Commons Sitting of 6 November 1980

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

PRIVATE BUSINESS
TYNE AND WEAR BILL [Lords]
Order for Third Reading read.

Clause 2
  INTERPRETATION
  Amendment made: page 5, line 3, leave out "331" and insert "329".—[Mr. Goodlad.]
Clause 10

  CONTROL OF DOGS IN CERTAIN AREAS
  Amendment made: page 12, line 22, leave out "331" and insert "329".[Mr. Goodlad.]
  Bill read the Third time and passed, with amendments.

PRIVATE BILLS [Lords] (SUSPENSION)
Ordered,
That so much of the Lords Message [4th November] as relates to the County of Kent Bill [Lords], the Derbyshire Bill [Lords], the East Sussex Bill [Lords] and the Humberside Bill [Lords] be now considered.—[The Deputy Chairman of Ways and Means.]
Resolved,
That this House doth concur with the Lords in their Resolution.—[The Deputy Chairman of Ways and Means.]
Ordered,
That a message be sent to the Lords to acquaint them therewith.

ORAL ANSWERS TO QUESTIONS
  NATIONAL FINANCE

    Minimum Lending Rate
    Mr. Newensasked the Chancellor of the Exchequer if he will make a statement on his policy on minimum bank lending rate in the current economic climate.
    Mr. Thomas Coxasked the Chancellor of the Exchequer what plans he has to reduce the present level of interest rates.
    The Chancellor of the Exchequer (Sir Geoffrey Howe): It is our firm intention that interest rates should come down from their current level as soon as circumstances make that possible, but the timing and size of any change will be governed by the requirements of the Government's monetary objectives.
    Mr. Newens: Does the Chancellor accept that the present penal level of interest rates is imposing a catastrophic burden on industry and is making recovery impossible for many firms at any future date? Does he recognise that unless a cut of perhaps 4 or 5 per cent. is made in the minimum bank lending rate forthwith, he will have destroyed many industries and made recovery impossible?
    Sir G. Howe: I do not accept the points put forward by the hon. Gentleman. As I have already said, it is our firm intention that interest rates should come down from their current level as soon as possible, but it would be foolish to believe that that would give rise to expectations of the kind that the hon. Gentleman has given.
    Mr. Cox: Is the Chancellor aware that his present monetary policies are just not working? Does he not know that throughout this country industry is collapsing and that even the most loyal of Tory Party Supporters—Tory businessmen—are now deserting him? When will he start to fight for the survival, not the destruction, of British industry?
    Sir G. Howe: The hon. Gentleman must appreciate that probably the single

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    most important cause of difficulty for British industry has been the high rate of inflation and that one of the most significant signs of success of the Government's policies is the pace at which inflation is now coming down. When we came into office it was rising at about 14 per cent. a year over the preceding six months. It is now moving at about the same pace. The difference is that when we came into office the rate was high and rising and now it is on the way down. That is a firm sign of the success of the Government's policies.
    Mr. Latham: If we are to have special factors every month, how will we ever get MLR down?
    Sir G. Howe: There is no question of special factors every month. It is our firm intention that interest rates should come down as soon as that is compatible with the requirements of our monetary objectives.
    Mr. Henley: Does not the Chancellor recognise that interest rates have now been at a record level in Britain for 12 months and that the only effect has been to push up the value of the pound and to force companies to borrow more to finance the cost of record interest rates? Does he accept the view, now widespread in the City of London, that he could cut interest rates by 4 per cent. without sending up the money supply one jot?
    Sir G. Howe: I congratulate the right hon. Gentleman on his success thus far and express the hope that—[Interruption] The right hon. Gentleman might be generous enough to allow me to say that I express the hope that, for one reason or another, this will be the last time that he appears at Treasury Question Time in his present capacity.
    Mr. Healey: Now answer the question.
    Sir G. Howe: It is our objective and our intention to secure a reduction of interest rates as soon as that is compatible with the achievement of our monetary policies. But the right hon. Gentleman knows that a number of factors have to be taken into account concerning that. He also knows that it is not possible to dissociate entirely the level of interest rates from the level of inflation rates. He knows that there is a relationship between them in other countries, which is clear and evi-
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    dent. He knows also that if one is considering the impact on the competitiveness of British industry, it is right to say that over the last 18 months competitiveness has been more damaged by high levels of pay settlements than by the level of the E. sterling.
    Mr. Healey: First, may I reciprocate the compliment and express the hope that the Conservative lobbyists are right in saying that the Chancellor is due for the sack in the next few weeks because of the failure of his policies?
    On the question of interest rates, will the right hon. and learned Gentleman answer the question that I put to him? Does he not accept the view, which is now widespread in the City, that he could cut interest rates by 4 per cent. without increasing the money supply? Also, does he accept the view expressed by his right hon. Friend the Prime Minister on Tuesday that the major factor now in crucifying British industry is the level of the exchange rate, due largely to the level of interest rates, which he refuses to reduce?
    Sir G. Howe: The right hon. Gentleman has apparently yet again misunderstood what my right hon. Friend the Prime Minister said, because what she said was precisely the opposite. More than half of the loss of competitiveness since the beginning of 1979——
    Mr. Healey: Answer the question.
    Sir G. Howe:—has been due to the level of pay settlements rather than to the level of interest rates. As to the other half of the right hon. Gentleman's question, interest rates have an effect over a period in lowering the rate of monetary growth and so lowering the rate of inflation.
    Mr. Eggar: Is my right hon. and learned Friend satisfied with the current growth of borrowing by the corporate sector? Does he feel that this growth is in any way affected by the present high level of interest rates?
    Mr. Healey: Listen to Nigel.
    Sir G. Howe: It is, of course, possible, as I have already stated, that interest rates cause additions to company borrowing in the short run; but over the medium run and longer run the level of interest

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    rates reduces bank lending by the corporate sector as by any other.

    £1 Coin
    Mr. Whiteheadasked the Chancellor of the Exchequer if he is now in a position to announce the result of the Treasury's study of the possible minting of a £1 coin.
    Mr. Greville Jannerasked the Chancellor of the Exchequer whether he is now able to announce the results of his review of currency in the United Kingdom and the date for the introduction of a £1 coin especially in the light of further recent representations on this matter including that of London Transport.
    The Financial Secretary to the Treasury (Mr. Nigel Lawson): I have nothing to add to the reply which my right hon. and learned Friend the Chancellor gave to my right hon. Friend the Member for Worthing (Mr. Higgins) on 24 July.
    Mr. Whitehead: As, under the present Government, the pound has now fallen to about a quarter of its value 10 years ago. is it not time that we got rid of the grubby £1 note and minted a coin, as 12 other European countries already have, to that value or more, which would have a lifetime expectancy much longer than that of the £1 note and would no doubt be known in public parlance—a small, almost valueless coin—as the "Thatcher"?
    Mr. Lawson: That was a rather laboured supplementary question. The reply to which I referred made clear that the. matter is under consideration.
    Mr. Janner: What representations has the Minister received from London Transport and what will he do as a result?
    Mr. Lawson: London Transport has made clear that it is in favour of the £1 coin. We have received a number of other representations. All those representations are being taken into account in the consideration which, as I have said, is being given to this matter.
    Mr. Marlow: If and when a £1 coin is introduced, will my hon. Friend take care to ensure that it is produced in metric measure so as not to give offence to our partners in Europe?
    Mr. Lawson: I note what my hon. Friend has said and the deep sincerity with which he uttered it.

    Economic Policies
    Mr. Dormandasked the Chancellor of the Exchequer if he is satisfied with the progress of the Government's economic policies.
    Mr. Winnickasked the Chancellor of the Exchequer if he is satisfied with the progress of his economic policies.
    Sir Geoffrey Howe: Inflation is now falling and this will help to restore confidence and lay the foundation for a stronger economy in future.
    Mr. Dormand: The right hon. and learned Gentleman will agree that the fundamental point of his policy is the control of the money supply. Will he confirm this week's news that the money supply has increased by 2 per cent. up to 15 October? Will he go further and admit that there are some factors quite outside his control which affect the money supply considerably? In those circumstances, is it not nonsense to place so much emphasis on the money supply itself? Will he change his policies before it is too late?
    Sir G. Howe: No, Sir. In continuing to emphasise the importance of monetary policy for the conquest of inflation, I am echoing precisely the policies followed by my predecessor. It is one of the points on which he was absolutely clear and explicit on a number of occasions, and quite rightly. The achievement of proper control of the money supply is essential for the conquest of inflation.
    Mr. Winnick: Is the Chancellor aware that over 2 million unemployed and the very many on short-time working on both sides of industry, as indicated by the CBI and the TUC, are certainly not satisfied with the progress of the economy? Is the Chancellor also aware that if other Conservative Members of Parliament spoke up like the right hon. Member for Sidcup (Mr. Heath) and criticised the disastrous policies of the Chancellor's administration, they would be putting loyalty to the country before loyalty to the Prime Minister?
    Sir G. Howe: I do not know about loyalty to any particular individual I

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    know about the importance of loyalty to the achievement of policies that are consistent and necessary for the country. The most important of those objectives is the reduction of inflation. Like any other hon. Member of this House, I am concerned about the level of unemployment. But one must remember that the level of unemployment is high and rising in many other countries, and that other countries beside our own are affected by present world recessionary conditions. As Opposition Members often emphasise, it is not possible to set about conquering unemployment if one turns back from an effective policy to beat inflation.
    Mr. Anthony Grant: Does my right hon. and learned Friend agree that one of the objectives of Government economic policy is to encourage the purchase of British goods and British services? With that in mind, can he say when we shall have an announcement to the effect that, in order to set an example in that respect. the Inland Revenue computer contract will be given to ICL?
    Sir G. Howe: That is not a question arising out of the question that I have just been posed. Questions about that topic are already on the Order Paper for answer today. In that and in every other respect, we attach importance to an enlightened and effective public sector purchasing policy, giving preference to British goods where that is compatible with the standards already enunciated.
    Mr. Healey: Does the Chancellor accept that the recent fall in the annual rate of inflation cannot be due to the success of his monetary policy, since he admitted yesterday that he has overshot by a factor of more than 100 per cent. the target which he set himself? Does not the Chancellor agree that that is due to the excessive level of the pound? Does he share the view of Mr. Frank Cassell, given to the Select Committee in July, that if the pound were at a level at which it was not crucifying British industry, inflation would be over 20 per cent. now?
    Sir G. Howe: I cannot accept any linkages of that kind. Of course it is clear that one of the factors that has contributed to the lower rate of inflation—we should not overlook this—is the present level of the £ sterling. It is equally clear—one should not gainsay this—that the
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    importance of monetary policy as part of the policy against inflation cannot be unsaid.
    Mr. Body: Will my right hon. and learned Friend assure the House that he will not be satisfied with economic policies until he has succeeded in balancing the budget so that revenue matches expenditure? Will he therefore tell his Cabinet colleagues who oppose any spending cuts that the only honourable course for them to take is to stump the country and argue for a higher rate of taxation?
    Sir G. Howe: I am grateful to my hon. Friend for his support. The Government's view on the importance of securing effective control over borrowing and spending has been set out in the medium-term financial strategy, which was published at the time of the Budget. My hon. Friend will see the importance that we attach to progress in that direction. That is why effective control over public spending is so crucial to the control of interest rates and inflation.
    Mr. Richard Wainwright: As the Government's targets for the growth in money supply have now lost any credibility as a firm and precise guide to those involved in pay bargaining, what will the right hon. and learned Gentleman put in their place to guide those now involved in pay negotiations?
    Sir G. Howe: I do not accept the hon. Gentleman's premise. Monetary targets remain important. It is equally clear that there are a thousand reasons why those concerned with pay bargaining should achieve settlements that are compatible with what employers and the nation can afford, and that are also compatible with preventing any further increase in unemployment. It is crucial to underline the link between unemployment and pay bargaining.

    Inflation
    Mr. Parryasked the Chancellor of the Exchequer what is the current rate of inflation.
    The Chief Secretary to the Treasury (Mr. John Biffen): The retail price index rose 15·9 per cent. in the 12 months to September.
    Mr. Parry: Is the right hon. Gentleman aware that when the Chancellor of

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    the Exchequer took charge of the Treasury 18 months ago, inflation was in single figures? When will the rate of inflation be reduced to single figures? Does the Government's strategy for reducing inflation mean control of public sector wages, such as those of railwaymen, firemen, and other public employees? Will such people be the whipping boys for that policy?
    Mr. Biffen: When the Government came into office inflation was rising sharply. Inflation is falling——
    Mr. Healey: Reading.
    Mr. Biffen: I am not reading. I carry these words in my heart. Inflation is falling, but I do not wish to anticipate when the rate of inflation will reach single figures. The hon. Gentleman will realise that the Government set external financing limits for the nationalised industries and cash limits for local government and central Government expenditure. Those limits give general guidance as to the amounts available for public sector pay.
    Mr. Bruce-Gardyne: Does my right hon. Friend recall that the Shadow Chancellor of the Exchequer, the right hon. Member for Leeds, East (Mr. Healey), wrote an article in July, entitled "Why inflation will not fall"? In the light of that forecast and of events since then, will my right hon. Friend be putting any money on the right hon. Gentleman in the current leadership stakes?
    Mr. Biffen: The right hon. Gentleman has not merely written to the nation giving his forecast, he has stated in debate that the Treasury forecast of 16+ per cent. inflation by the fourth quarter of this year would be exceeded. He quoted the figure of 20 per cent. On that basis, I shall make no comment. Doubtless Labour Members will draw their own conclusions when they come to make their judgments.
    Mr. Healey: As I know that the right hon. Gentleman pays immense respect to his civil servants, may I ask him to confirm the view of Mr. Frank Cassell, given to the Select Committee in July, that inflation would be 5 per cent. higher if the pound were at a level at which British industry could compete with foreign industry?
    Mr. Biffen: If the right hon. Gentleman states that Mr. Cassell said those words to the Select Committee, I accept that that is so.
    Mr. Kenneth Carlisle: Will my right hon. Friend continue to impress on people that if we want to re-create the confidence necessary for investment and for more jobs, we must continue to hold that fighting inflation is the number one priority?
    Mr. Biffen: I shall certainly do my modest best, and I shall start with the levels of public spending.
    Mr. Jay: As the Chancellor of the Exchequer has arrayed against his policies the TUC, the CBI, the chairman of ICI, two former Tory Prime Ministers and the Secretary of State for Defence, does he think that he might be wrong?
    Mr. Biffen: The more the right hon. Gentleman elaborated that list, the more confidence I gained in my right hon. and learned Friend.
    Mr. Peter Bottomley: Will my right hon. Friend accept my congratulations on getting the rate of inflation well below the level predicted by the Opposition Front Bench? Given the remarks made by his right hon. and learned Friend, what average level of pay settlements is compatible with the nation's economy?
    Mr. Ellen: I cannot give a reply. To do so would imply a degree of knowledge and judgment in a delicate field of economic affairs, in which Government have intruded dangerously in the past.
    Mr. Denzil Davies: Given that this year's public sector borrowing requirement is likely to be about £10·5 billion, and that it might be £14 billion next year, and as the money supply is twice as high as the Government's target, does it not follow that inflation will rise before long? The Government have always maintained that money supply and borrowing requirement affect inflation.
    Mr. Biffen: The Industry Act forecast for the public sector borrowing requirement will be published, as is legally required——
    Mr. Davies: Dodging the question.
    Mr. Biffen: I am abiding by the law. I know that this is difficult for the right

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    hon. Gentleman. The forecast will be published in about a fortnight's time. When that evidence becomes available, we shall have a premise upon which to judge the right hon. Gentleman's prediction.

    Value Added Tax
    Mr. Hicksasked the Chancellor of the Exchequer whether he has any proposals to zero rate value added tax charged by hotels and guest houses in respect of accounts charged for the accommodation of overseas visitors: and if he will make a statement.
    Mr. Biffen: No, Sir. My hon. and learned Friend the Minister of State is meeting representatives of the tourist Industries on 11 November to discuss the question of VAT on services supplied to overseas visitors.
    Mr. Hicks: Does not my right hon. Friend agree that tourism operates in an international market? Does he not also agree that as a result of the strength of the pound this year, the United Kingdom's tourist industry has suffered? Given the contribution that the tourist industry makes to invisible earnings, does not the proposal merit further consideration?
    Mr. Biffen: I shall say absolutely nothing—[HON. MEMBERS: "Hear, Hear".] That is one's usual objective at Question Time. I do not wish to say anything in advance of the meeting at which my hon. and learned Friend the Minister of State will discuss this question. However, I agree that it would be surprising, and a lacuna if the issue were not fully discussed at that meeting.
    Mr. Adley: Does not my right hon. Friend agree that the pound earned in foreign currency by the service sector is just as valuable to the nation as the pound earned by the manufacturing sector? Does my right hon. Friend have a policy that will ensure that those engaged in both sectors have equality of opportunity?
    Mr. Biffen: I understand that my hon. Friend will be leading the delegation that will be received by my hon. and learned Friend the Minister of State. I note what my hon. Friend has said. However, no country within the European Community operates a zero rating for hotel accommodation. We should be
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    exceedingly wary about making VAT even more complex.
    Mr. Maxton: If the Minister is considering zero rating VAT for overseas visitors, will he also consider zero rating for the theatre and the arts which are more important, and which also make a vital contribution as regards overseas visitors?
    Mr. Biffen: The hon. Gentleman's reaction confirms the Treasury's worst fears, namely, that once one kicks aside a pebble in this area, one gets an avalanche.
    Mr. Denzil Davies: If the money supply is running at 20 per cent., and if the Government believe that growth in the money supply affects the rate of inflation, does the right hon. Gentleman not accept that inflation will increase to 20 per cent. again in about 12 month' time?
    Mr. Biffen: That shows great ingenuity and might well be raised at the meeting with my hon. and learned Friend the Minister of State. However, the narrow subject of zero rating hotels surely cannot give rise to such philosophic considerations.

    Inflation
    Mr. Norman Atkinsonasked the Chancellor of the Exchequer if he is satisfied that the rate of inflation is now responding to the change in the money supply; and if he will make a statement.
    Mr. Biffen: The Government are satisfied that there is a broad and fundamental connection between the growth of monetary aggregates and the rate of inflation; but the variable time lags involved make any correlation imprecise.
    Mr. Atkinson: The correlation may be imprecise, but does the Minister agree that since he became Chief Secretary almost 18 months ago the retail price index has increased by exactly 25 per cent., of which no less than 12 per cent. has been the result of policies that he and the Chancellor of the Exchequer have announced to the House? How can the right hon. Gentleman have the hard-necked boldness to say that imprecise calculations of his sort depend upon money supply. the borrowing requirement and the like when his right hon. and learned Friend is already making a meal of the success which he claims in

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    reducing living standards as a result of wage agreements that produce less in percentage terms than the retail price index?
    Mr. Biffen: The hon. Gentleman's observations vindicate my having emphasised how imprecise were the relationships.
    Mr. Marlow: Will my right hon. Friend say in which industrialised economy inflation is now increasing and in which industrialised economies inflation is now decreasing?
    Mr. Biffen: Alas, not without notice. I am sure that that is a very helpful supplementary question.
    Mr. Healey: May I help the right hon. Gentleman and tell him that inflation is falling in Switzerland, a country which the Prime Minister purports to admire? Switzerland totally abandoned monetary policy when it found that it was putting Swiss citizens out of work. Will the right hon. Gentleman confirm the view expressed by the director of ICI, Mr. Harvey-Jones, that every cost for which the Government are responsible is rising faster in Britain than in any of the countries which compete with us?
    Mr. Biffen: I am grateful for the confirmation that the Swiss economy is still in stout shape. As my hon. Friend the Financial Secretary said to the right hon. Gentleman, there is still a monetary policy in that country. We have Dr. Brunner to remind us how effectively it can be executed. I am not in a position to comment upon the costs of ICI and to what extent they have related to Government policy.
    Mr. Healey: May I refresh the right hon. Gentleman's lack of memory? Mr. Harvey-Jones said that every cost upon which the Government can have an effect is rising faster in Britain than in any of the countries that compete with us.
    Mr. Biffen: One of the major factors that must be implicit in that calculation is the exchange rate. As the exchange rate, at least in substance, is deriving from the physical presence of North Sea oil, about which the Government can do nothing, I think that it was not a fair or balanced judgment.
    Mr. Bruce-Gardyne: Does my right hon. Friend agree that during the last
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    12 months of the previous Labour Government, when the right hon. Member for Leeds, East (Mr. Healey) was Chancellor of the Exchequer, the rate of growth of real money supply accelerated over the going rate of inflation, and that since that period, as far as we can judge, it has persistently stayed below the going rate of inflation? Is he aware that that explains the present very sharp deceleration of inflation? In the light of that sharp deceleration, is it not essential that the going rate of growth of money supply should contract sharply to remain in consonance with the going rate of inflation?"
    Mr. Biffen: I am fascinated by my hon. Friend's analysis of the policy of the right hon. Member for Leeds, East (Mr. Healey). I am aware that the right hon. Gentleman said on 20 July 1977 when he was Chancellor
    "we cannot master inflation unless we have control of the money supply."—Official Report, 20 July 1977; Vol. 935, c. 172–6.]
    Mr. Woolmer: Is it not clear that the Government are fighting inflation not by monetarism but by the deliberate creation of massive unemployment? Is he aware that in the Yorkshire region unemployment has increased by 70 per cent. and that West Riding textile towns are collapsing? Does he know that unemployment in Huddersfield has increased by 144 per cent? Is this not the destruction of our manufacturing base? When will the Chancellor stop being complacent and look after the interests of the British industrial worker?
    Mr. Biffen: I cannot accept that the Government are pursuing a conscious policy of unemployment. I suggest that the hon. Gentleman does no service to himself or his party by blinding himself with that sort of partisanship. One of the major factors behind present unemployment is the severe constraint operating in the manufacturing sector of the economy, which in turn is partly related to the exchange rate, which in turn is related to the problems of the North Sea, which are not the consequence of Government-designed policies. We are seeing an economy being transformed by the North Sea. That is the signal of the exchange rate. The hon. Gentleman can acknowledge that or retreat into an ostrich hole.

    Credit Cards
    Mr. Heddleasked the Chancellor of the Exchequer whether he will consider increasing the monthly repayment programme of credit cards to 15 per cent. of the outstanding balance.
    Mr. Lawson:No, Sir.
    Mr. Heddle: Does my hon. Friend agree that greater control should be exercised over the use of credit cards? Does he accept that the greater the extent to which plastic money is more readily available the greater will be the adverse contribution to the money supply, and that the more realistic and stringent the repayment terms are the more prudent and thrifty people will be?
    Mr. Lawson: It is important to keep this matter in perspective. Bank lending is only one of the counterparts of the money supply sterling M3. Total bank lending is £64 billion while total consumer credit is about £13 billion. Of that £13 billion only about £1 billion is accounted for by credit cards.

    Economic Policies
    Mr. Dubsasked the Chancellor of the Exchequer if he is satisfied that recent trends in key economic indicators, especially unemployment, interest rates, and money supply confirm that his economic policies are proving effective.
    Mr. Biffen: I am convinced that the Government's policies offer the best prospects for a stronger economy with higher employment and lower inflation.
    Mr. Dubs: Is the right hon. Gentleman aware that his answer effectively means "No"? Will he tell the House whether he is depending upon a decline in inflation as the only way of getting the economy into working order, or does he have other policies that he will bring forward at the appropriate time?
    Mr. Biffen: A fall in inflation and the restoration of greater monetary stability would be good preconditions for a revival in economic activity. The taxation changes that were made during the first few months of this Government are equipping people to respond to those chances when they arise. The same is true of all the other measures designed to liberalise
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    the economy—for example, the scrapping of exchange control, the scrapping of price control, the scrapping of dividend control and the ending of the vestiges of pay policy. These were all deliberate attempts to place opportunities before the British people rather than have them concentrated in political hands.
    Mr. Lyell: My right hon. Friends seek to keep Government borrowing under control, but will they recall that the increase in pay in August of 22 per cent. was generally recognised to be excessive? As they come to find measures to narrow the borrowing gap, will they not be too afraid of increases in indirect taxation to make a contribution to narrowing the gap?
    Mr. Biffen: I have noted my hon. Friend's fascinating suggestion. I shall retreat behind the time-honoured formula of saying that I cannot anticipate the Budget of my right hon. and learned Friend.
    Mr. Denzil Davies: Does the right hon. Gentleman agree that the only things that Treasury Ministers have achieved in the past 18 months, if that is the right word, are high inflation, soaring unemployment, exhorbitant interest rates, high Government borrowing and the virtual destruction of half of British industry? In those circumstances, would it not be the honourable thing for him and other Treasury Ministers to resign?
    Mr. Biffen: No. We are engaged on a policy for the lifetime of a Government. We are determined to chance our successes against what the right hon. Gentleman asserts are our faults and failures. When the right hon. Gentleman recited his catalogue of gloom with all the authority of a Welsh valley wet Sunday afternoon preacher he omitted to mention that we now have a falling rate of inflation and the lowest level of industrial disputes for 30 years. Those factors must be put in the balance.
    Mr. Latham: Is my right hon. Friend satisfied that he has sufficient influence and/or powers to control the level of pay increases in the nationalised industries?
    Mr. Biffen: This is an area where one moves and learns by experience.
    Mr. Geoffrey Robinson: In view of the previous answer given by the right

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    hon. Gentleman to the effect that the relationship between the money supply and inflation is so imprecise that he could offer neither estimate nor prediction, does he agree that the money supply is almost useless as a tool of economic management?
    Mr. Biffen: Certainly not. The very imprecision in some circumstances can be of great assistance.

    European Monetary System
    Mr. Knoxasked the Chancellor of Exchequer when he expects that the United Kingdom will take part in the exchange rate mechanism of the European monetary system.
    Mr. Lawson: I have nothing to add to the reply that my right hon. and learned Friend the Chancellor gave my hon. Friend on 24th July.
    Mr. Knox: Does my hon. Friend agree that, if Britain were to be a full member of the EMS, it would provide more stable conditions for those engaged in trade with our EEC partners to operate, which would be beneficial to this country? Is it not time that we seriously considered becoming a full member?
    Mr. Lawson: In the present conditions of the foreign exchange market and the factors affecting sterling, it would be wholly unrealistic for sterling to be a member of the European monetary system. Indeed, if we had been in the EMS, it would have disrupted our monetary policy or the alignment of exchange rates within the system or, more probably, both.
    Mr. Denzil Davies: Does the Financial Secretary agree that the only sensible economic decision that this Government has taken in the past 18 months has been not to join the EMS? Does he further agree that, with the total collapse of the Government's economy policy, that decision is beginning to look like a shining beacon in a sea of darkness?
    Mr. Lawson: I am glad that the right hon. Gentleman agrees that that is a sensible decision, but the list of other sensible decisions taken by this Government is so long that I do not have time to read it to the House this afternoon.
    Mr. David Steel: If the Financial Secretary is claiming that joining the EMS would interfere with both the monetary policy and the exchange rate policy of this Government, is not that a further reason for considering joining?
    Mr. Lawson: No, Sir. It is a reason for not joining.
    Sir Frederick Burden: Does my hon. Friend consider that the economic policy of the Labour Government was successful when unemployment doubled and in 1975–76 they even went to the extent of cancelling the Christmas bonus for old age pensioners?
    Mr. Lawson: My hon. Friend is, of course, right. Bearing in mind their record when in office, the attitude taken by the Opposition is a mixture of hypocrisy and cynicism.

    Money Supply
    Mr. Budgenasked the Chancellor of the Exchequer what was the percentage increase in the money supply as monitored by the M3 in the year ended 1 September.
    Mr. Raceasked the Chancellor of the Exchequer what are the latest figures for the annual rate of growth of M3 money supply in the financial year 1980–81.
    Mr. Chapmanasked the Chancellor of the Exchequer what was the movement in the official measure of the money supply in the last three months for which figures are available.
    Mr. Lawson: As my right hon. and learned Friend the Chancellor said to the Treasury and Civil service Select Committee last week, we estimate that underlying sterling M3 has grown at around 19 per cent. at an annual rate since the beginning of the target period. The provisional October figures suggest that this rapid growth has continued, but we firmly expect the rate of growth to slow down appreciably in the second half of the year.
    Mr. Budgen: Does that mean that, at some time between 18 months and 2½ years from the present, the rate of inflation will be about 19 per cent?
    Mr. Lawson: What it does mean is that, if we do not succeed in getting a deceleration of the money supply, the outlook for inflation will be dangerous and alarming. As the right hon. Member for Leeds, East (Mr. Healey), who was a distinguished monetarist Chancellor in his day, pointed out in his Budget Statement in 1978:
    "the rate of growth of the money supply is bound to fluctuate significantly from month to month."—[Official Report, 11 April 1978; Vol. 947, c. 1192.]
    Mr. Race: Is it not clear that the underlying growth of M3 money supply, which has just been reported to the House, is an absolute disaster, and that, on the Government's own estimates, must mean that inflation next year will be running at very nearly 20 per cent? What kind of policies will the Chancellor introduce to brine down that rate of inflation? How many more public sector workers will be sacked by his Government and how many more pay settlements will be made in single figures?
    Mr. Lawson: I am very glad to have the hon. Gentleman's support in our determination to bring down the rate of growth of the money supply.
    Mr. Maclennan: In view of what the Chief Secretary describes as the imprecision in the relationship between the growth in the monetary aggregates and the fall in inflation, will not the Government henceforth rely on what is quite precise, namely, the damage being done to British industry by interest rates that are penal and crippling?
    Mr. Lawson: The imprecision is not new. It has always been there. It did not deter the right hon. Member for Leeds, East (Mr. Healey) from paying great attention to the money supply when he was Chancellor. Nor will it in any way deter us.

  PRIME MINISTER (ENGAGEMENTS)
  Mr. Greyille Jannerasked the Prime Minister whether she will list her official engagements for Thursday 6 November.
  The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet. In addition to
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  my duties in this House I shall be having further meetings with ministerial colleagues and others, including one with the President of the European Parliament, Madame Simone Veil.
  Mr. Janner: In view of the present tragic level of unemployment may I ask whether the right hon. Lady discussed with her Cabinet colleagues the likely increase in unemployment as a result of the further cuts in public expenditure that she and her colleagues have in dispute at the moment? If so, with what result?
  The Prime Minister: The short answer is that we never give forecasts of future unemployment, except in the Red Book that comes out at Budget time. Otherwise, we follow the advice given by the Opposition when they were in power not to give specific forecasts. With regard to the latter half of the hon. and learned Gentleman's question, if we take too much out of the private sector for the public sector, we shall be positively encouraging unemployment in the private sector. Those who advocate more and more public expenditure would do well to remember that.
  Sir Anthony Meyer: In her talks with Madame Veil today will my right hon. Friend make it plain that the Conservative Party and this Government are finally committed to making a success of British membership of the EEC? Will she also make it plain that, whatever the opinion polls may say now, the Labour Party is unlikely to find that withdrawal from Europe proves a greater electoral asset than unilateral disarmament?
  The Prime Minister: I believe that this Government are making a great success of our membership of the European Community. Because we are devoted to the ideal of the European Economic Community and our partners know that we have been a great deal more successful than the Labour Government in securing budgetary settlements and other outstanding matters.
  Mr. Foot: We read in the newspapers this morning that the right hon. Lady has sent a message to Mr. Reagan. Could she tell us also whether she has had a chance to send a message to her right hon. Friend the Member for Sidcup (Mr. Heath)? If so, would she care to print it in the Official Report, if it is printable?

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  Does she agree with the opinion expressed by the right hon. Gentleman that now that Governor Reagan is President-elect, he would be far too intelligent to follow the policies of ruinous monetarism as they appear to be followed in this country?
  The Prime Minister: The right hon. Gentleman is certainly right to say that I sent a message to Governor Reagan after his splendid victory in the American elections, saying how very much I look forward to working with him. With regard to what the right hon. Gentleman said about my right hon. Friend the Member for Sidcup (Mr. Heath), I am sure that my right hon. Friend would agree that
  "once a decision is made, once a policy is established, the Prime Minister and … colleagues should have the courage to stick to it. Nothing has done Britain more harm in the world than the endless backing and filling which we have seen in recent years."
  That was my right hon. Friend's message to the electorate on the eve of the 1970 general election.
  Mr. Foot: Will the right hon. Lady tell us now to what she thinks her right hon. Friend was referring when he talked of ruinous monetarism? Does she think it is a good idea to continue on that course, even when the ruin is proved all round her?
  The Prime Minister: I rather thought from what I heard earlier that Labour Back Benchers were castigating us for not being strict enough on the monetary supply.
  Mr. Ian Lloyd: Lest my right hon. Friend should be tempted to pay too much attention to the well-meaning, gratuitous but often intemperate advice given to her on the radio, will she bear in mind that some of us take the view that the last person to give advice to Nelson would be Admiral Byng?
  The Prime Minister: I believe that the first objective of this Government—as, indeed, it was the first objective of the 1970 Government—is the curbing of inflation. We have to put that need first. We shall continue to do so.
  Mr. Cyril D. Townsendasked the Prime Minister if she will list her official engagements for Thursday 6 November
  The Prime Minister: I refer my hon. Friend to the reply which I gave earlier.
  Mr. Townsend: Bearing in mind that it was a Labour Prime Minister who committed his Government to increasing defence expenditure. in conjunction with our NATO allies, by 3 per cent. a year until 1984, and bearing in mind that since then the Russians have put 85,000 troops into Afghanistan, will my right hon. Friend make it categorically clear that her Government will continue to meet that commitment?
  The Prime Minister: We shall do everything possible to meet that commitment. So that there can be no possible misunderstanding, may I read out the NATO commitment? It was
  "to aim at making available resources which would allow for annual increases of defence spending in the region of 3 per cent. in real terms, recognising that, for some individual countries, economic circumstances would affect what could be achieved."
  In the first year we met that 3 per cent. We do not know what will be the precise outturn this year but it will not be very far short of 3 per cent., and may be 3 per cent. Next year there will be an increase in defence spending above this year, but I cannot say of precisely what amount.
  Mr. Stoddart: Before the right hon. Lady agrees to further swingeing cuts in public expenditure which will hurt our economy even further, will she bring forward legislation to deal with the tax-dodging Vesteys and others of that ilk who will not pay their way in this country. and will she make that legislation retrospective?
  The Prime Minister: The object of the present public expenditure review is to hold next year's totals to those which have already been published in aggregate. That is not a total reduction. It is to hold the total to what has already been published. With regard to the Vestey case, my right hon. and learned Friend the Chancellor of the Exchequer made perfectly clear that he will be bringing forward legislation in the next Finance Bill.
  Mr. Peter Fraser: Will my right hon. Friend convey the gratitude of this House to the Swedish ambassador for the efforts that his staff in Tehran have been making on behalf of Miss Jean Waddell and the

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  other British prisoners there? But at the same time, in communications with the American President and his successor, will she make it clear that if the prisoners are released we would hope in the future to obtain from the Americans the cooperation that we gave to the American people over their hostages?
  The Prime Minister: I shall be very happy to convey the generous message from my hon. Friend to our Swedish friends and to thank them very much for looking after the interests of Britain, particularly in regard to the four people who are detained in Iran. I am sure that we shall have full co-operation from the new American Government, as from the present one.
  Mr. Buchan: Will the right hon. Lady accept that the real significance of the failure of her policy on money supply is that she has been putting the people of this country through unnecessary and pointless suffering for the last year and a half? When will she stop listening to the advice of the mad monetarist guru in Chicago and listen to some of the wise words of her Tory predecessors in office?
  The Prime Minister: I would not agree with the hon. Gentleman for one moment. The fact is that inflation has now come down from 21·9 per cent. to 15·9 per cent.—a figure which Labour Members were telling us a few months ago it was impossible to reach.
  Mr. Ashton: Who put it there?
  Mr. Neale: Is my right hon. Friend aware of reports coming from the Pakistan Government regarding the annexation by the Soviet Union of the Wakhan corridor, running to the north of the Pakistan borders with the Soviet Union? Will she deplore that annexation, if it has taken place, and confirm that the British Government will not recognise it, and will she refer the matter to the United Nations Security Council?
  The Prime Minister: The British Government recognise the integrity of existing borders and I am not aware of any annexation. I am aware that there have been intrusions over the border, which we would naturally condemn as being intrusions upon someone else's territory.

  MIGRATION OF LABOUR
  Mr. Raceasked the Prime Minister what are the advantages of her policy of advocating the migration of labour from one region of the United Kingdom to another.
  The Prime Minister: Some mobility is essential if the labour market is to function properly; that has always been true and is still true today.
  Mr. Race: Does the Prime Minister accept that migration of labour from one part of the United Kingdom to another does nothing to reduce the cost of unemployment, currently running at £440 million for every 100,000 increase in unemployment? Does she recognise that it is precisely to those parts of England—and particularly South-East England which voted Conservative at the last general election that the people will be migrating? Does she also realise that people in South-East England. particularly unskilled workers, will be losing their jobs perhaps because of migrants from other industries and other regions?
  The Prime Minister: As the hon. Member comes from a constituency very near to mine, he will be interested to know that the migration between the regions in the years 1978–79 was away from greater London to the extent of about 56,000 people. It so happens that skilled people have always been used to moving in order to seek work. It can both reduce unemployment and help those employers who want skilled labour if people are prepared to move to where the jobs are.
  Mr. Stokes: Is my right hon. Friend aware that in the 1930s many thousands of people left Wales for the West Midlands, where they made a great success of their lives and careers, and are highly respected?
  The Prime Minister: Yes, Sir.
  Mr. Soley: With regard to the Prime Minister's remarks about people moving to the South-East, does she realise that they have great difficulty in obtaining housing because house building has already been severely hit in both the public and private sectors by the actions of her own Government?
  The Prime Minister: The hon. Gentleman will find that the new Housing Act gives very considerable help to those who are seeking work.
  Mr. McCrindle: Will the Prime Minister agree that in order to achieve mobility of labour it is necessary to make some progress concerning the transferability of pension rights under private pension schemes? Are the Government seized of the need to make progress on this front, and is she able to tell the House that we shall shortly be receiving the recommendations of the Occupational Pensions Board?
  The Prime Minister: I am aware that there are changes which still need to be made to ensure complete transferability. The matter is still being studied. I am grateful to my hon. Friend.
  Mr. Barry Jonesasked the Prime Minister what are her official engagements for 6 November.
  The Prime Minister: I refer the hon. Member to the reply which I gave earlier today to the hon. and learned Member for Leicester, West (Mr. Janner).
  Mr. Jones: Why must the right hon. Lady cut public expenditure while Britain slides into the deepest recession since the
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  1930s? Why does she callously sanction a massive rise in unemployment while Britain's industries collapse in ruins?
  The Prime Minister: I have repeated several times in the House that the present public expenditure review is to hold the totals of public expenditure to those already published for next year. However much one may wish to spend more, particularly on projects that all hon. Members favour, the fact is that public expenditure has to be financed by the private sector. Every increasing burden that we make on the private sector makes it more difficult for that sector to cut its costs and remain competitive.
  Sir John Eden: While there is still widespread support for the Government's economic policy—[Hon. Members: "Where?"]—will my right hon. Friend ensure that her Government take vigorous action to reduce the size of central and local government bureaucracy?
  The Prime Minister: That is most certainly our objective. Since this Government have been in power the size of central Government has been reduced by about 35,000 people. Local authorities have now embarked upon a policy of greatly reducing over-manning. The figures published for the last quarter were the best ever.

BUSINESS OF THE HOUSE
Mr. Foot: Will the Leader of the House state the business for next week?
The Chancellor of the Duchy of Lancaster, Leader of the House of Commons and Minister for the Arts(Mr. Norman St. John-Stevas): The business for next week is as follows:
MONDAY 10 NOVEMBER—Consideration of Lords amendments to the Broadcasting Bill.
Motions on the Supplementary Benefits (Aggregation, Requirements and Resources) Amendment Regulations, on the Remand (Temporary Provisions) Northern Ireland) Order, and on the Value Added Tax (Health) Order.
TUESDAY 11 NOVEMBER—Consideration of Lords amendments to the Local Government, Planning and Land (No. 2) Bill.
WEDNESDAY 12 NOVEMBER—Remaining stages of the Highways Bill [Lords].
Resumed debate on the motion on financial assistance to Opposition parties.
THURSDAY 13 NOVEMBER—Debate on codes of practice on picketing, and on the closed shop.
Consideration of any Lords messages that may be received.
Thereafter, subject to progress of business, Parliament will be prorogued.
As already announced, the new Session will be opened on Thursday 20 November this year.
Mr. Foot: Since the business announced by the right hon. Gentleman does not appear to be very thrilling on every day, and as there seems to be some difference of view about what is intended to be meant by "ruinous monetarism "the phrase of the right hon. Member for Sidcup (Mr. Heath)—is it not possible to arrange a debate on that matter next week to sort the question out?
Mr. St. John-Stevas: I am sure that it is not beyond the ingenuity of the right hon. Gentleman to fit in that matter on Wednesday, for instance, when we consider the remaining stages of the Highways Bill [Lords]. As for thrills, we look for thrills these days to activities outside this Chamber.
Mr. Adley: On the debate on the question of finance to Opposition parties, will my right hon. Friend confirm that this presumably relates to Opposition parties in Parliament? Will hon. Members be able to refer to the position that would arise should a squabble take place over who represents the main Opposition in this country, and whether it is a party inside this House or outside?
Mr. St John-Stevas: This is a resumed debate on the subject of assistance to Opposition parties to help them in their parliamentary duties. This has become an established part of our practice. It is not anyone's intention to extend this aid to activities outside Parliament.
Mr. John Silkin: In view of reports that BP is proposing to place construction orders for oil rigs worth £10 million in Japan and Korea and not in our shipyards, can we expect a statement from the Secretary of State for Industry in the near future?
Mr. St. John-Stevas: I have not received any application for such a statement from my right hon. Friend. I doubt whether the matter falls within his sphere of ministerial responsibility, but if the right hon. Gentleman wishes I shall certainly raise the matter with my right hon. Friend.
Mr. Silkin: It certainly does fall within the scope of the right hon. Gentleman, because the Minister of State himself said that he was going to encourage expenditure in British shipyards for exactly this sort of purchase.
Mr. Freud: If there should be any delay before the messenger from the other place comes along, will the Leader of the House consider a short debate on the Totalisator? Is he aware that there is considerable concern, both in the House and outside, about a nationalised industry that allows £200,000 credit to an individual? There is concern that this nationalised bookmaking industry is neither more efficient nor more profitable than the private sector practising in the same sport.
Mr. St. John-Stevas: That is an interesting suggestion to fill in a hypothetical gap. In view of our shared interest in the Turf, I will give it consideration.
Several Hon. Members rose——
Mr. Speaker: I shall call those hon. Members who have been rising in their places.
Mr. Gummer: Is my hon. Friend aware that my constituents expect the closest co-operation between their Members of Parliament and their Members of the European Parliament? This is made more difficult by the fact that this House has so far made no sensible and proper provision for European Members of Parliament even to have a pass to come and see Members of Parliament whose constituents they help to represent in Europe.
Mr. St. John,-Stevas: As my hon. Friend will know, the Services Committee has passed a resolution to the effect that European Members of Parliament should have certain limited access to this House. I will consider the matter that my hon. Friend raised.
Mrs. Dunwoody: Will the Leader of (he House find time next week for a debate on the extraordinary decision to rush through a study of the Royal ordnance factories with a view to moving them into private sector enterprise? These factories have been within Government circles for over 400 years.
Mr. St. John-Stevas: I will raise the matter with my right hon. Friend, but I am afraid that I cannot promise a debate next week.
Mr. Lawrence: Can my right hon. Friend say whether the debate on Wednesday, on financial assistance to Opposition parties, is intended to last for only one and a half hours, so that we can talk it out again?
Mr. St. John-Stevas: No time is set for the ending of the debate. Depending on the progress made on the previous business, it could run for longer than the time that my lion. Friend states. I hope, however, that hon. Members who are thinking of talking this measure out will remember that when this Government were in opposition they enjoyed the benefit of these arrangements and, in equity, this facility should be extended, not in the interests of the Opposition as such but in the interests of parliamentary government, to the present Opposition.
Mr. Cryer: Will the Leader of the House consider a debate next week—as
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we have a spare Friday—on the question of the American presence in Britain, particularly in view of the change in the presidential leadership in America, which sends a lot of shivers down a lot of spines? In view of the dissembling attitude of the Ministry of Defence and the secretive way in which the Americans operate a nuclear presence in this country without express parliamentary approval, can we discuss the whole affair and perhaps consider giving parliamentary approval to these warlike manoeuvres?
Mr. St. John-Stevas: I am afraid that I cannot promise a debate on that subject, important though it is. There may be an opportunity to raise it in the debate on the Address. As for recent events in the United States, I am sorry that the hon. Gentleman is shivering and shuddering. I think that he should be more optimistic. Things may turn out better than he expects.
Mr. Latham: In the interests of implementing the Government's plans for holding down the size of the Civil Service, can my right hon. Friend spend each of the 14 days between now and the Queen's Speech studying the draft of the Speech and striking out one draft Bill between now and then?
Mr. St. John-Stevas: We have been studying that draft for some time. I have been doing exactly what my hon. Friend has commended. If there is an opportunity to strike out a further Bill, I shall be the first person to take it.
Mr. Ioan Evans: Will there be a statement next week on the Government's intention regarding the statement by the Select Committee on Welsh affairs on employment opportunities in Wales? The people of Wales reject the Prime Minister's suggestion that they should have to leave Wales to obtain jobs elsewhere in the United Kingdom. That was possible in the 1930s, but there are no jobs now elsewhere in the United Kingdom.
Mr. St. John-StevasThe hon. Gentleman is not representing fairly what my right hon. Friend the Prime Minister said. The important report mentioned by the hon. Gentleman must be discussed. It is the Government's intention, at the earliest opportunity, to lay a Command Paper before the House giving their

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response. The report contains 40 major recommendations, and the Government must have the opportunity to be as thorough as the committee.
Mr. Marlow: Since it has recently been disclosed that European Members of Parliament, who have less than one-tenth of the relevance of Members of this House, cost the country more than 10 times as much individually, will my right hon. Friend bring measures before the House to prevent the continuation of this vast haemorrhage of public funds?
Mr. St. John-Stevas: My responsibilty is to this House. I am delighted that we are setting the example. I hope that we shall be able to do even better in economical administration in future.
Mr. Tilley: Has the Leader of the House seen early-day motion 837 on the deportation of Filipino domestic workers?
[That this House urges the Secretary of State for the Home Department to continue to exercise his discretion and to do so more widely in order to allow the limited number of workers, chiefly women from the Philippines, who have worked in the United Kingdom for many years as resident domestics and are now held to be illegal entrants because they had dependent children at the time their permits were issued, to remain on compassionate grounds.]
Is he aware that the motion continues to attract support from all parts of the House because the deportations continue unjustly and unfairly, and involve individuals and families? For that reason, may we have an early debate?
Mr. St. John-Stevas: I cannot promise an early debate. The issue obviously raises difficult personal problems. The Government cannot disregard the decision of the courts in this matter. Before a removal is enforced the case is examined carefully. Discretion is and will continue to be exercised when there are compelling reasons for allowing a person to remain here in exceptional circumstances.
Mr. Straw: Is the right hon. Gentleman aware of the deep anxiety among Opposition Members about the Government's intention to slip through sales of Royal ordnance factories to private buyers without proper parliamentary legisla-
1470
tion or even a debate? If he cannot promise a debate next week will he ensure that there will be a full debate on the Government's intentions before any firm decisions are taken by the Government.
Mr. St. John-Stevas: I am afraid that I cannot go further than I did in answer to the hon. Member for Crewe (Mrs. Dunwoody). I shall raise the matter with the Minister responsible.
Mr. Winnick: In view of the earlier exchanges today, will the right hon. Gentleman find time for a debate on early-day motion 897 so that at least Conservative Members of Parliament, including the right hon. Member for Sidcup (Mr. Heath), can give their views on the state of the economy to the House?
[That this House congratulates the right hon. Member for Bexley, Sidcup for rightly describing the present policies of the Government as catastrophic and destructive to Great Britain's industrial base; and invites other Conservative hon. Members to associate themselves with such criticism in the interest of the country.]
Such a debate might give the Leader of the House the opportunity to speak out on the state of the economy forthrightly and not in coded language as he did recently.
Mr. St. John-Stevas: I do not know what on earth the hon. Gentleman refers to. I do not speak in coded language in the House or anywhere else; I speak out forthrightly. Having read the motion signed by the hon. Member on the recent contribution to broadcasting late at night, my right hon. Friend the Member for Sidcup (Mr. Heath), I shall give him an equally forthright observation on his motion. In view of the subject of the motion and the signatories to it, it is a case of the blind leading the blind.
Mr. Parry: Has the Leader of the House seen early-day motion 898, tabled in my name and supported by more than 90 hon. Members, about flags of convenience?
[That this House supports the National Union of Seamen in its campaign in opposition to flags of convenience; deplores the double standards of Lord Matthews of Trafalgar House and the Daily Express, which, in August, called upon the nation to fly the flag; and calls

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upon Lord Matthews to practice what he preaches.]
Will the right hon. Gentleman find time for an early debate on this important issue? Will he ask the Secretary of State for Trade and the Secretary of State for Employment to have early discussions with the National Union of Seamen and Lord Matthews, in a bid to avoid what might be a national strike of seamen?
Mr. St. John-Stevas: The hon Member is not up to date with his information about the dispute. I understand that it has just been settled. We are delighted at that. I understand that the "Princess" will now fly the Bahamian flag and the "Countess" will remain as it is. I hope that the unnecessary dispute has come to a happy conclusion.

OFFSHORE SAFETY
Mr. Speaker: I have selected the amendment in the name of the right hon. Member for Plymouth, Devonport (Dr. Owen).
3.45 pm
The Minister of State, Department of Energy (Mr. Hamish Gray): I beg to move,
That this House takes note of the Report of the Burgoyne Committee on Offshore Safety.
I welcome this opportunity for the House to debate the report of Dr. J. H. Burgoyne's distinguished committee, and the Government's response to it.
As the House will recall, the committee was set up by the previous Administration in September 1978. Its terms of reference were:
"To consider as far as they are concerned with safety, the nature, coverage and effectiveness of he Department of Energy's regulations governing the exploration, development and production of oil and gas offshore and their administration and enforcement. To consider and assess the role of the certifying authorities. To present its report, conclusions and any recommendations as soon as possible."
I have described the committee as "distinguished", and I am sure that there will be no differences in view about that. Dr. Burgoyne is himself an eminent authority in this field, being an independent consultant as well as visiting professor in industrial safety at the City university. London. His colleagues on the committee comprised Mr. E. G. Everett and Dr. M. M. Linning. both consultants to the oil industry; Mr. B. Hildrew, managing director of Lloyds Register of Shipping; two trade union representatives in Mr. R. Lyons and Mr. J. Miller, both national officers of their respective trade unions, the Association of Technical and Managerial Staffs and the Transport and General Workers Union; Professor B. McNaughton, head of the school of mechanical and offshore engineering at Robert Gordon's institute of technology, Aberdeen; and Mr. H. G. Riddlestone, associate director of ERA Technology Ltd., formerly the Electrical Research Association Ltd. Dr. R. Week, visiting professor in the department of civil engineering at Imperial College, London, was technical consultant to the committee.
By any standards, the committee did a remarkable job in a relatively short time in what is a very complex, important and

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sensitive field. The committee met for the first time on 11 January 1979 and completed its work on 24 January 1980. In the space of a year the committee met on no fewer than 40 occasions; made 14 visits to various offshore installations and land-based establishments; considered 65 written submissions of evidence and formally met 13 organisations to clarify or amplify their written evidence—as I have said, a truly remarkable record, which resulted in an extensive and extremely valuable report and a list of no fewer than 62 recommendations, together with the note of dissent by Mr. Lyons and Mr. Miller.
I am sure that I speak for the whole House when 1 express deep gratitude to the committee for all its diligent work and carefully thought out recommendations.
Mr. Tam Dalyell: Why in the valuable document provided in the Library is there no detailed refutation of that crucial note of dissent by the two trade union representatives, Mr. Lyons and Mr. Miller?
Mr. Gray: The document which was placed in the Library deals in considerable depth with the recommendations. Since the minority report was diametrically opposed to the main recommendation, it is obvious that the Government must have considered both submissions before coming to a conclusion. I shall later try to deal in more detail with that matter.
The committee's report came at an opportune if grevious time for, as the House will sadly recollect, it was shortly followed by the tragic accident to the Norwegian accommodation rig. the "Alexander Kielland" which overturned in rough North Sea weather with the loss of 123 lives, including 24 British nationals. That disaster underlined for all of us the risks associated with winning hydrocarbons from below the sea bed in one of the worst environments in the world. We must clearly do all in our power to prevent a repetition of the "Alexander Kielland" and, more generally, to make the North Sea as safe a work place as it can possibly be. At the same time, however, we should not delude ourselves into thinking that industrial accidents can somehow be entirely prevented offshore or onshore by legis-
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lation, regulation or administration. All that we can hope to do in relation to the Burgoyne report is to set the best possible safety framework within which these difficult yet vital offshore oil and gas operations are carried out.
I have placed in the Libraries of both Houses a statement of the Government's response to all the recommendations in the committee's report.
Three of the report's recommendations are concerned with the organisation of offshore safety responsibilities within Government. This matter was outside the committee's terms of reference, but it has raised such important issues that the Government could not ignore them, and I welcome the fact that Dr. Burgoyne and his colleagues did not regard the limitations of their terms of reference as a barrier to making valuable and more wide-ranging recommendations in the cause of offshore safety.
These issues split the committee—the minority report or note of dissent is entirely concerned with them—and I suspect that the House will wish to devote much of its attention to them in this debate, but I should like to concentrate first on the more technical recommendations which make up the bulk of the report.
Many of these recommendations are concerned with points of detail on a wide range of offshore operations. Some draw attention to specific procedures and practices where safety standards might be improved, for example, in the matter of safety assessments during the design and construction of offshore installations, the fire protection of escape routes, and training in and qualification requirements for well control and diving. Other recommendations——
Mr. Dalyell: Will the Minister give way?
Mr. Speaker: Order. We cannot have two hon. Gentlemen on their feet at the same time.
Mr. Gray: I give way to the hon. Gentleman.
Mr. Dalyell: Will the Minister come back to the issue of diving later in his speech?
Mr. Gray: Yes.

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Other recommendations point to possibe deficiencies in offshore safety legislation, such as the question of the legal status of ancillary floating installations used for accommodation purposes, or the need for new regulations to cover, for example, engineering and operational safety in the construction and use of pipelines. The committee has in fact covered the whole spectrum of offshore safety operations in a very thorough and professional way.
The Government regard the vast majority of the committee's detailed recommendations as well conceived and sensible—indeed, a number merely give emphasis and support to measures we had already identified to be necessary. All the recommendations have been carefully reviewed. The statement that I have placed in the Library shows that almost all of the recommendations are accepted or that, where there is doubt about the practicability of implementing them, they are accepted in principle. Only one has been rejected entirely. Many have already been implemented in whole or in part and progress towards implementing others has reached an advanced stage.
The recommendation which we have not felt able to accept is number 6.11, which proposes that there should be a scheme of official approval of independent specialised surveyors which the certifying authorities such as Lloyd's, Det Norske Veritas and the American Bureau of Shipping may need to employ from time to time to help them with particular aspects of their task. The recommendation has been rejected on the ground that such official approval would be an unnecessary intrusion into the way that the certifying authorities manage their affairs. It would detract from their proper responsibility to decide who are best qualified to be employed by them in particular circumstances. It would also tend to confuse their ultimate responsibility to my Department for carrying out their survey, inspection and certifying role. But, as I have said, that is the only one of the 62 recommendations which we have felt it necessary to reject entirely.
Mr. Dalyell: Attendance in the House is fairly light and therefore I think that I am entitled to turn to submission 34 by the British Insurance Association on precisely this point. It says:
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"Apart from the obvious commercial disadvantages, this policy has the following side effects:"—
and it lists four which must be well known to the Minister. One is:
"(a) In spite of being accepted as the county's main independent source of expertise, the engineering offices have lost the opportunity to participate on offshore-technology at the construction stage, to the detriment of both their own stature and the national confidence in the industry".
I do not want, in an intervention, to go through all four, but I think that the Minister has an obligation at the opening of the debate to say why the Government object to the BIA submission.
Mr. Gray: I thought that I had spelt out fairly clearly why we have not accepted that recommendation, it being the only one of the 62 not to be accepted. I do not think that I can give more detail than I have for our not accepting the recommendation, but I give the hon. Member the undertaking that if I am fortunate enough to catch your eye later in the debate, Mr. Speaker, I shall, by leave of the House, deal with the matter a little more then.
Mr. Dalyell rose——
Mr. Speaker: Is this a point of order?
Mr. Dalyell: No, Mr. Speaker.
Mr. Speaker: In that case the Minister must be allowed to continue.
Mr. Dalyell rose——
Mr. Speaker: Order. It might be a thin House, but within the space of 10 minutes the hon. Member has risen to his feet four times. If everyone did that we should never make any progress.
Mr. Gray: There are currently three Government agencies with responsibilities for offshore safety: the Departments of Trade and Energy and the Health and Safety Commission with its executive, between them administering three Acts of Parliament.
The report challenges the allocation of responsibilities between various Departments and agencies in offshore safety. It contends that the present division of responsibilities leads to delays in preparing and amending safety regulations and that the regulations, when enacted, are at best overlapping and at worst conflicting, with divided administration and enforcement.

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The committee came to the conclusion that one agency should take the lead.
The question of divided responsibilities and the need for change has been very carefully considered within the Government ever since the report was published. I believe that I can speak for all interested parties when I say that the need for change had been amply demonstrated by Dr. Burgoyne and his colleagues. The Government were, however, concerned that changes in administrative arrangements should not be rushed, because we simply had to get these arrangements right this time so as to meet the overall objective of contributing materially to the improvement of safety in the North Sea. So I make no apologies for not having come to the House before now on these important and difficult matters.
The main report and the note of dissent agree on the need for a single agency to oversee offshore safety and on the many detailed technical recommendations and I welcome that wide measure of agreement. But they are diametrically opposed on the question of which organisation should take the leading role. The main report comes down strongly in favour of the petroleum engineering division of my Department, whilst the note of dissent equally strongly advocates the Health and Safety Executive. Clearly no solution could entirely satisfy both points of view. But, as I shall try to demonstrate, the totality of the solution which has been decided upon has much to recommend it and should avoid the main criticisms which have split the committee.
In their approach to those questions, the Government have had a number of factors very much in mind. First, there is the nature of the North Sea environment itself and the nature of the installations required to carry out the hazardous and highly specialised business of exploring for and producing oil and gas offshore.
I do not need to tell the House that the wind and wave forces encountered, particularly in the northern North Sea where most of those activities take place, can be among the worst in the world. The structures have to be designed and built to withstand the sort of extreme natural forces which may occur only once in every 100 years. They are supporting many thousands of tons of com
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plicated equipment, some of which operates constantly at pressures up to and even exceeding 5,000 lb psi—pressures very rarely encountered in other industries. All the facilities and equipment which, in a comparable operation on land, would be separated and well spaced out, are necessarily closely packed together on an offshore platform. Moreover, the platform is a place where men have to live literally on top of their work place. So I hope that the House will understand when I say that offshore oil and gas operations are unlike anything encountered on land, and that they are of a highly specialised nature.
Secondly, and arising from what I have already said, it is clearly necessary that those who are responsible within Government for administering safety requirements in the offshore industry should have an intimate knowledge and experience of the complicated and specialised processes being carried out; of the facilities, equipment and particular hazards involved; and of ways of guarding against and dealing with those hazards.
We are fortunate in having a nucleus of such experts in my Department in the shape of the petroleum engineering inspectorate. Nowhere else in Government is that particular type of expertise to be found. And beyond the hardware and the processes, my inspectors must have immediate and continuing access to other experts who are trained in the relevant geological and geophysical sciences and in oil and gas reservoir engineering, which are all part of the general picture. Again, the only Government experts in those fields are in other parts of my petroleum engineering division. We do not have as many of those experts as we would like—they are generally in short supply—and they must be retained in my Department to advise my right hon. Friend on oilfield developments and operations more generally.
Mr. Dalyell: I am puzzled. Surely if someone other than the sponsoring Department was responsible for safety those very same experts would be available to that organisation. We are not arguing about the experts.
Mr. Gray: The argument that I am developing, and which I hope the hon. Gentleman will allow me to continue, is that one of the important reasons why

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we decided to accept the majority report—and let us not forget that it is the report of a substantial majority of the committee—is that my petroleum inspectors frequently require detailed information about safety and about the reservoir technicalities of the field. We believe that it would be a great mistake to divorce those. It is important that they are considered together, not in isolation.
We recognise that however specialised are those offshore operations we cannot afford to allow safety policy for them to develop without regard to what is happening on safety policy generally on land. I ask the House to bear those points in mind in considering the new structure for offshore safety responsibilities that I shall now explain.
The Prime Minister has agreed that my right hon. Friend the Secretary of State for Energy will assume full responsibility for offshore safety, save for the safety of ships and seafarers engaged in offshore work. That responsibility, as the committee recommended, will remain with my right hon. Friend the Secretary of State for Trade. My right hon. Friend will add to his existing responsibility for offshore structural safety and the technical safety aspect of fires and blow-outs the responsibility for offshore occupational health and safety under the 1974 Act previously held by my right hon. Friend the Secretary of State for Employment.
In all the matters to fall within my right hon. Friend's sphere of responsibility, however, he will rely on the Health and Safety Commission—whose members include representatives of employers and trade unions—to provide him with advice on the making of policy, that is, the development of legislation and guidance to the industry, in so far as those are relevant to health and safety at work in connection with offshore installations. In addition, the commission will be made more clearly responsible for administering and keeping under review other relevant legislation for which my right hon. Friend has responsibility, such as the 1971 and 1975 Acts that I have mentioned.
In turn, and in all these aspects but one—which I shall come to later—the commission will look to the petroleum engineering division of my Department for advice rather than to the Health and Safety Executive. The exception is diving
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safety. Here, the PED and the executive will continue to act jointly in providing advice to the commission on policy. That is because the two organisations have worked together for some time now to produce unified diving regulations covering both on and offshore diving. Those regulations are due to be issued shortly and accordingly it seems sensible to keep them in harness for the time being, although the arrangement will be kept under review.
Mr. Dick Douglas: I apologise to the Minister for intervening, but I think that it may help with the progress of the House. Will the Minister indicate the exact nature of the liaison between the PED and the Health and Safety Commission? Many of us are not clear on that point.
Mr. Gray: Currently there is considererable liaison between the PED and the Health and Safety Commission. The difference is that in future, when my right hon. Friend assumes complete, overall responsibility for safety, we shall make use of all the possible advice that we can obtain. The Health and Safety Commission will be involved at each stage, especially when any advice on legislation is required.
The head of PED will continue to attend the executive's management board to present to it his division's proposals before submitting them to the commission, and also so that he may participate in the board's consideration and endorsement of those proposals from the executive concerned with occupational health and safety in other industries which could have relevance offshore. The Health and Safety Commission will continue to have an industrial advisory committee in that area, either a reformed oil industry advisory committee or a new offshore oil and gas industry advisory committee. The commission will be putting the question to the present advisory committee.
As regards enforcement duties, PED will continue to be responsible to the HSE under an agency agreement for enforcing the Health and Safety at Work etc. Act 1974 in its application to offshore installations. In addition, responsibility for enforcing the Act in respect of pipe-laying offshore will be transferred

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from the Factory Inspectorate to PED. The PED will continue to enforce the provisions of the Mineral Workings (Offshore Installations) Act 1971 and the Petroleum and Submarine Pipe-Lines Act 1975.
To strengthen PED on both policy and enforcement matters in the area of occupational health and safety, four experienced inspectors will be transferred to it from the HSE.
To summarise, we shall have a unified structure with the PED reporting through the management board of the Health and Safety Executive to the Health and Safety Commission, which in turn will advise my right hon. Friend. The cross-fertilisation which will take place at commission level will be further strengthened at the working level by liaison between the PED and the specialist and relevant areas of the Health and Safety Executive. These arrangements will very largely meet the recommendations of the main Burgoyne report. The rationalisation of the three organisations in question—the Health and Safety Commission, the Health and Safety Executive and the Department of Energy—will enable ministerial responsibility to be more clear-cut and direct.
Sir Albert Costain: Perhaps my hon. Friend will clear up one point. Who will be responsible while these structures are being constructed in the shipyard? Which Department will have the responsibility of vetting them before they are sent out?
Mr. Gray: The Department of Energy will be responsible only for the offshore aspect, and the Health and Safety Commission while they are being built.
As, I said, the rationalisation of the three organisations will lead to clearer ministerial responsibility. I stress that the role of the Health and Safety Commission will be greatly strengthened by giving responsibility to my right hon. Friend for advising on policy and legislation across the whole spectrum of offshore safety. The Health and Safety Commission has been consulted and has accepted the arrangements, although I know that the members nominated by the TUC were inclined towards the solution proposed in the note of dissent, which took the view that for a Department sponsor
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ing an industry also to be responsible for its safety could lead to a conflict of interests.
I do not accept that. On the contrary, far from this being the risk, we must weigh very carefully the evident risks of doing the opposite—in splitting responsibilities unduly, having regard also to the limited numbers of experts available to us in this particular area.
Mr. Dalyell: Earlier in his speech the Minister said that the majority of the Burgoyne committee had come down against the trade union representatives who dissented. On this subject, it is not only important that everything is seen to be whiter than white, and in no way to be incestuous, but also that it should be quite clear to everyone that appearances are enormously important. In these circumstances, and on this subject if on no other, would not it have been right to give weight to the view of the trade union representatives rather than the view of the rest of the committee, even though it was the majority? Those of us who have dealt with North Sea accidents in our constituency work know only too well that it takes a hell of a lot of convincing that mistakes did not occur and that blame was not attached where, in the opinion of relatives, it might well have been attached.
Mr. Gray: The hon. Gentleman, unintentionally perhaps, is being a little unfair to the inspectorate. I have made frequent visits to offshore installations, and that point of view has not been put to me. Like the hon. Gentleman, many of my constituents are employed in oil and oil-related work, both on shore and offshore. I must admit that I have not had that experience. That has not been represented to me. Most of those who work offshore are reasonably satisfied with the conditions in which they work as well as with the safety standards that are observed. I agree that it can never be perfect, and we must do everything that we can to try to ensure that we make it as near perfect as possible. We believe that the steps which we are taking will be an improvement.
Mr. J. Grimond: The Minister has been generous in giving way, and I do not want to divert him too much from his speech. Perhaps he will go a little further with regard to his

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answer about responsibilities offshore and responsibilities if a rig or platform is being repaired. As I understand it, if a rig or platform is brought in to, say, Lerwick harbour for repair or maintentance, it will come under supervision of a different Department compared with if it is at sea. If it is under repair in a yard it will come under the Health and Safety Executive, but if it is at sea it will come under the jurisdiction of the Ministry's inspectors. Is that satisfactory?
Mr. Gray: I am grateful to the right hon. Gentleman, because that enables me to emphasise the point that I made earlier. I think that it is satisfactory, because one of the main reasons why we have argued for the Department of Energy inspectorate looking after the offshore installation is that conditions in the northern North Sea are totally different from anything which can possibly be experienced in a yard or harbour. That is why we believe that those who have been directly involved in our own inspectorate are the most suitable people to be responsible for the offshore inspection.
Mr. Harold Walker: The same argument can be applied to a whole range of industries, not least coal mining. Coal mining is a unique experience underground. Work on nuclear installations can be a unique experience. One could go through a whole list. Surely it is absurd to argue that, because a particular type of employment is different, it should be the responsibility of an entirely separate body. That absurdity had long been recognised until this fix was set up by the Department of Energy.
Mr. Gray: I cannot accept what the right hon. Gentleman said. It simply is not so. The safety of the workers in a yard where an offshore structure is under construction is the responsibility of the Factory Inspectorate of the Health and Safety Executive. The structure itself, either under construction or repair, will be under constant review by the certifying authority acting for the PED.
Our solution is not a novel one. A number of different structures are in operation for safety at work in particular industries. For example, the safety of the workers in rail. sea and air transport—all special environments in their different ways—is organised differently from safety in the general run of manufactur-
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ing industry. These differences reflect the particular needs of the circumstances in those industries, and I am sure that that is right.
I believe that the proposals we have made for streamlining the Government machine should contribute significantly to bringing the detailed recommendations to fruition. But I should be deluding the House if I did not make the point that a great deal of work still remains to be done. It may take another year or two before we can finally close the Burgoyne file, but that is a measure of the wealth of detail that has come out of the committee's work.
We are pressing ahead as quickly as we reasonably can, and it is no disservice to Dr. Burgoyne and his colleagues to say that there will undoubtedly be room for fresh initiatives as new safety needs in this fast moving and technologically advanced area develop. We have designed the new administrative machine with this very much in mind. I am sure that it will respond in the most effective and efficient way.
Later, and by leave of the House, if I catch the eye of the Chair I shall try to answer any questions that hon. Members may raise with me during the debate. I commend the motion to the House.
Mr. Eldon Griffiths: Before my hon. Friend sits down, there are two questions which perhaps he could answer now so that the debate is better informed. Can he say whether at the end of the day this new apparatus of inspection, which I support, will cost more or less? Can he confirm that in no way shall we be removing the prime responsibility for safety in all circumstances, which must, of course, rest with the operators of the rigs?
Mr. Gray: On my hon. Friend's second point, I confirm that the operators will always have prime responsibility for safety. On his first point, we do not anticipate that there will be any significant difference in exercising the function, because what is removed from one body and taken over by another should be self-balancing.
4.20 pm
Mr. David Owen (Plymouth, Devon-port): I beg to move, to leave out from

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"House" to the end of the Question and to add instead thereof:
"believes that the only way to safeguard against future accidents is for responsibility for all aspects of offshore safety to be held by the Health and Safety Executive."
The House is debating an important subject for this country. There is no more important industry for this country's wealth and prosperity than the industry operating on the United Kingdom continental shelf, bringing oil and gas ashore to these islands, providing us with self-sufficiency in energy, and with revenues that, if properly used over the next 10 to 15 years, could be possibly the only way of reviving our industrial base. How we maximise our offshore oil is an issue of immense importance. In the discussion of that, it is also right that we should concentrate on the safety and health of the workers who work in an environment that all hon. Members will agree is exceptionally dangerous.
The figures in the Burgoyne report show that an offshore worker is twice as likely to have an accident as a worker in general manufacturing, and about half as likely to have an accident as a miner—an occupation that the House has long considered to be one of the most dangerous. An offshore accident is more likely to be fatal. That is particularly exemplified by diving. It is further clear that the major serious accidents occur in diving, drilling and construction in dealing with boats and cranes.
Many people believe that the figures in the Burgoyne report are a minimal estimate of the number of accidents, and there has been some criticism of the way in which those statistics have been compiled. Many people believe that accidents are more common than the figures show. But we must consider the whole of the Burgoyne report. I welcome its scope, and we can all join in congratulating Dr. Burgoyne and his colleagues on its overall comprehensive nature.
The "Alexander Kielland" disaster raises issues that are somewhat peripheral to the Burgoyne report, but it is important, in the light of that disaster, to analyse the Burgoyne report as it relates to it. Chapter 5 of the report discusses the coverage of the existing legislation and the different definitions of offshore platforms. The legislation is clear on the
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vast majority of installations, but there in some doubt about the status of certain types of ancillary structures that have come to be used in recent years. The report recommends a review of this legislation, which I welcome.
The "Alexander Kielland" fell within the scope of the Mineral Workings (Offshore Installations) Act 1971, and was duly registered by its owners. In the light of the disaster it is also to be welcomed that the report has recommended increased research into protection from deterioration of wire and other ropes in the marine environment, which is probably contributing to many accidents involving cables and cranes, and is of particular concern to the trade unions, and to fatigue endurance of welded joints, which most people think was the probable cause of the "Alexander Kielland" disaster. I do not wish to prejudge the report on the disaster, but I gather that the Norwegian Government hope to publish it soon.
The use of flotels has grown considerably in recent years, and most people would agree that there is a legislative grey area in that respect which should now be covered. Recommendation 6.10 of the report covers notification. There is a need for close inspection of structures of this sort, which are frequently converted into accommodation units from their former use as production platforms, especially as many of those units have recently reverted to drilling because of the shortage of rigs. In April Offshore Oil Weekly stated that
"their performance and structural integrity would need to be carefully monitored from now on."
I have some doubt about whether the Department of Energy's petroleum engineering division has adequate resources to do so. I shall return to that matter later in my speech.
I am not satisfied that the Government have done everything that they should to check British rigs in the wake of the "Alexander Kielland" disaster, especially in comparison with what the Norwegians have done. Immediately after the disaster the Government asked the operators of structures of the Kielland Pentagon-type to carry out checks for cracks, and later several installations were called into the Firth of Forth for checks by the certifying authorities. I should be interested to

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know what action has followed those checks. There does not seem to be anywhere near as much activity in this country, in marked contrast to Norway, where stability conditions of the Pentagon type were tightened and a second type of rig was later ruled to have failed to meet the new tougher standards because it had too high a centre of gravity.
British attitudes have been different from those adopted in Norway. I know that in the case of BP's Drillmaster rig there was an independent inquiry under Professor Sir Hugh Ford, and BP invested extensively in modifying that rig. But do the Government believe that the BP Drillmaster would now satisfy Norwegian regulations? For example, Norway's maritime directorate asked for modifications to be made to a similar vessel, the "Henrik Ibsen", but it appears that British officials have been content to rest with the alterations made to the Drillmaster and did not request further changes along Norwegian lines. Obviously the Department of Energy is aware of some of the findings of the Norwegian inquiry into the "Alexander Kielland" disaster, and I gather that it took those into account when allowing the Drillmaster to resume production. In the light of the anxiety that exists I hope that the Minister will make clear what has been done about the Drillmaster and whether it would satisfy Norwegian regulations.
I hope that the Minister will also deal with the considerable anxiety about BP's future ordering programme for oil rigs. Is it true that BP is considering giving orders for two oil rigs worth £100 million to either Korea or Japan? We know that British Shipbuilders has the capacity and capability, that it is modern and efficient, and that labour and space are available at Scott Lithgow on the Clyde and Cammell Laird on Merseyside. It would be a scandal for BP to place those major orders overseas.
Mr. Bob Cryer: One has been placed.
Dr. Owen: Yes, but there is some anxiety on the question whether there are two further orders, which must be placed in Britain. That is also related to safety. If we do not have a regular ordering programme and do not keep the expertise within this country we shall find that when we are asked to increase
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production, many of the skills will have been lost. We are talking about welding skills. The last accident was probably caused in that area. We have highly skilled welders, and they need to be retained in British yards. Their expertise needs to be retained. It is of considerable relevance to safety.
Let me turn to a number of the other recommendations. My hon. Friend the Member for West Lothian (Mr. Dalyell) has already said that the Government have rejected recommendation 6.11, despite the views put by the British Insurance Association in submission 34. We need more of an explanation about that. The Minister passed over it cursorily. The recommendation has won considerable acceptance. I imagine that cost is the argument against it. We shall have to look at that much more closely. I am not ready to accept the Government's rejection.
There appears to have been a grudging acceptance of recommendation 6.38, on the systematic collection of information on the reliability of equipment. The Government's reply states:
"The acceptability and practicality of such a scheme will be discussed with the Offshore Industry."
That is inadequate. The Government will have to make clear whether they intend to treat the recommendation merely as a subject for discussion with the industry or whether they will urgently implement it. They should not be talking about acceptability. If they have accepted the recommendation, that is it. We need clarification on whether it is a qualified or a clear-cut acceptance.
Recommendation 6.50 is dealt with on page 9 of the Government's paper and is discussed in paragraph 25 of the minority report. It accepts the extension of the Safety Representation and Safety Committees Regulations 1978, but those regulations have still to come into force, and the Government are still talking only in terms of proposed extension. I hope that I am not being unduly suspicious. but I have to ask whether the intention to implement is definite. What do the Government mean by "proposed extension"? I should like much greater clarification of that.
The Government have accepted recommendation 6.64, that more consistent standards need to be drawn up in relation to

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training. They must tell us whether they will ensure that the operators have enough inspectors and whether, given the number of inspector posts advertised in trade papers, they are confident that present inspectors have adequate experience. This is a theme running through the whole subject. We all recognise that there is not a large number of inspectors, and their skills have to be used in the most effective way.
The major question of principle, on which our amendment is based, is whether one can allow the sponsoring Department to be responsible also for safety in the industry. That is an important principle, which the House has debated many times. When the Health and Safety Executive was established I thought that there was widespread agreement on both sides of the House that the principle would be that the sponsoring Department was not responsible for safety and that it would be deliberately taken away from that Department. That was the result of considerable experience over decades and many debates in the House. We knew the proven value of inspectorates that were divorced from the sponsoring Department.
The mining industry is a classic example. It is the most hazardous of working environments, and no one has suggested that the mining inspectorate should come under the Department of Energy. Everybody believes that it should be divorced from the National Coal Board. It has built up a massive amount of understanding, sympathy, expertise and, above all, independence in the mining industry, and is respected for that.
The Minister seemed to say that the petroleum engineering division in his Department had a great deal of skill in the offshore industry. No one denies that. But the Nuclear Installations Inspectorate had similar skills, and it was transferred to the Health and Safety Executive. No one is asking for those in the PED to be sacked. They will not even have to change from being civil servants. We ask that they should be transferred to the Health and Safety Executive and no longer be responsible to the Secretary of State for Energy. There is no question of their losing their expertise. The question is where responsibility should lie.
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The first matter to be faced openly—it is well argued in the minority report—is that Norway has already made such a transfer. We do not have to follow everything done in Norway, but that was an important decision. The Norwegian Ministry of Energy lost its responsibilities for offshore safety on 31 December 1978. Since then, the Ministry of Labour has been responsible for occupational and structural safety offshore.
It is also noteworthy that one operator with experience in both the Norwegian and the United Kingdom sectors gave evidence to the committee that the Norwegian inspectorate was much tougher than the weaker United Kingdom system. The majority report recommended that responsibility should rest with the Department of Energy, but it said in a revealing statement in appendix 13:
"Nevertheless we gained the impression that Norwegian regulations were more detailed than those in the United Kingdom and that they were more rigidly and less knowledgeably enforced. The consequences were often time-consuming and expensive for operators."
That is our basic anxiety. We all know that there has been massive pressure from the industry and the Civil Service for responsibility to be given to the Department of Energy. The reason is that people are afraid of extra expense. I make it clear to the House that that is not an argument that should carry any validity. The industry is making massive profits and earning substantial revenues. No one should be using cost as an argument in this context. It will not work.
Another revealing part of the evidence that needs to be taken into account was supplied by the International Federation of Chemical, Energy and General Workers Unions. Its detailed memorandum said:
"It is particularly regrettable that the guiding principle for the application of occupational health and safety controls in the oil industry appears to rest upon paternalism—i.e. upon the assertion or hope that the company will do 'what is best for its workers'. The rights of workers themselves to decide under what conditions and to what guidelines they should work should be enshrined in legislation in any democratic society"—
hear, hear—
"Operation and safety decision-making in the United Kingdom sector fall very far short of this standard, although the oil companies already have to abide by these regulations in the Norwegian sector."

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The more that one reads the detailed submissions to the committee the more one sees built up a strong case arguing against the recommendation accepted by the Government and put forward by the majority on the committee.
I have had ministerial responsibility directly relating to safety only as a Health Minister. There was never any question of leaving the safety of drugs to be decided by the Department of Health and Social Security. The whole basis of legislation rests on the Medicines Commission, an independent commission divorced from the DHSS and making judgments on drugs.
Many of the Medicines Commission's recommendations carry considerable costs, which have to be accepted either by the pharmaceutical industry or by the National Health Service. I had no doubt then that to have taken those issues of safety into the Department of Health and Social Security would have been an outrageous decision.
The Minister used as his precedents aviation and merchant shipping safety, and he also thrust in the railways. On re-examination he may wonder whether the railways example is clear. I am not an expert, but I think that he will find that the Health and Safety Commission and the Health and Safety Executive legislation covers a substantial part of the railways. Both the aviation and merchant shipping industries operate in special environments, but for a substantial portion of the time they operate outside the legal jurisdiction of the laws of this country. That is not the case with the United Kingdom continental shelf. 'Therefore, when we talk about offshore oil we talk about people who still operate under our legislation. Those are extremely poor precedents against the movement of hiving off safety from the sponsoring Department and putting it into the Health and Safety Executive, which is working extremely well.
We do not find the Minister's arguments satisfactory in principle, so we are left with his detailed arguments on how to produce this new arrangement. In some ways the hon. Gentleman may find that he has produced the worst of all worlds—a hotch-potch of advisory committees and committee structures with one section advising this and joint work being
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done in certain other sectors. The Minister called it cross-fertilisation. A dog's breakfast would be a more apt description of what he produced. Instead of a single unified authority for health and safety, we are getting an extraordinary amalgam of committees.
When a rig comes into harbour or on to the shore it comes under the Health and Safety Executive. A week later, when it is offshore, it is under the Department of Energy. Six months later it may come in again, and come under the Health and Safety Executive. In these periods there will be examination of and responsibility for weld fractures, wires, and other major issues.
The trade unions have a good record of taking an enlightened interest in health and safety. Therefore, we must take seriously their view on this issue. They fear that, unlike the Factory Inspectorate, many of those involved in the petroleum engineering division, who have considerable knowledge of the environment offshore, will not have the same degree of knowledge of the standards and specifications of cranes and wires that comes naturally to the Factory Inspectorate. The offshore industry is not so different in its detail from the criteria that have to be looked at by the Factory Inspectorate.
Mr. Gray: We see the separation of the two issues as a real danger. The inspectors of the Department of Energy have specialist knowledge not only of the equipment on the offshore installations but of what happens in the exploration and production of oil. We think that it is extremely dangerous to separate the two issues. We believe that it is dangerous to say to people "That is not your responsibility; somebody else has to worry about safety." That is why we see great advantage in what we have suggested.
Dr. Owen: They would still have that knowledge of the offshore industry if they went to the Health and Safety Executive. Their prime responsibility would have shifted to being prepared to ask for a cost from the industry if they thought that health and safety were in jeopardy. In the Department of Energy they wear another hat—to get as much oil ashore as possible to maximise revenues. That is asking a man to divide his loyalties. In those divided loyalties, the danger is

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that health and safety will take second place.
In submission 11, from Shell UK Exploration and Production, four lines up from the bottom of page 137 we see the statement:
"The Department of Energy Inspectorate has grown up with the offshore industry".
That is a revealing but true statement. Some of its skills and knowledge have come from having grown up. The submission goes on to state that that factor is of help in dealing with safety. Many people fear that this intimate relationship that has developed will inhibit it from making criticisms and from imposing costs and other matters. That is Shell's view. It is entitled to want the Department of Energy to continue.
Sir Albert Costain rose——
Dr. Owen: The hon. Gentleman will have his chance later in the debate.
The facts are clear. No one denies that most of the oil companies want the responsibility to stay with the Department of Energy. What we are saying—I hope that we shall be joined by a few Tory Members, because this is not an issue that should divide us on party political lines—is that a fundamental principle is being breached in an industry that is of great concern to the House because the Department of Energy is to be solely responsible for health and safety. It has many other responsibilities for the offshore industry—to get out as much oil as possible, to get the revenues and, under pressure from the Treasury, to consider the interests of the oil companies. We categorically and emphatically say that making health and safety its sole responsibility is insufficient.
Mr. Gray: I listened with interest to what the right hon. Gentleman quoted from the report, but it should be put in context. In page 137 there is the statement:
"The Department of Energy Inspectorate has grown up with the offshore industry and has acquired valuable knowledge and experience. In our view this level of expertise is not to be found in other Government Departments involved in offshore work. It would be of benefit to all parties if the Department of Energy's role were to grow."
Dr. Owen: I do not know whether the hon. Gentleman is pretending to be stupid or really is stupid. No one has denied that these people have the expertise. We have said that they should go to the Health and Safety Executive, stay in Government employment and remain as civil servants. That is what happened to the Nuclear Installations Inspectorate. Its members used to be in the old Ministry of Technology. When they were transferred to the Health and Safety Executive, they did not lose their expertise: they remained knowledgeable about the nuclear industry. Exactly the same thing would happen with the petroleum people. We are not saying that they should disappear overnight. They will have the same pension rights, salaries and other arrangements as now, but they will turn up at a different office in Whitehall. That is not asking too much, to try to get a better record of safety in this industry.
I believe that the Minister has been misled by his officials, or he has allowed himself to be persuaded by the industry to make a wholly false and wrong decision. We hope that the hon. Gentleman will catch your eye later, Mr. Deputy Speaker, although he seems intent on intervening. Perhaps his interventions are more revealing than will be his speech later.
Unfortunately, we shall feel driven to divide the House if the Government stick to their present course, and we hope to be supported by some Conservative Members. We hope that, even if the Government win the vote, having lost the argument they will seriously think again about this question. In my judgment, they will place themselves in an extremely vulnerable position if this industry's safety record continues to be as bad as it currently is. It is pretty bad. It involves double the risks of manufacturing industry. It is improving, and we have every right to expect it to improve a great deal more. But also, hauntingly in the background, is the danger of another disaster, such as that which happened to the "Alexander Kiel-land".
The Government should have bent over backwards to meet the justified objections of those who wish to see health and safety somewhat divorced from the commercial pressures that are bearing right through the Department of Energy by

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transfering it and giving sole responsibility to one authority—the Health and Safety Executive. If we do not get more satisfaction from the Minister this evening, we shall feel it very important to divide the House.
4.50 pm.
Sir Albert Costain: I am surprised that the right hon. Member for Plymouth, Devonport (Dr. Owen) should have finished his speech by saying what he did before he had heard any arguments from Conservative Back Benchers, especially those amongst us who have had practical experience in the oil industry. I cannot claim to have had practical experience on North Sea rigs. I can claim to be responsible for the formation of a construction firm immediately after the war, when there was no British technology in the oil industry and the American firms were sweeping the board. I was responsible for forming a company which has built four refineries and has developed tremendous expertise in welding. I agree with the right hon. Member that welding is the issue here.
I have worked in the Persian oilfield and I have seen the oil industry develop. Let us get this matter right. We are dealing with an industry which is at the edge of our known technology. The right hon. Member based most of his argument on the assertion that, if a Department is responsible for production and safety, it will be so worried about production that it will ignore safety. Having worked mainly with British Petroleum I can tell the right hon. Member that as an oil company—not a Government Department—BP is just as conscious of the need for safety as any "Department of Safety" or whatever we call it. That is because it is working with men who are highly skilled technicians. If the element of commercialism is to be discussed in the debate, I mut say that it is in companies' commercial interests to see that these highly skilled and highly trained men do not take unnecessary risks.
I had something to do with Government inspectors during the laying of pipelines in the middle of the war. I was brought back from the Middle East to work on that. Government inspectors become part of a team. That is the point which the right hon. Member for Devon-port and other Opposition Members over-
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look time and again. They do not quite understand how one gets teamwork by having mutual trust. Where one is dealing with extremely dangerous tasks, one produces a team, just as teams of people are produced to rescue people trapped in coalmines. They work together and understand each other's language. If these inspectors get swept off into another Department, I believe that we shall lose their expertise and specialised knowledge. This is where the Minister's proposal appeals to me.
Some years ago, the most amazing little things happened. Cathode protection had to be developed at a certain stage, depending on the salt content of the water. We had the problem of electronic corrosion, which I think was part of the cause of the recent tragic accident, because people had not had that specialised experience.
Something has been left out in this situation, and in the Minister's statement, about which I should like to hear more. When these oil platforms were first built, the previous Government encouraged the building of sites, and those of us who were on the Public Accounts Committee—as two Opposition Members present were—did a good deal to encourage the international building of platforms. However, not enough has been done in their construction to give them the international Al. I should like to see much more general agreement amongst nations—Norway, ourselves, the United States and other nations—to the effect that we should have a standard of development and more interchange of safety knowledge. In that regard, not enough is being done now.
Dr. Owen: I have listened to the hon. Member's comments. He has great experience of the construction industry, as the whole House knows. However, did he oppose the transfer of the Nuclear Installations Inspectorate to the Health and Safety Executive? With his experience of the nuclear industry, does he think that that has been a good change, or is he opposed to that?
Sir A. Costain: I do not have experience of the nuclear industry, although in my constituency I have a nuclear power station being built which has had a number of disastrous complications. I am not qualified to answer the right hon. Gentleman's question. I do not speak

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often in this House. I try to confine my remarks and speak only when I know what I am talking about. When it comes to oil industry construction, I know what I am talking about.
It is teamwork. First, we have an industry which is responsible not only for profit but for production. We have got teams together who are able to understand each other. One chap might say "Bill, if I neglect that bit of inspection, Charlie might get killed, and Charlie has a nice wife." The people involved acquire a family spirit and they come together. Once one separates the specialists into the other Departments they become diluted and lose enthusiasm.
Equally, safety is so important on these rigs because the ordinary chap who wants to work on a rig, because the pay is good and there are good prospects, may have a wife and family who are not very keen that he should work on a rig if unnecessary risks are involved. What the right hon. Gentleman does not seem to appreciate on the commercial side is that it is in the commercial interests of the firms concerned to have maximum safety precautions.
Mr. Douglas: Some of them.
Sir A. Costain: The hon. Gentleman says "Some of them." Let us look at it practically. Let us suppose that the hon. Gentleman spent £30,000 or £40,000 training a man. Would anybody in his senses—leaving out the humane aspects—put that man to unnecessary risk? Let us leave politics out of this.
Mr. Douglas: I would not want to be unduly contentious. I said "some". The concentration in this House has all been on the oil companies in terms of North Sea safety. We are not really talking about the oil companies; we are talking about the contractors. Let us be frank about it. There are some cowboys around among the contractors, particularly in relation to the diving companies.
Sir A. Costain: I accept that, with all humility. However, I do not think that we are discussing certain contractors. We are discussing how the Government are to control contractors. As I understand it, that is what the debate is about. If it is not, I have got it wrong.
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All I am saying is that if the responsibility is in one Department, the Minister can be attacked. If production goes wrong, he can be attacked. But if production goes wrong for lack of safety, he can say "I wanted to get oil production up, but the other Department wants to have belt and braces on safety, and that is holding up development."
I suggest that we accept the proposal, but I ask the Minister for some assurance about the international situation and international vetting of these constructions.
4.59 pm
Mr. J. Grimond: The House will have listened with attention and interest to the words of the hon. Member for Folkestone and Hythe (Sir A. Costain). He is an acknowledged expert on such matters.
Before I could support the Government, I should like to be reassured on three points. First, not only must the inspectorate be independent but it must be seen to be independent. Will the Minister reflect on the remarks made by the Royal Commission on atomic energy, which pointed out that, although certain bodies that advised on atomic energy were independent, the fact that they recruited people from Harwell and that their address was Harwell might give the public the impression that they were biased in favour of the industry. That might not be a compelling argument, but the Minister should consider it. Not only should the inspectorate be independent, as no doubt it will be, but the public and those who work in the industry must have faith in it. That means that it must been seen to be independent.
Secondly, the Conservative Party rightly criticised the previous Labour Government for their complicated legislation. Since coming into office, the Conservative Party has produced some of the most complicated legislation that I have seen in my 30 years as a Member of Parliament. I am not sure that such legislation simplifies matters in the North Sea. I acknowledge that there have been many serious and sad accidents in the North Sea. However, as the hon. Member for Folkestone and Hythe reminded us, the oil industry stands on the boundaries of modern technology. As the Minister said, the industry operates in one of the

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roughest areas in the world. Indeed, it is surprising that there have not been more accidents in the North Sea. Some credit should be given to those who operate there, not only for their courage but also for their care. Nevertheless, the North Sea is a dangerous area and safety measures should be not only adequate, but simple to apply.
Will it not complicate matters if two bodies are responsible, one for offshore sectors and the other for building and repairing rigs and platforms? Will the Minister clarify the diversion of responsibilities? If rigs, platforms, or modules go—as they frequently do—into, for example, Lerwick Harbour, either because they are in passage or because they are in need of repair or maintenance, will the responsibility change? Will they come under a different safety authority? If accidents involve employees of a contracting company who are repairing a rig, will a different body be responsible?
Many platforms, rigs or modules are towed round the shores of my constituency on very long towropes. We should like to know who is responsible for safety.
Perhaps I might draw the Minister's attention to evidence given by the Grampian police. No doubt the Minister will have read page 123 of the report. It draws attention to the difficulties that the police experienced over a barge with a complement of 186. It was registered in Panama, owned by a Dutch company and skippered by a Dutch master. It was on charter to an oil company. It was some distance from any platform or rig when trouble occurred.
The Grampian police drew attention to the difficulties it had experienced in establishing responsibility. The report has not dealt with that. The Minister might say that this subject was outside the report's terms of reference. However, the terms of reference were fairly wide. This evidence was accepted and printed. Are steps being taken, either internationally or in relation to the Continental Shelf Act, to remedy such troubles? No doubt the Minister knows, from his constituency experience, of the troubles involved in taking action. Such action can be complicated because of the interlocking of international companies.
Thirdly, how will the inspection of pipelines be carried out? As pipelines
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grow older, many changes occur. As the Minister knows, fishermen have complained about the dangers involved. There was a curious incident. A pipeline made of solid steel and coated with concrete rose to the surface near Shetland. That would appear to be contrary to the laws of Galileo and to all the laws since then. It was sunk with considerable difficulty. Are pipelines regularly inspected? If so, how, and by whom? Are reports published? It must be a difficult job. Can we be satisfied that there will be some regular supervision of pipelines? As they age and as the sea bottom changes problems may occur. Not only should the pipelines at sea be supervised but also the installations involved in the delivery of oil, both to inshore terminals and to tankers and other craft at sea.
This is an important report. The House is right to probe the Minister on such issues, because we do not often have a chance to discuss them. I hope that the Minister will respond to those points.
5.5 pm
Mr. David Crouch: I agree with the right hon. Member for Orkney and Shetland (Mr. Grimond) that the report is important. I have been prompted to speak as a result of the points made by the right hon. Member for Plymouth, Devonport, (Dr. Owen). He questioned whether it was wise for the Department responsible for getting such wealth out of the North Sea as quickly as possible, and almost regardless of cost, be responsible also for safeguarding the health and well-being of those who work there. High prices and wages are involved. The sky is almost the limit when it comes to paying divers and others who work on rigs, because the work is dangerous. As the right hon. Gentleman said, it is probably the most dangerous work to be found in any industrial enterprise. There will therefore be a temptation to go to the limit when it comes to safety. I cannot speak from experience as an engineer, but I was briefed by the Royal Navy at Portsmouth about the dangers involved. In commercial operations, divers are going to depths in the North Sea that are beyond the limits to which Royal Navy divers are put. I realise that divers in the North Sea have largely been

1501
trained by the Royal Navy. There is some interaction between the Royal Navy and the contractors who use divers in the North Sea. They receive great help from the Royal Navy in that respect.
Divers are entering into the realms of the unknown. We do not know what the effect will be on men over the age of 35 or 40 who are forced to work for long periods at great depths. We are discussing a subject that touches the fringes of medical and scientific knowledge. The right hon. Member for Devonport is right to ask us to pause and consider whether we should do something more than take note of such an important report. Perhaps we should say "No". Perhaps a Department that is engaged in such expensive and important exploration and is the promoter of such activity, is nut the right body to hold the reins of safety.
The right hon. Gentleman spoke of the knowledge that he had gained as a Minister in the Labour Government. I, too, am familar with health problems, because I am a practitioner. I am not a medical man, but I am involved in the production of pharmaceuticals. As such I welcome the restraint that is put on that industry so that it does not go too far, too fast. That is in the interests of consumers, customers and patients.
The right hon. Gentleman made an important and telling point, but he did not do it as fairly as the Order Paper does. The Government ask us to take note of the report, but the Opposition say that the only way to safeguard against accidents is for responsibility for all offshore safety to be held by the Health and Safety Executive. That is not a drastic amendment, and I am in two minds. It may be that on this occasion the Opposition are the wiser of the two sides of the House.
The Government invite us to take note of the report. My hon. Friend has taken note of the conclusions that are set out in chapter 6 of the Burgoyne report. The principal conclusions are in paragraphs 6.5 and 6.6, and the first of those says:
"The Government shall discharge its responsibility for offshore safety via a single Government agency whose task is to set standards and to ensure their achievements."
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Paragraph 6.6 says:
"We consider that the Department of Energy is capable of discharging this responsibility effectively, provided it is suitably strengthened".
The Opposition are saying "Let us strengthen it a good deal more and say that the single agency shall be the Health and Safety Executive".
I return to paragraph 6.6, which states that the Department of Energy
"is capable of discharging this responsibility effectively, provided it is suitably strengthened and seeks advice from other bodies on matters of common concern. The strengthening is to provide the ability to monitor and where necessary set safety standards in relation to the selection, training and qualification of offshore personnel."
It lists where that advice could come from:
"The principal sources of advice to which we refer are the Department of Trade on marine safety, the Civil Aviation Authority on aviation safety and the Health and Safety Executive on occupational safety."
If we are taking note of the report, I shall take especial note of paragraph 6.6. That paragraph must be emphasised, otherwise I shall be unable to support the Government's request that the House takes note of the report. If I am asked by the Government to support the concept that the Department of Energy will seek oil and at the same time will take on board responsibility for safety, that will not be good enough, but if they say "We take on board seriously what is stated in paragraph 6.6 of the Burgoyne report in detail", I shall agree with them. If that is not the Government's approach, I shall be impressed by the note of dissent by Mr. Lyons and Mr. Miller, which appears on page 58.
Mr. Harold Walker: The hon. Gentleman should not overlook what the Minister said. His speech followed carefully the wording of the note that was helpfully placed in the Library. On the point that the hon. Gentleman is making, the Government go a long way beyond merely taking note. The note states:
"The Prime Minister has decided that the Secretary of State for Energy should take over the present responsibilities of the Secretary of State for Employment for occupational health and safety offshore … This means that the Secretary of State for Energy will in future carry sole ministerial responsibility for all aspects of offshore safety save for responsibility for the safety of ships at sea and seafarers engaged in offshore work. They will remain

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as the report recommends, with the Secretary of State for Trade."
The Government have gone a long way beyond merely taking note.
Mr. Crouch: The right hon. Member for Doncaster (Mr. Walker) is helpful to the House as always. I sometimes find the procedures of the House difficult to understand, even after 15 years. I go by what is written on the Order Paper. I am not sure how far I am required to go beyond what is set out on the Order Paper, whatever might be said. If my hon. Friend has taken us further than the motion that appears on the Order Paper, I can only take into account that he has the intention to persuade the House to go further.
The note of dissent by Messrs. Lyons and Miller does not incorporate a grave disagreement. It is an interesting approach to the problem. They feel prompted to say in the third paragraph of their dissenting note:
"Whilst we would be willing to accept the recommendation for a single Government agency, this must be based firmly on the principle that a Government Department substantially responsible for the direction and control of an industry should not in any way be responsible for the standards and enforcement of occupational health and safety in that industry."
I am left in some difficulty. I hope that my hon. Friend will recognise that there are parts of the report, including the note of dissent and the recommendations, that are worthy of debate.
I speak with a loose knowledge of the history of the nineteenth century. The building of the railways was rather similar to the exploration and the activities that are now taking place in the North Sea. Many people lost their lives in the building of the railways, and that happened in conditions that were not as hazardous as those in the North Sea. Surely we should draw some lessons from that episode. Perhaps we should have had more concern for the dangers that faced the original navigators, or navvies, the Irish immigrants that came to England to work. They came to build the railways across the Pennines, where there was so much loss of life and injury.
In the latter part of the twentieth century we should be doubly careful to indicate that Parliament is concerned. We should show the greatest possible concern
1504
for the health and safety of those who are involved in work in the North Sea, which is the richest opportunity before us. Whether that is best achieved by one Department, or by another, is a matter for debate. If it is decided that the Department of Energy should be the one Department, we should take into account the recommendations that appear in the Burgoyne report, especially the recommendation that the Department must rest strongly on the advice of the other agencies that have been mentioned.
5.18 pm
Mr. Dick Douglas: I welcome the remarks of the hon. Member for Canterbury (Mr. Crouch) and his support, albeit tacit, for the Opposition's amendment. I think that it is fair to say that in general terms we have come to the view that the Government have taken on board the excellent Burgoyne report. However, there are substantial key areas that are the subject of disagreement across the Floor of the House. That is because in these key areas the Government's response reeks of complacency. It is not unfair to say that that displays the general cavalier attitude of the Government towards the trade union movement. There has been no real attempt to answer the issues of principle raised by Mr. Lyons and Mr. Miller.
The Minister has growing experience of these issues. I apologise for the fact that I was not present to hear his earlier remarks. He must recognise that the attitude towards the safety of the men at the sharp end depends on a positive attitude and in their confidence in the organisation that enforces the regulations. That organisation, whatever it is, must display independence, intelligence and integrity in a way that is beyond dispute. That must be beyond dispute among those who embark on difficult operations in the North Sea.
I think that we are right to say that the responsibility for safety must rest primarily on the operators. Having put that responsibility where it should lie, on the licence holders and those on the operating committees for the various fields that are under exploration and development, the House knows only too well that we are talking of mammoth operations and developments and investments of £3 billion and more. No operator can engage in such programmes on

1505
his own. Operators have to employ subcontractors, which involves a variety of organisations that may or may not have the same degree of concern for the safety of personnel. I shall refer later to a particular area of concern—diving.
I wish first to follow up a point made by my right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) concerning the Kielland issue, which greatly disturbs me. I recognise the professional calibre of the authorities that certify the rigs in the United Kingdom. The Kielland disaster resulted in the loss of 123 lives. At this stage I would not place any responsibility for that loss on the design of the rig or the constructors. I have an intimate knowledge of the French company that made the rig. I am not competent to judge the design. However, following that, Det Norske Veritas has required Peutagone rigs like the Henrik Ibsen and the Gulnare to conform to new requirements for residual structural strength, but Lloyd's, with eight such rigs on its register, has not so far found it necessary to require such modifications. That strikes me as a disparity of approach to these complicated structures, when they are operating in a similar environment. The Department of Energy has the responsibility in this debate to at least give its view on that occurrence. If the Norwegians find it desirable to ensure that the same design of rigs are structurally strengthened, why has one of the certifying authorities approved of by the Department of Energy not sought to do so? That is an important consideration. I hope that the Minister can deal with that point.
The key area is the relationship between the Department, the Health and Safety Commission Executive and the Petroleum Engineering Directorate. We require much more detail about the interplay of the staff. If the Government's view is that it should be as they propose, we need much more information about the staff and the numbers and expertise deployed.
We have had discussions about the onshore petroleum industry. When that is involved in a detailed survey like the Canvey Island survey—a hazard and safety audit—the people concerned are related to the Health and Safety Executive. There is not much difference in
1506
these complicated, onshore petro-chemical operations and those offshore.
I find the cosiness of the relationship between the Department of Energy and the oil companies disturbing. My point here is not unrelated to Kielland and concerns certifying authorities. Recommendation 6.8 states:
"We firmly uphold the principle of independent certification of critical features of offshore structural and operational safety. In conformity with this view, we recommend that the responsibility of the Certifying Authorities be extended, as far as is practicable, to cover the complete oil and gas pressurised system from the down hole safety-valve to shore or tanker connections. We believe that the present Certifying Authorities are sufficient in numbers and have, or can acquire, the skills necessary to undertake this extension of their responsibilities."
In its response the Department says "Accepted in part", but it is not accepted at all.
"The principle of independent certification will be maintained."
It could not be otherwise. It goes on, however:
"The adequacy of shut down systems both for wells and for the pipeline attached to the platform, will in future be considered by the Certifying Authorities. Approval of individual well pressure systems and of pipelines will however, remain the responsibility of the Department of Energy's Petroleum Engineering Inspectors."
The only argument that the Minister can advance to support that case is that of confidentiality. On the Burgoyne committee were people who had operated in the North Sea, such as Matt Linning, who is well respected. They would have taken that into consideration, and they overruled the point. That is an indication of the cosiness of the relationship.
The body further recommends that there should be an appeals procedure when certification is not allowed. We are told that there is already an informal appeals procedure. We may or may not welcome that, but what is the nature of that procedure? What organisation does the Minister have or propose to second guess the certifying authorities? I respectfully suggest that we also need answers here.
Recommendation 6.28 deals with occupational safety. The suggestion is that some arrangement should be made in two years' time. The recommendation is that:
"Regulations should be made as soon as possible for the control of occupational safety during offshore construction."

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The Department's response states:
"The need for Regulations will be reviewed in the light of experience in two years' time."
We have been constructing offshore rigs since 1964–65, yet it will be another two years before we have detailed regulations on that important aspect.
Regulation 6.42 concerns radio and radar sparking, and I recognise that the matter may have come to light because of public inquiries in my constituency. Will the Minister indicate what progress has been made in that direction? The tests involved are bound to be complicated and have a bearing on the installations taking place at Moss Morran and Braefoot Bay.
Recommendation 6.59 concerns languages. The point that I wish to make may seem trite, but it is important. A number of different nationalities are employed at sea and there is difficulty in getting the regulations read and understood by all personnel.
One aspect of the matter arose in our discussion about flags of convenience. I am not saying that it takes place in the North Sea, but it is possible to have people officering ships who are not conversant with the English language. That is highly dangerous in an emergency. A supply boat may be tied up and unloading, and key personnel may not be conversant with the language used in communication. It may seem to be a small point, but in an emergency it is crucial. We should not allow companies to use flags of convenience and particularly be officered by nationalities not conversant with the language used in emergency procedure.
The Minister, in order not to extend the debate, has not said very much about the progress we have been making about the five-zone approach to safety. He has not said how many of the vessels called for maintenance and fire fighting are on station. It hurts me particularly, because of my association with shipbuilding, to know that not one of the vessels so far on station has been built in a United Kingdom yard. Happily, we shall rectify that soon by the commissioning of the BP/BNOC vessel that is being built by Scott Lithgow.
I return tangentially to the point made by my right hon. Friend the Member for Devonport about the expertise gained in building semi-submersibles and production platforms. If we are entering upon
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a period in which the rig market will be buoyant, although I should not like to predict day rates too far ahead, I am sure that we shall see not far short of $100,000 a day next year. These are substantial sums of money and argue for the construction of semi-submersibles irk the United Kingdom.
For good or bad reasons—because of Government interference or lack of Government interference—we missed the opportunity last time. We cannot afford to do that again. We have lost one BP order to the Koreans, of all people; and the terms of the order ought to be examined. This is and order placed in a yard which says, putting it colloquially, "If you do not like the ship that we are building we will take it back and give you credit terms that will beat anything that you can be offered elsewhere."
We cannot allow this to happen. My right hon. Friend rightly suggested that there are some prospects, and I hope that they will improve. I hope that the Minister will feel able to respond positively to the feeling within British Shipbuilders and British shipbuilding that the building of another generation of semi-submersible rigs should take place in the United Kingdom. It is a scandal that not one of the rigs operating in the North Sea at present was built in a United Kingdom yard. That reflects on my own party when it was in government, as well as on the present Government.
With regard to diving, I have some information from my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), who apologises for being absent. His union has been actively pursuing these matters. The Under-Secretary of State for Employment knows that we had a very fruitful deputation to his Ministry on 30 July. My hon. Friend's union supports the minority submission and is anxious to obtain information—as I am and as are my hon. Friends—about the Government's attitude towards the certification of divers.
This is a key issue. I refer to the letter of the Underwater Training Centre of 14 July 1977 to operators. It is worthy of some analysis by the House. The chairman of the board of control said:
"The Centre was formed specifically so as to minimise the chance of accidents occurring, particularly with mixed gas diving in the North

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Sea. Despite constant approaches to the diving contracting companies and despite Government grants to employers, a total of only 46 mixed gas divers have been nominated for courses at Fort William in the last 12 months. It is obvious that the contracting companies are either hopeful of obtaining foreign divers, who may or may not have the right qualifications, or they are holding back in the hope that someone else produces the necessary qualified divers. Surely the contracting companies, if they continue in this vein, are not acting in the best interests of their diving staff nor of the major oil companies A serious accident occurring during mixed gas diving could not be hushed up, following the Ekofisk blow-out. Because of your joint legal responsibilities with the diving contracting companies, I believe that the oil companies themselves must ensure that the quality of training received by the sub-contractors' personnel and by the divers operating in the North Sea is of the highest possible order."
That was in 1977.
Hon. Members who have read the report of the Public Accounts Committee will know about the disastrous and scandalous happenings at Fort William. Obviously, the Minister is intimately concerned with this matter. What happened at Fort William is a national scandal. The House is entitled to know how the Government propose—with the oil companies and with the Association of Diving Contractors—to rectify the position, but, most pertinently, how they intend to ensure that the training of divers and their supervision will end with certification. The Norwegians and other nations have this, and with our background of diving experience in the United Kingdom, there is absolutely no reason why we cannot have it as well. We have a responsibility to ensure that these matters are adequately dealt with in this House.
I trust that the Minister will endeavour to respond. I apologise to my colleagues for raising so many points, but obviously I am intimately concerned with these issues. I hope that the Minister will realise that, if we are to have safe operations in the North Sea, we have to have the confidence of the people involved. We must not have the sort of offhand attitude to the trade unions that is characterised by the Prime Minister. They have to be involved. If they feel that they have trust in the Health and Safety Commission and in the Executive, we have to listen very carefully to them, and to deploy better arguments to refute their case than those which have been deployed by the Government this evening.
5.36 pm
Mr. Ernie Ross: I should like to take the opportunity to make a brief intervention in the debate. It is a very important debate, for a number of reasons. One of the saddest features of it is that many Labour Members will be taking part in it without being able to question the Minister or to press him very closely on the extent to which safety regulations are broken in the North Sea and the extent to which safety regulations are the concern of the Government.
It is interesting to note a statement made recently by the Secretary of State for Energy at a Texaco dinner. He went out of his way to congratulate the multinational oil corporation, Texaco. He gave the game away to many of us when he said:
"The development of our North Sea oil reserves has taken great skill and massive investment, and has probably been achieved faster than in any other oil province in history."
That is exactly what concerns Labour Members in this debate. We are concerned about the speed with which the oil companies wish to extract this vital resource from the North Sea, and with the direct involvement that the Department of Energy has with them in ensuring that the rate of extraction is maintained. We are concerned that they should be responsible for safety in the North Sea. That is why we would certainly support the recommendations in the minority report calling for a separate organisation. We feel that that organisation should be the Health and Safety Executive.
Many of us on the Labour Benches would argue that the real total figures of deaths and injuries in the North Sea are being concealed from this House. I have asked the Minister's Department over 20 questions in an effort to elucidate the facts about the accidents which have occurred either in the North Sea or in the rig yards. There is one thing that is common about the answers to those questions. It is that the Department never gives a straight answer. It will use any excuse rather than answer correctly and allow hon. Members to press it on these matters. Some of the answers that I receive say that the information is not available. When one contrasts those answers with the information that is available on technology and commercial matters one cannot accept that the information is not available.

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Another method by which the Government seek to evade giving information is to pass the matter from Department to Department, thereby hoping to lose the inquiry. A matter can be passed from the Department of Energy to the Department of Employment and then to the Department of Trade—anywhere, in a circle, in the hope that the hon. Member will give up. Time and again, an answer states that separate figures for a category are not available.
One has only to look at the answers to find that the Department eventually catches up with itself and starts to give away the fact that the information is available. In a reply I received on 24 July 1980, the Under-Secretary of State for Employment told me:
"I regret that separate figures are available for fatal and serious accidents to persons working on the construction of oil and gas reception facilities in the United Kingdom from 1969 to 1979".
In two similar answers the Minister gave just about the same answer. It is interesting to note, however, that he makes the one mistake of saying "I regret that separate figures are available" in two separate answers on the same day. I have waited for those figures to be made available, but they have not yet arrived.
Opposition Members are worried that there is a cover-up in the Department of Energy. Unless responsibility for reporting and investigating accidents is taken away from the Department, hon. Members will not be able to ascertain the truth about what is happening on oil rig yards and in the North Sea. I argue that answers given by the Department of Energy underestimate the extent and seriousness of accidents that occur in the North Sea.
Reference has been made to divers. Inshore divers are never included in any list of North Sea accidents. It is essential that the Minister gives an assurance that hon. Members can question him and get answers about accidents that occur in the North Sea. If he fails to give that assurance, the Opposition will have to divide in support of the minority report. The Department of Energy cannot be the relevant Department for dealing with accidents in the North Sea. The Health and Safety Executive is the relevant organisation. It is time that this subject was taken away from the Department whose concern in the first
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instance is ensuring that the rate of extraction from the North Sea keeps up with the wishes and aspirations of the multinational oil corporations.
Mr. Harold Walker: I hope that my hon. Friend will recognise that we are not debating whether responsibility should be taken from the Department of Energy and given to the Health and Safety Commission. Following a decision by the then Prime Minister in 1976, this responsibility already rests primarily with the commission. The issue that now arises is that the Burgoyne report and the Government want to take back responsibility from the Health and Safety Commission and put it with the Department of Energy.
Mr. Ross: I thank my right hon. Friend for reminding me of the situation. We would wish to support the minority report in this debate. This matter cannot to be left with the multinational oil corporations and with the Department of Energy which are so closely linked. It must be kept within the Health and Safety Executive. I hope that this will be confirmed by the Minister.
5.44 pm
Mr. Robert Maclennan: This debate on offshore safety is one of high importance and one that has evoked speeches to which the Government are bound to give close attention. The speeches have been made by a number of hon. Members on both sides of the House who have an intimate knowledge of the industry. I speak as an hon. Member who has many hundreds of constituents involved in the offshore oil industry, travelling over some of the most difficult waters of the North Sea in conditions of great hazard. They exemplify the kind of personal courage that is characteristic of the pioneers of this new industry.
The record of the industry to date has been one of remarkable achievement. High safety standards have been established. As the right hon. Member for Orkney and Shetland (Mr. Grimond) has indicated, we are fortunate that the industry has not suffered the sort of disasters which, in such hazardous circumstances, it might not have been wholly surprising to see come about. There is, however, a great issue of principle at stake in the debate. It arises

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not only in connection with the exploitation of the offshore oil resources but in connection with any great productive industry.
The issue is whether it is appropriate that the sponsoring Department of the industry, whose prime concern must necessarily be the maximisation of production and the protection of that industry as it perceives its interests, should be responsible for safety. This issue is not confined to the offshore industry. It has been considered in the case of the nuclear industry, which others would consider at least potentially a hazardous industry.
In taking the decision that safety matters should not be left with the Department of Energy in the nuclear industry but should be reposed in the Nuclear Installations Inspectorate, the Health and Safety Executive and the Department of the Environment, the last Labour Government did not cast any doubt on the competence of the Department of Energy or any doubt upon the rigorousness with which safety matters had been considered while responsibility remained with that Department. It was, however, recognised that the work or reconciliation of different interests had to take place from time to time. Whether it was more important to reach certain levels or standards of training quickly or to give extra weight to considerations of thoroughness of training were questions that had to be resolved, but should be openly resolved, on the basis of debate between those whose specific responsibility was for safety and those whose specific responsibility was for training.
There are other areas in which the questions of safety arises. It seems that the Burgoyne committee, notwithstanding the general acceptance that can be given to its specific recommendations on the areas that need to be tightened up, tended to doubt the general principle that it is embodied in the Opposition amendment. This principle was firmly laid down in the minority report. I share the views expressed by the hon. Member for Canterbury (Mr. Crouch) that the minority report is extremely compelling in this matter. Paragraph 3 of the note of dissent points to the principle that I have outlined in general terms. It states:
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"Whilst we would be willing to accept the recommendation for a single Government agency, this must be based firmly on the principle that a Government Department substantially responsible for the direction and control of an industry should not in any way he responsible for the standards and enforcement of occupational health and safety in that industry."
The House should take that seriously and assent to it tonight. I hope that the Minister will feel compelled to reconsider the issue.
The main report recognises the startling structural inadequacy of the Department of Energy to take on the single agency task of safety. It recognises that there would have to be substantial changes in any event, whatever solution the Government decided upon. It is difficult to argue that the upheaval necessary in the Department of Energy to carry out the recommendations of the main committee would be any less than that required to strengthen the role of the Health and Safety Executive.
The hon. Member for Folkestone and Hythe (Sir A. Costain) rightly stressed the importance of employees and employers being regarded as the first line of defence against accidents at sea. No one would quarrel with that. The hon. Gentleman will not doubt that Government and public agencies must have responsibility for setting realistic standards for judging whether employers and employees are meeting the safety standards. I do not wish to diminish the necessity for agreement between employers and employees. The debate is about where ultimate Government responsibility should lie.
Sir Albert Costain: I must have expressed myself badly. I was saying that specialised workers and employers create a team with Government officials. We are considering whether Government officials should be in the Department of Energy or another Department. I say that the Department of Energy produces the better team.
Mr. Maclennan: Government officials and the industry must come together. However, the officials involved in promoting commercial interests will not necessarily be the same as those involved in safety matters. From the industry's point of view it is perhaps a matter of

1515
marginal importance whether the individuals involved in safety are housed in the Department of Energy or in the Health and Safety Executive. There will be two teams, one of which will deal with safety. For the reasons argued in the minority report it is appropriate that that team should be firmly outside the ambit and control of the sponsoring Department, the prime interests of which are not necessarily or clearly related to safety.
5.55 pm
Mr. Tam Dalyell: I pestered the Leader of the House in May, June and July for this debate, so I am grateful to the Government for finding time for it. In no curmudgeonly spirit I say that we might want to return to the subject once again when the Norwegian inquiry has been published—which I believe will be in December. It was helpful of the Minister to place in the Library a guide to his acceptance or otherwise of the recommendations.
I make no apology for returning to the topic, which was so eloquently raised by the Opposition Front Bench and by my hon. Friends the Members for Dunfermline (Mr. Douglas), Caithness and Sutherland (Mr. Maclennan) and Dundee, West (Mr. Ross). I refer to the minority report, which was discussed at Question Time on Monday. The Minister should understand that some of us feel deeply that an improper relationship is involved. Indeed, it is an incestuous relationship. The sponsoring Department has no business getting involved with health and safety.
I make no apology for going into this matter in some detail. Let us consider the Minister's argument. He said "Ah, we must understand that the majority of the Burgoyne committee was of the Government's view." I have friends on the Burgoyne committee, of whom Matt Linning is one. Each member of the committee is associated with the oil industry. Dr. Burgoyne is an oil industry consultant. Mr. Hildrew is managing director of Lloyds Register of Shipping. Professor McNaughton, Mr. Riddlestone and Dr. Weck are also experts in the oil industry.
There was no lay member or umpire on the committee. I am not insinuating that there necessarily should have been, but in the absence of a lay element it is doubly important that in a matter that
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overwhelmingly affects the trade unions special heed should be paid to what the trade union representatives said.
If the minority report had been accepted, would the arrangements affecing the civil servants involved be different? For example, if the minority report were accepted—not to put too fine a point on it—would it mean upheaval for certain civil servants living in the London area? The answer might be "No." I want a clear statement from the Government that they have not been suckled into rejecting the minority report because of the convenience of civil servants.
All I want at present is an assurance. My question is not rhetorical but genuine. There is a suspicion that part of the reason why the Government have not accepted the minority view and why pressure was put on the Burgoyne committee is that it did not suit civil servants to be inconvenienced.
The Minister said that workers on rigs live on top of one another, and that this presented difficulties. That is another reason for having a change of responsibilities.
I make no apology for going through certain points made by Mr. Miller and
Mr. Lyons. In paragraph 3 they state:
"a Government Department substantially responsible for the direction and control of an industry should not in any way be responsible for the standards and enforcement of occupational health and safety in that industry."
We are entitled to ask for the general philosophy on this issue. I understand the Government's opinion on this subject to be contrary to what is almost a central belief. I am surprised that Ministers from the Department accepted the contravention of that principle.
I come next to paragraph 7.
"Secondly, the Bingham report on Sanctions Busting records that one of Beckett's assistants. Alan Gregory (later Chairman of BP Trading) asked Shell if information received on sanctions busting could be passed to the Under Secretary of the Commonwealth Office 'on a purely personal basis', so that if 'there were any further signs of Ministers wishing to sound off on this subject the appropriate discouraging noises could be made'. The suggestion here is that top civil servants failed to pass vital information to Ministers."

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Paragraph 8 states:
"The possibility of shared values and membership of closed groups amongst offshore managements can have tremendous implications for the independence of inspectors involved. It is our view that any unification of responsibilities under the auspices of the Department of Energy, as the sponsoring Department, entails a continuing risk, to the possible detriment of safety standards. With the certain growing economic and political significance of oil, this danger is unlikely to be reduced in the near future."
As my hon. Friend the Member for Keighley (Mr. Cryer) and others have quite often said, there is a very quick transfer between the Department of Energy and outside bodies. I have had cause, in a case in my constituency, to be grateful to Ministers in relation to my constituent, Alan Blackshaw. But there are quite a number of civil servants, not only at permanent secretary level, who make a move out of the Department of Energy. I do not want to personalise this issue, but we have all seen the reports about Sir Jack Rampton going over to a key position in industry within a very short time.
It is in those circumstances that the Department, to protect its flank, must be seen to be whiter than white. I assure the Minister that, as he must know from his constituency of Ross and Cromarty, there has been enormous dissatisfaction about injuries in the North Sea and what has happened about them. There was a long case in the mid-1970s of a diver from Bathgate who lost his life. His family were far from satisfied about what happened after the accident. They may or may not be right, but it is insufferable that such dissatisfaction could be intertwined with the feeling that perhaps those in the industry in the North Sea are all in it together. Even if there was no cover up—I am not saying that in that case there was—it is of the utmost importance that it should be seen that there is a separate judgment by an outside organisation, as is taken for granted in the mining industry. In that industry it would be unthinkable to have this degree of cosiness.
I repeat that I am not saying that there was anything underhand or that there was a cover-up in that case. I say only from personal experience that it must be doubly clear that the organisation that is passing judgment on what did or did not happen
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in a tragic accident should be seen to be separate. There has been reference to my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott). I know that he and his union feel that equally strongly. I hope that he has a quick return to the House.
I come to paragraph 12 of the minority report, which states:
"No offshore safety committee visited by us has ever seen a PED inspector. PED told us they have never needed to meet safety committees or safety representatives offshore, or advise them of their visit offshore."
That needs some explanation. I find it astonishing in the context in which it is put, and it provides another reason why the Government should handle this issue with kid gloves.
Paragraph 15 states:
"The vast majority of offshore accidents, including even many of the most technologically-celebrated ones, arise out of circumstances which would be perfectly comprehensible to an ordinary Factory Inspector. Indeed, the ' unique' aspects of offshore operations are frequently overstressed, a tendency probably exacerbated by the retention of direct and agency responsibility within a specialised Department."
What was the Minister saying in his opening speech to the effect that this was all so complicated and technical that others could not pass judgment? My position here is like that of the hon. Member for Canterbury (Mr. Crouch). I have visited Alverstoke, which is the naval diving establishment, and I have also visited the establishment at Loch Linnhe, Fort William. I will pass on judgment on the latter, because I was impressed when I went there on 4 January 1979. I was totally surprised.
I just do not accept that all these judgments are so technically advanced that the Factory Inspectorate is not in a position to make the necessary kind of judgment.
Paragraph 18 states:
"One operator having experience in both Norwegian and United Kingdom sectors gave evidence to the Committee. This leading trans-national corporation found the Norwegian Inspectorate much 'tougher' than the 'weaker' United Kingdom system. Norwegian inspectors, for example, make sudden inspections, with legal rights to seize seats on helicopters without notice, unlike the United Kingdom situation where advance notice is given to the operator for access, with all that that implies. The operator, of course, prefers the United Kingdom system; especially the close relationships' enjoyed with the Department of Energy."

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The fact that in an official report both trade union representatives should state their belief that that was the situation, regardless of whether it was true, seems to me sufficient reason why the Government should be quite clear about separating the various organisations. On this, therefore, I simply say that the purpose of a second reading debate is surely to allow the Government to think again. There would be no loss of face. Ministers have heard my right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) and several other Labour Members. They have heard the hon. Member for Canterbury, who has considerable industrial experience. How is it that we are all reiterating the same point? On this sort of matter the opinion of the House of Commons should be taken into account, so I leave the matter there.
I should like to go through other points that have been raised, and I quote here from page 2 of the briefing that was placed in the Library.
"In addition the pressure systems and well head equipment of each well are designed to take account of the particular geological specifications of the well. This information is made available in confidence to the Department of Energy by the operator and could not be passed on to the Certifying Authorities".
I wish to know why it cannot be passed on to the certifying authorities. People at Heriot Watt want to ask the same question. At the bottom of the page it states:
"The Certifying Authorities are being asked to draw up minimum requirements for notification."
The question arises of when that will be done, as it is an urgent matter.
Paragraph 6.11 states:
"Consideration should be given to a scheme of official approval of independent surveyors qualified to undertake specialised surveys, if required, on behalf of the Certifying Authorities."
The Minister will recollect that that was one of the recommendations that he rejected. He said:
"It is considered that this would not be appropriate. Official approval of independent specialised surveyors to be employed by Certifying Authorities would detract from and confuse the latter's certification responsibilities."
The experts on the Burgoyne committee did not think that there would be any confusion. They said:
"It … was suggested that the work of the Certifying Authorities could be facilitated if the Secretary of State were to grant and
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publish approvals of suitable specialist organisations to undertake specified surveys for the Certifying Authorities."
I must return to the point on which I interrupted the Minister in his opening speech, namely, the evidence from the British Insurance Association. It states:
"Apart from the obvious commercial disadvantages, this policy has the following side effects:

(a) In spite of being accepted as the country's main independent source of expertise, the engineering offices have lost the opportunity to participate in offshore-technology at the construction stage, to the detriment of both their own stature and the national confidence in the industry.

(b) This in turn inevitably makes competition for future work both home and overseas all the more difficult.

(c) Because of their long-established activity in the in-service/statutory inspection field, the engineering offices present an invaluable source of expertise which should be called on in the interests of safety in offshore installations. Lack of prior involvement at the pre-commissioning stages makes effective contribution in the in-service phase more difficult.

(d) This continuing failure to draw on the country's main source of appropriate expertise must throw doubt on the efficacy of a system intended to ensure the operational safety of our installations in the face of an increasing public demand for greater measures to prevent losses.

We support steps which might lead to the imposition of specific requirements on Certifying Authorities to stipulate the need for independent inspection and certification of certain items by approved UK inspecting organisations. The engineering offices would be glad to cooperate in drawing up advice and guidelines to the Department both on the degree of inspection required and on the criteria for approval of inspecting organisations."
I do not apologise for having read that, because it is crucial. It is a case that must be answered when the Minister replies tonight and not at a later stage.
Paragraph 6.13 states:
"UK civil and criminal law should be applied to vessels engaged in pipeline works and the problems of its application to attendant vessels should be thoroughly investigated".
The Government replied:
"This will be examined in the wider context of consideration of the Law Commission's Report on the Territorial and Extra-Territorial Extent of the Criminal Law. There are however formidable difficulties in the way of extending UK law in general to foreign flag vessels.
During the summer I talked to a number of people in the industry. They think that it is unacceptable that foreign

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flag vessels should not come under British law. Difficult though the lawyers may be, I do not believe that it is beyond the ingenuity of the Foreign Office lawyers—Sir Ian Sinclair and his colleagues—to find some way around that difficulty. I am asking Energy Ministers to tell their advisers and the legal Department of the Foreign Office "This is a must. It is a requirement from Government." We must be able to alter the law to cover foreign flag vessels.
Paragraph 6.19 states:
"Guidance should be given to Employers and Offshore Installation Managers on reconciliation of the conflict regarding their responsibilities introduced by the application offshore of the 1974 Act."
The Government replied:
"These recommendations are being considered, but it may prove difficult to draw a clear distinction between the responsibilities of Employers and Offshore Installation Managers."
What is the difficulty in drawing that distinction? There may be some difficulty, and I look forward to the Minister's reply. Some of us do not see any difficulty.
I return to a question asked by my hon. Friend the Member for Dunfermline. Paragraph 6.28 states:
"Regulations should be made as soon as possible for the control of occupational safety during offshore construction."
The Government replied:
"The general duties of the Health and Safety at Work Act already apply and HSE has issued Guidance Notes. The need for Regulations will be reviewed in the light of experience in two years' time."
I ask the question a second time—why should that take two years? Perhaps we have twice the chance of an answer.
I return to the central issue. I repeat my question: as it is almost the unanimous opinion of those who have spoken, other than the Government Front Bench, will the Government not think again, without any embarrassment and without any loss of face, and accept the view of the two trade union representatives on those issues on which the trade unions have a special right to have a determining say?
6.17 pm
Mr. Bob Cryer: I wish to emphasise the importance of the Burgoyne minority report. It was instituted not because of satisfaction with the safety
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standards in the North Sea operations but because of dissatisfaction and concern. The Minister exuded complacency about the whole situation.
My hon. Friends have emphasised that the minority report favoured an independent body to supervise safety aspects. As my hon. Friend the Member for West Lothian (Mr. Dalyell) has read out paragraph 18, I shall not trouble the House with reading it again, but it makes it clear that the minority members of the committee pointed to the cosy relationship that exists between the oil companies and those responsible for the present safety arrangements through the Department of Energy.
I must emphasise the concern felt by the public about the way in which senior civil servants from the majority of Departments linked to industry nip swiftly from their highly paid senior Civil Service jobs into the boardrooms of the big corporations with which they have been dealing. They never join a trade union or a charity as an adviser. They always go into highly paid jobs in the boardrooms. The link is too close for comfort, and too close for the satisfaction of the public.
It may be that affairs are conducted with absolute probity, but when senior civil servants during the course of their employment are in close contact with the big corporations, and then join their boards, people say "What were they doing during the course of their employment on behalf of the Government? Were they lining themselves up for a job? When safety is at stake will a senior civil servant, because of that relationship, take the weaker position in view of the possibility of later joining a company?"
The Minister will say "That is absolute nonsense. We have total and utter confidence in all our senior civil servants". We have a lot of confidence in civil servants, and they often operate assiduously and with great competence, but as long as there is transfer on retirement, or part way through a Civil Service career, into lucrative jobs, a question mark will remain over the attitude of some of those people.
I emphasise that in principle the idea that the supervision of the safety of the offshore oil and gas industry should come under the Health and Safety Commission is right. It is right to take it away from the sponsoring Department. We have

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done it in relation to all the other sponsoring Departments, such as the Ministry of Agriculture, Fisheries and Food. The example of the Nuclear Installations Inspectorate has already been mentioned. It has been moved from the Department of Energy. The Mines and Quarries Inspectorate has been moved, and no one for a moment would contemplate its going back to the Department of Energy. No one would contemplate the idea that factory inspectors should go back to the Department of Industry. Why not follow that pattern and move responsibility for safety to the Health and Safety Commission': It seems a sensible conclusion.
The report points out the difficulties of the present legislative enforcement pattern. It says on page 136:
"The division of regulatory authority causes confusion and practical problems for an offshore operator",
and it goes on to give illustrations. Its analysis that duplication causes problems is right, but its conclusion that all administration should be allocated to the Department of Energy is wrong, because there should be a body of expertise concerned solely with safety. My hon. Friends have emphasised repeatedly that it is not a question of discarding the expertise that exists. The experts would be transferred to a body concerned with the imposition of standards of safety.
The Government's atttitude is not at odds with their attitude to safety in other areas. Not long ago the House debated and voted on the Notification of Accidents and Dangerous Occurrences Regulations 1980. They were introduced by the Under-Secretary of State for Employment. It seems to me that when a major, or, indeed, a minor corporation is bent on increasing profits, safety is placed at risk. Safety comes second to profits. That is why there is a regulatory system—to try to prevent such occurrences causing loss of life and injury.
We have a system of sanctions, under which firms that act in that way are prosecuted. That sanction is there to ensure that safety and human life and limb come before profit. In evidence to the Joint Committee on Statutory Instruments, which considered those regulations, a member of the Department of Employment said:
"'The major purpose in these regulations is not to prosecute but to encourage and exhort
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and persuade compliance with the regulations".
That is the attitude of the Department of Employment, and it fits in with that of the Department of Energy. Rather than placing safety at a higher level of importance, it diminishes it. It produces a lower level of safety in all its various aspects, which is a matter of grave concern to the House.
The Under-Secretary of State for Employment (Mr. Patrick Mayhew): As the hon. Gentleman has referred to me and to the regulations that I introduced, perhaps he will accept that the attitude of the Health and Safety Commission and of the Executive is that it is far better to educate and exhort than to prosecute, although in an extreme case one must prosecute.
Mr. Cryer: I was about to point out that the notion that transferring responsibility to the Health and Safety Commission would produce an instant solution is not necessarily right. As the Burgoyne committee points out, further facilities are required. These should be made the responsibility of the Health and Safety Commission, and the commission should be beefed up.
I have been a critic of the commission for adopting the very attitude that the Minister mentioned in his intervention. As he knows full well, the general drive of the Health and Safety commission comes from the sponsoring Department—the Department of Employment—and, if it were to breathe down the neck of the Health and Safety Commission, the commission would respond accordingly. Many members of the commission, such as the people on the ground and those who carry out the inspections, want to institute prosecutions for breach of regulations, but they are inhibited by the attitude of the executive, and that springs from the attitude of the Department of Employment.
All that I am saying is that the desire to inhibit the pursuit of higher safety standards springs direct from Government Departments. The criticisms that I have raised about the commission and the executive derive from the present attitude of the Department of Energy.
Sir Bernard Braine: I am following the hon. Gentleman's remarks with the closest

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of interest. I agree with him that the Health and Safety Executive's attitude should be toughened up. I have had long experience in my constituency of a residential population being exposed to industrial hazard. However, to be fair to the executive and to my hon. and learned Friend's Department, I must tell the House that during the past year the HSE has instituted one successful prosecution and served three enforcement notices against the hazardous installations with which we must live. I suggest that that is a movement in the right direction.
Mr. Cryer: The hon. Gentleman is right. All that I am suggesting is that the transfer to the commission and executive should be accompanied by a few digs in the right direction. The hon. Gentleman agrees with me on this matter. It is a question of constant scrutiny. He has usefully pointed out that there are some good moves in the right direction. However, the principle is right.
I conclude by making two further points. The first relates to the principle of putting safety one stage removed from the sponsoring Department. That principle is right. Whatever our criticisms of the commission and the executive—and they will always exist because this is an evolving situation—it is part of our job in the House of Commons to exercise scrutiny and to bring some of our reservations to the attention of the public. The more that we debate and examine, the better will be the implementation of safety standards. I have strong reservations about the Government's notion of maintaining the application of safety standards through the sponsoring Department.
My final point relates to cost. The question of cost is always raised as a sort of spectre in the application of safety. We must say again and again that higher safety standards do not increase costs. In fact, they reduce them. The cost of accidents is enormous, and not only in the short term. There is the cost of recovery of both people and materials. The cost of pollution in the industry about which we are talking can be open-ended, The cost in terms of lives and strained industrial relations can go on for years
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after the accident. It can involve relatives. There is the cost of legal actions, not to mention the tattered and frayed relationships that result. They are all costs on industry, and if we avoid accidents we avoid those costs.
In both the short and the long run, the improvement of safety standards reduces costs. The question of costs is a misnomer. Higher safety standards will not cause greater expense; they will save money. On all counts, Labour Members want the implementation of the minority report—it seems to be the more practical section of the report—and we hope that the Government will take action. I hope that my hon. Friends will indicate their strength of purpose and feeling about this matter by dividing the House on the amendment, which is right in principle.
6.30 pm
Mr. Gordon Wilson: I apologise to the Minister for not being present during most of his opening speech. I support the demands and persuasions from many hon. Members that the minority report of the Burgoyne committee should be considered again by the Government. I agree that this is not a question of political confrontation. We are involved in a process of persuasion. The Minister would gain more politically if he were prepared to accept the views that have been expressed and the arguments that have been deployed.
I think it is important that health and safety should be divorced from the Department of Energy, because of the particular position of the Department. As I understand it, its main strategy, within the limits of its new depletion policy, is to try to get as much production as possible. Financial penalties are visited on contractors and oil companies if a major flaw is discovered relating to safety, because drilling or production may have to be shut down. For the contractor, a decision whether to shut down is serious. The financial pressures faced by enforcement of the regulations are greater for the oil and gas industry than in manufacturing, where the incidence of danger is less likely.
The Department of Energy should think again about this matter in relation to what happened in the early days of oil development in the North Sea. The Offshore Supplies Office, which had been

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given the job of attracting contracts to the United Kingdom, had the first duty of helping the oil companies to make progress with their work so that oil could be produced in the interests of the State. If that is the case with procurement, if there is too cosy a relationship between the Department of Energy and the oil industry the Department may have to accept some pressures without accepting some of the allegations that were made by the hon. Member for Keighley (Mr. Cryer).
For instance, if there were a major shutdown of oil supplies in the Middle East and a serious safety hazard was likely to develop in the Forties platform, and the United Kingdom was facing the problem of the supply of oil, where would the Department place the emphasis? It might have to accept the risk and keep Forties in production, regardless of safety. The Health and Safety Executive, having the primary task of looking after safety, might take the contrary view. I am deliberately exaggerating the circumstances in order to put the matter into perspective, because many of the accidents occur to individuals, as in the case of the "Alexander Kielland". Nevertheless, that exaggerated example points to some of the pressures that can be put on individual officials in the Department.
For those reasons, I support the view that the minority report is more acceptable for those who work in the offshore industry. The emphasis should be put on protection, and I hope that the Government will sensibly and sensitively agree to the change that has been suggested by the House.
6.35 pm
Mr. Harold Walker: For the first time, I am beginning to feel some sympathy for the Minister. My hon. Friend the Member for Keighley (Mr. Cryer) has just passed me a note saying that in addition to the Minister there have been eight speakers in this debate, all of whom I have listened to, and I cannot recall one who supported the Minister's argument. It is true that the hon. Member for Folkestone and Hythe (Sir A. Costain) made some half-hearted remarks if not of support of at least not in opposition to the Minister. At this stage we are 71 to 1 against the Government, and I intend to make it at least 8½ to 1
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now. I hope that the Government will take account of and reflect the attitude of the House today.
This debate is part of what has been a long struggle to give decent standards of protection to men and women at work. There has been a slow advance in the 200-year period since the Industrial Revolution, marked by the Factories Acts, the Health and Safety at Work etc. Act, and so on. But we have had our setbacks as well as our advances. I am afraid that the Government are trying to give us another little setback today, but I hope that the Minister will take account of the views of the House and that they will be reflected in his reply.
The report is long, highly complex and technical. I expect that many people thought that it was not within their understanding. But at root, as the debate has shown, it is essentially concerned with one straightforward, important and serious question. Where should the responsibility lie for ensuring the adoption and maintenance of standards that will apply in a highly dangerous industry?
The Burgoyne committee was not asked to examine that. Indeed, the minority report pointed out that that lay outside its terms of reference. Those terms of reference were:
"To consider so far as they are concerned with safety, the nature, coverage and effectiveness of the Department of Energy's regulations governing the exploration, development and production of oil and gas offshore and their administration and enforcement. To consider and assess the role of the Certifying Authorities. To present its report, conclusions and any recommendations as soon as possible."
I find it difficult to understand why we have spent a whole afternoon debating a matter that fell outside the committee's terms of reference.
I should like to take up some of the points raised by my hon. Friend the Member for Dunfermline (Mr. Douglas), because it gives me an opportunity to talk about a matter that is before the Public Accounts Committee and to say something about the origins of the underwater training centre at Fort William, with which, as a Minister, I was involved at the time. I was involved in setting up that centre. I do not know whether to feel proud or whether to hang my head.
Reference has been made to my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), because before

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he was in the House he was extremely concerned, as we all were, about the growing fatality rate in the North Sea, particularly among divers. We were absolutely convinced that something must be done about this. We decided to begin by requiring every diver who was diving in the British sector of the North Sea to be properly qualified. This would mean that he had to have a certificate of competence which meant passing the necessary medical examination, reaching the appropriate standard of fitness and maintaining it and undertaking an appropriate course of training. But there was no appropriate training facility available at that time and if we were to make that a condition of issuing a certificate we had to ensure that the would-be diver had access to the appropriate training facilities. That meant that we had to provide those facilities. My view about that at the time was recorded in the documents at the Department of Employment. I refreshed my memory about it recently when I visited the Department and looked at the documents. It is all there.
In 1974 I set out instructions about the way in which these facilities should be set up and how they should be financed by the oil industry, preferably through appropriate levies administered through the petroleum industry training board, but that if it was not possible, it should be done by the establishment of an agency operated by the BNOC that was being set up at that time.
That is the way that we envisaged the operation. In order to dive in the North Sea, people would need the appropriate training, according to the depths to which they were diving. They would have to pass the medical examination, we would have to provide the medical facilities, and the whole thing would be financed by the oil industry.
I am hesitant about commenting in advance of the report on the work that has been done by the Public Accounts Committee, but it did issue an interim report that seemed to indicate that I had some responsibility for matters that had been misjudged and had not gone well. I very much regret that, and I do not intend to go further into these matters this afternoon. However, I hope that the Committee will take account of what I
1530
have said to the House and of what I put in a letter to it.
I return to the main issue before the House. I shall say something about the historical background behind the setting up of the Burgoyne committee. We begin by looking at the Robens report to Parliament and the recommendation that led to the creation of the Health and Safety at Work etc. Act 1974. The central theme of the Robens philosophy comes down against the fragmentation of responsibility for occupational health and safety and its division between different Government Departments. That report pointed out that the Department of Energy was responsible for coal mining and oil, and so on; the Department of the Environment had the responsibility for noxious and toxic emissions into the atmosphere and for the Nuclear Installations Inspectorate, and so on. The report said that all this fragmentation was nonsense and that these various responsibilities should be brought together under one independent body, which would not have divided loyalties and obligations to the basic work of any Department. It suggested the establishment of a single body to administer the whole area of occupational health and safety and to bring forward recommendations that would eventually lead to one comprehensive and codified statute law and regulations.
Of course Parliament embraced that report and we turned it into legislation—the Health and Safety at Work etc. Act. I take the point made by my right hon. Friend the Member for Plymouth, Devon-port (Dr. Owen), who said that this was not a party issue. It is not. Conservative Members have perfectly good credentials in these matters and the main work of drafting the Act fell to the then Conservative Government. I was very happy to take it over and make some modifications, which the whole House endorsed.
That Act was not achieved easily. The Department of Energy did not readily surrender its responsibility for the Mines and Quarries Inspectorate. It fought like a tiger, because it did not want to see its empire diminished. The Department of the Environment fought like a tiger against surrendering the Alkali Inspectorate. The Ministry of Agriculture vowed that it would not give up its responsibility for agricultural safety. The battles were

1531
fought and, in the main, were won. We have seen the benefits in improved occupational health and safety and the falling off in accident and fatality figures over the years. I hope that that trend long continues.
However, we did not win the battle for offshore health and safety. We put into the Act a power to extend the Act to offshore activities by Order in Council while we discussed the matter further with the appropriate Department. By 1976 the case had become so overwhelming that the then Prime Minister, my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) made a statement to the House saying that we would make the Order in Council on the primary responsibility for health and safety in the North Sea and that this would pass through the Health and Safety Committee. The Department of Energy was not ready to give up as easily as that. It had lost only one round.
I wonder whether hon. Members have seen that delightful and amusing programme on television called "Yes, Minister". You, Mr. Speaker, and I have been Ministers and we know that sometimes that programme comes very near the truth. The "Humphrey" in the alpartment of Energy must be smirking all over his face because he has won again. His Minister is here, acting as the stooge for Humphrey, who is sitting in the box, no doubt. Perhaps he will say "We will set up a committee". Like all Government-appointed committees, the key will lie in who is on it. They will include carefully hand-picked people, so that the Government can be certain in advance that the committee will come up with the answers that they really want. They will also make sure that the terms of reference are sufficiently elastic, so that with the passage of time they can be bent sufficiently to include those things that were specifically excluded. That is why we have this report this afternoon. It is all to do with the preservation of the empire of the Department of Energy and the vested interests to which my hon. Friends have referred, and are referred to in the minority report.
Paragraph 7 of the minority report is straightforward about the conflict of interests and the interchange of personnel. We do not wish to question the integrity
1532
of any employees, but the report goes on to give two examples. It says:
"in 1978 Dr. Jeremy Bray, MP said of Angus Beckett, a Head of the Petroleum Division, His view was that whatever was good for the oil companies was good for Britain… . He was so obviously in the pockets of the oil companies that I don't think they had any respect for him.' Secondly, the Bingham Report on Sanctions Busting records that one of Beckett's assistants, Alan Gregory (later Chairman of BP Trading) asked Shell if information received on sanctions busting could be passed to the Under-Secretary at the Commonwealth Office, 'on a purely personal basis', so that if 'there were any further signs of Ministers wishing to sound off on this subject, the appropriate discouraging noises could be made'".
Shades of "Yes, Minister" again. I do not know who advises the producers of that programme but I think that there must be some mole in the Department of Energy earning a bit on the side.
The grim side of this is that on the receiving end, way down the line, are those poor people whose lives are at risk in the North Sea, and many whose lives have been snatched away from them in the most grim and gruesome circumstances. I shall not harrow the House with the descriptions given to me, when I was responsible for occupational health and safety, of some of the terrible tragedies that have occurred in the North Sea. Those who are putting forward the proposals ought to be aware of them, because they may feel that they should carry a heavy responsibility for any such tragedies that occur in future.
The Minister spoke of liaison between the HSE and his Department. The note of dissent takes up that aspect and says:
"In spite of requests from the HSE, as part of the Agency Agreement, for detailed information on fatal and serious accidents, so that there could be consultation over the investigation and reporting, PED does not appear to have complied on a regular basis. Scrutiny of investigation reports on serious or fatal accidents has tended to indicate absence of some necessary factual information; insufficient consideration of legal aspects necessary to identify contraventions of laws or regulations; absence of first-hand statements taken by PED inspectors; delay, sometimes considerable in assembling papers which are not normally accompanied by a covering report on the lines of the Factory Inspectorate accident report; and insufficient consideration being given to enforcement procedures generally or legal proceedings in particular."
The whole House knows that the risk of accidents in the industry is in excess of that in almost any other industry. It

1533
is obviously dangerous work, yet the service of the PED has so far not included the service of any prohibition or improvement notices. The note of dissent continues:
"No offshore safety committee visited by us has ever seen a PED inspector. PED told us they have never needed to meet safety committees or safety representatives offshore, or advise them of their visit offshore."
I find that astonishing, in view of the legitimate concern that built up over the years and led to my arranging with the chief inspector of factories that, in the relatively much safer environment of onshore factories, inspectors making visits are required to talk to the representatives of workers and are required by section 28(8) of the 1974 Act to pass on to those representatives any factual information relating to their health, safety or welfare.
We have imposed that statutory obligation in respect of much safer establishments and it seems extraordinary that the PED inspectors have never met safety committees or safety representatives offshore, and have never advised them of visits offshore.
We have heard many quotations from the minority report. My hon. Friends and I are at one with those who compiled the report, and it seems that we are not alone in that. I am not attacking the Government on traditional party lines. I am saying "Please listen to those in the House who know something about these matters and have been involved with them over the years." The Government must do what is right for the blokes whose lives are at risk in the North Sea.
We are all concerned to get the oil and gas ashore and to get the benefits of it for this country—the Government want to use the revenue for cutting taxes and we want it to be used to build schools and hospitals, but that is a separate argument—but we do not want that to be at the expense of workers lives. Those who have produced the report are not sufficiently sensitive to the health and safety needs of those working in the North Sea.
Not only Labour Members take that view; we have heard it from the Liberal and Scottish National Benches, and even from the hon. Member for Canterbury (Mr. Crouch), who has an honourable record in these matters. I hope that the
1534
Minister will tell us that he and his officials want to think about what we have said and will have further discussions with the Department of Employment. If the Government do not agree that until they have had those further discussions they will leave the motion before the House, meaning only what it says—take note and nowt else—we shall have to put our views on record and divide the House.
If the Government do not listen and respond to us, the Minister and his colleagues will have a heavy responsibility to bear for the fatalities and serious accidents that will undoubtedly continue to occur in the North Sea.
6.56 pm
Mr. Gray: By leave of the House, it might be convenient if I try to deal with some of the points that have been raised in our interesting debate.
The right hon. Member for Doncaster (Mr. Walker), the hon. Member for West Lothian (Mr. Dalyell) and others questioned the membership of the committee and the views of some of the members. I remind them that their Government set up the committee and that we are accepting the majority view of the members appointed by the previous Government.
There is no conflict between us on the issue of safety. We are every bit as anxious about safety as is anyone on the Opposition side. There is also little conflict about the report. The recommendations are broadly acceptable to both sides. The one exception is the recommendation that attracted the attenion of the trade union members who submitted the note of dissent.
We believe that the suggestions that we are prepared to accept from the majority report and the action that we propose to take as a result will ultimately lead to greater safety offshore than would the suggestions of Opposition Members.
I return to the theme that I developed earlier. We believe that it would be highly dangerous to separate safety from the production functions of offshore installations. If we have people saying "We are not responsible for safety, somebody else is", we shall be taking serious risks in the conditions prevailing in the North Sea—probably the most hazardous oil exploration conditions in the world.

1535
The right hon. Member for Plymouth, Devonport (Dr. Owen) asked about recommendation 6.11—the official approval of independent surveyors for specialised surveys. That is the one recommendation that we are unable to accept. The hon. Member for West Lothian gave our reason for rejecting that recommendation. It would not be appropriate for the Department of Energy to give official approval for independent specialised surveyors to be employed by certifying authorities. That would detract from and confuse the authorities' certification responsibilities. The terms of appointment of the certifying authorities require them to accept reputable independent agencies. Many are recognised. It is not a question of cost. The reasons are, first, the difficulty of ensuring full coverage of the many organisations involved, and, secondly, that it would detract from their ultimate responsibility.
It may be that Opposition Members do not agree entirely with that, but after a report such as this, which has been prepared by a distinguished group of people, the time comes when the Government must take a view. That view may not be the same as that of the Opposition. However, we took the view that the recommendation was not sufficiently compelling for us to accept it.
The right hon. Member for Devonport referred to the data bank on plant and equipment failure. There is no doubt about its value. The discussions mentioned in the Government's statement will be concerned with how to obtain proper coverage of these failures and how to assemble it to be credible and useful. Therefore, I agree entirely with the right hon. Gentleman on that point.
The right hon. Gentleman also asked what steps were being taken to ensure that there would be no repeat of the "Alexander Kielland" disaster. I reiterate that I am reluctant to make any comment on the "Alexander Kielland" disaster at the moment. When I was in Norway earlier this week I was given an up-to-date report on how the attempts to right the "Alexander Kielland" were proceeding. Until we see the report that is being prepared as a result of the investigations in Norway, it would be unwise to comment.
All the installations similar to the "Alexander Kielland" and operating on
1536
the United Kingdom continental shelf were thoroughly examined shortly after the accident, and necessary modifications were made in some instances. Such minor defects as were disclosed were not considered to be critical. The owners of other types of mobile installations were required to carry out safety checks, particularly in relation to structural stability. No significant defects were found. We still await the report of the comminssion. Until it is received, I cannot comment further.
Mr. Douglas: It is true, as I indicated, that the Norwegians found it necessary to make structural changes and to reinforce at least two rigs, one being the "Henrik Ibsen", but Lloyd's did not find that necessary. Surely the Department of of Energy has a view on the reasons why Lloyd's took a different view from Det Norske Veritas.
Mr. Gray: The hon. Gentleman will recall that the alterations to the "Henrik Ibsen" were carried out on the volition of the owners, not under any pressure. They did that of their own volition. The Government must take the advice of the certifying authorities. We are satisfied that we were given the correct advice. If the hon Gentleman requires any further information, I shall provide it.
Recommendation 6.50 on the timing of the application of regulations offshore was referred to by the right hon. Member for Davenport. The draft extending these regulations offshore is being considered by the Health and Safety Executive's legal advisers. The consultations over the draft have been protracted because of the complex employment practices in the offshore oil industry.
The right hon. Gentleman asked about transferring responsibility for this matter to the Health and Safety Executive. I make no criticism, but it would mean divorcing the Petroleum Engineering Division Inspectorate from immediate and continuing access direct to other petroleum specialists in my Department. In the event of a major accident or emergency such reservoir engineers, who are limited in number, must be retained in my Department because of the nature of their main responsibilities for field developments and operations. These are points of which Opposition Members and even the authors of the note of dissent

1537
may not fully have been aware, but I assure the House that they are vital.
Mr. Maclennan: I am at a loss to understand what that last statement meant. Similar considerations must have arisen within the nuclear industry. That is a high technology industry, with officials in the responsible Department, in the sponsoring Department and in the industry, who must retain responsibility for safety matters. However, that does not mean that it is not necessary to bring in outside authorities and officials to double check and to give an independent and authoritative analysis of problems of this kind. Where, if there is a difference, does the difference lie?
Mr. Gray: I cannot accept that there is no difference. There is a great difference. The nuclear establishments are on shore, and that makes a great difference. Offshore, it is imperative that the inspectorate has easy access to other specialists within the Department so that they may benefit from the knowledge that can be given to them on production and exploration. I repeat that it is imperative that the two functions are not divorced.
The right hon. Member for Orkney and Shetland (Mr. Grimond) asked about the possible extension of the United Kingdom civil and criminal law pipe-laying vessels and other vessels attending installations. There are formidable difficulties in the way of extending United Kingdom law in general to foreign flag vessels, which account for a fair proportion of the vessels engaged in our offshore areas. This recommedation will be examined in the wider context of the Law Commission's report on the territorial and extra territorial extent of the criminal law. That point was also made by the hon. Member for West Lothian. We intend to follow this up to see whether anything can be done about it.
The right hon. Member also asked about pipelines and their inspection. Pipelines are inspected by the owners and the pipelines inspectors of the Department of Energy. Pipelines are usually inspected externally from submersibles. The Department is collaborating on research into internal remote inspection devices.
My hon. Friend the Member for Canterbury (Mr. Crouch) made an in-
1538
teresting speech. We always pay attention to his advice, because he is never afraid to express himself clearly, whether or not he agrees with his Front Bench. I suggest that offshore activities are spearheading diving developments. We should not confuse naval diving with offshore diving. They are substantially different. However, experience gained in naval diving can be extremely useful in offshore diving.
Mr. Dalyell: What is meant by "Offshore activities spear-heading diving developments"?
Mr. Gray: The hon. Gentleman is a real nit-picker. On this occasion he has picked yet another. There is nothing particularly intricate about that expression. The diving industry is more widely represented offshore in the oil industry than in any other sphere. For the hon. Gentleman's benefit, that is what the expression means.
The PED diving inspectors are, with one exception, ex-Royal Navy divers. I remind the hon. Gentleman, who was anxious about this matter—I hope that I have removed any qualms that he had as a result of my opening remarks—that we are extremely interested in the whole aspect of safety. It is for that very reason that we believe that our solution will, in the long term, be better than what is contained in the minority report for those who work offshore.
Mr. Crouch: Is my hon. Friend asking the House in his motion—which is all that I have—to take note of the Burgoyne report—the whole report—or is he asking us to take note of the conclusions and recommendations only? Or is he asking us to take note of a paper which was lodged in the Library by his Department and which is not before this House but is to be found in the Library? I must ask that question, because all that we are seeking to do tonight is to decide whether to take note of the Burgoyne committee report. It is that and nothing more.
Mr. Gray: My hon. Friend will accept that the normal procedure is that, when a report is submitted to the Government, the Government give a view on that report. The Government have given a view. The way in which we did that was

1539
by lodging in the Library our responses to the recommendations that were made. This debate is on a take-note motion, of both the report and the Government's responses.
Mr. Harold Walker: I cannot hear the Minister.
Mr. Gray: I beg the right hon. Gentleman's pardon.
Mr. Harold Walker rose——
Mr. Gray: I shall not give way.
Mr. Harold Walker: On a point of order, Mr. Speaker. With respect, the question put by the hon. Member for Canterbury (Mr. Crouch) is very importtant. The answer will determine the way in which the House is to vote. The Minister is replying to the hon. Gentleman. I think that the House must understand what we shall be voting on shortly. Is it merely on the question that the House takes note of the report, or is it, as is implicit in the paper in the Library, on the basis that the House and the Government accept the principles and the recommendations?
Mr. Gray: The right hon. Gentleman is correct. It would be rather strange if the Government did not give a view when a distinguished committee reported to it. The Government's responses to the report's recommendations are clearly set out in the paper that was lodged in the Library. That is a normal state of affairs. Therefore, tonight, hon. Members may care to interpret the take-note motion as meaning accepting what the Government will be doing, or to vote for the Opposition amendment. If the hon. Member for Keighley (Mr. Cryer) is correct in saying that the Health and Safety Executive is in the pocket of the Department of Employment, the amendment is unnecessary.
Mr. Harold Walker: We must have this cleared up. The Minister accepts that the motion before the House is that the House takes note, but then he goes on to talk about the House possibly interpreting that as acceptance by the Government of the recommendations, and of that being a matter for the House. The Government cannot have it both ways. I do not wish to accuse the Minister of sharp practice, but it is getting near to that when we are being asked to
1540
vote for something which the Government subsequently say is something very different and far-reaching.
Mr. Crouch: On a point of order, Mr. Speaker. I am afraid that we have to involve you in this matter, because the time will come later this evening when you will put the Question on the motion to the House. As I understand it, we shall first have to decide on the amendment to the motion. Perhaps we shall divide on that, and then you will put the Question on the motion that we take note.
Can you advise me whether you are asking me merely to take note, or are you asking me to do more than take note, and to take note of the Government's intentions? It is important that the Government should make clear their intentions, either in writing in a paper in the Library, or in a statement by the Minister this evening.
What are you asking me to do, Mr. Speaker? Are you asking me to take note of the Burgoyne committee's report in its entirety, including the note of dissent, or are you asking me to take note and add a rider to the effect that I must bear in mind what the Government have said? This is extremely important, Mr. Speaker.
Mr. Speaker: I have no doubt that it is important, but the hon. Member has been a Member of the House for a long time and he knows that I am not asking him to do anything. All that I intend to do is to put the Question.
Mr. Gray: The hon. Member for Dunfermline (Mr. Douglas) asked a number of questions. He asked, first, about offshore installations. The technical advisory committee is available to advise on disputes between the owner of an installation and the certifying authority. The committee, which meets on an ad hoc basis, consists of officials from the Health and Safety Executive, the Department of Trade, naval constructors, the Meteorological Office and the Institute of Oceanographic Sciences, and it is chaired by a member from the Petroleum Engineering Division.
The hon. Gentleman made some other points about the "Alexander Kielland", which I think I have dealt with and about which I shall write to him.

1541
The hon. Gentleman also asked about the certification of divers. Under the new unified diving regulations, which will come into force during 1981, a diver will not be able to dive unless he has a certificate that he is competent by training or experience. A proposal from the TUC and the CBI is under consideration for approval by the Health and Safety Executive for a diver training certification board to be set up, with expert membership.
The hon. Member for West Lothian and the hon. Member for Dunfermline raised the question of recommendation 6.19 and asked the reason for the time lag. The difficulty is that the Mineral Workings (Offshore Installations) Act 1971 puts the main responsibility for safety on the owner and the offshore installation manager, whereas the Health and Safety at Work etc. Act 1974 puts it on the employers of the individual workers, who may be contractors or subcontractors. Both Acts now apply to offshore installations, so there is a serious difficulty which needs further consideration. We intend to take action on those matters.
The hon. Member for West Lothian also asked whether the minority report was rejected because acceptance of it would have involved inconvenience for civil servants. I imagine that the hon. Gentleman had in mind the fact that most of the headquarters of the HSE is to be dispersed to Merseyside, but I assure him that this has no bearing on the decision.
On the subject of civil servants, I should like to put the record right in connection with a reference that the hon. Gentleman made to Sir Jack Rampton, the former permanent secretary at the Department of Energy. I refer the hon. Gentleman to Hansard for Wednesday 5 November and the answer that my right hon. Friend the Minister of State, Civil Service Department gave when he was asked about Sir Jack Rampton. He said:
"Since the hon. Gentleman has tabled his question, I must tell him that the Government have received no such request from Sir Jack Rampton to take up a business appointment. Were any such request to be received, it would have to be considered in accordance with the rules."—[Official Report, 5 November 1980; Vol. 991, c. 1287.]
1542
I hope that that clarifies that point.
I have dealt with the hon. Gentleman's point about the composition of the committee.
My hon. Friend the Member for Folkestone and Hythe (Sir A. Costain) made a very helpful contribution to the debate. His view and his experience of the construction industry must be envied by some Opposition Members. The Department of Energy is playing a leading role in the North-West European harmonisation group, which consists of officials of countries bordering the North Sea. The committee is committed to the harmonisation of regulations on the continental shelf on matters of safety and pollution. That point was also raised by the right hon. Member for Orkney and Shetland.
I suspect that the House is anxious to move on to other business, so I do not propose to detain hon. Members. [Interruption.]
Mr. Maclennan: What about the diving school?
Mr. Gray: The hon. Gentleman knows that negotiations about the diving school are taking place. It would not be right to make any detailed comment now. We all have the same objective, and we are anxious to see the school continue successfully.
Mr. Maclennan: Before the Minister concludes his speech, can he tell us what weight the Government give to the fact that hon. Members are virtually unanimous in their belief that the Government are wrong on the central issue of taking responsibility away from the Department of Energy? It is understandable and right that he should state the Government's view. Nevertheless, will he give some weight to the opinions that have been expressed by hon. Members from all parties before he makes any final decision?
Mr. Gray: The hon. Gentleman has rightly asked for the Government's view, and I have given it. The Government have taken considerable notice of the minority report. We believe that we are acting in the best interest of those who work on offshore installations. Therefore, the Government do not intend to change their mind.
Mr. Dalyell: What about safety representatives?
Mr. Gray: Many safety committees are now in operation.
Mr. Dalyell: How many?
Mr. Gray: I cannot tell the hon. Gentleman how many without having been given prior notice. It is up to those who work on the offshore installations to set up safety committees. Some companies have done so. The operators have every right to set up safety committees, and the initiative should usually come from them.
Mr. Harold Walker: The hon. Gentleman has missed the point. At present, those who work onshore are covered by
the Health and Safety at Work etc. Act 1974 and they have a statutory right to appoint the safety representatives and committees if their unions request that. Those who work on offshore installations do not have that statutory protection. Is the proposal to be made effective? If so, when?
Mr. Gray: As regards offshore installations, it is a condition of their licensing agreements that companies should make facilities available to trade unions. There is no question of that being discontinued. The ultimate decision rests with those who operate them.
Question put, That the amendment be made:—
The House divided: Ayes 60, Noes 99.

Division No. 490]

AYES

[7.22 pm

Adams, Allen

Grimond, Rt Hon J.

Owen, Rt Hon Dr David

Alton, David

Hamilton, W. W. (Central Fife)

Penhaligon, David

Anderson, Donald

Harrison, Rt Hon Walter

Powell, Raymond (Ogmore)

Archer, Rt Hon Peter

Haynes, Frank

Robinson, Geoffrey (Coventry NW)

Barnett, Guy (Greenwich)

Hefter, Eric S.

Rodgers, Rt Hon William

Booth, Rt Hon Albert

Home Robertson, John

Rooker, J. W.

Campbell-Savours, Dale

Homewood, William

Rowlands, Ted

Cocks, Rt Hon Michael (Bristol S)

Horam, John

Snape, Peter

Crowther, J. S.

Jay, Rt Hon Douglas

Steel, Rt Hon David

Cryer, Bob

Jones, Rt Hon Alec (Rhondda)

Stewart, Rt Hon Donald (W Isles)

Cunliffe, Lawrence

Jones, Dan (Burnley)

Strang, Gavin

Dalyell, Tam

Lyons, Edward (Bradford West)

Tinn, James

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

McElhone, Frank

Walker, Rt Hon Harold (Doncaster)

Dixon, Donald

McKelvey, William

Welsh, Michael

Dobson, Frank

Magee, Bryan

Whitlock, William

Dormand, Jack

Mitchell, Austin (Grimsby)

Wilson, Gordon (Dundee East)

Douglas, Dick

Mitchell, R. C. (Solon, Itchen)

Winnick, David

Dunwoody, Hon Mrs Gwyneth

Morris, Rt Hon John 'Aberavon)

Foot, Rt Hon Michael

Moyle, Rt Hon Roland

TELLERS FOR THE AYES:

Foster, Derek

Newens, Stanley

Mr. Joseph Dean and

George, Bruce

Orme, Rt Hon Stanley

Mr. George Morton

Graham, Ted

NOES

Aspinwall, Jack

Gray, Hamish

Neale, Gerrard

Atkinson, David (B'mouth, East)

Greenway, Harry

Needham, Richard

Baker, Nicholas (North Dorset)

Griffiths, Eldon (Bury St Edmunds)

Nelson, Anthony

Beaumont-Dark, Anthony

Griffiths, Peter (Portsmouh N)

Neubert, Michael

Bendell, Vivian

Hannam, John

Newton, Tony

Benyon, Thomas (Abingdon)

Henderson, Barry

Onslow, Cranley

Best, Keith

Hicks, Robert

Page, Richard (SW Hertfordshire)

Biggs-Davison, John

Hoeg, Hon Douglas (Grantham)

Parris, Matthew

Blackburn, John

Holland, Philip (Carlton)

Percival, Sir Ian

Body, Richard

Howell, Ralph (North Norfolk)

Pollock, Alexander

Boscawen, Hon Robert

Hunt, John (Ravensbourne)

Proctor, K Harvey

Bottomley, Peter (Woolwich West)

Hurd, Hon Douglas

Renton, Tim

Budgen, Nick

Jopling, Rt Hon Michael

Ridley, Hon Nicholas

Burden, Sir Frederick

Lester, Jim (Beeston)

Rossl, Hugh

Butcher, John

Lloyd, Peter (Fareham)

Sainsbury, Hon Timothy

Cadbury, Jocelyn

Lyell, Nicholas

St. John-Stevas, Rt Hon Norman

Carlisle, John (Luton West)

McNair-Wilson, Michae (Newbury)

Shelton, William (Streatham)

Carlisle Kenneth (Lincoln)

Major, John

Shepherd, Colin (Hereford)

Clarke, Kenneth (Rushcliffe)

Marlow, Tony

Shepherd, Richard (Aldridge-Behills)

Colvin, Michael

Mather, Carol

Sims, Roger

Cope, John

Mayhew, Patrick

Speed, Keith

Critchley, Julian

Meyer, Sir Anthony

Squire, Robin

Dunn, Robert (Dartford)

Moate, Roger

Stainton, Keith

Elliott, Sir William

Moore, John

Stanbrook, Ivor

Faith, Mrs Sheila

Morris, Michael (Northampton, Sth)

Stradling Thomas, J.

Fenner, Mrs Peggy

Morrison, Hon Peter (City of Onester)

Wakeham, John

Garel-Jones, Tristan

Murphy, Christopher

Waldegrave, Hon William

Gow, Ian

Myles, David

Ward, John

Wells, John (Maldstone)

Wickenden, Keith

TELLERS FOR THE NOES:

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

Wolfson, Mark

Mr. David Waddington and

Wheeler, John

Lord James Douglas Hamilton

Question accordingly negatived.
Resolved,
Main Question put and agreed to.
Resolved,
That this House takes note of the Report of the Burgoyne Committee on Offshore Safety (Cmnd. 7866).

ORDERS OF THE DAY

  OVERSEAS DEVELOPMENT AND CO-OPERATION BILL [LORDS]
  Considered in Committee.
  [Mr. Bernard Weatherill in the Chair]
  Clauses 1 to 13 ordered to stand part of the Bill.

Clause 14
Mr. Frank McElhone: We are advised that the Bill is mainly a consolidation measure. Nevertheless, as the Solicitor-General indicated on Second Reading, we are to repeal 17 complete Acts of Parliament and parts of 12 others. However, the House of Commons will have no real opportunity to discuss the reasons for doing so.
We are told that the Government are again on an exercise to cut public expenditure. Is the valuable time of the House of Commons being wasted? If there are any further cuts in public expenditure on overseas development, parts of the Bill will be obsolete even before it appears on the statute book. The Government are treating overseas aid and development in a mean and cavalier fashion. We hope that the Minister will make a strong recommendation that there should be a full and urgent debate on the subject.
I shall attempt to get some clarification of clause 14. I do not wish to discuss the merits of the clause, but the Minister should clarify the intention of the clause. I draw the Solicitor-General's attention to a letter that I received from the Minister for Overseas Development on 21 August 1979 when we were discussing matters relevant to the clause. At that time we were discussing education and development banks, especially the Asian Development Bank. The Minister accepted that efforts in education had been
1548
relatively small. The clause refers to the provision of teachers and further education co-operation.
In the last part of the letter from the Minister for Overseas Development—I accept that the Solicitor-General is in some difficulty because the Minister for Overseas Development is not present—the hon. Gentleman stated:
"I share your regret that the Caribbean Development Bank's Student Loan Scheme is not running smoothly."
The Minister agreed in large measure with the concern that I expressed at that time. However, apart from the 17 Acts that are being repealed there is included on page 21 the revocation of the Asian Development Bank (Extension of Limit on Guarantees) Order 1977. That causes me to be in a state of some confusion. In the debates that took place on the bank the Minister referred to substantial sums. The Government are treating overseas development in a rather mean and callous fashion. The Opposition have only 10 minutes per month to ask oral questions on overseas development matters. Bearing in mind that The Sunday Times described the Government's response to the Brandt report as a rather shabby document, I hope that the Solicitor-General will accept the urgency of debating an issue that concerns 800 million people who are living in absolute poverty.
It is not good enough that we should be concerning ourselves with this legislation, which is circumscribed by consolidating procedures. It is grossly unfair to the House, and to the Third world in particular. It is not good enough for a Government whose Prime Minister started her career with the famous words of St. Francis of Assisi.
Mr. William Hamilton: I share the views of my hon. Friend the Member for Glasgow, Queen's Park (Mr. McElhone). I appreciate that we cannot go into the whole policy programme of overseas aid, but we should be allowed to take the opportunity in a few minutes to voice our protest at the way that procedure of consolidation measures is conducted. It may be a matter that should be looked at by the Procedure Committee. It may be considered desirable that we should move the matter formally and then hinge a

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debate on wider issues on that formal motion. My hon. Friend quoted the Solicitor-General on Second Reading when he said:
"The Bill is a consolidation of a considerable body of law relating to the terms and conditions on which aid and assistance may be granted to overseas territories."
He rightly went on to say;
"It will make a useful contribution to the tidying-up of the statute book. "—[Official Report, 30 October 1980; Vol. 991, c. 859.]
It may be our fault that we have not followed the proceedings by which the consolidation takes place as closely as we would like. However, the Acts repealed by the schedules include two Coal Industry Acts, part of a National Health Service (Scotland) Act, part of the Electricity (Scotland) Act 1979, part of the Post Office Act 1969 and part of the Police (Scotland) Act 1967.
It is difficult for humble Back Benchers like myself to follow what is happening. We have to take a great deal on trust, and there is not that much trust on this side of the House of what the Government are doing in this or any other field. We have no chance to cross-examine them on how these 17 Acts or parts thereof are to be repealed. That is unsatisfactory.
My hon. Friend referred to the aid programme. The whole point of the debate is that we are laying down a marker. We are concerned, and I believe that large areas of the world are concerned, about the cavalier attitude of the present Government to Third world problems and our aid programme. We ask the Government to give serious and careful consideration to providing Government time for a major debate on the aid programme very early in the new Session. It would not be good enough for the Government to say that the Opposition have had their Supply Days and, if we consider the matter to be of such supreme importance, it is imperative on us to provide the time. If that is their view, let us compromise and each party provide one day of a two-day debate. The importance of the subject merits it.
There is an article in The Guardian today about the conference that is taking place in Vienna tomorrow, and at which Britain will not be represented. Our name is mud in the Third world as a direct consequence of the Government's
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policy. That will be compounded, because I believe that the aid programme will be further cut as a result of Cabinet decisions taken this week or shortly thereafter.
I repeat my hon. Friend's suggestion. We must insist on an early and major debate in Government time or in Government and Opposition time to enable us to have a one- or two-day debate on the aid programme.
7.45 pm
The Solicitor-General (Sir Ian Percival): It will be no surprise to the hon. Member for Fife, Central (Mr. Hamilton) that I take issue with him on his criticisms of policy, but I do not take issue on anything else. I fully understand the desire of right hon. and hon. Gentlemen to debate either a change in the amount devoted to overseas aid or the law relating to overseas aid, but they will equally understand that it is not within my province to say what shall or shall not be debated. What has been said is on the record. I have no doubt that the business managers on this side of the House will pay close attention to the suggestions made.
My task is relatively simple. I believe that I can remove the other causes for concern expressed by the hon. Gentleman. If I can do so, the debate will have served a useful purpose in that respect, as well as in getting the other views on the record.
I believe that there is some misunderstanding about my statement that the Bill repeals 17 Acts. So it does, but it re-enacts all the provisions of those Acts. There is no change in the law. We have got rid of 17 statutes and parts of 12 others, and all the provisions of the law that are contained in those are now contained in this one Bill. It is the last of a series of consolidation measures, tidying up the bits and pieces. I assure the hon. Gentleman that there is no question of having to take something on trust. We are merely bringing within the covers of one Bill the provisions of 17 statutes—or 29—without altering the effect of them save in one respect, to which I shall refer.
The hon. Gentleman is a senior Member of this House. He knows that the

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verification of that is to be found in the report of the Joint Consolidation Committtee. In this House we are lucky that we have that Committee to do for us the work that the hon. Gentleman rightly says that we should have to do for ourselves if someone else did not do it. I can set his mind and the mind of the hon. Member for Glasgow, Queen's Park (Mr McElhone) at rest on that. We are not changing anything. The measures are repealed, but their provisions are reenacted.
There is one small exception. Two sections of the West Indies Act 1967 are repealed and not re-enacted, because they are obsolete. That does not take away any right that there might have been to anybody to have aid, nor does it take away any right that anybody would need to give aid. In all other respects the law is as it was before.
The hon. Member for Queen's Park asked whether, if there were to be further cuts, that would mean that parts of the Bill would be obsolete. My answer is "No". Nothing could be done that would affect the provisions of the Bill without further legislation. Mere changes in the amounts available would not necessarily have an effect on the provisions of the Bill. If they did, there would have to be further legislation. Even then, this Bill would be worth while, because after the Bill has been passed we have all the relevant provisions between its covers. If something has to be amended, we are merely amending this one Bill.
The hon. Gentleman asked what clause 14 did. I draw attention to the table of derivations. If the hon. Gentleman has not had one I shall be very glad to supply him with a copy. It sets out one by one the clauses of the Bill and then says where the provisions come from—in other words, that a clause is re-enacting the sections that are specified in the table of derivations. If the hon. Gentleman would like me to deal with it further he has only to say so. I know that some provisions of the Overseas Act 1960, for example, are re-enacted in clause 14, and some provisions of the 1966 Act.
Mr. McElhone: I am grateful to the Solicitor-General. He said that the Bill would not interfere in any way with the cuts that I understand are now being discussed by the Cabinet. I do not wish him
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to send me a list of the items that he mentioned in his last comments, but in referring to clause 14 we know that the provision of teachers for, and for further educational co-operation between, Commonwealth countries has already been seriously impaired. We know that from the statement of the Minister in August 1979, and that there will be a 14 per cent. cut in the next three years. It is almost a certainty, therefore, that items such as education for Commonwealth students must be seriously at risk.
The hon. and learned Gentleman has been rather optimistic. We do not know what happened at the Cabinet meeting this morning, but if he can tell my hon. Friends and me that no cuts in overseas development have been discussed at the Cabinet meeting this morning, or since the Cabinet met this morning, I shall be delighted to hear that.
The Solicitor-General: I am glad that the hon. Gentleman intervened. In so far as I referred to possible cuts, I was taking a purely hypothetical case. I am not indicating either that there are likely to be any, or that, if there were any, they would be of such a nature as to be relevant to clause 14. I am speaking, as it were, in the air about this and seeking merely to deal in general terms with the hon. Gentleman's point.
Clause 14 contains enabling provisions. It says what may be done with moneys provided by Parliament. What can be done must depend, of course, upon how much money is provided by Parliament, but the amount that is provided by Parliament does not depend upon clause 14. That clause merely says what may be done with the money provided by Parliament for the purposes of the clause.
Mr. Peter Archer: Perhaps the Solicitor-General will accept some support from me. I think that the point was that it is something of a charade to have powers on the statute book if the Government manifestly do not avail themselves of them. Will the Solicitor-General agree that it is as well to retain the powers on the statute book because we hope that a future Government will avail themselves of them?
The Solicitor-General: Adopting the point in rather more general terms, I think that all of us who would wish it to be possible to give the assistance for

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which clause 14 provides, whatever the amount of money provided, would wish to see the clause remain in the Bill. 1 hope, therefore, that although we have had this debate on the clause, the conclusion will be that the clause should stay in the Bill. Unless the clause stays in the Bill, however much money is provided for the purposes of the clause it cannot be used for that purpose.
I understand the great interest in the amount of money that may be available for the purposes of the clause, but the conclusion to which the discussion must lead us, I suggest, is that we need the clause in the Bill so that whatever moneys are available may be used in the appropriate way.
With regard to the hon. Member's point about the letter that he received, I know that he will not feel it discourteous of me to say that it would not be right for me to try to answer the detailed point involved. If the hon. Gentleman wishes to pursue it, no doubt one of my colleagues will be happy to deal with it.
If there are any further matters on the clause, I shall be happy to deal with them, but, for the reasons that I have mentioned. I hope that it will be appreciated that the fears expressed as to the law have no foundation. The clause does not alter the law in any way, and it is very much for the convenience of everybody interested in the matter that these remaining bits and pieces should be brought within one Bill. I hope, therefore, that the clause will remain in the Bill and very soon become law, together with the rest of the Bill.
Question put and agreed to.
Clause 14 ordered to stand part of the Bill.
Clauses 15 to 19 ordered to stand part of the Bill.
Schedule 1 agreed to.

Clause 14

  PROVISION OF TEACHERS FOR, AND FOR FURTHER EDUCATIONAL CO-OPERATION BETWEEN COMMONWEALTH COUNTRIES
  Question proposed, That the clause stand part of the Bill.
  7.30 pm

Schedule 2

  ENACTMENTS REPEALED AND ORDERS REVOKED
  The Solicitor-General: I beg to move amendment No. 7, in page 21, line 8,
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  column 3, at end add:
  'so far as it relates to British Shipbuilders'.
  This is a technical amendment. When the Bill was considered in another place by the Joint Committee it was suspected that the appointed day for the vesting of the property rights and obligations of British Aerospace, under section 1 of the British Aerospace Act 1980, would occur before this Bill came into force. It is now clear that this will not be so, and it is that fact which necessitates the amendment. I shall be happy to enlarge upon it if hon. Members wish me to do so, but that basically is the reason for the amendment. I hope that it will be acceptable.
  Mr. McElhone: I thought that I heard the Minister refer to the rights of British Aerospace. I understood from the Amendment Paper that the amendment related to British Shipbuilders.
  The Solicitor-General: I referred to the rights and obligations of British Aerospace under section 1 of the British Aerospace Act 1980. I said that it was expected that the appointed day for the vesting of the property rights and obligations would occur before this Bill came into force. It is now clear that this will not be so. Until that is so, it is wrong to repeal in its entirety section 3(6) of the Aircraft and Shipbuilding Industries Act 1977, under which British Aerospace has the power to enter into overseas assistance agreements. Hence the need to limit the repeal to British Shipbuilders. The power of British Shipbuilders to undertake such assistance is brought into the consolidation and is safeguarded by clause 2(1) and the entry in part III of schedule 1 to the Bill. I hope that I have answered the hon. Gentleman's point.
  Amendment agreed to.
  Schedule 2, as amended, agreed to.
  Bill reported, with an amendment; as amended, considered.
  Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
  Bill accordingly read the Third time and passed, with an amendment.

REGULATED TENANCIES
8 pm
The Minister for Housing and Construction (Mr. John Stanley): I beg to move,
That the Regulated Tenancies (Procedure) Regulations 1980, which were laid before this House on 27 October, be approved.
The regulations are concerned with the procedures followed by rent officers. Schedule 1 deals with the procedures for registering a fair rent and schedule 2 with the procedures for issuing a certificate of fair rent. They amend schedules 11 and 12 to the Rent Act 1977. I stress that nothing in these regulations alters the relations between the rent officer service and central government or affects the basis of assessment of fair rents.
The objective of the changes made by these regulations is to streamline rent officer procedures and to reduce delays without of course prejudicing the rights of either landlords or tenants. The proposals flow from a working party consisting primarily of serving rent officers whose report was received earlier this year and was placed in the Library on April 30. After consulting the Institute of Rent Officers on the report and modifying the proposals in the light of their comments, the Government introduced an amendment to the Housing Bill on Report in this House to give effect to the most important of the recommendations. This was debated on 19 May and agreed to without a Division. It now forms part of schedule 6 to the Housing Act 1980.
The amendment which was agreed to covered the subject matter of schedule 1 to the regulations we are now considering, namely, the procedures for registering a fair rent. The four changes to rent registration procedures which were originally in schedule 6 to the Housing Act and are now reproduced in schedule 1 to the regulations are as follows.
First, they amend the circumstances where a rent officer must hold a consultation with the landlord and tenant prior to fixing a fair rent. At present, the rent officer must hold a consultation if he disagrees with the rent sought by the applicant or if the other party makes representations on the rent sought. This is inflexible and leads to consultations
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which the parties have not sought and which frequently they do not bother to attend. This can be a waste of everyone's time, especially on re-registrations which form over 80 per cent. of cases where the issues are relatively strightforward. The regulations before the House instead provide that the rent officer, on receipt of the application, should ask the landlord and the tenant whether they want a consultation. If either does, he must hold one. In addition, he may also hold one at his discretion if he thinks it necessary. But there will be no automatic triggering of consultations regardless of whether the parties want one. This new procedure is expected to save a considerable amount of rent officer time that is now wasted, but I stress that it provides an absolute right for landlord or tenant to a consultation on request.
Second, schedule 1 provides that, where the applicant is the landlord and he has included in the proposed rent an amount for services and has submitted supporting evidence, the rent officer must send this evidence to the tenant when he notifies him of the application. If the tenant asks for a consultation the rent officer must then give at least 14 days' notice before holding it. This is a new procedure which will ensure that tenants on fixed fair rents will always have the opportunity to see, in advance of consultation with the rent officer, the evidence on which their landlord is seeking an increase in rent attributable to services.
Third, the rent officer may arrange joint consultations at which more than one tenant is present. As the legislation at present stands, there is no explicit power for this, but it can save a good deal of time where rents are being registered for a number of identical or similar flats in a block.
Fourth, there will be a right of appeal to a rent assessment committee in all cases where the landlord and tenant have individually made applications for rent registration. This is a broadening of landlords' and tenants' rights, because at present there is no right of appeal unless a consultation was held prior to the registration. This means, for example, that if the landlord applied for a fair rent of £10 and the rent officer agreed with that figure the tenant would not be

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able to appeal unless he had made representations about the proposed rent to the rent officer before the rent was registered.
If the tenant had not made representations—say, because he was away from his home at the time—there would have been no consultation and hence no right to appeal. The regulations remove this appeal. The regulations remove this anomaly by allowing a right of appeal regardless of whether representations were made, or a consultation held, on the application when it was before the rent officer.
In addition to reproducing the bur changes to rent registration procedures which I have described, schedule 1 to the regulations contains some small differences from schedule 6 to the Act. This is because in discussion with the Department on the detailed implementation of schedule 6 to the Housing Act, 1980, the Institute of Rent Officers has proposed a few minor administrative changes.
Schedule 1 to the regulations merely reproduces schedule 6 to the 1980 Act but with the minor administrative changes I have mentioned. Hon. Members may reasonably ask why we did not directly amend the original schedule 6 by regulations. The reason is that schedule 6 to the Housing Act 1980 is not in force and thus not yet embodied in the Rent Act 1977. Hence, there is no power to amend it at present by regulations. If schedule 6 to the 1980 Act was brought into force and then amended immediately afterwards, it would be administratively confusing. Thus, if the regulations before the House are approved, schedule 1 to these regulations will in effect replace schedule 6 to the Act and it will not be necessary to bring schedule 6 into force.
I turn now to schedule 2 to the regulations which deals with the procedures governing certificates of fair rent. These were not covered by schedule 6 to the Act. Although the Rent Act 1977 provides the power to change rent officer procedures by statutory instrument, we had originally intended to propose amendments to the certificate of fair rent procedure similar to those to the rent registration procedure during the remaining stages of the Housing Bill.
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Subsequently, however, my noble Friend the Under-Secretary announced during the Bill's proceedings in another place that the Government's intention was to make the necessary changes by statutory instrument as soon as possible after Parliament's return from the Summer Recess. This is what schedule 2 does.
As the House knows, a certificate of fair rent is a very useful procedure for giving a landlord who wants to let or improve his property a clear indication of the fair rent he will get if he goes ahead with his letting or his improvement. The existing procedures have stood unchanged for 15 years since fair rents were first introduced by the Rent Act 1965. They have worked well and it is only minor changes that we want to propose now.
The proposals in schedule 2 have been fully discussed and agreed with the Institute of Rent Officers. There are five changes that we propose to the existing certificate of fair rent procedures, and I will describe them briefly.
First, rent officers cannot at present take any action on a case where the landlord supplies insufficient information other than by referring it to a rent assessment committee. This causes delay due to rent assessment committee hearings having to be held which are, in fact, unnecessary. The new procedures in the regulations empower the rent officer to request more information from the applicant so that cases need not be referred to the rent assessment committee simply because of a lack of information. This will bring the certificate of fair rent procedure into line with ordinary rent registration procedure in this respect.
Second, the new procedures provide that, where there is no existing tenant, the rent officer is not required to hold a formal consultation but can consult the landlord in such a way as he considers suitable. This will avoid the need for formal notices having to preceed the consultation and will greatly speed up decisions on simple cases.
Third, consultations are at present held automatically whenever there is an existing tenant, regardless of whether either the tenant or the landlord has asked for one. This often results in unnecessary consultations. Schedule 2 provides that

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landlords and tenants will always have an absolute right to a consultation if either so requests—and I stress this—but consultations will no longer have to be held automatically even when neither party wants one. This arrangement parallels the procedures for fair rent registrations in schedule 1 to the regulations to which I have already referred.
Fourth, at present all cases have a 14-day delay imposed upon them between the determination of the rent by the rent officer and the issue of a certificate of fair rent. Schedule 2 provides that, if the landlord indicates before the expiry of the 14-day period that he does not object to the rent which the rent officer proposes to specify in the certificate of fair rent, the rent officer will be able to issue the certificate of fair rent straightaway without having to wait the full 14 days. This will apply only where there is no tenant, and will again eliminate unnecessary delay.
Fifth, rent officers are not at present specifically empowered to save time and effort by holding joint consultations involving several similar or identical dwellings where this is sensible. The regulations provide that the rent officer may hold joint consultations in the same way as is provided for fair rent determinations in schedule 1 to the regulations.
It will be helpful both inside and outside the House if I say that these regulations will, if approved by both Houses, come into force on 28 November. This is the date on which we are planning to bring the main private rented sector provisions in part II of the Housing Act into operation. Subject to today's proceedings, we intend shortly to make a commencement order and to lay before the House the various negative resolution instruments needed to give effect to part II.
Finally, may I express my appreciation to the Institute of Rent Officers for its valuable and most constructive work over many months in suggesting ways in which unnecessary delays and inefficiencies in rent determination procedures can be ironed out.
I commend these regulations to the House.
8.11 pm
Mr. Ted Graham: On behalf of the Opposition I welcome the streamlining that the regulations are in-
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tended to achieve. The delicate relationship between tenant and landlord must be tackled with care. When the additional clause and schedule were introduced in May, they were not opposed and none of my right hon. and hon. Friends debated them. In that case, silence indicated assent. We shall not put any obstacle in the way of the Minister making progress.
Earlier this evening I had the pleasure of hearing Lord Bellwin making a speech remarkably similar to that which the Minister has delivered. I took careful note of a number of his arguments. That is why I was more relaxed than usual when listening to the Minister.
The Minister commended the Institute of Rent Officers for its report published in April. He said that its recommendations were constructive. It is a pity that it is not possible to include many of those recommendations, but I understand that there is a limit to what can be done. The report is a credit to the rent officer service. All hon. Members have experienced the benefit and sympathy of rent officers.
Justice must be seen to be done. There are always aggrieved parties. People are often disappointed with an arbitration or adjudication. We must satisfy ourselves that as far as possible the system is fair and equitable. The proposal puts a little additional flesh on the bones of the Housing Act. That is to the good. If it works out as the Minister believes it will, it will make the service speedier and more efficient. However, we must ensure that the name of the game is not simply speed. According to the Minister, there is no intention of diminishing the rights of landlord or tenant. I should like to be satisfied that that is so.
One of the major changes involves the circumstances in which consultations can take place. I should like to be assured that in three or four months' time the rights and opportunities of tenants will not be diminished by these modest modifications. Many of my constituents are sensitive. Sometimes they do not comprehend. Sometimes they may not read about their rights or understand what they read, in spite of the best efforts by Government and rent officers.
When a tenant is notified by the rent officer that an application for a change

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in rent has been made he must put in writing a request for a consultation. The aggrieved tenant will be exposed more to his landlord when he takes the opportunity to exercise his rights. I am not talking about Rachmanism or about a plethora of bad landlords; I am talking about a normal elderly tenant who is told by a rent officer that his landlord is asking for a new rent of £10 or £12. That elderly tenant may not be in receipt of any aid and may be frightened about his security of tenure. That tenant may wonder whether, by challanging the landlord, his relationship with his landlord will be affected. By having to state in writing that they cannot afford the rent, tenants may be more inhibited.
I understand the need to put such a request in writing, but many people will have difficulty in expressing themselves in the formal language that is necessary. I am talking not about illiterate people but about people who are limited in their ability to express themselves. Will the Minister ensure that a form or outline procedure is publicised so that spelling out the reasons for objecting to a rent increase is made as easy as possible?
The rent officer could be encouraged to ensure that the facilities of his office were made available to tenants who wanted a consultation but who were limited in their ability to put their reasons in writing. That could very well be done if there were a form and if the tenant had only to sign it, perhaps in the presence of a rent officer.
The new regulations spell out that it is proper for the rent officer to carry on multiple consultations. I was surprised to find it necessary to be so specific. All the consultations that I have attended in my constituency have involved three, four and sometimes five or six tenants of the same landlord on an old estate. They have all been invited together because the same rent has been applied for in respect of all of them. The landlord's agent has sat at one end of the room, with the tenants at the other. I have been present strictly as an observer. The tenants have wanted me not to hold their hands but to be there for the assurance that it has given them. That is one of the pleasant duties of a Member of Parliament. If the Minister and his advisers have any
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doubts in that score it is right that the provision should be written into the regulations.
The rent officers' report, however, states quite clearly:
"In practice, however, rent officers do arrange multiple consultations for tenants of comparable properties with one landlord in common."
It then goes on to give the reasons. We welcome that provision very much.
Reference was made in a note from the Department and in the Minister's speech to the time that is wasted through needlessly calling for consultations. Has the Minister any statistics upon which to base the claim that the consultations are often unnecessary? It is not my experience that they are. Tenants who have come to me with a query have not felt, even though they have been reasonably resigned to the equity of the landlord's case, and even though the adjudication has produced the result they expected, that the consultations failed to serve a purpose.
Consultation is not strictly the argument of a case by two advocates, but the process serves a useful purpose because it gives my constituents a much broader understanding of the whole fabric of the landlord and tenant relationship. The rent officers of whom I know in Edmonton have done a good job as advocates for the arbitration of the system they operate. Is the Minister simply assuming that many consultations have been a waste of time? I do not oppose the regulations, but, leaving aside the question of time and money, I feel that consultation provides a valuable element in the whole structure of the relationship between landlord and tenant, and I hope that it will not be diminished by the provision that consultation should take place only in certain circumstances.
I turn to the Minister's reference to those who fail to take advantage of a response to the note from the rent officer saying that if they wish they can go directly to the rent assessment committee. That is a valuable additional aid. I speak from the tenant's point of view, but I do not want to be biased, and therefore the matter should be seen from the landlord's point of view as well.
If landlord and tenant are on two sides of an argument, the issues between them are of utmost importance. I do not want to see the procedures changed to

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achieve greater efficiency and save time and money if that confronts ordinary people—I use the term without offence—with a greater obstacle to ensuring that their rights are protected. We on the Opposition side feel that the Government have acted reasonably in the matter, and we certainly do not seek to oppose the regulations.
8.26 pm
Mr. John Heddle (Lichfield and Tam-worth): I wish to bring to my hon. Friend's attention two points about the fair rent procedure. I register an interest as a consultant to a firm of chartered surveyors, which no doubt numbers among its clients landlords and tenants who would, presumably, benefit if the regulations were passed tonight.
I understand that the regulations are designed to reduce what some might regard as the inordinate time taken in determining fair rents. That inordinate time arises from the complicated procedure under which the rent officer service must operate. It is not unknown for the procedure to take three or four months, and therefore one benefit that will flow from our passing the regulations tonight will be the greater supply of homes to rent, because landlords will feel that the bureaucratic red tape that binds the rent officer procedure at the moment will be loosened a little. That in its turn should provide a ray of hope for those who are unable to buy their own homes or who do not qualify for a home to rent from the local authority or a housing association.
I hope that my hon. Friend will take a further and more critical look at the procedures under which the rent officer service must operate. The present system is unnecessarily cumbersome. The time lag between the submission of an application for registration of a fair rent and the determination of a fair rent is unnecessarily long. That undoubtedly serves as a deterrent to some landlords, and on that score I give the House one brief example.
I understand that the rent officer has to measure the property in question and then translate the dimensions on to a plan. This time-consuming process is irrelevant, because rental values of residential property are not determined on the basis of a price per square foot or per square metre. Residential values are
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determined by supply and demand, by the scarcity factor, which is built into the rent officer's determination, by the structural and decorative condition of the demised property and by the standards of amenities available.
I wish to bring to my hon. Friend's attention one further defect in the procedure for the registration of fair rents that has not been raised in the House previously—certainly not during the passage of the Housing Act 1980. There are four major land Acts affecting the public—the Compulsory Purchase Act 1965, the Town and Country Planning Act 1971, the Valuation and Rating Act 1956 and the Rent Acts. The first three stipulate that accountability rests with the authority responsible for administering the Acts. The official concerned is required to justify his calculations, to defend his decision, to accept that he may be cross-examined on appeal and to establish facts. If the appellant is successful on appeal he will be entitled to recover his costs.
That is not so, regrettably, under the Rent Acts. I share my hon. Friend's esteem for the Institute of Rent Officers, but, with great respect to that profession, the rent officer is not required to attend an appeal, to justify his calculations or to answer questions under cross-examination. The successful appellant is not entitled to claim his costs. He has to foot the bill. If the appellant is the tenant, inevitably it involves a great deal of money which he cannot recover in any way. The landlord can recover his costs because they are part of his management costs. The rent officer is not entirely accountable. His file will be closed with his decision, except possibly for the notes that he makes on site, which he would have to reveal to the panel if the case were taken to a rent assessment committee.
With those two comments, I invite my hon. Friend to answer two questions. Is he satisfied that, with the passing of these regulations, the whole process of the registration of fair rents will be as streamlined and efficient as it might be, or can we go further? Will he consider making accountability under the Rent Acts similar to that under the other three land Acts that I mentioned, and so enable cross-examine the person who ultimately either the landlord or the tenant to makes the decision?
8.31 pm
Mr. Frank Dobson: As the hon. Member for Lichfield and Tamworth (Mr. Heddle) declared his interest as a consultant to a firm of chartered surveyors, perhaps I should declare a non-financial interest, in that I spend a great deal of my time as an unpaid consultant to a considerable number of residential tenants who object to their landlords' high rents.
Both Front Bench speakers might learn with regret that the tenants object to the functioning of the rent officer service. In a written answer of 19 June, the Under-Secretary of State for the Environment said that the reason for their objection might be that, in the borough that both he and I represent, the average percentage change from the previous rent in determinations made in 1979 was no less than 75 per cent. That is substantial, and considerably higher than the increases that arose in Enfield, which is represented by my hon. Friend the Member for Edmonton (Mr. Graham).
I do not wish to speak at length about the general shortcomings of the rent officer organisation. Before anyone chides me I readily acknowledge that that was established by a Labour Government 15 or 16 years ago. In my view, it has been unsatisfactory for all that time, and is not becoming more satisfactory. I wish to refer to the modifications of schedule 12, which relates to the procedure under which certificates of fair rent may be issued by a rent officer. I shall concentrate especially on the circumstances in which the certificates are issued to landlords in cases where a tenant is not involved. That is an area of the operation of the Rent Acts that has been quite unsatisfactory and has not worked as well as the Minister suggested.
In circumstances where a tenant is not involved, the landlord negotiates or argues with the rent officer about the rent that he, quite naturally, wishes to maximise. The rent officer finds himself in the role of adjudicator between two parties—the tenant who wishes to keep down the rent and the landlord who wishes to maximise the rent. There has been a number of examples in my consituency, and others that I know of in other constituencies, where there has been considerable dissatisfaction following the issue by a rent officer of a certificate of
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fair rent on empty premises. That has imposed a rent well above what was felt to be the going rate by people living in the area who were interested in rent officer determinations. That is an unsatisfactory situation which will not be made any better by the speeding up of the process through these regulations.
It is absurd to have a system—which normally operates on the concept of two people arguing with one another, with the rent officer as the adjudicator—whereby in certain circumstances there is only one party to the argument. I do not know how we might set about building in some party who has an interest in keeping the rent down. It may well be that any local organisations that wish to make representations would be entitled to do so, or tenants' organisations in neighbouring blocks or streets or, in some cases, even a neighbouring house. They have an interest in these determinations, because once the certificate of fair rent has been issued on an empty property, it is fed into the experience in that area next time the rent officer determines a rent in that block, street, or area. That is an example of the operation of the Rent Acts where one party is pressing to increase the rents and no one is pressing to keep them down, yet it establishes precedents that will tend to be binding on everyone else. In my view there is a ratchet on that, because, putting it at its lowest, rent officers in my area are not notorious for keeping the rents down.
I talked about an average 75 per cent. increase in the borough of Camden in 1979. From the tenant's point of view, that is better than the experience in Kent, where the average increase in 1979 was 103 per cent. That is a substantial increase, even in times of inflation. Therefore, more consideration should be given to this matter.
There is another source of dissatisfaction in the area that I represent. I believe that it also exists in the area represented by the Under-Secretary of State for the Environment, the hon. Member for Hampstead (Mr. Finsberg). That relates to the procedure for appeals when rent officers have made their determinations. I am sure that everyone accepts that in one way or another the rent officer is some form of professional or has some basic experience in valuation. However, there is another ratchet in this

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system, because, if there is no tenant in respect of the certificate of fair rent, no one can appeal, at least not at the time of the determination. If, in other circumstances, people appeal to the rent assessment committee, they can expect a judgment by what I regard as a biased court of appeal.
The London rent assessment panel, from which the rent assessment committees are drawn, consists of 35 lawyers, 35 valuers and about 30 laymen. Even the laymen include eight bank managers, as well as company directors and accountants. It would be interesting to undertake an analysis to discover exactly how many members of the London rent assessment panel have ever paid rent. I suspect that more of them are in the landlord class than in the rent-paying class. If lawyers and valuers are involved in valuation matters or matters concerned with landlord and tenant, most of them will almost perforce be normally employed on, or have their basic experience in, the landlord's side.
Certainly in my area, there is a substantial body of opinion among tenants to the effect that they will not get a fair deal, and cannot expect to get a fair deal, from rent assessment committees two-thirds of whose members are lawyers, valuers or chartered surveyors. After all, the caring professions are normally medicine, nursing and, so on, and if a distinction has to be made, presumably valuers, chartered surveyors and lawyers fall into the category of the uncaring professions. Many people in my area get that sort of response from the rent assessment committees. I do not have up-to-date figures. but the last time I looked at them there was no doubt that, even with the 75 per cent. increases from the rent officers, in the London area the odds were that a person's rent would be increased rather than decreased by the rent assessment committees. There was a positive disincentive for tenants to appeal.
I still say, despite everything that the Minister has said about the concept of the rent officer services and their operation, that, where it is a matter of issuing certificates of fair rent where there is no tenant in residence, there is a direct bias against the interests of the tenants. The structure and personnel of the rent assessment committees are seen and felt to be biased against the interest of tenants, and
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while that system prevails I cannot support any tinkering with the stystem. We need major changes, and we should make sure that there is a proper distribution of membership of the rent assessment committees so that they include a substantial proportion of members who know what it is like to be a residential tenant, rather than members who simply have experience of operating on behalf of landlords.
8.41 pm
Mr. Stanley: I appreciated the expressions of gratitude from the hon. Member for Edmonton (Mr. Graham) on the role played by the rent officer service. They have a difficult function to perform, underlain to some extent by what was said by the hon. Member for Holborn and St. Pancras, South (Mr. Dobson). They have a balance to strike between two conflicting interests. They have to do so impartially, and with regard solely and wholly to the statutory provisions under which they function. Hon. Members who have served in the Department of the Environment recognise that this is one of the important, largely unseen and unrecognised services that make an important contribution to our society.
Having considered the recommendations of the working party, I assure the hon. Member for Edmonton that there is no material, or in any way significant, diminution of the rights of tenants in the changes that we are making to the consultation procedures. I remind him that even under the present legislation, which has been in force since 1965, there are circumstances in which a tenant will not get a consultation now. If the rent officer agrees with the rent proposal that is put to him by a landlord and no representations are received, there will not be a consultation. So, even under present circumstances, it could be argued that there might be reluctance in certain cases for tenants to exercise a right to consultation, because there is no automatic consultation.
Depending on the circumstances, tenants have security of tenure, but many of the tenants to whom we are referring are tenants with security of tenure under the 1965 fair rent legislation, which is basically long-term security of tenure. In those circumstances it is not unreasonable to look to one of the parties specifically to request a consultation in order to avoid situations in which a rent officer has to

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hold a consultation that neither party has requested, and, in some cases, where a consultation is arranged and neither party appears, resulting in a waste of a rent officer's time.
The hon. Member for Edmonton asked me whether we had any statistics of abortive consultations. The advice that I have had is that we do not have that group of statistics, but the rent officers who took part in the working party reported that their experience was that many abortive consultations were held. The Institute of Rent Officers supports that view. Certainly there are occasions on which abortive consultations are held.
Mr. Graham: If a consultation is abortive, surely it means that the consultation has been called either by the rent officer himself and neither of the parties have turned up or that it has been requested by one of the two parties and neither has turned up. We have to accept that when the rent officer calls the consultation and neither party turns up, apparently both are satisfied to leave it to him. Although he has called a consultation he has, in effect, misjudged the need for it, because both parties have declined to come. The alternative is that one of the two parties who has asked for the consultation has had second thoughts. Is that not the case at present?
Mr. Stanley: That could be the case, but there are circumstances in which, for example, a landlord on a review of rent could put in a rent application rather higher than he would expect to get. He might wish to err on the side of a high rent. He might well be prepared to settle without consultation for a lower rent, but simply because the rent officer disagrees with the application that a landlord has put in, willy-nilly it is necessary for the consultation to be held, even though both parties may be happy to settle for the judgment of the rent officer. So clearly there is an element of inefficiency there.
I believe that nothing that we are doing here materially detracts from the rights of tenants, but I assure the hon. Member that when we make changes of this nature in a sensitive area we shall want to observe them very closely and see how they work out in practice. If
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further changes seem to be necessary, we shall be very open-minded.
I turn to the points made by my hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle). I was grateful for his contribution, which was made from personal experience. I shall look further at the points he made about accountability and particularly the comparisons that he made with other legislation. Perhaps I could come back to him later when I have looked at it.
On the other question, on whether I am satisfied that this is the most efficient possible means by which we can make changes in the rent officer procedures, I believe that these changes to the present procedures will materially help to reduce inefficiencies. However, as I made clear to the hon. Member for Edmonton, in this area the sole objective cannot simply be efficiency. A careful balance must be struck between landlord and tenant, and we are concerned with the rights of both and not simply with the administrative procedure which is the most efficient possible. We must try to balance those two interests. We shall see how these procedures work out in practice and if there is scope for improving them further and ending the delays of rent registration the Government will discuss this further with the rent officer service.
The hon. Member for Holborn and St. Pancras, South asked about the certificate of fair rent on empty dwellings. I note what he said. He may have a different experience in his part of London, but it is not my impression that there is a general sense of dissatisfaction with the certificate of fair rent procedure. It is a useful administrative device, which allows a landlord with an empty dwelling to obtain an indication of what the fair rent would be if that property were occupied. That is an important facility to make available to landlords as part of our objective of getting more private rented accommodation available and more empty accommodation brought into letting.
I remind the hon. Gentleman that when the rent officer makes his determination in terms of the certificate of fair rent on an empty dwelling he is obliged to make the registration fully in accordance with existing stautory provisions. I see no

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grounds for attributing any suggestion of bias in the way in which the rent officer approaches that task, any more than I would accept that there is an element of bias when he makes his determination of a fair rent. I see no logical reason why that need be the case, and I am confident that the rent officer service carries out determinations in a detached and dispassionate way, within the framework of the legislation.
Mr. Dobson: I am not suggesting—at least in general—that there is bias on the part of the rent officer service. However, if it is of benefit to the process of adjudication for an officer to hear both sides of the case when there is a landlord and a tenant and it is worth the tenant's being represented, there is surely a structural fault if the party who would like to have the rent kept down is not represented in other cases. I have been told by rent officers that tenants will frequently draw to their attention certain elements affecting the officers' judgment of the value of a property which they have not noticed, because they are not omniscient. The certificate of fair rent issued when there is no tenant leaves out the possibility of disadvantages being drawn to the attention of rent officers.
Mr. Stanley: I take the hon. Gentleman's point. He is questioning the existence of the certificate of fair rent on empty properties. By definition, that procedure is usually operated on a dwelling that is untenanted, and there is no way in which a tenant is able to make representatations. The hon. Gentleman is calling into question the use of that procedure.
The counter argument in support of the retention of the procedure is that landlords with empty properties will wish to know what is likely to be the fair rent, particularly if the property is let with the existing security of tenure under the Rent Act 1977, which may prevent them from getting repossession for a long time. It is of critical importance that we should give owners the facility to establish in advance what a fair rent would be on a dwelling should they decide to let it.
The hon. Gentleman's comments about rent assessment committees were interesting echoes of a debate some months ago, in a Committee with which a number of us were involved for a long time. The hon. Member for Salford, East (Mr.
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Allaun) made similar observations about the composition of rent assessment committees, and I must give the hon. Member for Holborn and St. Pancras, South a similar reply to the one that I gave then.
I do not accept that there is some sort of class basis that produces class blinkers on those who are called to serve on rent assessment committees and results in their loading determinations in one direction. The composition of committees was established by a previous Labour Government and has continued under successive Governments. The function of the committees is to fix rents in the light of the statutory criteria that are laid down. I have just as much confidence in the ability of the rent assessment committees, as currently composed, to carry out what is a statutory function as I have in the members of the judiciary generally, regardless of their individual backgrounds, to perform their independent functions as members of the judiciary. Therefore, I do not accept what the hon. Gentleman said.
The critical requirement on rent assessment committees is to have a balanced composition of people with relevant interests to carry out a statutory and not a social function. It is a statutory determination of rent. The judgment that was made, when the legislation was first put through in 1965, on the right balance of rent assessment committees, has been justified during the past 15 years by the general confidence in which rent assessment committees are held. Certainly when the Housing Bill was going through it was not our view that we should make any change in the composition of rent assessment committees.
Mr. Graham: Will the Minister deal with the point that I made about the difficulties that some tenants might have because the request for consultation must be made in writing? Schedule 1 refers to the circumstances in Which this request can be made. Paragraph 3(1) states:
"the rent officer shall serve on the landlord and on the tenant a notice inviting the person on whom the notice is served to state in writing, within a period of not less than seven days after the service of the notice, whether he wishes the rent officer to consider, in consultation with the landlord and the tenant, what rent ought to be registered for the dwelling-house."

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I can see the value of that statement being made not verbally but in writing, so that there is no dubiety about what is wanted. I do not want to make heavy weather of the inability of some people who may be elderly, frightened, nervous or unsure of what they must do. They must have guidance in prescribed form or directly from the rent officer, and that advice must be publicly available. I am uneasy about rights that have not been eroded but could in practice inhibit some of my constituents from taking advantage of them.
Mr. Stanley: The reason for the provision to make this request in writing is to introduce an important element of certainty where a request for consultation has been called for. I have noted what the hon. Gentleman said. I assure him that I shall look at the mechanics of the way in which a tenant or a landlord would exercise his request in writing. I shall want to satisfy myself that people have a simple process whereby they can exercise that important statutory right.
Question put and agreed to.
Resolved,
That the Regulated Tenancies (Procedure) Regulations 1980, a copy of which was laid before this house on 27 October, be approved.

HOUSING INVESTMENT (CARADON)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Newton.]
8.57 pm
Mr. Robert Hicks: Since May 1979, whenever I have been called upon in my constituency or elsewhere to explain, or, indeed, to defend, the Government's basic economic strategy I have invariably used the analogy of this policy being essentially an exercise in good housekeeping. I have pointed out to my constituents that no country can go on indefinitely paying out more than it earns, any more than a typical family can continue ad infinitum to live beyond its means. At some stage the realities catch up and one has to adjust. This can be a difficult, indeed often painful, process. I am sure that in our private lives all of us in the House have been through that
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process at some time, and now the nation as a whole is having to do likewise.
I find it somewhat ironical that in attempting to pursue those laudable objectives in local government a serious situation has been created, largely as a direct consequence of the statement about two weeks ago by my right hon. Friend the Secretary of State for the Environment, when he suspended local authority housing investment. The result is that those local authorities that have been responsible and have conformed to his Department's financial constraints will now be penalised for their prudent actions.
One such local authority is the Caradon district council, which forms part of the Bodmin parliamentary constituency. Caradon's allocation for its housing investment programme for the current financial year, 1980–81, was £2,253,000, and together with the tolerance factor it gained a total allocation of £2,285,000. Those figures hardly represent large sums of capital expenditure when compared with the potential national overspending of £180 million, which was the figure quoted at the time of the announcement by my right hon. Friend of the moratorium that has been imposed.
I think that it is relevant to point out that since 1974, when Caradon district council came into existence, only once has it exceeded its basic housing investment programme allocation from the Department, and even in that year—1979–80—it adhered to the rules of the scheme, since it was within the accepted tolerance levels.
Furthermore, it is worth adding, as part of this background of responsibility on the part of Caradon that I am attempting to establish this evening, that the net general rate fund expenditure of Caradon in 1979–80, in terms of 1973–74 general price levels, was only 4 per cent. above the combined expenditure level in 1973–74 of the six former local authorities that were amalgamated to form Caradon on 1 April 1974. I should add that that increase of 4 per cent. was accounted for mainly by loan charges—something beyond Caradon's control.
I believe that these two groups of figures demonstrate clearly not only that the Caradon district council is far from being an irresponsible local authority but that

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it is cautious and sensible and has constantly practised what the Prime Minister seeks of the nation as a whole, namely, good housekeeping. It was, therefore, no small wonder that, locally in South-East Cornwall, we were all shaken—indeed, amazed—by the Secretary of State's recent moratorium on housing investment in the public sector. Councillors, council officials and, above all, those on Caradon's housing waiting list—who number about 1,686 families, and of whom 735 are pensioners—felt that they were being victimised for the sins of others.
It has been pointed out to me that the Secretary of State for the Environment and others in the Government constantly say that the country must adhere to the constraints and limits of public expenditure. Yet in our case, having done just that, we were victimised. Of Caradon's allocation of just over £2¼ million for 1980–81, its committed expenditure at the time of the moratorium was approximately £1·9 million. Therefore, contrary to the amount that it thought it could spend, there was a shortfall of £323,000.
That figure may not seem too high a ratio of Caradon district council's total annual allocation for the current year, but such financial statistics do not convey the essential structure and nature of a council's HIP. I refer to its continuity, or rolling characteristic. My hon. Friend has experience of local government, and he will appreciate the need for continuity and good planning. Something is hidden in the curtailed figure of £⅓ million. The clampdown has prevented construction from starting on three projects. First, it has prevented a start on the construction of 32 local authority houses at Torpoint—which were allocated £72,000 out of this year's financial investment programme. Secondly, it has prevented the start of construction on four bungalows for disabled persons, which were to have been built at To-point, and for which £20,000 had been allocated from this year's programme. Thirdly, construction has been prevented on 40 local authority houses at Looe, for which £32,000 had been allocated.
According to Caradon's housing committee's projected planning, the two Torpoint programmes were to have been started in November, and the Looe pro-
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ject was to have been started in early January. In July Caradon district council started work on 40 dwellings for old-age pensioners at Saltash. In September work began on 10 flats and two bungalows for the disabled in Looe. Last month work began on eight dwellings for old-age pensioners in St. Germans. I mention that because I hope that the Minister will understand that they are all part of a rolling, and sensibly and carefully planned HIP. The curtailment of the two schemes at Torpoint and the curtailment of the Looe project will mean that, out of a total of 136 anticipated housing starts, 76 may not be made during this financial year. That represents about 60 per cent. of the anticipated housing starts. That will have serious social consequences for our area.
Sadly, the tale of woe does not end there. The suspension means that Caradon district council will not be able to proceed with the purchase of land at Callington. A sum of £13,000 had been allocated for that. A sum of £20,000 had been allocated for Pillaton, and that would have provided a total of 26 dwellings for retired persons. In addition, Caradon district council will not be able to proceed with providing access to four acres of land at Liskeard. That land is owned by Caradon district council and was intended for housing purposes. Incidentally, once access has been established the way will be open for further development of housing in the private sector.
Finally, this decision has meant a halt to the purchase of five cottages at St. Mellion, which was the subject of extensive correspondence between the Minister and myself. It means the suspension of the replacement of a number of roofs on the existing local authority housing stock and prevents the provision of more residential caravans at the council's homeless centre at Liskeard. I hope that this brief description will have demonstrated the adverse effects that the suspension of funds will have on Caradon's carefully planned and phased housing investment programme.
It might be said that Caradon was rather slow in getting off the mark with its housing investment programme at the beginning of the year. I respectfully remind my hon. Friend the Under-Secretary of State that this year it was only in

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February that it knew what its housing investment programme allocation was to be, whereas normally it knows it in the autumn of the previous year.
I shall make a number of brief observations that are relevant to the situation that I have described. First, I deal with the effect on local employment, especially in the already depressed building and construction industries. I know that this is a matter of national concern as well. The Timber Trade Federation has kindly sent me a copy of the letter that it sent to the Secretary of State, in which it draws attention to the consequences of his announcement for its members. The South-West Building and Construction Confederation has made its views known about the adverse consequences of my right hon. Friend's decision.
It is relevant to observe that Caradon does not employ a large direct labour force. It employs only 42 men. That is the labour force that is required for essential minor works and maintenance. Caradon's total housing stock is about 4,500 housing units, so 42 is a minimal direct labour force. All the other work is undertaken by local private builders.
I remind my hon. Friend that unemployment in my constituency is in excess of 12 per cent. When the tenders for the 40 new houses at Torpoint were opened—they would have been opened on the Wednesday following my right hon. Friend's announcement—it became clear that the contract would have gone to a local builder, thus guaranteeing work for his employees for the next two years.
The second point of relevance is that South-East Cornwall is a low-income area. Average earnings are 16 per cent. below the national average, and 18 per cent. of my constituents are living on retirement pensions or fixed incomes. Therefore, Caradon has to fulfil particular but essential social functions arising from the problem of retired people who are living on fixed incomes and who, at a time of high inflation, find that they can no longer afford to live in the private sector. Therefore, they have to join the waiting list in the public sector.
At the other end of the scale there are young people in my constituency, first-time owners, who find that they can afford only older properties, which are often in
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a poor condition. Therefore, they are totally dependent on the district council for housing advances, because the building societies are not interested in their situation. I remind the Minister that Caradon makes it a condition before it gives anyone a housing advance that he must first have applied to a building society.
My third general point is that the particular problem that Caradon faces, being in a desirable part of the United Kingdom, in the South-West, is its statutory obligation to house the homeless. People often come from other parts of the country, and there is a large residual group of people who often live in substandard and condemned houses. The figures for April to October of this year indicate that Caradon was obliged to rehouse 50 such cases. In addition there are still on the waiting list 18 families whom Caradon has a statutory obligation to rehouse and five families who formerly lived in agricultural tied cottages. The Minister will recognise that the 73 cases in total represent a high percentage of the council's total lets since April, particularly when one realises that the average number of lets per year in Caradon of existing properties is only just over 200.
I hope that I have demonstrated to my hon. Friend that Caradon is a responsible local authority. It has an excellent track record. It genuinely and urgently requires permission to continue its phased housing investment programme. There is a very strong case for saying that, on a selective basis, local authorities should be allowed to continue with their housing investment programmes, provided that they have acted within the guidelines and constraints laid down by the Department during the current financial year.
My right hon. Friend the Secretary of State for the Environment has powers of control over certain parts of the housing investment budget. He or his regional officers have to authorise contracts for new housing projects and for land acquisition. A degree of control already exists. The blanketing effect of imposing a moratorium is misplaced. District councils like Caradon have had to suffer unnecessarily. I do not believe that there was a need for this. One consequence has been the victimisation of responsible authorities. I hope that my hon. Friend

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can give me some encouragement when he replies to my request.
9.18 pm
Mr. David Penhaligon: All of us from the peninsula that the hon. Member for Bodmin (Mr. Hicks) and I both represent are greatly indebted to the hon. Member. I congratulate him on having an Adjournment debate at such a sensible time. It has enabled me, perhaps uninvited but I am sure not unwelcome, to say a few words.
As someone who comes from outside Caradon I can genuinely say that that authority is recognised in the county of Cornwall as being a good authority, which has attempted, within the limits imposed, to build a gradual rolling programme to cope with the problem. However, as I am sure that the hon. Gentleman will concede, tragically, the problems are not unique to Caradon. If they were the problem could be solved without too much anguish. The problem is growing throughout the South-West, and I am extremely disturbed about it. I welcome this unexpected opportunity to give the Minister some indication of what is happening in the far South-West.
The truth, quite simply, is that in Caradon and other areas in the far South-West of Cornwall the housing position is very near to collapse. I am sure that, like myself, the hon. Member meets people at his surgeries with an overwhelming case to be rehoused and who look to the local authority for housing; but, as we both know, there is little prospect of anything being achieved for them.
I understand from the building societies to which I have spoken in the South-West that it is impossible for anyone at the moment to borrow much more than one and three quarters or perhaps twice or two and a quarter times his earnings. House prices in the far South-West are fixed by the wealth and purchasing power of those who come into Cornwall to settle there. Local people who wish to buy have their purchasing power fixed by the local levels of income.
We are told that the national average wage is now £124·50 a week. I am sure that the hon. Member will confirm that the mention of such figures in the South-West produces hollow laughter. The people in my area never get that mad about these statistics because I suspect
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that they do not believe them to be true. Any young person in my county who earns £100 a week knows just how lucky he is. It means that he can borrow £11,000 or £12,000. Perhaps the only real answer to the housing problem in the far South-West is to get around to building rows of houses for £10,000 or £12,000 each. Tragically, we know that that is impossible. Therefore, the young people are increasingly forced to look to the local authority for some relief of their housing difficulties.
My local authority is Carrick. It has 10 families in a place called Trennick House. It is a large old house and each family is given one room. My authority has another eight families at Falmouth. It also has 28 families on a caravan site in my constituency. On the last occasion that I inquired I was told that there were another six families living in bed and breakfast accommodation.
When housing in the more urban areas is discussed in this House, reference is often made to "hard to let" council houses. I have heard that expression so many times since I have been in this House that I decided to ask one of my colleagues what was meant by a hard to let council house. He told me that it is a council house that is built, furnished and equipped to such standards that no one can be persuaded to accept it.
I understand from my hon. Friend the Member for Liverpool, Edge Hill (Mr. Alton) that there are 1,700 hard to let—in other words, empty—council houses in that great city. I do not denigrate Liverpool, and I know that it has many economic problems, but such a concept in the far South-West is beyond imagination. If I happened to be lucky enough to get one of my constituents rehoused, I should have very little sympathy with him if he came back to me and said that the house was not suitable for his needs. But that simply could not happen, because the people in my area are only too well aware of how lucky they are if they are able to get a council property.
I have no reason to believe that the position will get other than worse. In Caradon, in Carrick, in Restormel and in all the local authorities——
Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. The hon. Gentleman will be aware that we are discussing Caradon and Caradon alone.
Mr. Penhaligon: I recognise that, Mr. Deputy Speaker, but in supporting the hon. Member for Bodmin I was trying to show that his arguments apply to a general area.
Mr. Deputy Speaker: At some early date there may well be a general debate about the difficulties in the South-West, but today we are talking about Caradon.
Mr. Penhaligon: Thank you, Mr. Deputy Speaker. The point has probably been made. There is one other matter that affects the good people of Caradon who are seeking aid and advice as to how they are to deal with their housing problems. The good people of Caradon, like many others, look to an organisation called the Devon and Cornwall Housing Aid for advice in a no-housing situation. This is a small local body that tries to serve the whole of Devon and Cornwall—an area some 150 miles long—funded on £9,000 from Shelter, £6,000 from the Government, and whatever it can raise by its own charitable efforts locally. The Government, tragically in my view, have decided to end their £6,000 contribution—a paltry sum. The good people of Caradon, seeking advice in the rural areas of that locality, have few other people to whom they can turn for professional, specialist advice on housing other than the hon. Member for Bodmin and this body with its specialist knowledge.
I am sure that the hon. Gentleman and I, as Members representing Cornwall, recognise how useful it is. There is general dismay that this teeny-weeny, miserable, £6,000 is being saved at the expense of closing down this body. I do not expect the Minister to say tonight that he will change his mind. I would, however, ask him, especially if housing problems are to increase because of the stopping of the current investment programme, to give the House an assurance that another look, possibly favourable, will be taken at that grant.
I recognise that the Government find themselves in some financial difficulty. I have more sympathy with them than some hon. Members have, because I recognise that they inherited a difficult situation. I cannot believe, however, that the Government are hard up for £6,000.
9.27 pm
The Under-Secretary of State for the Environment (Mr. Geoffrey Finsberg): I should like to deal first with the points unexpectedly raised by the hon. Member for Truro (Mr. Penhaligon). His remarks went wider than the subject introduced by my hon. Friend the Member for Bodmin (Mr. Hicks). I shall confine myself to those elements of his remarks which have a direct relevance to the actual subject that my hon. Friend raised.
Much of what I want to say to my hon. Friend will cover the broader aspects to which the hon. Member for Truro referred. I assure him that the advice organisation to which he referred was a matter to which I gave my personal attention. I looked carefully into the proposal. After careful thought, I came to the conclusion that it was not possible for the grant to be continued.
It would not be fair if I said that I would look again at the matter. I do not believe that I could come to a different conclusion. The matter was not left to officials. I looked at it myself and I came to a conclusion. I confess that I have not put into eloquent words, as the hon. Member for Truro did, the invaluable advice that those seeking housing can obtain from my hon. Friend the Member for Bodmin. That is self-evident. There are also a number of highly competent local councillors. I would have thought that, between them, they are in a position to give the advice that may be needed in that area.
I hope that the hon. Gentleman will accept that I will have another look at the papers. I would not wish him to believe that I can hold out a scintilla of hope that I will change the position. I shall have a further look to satisfy myself, in the light of what has been said, that the decision is still justified.
I thank my hon. Friend the Member for Bodmin for the careful and moderate manner in which he has presented the issues, from his own knowledge, as they have been put to him by the local authority. It is a refreshing change from some of the more emotive, mischievous and misleading statements that I have been reading in the press over the past

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few days since my right hon. Friend issued a circular about the moratorium.
Whatever else the House may learn from this debate—and I hope that hon. Members will bear with me while I deal with the detail of the issues raised—there should be no doubt in anyone's mind of the Government's determination to hold very firm to the cash limits that we have determined. Spending on housing will be brought under control.
I have no doubt that Caradon is now faced with a new set of problems in managing its housing programme and I sympathise with the difficulties that it is facing as eloquently put by my hon. Friend the Member for Bodmin (Mr. Hicks).
Caradon is not alone. Hardly an authority in the land is not having to reappraise its programme in the light of recent events. My hon. Friend has detailed the effect on Caradon of the Government's recent announcement of the action that it has been necessary to take to correct overspend on this year's programmes, and I shall deal with that in a moment.
There are in fact three issues with which I must deal. First, there is Caradon's housing investment allocation for 198081. Then there is the effect of the Government's actions on their current programme, and, finally, the problem of next year's allocation. I shall deal with them in turn. They are separate issues, but in one sense they are linked like pieces of a jigsaw puzzle and they have one feature in common—the underlying need for us all to cut our coats according to our cloth. The amount of money available for housing is a finite sum, and there is no way in which it can be exceeded.
First, I shall deal with the allocation for 1980–81. Caradon received an allocation of £2·25 million, which, together with the allocation for insulation grants and a tolerance brought forward from 1979–80, gave it a total allocation of £2·28 million. This fell some way short of its bid for £3·79 million, but I must say that, overall, that is slightly better than most authorities in the South-West region.
In its HIP submission earlier this year, Caradon estimated what its payment would be. It was estimated that these would come within the allocation, and it would be ungracious of
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me—indeed, it would be monstrously unfair of me—not to applaud the efforts that Caradon made to achieve this. However, this was not the case generally. There were alarming indications from the returns that we were getting from local authorities that unless special actions were taken there would be an unacceptably high risk of substantial overspend on the total housing investment programme. This was so nationally and was also the case for the South-West region.
The Government could not allow this. We had to take immediate steps to ensure that the cash limits were not overspent. The painful decision was therefore taken to ask local authorities not to enter into further contracts for housing purposes, for the acquisition of land and building or for building works; not to start further capital housing projects by their direct labour organisations and not to give further undertakings to make grants and loans for housing purposes, except of course when they are required to do so by statute.
Furthermore, local authorities were also told that they would not be allowed to anticipate any sums which may be allocated for the next financial year. Accordingly, and for the time being, we have stopped giving any further borrowing approval and have withdrawn any unused sanctions and approvals.
I wish to make it crystal clear—my hon. Friend did so, but there has been too much misrepresentation—that this is not a cut. All that we have said to local authorities is, in effect, "For the time being you must stop taking on new work. Let us know exactly what your commitments are, to enable us to determine as quickly as possible whether these commitments generally will take us over the top. When we have that information we will consider what scope there is for additional commitment this year". We have promised to let local authorities know of our decisions as quickly as possible.
Let me spell out what this temporary standstill will not do. It will not affect work that is already proceeding, or for which tenders were accepted before the date of receipt of our circular 19/80. It will not affect any undertaking, formal or informal, that an authority may have given, before receipt of the circular, to

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make grants or loans for housing purposes, and it will not prevent it from entering new contracts or approving grants in cases where the expenditure results from a specific statutory obligation. Finally, neither the homes insulation scheme nor the giving of mortgages on council house sales is affected by the circular in any way.
I fully recognise that our action must seem desperately unfair to any authority that has done its best to contain its expenditure for the year within its allocation. Why should it have to suffer the consequences of the failure—deliberate in some cases—of other authorities to do the same? The immediate answer is that the size of the prospective overspend gave us no alternative. Local authorities submitted, in their HIP returns, estimates of spending in 1980–81 that exceeded their allocations by £180 million, or 8 per cent. It is fundamental to the success of our strategy for beating inflation that when we set cash limits for public sector expenditure we should stick to them.
The only way to be certain of containing housing investment within the limit for the year was to call a halt to new commitments by all authorities, whatever their spending records and whatever their forecasts of spending for the year, until such time as we could establish just how much expenditure was already committed.
We are now hard at work analysing the estimates of commitments that authorities have supplied. We hope to he able to announce our conclusions very shortly. Will there be any comfort for those authorities with commitments well below their allocations for the year? I cannot say. But my hon. Friend will know that in other contexts we have taken steps to prevent the consequences of overspending by some authorities being visited on the heads of others. That is one of the main principles of the new block grant arrangements for which we are providing in the Local Government Bill.
In the case of housing investment, too, we will see whether anything can be done, now or for the future. I make that clear to my hon. Friend, who will understand that I can make no promises.
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Local authorities have been shocked by the action that we have had to take. Many have been equally shocked to realise just how profligate some of the other authorities have been. But generally local authorities are wisely refraining from making excited comment. They, like the Government, realise that it is too early to make sensible comment about what it all might mean.
We now know that Caradon is committed to an expenditure of £1·9 million this year. Within its budget it has been able to take up virtually all that it allowed for housing improvement grants; it is true that it has had to stop issuing approvals for the moment, but its committed expenditure is only £25,000 or so short of what it decided it would spend at the beginning of the year. Similarly, it is only £30,000 short of what it said it would spend on housing advances and it has fully taken up the allocation for insulation grants.
My hon. Friend has described dramatically and fairly the effect of the stop on the other parts of Caradon's programme. He mentioned villages and towns whose names are bywords to those who enjoy their holidays in that delightful part of the world. I might at some stage even visit the area personally to examine for myself the facts that my hon. Friend has been putting forward.
The main impact has been felt in Cara-don's programme for new house building, for the purchase of land, for some cottages, and for repairs to some council houses. But let me put that in the context of this year's allocation. It has committed itself to all but £300,000 of what was allocated. It really is not right for Caradon to claim that the stop on its activities has seriously affected its ability to take up its allocation for 1980–81.
The main effect—and this is a holding operation—has been to stop a number of housing starts where the bulk of the expenditure would count against next year's allocation. Those are the houses at Torpoint and Looe, to which my hon. Friend referred, half of which would not be starting until December. I do not underestimate the implications that has for its running programme. As my hon. Friend said, any intelligent local authority will provide itself with a running programme. But it is overstating the case to

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say that the recent announcement has cut those from the programme. Inevitably there will be some delay. How long that delay will be I cannot say at the moment.
The effect of the temporary halt is to give a new and, I hope, helpful meaning to the range of initiatives that we have proposed for the promotion of low-cost home ownership and in the use of capital receipts. That refers to one point raised by the hon. Member for Truro, namely, that there is no reason in some local authority sales where equity sharing should not be started and where stair-casing should not be introduced so that the young first-time buyer does not have to make the sudden jump to total purchase. That is one of the initiatives put forward by my hon. Friend the Minister a short time ago.
The low-cost home ownership programme will incur only a small, in some cases even a nil, call on a local authority's HIP allocation, and there can be great advantage, as Ministers have said on numerous occasions, to a local authority from selling council houses to sitting tenants, from selling local authority land to private builders with planning permission for starter homes, from providing starter homes for sale on local authority land in partnership with private builders, and from acquiring properties for improvement and for sale, or for selling unimproved houses for improvement by the purchaser. As I said earlier, I urge local authorities to consider offering shared ownership as an alternative to outright sale wherever possible.
My hon. Friend raised a point about the problems of people in Caradon obtaining mortgages from building societies. The hon. Member for Truro alluded to that also. I remind the House that there are adequate provisions that can be used by local authorities to use the mortgage guarantee powers that exist to facilitate down-market lending by building societies. My regional officers have discussed those initiatives with Caradon, and Caradon has approached them realistically but perhaps a little too tentatively to date.
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I hope that my hon. Friend will draw Caradon's attention to some of the initiatives to which I have referred, to see whether he can spur it on to make more use of some of the facilities.
I said that I would deal with the 1981–82 allocations. I can do so only very briefly. We have not yet determined them and there may be some apprehension about the levels at which they may have to be fixed. But I can assure my hon. Friend that the arrangements that we are proposing are directed towards the need to ensure that broad equity is maintained between competing claims—whether that be a village, a district authority in Cornwall or a major city in the North-West—and that proper scope is given for the circumstances and the problems of individual local authorities to be taken into account.
I hope that my hon. Friend will feel that my Department understands the problems in Caradon. We will take account of its specific housing need in determining its allocation for next year, although I do not need to remind Cara-don or the House of the continuing need for severe overall constraint on public expenditure. That is the message that Ministers have put to the House for a considerable time. I do not apologise for having started tonight by putting that message again both to the House and to my hon. Friend; neither do I apologise for finishing with it. It must be realized fat there is only a limited amount of money for capital investment in housing. We shall do our best to ensure fairness within that limitation.
I repeat what I said to my hon. Friend. As soon as we have analysed the figures that have been coming in since we issued the circular and brought the moratorium into force, the sooner we can make an announcement about what is to happen for the future. We shall not overlook the particular problems of Caradon, which my hon. Friend has so reasonably put to the House.
Question put and agreed to.
Adjourned accordingly at fourteen minutes to Ten o'clock.