58 pm
    Mr. John G. Blackburn: I am pleased to have been selected for this Adjournment debate. Naturally, I am sad that the topic of the debate is the role of the Dudley skill-centre. However, it reveals the true spirit of the work of the House of Commons when the opportunity is granted for an hon. Member to raise a local issue upon which deep and strongly-held views can be expressed. I intend, with your permission, Mr. Deputy Speaker, to exercise that right tonight, particularly to such a packed House and a crowded Strangers' Gallery !
    At the outset, may I outline to the House those who support the retention of the skillcentre. First, the Conservative Party in Dudley wants the centre to remain open. The Socialist party in Dudley holds a similar view, as do the local chamber of commerce, the trades council, the trade unions—I am a full-time member and office bearer—and local industry, local management, and the staff and trainees of the local training centre. I pay tribute to the local authority for its excellent work in preparing the case for the retention of the skillcentre. In parliamentary terms, the retention of the centre is supported by the right hon. Member for Dudley, East (Dr. Gilbert), the right hon. and learned Member for Warley, West (Mr. Archer) and my hon. Friends the Members for The Wrekin (Mr. Hawksley) and Bromsgrove and Redditch (Mr. Miller). I, as the local Member, give it my blessing.
    Having gone through those who support the retention of the skillcentre, we must consider who opposes it. It is an easy task for me to outline who it is—the Manpower Services Commission. Historically, it was not the initial choice of the MSC to locate a skillcentre in Dudley. The choice was Wolverhampton, but the proposal was frustrated by the attitude of the local authority there. At once, and to its credit, Dudley seized the opportunity 10 years ago and a purpose-built centre was opened.
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    It is the unanimous opinion of local interests that the skillcentre is an integral part of the local economy, which has an industrial structure heavily and traditionally based on metal working. We are speaking about the heart of the Black Country, with Cradley Heath, Brierley Hill, Quarry Bank, Gornal and Sedgley so dominant.
    Dudley is not significantly different from other older industrial areas, apart from the excellence of the men and women who are beyond compare for their industry. However, it is an area that has traditionally been among the most prosperous manufacturing areas of this country. From the first metal pen nib to the chain of Cradley, all have gained a world-wide reputation of high repute.
    Over the past three years, my constituency has been ravaged by redundancies—the closure of the Bilston steel works in the northern part, the proposed phased redundancies at the Round Oak steel works in the centre and the closure of the Cookley steel works in the southern section.
    Against that background, the cry is for a resurgence of small manufacturing companies. The excellent local authority and, with due modesty, my own efforts are showing remarkable results that are worthy of commendation.
    The problem is retraining employees from former and existing industries. The skillcentre is vital to us. Prior to my election to the House, I spent 17 years in the engineering industry, walking the avenues of the industrial scene, and I speak with authority when I say that the skills that are required from the Dudley skillcentre, which is valued at more than £3 million, are plate and structural steelwork, pneumatic and hydraulic fitting and electric are welding. The latter two courses have one of the highest occupancy rates in the country, while there is a demand for white—furnace—bricking and press tool fittings.
    The centre, with the excellence of its staff, and anchored by a 30-year lease, must be retained. The entire local industrial strategy is dependent on it. The future known phased redundancies from local steel works are geared to it. On this issue, I fight the battle for my people with all the power at my command.

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    The manner in which the tragic saga has been handled is a prime candidate for a searching inquiry. The written decision was conveyed to me by hand at the House at noon on Wednesday 14 May. That correspondence contained the press release of the decision, dated 23 April 1980. The decision had been made three weeks earlier.
    The other options do not stand up to investigation. It is accepted that there is insufficient spare capacity at more distant centres. In addition, the new centre is blatantly too far away. It is served by an hourly bus service. The alleged savings resulting from the proposed closure of the Dudley skilcentre are not certain, established or possible. They are alien to reality for sound economic reasons. The current staff will have to be retrained to serve the construction unit, or they will have to be transferred to Red-ditch or other centres.
    The pressures on the skillcentres at Birmingham, Handsworth and Wolverhampton will be considerable. The buildings have been purpose built and are on 30-year leases. It will not be easy to relet them. Access to Redditch is difficult. Does the Minister appreciate that there has been a 300 per cent. increase in the number of sponsored places at Dudley skillcentre in the past nine months? That figure is rising.
    The regional office of the Manpower Services Commission alleges that public transport is difficult. That allegation is utterly without foundation. A bus service serves the northern, western and southern perimeters of the industrial estate. During the past 10 days, I have walked from all those bus stops to Third Avenue. At the most, it took me five minutes to do so. I should add that I am certainly not an athlete. In addition, a bus service runs through the centre of the estate.
    Is the Minister prepared to risk Dudley's established skillcentre—which has gained a high reputation and which has an excellent management—for an experiment at Redditch? Let us suppose that the experiment fails. There would then be extra expenditure and duplication. The Redditch centre is badly sited. The Manpower Services Commission must take responsibility for a serious blunder. Indeed, that blunder will be compounded by its insistence on conceiving this
    896
    unwanted child.
    The Dudley centre is an integral part of an established economic unit of two centuries' standing. I visited the centre this week, and I noted that the courses are over-subscribed for months ahead. I submit that I have given ample evidence to support the retention of that skillcentre.
    There is one particularly compelling reason for maintaining the skillcentre. I am delighted to announce that the local authority and I have been working closely together since 26 March, when my right hon. and learned Friend the Chancellor of the Exchequer made his Budget statement and spoke of enterprise zones. The authority has made a submission for a 510-acre site which is to be developed as an enterprise zone. An integral part of that scheme is the provision of a skillcentre.
    Is the House aware that a Minister will visit the Dudley skillcentre in 24 days' time in order to consider its excellence? The centre is in an area that is undergoing industrial redevelopment. I have been supplied with a document that was commissioned by the Manpower Services Commission. It contains 82 pages and refers to the shortage of skills in the Dudley and Sandwell areas. It is ironic that the commission wants the numbers at the skillcentre to be reduced drastically.
    It does not trouble my conscience to tell the House that such a policy shows the madness of the asylum and the confusion of the slaughterhouse, supported by the assets of the poor house. I plead with the Minister to consider my proposals. The Dudley skillcentre, which meets a valid local need, should remain in full operation until the experimental centre at Redditch is well established, and the entire matter should be subject to further review, preferably on 31 March 1982.
    I commend the Minister to accept these constructive and bona fide proposals. The Dudley skillcentre must remain open. On sober and responsible reflection, the case for its retention is overwhelming. A small team of local interests and representatives from the Manpower Services Commission could study the existing courses. In the proposals announced on 23 April I was horrified to discover that consultations are to take place with the regional

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    council of the TUC in Birmingham. It is a local skillcentre and there should be local input. There is boundless enthusiasm for it.
    I have discharged my responsibility and vow to my people to fight for this skillcentre tonight. I cannot be a party to its closure. If it closes, the Minister and the Government will be making a mistake.
    12.11 am
    The Under-Secretary of State for Employment (Mr. Jim Lester): It seems to be my fate to speak on Thursday evenings about the Manpower Services Commission's decision on rationalising the skillcentre network. Last week it was Treforest: this week it is Dudley. As my hon. Friend the Member for Dudley, West (Mr. Blackburn) said, this is a proper use of the House, at whatever time and before whatever audience. Thanks to the work of our helpful friends in Hansard, the debate can reach a much wider audience than is present in the House.
    First, may I extend to my hon. Friend the same understanding of his concern as I extended to the hon. Member for Pontypridd (Mr. John)? I appreciate, and so, I believe, does the Manpower Services Commission, the genuine disappointment that local people must feel when a facility such as the skillcentre at Dudley is closed, even if there are other facilities only six miles away. My hon. Friend has listed an impressive array of supporters. I know that he has put up a vigorous and well-informed fight on behalf of his constituents, which deserves congratulation, whatever the outcome.
    Decisions to close skillcentres can never be taken lightly, and I am convinced that the Manpower Services Commission has not done so. However, it had to look at wider issues and at the shape of the skillcentre network as a whole. Any reshaping and updating of an organisation is bound to mean that some gain and others lose in terms of convenience and immediate access to services.
    The MSC did its best to find out what local interests see as the main problems in reshaping the network and to come up with proposals that minimise inconvenience and maximise advantages. My hon.
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    Friend, who has presented his case with great moderation and considerable background experience, would, I am sure, acknowledge that the MSC's regional officers have made some effort to keep him fully briefed on the MSC's arguments for closing Dudley skillcentre and to take account of his points of concern.
    In considering the future shape of the skillcentre network, the MSC's aims, which I endorse, 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. At the same time, the MSC's proposals are designed to provide 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, of the sort that my hon. Friend is helping to encourage in Dudley. We pay tribute to the work that he is doing.
    The MSC 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 special transport needs to be provided, how many people will benefit from new alternative centres opening and from classes being moved from closed centres, and so on. I truly believe that the MSC has made positive attempts to ensure, with the help of local interests, that local training needs—of both employers and trainees—are met, whether through skillcentres or otherwise.
    The people of Dudley will, of course, see things a little differently. They must wonder why a 250-place centre that was established only seven years ago, built by the Pensnett trading estate to fit the MSC's requirements, should now be abandoned.
    Dudley skillcentre was, as my hon. Friend has said, built on a backlash. Wolverhampton, the MSC's original choice, did not want one. The Dudley centre was built instead to fill the breach. Wolverhampton changed its mind and a very good centre was built there, only six miles away, which opened in 1975.

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    Since then Wolverhampton has gone from strength to strength and does very well in recruiting and placing people in the area. The use of the centre at Dudley, on the other hand, has gone down. Although just recently the centre has managed to improve things by attracting a good deal of sponsored training from industry, people are not coming forward for training under the TOPS scheme, despite the unemployment level in Dudley. This has to be seen against the background that more than 25 per cent. of the places available at Birmingham's main centre eight miles away are unfilled, as are 15 per cent. of those at Wolverhampton, as well as nearly 20 per cent. of those at the Castle Bromwich centre.
    That brings us to the nub of the issue. There are now, already, too many skill-centre places all serving a small area, the western part of the West Midland conurbation. They are, moreover, wrongly positioned to benefit people from a wider catchment area. In saying that, I want to make clear that the MSC has decided that Dudley should be closed not purely because a new centre has been built at Redditch but because there are already three biggish centres in the area, which is too many. The presence of a new centre at Redditch to the south will add to the problem.
    Mr. hon. Friend has asked why a new centre is being built at Redditch when there are clearly occupancy problems in the area and why the MSC should proceed with this centre rather than cutting its losses and keeping what is already working. The first point to be made is that not to proceed with Redditch, or to put it in mothballs, would be costly, too. Nearly £2 million had been spent by the time falling occupancy and changed circumstances encouraged the MSC to reexamine the position. Moreover, the MSC owns Redditch, whereas the Dudley skillcentre is one of the most expensive to rent in the country.
    Secondly, my hon. Friend suggests that the Redditch centre is experimental. I prefer to describe it as progressive. It has been deliberately constructed to make changes in the class—mix at the centre easy and quick—essential if a centre is to be flexible in response to the demands of local industry. Its experimental nature
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    is one of the reasons why the centre has been expensive to build. However, the basic range of courses is still available. We are trying to introduce flexibility of operation into the network. That is what we are trying to do at Redditch.
    Third, and most important, a look at a map of the area will explain why the decision was reached. My hon. Friend knows the geography better than I do, even down to the timings of buses and walking, though I am not unfamiliar with it. But it must be apparent that a network of centres sited at Birmingham, Wolverhampton and Redditch must be better placed to help more people than a network sited at Birmingham, Wolverhampton and Dudley. A network including Redditch rather than Dudley will still leave everyone in the conurbation within 10 miles of a skillcentre, a distance that would make people in many parts of the country—the South-West or East Anglia, for instance—jump for joy.
    I have already said that Dudley is not being shut purely because Redditch is being opened. But there is one very direct sense in which the two are linked. Given that the Manpower Services Commission wants to proceed with Redditch because of its good location to serve a wider catchment area and its experimental nature, staff must be found for it. As my hon. Friend knows, the Manpower Services Commission is subject to restraints on staffing as much as other parts of the public sector. The simple equation is that if Redditch is to be opened, as we hope it will be, towards the end of this year, staff have to be found from closing another centre. The obvious centre in the circumstances is Dudley, which is conveniently similar in size.
    That is the background for the MSC's decision to close the Dudley skillcentre and open a new one at Redditch. I now turn to the effects, which are obviously of great concern to my hon. Friend.
    First, as I have already said, more people will be within relatively easy striking distance of a centre. The MSC has undertaken to provide special transport if needed for those living in the Kidderminster, Droitwich, Brierley Hill and Halesowen areas to get them to Redditch centre, so they are likely to be better off than they would have been in trying to get to the Dudley centre, which is a little off the beaten track.

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    Secondly, the range of classes available in the area will not be reduced. The full range of classes run at Dudley—16 in all—is also run at Wolverhampton or Birmingham, with two exceptions.
    One of the exceptions—plastering—will be run at Redditch. The other-repair and maintenance of contractors plant—is run at the Castle Bromwich centre. We know that a lot of people from Dudley already travel to Birmingham, Wolverhampton and also Castle Bromwich in order to get the training of their choice. As I have already said, there is spare capacity there to take more people from Dudley, and also sponsored training that has gone to Dudley.
    As a result of my hon. Friend's convincing representation, the MSC has decided to keep classes in bricklaying, carpentry and joinery, and plumbing going in a separate building in Dudley so as not to reduce the availability of construction training in that area. That point should greatly assist my hon. Friend and his constituents, for these are popular trades with the longest waiting lists.
    My hon. Friend has pointed out that there is the possibility of redundancies at the Round Oak steel works and that this is likely to increase the demand for skill-centre places in Dudley. I hope that what I have said illustrates that there are plenty of empty places fairly easily accessible to help those who may be made redundant.
    I give the pledge that if, in practice, it became clear that demand was greater than could be met by the other West Midlands skillcentres, I would ask the MSC to re-examine the timetable for closing Dudley, which, in any case, is a fairly extended one, and consider whether it had the resources to keep some part of the centre open a little longer to meet the extra demand.
    My hon. Friend is concerned how the staff and trainees at Dudley could be dealt with. I am assured that the phasing of the closure will enable relocation to take place smoothly and, wherever possible, in accordance with the wishes of everyone concerned.
    Finally, my hon. Friend has said he is concerned about the alternative use to which the Dudley centre might be put,
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    and the Manpower Services Commission's obligations in this matter. The MSC rents the building for nearly £250,000 per annum, on a 30-year lease which has 17 years still to run. I am in no position to challenge my hon. Friend's figures on the current value of the building, but I understand that it can easily be converted for manufacturing use and that the basic premises and facilities are suitable for factory use. Clearly the Manpower Services Commission would have to meet its contractual obligations in terminating the lease, but I do not believe that the Pensnett trading estate is left with an expensive white elephant.
    The machinery and equipment in the centre, which is valued at about £500,000 belongs to the MSC. Some of it will be used in Redditch. The rest will go to other skillcentres as need arises, which it constantly does. The re-use of this machinery and equipment is a useful saving for the MSC.
    I believe, on balance, in spite of the persuasive case of my hon. Friend, that the MSC has made the right decisions on Dudley and Redditch, and is going about matching skillcentre provision to the needs of the area, and ensuring access to it for potential trainees, in a sensible manner. There may in the past have been what, with hindsight, we can see to be mistakes, but we should not let these prevent the present attempts to arrive at a sensible cost-effective and well-located network of skillcentres.
    I appreciate by hon. Friend's legitimate arguments, but I believe that his constituents will still be left in a happy position in terms of range and availability of skillcentre provision. This debate has been useful in airing facts and views. I hope that it has contributed to a better understanding of the reason for the MSC's decisions.
    My hon. Friend has drawn to our attention one or two new points that I believe have not previously been put to the commission and I shall ensure that they are passed on. But the final decisions on closures and on the timing of closures must rest with the commission.
    Question put and agreed to.
    Adjourned accordingly at twenty-four minutes past Twelve o'clock.