Commons Sitting of 8 April 1981

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  SCOTLAND

    Unemployed Persons
    Mr. Norman Hoggasked the Secretary of State for Scotland how many persons under 18 years of age were registered as unemployed in Scotland at 3 May 1979 and 24 March 1981.
    The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): The age analysis of the unemployment register is carried out quarterly, in January, April, July and October. On 5 April 1979, 14,745 people under 18 years of age were registered as unemployed in Scotland. On 15 January 1981, the latest date for which information is available, the number was 30,623. These figures are not seasonally adjusted, and the January figures are normally higher because of the December school-leaving date.
    Mr. Hogg: Does not that reply expose the Government's disgraceful employment record? Does the Minister realise that the Government's economic policy has collapsed and that he is destroying the hopes and ambitions of young people? Will he admit to his failures and argue for a change of strategy?
    Mr. Fletcher: The Government's strategy is on target. We are tackling the problems that we set out to solve in the correct order of priority. Since before the election, inflation has been top of the list.
    Mr. Sproat: As regards youth unemployment, does my hon. Friend agree that there is an urgent need to restructure the apprenticeship system? Does he accept that the apprenticeship system operates too often against young people and against industry, because it is too rigid and concentrates more on the length of time served than standards and achievements?
    Mr. Fletcher: I entirely agree with my hon. Friend. My right hon. Friend the Secretary of State for Employment is busy studying such problems. My hon. Friend will know that the youth opportunities programme gives young people an opportunity to enhance their job prospects. Surveys show that 70 per cent. of participants in the programme are employed five months after leaving it.
    Mr. O'Neill: Given the unemployment figures that the Minister has announced, how does he hope to motivate
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    those who are in full-time education? Will he seriously consider introducing a mandatory grant system for those who are in full-time school education and who have no prospect of finding jobs when they leave school?
    Mr. Fletcher: The hon. Gentleman is being over-pessimistic. As I said, 70 per cent. of those who have been on a youth opportunities programme scheme find employment after five months. Most of those who left school in December will find jobs within the next few months.
    Mr. Myles: Is my hon. Friend aware that many small firms are inhibited from employing young people, because they have to comply with so many regulations?
    Mr. Fletcher: My hon. Friend is correct. As my hon. Friend the Member for Aberdeen, South (Mr. Sproat) pointed out, the apprenticeship system does not increase the number of trainees and tends to restrict entry into the trades. Therefore, my right hon. Friend the Secretary of State for Employment is re viewing the system.

    Manufacturing Industry
    Mr. Douglasasked the Secretary of State for Scotland if he will make a statement on his assessment of the rate of growth of manufacturing industry in Scotland in the year 1981–82.
    The Secretary of State for Scotland (Mr. George Younger): Budget forecasts suggest that United Kingdom manufacturing output might be 6 per cent. lower in 1981 than in 1980, but also that some recovery in the second half of this year is likely. On the basis of recent trends, I would expect activity in Scottish manufacturing industry to move broadly in line with that in the United Kingdom.
    Mr. Douglas: Is the Secretary of State suggesting that the recession is bottoming out in Scotland? How much investment will be made in manufacturing industry in 1981–82? Other nations are investing at the bottom of the recession. We want to be stronger than them rather than weaker, as is likely to be the case under this Government.
    Mr. Younger: I appreciate the hon. Gentleman's point. It seems to be the general view—and it is our advice—that the recession will bottom out some time during the year. The evidence suggests that Scotland's performance is at least no worse than that of the United Kingdom. It is hoped that Scotland will emerge more strongly from this recession than from any previous recession.
    Mr. Gordon Wilson: Does the Secretary of State not accept that one of the problems facing the Scottish economy is lack of indigenous financial control? Therefore, will he make representations immediately to his right hon. Friend the Secretary of State for Trade about the intended takeover of the Royal Bank of Scotland, because extreme damage would be done to Scotland if the bank were to fall into the hands of financial barracudas from overseas?
    Mr. Younger: I have been concerned at the events of recent days. I have seen the chairman of the bank on a number of occasions, and I have been in touch with my right hon. Friend, who must decide whether this matter should be referred to the Monopolies and Mergers Commission.
    Mr. Peter Fraser: Has my right hon. Friend had time to consider the analysis of the Chemical Industry Association of capital investment intentions in Scotland over the next three years, which shows that, while there will be a decline in the United Kingdom as a whole, there will be a 27 per cent. increase in capital investment in Scotland? Does he agree that an emphasis on that style of confidence in the Scottish economy would generally help us much more than the constant carping which we hear from the Opposition?
    Mr. Younger: I am grateful to my hon. Friend and I entirely agree with what he says. That analysis not only shows that there are signs of an investment revival in Scotland, but also that it is directly associated with North Sea oil development, which takes a great deal of Government money in various ways.
    Mr. Millan: Is the right hon. Gentleman aware of the widespread concern about the Royal Bank takeover, particularly following the second bid? It would be completely unforgiveable if that major Scottish institution went out of Scottish control without a reference to the Monopolies and Mergers Commission and without those bids being stopped by both the commission and the Minister. What is the right hon. Gentleman's own view on this? Is he pressing for a reference?
    Mr. Younger: As the right hon. Gentleman knows, it is not customary for a Minister to reveal his representations to other members of the same Government. However, as I have made clear, I have been in touch with my right hon. Friend, who must make the decision.

    Job Creation (Linwood)
    Mr. Adamsasked the Secretary of State for Scotland what progress is being made in creating new job opportunities following the impending closure of the Talbot Linwood factory.
    Mr. Alexander Fletcher: My right hon. Friend welcomes the undertaking given by trade union representatives, following the decision of the work force at Linwood to accept the closure, to help in the difficult task of generating new industrial development and employment. He has asked the SDA to study urgently the potential of the plant for use by one or by several companies. He looks to the local organisations represented on the ad hoc committee chaired by convener Charles O'Halloran to lend their support to these efforts.
    Mr. Adams: That is not really an answer to anything. How many real jobs have been created in Strathclyde in the past month, and how many jobs have been lost? If the Minister cannot give the figures today, will he undertake to furnish the House with them as quickly as possible?
    Mr. Fletcher: If that was the urgent matter which the hon. Gentleman wished to raise, I do not know why he did not table a question to that effect. I shall certainly furnish the information. The hon. Gentleman will have noticed reports in today's press that new jobs are coming to the Strathclyde area in considerable numbers.
    Mr. Allan Stewart: Will my hon. Friend confirm that the Scottish Development Agency was asked to undertake this study on 13 February—eight weeks ago? What has it done in the last eight weeks?
    Mr. Fletcher: The SDA is working in collaboration with the company, which is still producing cars at Linwood. It will report as soon as it has been able to survey the premises and decide what further use should be made of them—for example, whether they should be divided into several units or be retained as a large manufacturing plant.
    Mr. James Hamilton: Is the hon. Gentleman aware that I have a later question on the Order Paper about the Nissan-Datsun company? There is a feeling in Scotland that the Scottish Office has let the Scottish people down and that is has not shown any fight to bring this industry to Scotland. Is he aware that the Scottish Office has been accused of hanging on to the coat-tails of England and Wales? Will he now say categorically what the Scottish Office is doing for Scotland?
    Mr. Fletcher: As usual, Labour Members are ill-informed. That is not the opinion which prevails in Scotland. For many months now, long before the news of this potential project hit the headlines, the Government were deeply involved with the Japanese company in considering this project. Any hon. Member who considered in detail the specification put forward by Nissan for a possible site in the United Kingdom must have known that Scotland stood only a slight chance of success. Nevertheless, my right hon. Friend, the Scottish Economic Planning Department and I have worked extremely hard to try to persuade Nissan to come to Scotland.
    Mr. Millan: If there was only a slight chance of success, why did the Secretary of State try to put off the trade union delegation, which he met the other day to discuss alternative jobs for Linwood, by mentioning that project as one of the possibilities?
    Mr. Fletcher: Because it was one of the possibilities.

    Council House Sales (Dundee)
    Mr. Peter Fraserasked the Secretary of State for Scotland what action he proposes to take in view of the failure of Dundee district council to comply with the sale of council house provisions in the Tenants' Rights, Etc. (Scotland) Act 1980.
    Mr. Younger: After considering the report of the public inquiry which I caused to be held on 23 February, I issued a default order on 23 March requiring the district council to instruct its officials to implement part I of the Tenants' Rights, Etc. (Scotland) Act. As the hon. Member will be aware, the council gave the required instruction on 30 March. I have consistently made it clear that this Government will not allow any local authority to deprive its tenants of their statutuory rights, and our determination on this point has been clearly demonstrated in Dundee.
    Mr. Fraser: I welcome the fact that the district council has quailed before the prospect of this question coming before my right hon. Friend. Does he not agree that the council's action has only caused misery and confusion to those tenants who wanted to buy their houses, and quite unnecessary expense to the ratepayers of Dundee who already face an enormous rates increase of over 150 per cent?
    Mr. Younger: I agree with my hon. Friend. The least attractive aspect of this whole business has been the

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    absolute contempt which the Dundee district council appears to have for its electors and those who wish to buy council houses.
    Mr. Ernie Ross: Will the right hon. Gentleman inform the House of the circumstances surrounding the inquiry? How many individuals or groups of tenants came forward during the inquiry in support of his determination to sell council houses?
    Mr. Younger: It is nice to see the hon. Gentleman back from his travels. The inquiry was not about that matter, but about whether Dundee council was or was not taking steps to implement its statutory obligations. It was on that basis that the matter was clearly resolved.
    Mr. Ancram: Does my right hon. Friend not think that the Dundee district council would be better occupied fulfilling the wishes of the people of Dundee to own their own council houses rather than shaming the whole of Scotland with its anti-semitic rantings and behaviour that we have seen over the last few weeks?
    Mr. Younger rose——
    Mr. Ernie Ross: On a point of order, Mr. Speaker.
    Mr. Speaker: Would the hon. Gentleman very much mind waiting until the end of Question Time? He can raise his point of order now if he wishes, but it will delay other questions.
    Mr. Ross: Is it not a breach of the Rules of the House for the hon. Member for Edinburgh, South (Mr. Ancram) to suggest the democratically-elected Dundee district council is anti-semitic, when it made strenuous efforts to ensure——
    Mr. Speaker: Order. The hon. Gentleman cannot answer the argument now. What was said was not out of order.
    Mr. Younger rose——
    Mr. Robert Hughes: Further to that point of order, Mr. Speaker.
    Mr. Speaker: Very well. I shall take the point of order now and delay subsequent questions. I apologise to other hon. Members.
    Mr. Hughes: With respect, Mr. Speaker, I cannot believe that it is in order, on a question relating to council house sales, for an hon. Member to refer to alleged anti-semitism. I am sure that that is an abuse of the House.
    Mr. Speaker: Hon. Members on both sides of the House refer to matters which are totally outside the question on the Order Paper. If I try to ensure—as I shall try to do for the rest of the afternoon—that nothing other than what is in a question is referred to, we shall get through many more questions.
    Mr. Younger: I am not surprised that Labour Members appear to want to waste time to avoid reaching some of their later questions. Apart from the political issues involved, I doubt whether anyone of any persuasion would dream of denying that the Dundee council has not done itself much good in publicity terms in the last few weeks.
    Mr. Dewar: Does the right hon. Gentleman accept that it is not Dundee district council which has shown contempt for the electorate, but rather he himself in insisting on
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    going ahead with his ill-advised policy of council house sales? Given the Government's weak electoral base in Scotland, will he listen to the genuine voice of public opinion in Scotland rather than to the handful of tenants who wish to buy their council houses? The vast majority of Scottish tenants do not want to buy and are rightly angry about the divisive results of a sales policy which flogs off on the cheap the best council housing in Scotland.
    Mr. Younger: The absolute nonsense of that question is demonstrated by the fact that over 10,000 ordinary citizens in Scotland have already chosen to buy their houses and that there are a further 15,000 applications in the pipeline at the moment. That is an eloquent answer to the hon. Gentleman's nonsense.

    Building Regulations
    Mr. Chapmanasked the Secretary of State for Scotland if he intends to simplify or otherwise change the building regulations in force in Scotland.
    The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): We shall publish a consolidated edition of the Building Standards (Scotland) Regulations later this year which will include amendments and presentational improvements. It will provide a base for simplification of the regulations in the course of a review of the building control system in Scotland.
    Mr. Chapman: I welcome and appreciate any attempt to consolidate the building procedure regulations and all the amendments, and the building standards regulations and all the amendments made under them, into one—albeit very thick—volume, but will my hon. Friend be a little more forthcoming? Will he perhaps give it as his opinion that the building regulations in Scotland could be considerably simplified without detriment to safety or health factors? Will he also meet the other relevant Ministers to see whether those regulations could be unified throughout the whole of the United Kingdom?
    Mr. Rifkind: We are continually looking for ways of simplifying the regulations, consistent with the public interest. I would not say that there is an argument for uniformity for its own sake, but where there are no significant differences it is obviously sensible to have similar regulations in different parts of the United Kingdom.
    Mr. Hugh D. Brown: Am I being unduly suspicious or does this question really relate to Barratt's? In the circumstances, will the Minister assure me that there will be consultations with the clients' and consumers' interests before there is any reduction in building standards?
    Mr. Rifkind: I assure the hon. Gentleman that we are looking not only at the application from Barratt's but also at the representations which have been received from local authorities and other legitimate interests. As the hon. Gentleman will be aware, contrary views have been put forward as to the desirability or otherwise of reducing the present minimum space regulations in Scotland.
    Sir Albert Costain: Will the Minister appreciate that, as a person who set up a factory in Scotland, giving employment in Scotland, I found it difficult to develop that factory because of the absence of standard building regulations? If the Minister wants to have more

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    employment in Scotland in the making of building materials, he ought to standardise the building regulations in the United Kingdom.
    Mr. Rifkind: Sometimes standardisation can lead to the sort of improvement to which my hon. Friend referred, but one has to take into account the fact that some of the different regulations that currently exist in Scotland are different for very good reasons. It would not necessarily follow that it would be in the interests of the people of Scotland that the regulatons should be made uniform with the rest of the United Kingdom.
    Mr. William Hamilton: Is the Minister aware that Costain's built a big hospital in Glasgow, at considerable public expense, and that it fell down? Will he give a categoric assurance that Barratt's will not be allowed to build houses in Dunfermline or anywhere in Fife that will be a fire hazard?
    Mr. Rifkind: The hon. Gentleman can be assured that houses built in accordance with the building standards regulations will not normally fall down. The hon. Gentleman will have to await the outcome of the consideration that we are giving at the moment to the application from Barratt's.

    Test Bore (Loch Doon)
    Mr. Foulkesasked the Secretary of State for Scotland if he is now able to make a statement on the report of the inquiry into the refusal by Kyle and Carrick district council to allow the United Kingdom Atomic Energy Authority to test bore at Mullwharcher near Loch Doon.
    Mr. Rifkind: The report is under consideration, and a decision on the appeal will be announced as soon as possible.
    Mr. Foulkes: Will the Minister explain the delay in making this announcement, as the Secretary of State has had the report for over three months, and as the overwhelming evidence was against the explorations taking place? Does the Minister appreciate that there is a huge pent-up feeling against these explorations, which could burst out into civil unrest if the Secretary of State overrules the decision of the democratically elected district council and the overwhelming views of the people in that area?
    Mr. Rifkind: My right hon. Friend will not take into account the foolish rantings to which the hon. Gentleman has just subjected the House. As the hon. Gentleman will be aware, these are important matters which are the subject of the appeal. It is right and proper that my right hon. Friend should give the fullest consideration to a complex matter. As soon as he can reach a decision on the matter, he will announce it in the usual way.
    Mr. John MacKay: Will my hon. Friend agree that it is about time the hon. Member for South Ayrshire (Mr. Foulkes) came clean on his attitude to nuclear power? The long-term storage of nuclear waste cannot be separated from nuclear generation. Does my hon. Friend wonder, as I do, whether the hon. Member for South Ayrshire has told his constituents and people in the neighbouring constituencies in Ayrshire that his policy would close down Hunterston, with a loss of over 1,000 jobs in that plant?
    Mr. Rifkind: My hon. Friend is correct in suggesting that some of those who have made comments op this subject sometimes appear to find it difficult to reconcile two different points of view. The appeal that is at present before my right hon. Friend dealt not with the general question of nuclear power but with the specific question whether test borings should be made and certain buildings erected, which was the basis of the application made to the local authority.
    Mr. Millan: When we are talking about equivocal or hyprocritical attitudes, should we not remember that the Secretary of State, as a Back Bencher, came out publicly against the borings when the previous Labour Government were in office?
    Mr. Rifkind: My right hon. Friend will consider a planning application according to the normal rules of planning law. The right hon. Member for Glasgow, Craigton (Mr. Millan) would be the first to accept that that is the normal, proper and acceptable thing to do.

    Confederation of British Industry
    Mr. George Robertsonasked the Secretary of State for Scotland when he next expects to meet the Scottish Confederation of British Industry to discuss unemployment.
    Mr. Younger: My hon. Friend and I have met representatives of the CBI Scotland on several occasions and have made it clear that we are prepared to meet them whenever this would be useful. Our most recent meeting was on 18 March.
    Mr. Robertson: When the Secretary of State next meets the CBI, what sort of comfort will he be able to give its member companies and its thousands of employees in Scotland? With the number of bankruptcies now reaching an all-time historic high level, and with all of us in Scotland becoming inured to a daily catalogue of redundancies, closures and lay-offs, when will he realise that he cannot continue to ignore the advice from the employers and the unions? When will he realise that the policy of the Government is disastrously wrong for the people of Scotland?
    Mr. Younger: I do not know where the hon. Gentleman gets his information. When the chairman of the CBI Scotland saw me on 18 March he made it clear that the CBI was totally in support of the Government strategy but only wished that a little more money could be found with which to help industry. I pointed out to him in return that if we had found more money it would have put up the minimum lending rate, which was the opposite of what the CBI wanted.
    Mr. Bill Walker: When my right hon. Friend next meets the CBI Scotland, will he discuss the image that various places have and how a wrong image can deter investment? Is he aware that the anti-Jewish activities in Dundee, which are the direct result of the flying of the PLO flag, are reminiscent of the early days of Hitler, and that this acts as a deterrent to investment?
    Mr. Speaker: Order. We have heard rather a lot about that this afternoon. The question relates to the Confederation of British Industry in Scotland.
    Mr. Younger: I always wish that all parts of Scotland would bear in mind that what is done in support of various causes should help to attract new jobs rather than repel them. That is a very important point.
    Mr. Robert Hughes: How can the Secretary of State still believe that the CBI Scotland is in favour of Government strategy, when it is making it clear that its comments about being broadly in favour of the strategy are only a peg on which to hang its argument that it wants the Government to change course, in view of the disastrous reality of the collapse of industry in Scotland?
    Mr. Younger: The CBI has made it clear to me repeatedly that it does not wish the Government to change course. That is the answer to the hon. Gentleman.
    Mr. Grimond: Did the CBI produce to the Secretary of State any evidence to support his statement that the depression is bottoming out and that things are getting better? Is investment going up? Is restocking taking place? Is there specifically Scottish evidence that things are getting better?
    Mr. Younger: There has been a good deal of Scottish evidence that firms are now getting orders in a much better way than they were. There are, for instance, the very interesting orders achieved by Redpath de Groot and UIE, recently, of the new developments in East Kilbride with Gray Tools, new orders obtained by John Brown Engineering, by Barr and Stroud, and by Caledonian Airmotive, to mention only a few. There are many indications.
    Mr. Henderson: In discussing unemployment with the CBI Scotland, has my right hon. Friend stressed the importance of building upon our considerable successes in the electronics industry and particularly the opportunities that will flow to that industry from the passing of the British Telecommunications Bill through Parliament?
    Mr. Younger: I appreciate what my hon. Friend says. He is right in saying that the electronics industry in Scotland is one of the strongest features of our economy, even at this difficult time. Expansion in the electronics industry, producing many new jobs in the pipeline, can be found all across Scotland.

    Talbot (Linwood)
    Mr. David Marshallasked the Secretary of State for Scotland whether, in view of the substantial public investment in Talbot Linwood, he will take steps to ensure that the equipment and plant in Linwood be protected against destruction or removal by the company and that it be kept available for possible future manufacturing purposes in Linwood.
    Mr. Alexander Fletcher: While acknowledging that the disposal of the plant and equipment at Linwood is primarily a matter for its owners, Talbot Motors, my right hon. Friend has asked the chairman of Talbot Motors to do what he can to ensure that the major facilities of the toolroom, die-casting foundry and press shop are retained.
    Mr. Marshall: Does not the Minister realise that almost £170 million of public money has been invested in Talbot UK? The company paid virtually nothing for the Linwood plant and has put nothing into it. Does not he consider that it is a national disgrace that this French
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    company should be allowed to strip the assets of Linwood? Does not he agree that the Scottish Development Agency should take over the plant in its entirety at no additional cost?
    Mr. Fletcher: I have already told the House that the SDA is surveying the plant to see how it can be best adapted to bring more jobs to the area in the future. On the amount of public financial support, I hope that all hon. Members will agree that, whatever the reason for the plant's failure, it was not due to shortage of Government financial support.
    Mr. Allan Stewart: May I congratulate my hon. Friend on his statement about those areas of the plant which the trade unions have identified as possessing possible alternative uses outside the motor car industry? Will not he agree that concern on this issue underlines the necessity for the SDA study to be completed sooner rather than later?
    Mr. Fletcher: Yes, Sir I agree that the SDA should complete its study urgently and quickly, as we have asked. I have every confidence that this will be achieved, although we must plan the action that we shall take before trying to bring many people together and, perhaps, working on the basis of opinions that would not stand up to proper examination. The important question of the die-casting foundry, the press shop and the toolroom was raised with my right hon. Friend by Mr. Livingstone, convener of the shop stewards. My right hon. Friend immediately took action with the company along the lines that I have already set out.
    Mr. Millan: While we are glad to hear that the Secretary of State is in touch with the company about these facilities, may I ask whether it is likely that if, at the end of the day, they are to be retained at Linwood, there will have to be some kind of public money involved? Will that be made available?
    Mr. Fletcher: We have to decide who should own the plant in the future, whether it should be the SDA, as happened in the case of the Singer plant, or whether there should be some alternative arrangement. Once my right hon. Friend has received reports from the SDA and other parties, he will make a decision on that important matter and the others.

    Unemployed Persons
    Mr. Gregor MacKenzieasked the Secretary of State for Scotland if he will make a statement on the latest Scottish unemployment figures.
    Mr. Younger: On 12 March, seasonally adjusted unemployment in Scotland stood at 264,600—11·7 per cent. While the continuing high levels of unemployment in Scotland are a cause for concern, I am encouraged by the slight fall in total unemployment in Scotland last month and by the fact that in recent months the underlying rate of increase in seasonally adjusted unemployment in Scotland has been slower than at the end of last year and less severe than in other parts of the United Kingdom.
    Mr. MacKenzie: Is the Secretary of State aware that, while most hon. Members are very concerned about the number of people who are unemployed, we are becoming increasingly concerned about the length of time that people

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    are unemployed? What are we to tell constituents over 45 years of age who genuinely believe that under this Government and their policies they will never work again?
    Mr. Younger: I share the right hon. Gentleman's concern about the level of unemployment and the long-term nature of much of it. There are two points to be made in answer to his question. The first is to tell such people that there are considerable signs of new orders being gained by many industries in Scotland. This will undoubtedly mean that some skilled people will be called back to work—as many as possible, I hope. Secondly, the right hon. Gentleman can tell them that, so far as long term unemployment is concerned, not only has the youth opportunities scheme been expanded by 75 per cent. but a new scheme for the older unemployed is coming into being.
    Mr. McQuarrie: While all hon. Members welcome the fact that my right hon. Friend is endeavouring to help the unemployed in Scotland, will he agree that Mitsubishi intends to create 200 to 300 more jobs in the course of the next year? This is the kind of activity that is welcome to Scotland.
    Mr. Younger: I am grateful to my hon. Friend. There are many such cases. I am glad that Mitsubishi is one of them. Apart from those that I gave to the right hon. Member for Orkney and Shetland (Mr. Grimond), there are numerous other examples of export orders won within the last six months by Volvo trucks, Rolls-Royce Aero-Engines, Anderson Strathclyde and, most recently, Babcock's, whose huge boiler order for a power station in Hong Kong will keep thousands of jobs going in the West of Scotland.
    Mr. Russell Johnston: Is the Secretary of State aware that the optimistic forecasts he has made are not shared by many people? Fraser of Allander, for instance, has forecast an unemployment rate of 320,000 by the end of the year. Is the Secretary of State saying that he disagrees entirely with this forecast? Can he give any estimate of new jobs that are likely to be created this year?
    Mr. Younger: If I spent my time looking at all the gloomy forecasts made by various economists—364 or any other number—I would never get my job done at all. I concentrate on the practical matter of trying to get the maximum number of jobs into Scotland. I can tell the hon. Gentleman that in the past year no fewer than 14,500 new jobs were created by the efforts of the various agencies in Scotland. As recent items in the press have shown, we expect many thousands more in the near future.
    Dr. M. S. Miller: Is not the right hon. Gentleman ashamed that were it not for the relative buoyancy of employment in East Kilbride, for which the Government can claim no credit, and if it were not for the oil industry—which is a fortuitous quirk of nature—Scotland would be the poorest country in Europe?
    Mr. Younger: Of all the people I expected to put questions on this subject today, the hon. Gentleman is the last. He must be the envy of every hon. Member, having received yesterday some splendid news about a new development in his constituency which I would have thought he would unreservedly welcome.
    Mr. Sproat: Will my right hon. Friend remind Opposition Members that, the present world recession
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    aside, the main reason for the tragically high levels of unemployment is the uncompetitive state of British industry in relation to its international rivals? Will not he agree that the main reason for that uncompetitiveness is the fact that the trade unions have been their own worst enemies in insisting on overmanning, disproportionate wage demands, refusing to use new technology and other restrictive practices?
    Mr. Younger: My hon. Friend is right in saying that the tragedy of unemployment and job losses in Scotland follows many years of policies pursued by the Labour Party. The greater tragedy is that every remedy that the Opposition now announce is a repetition of the old measures that have failed on every occasion when they have been put into effect.
    Mr. David Steelasked the Secretary of State for Scotland how many additional people have become unemployed in Scotland for each of the years 1977 to the present.
    Mr. Younger: There was an increase in seasonally adjusted unemployment of 15,000 between March 1977 and March 1978, a fall of 6,100 between 1978 and 1979, an increase of 14,500 between 1979 and 1980, and an increase of 79,600 between 1980 and 1981.
    Mr. Steel: Will the Secretary of State, in view of these escalating figures, undertake a review of development area policy? Is he aware that the Borders regional council has had to cancel a couple of projects because it cannot get the EEC funds which would have been available had it been a development area? This means a loss of employment in the Borders region.
    Mr. Younger: I would like to see evidence of the instances that the right hon. Gentleman mentions. I appreciate the difficulties that the Borders has experienced. I have been to the area and talked to those concerned. In answer to the first part of the right hon. Gentleman's question, I do not think that I would be helping Strathclyde, which has a far higher level of unemployment than any part of the Borders, if I were to spread the aid that is available even wider. The highest priority must be given to those areas with the greatest difficulties.
    Mr. Myles: Does my right hon. Friend agree that, but for the satisfactory outcome of the EEC agriculture price review, many agriculture workers in Scotland would now be unemployed? Does he agree that, if there had been a nil increase, as advocated by Opposition Members, unemployment would certainly have resulted?
    Mr. Younger: My hon. Friend is right. My right hon. Friend did a magnificent job for the rural communities in Scotland in achieving the settlement on agriculture prices. I know that the NFU agrees with that.
    Mr. Craigen: Has the Secretary of State studied the rising trend in short-time working in Scotland? Can he give figures to show the level now reached in Scotland since there are nearly 1 million workers on short-time working in Britain?
    Mr. Younger: I shall give the hon. Gentleman the detailed figures, if he wants them. Short-time work is often one way of keeping a factory going during difficult times so that it is ready to take advantage of the upturn in the economy, when the time comes.

    Unemployment (Ayrshire)
    Mr. Lambieasked the Secretary of State for Scotland what reply he has given to the request by the Ayrshire standing conference on unemployment for a meeting to discuss ways in which the unemployment and industrial problems of Ayrshire might be tackled; and if he will make a statement.
    Mr. Alexander Fletcher: The Government very much share the concern of the standing conference on unemployment in Ayrshire and already accord the highest priority to measures to tackle the unemployment and industrial problems of the area. The greater part of Ayrshire already has special development area status, and special measures have been taken to assist the development of new industry in the Irvine travel-to-work area and in the Garnock Valley. My right hon. Friend has, however, informed the conference that while he sees little purpose in a meeting to discuss matters of which he is already well aware, if it has any further practical suggestions, he will, of course, be glad to consider them.
    Mr. Lambie: That is a disgraceful reply. How can the Secretary of State for Scotland, who represents an Ayrshire constituency, refuse to meet representatives of the Ayrshire district councils to discuss unemployment when the unemployment level there is already among the highest in Strathclyde and is 21 per cent. in my area of Cunninghame? Will the Secretary of State resign and give way to someone who is prepared to meet his own people in Ayrshire?
    Mr. Fletcher: There is no justificaton for saying that my right hon. Friend is not meeting "his own people in Ayrshire". As an Ayrshire Member he is regularly in that part of the world. My right hon. Friend helped to plan the new enterprise trust in Ayrshire. Indeed the hon. Gentleman was invited to meetings about the trust, but I believe that he was unable to attend. They were important meetings, and as a result of them a new initiative was taken.
    Mr. Bill Walker: Will my hon. Friend confirm that his right hon. Friend and others have worked constructively with organisations such as British Aerospace to safeguard jobs in that constituency?
    Mr. Fletcher: Yes, Sir, and—as my right hon. Friend said earlier—with considerable success.
    Mr. McKelvey: Will the Secretary of State consider further my request to him to come to Kilmarnock and speak to employers and unemployed people——
    Mr. Speaker: Order. Is Kilmarnock in Ayrshire? [HON. MEMBERS: "Yes."] I am only a poor Welshman.
    Mr. McKelvey: Will the Secretary of State, who, like me, represents a constituency in Ayrshire, consider my earnest request asking him to meet not only employers but the people who are unemployed in the area and explain the reasons for unemployment in Scotland? I do not have much faith in the Government's policies, and find myself unable to explain them.
    Mr. Fletcher: I believe that the invitation was the one I replied to in the question that was tabled by the hon. Member for Central Ayrshire (Mr. Lambie).

    Public Transport
    Mr. Home Robertsonasked the Secretary of State for Scotland if he will study the effects on the mobility of people in all parts of Scotland of proposed cuts in spending on public transport and increases in the price of road fuel.
    Mr. Rifkind: I think it unlikely that such a wide-ranging study would be of any real practical benefit.
    Mr. Home Robertson: Will the Minister accept that the recent 20 per cent. increase in the tax on petrol will have a disastrous effect, particularly on people who live in rural Scotland? What representations on the matter has he brought to the attention of his right hon. and learned Friend the Chancellor of the Exchequer? How can he justify his recent intervention to prevent Lothian regional council from reducing bus fares in those parts of the area that are outside Edinburgh?
    Mr. Rifkind: The hon. Gentleman's question implies that those who use public transport in rural areas will suffer because of the increase in fuel tax. Public transport should not be affected in any way, because bus operators do not pay duty on the fuel that they use for public services. In answer to the second part of the hon. Gentleman's question, the Lothian regional council's application could not be accepted by the bus group because its external financing limit would have been exceeded.
    Mr. McQuarrie: Will my hon. Friend bear in mind that there is no public transport in some of the rural areas in eastern Scotland, and that the 20 per cent. increase, together with the additional 4p levied recently and the further 4p expected next week, will have a devastating effect on those rural areas?
    Mr. Rifkind: The Government accept that any increase in fuel costs creates problems for people living in rural areas. However, I remind my hon. Friend——
    Mr. Canavan: Friend?
    Mr. Rifkind: —that even taking into account the proposed increases, the proportion of the tax to the total cost of petrol is still less today than it was in 1970.
    Mr. Donald Stewart: Is the Minister aware that the study called for by the hon. Member for Berwick and East Lothian (Mr. Home Robertson) is of vital importance to my constituency, where petrol is now £1·75 a gallon in some areas? Is he further aware that as a result firms such as Schweppes and Beecham Foods have announced that they will no longer bear the extra transport costs to the Western Isles, and that the cost will be added to the 15 per cent. VAT?
    Mr. Rifkind: If the right hon. Gentleman is concerned about transport to the Western Isles, he will acknowledge that in the period of less than two years during which this Government have been in office they have more than doubled the amount of assistance given by Government to keep down transport costs to island communities. The costs are far less than they otherwise would have been.
    Mr. Millan: Would not the study be useful in providing further evidence of the devastating effect of the 20 per cent. increase in petrol tax on rural areas, and perhaps encourage those Conservative Members who spoke brave words at the time of the Budget to vote against the increase?
    Mr. Rifkind: The right hon. Gentleman should be aware that the increased cost of petrol is only one of the factors that affect mobility in rural areas and elsewhere. Those factors were taken into account by my right hon. and learned Friend when he announced his Budget.

    Seed Potato Industry
    Mr. Hendersonasked the Secretary of State for Scotland how many forms have so far been returned ,and what proportion this represents of those distributed, for the referendum on the revised proposal for the establishment of a Development Council for the Scottish seed potato industry.
    Mr. Younger: As the last date for the return of forms is 10 April, the referendum is not yet completed, but seed potato growers appear to have responded readily. By 7 April, 707 forms had been received, representing about a half of those issued.
    A total of 1,535 forms were distributed. They were sent to all seed potato growers recorded as having had seed potato crops classified in 1980, and about 200 growers who had crops classified in 1978 and 1979 and who might be considered as having an interest in the issue. The response from the two types of grower polled will be recorded separately.
    Mr. Henderson: Is not my right hon. Friend disappointed, with only two or three days remaining for the return of the forms, that there has not been a larger return because the poll affects a matter that is vital to the industry? Whatever the outcome of the referendum, will my right hon. Friend ensure that something will be done to help this industry, which is so vital to the Scottish economy?
    Mr. Younger: I appreciate my hon. Friend's concern. The original proposal for a Development Council was modified and simplified as a result of discussions. A further extended debate would be to no one's advantage, and would result in delay in implementing the wishes of the majority. However, I shall study the matter, once the returns are in.
    Mr. Peter Fraser: If the referendum shows that a substantial majority—more than 40 per cent.—is in favour of the establishment of development council status for a seed potato organisation in Scotland, will the Secretary of State support it, because it is in line with the aggressive marketing initiative that his right hon. friend the Minister of Agriculture, Fisheries and Food has so frequently urged on the agriculture industry?
    Mr. Younger: I appreciate what my hon. Friend says. However, I have to await the result of the poll, and I shall then decide whether to make a development order. If I so decide, I shall lay a draft order which requires a resolution of both Houses of Parliament.

    Electricity Generation and Supply
    Mr. Canavanasked the Secretary of State for Scotland whether he will meet the chairman of the South of Scotland Electricity Board to discuss the future plans of the board for electricity generation and supply.
    Mr. Alexander Fletcher: My right hon. Friend has no immediate plans to do so. My officials meet the board's senior officials regularly to discuss its plans.
    Mr. Canavan: How can the electricity board use a so-called increase in demand to justify building Torness while coal-fired power stations such as that at Kincardine are under-used, and at the same time claim that there is a decrease in demand and use that as an excuse for reducing the number of electrical power engineers by 17½ per cent.? What kind of crazy double talk is that from a public body?
    Mr. Fletcher: The position with Torness is simply that its capacity will be required in the 1990s, not only to meet the level of demand then, but because it is wasteful to burn oil and coal is expensive to burn. Nuclear power must be the fuel of the future.

    SOLICITOR-GENERAL FOR SCOTLAND

      Newspaper Vendors
      Mr. Ron Brownasked the Solicitor-General for Scotland how many people selling newspapers were charged with breach of the peace during 1980.
      The Solicitor-General for Scotland (Mr. Nicholas Fairbairn): I regret that the statistics for persons convicted of breach of the peace do not disclose the circumstances of the offence.
      Mr. Brown: Is it not the case that the couple commonly known as the "Glasgow Two" were charged and convicted for a breach of the peace? More important, was it not true that before that they were charged under the prevention of terrorism legislation? Why did the Ministers deny that? Why did they lie to us?
      Mr. Speaker: Order.
      Mr. Brown: Is the Minister aware——
      Mr. Speaker: Order.
      Mr. Brown: Why did the Minister deny that?
      Mr. Speaker: Order. The hon. Gentleman is very fortunate that he is not being named. He has been here long enough to know that when I rise to my feet he should resume his seat. He was being extremely discourteous. The hon. Gentleman came here only at the last election, but he has been here two years——
      Mr. Brown: It is still a lie——
      Hon. Members: Name him.
      Mr. Speaker: The hon. Gentleman is inviting me to name him. He——
      Mr. Brown rose——
      Mr. Speaker: The hon. Gentleman will leave the Chamber for the rest of the day. If he does not, I will name——
      Mr. Brown: In natural justice, Mr. Speaker, I would expect you——
      Mr. Speaker: I name Mr. Ron Brown for gross discourtesy to the Chair. [HON. MEMBERS: "out."] Will the senior Minister present move the motion?
      Mr. Younger: I beg to move,
      "That Mr. Ron Brown be suspended from the service of the House."
      Question put and agreed to.
      Mr. Speaker: The hon. Gentleman will now withdraw from the House.
      Mr. Brown: So much for democracy.
      The hon. Member withdrew accordingly.
      Later—
      Mr. Hugh D. Brown: On a point of order, Mr. Speaker. It is always a matter of regret when an hon. Member has to be named in the House. I am not trying to suggest, Mr. Speaker, that the decision was wrong. I know the circumstances of the incident referred to by my hon. Friend the Member for Edinburgh, Leith (Mr. Brown) and I am satisfied that the action taken by the police and the Crown Office was totally correct. May I draw your attention, Mr. Speaker, to an inconsistency that I think appeared in the Solicitor-General's reply——
      Mr. Speaker: Order. We cannot now pursue the answer to the question. The House gave me support when I put the Question, and I had given the hon. Member for Edinburgh, Leith (Mr. Brown) an opportunity to leave the House for one day.
      Mr. Hugh D. Brown rose——
      Mr. Speaker: Order. I am not taking any further points of order at this stage.

      Sheriff Court, Peterhead
      Mr. McQuarrieasked the Solicitor-General for Scotland how many persons are employed in the procurator fiscal's temporary office at the sheriff court in Peterhead.
      The Solicitor-General for Scotland: The procurator fiscal at Peterhead has a staff of three.
      Mr. McQuarrie: I am grateful to my hon. and learned Friend for that reply. Is he aware that the continued delay in completing the alterations to the sheriff court is putting great pressure on all those who use it? Can my hon. and learned Friend apply pressure to the authorities to complete the alterations to the court so that it may be brought into action at the earliest possible moment?
      The Solicitor-General for Scotland: This matter is the responsibility of my right hon. Friend the Secretary of State, but I understand that the adaptation and enlargement is going ahead, and the procurator fiscal and the sheriff clerk should be able to return to permanent accommodation in the court house next April.

      Scottish Courts (Industrial Action)
      Mr. Ancramasked the Solicitor-General for Scotland how many prosecutions have been abandoned or delayed as a result of industrial action in the Scottish courts over the last month.
      The Solicitor-General for Scotland: This information is long and complicated and I shall write to my hon. Friend, but in Edinburgh and Glasgow, where the strike is continuing, the number of cases that have been abandoned or delayed as a result of industrial action in these courts is about 1,600. A proportion of these cases, which includes cases of drunk driving, driving while disqualified and driving with no insurance, is likely to be lost.
      Mr. Ancram: I am grateful for the answer. Will my hon. and learned Friend agree that, industrial action of this sort is an impediment to justice and a disgrace upon those
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      whose duty it is to serve the courts, not to close them? Does my hon. and learned Friend agree that while justice is necessarily blind, it should not be silent?
      The Solicitor-General for Scotland: Yes, I greatly regret that the action should be taken. I remind those who are taking it that they are riot just employees. They have statutory duties which they ought to perform, and the scuttling of justice does nothing for those involved in the dispute.
      Mr. Dewar: Does the hon. and learned Gentleman recall that in March 1979, when the emergency legislation to deal with the last courts strike was being discussed, he described the strikers as highwaymen and mobsters and compared them with torturers? He suggested that the strike should be made illegal. Are those still his opinions? As he violently attacked the then Government for delaying the introduction of emergency legislation, when will his Government introduce such legislation to deal with the present action?
      The Solicitor-General for Scotland: I have no reason to withdraw anything I said during the last dispute. I confirm that those who serve the courts have a number of statutory duties and a duty to undertake them
      Mr. Budgen: Are there any plans in Scotland for the abandonment of prosecutions primarily in the interests of good race relations?
      The Solicitor-General for Scotland: No, Sir.

      Flying of Flags (Breaches of the Peace)
      Mr. Bill Walkerasked the Solicitor-General for Scotland how many prosecutions have resulted from breaches of the peace whch have been caused by the flying of flags since 1 July 1980.
      The Solicitor-General for Scotland: There have been, so far as I am aware, no prosecutions resulting from breaches of the peace caused by the flying of flags since 1 July 1980.
      Mr. Walker: I thank my hon. and learned Friend for that reply. Does he agree that there are outstanding problems in the city of Dundee where incidents relating to the flying of a flag and the defacing of Jewish buildings and other such matters have occurred?
      The Solicitor-General for Scotland: There may be circumstances where the flying of flags or banners contributes to circumstances which could amount to a breach of the peace, and if such are reported to the procurator fiscal prosecution may result.
      Mr. Ernie Ross: Is the Solicitor-General aware that when the police examined the synagogue that was unfortunately daubed with slogans they confirmed that the gang slogans on the building could be seen on many walls in Dundee? Is he aware that they have nothing to do with flags? They are more a symptom of our present society which does not give young people jobs, something that causes problems in the inner cities. Such daubings can be seen in towns and cities throughout Great Britain.
      The Solicitor-General: I have no reason to believe that the daubing of buildings and other vandalism is justified by any excuse, and it should not be stimulated by any activity.
      Mr. Allan Stewart: Does my hon. and learned Friend agree that the flying of the PLO flag in Dundee has created a sense of outrage throughout the Scottish community?
      The Solicitor-General: That may very well be so, and it will have its repercussions, but not necessarily in the prosecution of a criminal offence.

      High Court (Industrial Action)
      Mr. Peter Fraserasked the Solicitor-General for Scotland how many High Court prosecutions have been delayed or abandoned as a result of industrial action in the courts this year.
      The Solicitor-General for Scotland: On 9 March the High Court was to have commenced sittings at Edinburgh, Glasgow and Perth. Because of industrial action these sittings were delayed for a day. At the High Court at Glasgow a case involving three accused who were due to stand trial on 30 March was dropped from the roll. However, the accused will be re-indicted for the sitting which is due to commence on 5 May 1981. The accused are all on bail.
      Mr. Fraser: While the problem is not yet acute, does my hon. and learned Friend accept that if this industrial action continues for any length of time there will be serious problems in the prosecution of crime in Scotland and highly serious complications arising from the operation of the 110-day rule?
      The Solicitor-General for Scotland: I can assure the House that no cases in the High Court or on indictment will be lost. I do not for a moment underestimate the seriousness of the loss of cases of drunk driving or of driving without insurance. However, the matter is at the moment contained.

      Glue Sniffing
      Mr. Gordon Wilsonasked the Solicitor-General for Scotland how many prosecutions involving glue sniffing took place in 1980; what was the success rate in defended cases; and if he will make a statement.
      The Solicitor-General for Scotland: There is no separate register kept by procurators fiscal of the numbers
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      of prosecutions involving glue sniffing, as that act in itself is not illegal. The charge libelled in any prosecution where an accused has inhaled a solvent will depend on the circumstances. I cannot therefore quote the success rate in defended cases where glue sniffing is a feature.
      Mr. Wilson: Will the hon. and learned Gentleman consider the cases of Fisher v. Keane and Skeen v. Malik in which the Crown Office through the procurators fiscal sought to control this dangerous habit by prosecution? In the event of the failure of those cases, what does the Crown Office intend to do either by way of different charges or by way of encouraging his right hon. Friend to take action and to introduce legislation to deal with this problem?
      The Solicitor-General for Scotland: As the hon. Gentleman knows, this is a matter which finds agreement on both sides of the House. It is a serious problem among young people and so far it defies solution. The case of Fisher v. Keane was successful. If appropriate circumstances arise, I have no doubt that we can try another prosecution. In the meantime, it is the responsibility of all hon. Members to demonstrate the hazards of this unfortunate habit.

      Questions to Ministers
      Mr. John Home Robertson: On a point of order, Mr. Speaker. During the course of Question Time the hon. Member for Edinburgh, South (Mr. Ancram) and subsequently the hon. Member for Perth and East Perthshire (Mr. Walker) accused members of the Labour Party, both inside and outside the House, of anti-semitism. In the absence of any evidence to support such an outrageous slur, can you offer, Mr. Speaker, any protection to my right hon. and hon. Friends against such outbursts from Conservative Members?
      Mr. Speaker: I was not aware of any such charge against any hon. Member in the House. As I understood it, it was a reference to others outside the House and was something to do with one of the cities in the North.
      Dr. M. S. Miller: On a point of order, Mr. Speaker. Is not it a case of "methinks the gentlemen doth protest too much"?

Northern Ireland (Air Services)
Mr. James Molyneaux (Antrim, South) (by private notice)asked the Secretary of State for Northern Ireland what steps he proposes to take in view of the continuing interruption of air communications between Great Britain and Northern Ireland.
The Under-Secretary of State for Northern Ireland (Mr. David Mitchell): I appreciate the considerable inconvenience that the closure of Aldergrove airport has caused. Although there are other means of transport available, including ferry services, many people have had to postpone journeys or make alternative travel arrangements. This sort of situation cannot fail to add to the difficulties that industry and commerce in Northern Ireland have to face. The Government are not, however, directly involved in this dispute. It is one between Northern Ireland Airports Limited and some of its employees. I understand that a joint statement by the Northern Ireland airport company and the union will be made later this afternoon to announce the results of discussions that have now concluded. Like right hon. and hon. Members, I hope that there will be a successful conclusion.
Mr. Molyneaux: Is the hon. Gentleman aware that we share his satisfaction at the fact that the two sides have now come together and that there has already been a report that something constructive has emerged from that? Does he agree that the recent disruption to traffic highlights the demand that our party has repeatedly made from this Bench, namely, that there should be an increased number of links, both surface and air, between Great Britain and Northern Ireland? Does this not also highlight the need for further study on the lines of the recommendations of the Northern Ireland Economic Council?
Mr. Mitchell: I recognise the importance of Northern Ireland maintaining as far as possible sea and air links with Great Britain. I have some reason to believe that the dispute will be settled later today and that we may expect the airport to return to normal working later this evening.
Mr. James Kilfedder: If there is no settlement of the dispute this afternoon, will the Government become involved, in view of the great hardship caused to business people and holidaymakers, and the disruption of freight? Surely it is possible for the Government to act more quickly, rather than to allow the public to be inconvenienced, as has happened so far.
Mr. Mitchell: I understand that freight services are not involved in the dispute. There are many occasions when it is wiser to leave it to the respective parties to settle their own differences.
Mr. Robert Atkins: Are the employees who are involved in the dispute members of a Civil Service union, rather like employees of the Civil Aviation Authority, or are they civil servants in their own right?
Mr. Mitchell: No, they are not members of that union.

Liverpool Inner Ring Road
Mr. David Alton: I beg to ask leave to move the Adjournment of the House, under
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Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the fact that the leader of the Merseyside county council has refused me permission to address his council committee about the decision to proceed with the construction of the Liverpool inner ring road, despite a standing order of the county council requiring all-party agreement at the time of the opening of tenders."
In the teeth of local opposition the Merseyside county council has decided to suspend its standing orders to enable it to accept tenders for phase 4 of the Liverpool inner ring road scheme. The scheme will cost taxpayers and ratepayers a total of £150 million. The rate to be paid will total £5 million, at a time when Liverpool ratepayers are facing horrendous rate increases and when the local police force is being cut back in numbers and overtime is being reduced because of lack of funds.
This decision has been taken by a small cabal arbitrarily changing its own rules against the wishes of local opposition parties. The decision has been bulldozed through three weeks before the local elections. The decision has been taken in the almost certain knowledge that there will be a change in control of the council.
The issue is also important because £50,000 was paid in fees to the consultants, of which the chairman of the highways committee was then an employee—[Interruption.]
Mr. Speaker: Order. I shall have something to say at the end of this application. I hope that the House will listen.
Mr. Alton: In recommending that the road be built, he did not declare his financial interest at any meeting of the committee. The road has more to do with corruption and vested interest than the needs of the people of Liverpool. The matter is important and urgent, because a special meeting has been called on Friday to discuss the applications for tender. I have today received a letter from the leader of the county council refusing to allow me to speak at the meeting on behalf of my constituents, who regard this expenditure as an outrageous waste of ratepayers' money. This is typical of the high-handed and undemocratic way in which the council behaves. My only response to the attempt to gag me was to raise this urgent matter in this way on the Floor of the House.
The road will result in the disappearance of a further 1,000 jobs in a city where there are already 50,000 people out of work. It will cost £150 million, when expenditure on much more important things, such as the buses, police, education and housing, is being slashed. This matter is being rushed through in a last-minute panic, in a devious and deceitful way. So frightened is it of criticism that the Conservative-controlled county council will not allow a Member of Parliament to speak against its proposal at the meeting on Friday. For that reason, I gave notice that I wished to raise that matter under Standing Order No. 9.
Mr. Speaker: The hon. Member for Liverpool, Edge Hill (Mr. Alton) gave me notice this morning, before 12 o'clock that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the fact that the leader of the Merseyside county council has refused the hon. Member permission to address his council committee about the decision to proceed with the construction of

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the Liverpool inner ring road, despite a standing order of the county council requiring all-party agreement at the time of the opening of tenders."
I believe that our Standing Order No. 9 procedure is being abused. It is being abused today and it has been abused recently, because it enables hon. Members to make a speech to which no answer is possible. It should be directed to ensuring that there is an emergency debate. I have had the uneasy feeling in the last few days and today that the House knows that not all applications under Standing Order No. 9 are genuine. Therefore, I must rule that the hon. Gentleman's submission does not fall within the provisions of the Standing Order and I cannot submit his application to the House.
Mr. Barry Porter: On a point of order, Mr. Speaker. In his undistinguished speech the hon. Member for Liverpool, Edge Hill (Mr. Alton) made a charge of corruption against a distinguished, although, I regret, deceased constituent of mine. I do not know whether that charge of corruption is in order, but if it is in order, should it not be ruled as immoral?
Mr. Speaker: I have said before that every hon. Member takes responsibility for his statements in the House. We have our freedom of speech and every hon. Member is responsible for what he says.

House of Commons Disqualification Act 1975 (Amendment)
Mr. Tristan Garel-Jones: On a point of order, Mr. Speaker.
The House will recall that on 24 March the hon. Member for West Stirlingshire (Mr. Canavan) sought leave to introduce a Bill under the Ten Minutes Rule entitled "House of Commons Disqualification Act 1975 (Amendment)". That Bill was aimed fundamentally at disqualifying the right hon. and hon. Members who sit in the House in the Social Democratic interest. The hon. Gentleman introduced his Bill with his characteristic moderation, but you may be disturbed to know, Mr. Speaker, that in col. 813 of Hansard the hon. Gentleman's speech is recorded as having been delivered by you. Therefore, I ask that the appropriate column of Hansard be amended accordingly.
Mr. Dennis Canavan: I can well understand the Hansard reporters confusing you with me, Mr. Speaker, because we have so much in common. I congratulate you on the best speech that you never made.
Mr. Speaker: I am obliged to the hon. Member for Watford (Mr. Garel-Jones). Life is full of tribulations. I had noticed that error and I moved with greater speed than usual to assure Hansard that I was unworthy of being shown as the author of the oratory of the hon. Member for West Stirlingshire (Mr. Canavan). I understand that in the fullness of time, when the bound volume is published, the correction will be made.

Prayer Book Protection
3.46 pm
Viscount Cranborne: I beg to move,
That leave be given to bring in a Bill to provide for parishioners in any parish to require certain forms of service to be used in the parish.
It is a sad occasion when any hon. Member should feel impelled to seek leave to introduce a Bill such as this. The Book of Common Prayer is one of the glories of English literature. I am gratified to find that so many of my right hon. and hon. Friends and Opposition Members have seen fit to give me their support because the Book of Common Prayer and the forms of service contained therein have permeated the English language. They have enriched it and formed the basis of part of the tradition of England. That language was produced many centuries ago. It has matched man's highest aspirations. Those religious aspirations have separated man from the animal kingdom.
Until recently the Book of Common Prayer was available to all people who wished to use it. Many hon. Members have ackowledged the beauty of the Book of Common Prayer. They have expressed the hope that its language and form of service would not be lost and would not remain unavailable to those who wished to use it in their worship in the Church of England. I would go so far as to quote my hon. Friend the Member for Wokingham (Mr. van Straubenzee) in a typically distinguished speech which he made in the debates in December 1974, when the House considered the worship and doctrine measure. He said
"I believe in all conscience, as one who would regard it as retrograde beyond measure if this book disappeared from the services of the Church, that those like me would have a power to our elbow which the law does not currently provide if the measure were passed."—[Official Report, 4 December 1974; Vol. 882, c. 1691.]
I have heard a strong rumour that after I have spoken my hon. Friend the Member for Wokingham will seek to catch your eye, Mr. Speaker, in order to oppose this motion. I look forward to his speech. I know that he will address the House with his customary scholarship and eloquence, and that he fully supports the beauties and glories of the Book of Common Prayer.
However, I feel a trifle sorry for my hon. Friend because he will be supporting a point of view which, in retrospect, has managed to achieve the slow murder of the Book of Common Prayer since the passing of the 1974 measure. Far be it from me to anticipate what my hon. Friend will say. He will make his speech in his own good time. However, I suspect that when he speaks he will deploy certain arguments, and I shall hazard a guess as to what at least one of them will be.
My hon. Friend will say that I am meddling in matters of great constitutional importance. He will say that as a result of the 1974 measure a concordat was, in effect, put into operation between Parliament and the Synod of the Church of England which clearly provided that the initiative in legislative matters governing the Church should come from the Synod and not from the House. I do not deny for a second that that has been the effect of the 1974 measure. I would not seek to argue with my hon. Friend if that is the basis of his argument. But that concordat was made on two clear conditions, and it is one of those to which I draw the attention of the House.
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I can do no better than quote a great luminary of the Church of England, the former Archbishop of Canterbury. At the time of the debates on the worship and doctrine measure, he stated in another place:
"Again, it is not a Measure for abolishing the Book of Common Prayer. As I shall presently show, it gives to the Book of Common Prayer a secure place which could be altered only by the action of Parliament itself."—[Official Report, House of Lords, 14 November 1974; Vol. 354, c. 868.]
The Archbishop of Canterbury was supported in this House by the then hon. Member for Kingswood, Mr. Terry Walker, who stated:
"If the Synod should ever wish to alter this so that the 1662 book, or some services in it, were to be abolished, the Church would have to come to Parliament with another measure and thus, the Book of Common Prayer is given a secure place in the future of our worship."
My contention is simply that it is not Parliament which is in danger of breaching the concordat; the Church has breached it. I pay tribute to my hon. Friend the Member for Gloucestershire, South (Mr. Cope). He is an ornament to the Government Whips' Office. We on the Government Benches have come to value his prescience. In the same debate he stated:
"In spite of the safeguards referred to by a number of hon. Members, I believe that it will make permanent the decline, to put it no stronger, of the Book of Common Prayer."—[Official Report, 4 December 1974; Vol. 882, c. 1571–1649.]
I fear that my hon. Friend's forebodings were correct.
What has happened—there is evidence of this in the colossal amount of correspondence that I have received during the regrettable publicity prior to my application this afternoon—is that more and more people throughout the country find it impossible to attend a service in which the Book of Common Prayer is used. The clerics of the Church of England have brought about the beginnings of the slow strangulation of one of the greatest glories that this country enjoys. If the House needs an example, I have it on good authority that in the majority of theological colleges in the provinces of Canterbury and York the 1662 prayer book, or, indeed, the 1928 prayer book, are not in use at all. [HON. MEMBERS: "Shame."] There is a new generation of Church of England priests who do not know of the prayer book and who are, therefore, all too happy to override the evident rights of parochial church councils, as my hon. Friend the Member for Wokingham pointed out in 1974, to decide whether to use the 1662 liturgy or alternative services.
My proposed Bill is moderate. It will merely ensure that if 20 people in a parish so petition an incumbent, that incumbent should hold one service a month—the principal service of the morning—according to the right of 1662. I hope that the House will support me in ensuring that the 1662 prayer book can be enjoyed by everyone who wishes to do so, instead of its being consigned to the muniment rooms, where only scholars and the cognoscenti may appreciate it.
Mr. Speaker: I understand that the hon. Member for Wokingham (Mr. van Straubenzee) wishes to oppose the motion.
3.55 pm
Mr. William van Straubenzee: I rise to oppose the motion, acknowledging at the outset how difficult that is when it is moved in such a charming and persuasive way. I am grateful to my hon. Friend the Member for Dorset, South (Viscount Cranborne) for the kindly trailer of my speech. Unlike so many others who

961
pontificate about these matters outside the House, he at least knows what he is talking about and is a regular attender at church services.
However well intentioned towards my hon. Friend, the House should reject his proposition for two reasons. In 1974 it was the Church that asked that the Book of Common Prayer should continue to be enshrined in the laws of this land. It was not a concession wrested from unwilling clerics. It was freely given and willingly offered, because at that time it was inconceivable, as it is today, that so glorious a heritage of the English language should be abolished by either Church or State. However, it must be acknowledged that for many whom the Church seeks to serve—perhaps serves inadequately but seeks to serve—the language of Cranmer and the sixteenth century reformers does not have the same force as it did for our forefathers, and that alternative services—not substitutes but alternatives—need to be provided if their worship is to be relevant.
So it was that in 1974, when giving the Church freedom over its worship and doctrine, this House approved safeguards. It provided that decisions on the form of service in any congregation should be made jointly between the incumbent and the elected parochial church council. It was no dictatorship by the clergy. Lest it be thought that the clergy, by virtue of their office, are more likely to know the law than are their laity, I report that it was the General Synod that issued an explanatory leaflet to every incumbent and the secretaries of every parochial church council in two subsequent editions—some 112,000 simple explanatory leaflets—not only explaining the law but urging that the needs of all potential worshippers should be considered. In the 1980s that is the right way to deal with the infinite variety of situations to be found in the Church, and not through the rigidity of a Bill tied to a number regardless of the size of the congregation.
Furthermore, I can reassure my hon. Friend on one matter of fact upon which he relied. I accept, of course, that he gave his facts in all possible good faith. I have, however, checked the practice at the 14 theological colleges. It is true—I regret this—that in four of them the 1662 Holy Communion service is not in use, but in four others it is used occasionally and in six it is used regularly. That is a very different picture from the one that my hon. Friend painted.
My second reason for opposing the motion is that the House has progressively thought it fitting to entrust to the Church increasing authority over its own affairs. In 1919 it provided for the Assembly of the Church. In 1969 it approved synodical government, which was itself a very significant step forward. In 1974, as my hon. Friend said, it gave freedom to the Church to order its own worship and doctrine within very strict safeguards.
For what fundamental reason did our predecessors so decide? They did so for reasons that I believe remain valid today. They felt that it was no longer fitting for us in this Chamber—constituted not as we once were but as we are now—to concern ourselves with the details of matters domestic to the Church, especially as we ourselves had approved the setting up of representative institutions whereby the voice of clergy and laity could be heard.
As Parliament is sovereign in principle it will, of course, always remain open to Parliament to revoke that measure of independence, although I should greatly regret
962
such an attempt. The Bill, however, does not go to the principle. Instead, it intervenes in one albeit important area in which Parliament has decreed that decisions shall be a matter for the Church and in respect of which Parliament has approved an elaborate system of decision-making and safeguards. In so doing, the Bill goes against the whole trend that I have briefly outlined and that has represented an understanding by both Church and State of their respective roles in the days in which we live.
If, therefore, the motion is pressed to a Division—which I should regret—I shall seek to persuade right hon. and hon. Members on both sides of the House that it should not be approved.
Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business):
The House divided:Ayes 152, Noes 130.

Division No. 150]

[4.03 am

AYES

Adley, Robert

Fry, Peter

Aitken, Jonathan

Gardiner, George (Reigate)

Alton, David

Gardner, Edward (S Fylde)

Amery, Rt Hon Julian

Garel-Jones, Tristan

Ancram, Michael

Greenway, Harry

Anderson, Donald

Grieve, Percy

Ashton, Joe

Griffiths, E. (B'y St. Edm'ds)

Atkinson, David (B'm'th,E)

Grimond, Rt Hon J.

Banks, Robert

Grist, Ian

Barnett, Guy (Greenwich)

Grylls, Michael

Beaumont-Dark, Anthony

Hamilton, Hon A.

Beith, A. J.

Hamilton, Michael (Salisbury)

Bell, Sir Ronald

Hardy, Peter

Bennett, Andrew(St'Kp't N)

Haynes, Frank

Bennett, Sir Frederic (T'bay)

Heffer, Eric S.

Best, Keith

Hicks, Robert

Biggs-Davison, John

Higgins, Rt Hon Terence L.

Body, Richard

Hill, James

Bonsor, Sir Nicholas

Holland, Philip (Carlton)

Bowden, Andrew

Hordern, Peter

Braine, Sir Bernard

Hughes, Roy (Newport)

Brinton, Tim

Irving, Charles (Cheltenham)

Brotherton, Michael

Jessel, Toby

Brown, Michael (Brigg & Sc'n)

Jones, Dan (Burnley)

Bruce-Gardyne, John

Kilfedder, James A.

Budgen, Nick

Kimball, Marcus

Carlisle, John (Luton West)

Kinnock, Neil

Carlisle, Kenneth (Lincoln)

Knight, Mrs Jill

Churchill, W. S.

Lennox-Boyd, Hon Mark

Clark, Hon A. (Plym'th, S'n)

Lloyd, lan (Havant & W'loo)

Clark, Sir W. (Croydon S)

Lloyd, Peter (Fareham)

Clegg, Sir Walter

Loveridge, John

Cohen, Stanley

Lyell, Nicholas

Colvin, Michael

Mabon, Rt Hon Dr J. Dickson

Cormack, Patrick

McCusker, H.

Cranborne, Viscount

MacKay, John (Argyll)

Dixon, Donald

Macmillan, Rt Hon M.

Dover, Denshore

McQuarrie, Albert

du Cann, Rt Hon Edward

Mates, Michael

Dunlop, John

Mawby, Ray

Dykes, Hugh

Maxwell-Hyslop, Robin

Eden, Rt Hon Sir John

Mellor, David

Elliott, Sir William

Meyer, Sir Anthony

Ellis, R. (NE D'bysh're)

Moate, Roger

Emery, Peter

Molyneaux, James

English, Michael

Morrison, Hon C. (Devizes)

Fairbairn, Nicholas

Neale, Gerrard

Farr, John

Neubert, Michael

Fell, Anthony

Ogden, Eric

Fenner, Mrs Peggy

Onslow, Cranley

Field, Frank

Page, Rt Hon Sir G. (Crosby)

Fisher, Sir Nigel

Palmer, Arthur

Fletcher-Cooke, Sir Charles

Parris, Matthew

Fookes, Miss Janet

Peyton, Rt Hon John

Forrester, John

Porter, Barry

Fraser, Rt Hon Sir Hugh

Powell, Rt Hon J.E. (S Down)

Freud, Clement

Price, Sir David (Eastleigh)

963

Proctor, K. Harvey

Stokes, John

Rees-Davies, W. R.

Tapsell, Peter

Rhys Williams, Sir Brandon

Taylor, Robert (Croydon NW)

Roberts, Gwilym (Cannock)

Taylor, Teddy (S'end E)

Ross, Stephen (Isle of Wight)

Temple-Morris, Peter

Rost, Peter

Thornton, Malcolm

Royle, Sir Anthony

Wainwright, E. (Dearne V)

Ryman, John

Wainwright, R.(Colne V)

St. John-Stevas, Rt Hon N.

Waldegrave, Hon William

Shaw, Michael (Scarborough)

Walker-Smith, Rt Hon Sir D.

Shelton, William (Streatham)

Warren, Kenneth

Shepherd, Colin (Hereford)

Wells, John (Maidstone)

Shepherd, Richard

Whitney, Raymond

Skinner, Dennis

Wickenden, Keith

Smith, Dudley

Wilkinson, John

Speller, Tony

Williams, Sir T.(W'ton)

Spence, John

Wolfson, Mark

Sproat, Iain

Squire, Robin

Tellers for the Ayes:

Stanbrook, Ivor

Robert Atkins and Nicholas Baker.

Stevens, Martin

NOES

Aspinwall, Jack

Dunn, Robert (Dartford)

Atkins, Rt Hon H.(S'thorne)

Durant, Tony

Benyon, W. (Buckingham)

Edwards, Rt Hon N. (P'broke)

Berry, Hon Anthony

Edwards, R. (W'hampt'n S E)

Blaker, Peter

Eggar, Tim

Booth, Rt Hon Albert

Ellis, Tom (Wrexham)

Bottomley, Peter (W'wich W)

Evans, John (Newton)

Boyson, Dr Rhodes

Fairgrieve, Russell

Bray, Dr Jeremy

Garrett, John (Norwich S)

Brooke, Hon Peter

Ginsburg, David

Buchanan-Smith, Alick

Goodlad, Alastair

Burden, Sir Frederick

Graham, Ted

Butler, Hon Adam

Grant, George (Morpeth)

Campbell-Savours, Dale

Gummer, John Selwyn

Carlisle, Rt Hon M. (R'c'n)

Hampson, Dr Keith

Chalker, Mrs. Lynda

Harrison, Rt Hon Walter

Channon, Rt. Hon. Paul

Haselhurst, Alan

Clark, Dr David (S Shields)

Havers, Rt Hon Sir Michael

Cocks, Rt Hon M. (B'stol S)

Hawkins, Paul

Coleman, Donald

Heddle, John

Cope, John

Homewood, William

Crouch, David

Howell, Rt Hon D.

Cryer, Bob

Howells, Geraint

Cunliffe, Lawrence

Hunt, David (Wirral)

Davies, Rt Hon Denzil (L' lli)

Jenkin, Rt Hon Patrick

Davis, T. (B' ham, Stechf'd)

Johnson Smith, Geoffrey

Dean, Joseph (Leeds West)

Jones, Barry (East Flint)

Dormand, Jack

Jopling, Rt Hon Michael

Douglas-Hamilton, Lord J.

Lamond, James

964

Lamont, Norman

Rees, Rt Hon M (Leeds S)

Lawson, Rt Hon Nigel

Ridley, Hon Nicholas

Le Marchant, Spencer

Roberts, Albert (Normanton)

Lewis, Kenneth (Rutland)

Roberts, Ernest (Hackney N)

Litherland, Robert

Roberts, M. (Cardiff NW)

Lofthouse, Geoffrey

Ross, Ernest (Dundee West)

Luce, Richard

Sainsbury, Hon Timothy

Lyon, Alexander (York)

Shaw, Giles (Pudsey)

McDonald, Dr Oonagh

Sheer man, Barry

McKay, Allen (Penistone)

Silvester, Fred

MacKenzie, Rt Hon Gregor

Sims, Roger

McTaggart, Robert

Spearing, Nigel

McWilliam, John

Spicer, Michael (S Worcs)

Major, John

Stanley, John

Marks, Kenneth

Steel, Rt Hon David

Marlow, Tony

Stott, Roger

Marshall, D(G' gow S'ton)

Stradling Thomas, J.

Marshall, Dr Edmund (Goole)

Thompson, Donald

Mawhinney, Dr Brian

Thorne, Stan (Preston South)

Mayhew, Patrick

Tinn, James

Mellish, Rt Hon Robert

Townsend, Cyril D, (B'heath)

Miller, Dr M. S. (E Kilbride)

Urwin, Rt Hon Tom

Mills, Iain (Meriden)

Vaughan, Dr Gerard

Mitchell, R. C. (Soton Itchen)

Waddington, David

Moore, John

Wakeham, John

Morris, Rt Hon C. (O'shaw)

Wells, Bowen

Morrison, Hon P. (Chester)

White, Frank R.

Nelson, Anthony

Whitelaw, Rt Hon William

Newton, Tony

Willey, Rt Hon Frederick

O'Halloran, Michael

Williams, D.(Montgomery)

Patten, John (Oxford)

Young, David (Bolton E)

Pavitt, Laurie

Young, Sir George (Acton)

Pawsey, James

Younger, Rt Hon George

Powell, Raymond (Ogmore)

Prior, Rt Hon James

Tellers for the Noes:

Pym, Rt Hon Francis

Mr. W. van Straubenzee and Mr. Ken Eastham.

Race, Reg

Raison, Timothy

Question accordingly agreed to.
Bill ordered to be brought in by Viscount Cranborne, Mr. William Waldegrave, Mr. Frank Field, Mr. J. Enoch Powell, Mr. Michael English and Mr. Robert Atkins.

Prayer Book Protection
  PRAYER BOOK PROTECTION
  Viscount Cranborne accordingly presented a Bill to provide for parishioners in any parish to require certain forms of service to be used in the parish: And the same was read the First time; and ordered to be read a Second time upon Friday 1 May and to be printed [Bill 114].
Orders of the Day
  SUPPLY
  [16TH ALLOTTED DAY]—considered
  SUPPLY

    European Community (Developments)
    Mr. Speaker: The Lord Privy Seal.
    Mr. Denzil Davies: On a point of order, Mr. Speaker. I understand that this is a hybrid form of debate in that the Government tabled the motion, but in the past it has been customary, since this is a Supply day, for the Opposition spokesman to start the debate. I hope that we can still follow that precedent.
    Mr. Speaker: I am easy, if the House is.
    Mr. Davies: I am grateful to you, Mr. Speaker, and to the Lord Privy Seal.
    Motion made, and Question proposed,
    That this House takes note of the Report on Developments in the European Community, July to December 1980 (Cmnd. 8195).—[Sir Ian Gilmour.]
    4.16 pm
    Mr. Davies: Since we debated the last report on developments in the European Community, just before Christmas, Britain's relationship with the other countries of the Common Market has deteriorated and there has been no progress towards alleviating what many see as some of the more damaging aspects of Britain's membership.
    The common agricultural policy, as has been shown by the recent price agreement, is now more entrenched than ever. The Government do not seem to have either the imagination or the strength to propose and press for fundamental reforms.
    The Ministry of Agriculture, Fisheries and Food is gradually filleting our fishing industry into minute pieces. Our net contribution to the 1981 Community budget will probably exceed £500 million. The Government's negotiating tactics, if they can be so described, have achieved nothing while arousing the contempt of the French and the anger of the Germans, so that, again, after the last summit, the cry "Perfidious Albion" was heard in the counsels of Europe.
    Paragraph 1·4 of the report deals with the common agricultural policy. It contains an even weaker statement on the CAP than the last report that we debated. It merely states:
    "The Government will continue to stress the need to restrain surplus production…and to reduce the…costs of the CAP."
    Merely to stress the need to reform the CAP will achieve nothing, and nothing has been done to remove some of the damaging aspects of that system.
    Only last week the Minister of Agriculture, Fisheries and Food acquiesced in a price agreement which will probably cost the British consumer at least £500 million, will put up prices probably by between 1 and 2 per cent. and will generate even more surpluses which will have to be disposed of at even greater cost.
    A report in The Daily Telegraph on Tuesday—I hope that the Minister will comment on it—suggested that the figures given in the House by the Minister of Agriculture
    966
    about the increase in the price of food were not similar to some of the figures that his officials put to the House of Lords Select Committee. Under the headline
    "Walker Food Prices Wrong Say Ministry",
    The Daily Telegraph states:
    "The ministry"—
    not necessarily the Minister—
    "estimation is 7p lb. on butter, 5½p lb. on cheese, 2½p a kilo bag on sugar, 2p lb. on bacon, 5p lb. on beef, and ½p on a standard loaf".
    I hope that when he speaks the Minister will tell us whether those price increases in The Daily Telegraph were correct.
    Mr. Tony Marlow: The right hon. Gentleman has probably heard in this House from the Minister of Agriculture his estimate that food prices will go up by 1 per cent. a year. Is he aware that the Commission believes that the average level of food price increases in Europe this year will be 3 per cent. as a result of these measures? I dare say that there are differences between this country and Europe, but is it that we are learning new maths in the Ministry of Agriculture of the United Kingdom whereas they have got old maths in Europe? What is the position?
    Mr. Davies: Sometimes we feel that perhaps they have not learnt any maths at the Ministry of Agriculture because it is not very clear, as the hon. Gentleman says, what the increase is likely to be. I said between 1 and 2 per cent., being modest and fair and not wishing to criticise the Ministry too much. No doubt we shall be told what the figure is when the Minister replies to the debate.
    There is little doubt that the CAP has been a financial disaster for the British consumer and the British taxpayer. What is not always remembered is that it has not generally provided corresponding benefits to British farming. Many sections of British agriculture would be much better off if we had a system of national aids to agriculture instead of the ridiculous system of the CAP.
    Mr. David Myles: Would the right hon. Gentleman care to give an example?
    Mr. Davies: I was about to give two examples. One is in relation to dairy farmers. It is absurd that there is a levy on dairy products, the reason being apparently to reduce surpluses. But, as I understand it, there are no surpluses of dairy products in this country, so why should our farmers, and our consumers presumably, have to bear this levy?
    Another example is livestock producers. Their greatest input cost is the cost of feeding stuff, especially maize imported from North America. The cost of maize is pushed up artificially by the tax on imports and as a result of this settlement the cost of importing maize from North America will increase and these costs will have to be taken into account in next year's price settlement. So that with the CAP prices are putting up costs and costs are putting up prices. It is a quite ridiculous system and certainly not the best way of regulating food production or the agriculture industry.
    It is quite clear that we shall not get from the Government any fundamental proposals for the reform of the CAP. It is quite clear from the statements of the Minister of Agriculture that he has no intention or idea of reforming the system. I do not think that we shall see any radical proposals from the Commission, either.

    967
    The first paragraph of the report that we are debating states that it covers the last period of the Presidency of Mr. Roy Jenkins, who I believe is this month's leader of the Social Democrats. In a depressing epitaph for the Jenkins' Presidency the January edition of the publication Agra-Europe, which is a respectable publication in Europe on agricultural matters, says that the European Commission, under the Presidency of Mr. Roy Jenkins
    "has failed miserably in the attempt to tackle the problem of farm surpluses in the EEC."
    Farm support costs have gone up from £3 billion at the beginning of that Presidency to £8 billion at the end—an annual rate of growth of more than 23 per cent. The report goes on:
    "The Jenkins Commission made no recommendations, nor has it initiated any policy changes which have done anything to solve the CAP problems."
    So on past evidence there has been no real attempt by the Commission to reform the system, and I do not believe that we shall see any attempt in the future. A paper has now been produced called "Some Reflections on the CAP", but all that it does is suggest that the problems can be solved, or at least alleviated, by putting another tax on food. It suggests a tax or a levy which is pompously called a co-responsibility levy, but all that it is is a tax on food production. The only effect that the levy will have will be to put up prices even further, because farmers will decide on the prices they require and the levy will be put on top of that. So prices will go up, and neither the farmers nor the consumers will benefit. The more efficient farmers will suffer more than the less efficient because of the way the system will operate.
    The whole object of this tax is to provide more money for the Commission. Why not simply reduce the prices? The object is to provide more money for the Commission so that, presumably, that money can be used to create a new common policy, which will probably be quite as absurd as the ones that we have already.
    Mr. Robert Maclennan: I am very interested in the right hon. Gentleman's view on the co-responsibility levy. Is this one of the many matters on which the Labour Party is performing a neat U-turn? Has he completely forgotten that the co-responsibility levy was supported by successive Labour Ministers of Agriculture?
    Mr. Davies: That is a rather silly point. The Commission has now brought forward proposals for the reform of the whole system and it is proposing a co-responsibility levy over the whole range of products. That is how the system is to be changed—by putting a tax on food across the board, as I understand it. I should have thought that the hon. Gentleman would agree entirely with my criticism.
    The only worthwhile reform of the CAP would be to dismantle it and let each country in the EEC get on with helping its own farmers and its own food industry in the ways best suited to its own traditions, economic factors, and farming structures. I cannot believe that the security and the prosperity of Western Europe would be jeopardised by the disappearance of the common agricultural policy.
    Mr. Hugh Dykes: In the major debate on the EEC last year the right hon. Gentleman said, in castigating the French, that 25 per cent. of the French population still worked on the land. The real figure, as we
    968
    know, is 9 per cent. In view of his abysmal ignorance on the subject, why should we listem to anything that he says about agriculture in Europe?
    Mr. Davies: I admit entirely that I gave the wrong figure, but the point that I was trying to make then was fair and a right one—that because France is still to a great extent an agricultural country, far more so than we are, there will not be any basic change in the system.
    As a start on the process of demolition, perhaps the Government should use the talks which I understand will be starting in the middle of this year for restructuring the budget to try to change the system whereby spending on the CAP is an open-ended commitment. The present position with regard to the budget is quite absurd. We have Treasury Ministers shuttling back and forth to Brussels for budget meetings, arguing about expenditure which is only 30 per cent. of the total EEC budget.
    I hope that the Government will press for a change in the system so that the way in which the budget operates in relation to agriculture is no different from the way in which it operates in relation to the regional fund, the social fund and any other form of expenditure. I think that that is a quite reasonable and constructive suggestion to make. There is no case for having an open-ended commitment. I hope that the Lord Privy Seal will tell us the Government's thinking about this matter and the whole process of reorganisation and restructuring of the budget.
    If the CAP has been bad for both the consumer and sections of British agriculture, the other common policy, the common fisheries policy, looks like being a disaster for the British fishing industry. In the first section of the report the Government talk about the continuing effort to negotiate what they call a satisfactory common fisheries policy. Of course, the time has long passed for the negotiation of a satisfactory common fisheries policy because the pass was sold when the last Tory Government negotiated entry and agreed in the Treaty of Accession to allow, after a period of transition, the fishermen of the other countries to fish right up to our shores.
    The irony of the situation is that one leading member of that Government was the present Minister of Agriculture, who now has to try to pick up the pieces of that betrayal of the British fishing industry and is not making a very good job of it.
    Mr. Russell Johnston: I am sure that the right hon. Gentleman is always anxious to be fair and that with his condemnation of the Conservative Government he would wish to associate the Labour Government., who renegotiated the terms.
    Mr. Davies: I have never denied that the renegotiation process did not go half as well as we hoped.
    There have been two opportunities for discussion on fisheries. The first was before we entered, and the second is now, when we are coming to the end of the transitional period. Now is the time to stand firm on behalf of the British fishing industry. The Government are not doing that because they have given way on the percentage of total allowable catches. They have accepted 36 per cent. when most people, inside and outside the House, said that they should stand fast on 45 per cent. I quote a passage which appears in a House of Lords Select Committee report, which sums up the position:
    "Given that around two-thirds of the Community's catch is taken from United Kingdom waters, a quota of 45 per cent.…

    969
    seems none too high, and the Committee urge the Government to press for a figure of at least this order in respect of quotas in Community and third-country waters".
    The Government failed to do that. They caved in and settled for a percentage that was far too low.
    Dr. M. S. Miller: Does my right hon. Friend agree that the point at issue is not just the amount of fish taken from our waters compared with that taken from other EEC areas; is not the quality of the fish round our shores better than the quality of fish round their shores?
    Mr. Davies: I do not pretend to be as much of an expert on fishing as is my hon. Friend, but he is absolutely right, and that factor has to be taken into account.
    All that is left now is the final sell-out, which will take place after the French Presidential election. The Government are always optimistic in their negotiations with the French and they think that perhaps after the election the French will be nice to us. Of course, they will not be, and there will be another sell-out on the exclusive zone and the zone of dominant preference.
    Will the Lord Privy Seal give an assurance this afternoon that the Government will not abandon either the 12-mile exclusive zone demand or the demand for a dominant preference zone between 12 miles and 50 miles? Will he say categorically that the Government will not budge from that position? If he cannot give that assurance, the statement made by the Prime Minister during the election campaign that
    "fishermen will find a true and determined friend in the next Conservative Government"
    will be seen to be even more false and hollow than it seems now.
    The role of the Minister of Agriculture, both in the CAP negotiatons and on fisheries, cannot be better summed up than it is in an article in the magazine "Livestock Farming". A Somerset farmer in the April edition writes as follows:
    "The inability of Mr. Peter Walker to negotiate a fisheries policy, and the plight of our fishermen should fill us with foreboding. The Minister of Agriculture appears to be equally unwilling to deal with our difficulties. Mrs. Thatcher should appoint a Minister of Agriculture of the calibre and vision of the late Tom Williams who would give us sound policies to ensure security, confidence and expansion in place of our present unsatisfactory position."
    Trade figures are set out in table 2 in the final annex of the report, which shows that for the first time since we entered the Common Market we have a balance in our trade with the Community. As so often in the past, the appearance of EEC matters is different from the reality. We have to look further along that table to see our trading position with the EEC. The figures show only the balance of visible trade, not the contributions across the exchanges that go to the budget. More important than that, for every year since we have been in the Common Market we have had a massive deficit in trade in manufactured goods. There was a deficit of £1·7 billion in 1980, making a cumulative total over the years of almost £9 billion.
    Will the Lord Privy Seal tell us how many jobs have been lost as a result of that decline in our manufacturing industry? He might tell me that jobs were not lost, but the Foreign Secretary in Tokyo today gave a stiff warning to the Japanese that if they did not stop sending their goods to Europe import controls would be imposed by EEC
    970
    countries. He went on to say that he was talking about the loss of thousands of jobs. If our trade deficit with Japan means the loss of thousands of presumably manufacturing jobs, equally our trade deficit with the EEC must mean the loss of thousands of manufacturing jobs. We need an assessment from the Government of what that loss has been.
    Mr. Marlow: The right hon. Gentleman is possibly coming to this point, but it is worth emphasising that our trade deficit in manufactures with the Japanese is a mere £800 million a year, whereas our trade deficit in manufactures with West Germany was £1·8 billion in the last year—two-and-a-quarter times as much. That has not been sufficiently taken on board.
    Mr. Davies: I am sure that the hon. Gentlman's figures are right. If we have a deteriorating balance on manufactured goods, jobs are lost.
    The facts on manufacturing trade have borne out what we said from the Labour Benches when the previous Tory Government were dragooning the country into the Common Market. We said then that British industry was not in a competitive position to withstand the dismantling of tariffs which entry entailed. That is what has happened. If our industry had been competitive the resource cost and the budget cost of the CAP might just about have been carried, but as it is, the substantial deficit in trade in manufacturing goods plus the high cost of the CAP have broken the back of the British economy over the past seven or eight years.
    The Lord Privy Seal will argue that the position is improving—that our deficit in manufacturing goods in 1980 was less than it was in 1979. That is absolutely right. In 1980 it was £1·7 billion and in 1979 it was £2·7 billion, so the deficit was less. The reason for that is the depressed state of the British economy, caused mainly by the Government's policy.
    Retailers, companies and business men have destocked because they cannot afford to carry large stocks when there are high interest rates and high inflation. Those stocks are largely in cars and other manufactured consumer goods from Europe. It is only to be expected that the deficit in 1980 will be lower, because of the depression and the recession.
    If, as the Government say—no one else believes it, but the Government apparently do—we have bottomed out and the economy is gradually on the upturn, there will be more stocking. More cars will be brought in, and more consumer goods, and in 1982, if there is a recovery, the deficit on manufactures will go back to £2·7 billion.
    Mr. Tom Ellis: Will the right hon. Gentleman come clean? When he links the deficit in our manufacturing trade with the Community and other countries with the lack of competitiveness of British Industry, is he advocating a siege economy?
    Mr. Davies: I will come to that in a moment. I am not avoiding the point.
    The Lord Privy Seal will say that everything is much better now because we have North Sea oil, which we are selling to the Common Market. Indeed, it is the oil that balances the trade between us. The tables show that in 1980 we had a surplus of £2·8 million in our trade in fuels—presumably that was mainly oil—with the EEC. That is more than double the 1979 figure.

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    We now have the worst of all possible worlds. Our massive deficit in manufacturing and the enormous cost of the CAP are being paid for by the depletion of a finite resource, North Sea oil. There was a time when we debated in the House and outside what we should do with the benefits of North Sea oil. It is quite clear that that avenue has been frittered away in financing the dole queues which the Government have created by their economic policies and in paying the enormous cost of membership of the Common Market.
    The hon. Member for Wrexham (Mr. Ellis) asked whether I was in favour of a siege economy. That is an emotive term and I am not sure what it means. Judging from what I have read of his remarks in Tokyo, the Foreign Secretary is in favour of a siege economy. One of the leaders of the hon. Gentleman's party—I do not know whether he is last month's or next month's leader—the right hon. Member for Plymouth, Devonport (Dr. Owen) is also in favour of import controls. The Financial Times of 5 February reported that he made a speech in London to some French industrialists. He said that we might have to impose controls on imports from Europe. We might have to move towards the terrible siege economy that the hon. Gentleman deprecates and seems to fear.
    There is already a siege economy in relation to agricultural products. There are controls on food coming into the country. There is no free trade in food. Given the difference in value between the green pound and the natural exchange rate, we pay tax on inter-Community trade in food. With a certain amount of poetic licence, that could be described as a tariff. Therefore, there is a siege economy in agriculture. The country needs free trade in agriculture and some measure of protection for our manufacturing industry. However, the Treaty of Rome does not allow that. The system is wrong and does not suit our structures.
    Paragraph 1.2 of the report states that the Commission must produce proposals for the restructuring of the Community budget by the end of June 1981. That is an important statement. I am sure that everyone looks forward to the negotiations. No doubt the Government have some hopes. I do not know their plans or proposals for restructuring the budget. I hope that the Lord Privy Seal will give us some idea of the Foreign Office's radical thinking on restructuring the budget and the CAP. We should like to be told at least the bare outlines. No doubt the right hon. Gentleman will say that he is negotiating and cannot divulge everything, but he should tell us something about the Foreign Office's radical plans for restructuring the budget.
    The report does not say that Britain's net contribution to the 1981 Community budget could be at least £500 million. There are differing figures. In March 1981 a pamphlet gave the figure of £570 million. The White Paper on public expenditure gives a smaller figure. However, it will be about £500 million. That is the figure after the rebates that were negotiated at the Foreign Affairs Council on 30 May. Therefore, £500 million will cross the exchanges to our competitors. What is the point of such a system? We are subsidising our competitors in Europe when our economy is in a bad state, when we have had to cut public expenditure and when many of the disadvantaged cannot get any help from the Government. Nevertheless, the contribution could be at least £500 million. I should remind the Lord Privy Seal that a 10p tax on a gallon of petrol would be roughly equivalent to £500
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    million. No doubt the Lord Privy Seal will correct me if my figure for the 1981 budget is wrong. However, if it is right, it means that we are handing an enormous amount to our competitors in Europe.
    Hon. Members will agree that restructuring is most important. We should be given some idea of the Government's thinking. What justification is there for countries paying more into the EEC than they can get out of it? What justification is there for a system in which three countries pay in, namely, West Germany, Great Britain and France, and the other countries are net beneficiaries? What is the purpose of such a system? What is wrong with balancing the books? What is wrong with what the French call the "juste retour"? According to that system, a country pays in roughly the same amount as it gets back. I understand why the Germans are unhappy about their contribution.
    If the system under which some benefit while others do not created equality between the poorer and the richer regions of Europe, and if regional disparities were becoming smaller, there might be something to be said for it, but the system is getting worse. The disparities between the poorer and the richer regions are becoming greater. What is the point of some countries paying more in while others get more out? Perhaps the Lord Privy Seal will explain.
    Mr. James Hill: The original concept behind the principle of not expecting a juste retour—which was found in the regional development documents and in the regional fund—was that wealth should be spread throughout the Community. The Community has probably suffered because certain member States have always expected £1 back for £1 put in. It is that false, almost shopkeeping approach that has prevented a spread of wealth throughout the Community. In terms of regional development, we could benefit just as other members of the Community benefit.
    Mr. Davies: I am surprised to hear the hon. Gentleman criticise a "shopkeeping approach". I should have thought that it was sensible to question the paying of large sums into the Community when nothing happened. The disparities are becoming greater. Where is the money going? What good does it do to the Community as a whole, let alone to the net payers into the EEC?
    From 1 July, for six months, we shall hold the Presidency of the EEC. That should be a golden opportunity to reform the CAP and to restructure the budget. Unfortunately, the Minister of Agriculture, Fisheries and Food will chair the Agriculture Minister's Council meetings and the Foreign Office will chair the Council of Foreign Ministers. Therefore, to expect radical change is to expect a lot, particularly from this Government.
    If the Foreign Office displays the same appalling negotiating tactics as it used on 30 May in the Foreign Affairs Council there will he no hope of any change. Those negotiations led the West German Chancellor—who has been Britain's friend in many negotiations— to accuse the British Government of cheating. From the communique, most Opposition Members realised that there was a link between the budgetary arrangements and the common fisheries policy and other matters. I am not surprised that Helmut Schmidt thought the same. He read it in the same way. It is time that the Foreign Office looked at the exact

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    words and clauses of the treaties and communiques. It should not negotiate, as it sometimes does, as if it were negotiating with eighteenth century Mogul princes. It is negotiating with highly sophisticated, competent, Continental civil servants.
    The British people know that Britain got a bad deal when it entered the Common Market. They know that entry has been bad for the housewife, bad for the taxpayer and bad for our industry. Unless there are fundamental radical changes soon, the increasing demands to free Britain from the damaging provisions of the Treaty of Accession and the Treaty of Rome will become so irresistible that even this Government will not be able to ignore them.
    4.48 pm
    The Lord Privy Seal (Sir Ian Gilmour): The right hon. Member for Llanelli (Mr. Davies) treated us to his usual polemic about British membership of the Common Market. He told us that we had made no progress towards alleviating the burdens of membership. He said that the Government had neither the imagination nor the strength to do this or that. Apparently, we have been filleting our fishing industry. He even complained about our net contribution. He said that we needed radical change. He kept attacking my right hon. Friend the Minister of Agriculture, Fisheries and Food. It is noticeable that when anyone does that to my right hon. Friend's face, the person doing so gets very much the worst of it. When hon. Members say such things to his face, they do not get much change.
    It was interesting to note that when the right hon. Gentleman tried to find a better Minister of Agriculture he had to go back to Mr. Tom Williams. He was not a member of the last Labour Government or of the one before that, but of the Government from 1945 to 1950. Mr. Williams was a good Minister, and I agree with the right hon. Gentleman's implicit judgment that there has not been a good Labour Minister of Agriculture since then. That means that there has not been a good Labour Minister of Agriculture for 30 years.
    What the right hon. Gentleman said was silly enough, but it was absurd when we remember that he was a member of the Labour Government who were in office from 1974 to 1979. One would think that a visitor from Mars would never believe that there had been a Labour Government during the past 15 years or that they had anything to do with the present position in the Community. However, the House knows that the Labour Government did nothing to improve our conditions of Community membership.
    At one point the right hon. Gentleman even referred to the rebates that "we" negotiated. It was once said in a Western "Who's 'we' , white man?" It certainly was not the right hon. Gentleman. It was a Conservative Government who negotiated the rebates, and the right hon. Gentleman and the Labour Party did nothing whatever. The right hon. Gentleman complained about the appalling negotiating tactics of the Foreign Office, but one wonders what they were like in his day, because nothing happened.
    The right hon. Gentleman makes the debate totally sterile when he draws a veil over the Labour Government's five years in office and pretends that it did not happen. We ought to debate this subject on a more serious level. The right hon. Gentleman also talked about the trade deficit.
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    Of course we have trade deficits with other countries—for example, with the Community and Japan. So far as I can see, the right hon. Gentleman's only remedy is to cut off trade altogether, which would not be sensible.
    I am sure that the majority of hon. Members will agree that the White Paper that we are supposed to be discussing describes a busy if undramatic period in the Community. It was a period of consolidation between one important negotiation and another. The report permits us to assess the progress that the Community and Britain within it is making.
    It is better to approach this subject in that spirit than to recount developments in a way that makes the Community sound like a boxing ring. We do not regard it as a boxing ring. Obviously, it is our responsibility to stand up for British interests in the Community. The Government have done that consistently, and will continue to do so—I shall deal with some of the right hon. Gentleman's wilder points as I proceed—but, equally obviously, confrontation with our partners is not an objective of our policy. The objective must be fair and fruitful co-operation. I think that I can fairly say that that is what took place in the period that we are discussing.
    One of the principal examples of this, which is of close interest to us, is the subject to which the right hon. Gentleman referred in such misleading terms, namely, the budget contribution settlement which was reached on 30 May and was debated in the House on 2 July. That agreement had to be turned into a concrete arrangement. The Community had never done anything like it before. It was no easy task, but it was successfully negotiated and agreed at the Council on 7 October. The outcome was complex, and I set it out in an answer to a question from my hon. Friend the Member for Lincoln (Mr. Carlisle) on 27 October last year.
    There were those in Britain, particularly Labour Members, who feared that we would never be able to negotiate that agreement and that our Community partners would not keep their word. We never shared those doubts. We knew that the agreement would be honoured, and it was. The payments are being made on time. Before 31 March we received £645 million, of which £211 million was paid under the financial mechanism—75 per cent. of our estimated gross entitlement. A total of £434 million was paid under the supplementary measures scheme, and that represents 81 per cent. of our estimated entitlement under the scheme. The remainder of our refunds will be paid in the autumn.
    It was also agreed on 30 May that the Community should try to reach a settlement of the common fisheries policy by the end of 1980. The right hon. Gentleman said that there was a linkage and advised us to look at the words. I was instrumental in negotiating the words, and I assure him that we paid close attention to them. In fact, there was no linkage. If he looks at the words, he will see that that is so.
    Mr. Denzil Davies: In that case, is the right hon. Gentleman saying that Helmut Schmidt's interpretation is wrong?
    Sir Ian Gilmour: I am. I am saying that our interpretation is right. I ask the right hon. Gentleman to look at what was agreed on 30 May.
    It is nearly five years since, at the Hague conference in 1976, the Community set itself the task of adapting the

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    common fisheries policy to take account of the general move to 200-mile limits and laying the basis for the necessary changes. I doubt whether the right hon. Gentleman thinks that that agreement could have been better, as the Labour Government were in power at the time. However, five years is too long. We were ready to come to an agreement last December, but our French partners were not.
    Here again it was wrong of the right hon. Gentleman to imply that it was our fault that there was no agreement on a common fisheries policy by the end of last year. It was not our fault. We were ready, but our French partners were not. We are still ready, but we cannot reach an agreement if other parties are not prepared to do so. We are not responsible for the delay. We regret it.
    Obviously, a common fisheries policy is of the greatest importance to the Community. It will enable stocks to be conserved and marketing to be conducted in an orderly way. Without it our industry cannot look forward to a secure future and plan its investment as it would like. We made it clear that we could not agree to arrangements that did not safeguard the interests of British fishermen in our own coastal waters. It is really an abuse of language to say that it is "un-communautaire" to refuse to give priority to the French in those waters. My right hon. Friend the Minister of Agriculture and his colleagues have been scrupulous in ensuring that the interests of our industry will be safeguarded in any agreement.
    Mr. Tom Ellis: Does the right hon. Gentleman accept that even if he were to establish an exclusive limit around our shores the problems would not be solved? I ask that because the secretary of the Cornish Fish Producers' Association agreed with me at a public meeting in Plymouth recently that the main threat to Cornish fishing came from Humberside.
    Sir Ian Gilmour: As the hon. Gentleman sagely pointed out, those difficulties exist. There are, of course, other difficulties to which the right hon. Gentleman did not refer. For example, fish do not remain in the same waters all the time. They breed in some parts of the waters and then move to other parts. Therefore, the idea of creating the equivalent of a moat around fishing waters would not work.
    Mr. Austin Mitchell: rose——
    Sir Ian Gilmour: I shall not give way. The hon. Gentleman can make his own speech. I regret to tell him that I shall be winding up the debate, and I shall have a chance to answer him then.
    I should also like to mention the important agreement reached last week by my right hon. Friend the Minister of Agriculture on an agriculture price package, about which he told the House last Friday. In spite of what the right hon. Gentleman said, it is a satisfactory package to us, and it is satisfactory that agreement was reached early in the year.
    The right hon. Gentleman and my hon. Friend the Member for Northampton, North (Mr. Marlow), who is no longer present, talked about the discrepancy between what my right hon. Friend said and what was said by Ministry officials in the House of Lords. The Ministry officials were talking about the original Commission proposals, which did not include the savings and gains for us that my right hon. Friend negotiated in Brussels last week.
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    These are matters of real concern to us. We retained both the butter subsidy and the beef premium. We also obtained improved arrangements for clawback on sheepmeat exports. The regulation governing payment of our whisky refunds, which will be retroactive to 1973, was also agreed. Some measures—for example, agreement on future access for New Zealand butter and the import quota for manufacturing beef—will be especially welcome to our friends in New Zealand and Australia and will mean that the Community will fulfil the international obligations that it has undertaken.
    The right hon. Gentleman waxed eloquent about the iniquities of co-responsibility levies. No one would gather from his remarks that the co-responsibility levy originated under the Labour Government. He ought to check his facts a little before making that sort of speech to the House.
    The agreement also contains a number of useful savings measures of the same sort in the cereals and, processed fruit and vegetable sectors. We regard it as very important that the Council was able to agree on the need to keep milk expenditure within the 1981 budget provisions. We regret, on the other hand, that the Council did not endorse the view that the rate of increase in expenditure on the CAP should be kept markedly below the rate of increase in our own resources. None the less, we had our own position on this clearly recorded, and we received welcome support from the German and Dutch Governments.
    With regard to price increases, our farmers will receive benefits that they greatly need in order to cope with steeply rising costs. At the same time, the cost to consumers has been kept as low as possible. I shall not say to my hon. Friend the Member for Northampton, North what I said while he was out of the Chamber, but I say again that the estimate of 1 per cent. is right. The reason why it may be 3 per cent. in the Community is that we received benefit in the settlement which other countries did not receive. The increase in United Kingdom food prices should, therefore, be no more than 1 per cent.
    Mr. Nigel Spearing: I am grateful to the right hon. Gentleman for giving way. I know that he takes account of debating points. Last Friday the Minister of Agriculture, Fisheries and Food did not reply to me when I asked him how a farm gate price increase of about 9 per cent. reflects itself as only 1 per cent. in retail prices. Can the Lord Privy Seal answer that?
    Sir Ian Gilmour: It is due to a number of reasons. Farm prices are only one element in food prices. In addition, the commodities Mat are covered by a CAP are not only part of what everybody eats. A further reason is that things such as milk prices are set by the Government, and not by the Council of Ministers. The effect is only in regard to manufacturing and does not affect the doorstep delivery of milk. I can give a slightly longer and more detailed answer in my winding-up speech, but that is the basis of it.
    Mr. Marlow: Will my right hon. Friend give way?
    Sir Ian Gilmour: I think not. I dealt with my hon. Friend's point when he was out of the Chamber. He will be able to make his speech later. On second thoughts, I give way to my hon. Friend.
    Mr. Marlow: I am delighted that we are to receive benefits from last week's negotiations that will not be received by other countries Our food prices are to go up

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    by only 1 per cent., whereas in the other countries food prices will go up by 3 per cent. These must be massive benefits. Will my right hon. Friend tell us something about them?
    Sir Ian Gilmour: I have already mentioned the butter subsidy. I have also mentioned beef and lamb. I have no reason to believe that our estimates are wrong. I do not think that they have been challenged by anyone except my hon. Friend the Member for Northampton, North, who tends to stick out his neck on these matters. But that is up to him.
    I deal next with the Community's external relations. Co-operation over foreign policy—no doubt the right hon. Gentleman left that out for the sake of brevity, and I do not complain—is another matter in which there has been increasing interest and willingness to make progress. My right hon. and noble Friend made a major contribution to this in his speech in Hamburg last November, when he called for a framework for a European foreign policy
    "strong enough and flexible enough to respond rapidly to the challenges of the world today".
    Herr Genscher has since taken up a similar theme.
    The importance of the European role in the Middle East is widely acknowledged. President Sadat said that Egypt considered the Luxembourg declaration of last December to be a turning point that was likely to have a constructive impact on the peace process in the near future. As the House knows Mr. van de Klaauw, the Dutch Prime Minister, is continuing his consultations.
    Similarly, on Poland, the Ten remain in close contact with one another and with the United States. Europe has underlined to the Soviet Union the obligation of all States that signed the Helsinki final act to base their relations with Poland on the strict application of the charter of the United Nations and the principles of the final act. If they do not, the consequences for relations within Europe and throughout the world will be extremely serious. As the House is aware, this was re-emphasised in the recent communiqué of the European Council at Maastricht.
    I hope that the House will share my satisfaction at the entry of Greece into the Community on 1 January. As we know, the Community continues to negotiate with Spain and Portugal on the terms under which they will accede to the Community in due course. Much progress has already been made, but there is considerable ground yet to be covered. We remain determined to bring the negotiations to a successful conclusion with the minimum of delay.
    Looking to the period ahead, to which the right hon. Gentleman referred, we have a major task in seeking to restructure the Community budget. The Community committed itself to this under the 30 May agreement, and the European Council at Maastricht urged the Commission to bring forward its paper on restructuring in good time so that the Heads of Government could have a first discussion in Luxembourg at the end of June. Meanwhile, we have been thinking about the various ways in which this task can be approached, and we have been examining ideas on an informal basis with our partners.
    We start from certain principles. In future the Community budget must not result in any member State being put in the unacceptable situation in which we found ourselves when we took office—that of bearing an excessively high proportion of the cost of the Community.
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    It would, however, be neither practical nor appropriate to buy ourselves out of difficulty by simply increasing the total of Community expenditure. The Government are firmly opposed to raising the ceiling of 1 per cent. VAT, and both the German and French Governments are firmly on the record with the same position.
    Chancellor Schmidt, whose country now bears the largest financial burden, has recently repeated the proposal which he and President Giscard aired last year, namely, that there should be some kind of limit on net contributions to, and receipts from the Community budget. Such ideas as that will need close examination.
    There is no magic solution to the overall problem. We hope that the Commission paper, to be produced in June, will give a broad assessment of the possibilities and provide the Community with an acceptable basis for the negotiations that will follow. We shall negotiate with a firm and recognised commitment to making a success of restructuring. We shall press for a much better balance in Community spending policies. This means reducing the disproportionate share of the Community budget taken up by agricultural expenditure, and further developing nonagricultural policies.
    Sir Anthony Meyer: To put the matter of the budget contribution into perspective, and without in any way wishing to reduce its importance, may I ask my right hon. Friend to take this opportunity to tell the House what the total budget contribution—even before the contribution was renegotiated—represented as a proportion of the gross national product?
    Sir Ian Gilmour: My hon. Friend has got me there. I shall give the answer later. I do not think that it is a very high percentage, but it is a sizeable sum of money.
    Mr. Teddy Taylor rose——
    Sir Ian Gilmour: I think that the House fully supported us—even though some hon. Members were less than gracious about our achievement—and fully appreciated that it was right that we should seek and get a two-thirds reduction in those contributions.
    A number of modest and welcome savings in the CAP formed part of last week's settlement on agricultural prices, but obviously much more thoroughgoing reforms will be necessary in order to provide a permanent solution. To the extent that we succeed in doing that, obviously additional finance will be available for policies such as those of the regional and social funds, which are of particular concern to the United Kingdom.
    At the same time, any solution must take into account the accession of Spain and Portugal.
    Mr. Douglas Jay: If I heard the right hon. Gentleman aright, he said that thoroughgoing reforms of the CAP were obviously necessary. As the Commission will not propose any, and as the British Government are not making any proposals, where are these thoroughgoing proposals to come from?
    Sir Ian Gilmour: These things are evidently clearer to the right hon. Gentleman than they are to me. It is not clear to me that the Commission will not make those proposals. We shall have to see—[Interruption.] I do not think that it is clear. The Commission will make its proposals in June. We hope that they will be thoroughgoing proposals.

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    If not, I agree that other people will have to put forward proposals, but in the first instance it must be for the Commission to do so.
    What is needed, as I think all hon. Members agree, is for the Community to find a way of ensuring that the budgetary burdens and benefits correspond much more closely than they do at present to the needs and capacities of individual member States, so that unacceptable situations do not arise in future. I believe that we shall find the right way to deal with these matters. There is wide agreement in the Community on the need for change. I think that we are all agreed that we have to succeed.
    Clearly, there is a need for confidence and co-operation between member States over the coming year. I believe that the agreement of 30 May last year created a better equilibrium and a better atmosphere in the Community. Various political issues were resolved during that period. Equally, this year's agricultural price settlement was achieved fairly quickly. Against that background, it is easy to exaggerate the degree of crisis within the Community.
    I realise that things are often said during elections that should not be taken too seriously. As Dr. Johnson might have said, politicians are not on oath during election campaigns. The allegation that Britain is not prepared to obey the rules of the Community is unfounded. Anyone who makes such a suggestion should specify which rules we have broken and which rules we are not prepared to observe. I hope that anyone trying to do that will at the same time list the rules that his country has broken in the past and list the rules that his country is breaking at the moment.
    The idea that it would have been better for the Community to remain a Community of six seems to me parochial and out of touch with history. President Pompidou surely showed the vision of a far-sighted and realistic statesman in agreeing with other founding members to enlarge the Community. he made a major contribution to the construction of Europe. It is perhaps worth noting that President Giscard d'Estaing, to name only the most eminent, was a prominent member of President Pompidou's Cabinet. Mr. Pompidou was able to see that a Community of nine or 10 could work as harmoniously as one of six. Afer all, in the life of the enlarged Community, there has been no empty chair.
    Mr. Austin Mitchell: It is possible to argue that President Pompidou, in finding another dumping ground for surplus French agricultural production and surplus German manufacturing production was showing a little self-interest.
    Sir Ian Gilmour: I think that the debate is taking place on a more elevated level than that.
    We approach the restructuring exercise in a spirit of cooperation and with confidence. Much is at stake. We wish to see a Community greatly strengthened, with an agreed common fisheries policy, less costly agricultural funding, which does not encourage the production of surpluses, and a budgetary system that is equitable.
    The White Paper gives an account of the responsible stewardship of British interests within the Community, combined with a real feeling for the benefit of the Community as a whole, which is itself a British interest. The progress made is the result of steady work by a Government who believe in what they are doing. The difficulties that we encounter can be, and are being,
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    overcome. We cannot expect everything to come right at once. To build a Community that is beneficial to us all is not the task of a few weeks or months. If one is building for the future, one has to build thoroughly and well.
    It is depressing, therefore, to hear talk of withdrawal by some Opposition Members, although not all. There have been even more curious notions of a sort of selective membership, involving withdrawal from our legal commitment to enforce Community legislation, and the enactment thereafter of only those Community laws with which Parliament agrees. Apart from the legal impossibility of running such a system, our partners would quite rightly not stand for the two-faced commitment that it would represent. We shall not let ourselves be put off course by such ill-formed ideas. The issue is far too important.
    It must be kept in mind that the Community is about much more than money and agricultural products, vital though these isssues are. The economic problems of the Community can be resolved in a way that benefits everyone. I believe that the White Paper that we are debating shows solid progress towards that end. Economic questions are not the be-all and end-all. The vision of political unity that inspired die founders of the Community may have become blurred in our severely practical age. Opposition Members show a remarkable lack of vision and a remarkable neglect of what is happening in the world if they are pleased about what they regard as Western disunity. Their approach is not merely parochial; it is a blindfold one.
    The realities on which the vision was based—the background of post-war devastation and the wish to drive away the spectre of conflict: in Western Europe, once arid for all—are, if anything, more relevant today than ever before in a world of political and economic uncertainty. The ability to work together in the European Community to deal with our common problems has become riot just a matter of convenience or an optional extra that successive Governments can accept or reject at will. It has become a necessity.
    5.15 pm
    Mr. Laurie Pavitt: I am pleased to follow the Lord Privy Seal. I wish to direct most of my comments towards Foreign Office responsibilities rather than to those of the Minister of Agriculture, Fisheries and Food. I do no propose to deal with all 11 sections and five annexes of the White Paper. I shall concentrate entirely on section II.
    This is the first time since 1972, Mr. Deputy Speaker, that I have sought to catch your eye in a Common Market debate. The House will recall that I am a convinced opponent of Britain's entry to the Common Market. I am a Francophile. I am one of the vice-chairmen of the Franco-British group. I am also a convinced European. I am grateful that this House sends me to the Council of Europe of 21 countries. I would not wish to be a member of the European Parliament in spite of the fact that my bank manager would probably be most pleased with the balance that I would be able to show for services in that direction.
    Since the accession of Britain, I have not spoken on these matters in terms of secession. I was convinced that I did not need to add my pressure. However, I have been watching the situation over the years. One of the saddest

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    aspects of the life of a parliamentarian is the number of times that one can regretfully say "I told you so" about the consequences of Government action. Since our accession, that has been my situation. I have been expecting for some time that the Common Market would drown itself in its lake of wine, kill itself on ascending its mountains of agricultural and other produce or, more likely, choke itself on the miles of documentation which seem to emerge from Brussels. Hon. Members receive a yellow paper once a fortnight. If the documents contained therein were laid end to end I believe that they would reach from Land's End to John o'Groats.
    Among the many reasons why I opposed Britain's accession was my feeling that the Community was not outward looking. It was an inward-looking Community. I should therefore like to draw attention to a paradox with which I think the Lord Privy Seal should deal. I address myself to the political arrangements under which the Common Market, for the first time in a considerable period, has shown itself to be outward looking. I do not criticise what is a move in the right direction by the Community in looking out from its own immediate problems.
    My complaint concerns section II, dealing with the initiative taken last June and followed up last July in the Middle East and the intervention in arrangements that have been proceeding since 1974 to try to solve the Israel-Palestine problem. I believe that the initiative that has been taken is misguided and is likely to be counterproductive to the purposes that the Community, wishes to pursue.
    I support a wider Europe. It will not surprise the House to know that I serve on the health committee of the Council of Europe. It met only a fortnight ago in Israel. One was therefore able to gain an impression, far more than is possible from reading newspaper articles, about how it feels to be an Israeli citizen in the circumstances that have
    The initiative last June by the EEC has not helped but has served to complicate an already complex matter. It is right that the desire for peace should be part of the Common Market's outward-looking political programme, but in a dispute of this kind the nations concerned cannot be seen to be independent of the argument when they have their own interests, particularly the oil of the Middle East. The initiatives ignored reality and sought a blueprint in which was put forward, in the guise of an honest broker, a loaded solution to the difficulties of the countries in the Middle East.
    Israel, Egypt and the United States—the three signatories to the Camp David accord—have all expressed concern, in varying degrees, especially about the Venice declaration clause in connection with PLO participation in future negotiations. The Arab world, too, received the initiative coolly. It says that the declaration initiative does not go far enough. However, although the EEC initiative has made little impact on the parties involved in the Arab-Israel conflict, the British Government continue to argue that the framework set out in the Venice declaration should provide the basis for reviving the Arab-Israel peace initiated at Camp David.
    The White Paper, in chapter 2, focuses attention on the PLO. It is argued that if the PLO were involved in the negotiations the PLO would be bound to recognise Israel, and that would lead to the resolution of the Arab-Israel
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    conflict. There is no evidence for that. It is evident from the recent statements of Foreign Office Ministers that when Lord Carrington takes over the Presidency of the European Council in July the British Government will have an opportunity to upgrade contacts with the PLO. That would be a retrograde step. If a meeting takes place, it will set back even further the peace process in the Middle East.
    The Foreign Office analysis of the Middle East contains certain flaws. First, it says that the Arab-Israel conflict, if resolved, would stabilise the region. I do not agree. That conflict is only one of a multitude of crisis points in the Middle East. Even if that conflict were resolved, many areas of tension would remain, notably the Iran-Iraq war, not to mention Libyan and Soviet ambitions for expansion.
    Muslims are worried about the increasing conflict between two sectarian groups in Islam—the Sunnis and the Shi'ites. That conflict is likely to cause headaches in the Foreign Office during the next decade—just as Northern Ireland has done during the past 10 or 12 years.
    Mr. Roy Hughes: Is not my hon. Friend underestimating the long-standing grievance of the Palestinians? Does he deny them their right to the homeland that they so desire?
    Mr. Pavitt: My hon. Friend is right to draw my attention to the Palestinians. I shall deal with that matter later. However, the PLO is not the only group of Palestinians with a grievance. There are many Palestinians outside the PLO who do not resort to terrorist tactics. I doubt whether the EEC initiative in trying to involve Arafat and the PLO will take us any further forward.
    The Foreign Office assumes that the PLO is prepared to recognise, if the circumstances are right, Israel's right to secure borders—despite about 30 meetings between Foreign Office officials and the PLO, not to mention contact with other European States, and the visits of Gaston Thorn and Mr. van der Klaauw. The PLO even hinted that it would be willing in any circumstances to recognise Israel. To date, no statement of recognition has been issued by any PLO official. A meeting between Lord Carrington and PLO representatives, before any such guarantees were given, would be construed by the PLO as British endorsement of its present position, entrenching even further its refusal to accept Israel's right to exist.
    Mr. Marlow: When will the Israeli Government recognise the Palestinian right to exist?
    Mr. Pavitt: There have been at least five rounds of negotiations since 1974. That right to exist was accepted by Israel in discussions with President Sadat as a long-term view, and was part of the Camp David arrangements agreed between Egypt and Israel.
    There have been five agreements since 1974. There was the agreement between Syria and Israel. In 1975 there was the agreement between Israel and Egypt. Then in 1977 there was the startling and world-shaking meeting between Sadat and Begin. In 1978 there was the Camp David accord. Finally, there was the 1979 treaty beween Egypt and Israel.
    The EEC and Great Britain are not neutral bystanders. The EEC initiative should be rethought because it is unlikely to preserve the kind of peace that we are seeking in that part of the world. I shall quote the words of a man whom I regard as one of the great world statesmen and who

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    may return to power after the election in Israel. I refer to Mr. Abba Eban. He said in a recent speech, after talking of all the changes that had taken place as a result of Camp David, American intervention, and Egypt, and the possibilities of a slow and progressive move towards settling the quite legitimate rights of the Palestinians to have their own country with their own autonomy and a democratic system of government, and not one governed by Mr. Arafat——
    Mr. Roy Hughes: I apologise for intervening, but I know that my hon. Friend is a keen supporter of the United Nations. When he talks about the right of Palestinians to have a state of their own, does he take into consideration the views contained in successive resolutions of the United Nations on the matter?
    Mr. Pavitt: Yes, indeed—especially resolution 242. I could talk on that subject at great length. It may be remembered that I was sacked from my job as PPS in the Foreign Office and my then Foreign Secretary, Michael Stewart, is now in another place.
    Mr. Abba Eban said, in connection with the number of changes that had taken place:
    "What has remained unchanged is the PLO's attitude towards Israel. Not one letter in the PLO's Charter has been altered, on the contrary: at the National Council meeting of the PLO in Damascus all the old tenets and policies have again been confirmed. The PLO stands firm behind its wish to 'eliminate the Zionist entity from the Arab homeland'. This inflexibility in the desire to finish Israel off as an independent Jewish state rules out the PLO and its leader Arafat as partners in any discussion. There too the European Middle-Eastern policy starts from false assumptions."
    I remind the House of the trauma felt by Israel at the time of the Six-Day War. The United Nations peacekeeping force was present, but within 24 hours the guarantees that Israel would not be driven into the sea disappeared and it found itself standing alone. That traumatic experience has deeply embedded itself in Israeli consciousness. It means that any future guarantees must be more effectve. Face-to-face negotiations across a table are more likely to be successful because those principally concerned—the Egyptians, the Israelis and Palestinians in a wider sense—can be assured what will happen.
    I am a member of the United Kingdom all-party group to the Western European Union. The union has been discussing these matters. It passed a resolution requiring that Israel should retain its sovereignty and be given a guarantee. The difficulty over the guarantee is who gives it and who, after the withdrawal of the United Nations in 1967, can give the assurance that it will be worthwhile.
    Sir Ian Gilmour: I agree with the hon. Gentleman about the important experience of 1967, but that was not necessarily a precedent because had Israel allowed or wanted the United Nation forces to be stationed on its side of the border that particular danger would not have arisen.
    Mr. Pavitt: From my reading of the history of that period—and I was then closer to these events than I am now—I believe that there was no such option. The United Nations troops were withdrawn in 24 hours. For seven days there had been a massing of Egyptian artillery. The consequence of that action is that whatever guarantees are given must be copper-bottomed, and whatever happens the outcome must be a negotiated settlement.
    My hon. Friend the Member for Newport (Mr. Hughes) asked about the United Nations. Part of my opposition to
    984
    the Common Market and Britain's membership of it stems from my experience between the wars. Regional associations were shown then not to be a step towards world government. The Axis powers formed regional groups and that killed the League of Nations. When it was most needed it was a dead duck. I would therefore rely on the United Nations rather than on any initiative through the EEC.
    My final point requires me to wear another hat. I am a sponsored member of the Co-operative movement. I have no financial interest, but through that movement I declare the interest of the consumer. I am profoundly concerned at the possible disappearance of the ancient British custom of the morning doorstep delivery of milk. I regret that the Consumers Association response to this issue has been related solely to the price.
    If present agricultural mechanisms continue to apply we shall be drinking UHT milk purchased in packets. It will be a great boon to the supermarkets, in that people will be encouraged to buy the milk in this form as a draw to other spending. Having saved money on the milk, they will spend more on other items. Although on the face of it the housewife may be able to save a penny on a carton of milk over the delivered price, the process threatens to destroy the economics of doorstep delivery. If the volume of milk handled by the delivery dairies falls, their operation will become uneconomic.
    The hon. Member for Flint, West (Sir A. Meyer) was out of the Chamber when I said that I was a Francophile. He knows more about these matters than I do. He understands that milk is a key element in the overall production of Britain's farmers. With the establishment of the Milk Marketing Board it has been possible to have a balanced farm economy in which milk plays its part. If milk is removed from the equation, the inevitable result for the housewife is that all other dairy produce will become dearer as the farmer puts up the prices to compensate for the loss of income from the milk..
    I hope that when this issue comes before the Council of Ministers our Minister will bear in mind that while the method of delivering milk to the doorstep is peculiarly British, that is how we like to proceed. If they are denied that method, Britain's housewives will resent not being able to "pick up a pinta" on the doorstep as they have done in the past 100 years.
    5.36 pm
    Mr. Richard Body: The hon. Member for Brent, South (Mr. Pavitt) has spared me having to make the comment that I almost invariably do in these debates when I follow a Labour Member, to the effect that I agree with every word that has been said. On the first part of his speech I urge him to appreciate that the European Council is primarily concerned with three issues. The first is the withdrawal of Israel from those lands to which no one, least of all someone who supports the efforts of the United Nations, as the hon. Gentleman so warmly does, could claim it has any title. Secondly, the Council has tried to form a reasonable view about the self-determination of the Palestinian people. Thirdly, it has considered the anxious problem arising from the new status of Jerusalem. There can be no prospect of any enduring peace in the Middle East unless those three matters are resolved, and they must be resolved fairly soon.
    Mr. Pavitt: I hasten to agree, but I am more concerned with how they are resolved. The Common Market's approach is wrong. The Camp David approach, involving negotiations, will be the most effective.
    Mr. Body: That remains to be seen. I am willing to throw almost any brick at the Common Market, but on this occasion I do not doubt its intentions. I think that the initiative can be useful, and I pay tribute not to any Head of State in the Community but to the President of Austria for the lead that he has taken in this matter. If we could make the Council of Europe a more effective organisation, which I would dearly wish to see, it would be an infinitely better forum than the so-called European Council.
    On the other point in the hon. Gentleman's speech, he may know that I am a member of the Select Committee on Agriculture. We spent the whole of last year examining the problem of UHT milk. I cannot see how we can exclude it if we are to stay in the Common Market. We have sought to keep it out on two grounds. First, the EEC does not use imperial units. However, now we are going metric we can no longer advance that argument. Secondly, the Government were not satisfied about the hygiene of the processing plants.
    Our Committee, which carried out a most careful examination, was unanimous in its view that there could be no question mark about hygiene. Therefore, we have no valid excuse, as long as we are hooked on the common agricultural policy, for keeping out UHT milk. This will be serious for the delivery of the pint of milk on our doorsteps every day or every other day. The Select Committee had strong evidence that once an appreciable amount of milk is purchased by housewives at supermarkets at perhaps 2p a pint cheaper than they can buy it on the doorstep, the economics of the doorstep delivery will collapse and many areas will no longer have that delivery.
    We were all entranced by my right hon. Friend's peroration. I made a mental note of one phrase when he was speaking of the Western unity that is evolving. As I understand it, Herr Schmidt arranged for his Foreign Secretary to visit Moscow. As a result, it has emerged that Mr. Brezhnev is to visit Bonn on a date to be agreed. It appears that the visit will take place fairly soon. Most of us applaud this initiative. Was there any co-ordination or consultation, or whatever the vogue phrase is in the Foreign Office, among the Heads of State before the initiative was taken by Herr Schmidt in an area that is obviously of incalculable importance to Western Europe?
    The White Paper contains many disappointing paragraphs. Indeed, every paragraph is disappointing. I am more than delighted that my hon. Friend the Member for Flint, West (Sir A. Meyer) is in his place. We remember so well the speeches that he used to make. Is there a single paragraph that my hon. Friend says can justify even the meanest portion of all the propaganda to which we were subjected a few years ago?
    Sir Anthony Meyer: My hon. Friend must not tempt me into making the speech that I hope to make if I succeed in catching the eye of the Chair. As we are constantly hearing about the horrifying balance of trade that we have with the EEC, will my hon. Friend care to read the figures contained in the final annex, which tell us that British trade with the EEC is now in balance?
    Mr. Body: I think that my hon. Friend has been present throughout the debate. He probably heard the right hon. Member for Llanelli (Mr. Davies), who I think understated the position. The right hon. Gentleman should have made it plain that in our trade with the Community in manufactured products—he rightly said that this was the area that would determine whether jobs and factories would survive—we were exporting 28 per cent. more to the Community than we were importing in 1970, before we joined. We are now exporting 11 per cent. less than we are importing. That is an enormous difference.
    I do not want to be unfair to my hon. Friend, but how many jobs are being lost on Merseyside, an area that he knows only too well, and how many factories are being closed as a result of the grave deterioration in our trading relationship with the Community? The hon. Member for Wrexham (Mr. Ellis) referred to a siege economy. Does anyone suggest that we had a siege economy in 1970, or that we were trading unfairly with the rest of the Common Market at that time?
    Some hon. Members—at the moment the majority of those in the Chamber—would dearly like to go back to the trading conditions that we had in the 1970s. If that were possible we might have fewer people in the jobcentres queueing for work.
    There is one paragraph in the White Paper that is especially disappointing to tens of thousands of extremely poor people in Third world countries. I refer to paragraph 4.6, headed "Sugar and Isoglucose". In July 1980 the Council of Ministers agreed to authorise negotiations for the EEC to join the International Sugar Organisation. Some of us said "About time too". Every other country and trading group has joined it. Soviet Russia has joined it. The USSR is not a sugar exporter but it is peddling the tale to Third countries that it is more interested in their welfare than is the EEC, and its ambassadors and its trade missions are making that point with some success. I hope that those in the Foreign Office who are concerned with containing Communism will bear in mind the importance of the issue, especially when so many sugar producing countries are in strategic positions of great value to the expansion of Soviet Russia.
    To join the International Sugar Organisation means subscribing to the International Sugar Agreement. That in turn means that the EEC will have to stop its practice of dumping vast quantities of sugar on to the world market in such a way as to depress the price for sugar that is available for tens of thousands of very poor people.
    Sugar consumption in the Common Market is now static. It is about 9½ million tonnes a year. Under the Lomé convention we are bound to import 1·3 million tonnes from a number of Third world countries. That means that sugar production within the Common Market should be no more than 8·2 million tonnes. Any surplus has to go on to the world market at a dumped price, yet sugar production in the Common Market is likely to approach about 12 million tonnes this year. Therefore, we can be certain that about 3 million tonnes will be put on to the world market at a dumped price by the EEC. Every ounce of that sugar will undercut the sugar produced by Third world countries, together with a limited amount from Brazil and Austria.
    The 1·3 million tonnes that comes in under the Lomé convention is only half of that which the ACP countries must export to gain the foreign exchange that they need.
    If they are to maintain their standard of living, woeful though it is, they must export, at a reasonable price,

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    another 1·3 million tonnes. It is impossible for them to have that market if the Community persists in putting on to the world market such a vast quantity of sugar, as it has in recent years, and as it is likely to do again this year.
    The Council of Ministers will consider that matter in the course of the year. No doubt it will say, as it has said so often, that those countries in the Third world should grow something else. There are a number of reasons why it is not feasible for those countries to do so. Cane sugar is one of the few crops in the tropics that can be grown on the same soil for 50 years or more without the yields declining. The experts who have seen the problem cannot think of any other crop that can be grown as successfully as sugar cane in those circumstances. Every other crop has been considered. A queue of experts has gone out to the Third world to conduct experiments with other crops, yet each in turn has come back with the knowledge that there is no substitute for sugar in those countries.
    Almost without exception, the tropical countries, which grow sugar at a reasonable price, are in danger of having hurricanes and cyclones at regular intervals. Those will devastate any other crop. Last summer I was in what was said to be the worst hurricane in living memory in the West Indies. The day after, I saw houses and property which were appallingly devastated. However, when I went round the plantations I saw the sugar cane that had survived and that had hardly been damaged. The banana crop was gone for the year. Tomatoes and all the other alternative crops were destroyed, but the sugar cane survived. Even when the hurricane or cyclone strikes when the crop is nearly ready, unless the cane is split altogether the crop can still be harvested. That was so in Mauritius recently, when 45 per cent. of the crop was harvested, although the people had endured one of the worst cyclones in their history. Therefore, the climate is such in those countries that no other crop can be grown. I hope that that point will be argued on their behalf by someone who is their only spokesman in the Council of Ministers—the representative from this country.
    May I put forward two other arguments to my right hon. Friend in the hope that they will not be forgotten by those who argue the case? The growing, harvesting and milling of the cane sugar can be mechanised. However, in most of the Third world countries, this has not been done. The Governments of those countries take active steps to prevent mechanisation so that tens of thousands still have a job. Those jobs would be lost if the industry were to be mechanised, as it is in Australia. In a word, the sugar industry is labour-intensive. In those countries no other crop could provide as many jobs as in the sugar industry.
    We know why there are so many tens of thousands of people in those countries. Islands such as Jamaica, Barbados and Mauritus were scarcely inhabited when our forebears chose to take them over. The inhabitants at that time have long since disappeared. In their place came hundreds of thousands of slaves and indentured servants. We know that too well. But it is not ancient history. I think that I know how old my right hon. Friend the Lord Privy Seal is. It was in his lifetime that those indentured servants were still being taken to places such as Fiji and Mauritius.
    Our moral responsibility is not an ancient one to be written off. It is one of this century and of the lifetime of many of us. It will not be good enough to wash our hands of that responsibility. In this century we are doing as much as we did in the last century to people in those islands so that we might have sugar at a price cheaper than that at
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    which any other Western country could obtain it. I know that my right hon. Friend the Lord Privy Seal will not overlook that moral responsibility.
    The Lord Privy Seal is a kindly man. I hope that he will not mind my saying that I remember that more than 30 years ago he used to argue with great conviction on behalf of people whose fortunes were not of the happiest, in magistrates' courts in the poorest parts of London. I dearly wish that some sort of concern could be expressed on behalf of those tens of thousands of people who are now in danger of losing their livelihoods if the EEC goes on dumping such vast quantities of sugar in such a cruel way. It dumps twice as much on the world market as the amount which the Third world countries must get on the world market—apart from the Lomé convention—at a reasonable price to secure their standard of living, which is in any case pretty deplorable.
    I visited Australia, another sugar-producing country, about three weeks ago. I was appalled to see that farmers there, who can produce sugar much more cheaply than anywhere else in the world, have a standard of living which farm workers in my constituency would not tolerate. I visited a number of farmers' homes and saw farmers with 100 or 200 acres of well-farmed land. Their homes appeared to have no recently manufactured furniture. Any car outside seemed to be an elderly model. Judging by their clothes and their possessions generally, their standard of living was more than modest. I hope that I am not using unkind words about my hosts.
    However, those farmers had sizeable acreages. They had invested their all, yet they were not living as they should live. Adjoining vacant land, which could grow wheat at half the price at which we could produce it, was available for sale at £200 an acre. Other land which could no longer grow wheat had to go over to cotton and other commodities in order to secure an outlet. Above all, some of the dairy farmers had been driven out of business.
    The Prime Minister of Australia has said that one-third of Australia's dairy farmers have been driven out of farming because of the EEC dumping butter and dairy products on to the world market. Australian farmers are among the most efficient in the world, but they cannot compete in those circumstances.
    The people who support the CAP because they believe that the world is growing short of food should appreciate that there need be no shortage. Only 44 per cent. of the world's arable land is being cultivated, and the remainder will never be brought into production unless those who will cultivate it can expect a reasonable return. I do not want to take the Lord Privy Seal to task, but he is mistaken in saying that the opportunities for getting cheaper food from the rest of the world have gone and only small quantities are available. That is nonsense, when many farmers have gone out of business because they cannot find a market for their produce. If farmers can be assured of an outlet, they will produce the food. As long as they are denied an outlet their production will contract and they will grow less and less food, as is only too visible when one visits Australia and other countries that grow food much more cheaply than, I regret to say, our partners across the Channel.
    I also visited Mauritius recently, and was sad to see how many Russian diplomats were there. Similar overture s are made by Russia and her satellites to all the countries with which we have cut our trade. If we do not buy the food that they produce they will sell it to the Russians. When

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    those markets are opened to the Russians it is not only trade missions that move in, as my right hon. Friend knows. Apart from the morality and economics of the situation, I hope that the Foreign Office will understand the strategic importance of the sugar-producing countries and play fair with them.
    We must ensure that the EEC acts honourably, subscribes to the International Sugar Agreement and stops the despicable practice of making poor people still poorer.
    6.3 pm
    Mr. Russell Johnston: It is my lot to follow the hon. Member for Holland with Boston (Mr. Body) for the second time in debates of this sort. I am deprived of the pleasure of saying that I agree with every word that he said, but I agree with most of his criticisms over the sugar problem, although I make no claim to be as knowledgeable about it as he is. However, it would be wrong to proceed from criticising a particular EEC policy to arguing that the Community, per se, is unacceptable. Criticism of one aspect of an institution should not undermine its whole concept.
    The hon. Gentleman suggests that because Australian farmers are efficient and can produce food more cheaply they should be allowed to do so, but he should realise that that suggestion has repercussions not only for our Continental colleagues but for our domestic agriculture. I see him nodding.
    Unfortunately, these debates are tending to rehearse arguments about membership instead of examining how progress can be made. That was exemplified by the right hon. Member for Llanelli (Mr. Davies) in his remarks on the CAP, when he said that the best reform would be to dismantle it. That is a point of view, but his speech was depressing, because it was arid, cold, lacking in forward projection and without a single positive idea. If he is suggesting that we should get out of the Community because it is causing us devastating damage, what is the promised land that he proposes as an alternative? He did not even faintly sketch an alternative scenario. That is the weakness in the stand taken by the official Opposition.
    We on the Liberal Bench believe that withdrawal from the Community would do profound political and economic damage to this country and to the Western Alliance. The Polish situation throws into relief the threat from the East, and we are still far from clear about the direction of the American Administration, so it is mad to contemplate weakening our ties with our natural allies—and if it is suggested that the other countries in Western Europe are not our natural allies, who are?
    Trade figures are usually rehearsed in these debates, although this time we have not gone through the well-founded argument, which pro-Marketeers sometimes forget, that oil exports are thrown into the balance. Our trade balance with the other EEC countries is unsatisfactory, but objective commentators accept that the pattern of Britain's industrial decline was well established before we entered the Community. It is unfair to suggest a causal relationship. The question is whether the opportunity to pull out of the decline is greater inside or outside the Community.
    Mr. Austin Mitchell: In 1979 our deficit in manufactured trade with the Six was £4,000 million and
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    our surplus with the remainder of the world was £5,900 million, so we are financing a deficit with the EEC out of the surplus that we are still having to run with the remainder of the world. That is the essential pattern.
    Mr. Johnston: Our export market with the Community is growing, but our export market with the remainder of the world is declining. The hon. Member for Holland with Boston said that we should go back to the halcyon days of 1970. I am surprised that he did not suggest returning to the situation in 1870, when our trade position was much better. We cannot go back. The hon. Gentleman is a natural-born free trader, and is not in favour of barriers, but there would be no point in coming out of the Community unless we put up trade barriers—even moderate ones—to prevent an inflow of manufactured goods from the Community.
    Mr. Body: I do not want to go too far into history, but surely in 1846 the Liberal Party was urging precisely that in seeking to repeal the Corn Laws.
    Mr. Johnston: Perhaps we should leave that before we go even further back into history.
    The right hon. Member for Llanelli asked what was wrong with the juste retour. We have been through that many times in the past decade, and it is sad to hear that question asked in the House. What is wrong with it is the point made by the hon. Member for Southampton, Test (Mr. Hill), in his intervention. One will never achieve any kind of wealth distribution throughout the Community if one adheres to the juste retour. The logical consequence of the hon. Gentleman's argument is that if one wants redistribution of wealth there must be an extension of the regional and social funds.
    I cannot see how successful political enlargement—by which I mean the accession not only of Greece but of Portugal and Spain—will be possible unless there is also some budgetary enlargement. Like other hon. Members, I have visited all three countries and discussed what they hope will be the consequences of membership. Their economic expectations cannot be met within the Community's present budgetary restraints. Nor do I see how the Community can make any progress towards economic convergence and wealth redistribution without contemplating budgetary extension. The Lord Privy Seal re-emphasised that that was not the policy of the Government. I see no possibility of progress unless the Government, as well as Mr. Schmidt and President Giscard d'Estaing, change their minds on that.
    On the common agricultural policy, it is sadly true that the Community is, as it were, going sour on milk. One should not overlook the security of supply that the CAP has developed and the agricultural revolution that it has achieved in the original Six. It is an incontestable fact, however, that its budgetary effect has been gravely disadvantageous to this country. Nevertheless, the problem is much more specifically a commodity problem than a general problem of the basis or principles of the policy itself.
    If one asks the Government, as I do occasionally at Question Time and at other times, what they intend to do in the Community, the usual answer nowadays is to refer one to the Foreign Secretary's speech in Hamburg. One is told that the text is available in the Library and that one will find all the answers there. I do not deny that it was a good speech. But a speech is neither a strategy nor a set

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    of proposals. The Lord Privy Seal said earlier that the Government wished to see the Community greatly strengthened. How do they intend to do that? I shall put four questions to the right hon. Gentleman.
    First, what are the Government's financial proposals? Given the status quo, I believe that there is little argument, even between pro- and anti-Marketeers, about the urgent need for the removal of barriers to invisible trade and of non-tariff harriers to trade within the Community. Both those factors operate to the disadvantage of this country. Their removal would be wholly within the spirit of the Treaty of Rome and the competition policy. What are the Government's views on that aspect?
    If the Lord Privy Seal mentioned the terrible term "EMS", he did not do so very loudly, and it slipped past me. Have the Government taken their thinking any further forward on that aspect?
    Secondly, how do the Government see the future of Community regional, social and industrial policy? We know that the existing regional policy is a sham. I say that as a pro-Marketeer. I remember the time when everyone was excited about the regional fund. I remember the work put into it by George Thomson when he was our first Commissioner, and the idealism at that time. All that has gone. It is an absolute sham, when it could be very much otherwise. Again, however, if it is to be otherwise, it will require acceptance of budgetary extension.
    There is no reason why a regional employment premium should not be introduced, for example. Members on the Opposition Benches frequently—and Conservative Members occasionally—regret the disappearance of the regional employment premium in this country. I should have thought that there could be no objection in principle to such a development on a Community-wide basis.
    Thirdly, what developments do the Government wish to see on the energy front? Section IX, on page 27 of the White Paper, is entitled "Energy", but that one page does not tell us much. It certainly tells us nothing about the future.
    I ask two simple questions on this. First, are the Government talking to other Governments about Britain's being willing to give priority assurances on oil supply in any crisis situation? It is comforting to know that one's friends may be depended upon if anything goes wrong. We all remember what happened to the Dutch the last time they fell out with the Arabs. Secondly, are the Government satisfied with EEC expenditure on research in two important areas? One is in nuclear safety. I am not against nuclear power, but I accept that many people have reasonable reservations about safety and believe that insufficient attention has been paid to it. It is an expensive and complicated business, and typical of the kind of business that is better carried out by the Community as a whole with more concentrated resources. The same applies to the search for alternative energy resources.
    Mr. Dykes: Has the hon. Gentleman considered the idea of a levy on oil imported into the Community? The United Kingdom would benefit through having its own oil and not having to pay the levy. For the others, it would mean a marginal percentage, so as not to deter, on the gross price of a barrel of oil, but it would provide a useful additional source of revenue to the total Community budget in the long term.
    Mr. Johnston: That proposal is certainly worth considering.
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    My final point is, I know, close to the heart of the Lord Privy Seal. He is on record on many occasions as speaking of the need for an effective mechanism to develop political co-operation. How successful has he been in persuading our Community partners to develop, for example, a permanent Secretariat for the Council? Again, speaking personally, I reject the view now very fashionable among hon. Members, that economic and political problems are best solved by increased nationalism. The root of their rejection of the Community is the belief that we cannot solve problems in co-operation with others, but only through our solution alone. They are therefore not prepared to consider negotiation. Sad to say, not since the pressure exerted for the creation of the regional fund have any British Government taken a significant initiative within the Community. The White Paper gives no hint that the Government are considering embarking upon one now.
    The White Paper is laid before us at a time of general recession, when incipient nationalism in the Community is growing. I have often said that if Germany behaved with the same degree of nationalism as do Britain and France, Europe would be in grave danger. The Lord Privy Seal is a civilised, reasonable and almost benign man, and I understand that he will be responding to the debate. However, I must say that the White Paper does not give a hint that the Government intend to proceed in Europe with the urgency that is required.
    6.20 pm
    Mr. Maurice Macmillan: The debate so far has been mostly about the internal affairs of the Community. The problems are real and important. We have gone over them before. Some of my more expert hon. Friends have dealt thoroughly with the details of those problems today.
    My right hon. Friend the Lord Privy Seal touched on political co-operation, as did the hon. Member for Inverness (Mr. Johnston). I agreed with much of what he said. The hon. Member for Brent, South (Mr. Pavitt) also referred to political co-operation. However, he dealt with a specific political problem facing the countries of the Community and the Community as a whole rather than the general matters referred to by the hon. Member for Inverness.
    Listening to the debate, as to previous debates, I got the feeling that, important though the issues were, they arose only because of the member States' failure to co-operate and the Community's fundamental political and economic weakness in the world.
    If we want evidence, a startling fact is that the countries of Western Europe are now no longer able to pay for their own defence. They certainly cannot pay for their own nuclear defence, and they are no longer able to defend themselves with their own armies, navies, air forces and weapons, even on the conventional front.
    That seems to be the background against which the debate should be conducted, stating, as it does, the fundamental fact that the Community apparently does not have the will to exist as an independent, or potentially independent, entity in the political world.
    I am not suggesting that it will be desirable or possible for the Community to withdraw from NATO or to regard itself as equivalent in strength to the greater Powers, but it should be a modest target to develop our own resources to make a contribution slightly more geared to our potential wealth.

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    I wish to concentrate on the Community's external political and economic policies, to put forward some ideas, and to hear from my right hon. Friend how he thinks the Community's position in, the world can be strengthened.
    The White Paper, in paragraph 5.1, under the heading
    "Section V: Economic, Monetary and Budgetary Questions",
    states:
    "The European Council … reviewed the operation of the European Monetary System and decided that further development, including the creation of a European Monetary Fund, should be undertaken at an appropriate time."
    I am moderately glad to hear that, but it does not seem to recognise the urgency of some of the monetary and exchange problems that affect Europe, or some of the basic economic problems that face the Western world. Both the Community and the Western world as a whole are in a classic slump. I think that the Communist world is rather worse off, but for somewhat different reasons.
    Savings within this country, Europe and the world are high, and possibly still on the increase, yet investment is low, and possibly still declining. That is one of the root causes of the world's difficulties. In my view at least it stems largely from the fact that the increasing price of oil means that the greater part of our loose resources are flowing to the Arabs, who are not investing them in manufacturing industry or in the Third World, where they have at least as great an interest as Europe.
    I am sure that my right hon. Friend will say that the problem requires a wider solution than that which Europe alone can provide. Of course it does. We need a solution based at least on the OECD, and better an even wider one including Japan, but if the European Economic Community means anything it should be trying to take the first step on its own. Must we always wait to do something that could be useful? Must we always wait to try to persuade others to do something that we think will be still more useful? Could not Europe, on occasion, make a start and try to persuade others to follow?
    I think that the European monetary fund could be developed into a genuine European bank, which could be developed even more as a true bank than the World Bank. We must have some mechanism by which the vast amounts being earned by the OPEC countries can be rechannelled into investment in the developing and manufacturing countries. We need a mechanism of that kind to deal effectively with investment in the Third world, including the raw material producers, and with some of the dangerous implications of Europe's trade with Iron Curtain countries.
    I should like my right hon. Friend to comment on the potential dangers to Western Europe and the EEC of the current situation in Poland, not so much militarily or politically as economically. I understand that Poland's debt to other Governments is more than $20 billion. In addition, Poland is heavily indebted for its current balance of payments to private sector banks in Europe—especially in Western Germany. If Poland's difficulties take too long to resolve, what effect will its economic position have on the Community and what organisation has the Community to deal with it? The answer to the last point is "None". If the dangers that I have suggested are real, we need something more than an undertaking to do something "at an appropriate time", because that is very vague,
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    Also, we in Western Europe, in the Community, have been bedevilled for some time now by problems of rapidly changing rates of exchange—a sort of post-Bretton-Woods situation, in which there is no coherence in the fluctuation of exchange rates in relation to each other. I fully accept that an ultimate solution has to be found which is wider than purely European, but if we had a European Bank we might start an initiative that would attempt to bring about a certain degree of coherence in exchange rates.
    I know that we have the EMS. I am one of those who think that the British Government could take a step in this direction by joining the system. I do not think that it is very satisfactory for us, but I do not see how we can urge another system on our partners within Europe until we at least try to make some sense of this one. I do not like a basket of currencies. As somebody once said, if a basket is filled with different kinds of rotten fruit, all the fruit remains rotten whatever combination there is in the basket. The difficulty is that we have no standard against which to measure currencies—no true link with reality. However the situation is organised, in purely monetary terms it will not, in the end, prove very effective.
    I am not one of those who believe that it is possible to reforge the link with gold; nor do I think that a gold exchange standard is really workable. But I believe that it should be possible to devise a system of stabilising currencies against an agreed measure of the price of manufactured goods or the price of raw materials, or a combination of the two. Indeed, in about 1973 some work was done within Europe on these lines, the Dutch notably making a very significant contribution.
    Paragraph 2·9 of the White Paper refers to a rather slow approach to a better mechanism for achieving political unity. Incidentally, the speech of the hon. Member for Brent, South illustrated the need for a more coherent organisation in order to obtain a policy with some sort of overall identified purpose, rather than one that relied on a whole series of ad hoc approaches to different political problems.
    Many years ago I was a rather incompetent amateur soldier, but I was taught one thing that I have always remembered. It is not possible to decide what objectives have to be captured in the course of an operation until it is decided precisely what the object of that operation is. Many good ideas come to nothing because of confusion between the interim objectives and the overall object.
    I ask Her Majesty's Government to push rather harder than they have so far—despite the admirable speech in Hamburg of my right hon. and noble Friend the Secretary of State for Foreign and Commonwealth Affairs—to achieve some sort of organisation for working out a clear intention in general before acting in particular cases. This implies a somewhat more coherent approach to defence problems and to NATO, as indeed it does to the need for greater economic effort and co-operation. It still seems ridiculous to me, from a political, defence and, indeed, economic point of view that the countries of Western Europe should be using weapons that cannot even use one another's ammunition. That is absurd. Nor do I believe that the Community can seek to be taken seriously as a political force until its members have shown that they are willing to work together more closely within NATO on the defence side.
    As a sideline, I wish that a little more study could be carried out within the Community of the likely economic

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    effect on this world slump situation of trying to improve our capacity to defend ourselves and our own procurement of weapons, transport, and so on.
    Looking back, I think it is fair to say that when the then President of the United States, Mr. Roosevelt, started his New Deal, a major contributory factor to its success was the rearmament programme that was undertaken at about the same time. That is something that we ought to look at not only within the United Kingdom but collectively within the Community, in case it might have much the same effect.
    In making these few points I have been concerned solely with one overriding consideration, namely, the strength and position of the Community in the world—its political strength, its overall economic strength, and its capacity to act as a serious ally within NATO, including the provision of such help and support as has to be given to our allies outside the NATO area. I hope that when he winds up the debate my right hon. Friend will give the House reassurance on these points, which to me at least are very worrying indeed.
    6.37 pm
    Mr. Robert Maclennan: When I entered the Chamber at the beginning of this debate my heart went out to the Lord Privy Seal. When I realised who was likely to participate in it, I sensed that he must have felt that he had been here before. Those who are apt to participate are apt to make the same points, and today's debate has proved not altogether exceptional in that respect, although I must say that the speech of the right hon. Member for Farnham (Mr. Macmillan) focused on some of the issues that are particularly pressing at the present time. I am happy to follow him, because he has made my task of speaking in this debate much lighter, as many of the points that he made were on matters to which I intended to address myself.
    The difficulty that we face in viewing our place in the European Community is that the perception of the British people of the Community is very different from that of those who are outside the Community. I think that we often underestimate the enormous capacity of the Community to inflict damage, and even more its capacity to intervene powerfully to assist the countries of the world in facing some of the acute political and economic difficulties that characterise our present situation.
    Those who attend any of the sessions of the United Nations bodies are made aware of the powerful impact of the collective voice of members of the European Community upon their debates. In the corridors, when discussions of trade policy are taking place, one realises what enormous power the Community has, although it does not always choose to exercise it collectively.
    I share with the right hon. Member for Farnham a sense of disappointment that at this time, perhaps one of the most dangerous in the post-war period, there is not a clearer sense of direction coming from the Community, and perhaps from the Government, on the development of our Community role in the world.
    The right hon. Member spoke of three issues to which I want briefly to draw attention. Some of them were also touched on by the hon. Member for Inverness (Mr. Johnston).
    The instability that we face because of the world slump is not being assisted by a coherent response from the European Community. The Government have not made
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    clear how they can use our membership of the Community to come to terms with issues that are perceived as problems. They have not made clear whether they see for Europe a role in tackling the recycling of oil surpluses. Of course, that problem will have to be tackled in another forum as well, and other members of the OECD should be involved in these issues, but within the Community we are in a position to take a lead, to co-ordinate our views and to seek to effect some of the recommendations which, for example, have come from the Brandt Commission. There is not a great deal about this in the White Paper—indeed, there is nothing about it—allthough I suspect that the Lord Privy Seal will acknowledge that it is not beyond the competence of the European Community to come to terms with this issue.
    The White Paper suggests a vague commitment to further development of the European monetary system. There will undoubtedly be differences of view within the Council of Ministers on what that development should be, and the White Paper perhaps cannot sufficiently spell out the position of member Governments on the issue—that is not its purpose. This debate provides the Government with an opportunity to state their view on what further development there might be and the time scale that they have in mind for the creation of a European monetary fund. The White Paper speaks of "an appropriate time". Perhaps the Lord Privy Seal will tell us what the Government think is the appropriate time.
    The contribution of the right hon. Member for Llanelli (Mr. Davies) was focused, as his contributions tend to be, not on the wider question of the capacity of the Community to influence the development of arguments in world forums but on the impact of particular European policies on specific parts of the British economy. I thought that the right hon. Gentleman's speech was more than usually empty, not only because it was to some extent repetitive but because it sought to make rather arid debating points.
    In his line of argument on the common fisheries policy the right hon. Gentleman seemed to be more concerned with demonstrating the truth of an assertion that he had made some months ago that there was a link between the settlement of the fisheries policy and the settlement of the budgetary differences than with obtaining a settlement of the common fisheries policy that is in the interests of British fishing. He posed briefly as the friend of Helmut Schmidt, an astonishing posture for one who is interested in the future of Britain's fishing industry.
    I was not clear whether the right hon. Gentleman was suggesting that the British Government should have acceded to German pressure for the settlement of the dispute with Canada in December. The British fishing industry would not have been at all satisfied if the Government had made that concession. The unwillingness of the Government to accept a part of the package in December cannot properly be thrown at them as a criticism.
    Mr. Austin Mitchell: My right hon. Friend the Member for Llanelli (Mr. Davies) did not say that. The hon. Gentleman should not put words into the mouth of my right hon. Friend. That is not what he said.
    Mr. Maclennan: I did not suggest that it was what he said. I said that it was the clear implication of what he said. The clear implication was that the British Government, in

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    not acceding to Helmut Schmidt's request in December, were acting in bad faith in their dealings with him. The Government could have acceded to Helmut Schmidt's request only if they had sold out. The right hon. Gentleman cannot ride those two horses at the same time. That is the sort of argument that he constantly produces.
    Mr. Roland Moyle: My right hon. Friend the Member for Llanelli (Mr. Davies) is not here to defend himself. The clear implication of my right hon. Friend's remarks was that the relationship that Britain has with her Continental partners will inevitably lead to bad blood and enmity. In talking about the fishery dispute and its resolution the hon. Member for Caithness and Sutherland (Mr. Maclennan) is missing the point.
    Mr. Maclennan: I thought that it was the right hon. Member for Llanelli who was missing the point. He was trying to score a debating point at the expense of the Lord Privy Seal and the Government. I thought that he was doing so at the expense of the interest that this country has in a united, bipartisan approach to the resolution of our dispute with the Community about the shape of the fisheries policy.
    I do not propose to follow the line taken by the right hon. Member for Llanelli in going through the long list of disagreements that exist between ourselves and certain Member countries of the Community on particular topics. That is perhaps better confined to discussions on specific issues. A debate of this kind allows us to take a broader view of the issues involved in the development of the European Community.
    If there is one major disagreement between myself and right hon. Members who speak for the official Opposition about Europe, it is that they have the most selective memories. They seem like men who have suffered a motor cycle accident and have lost their memories about the years when they served in Government. It is almost as if things had never happened. It is as if for the bulk of the time that we have been full members of the EEC they were not personally and ministerially responsible for many of the matters on which they now take such a strong line. Not only are they unwilling to acknowledge the difficulties that confronted them as Ministers and led none of them—not even the right hon. Member for Bristol, South-East (Mr. Benn)—to resign his portfolio, they fail to acknowledge that those problems are still with us. These problems will be resolved only by the step-by-step approach that they espoused when they were Ministers. They were ready to trumpet their small steps in the House.
    I accept what the Lord Privy Seal said, particularly when he spoke about the CAP. Successive Labour Ministers of Agriculture, Fisheries and Food had much less to trumpet about when they came back from price fixings with the EEC.
    Mr. Jay: Is not the hon. Gentleman's selective memory overlooking the fact that in 1971 the Conservative Party signed the Treaty of Accession, which has limited the actions of every Government and which began all our troubles?
    Mr. Maclennan: The right hon. Gentleman's memory seems to overlook the renegotiation of terms, in which Labour Ministers participated. When the issue was put to
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    the British people in the referendum it was not suggested that such matters could not be taken further. Today's leaders of the Opposition said then that what had been achieved was acceptable and should be accepted. Those same people now argue that the impossible can be achieved within the short space of time that elapses between these six-monthly debates.
    Mr. Jay rose——
    Mr. Maclennan: I have already given way to the right hon. Gentleman.
    Mr. Dan Jones: Will the hon. gentleman give way to me?
    Mr. Maclennan: Yes.
    Mr. Dan Jones: I worked for my right hon. Friend when he was president of the Board of Trade and a member of the Government. During that period he was against the EEC.
    Mr. Maclennan: I have the highest regard for the honour of the right hon. Member for Battersea, North (Mr. Jay) on this matter. I yield to none in my admiration for his consistency. However, it is not mirrored by many of his right hon. and hon. Friends, who have remained members of successive Labour Governments.
    Mr. Dan Jones: I did not say that.
    Mr. Maclennan: I acknowledge that. The right hon. Member for Battersea, North has a proud record of coherence on this issue. There is a damaging tendency—which has been greatly fostered by some of those who have consistently opposed our membership of the EEC—to attribute post-1973 events to our membership of the EEC. It is a pure coincidence of time and history that 1973 also saw the beginning of a world crisis, which was caused by factors external to the Community. The oil crisis in the Middle East had a disastrous effect on the world economy. It was coincidental with our membership of the Community.
    It will not do for hon. Members consistently to support the post hoc ergo propter hoc fallacy in relation to Europe. Our membership of the EEC is damaged by constant shifts in position, which are undertaken, in particular, by the Labour Party. We shall not secure the full benefits of membership if our adherence to the Community is constantly debated. Nor shall we secure the full benefits of membership if we leave ourselves open to the criticisms to which the Lord Privy Seal—with his typical, skilful diplomacy—referred in general terms.
    The Opposition are not coherent about what they would do if, by some mischance, they were once again to form the Government.
    Mr. Austin Mitchell: Nice.
    Mr. Maclennan: It is not nice. It is far from nice.
    Mr. Mitchell rose——
    Mr. Maclennan: I shall not give way, because the hon. Gentleman made a silly remark
    Mr. Mitchell rose;——
    Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The hon. Member for Caithness and Sutherland (Mr. Maclennan) is obviously not giving way.
    Mr. Maclennan: It is not nice that the British people should be in such doubt about what a major party, as represented in the House, would do if it were to enter office.
    Mr. Mitchell rose——
    Mr. Maclennan: It is not nice that people do not know whether Britain will be withdrawn from the EEC without consulting them in line with the resolutions passed at the Labour Party conference. It is not nice that people do not know whether the Labour Party's policy is to repeal the European Communities Act and put ourselves in breach of our Treaty obligations. It is not nice that the British people should be left in a state of complete uncertainty. Nor is that nice for our European allies and Community friends.
    The truth is that there is a wide spectrum of views within the official Opposition, which they cannot reconcile. As a result, the Opposition Front Bench produces nit-picking arguments that are wholly destructive in intent. They are directed solely at the minutiae of the disagreements—[Interruption.] It has led them to such forgetfulness that they overlook the fact that at meetings of the Council of Agriculture Ministers, Labour Ministers accepted the introduction of the co-responsibility levy. The right hon. Member for Llanelli used that set-piece to beat the Lord Privy Seal round the head. That is political opportunism of the worst type. It does not go unnoticed by the public. Such political opportunism has led many people to become disenchanted with a party that was once proud to speak in more principled terms about some of the great issues to which membership of the EEC gives rise.
    7 pm
    Mr. Hugh Dykes: I agree with much of what the hon. Member for Caithness and Sutherland (Mr. Maclennan) said about the Community and the strong and valid arguments in favour of our membership. I also agreed with virtually everything said by my right hon. Friend the Member for Farnham (Mr. Macmillan). He made a far-sighted and constructive speech, which took the debate substantially away from the routine parameters in which we constantly find ourselves.
    We had an enormously depressing and lugubrious opening speech from the right hon. Member for Llanelli (Mr. Davies), who, in his characteristic way, summed up the totally negative and defeatist attitude not only of the official Labour Opposition but of the Labour Party as a whole to our membership of the Community. To many people it is utterly depressing that this is the only member State in which this silly, nonsensical, fundamentalist debate still goes on. [HON. MEMBERS: "Denmark?"] I hesitate to dwell on the Danish situation at too great a length, because it is extremely complicated. To some extent that is a special situation. Instead, I qualify my remarks by saying that in the main member States—the Big Four—and in most of the other member States, no such debate exists.
    It is interesting to notice that by and large, but with some dissident voices—for example, the small Labour Party, which no doubt is a noticeable similarity—Ireland, which is only a small country, has been enthusiastic about its membership of the Community.
    Mr. Marlow: It is on the gravy train.
    Mr. Dykes: I want to see in Britain the inculcation of the original enthusiasm for the Community, which took us in and which was later endorsed by a two-thirds majority in the Labour Government's referendum.
    The right hon. Member for Llanelli is a principal financial spokesman for the Labour Party. The House cannot listen to what he has to say, because no one can rely on any of his statistics. He has still not adequately explained why he made the gross error of saying that 25 per cent. of the French population lived on the land, whereas the real figure is 9 per cent. A margin of error of 3 per cent. would be generous, and an estimate of between 6 per cent. and 12 per cent. might be allowable by a tolerant House of Commons; but an estimate of 25 per cent. means that one of the Opposition's principal spokesmen has produced statistics that amount to fantasy and imagination, and are not based on real facts. Therefore, no one will be able to listen closely to any of his other arguments about the Community.
    I was also depressed by what the hon. Member for Brent, South (Mr. Pavitt) said about milk distribution. It is contradictory for hon. Members to argue that the Community is heinous because it produces dearer food products and at the same to say that it is all right for British doorstep milk to be dearer, because it is a special case. There is a built-in contradiction in that argument. We wish to develop free trade within the Community on all sorts of items, yet some hon. Members complain that we do not have free trade in food products. Surely we should have free trade in milk-related products as well. The greater competition that will result in allowing in milk from all sources, including France, will give the housewife and other consumers a greater choice. Surely that is preferable to inflicting a monopoly system of distribution upon them and saying "That is all you can have".
    It was particularly offensive of my hon. Friend the Member for Holland with Boston (Mr. Body) to refer to foreign milk as positively unhygienic. It is true that at present French milk does not conform to our existing health regulations, but according to the French newspapers France plans to take Britain to the European Court to have the matter re-examined, and the Court may well uphold the French case. It is silly to be offensive in that way about other member States. Once we start being offensive they will be more offensive, we shall retaliate, and the whole furore of dangerous nationalism will build up, just as it has in previous decades. I do not want to see that happen.
    Britain has always been internationalist in its nature. We changed the orientation of our internationalism by entering the Community in 1973. I wish that new, modern internationalism and Europeanism to continue, for the benefit of future generations.
    I agree with other hon. Members that few positive, enthusiastic signs emerge from the White Paper. It is a catalogue of what is now taking place, but there seems to be very little progress on important issues. There is now an overriding requirement for real co-operation between member States. We must take the Community forward against a background of 8 million unemployed in the Community—particularly youth unemployed—and the need for substantial new industries to be developed. The Community still has scarcely any coherent industrial policy. Those are the urgent requirements of the member States, working together in positive co-operation and friendship, and we should riot be ashamed to say that.

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    Nothing is sillier than to say that foreigners always try to do us down and that anything that we say is right and anything that they say is wrong. I was struck by the words of the German Chancellor, Herr Schmidt, who said at the weekend that everyone in the Community had to act as positive double agents—agents for their own country's essential interests and agents for the Community's interests as well. That is why it is important for the member States to find a solution to the fisheries dispute as quickly as possible.
    I feel that last week's agriculture price package, which resulted in an average price rise of 9 per cent., will help us obtain agreement on fisheries, in the sense that, temporarily and momentarily, a new spirit of co-operation seemed to emerge.
    Mr. Richard Shepherd: Will my hon. Friend give way?
    Mr. Dykes: Not for the moment. I want to be brief. That spirit of co-operation emerged then, but in recent weeks we have seen very little of it.
    The White Paper deals with developments up to December. However, the budget proportion for farming will be reduced to 69 per cent. [Interruption.] The figures are available from the Ministry of Agriculture, Fisheries and Food. That gives the lie to the suggestion that there is an inexorable rise in the agriculture portion of the Community's budget. That is not so. That tendency has been arrested, albeit against a background of severe inflation. It is a notable achievement.
    The 1 per cent. VAT ceiling, while still looming towards us, has not yet been reached, although there were forecasts that it would have been reached by now. It is probably the case, although we cannot be sure, that that 1 per cent. ceiling will be reached later than expected. I suppose that that is partly due to the inflationary rise in total receipts, as well as to the distortions produced, for good or ill, by the MCA changes.
    In the context of the Commission's examination of the modern budget system and the CAP, that gives us longer to think ahead about what should be done in terms of a budget for the 1980s. I am sad, therefore, that the White Paper is not more positive about that matter, because some constructive thinking is needed in that regard.
    There are several other items in the White Paper to which I should like to refer. I agree with my right hon. Friend the Member for Farnham that we should have joined the European monetary system by now. Had we gone into that enthusiastically, we could have pressed energetically for the EMF to be located in London. After all, London is the financial centre of Europe, and there is a strong case for locating a principlal Community institution in Britain. In the financial sense, London would be the logical location.
    In section VII on "Environment and Transport", there is nothing about the Channel tunnel, which is a vital question for Britain. I hope that the earlier, incipient indication by the Commission that Community money for that project would be available in substantial measure will again be pursued by the Government.
    I hope that in his reply the Minister will be able to deal, even if only fleetingly, with that matter, which will be tremendously important for this country in the long-term future. One reflects sadly that the ossification of thought
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    in the Opposition and in those quarters that are anti-EEC has overlapping effects on projects such as the Channel tunnel, which should be a bilateral project, and in stopping any progress in such vital areas.
    I hope that in a number of other areas, too, progress will be made. The European Parliament is mentioned briefly in the White Paper in a couple of places. The whole debate about the single site for that institution should have been concluded by now. It is a disgrace—that is the only word for it—that the member States that have responsibility for the decision have not yet made it, and have only now begun to whittle down the old-fashioned French insistence on Strasbourg still being the seat of the Parliament when most people would prefer Brussels first and, perhaps, Luxembourg second.
    I should like to mention briefly a subject that is not mentioned in the White Paper because it was not discussed over the six months period of the White Paper. I hope that the Government will now begin to revive the arguments for, and the debate about, the European Trade Mark Office. If progress continues at the rate at which it can now be envisaged, that office will probably be set up in about three years' time, once the trade mark legislation is concluded.
    There is every chance that because of departmental insouciance the declining reputation of the British trade mark registry—which used to be the best in the world—and a failure of the political will to press the point hard in Community circles, Britain will run the risk of not having the office in this country when it is established. That would be a grievous loss, because the Germans were given the Patent Office and the French are now pressing very hard for the future Trade Mark Office to be set up in their own country in—surprise, surprise—Strasbourg.
    These are positive areas in regard to which the hon. Member for Caithness and Sutherland suggested that we should elevate debate rather than continue the obsession with anti-EEC policies. The only person who does it with elegance is, perhaps, the right hon. Member for Battersea, North (Mr. Jay), because of his historical consistency. But for others to continue this old obsession, plus a new-found obsession, for opportunistic reasons of opposition in the Labour Party, is to go back to the idea of withdrawal from the Community. [HON. MEMBERS: "Shame".] My hon. Friends say "Shame", but I use the word "opportunistic" in the sense of slight praise, because this is the kind of thing that, historically in Britain, parties have done when they have gone from Government into Opposition. They have gone back on their previous positions. [Interruption.] In the face of the overwhelming requirement for nations to stand together in the blizzard of the recession, when the dangers of nationalism are now so great, it is above all——
    Mr. Marlow rose——
    Mr. Dykes: I shall not give way to my hon. Friend—it is above all important for all of us to revive the old, original rationale of Community membership and to build new ideas for the future.
    7.12 pm
    Mr. Roy Hughes: Command Paper 8195 is entitled "Developments in the European Community July-December 1980". Reports of this kind are growing grimmer and grimmer and ever more depressing in character.

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    Much reference has been made to consistency on the issue of the Common Market. I have the utmost respect for my right hon. Friend the Member for Battersea, North (Mr. Jay). On a secondary plane at least, I can claim to have been equally consistent, because I spoke against Britain joining the Common Market in the famous debate at the Labour Party conference in 1962.
    Some of my remarks, in comparison with other contributions to the debate, will be perhaps slightly mundane in character. The first paragraph of the White Paper, in referring to the period covered by the report, says that it marks the end of the period in which Mr. Jenkins was the President of the Commission.
    We are all aware that Mr. Jenkins was always a fervent Marketeer. He was prepared to split the Labour Party from top to bottom over the issue. I would be the last to claim that his interest in the Common Market was only a financial one.
    Mr. Arthur Lewis: Why not? I would.
    Mr. Hughes: I shall come to the point made by my hon. Friend the Member for Newham, North-West (Mr. Lewis), if he will allow me to do so. I notice that there is no mention in the White Paper of the remuneration received by Mr. Jenkins. It is a fact that as President of the Commission he received £60,000 annually, plus, we understand., very lavish expenses, all of which was tax-free. Presumably, out of that sort of income he was able to put away a few shillings for the future. But, even if he was not, he still gets £30,000—again tax-free—for the next four years, and then £10,000 annually for life.
    Mr. Lewis: I am sorry that I interrupted my hon. Friend from a sedentary position, but I want to put it on record that I think that Mr. Jenkins went to the EEC only for the money, because he has been interested only in himself all the way through. Is it not a fact that this dishonest hypocrite declares himself to be in favour of an incomes policy for everyone but himself? Now he is a leader of a party and is proclaiming an incomes policy for everyone but himself. He is a hypocritical crook.
    Mr. Hughes: Without using such ardent language, I can again claim to have been equally consistent about incomes policy.
    It is apparently not Mr. Jenkins' intention to rusticate in the country, or even to go back to Abersychan, because, in addition to the £10,000 a year that he will be receiving throughout his life, he has a little part-time number with a firm of merchant bankers for which it is suggested he is paid about £10,000 a year. We also note his efforts to save Britain, and——
    Mr. Maclennan: On a point of order, Mr. Deputy Speaker. The remarks which have been made suggest that the former President of the European Commission has been motivated by finance. Had those remarks been made when he was a Member of this House—as undoubtedly he will be again very soon—they would have been wholly out of order. Would you confirm that?
    Mr. Lewis: Before you deal with the point of order, Mr. Deputy Speaker, I point out that it is a hypothetical point of order. You will have noticed that the hon. Member mentioned what would have been the position if Mr. Jenkins had been here, or if he were to come back to this House. An hon. Member of this House expresses his
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    own views and opinions and is responsible for his own views and opinions. Subject to the Chair allowing him to say it, an hon. Member can say whatever he likes about anyone. If it is my view that Mr. Jenkins has feathered his own nest I am entitled to say it, and I shall say it and say it again.
    Mr. Deputy Speaker: I am grateful for the hon. Gentleman's advice. It is true that the matter raised by the hon. Member for Caithness and Sutherland (Mr. Maclennan) was hypothetical. Each hon. Member must take full responsibility for what he says in the House.
    Mr. Dykes: On a point of order, Mr. Deputy Speaker. Would not the matter be resolved if the hon. Member for Newham, North-West (Mr Lewis) were to give the House an undertaking that he will say the same thing outside?
    Mr. Deputy Speaker: That is not a matter for me.
    Mr. Lewis: What I say in the House of Commons is my privilege. If we had fair libel laws in this country I would say it outside, but the laws are weighted in favour of the rich. Roy Jenkins, as a quarter of a millionaire, is a rich man, at the expense of the hard-pressed taxpayer.
    Mr. Deputy Speaker: These are not points of order. We should now continue the debate.
    Mr. Hughes: I have simply been mentioning the facts. Mr. Jenkins' remuneration, unfortunately, is not mentioned in the report with which we are dealing. The fact that he is now in semi-retirement has given him the chance to participate in the launching of the new party.
    The SDP cannot gain much cheer from the White Paper that the House is debating. We know that the party consists of Euro-fanatics. We know that the polls allegedly give the party a good rating. However, the polls also point out that 50 per cent. of the support comes from people who wish to see Britain out of the Common Market.
    Dr. M. S. Miller: Will my hon. Friend make sure that "polls" is spelt "polls" and not the other way, because that involves Solidarity?
    Mr. Hughes: I take the point made by my hon. Friend. Bearing in mind the support that the SDP is alleged to be receiving, is it any wonder that its bikini-like party prospectus has its overwhelming and dedicated support: for the Common Market well down the list.
    I turn to page 9 of the White Paper and its reference to Japan—
    Mr. Marlow: The hon. Gentleman is a little closer to this matter than I am. Is there any truth in the substantial rumour that when those connected with this nice party were seeking a title they considered calling it the Brussels party?
    Mr. Hughes: I am not much of a gardener. E am not accustomed to this terminology.
    I see that the White Paper calls for "moderation of Japanese exports". I understand this point of view. My constituents and I are concerned about imports from our European partners. The steel workers in Newport axe particularly interested in this issue. Forty per cent. of registered new cars—steel forms a great part of their construction—come from European countries, mainly Germany, France and Italy.
    I recall, at the start of this Common Market business, Lord Stokes, then chairman of British Leyland,

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    commenting on the marvellous opportunities that lay ahead for the British motor industry. Not long afterwards, British Leyland was almost bankrupt and had to be saved by the Government of the day. What has happened with cars has happened in many industries. Membership of the Common Market bears a major share of responsibility for much of the present unemployment, particularly in South Wales, once a major producer of steel.
    Section 9.2 of the White Paper, dealing with energy, speaks of the need
    "to encourage the adjustment of supplies to correct imbalances which pose particular problems for some Member States".
    This refers to oil supplies. It means, in reality, that countries such as West Germany and France are to have guaranteed oil supplies, untroubled by the vagaries of supplies from the Middle East—in other words, supplies of our North Sea oil.
    The Euro-fanatics speak about our improved balance of trade with the Common Market countries. The reality is a little different. It is North Sea oil that pays for many of the imports of manufactured goods such as cars, machinery and domestic appliances. North Sea oil is being used to pay for these imports and to keep our own people in the dole queue. Many of my constituents put their cross in the referendum in favour of Britain staying in the Common Market. They believed what they were told—that out of the Market meant out of a job. Many of those people are now signing on at the labour exchange.
    Mr. Keith Best rose——
    Mr. Hughes: I am sure that the hon. Gentleman will be called to speak, should he catch Mr. Deputy Speaker's eye.
    I turn now to the bete noire of all anti-Marketeers, the agricultural policy. I claim no particular expertise in agriculture. I say only that I have never known the farmers in my area to be so disgruntled. I received a huge deputation only last week, rightly indignant——
    Mr. Best: Will the hon. Gentleman give way?
    Mr. Hughes: No, I will not. The farmers thought that there would be great pickings for them originally from the common agricultural policy. Things have not come up to expectations. Praise has been given to Labour's post-war Agriculture Minister, Tom Williams. Government support for agriculture was put on a firm and realistic basis. It reminds me of the story of the old Tory farmer who declared "It is only since this damned Government have been in power that I have been able to make a donation to the party". That illustrates the goodness that emerged from the policy pursued by Tom Williams. Now we have a contradiction. Not only are the farmers disgruntled; the housewives have had a terrible deal.
    Labour Members represent essentially working-class people. We know what percentage of household expenditure goes on groceries. Section III of the White Paper refers to the accession of Greece on 1 January 1981. This can only intensify the problems within the common agricultural policy. Our people will be adversely affected, and still more so by the accession of Portugal and Spain.
    I am aware that there has been a recession following the Middle East war of October 1973. I have a fair understanding of the Middle East situation. I have followed it closely for many years. I was vice-chairman
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    of the Labour Middle East council. Before our entry into the Common Market, British households benefited from what became known as cheap food. This, in turn, kept down the level of wage claims. Small tariff barriers that existed had to be swept away when we joined the Common Market. Our products were still competitive in Europe and perhaps even more so in the markets of the world.
    All that has changed, and much of the unemployment in Britain is a direct result of our membership of the Common Market. Moreover, we are paying huge membership fees for that doubtful privilege. The White Paper offers no hope. As my right hon. Friend the Member for Llanelli (Mr. Davies) said, the Common Market is wrong for Britain because we need free trade in agriculture and an element of protection in industry. What is more—here I speak as a Welsh Member—the United Kingdom is on the periphery of the Common Market. Wales is on the periphery of the United Kingdom, and the periphery is the area that invariably gets a bad deal.
    From a party political point of view, I note with pleasure the growing band of anti-Marketeers on the Government Benches. That is most encouraging.
    At the Labour Party conference last October composite motion No. 15, stating that Britain should come out of the Common Market, was passed by the requisite two-thirds majority. I accept that as my party's policy and I sincerely hope that a future Labour Government will have the courage to say "Enough is enough" and bring Britain out of the Common Market.
    7.32 pm
    Mr. Tony Marlow: I am pleased to follow the hon. Member for Newport (Mr. Hughes). He made a far-sighted and eloquent speech.
    We have had an exciting day. I am an assiduous attender of debates, but this is the first one that I have attended at which a Member of the new Democratic Socialist Party—the nice party—not only has been present but has spoken. The Liberal Party is very concerned, because it has been ploughing this strange territory for some time. Now it sees this new spectre sweeping up on the outside. So populist and exciting was the oratory of the hon. Member for Caithness and Sutherland (Mr. Maclennan) that I can reassure the hon. Member for Inverness (Mr. Johnston) that after the next general election the Liberal Party will probably still have its nine seats and still be the third largest party in the House.
    My right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour), as always, made a speech of intelligence, courtesy and good humour. I look forward to hearing him wind up the debate later. I was interested in the elevated objectives that he described, but what concern me are the bits and pieces in the middle—the mechanics—that we shall need to get there.
    The White Paper deals with political co-operation, enlargement, agriculture and fisheries, social affairs, and the Parliament and Assembly. But one important subject is missing—I hope that my right hon. Friend will see that it is included in the next White Paper, even to the extent of almost taking pride of place—namely, the cost of the Community to the United Kingdom. Our foremost task in the House is to act as guardian of the public purse. We are responsible for Supply and for people's money. Yet the White Paper contains nothing about the cost to the British people of the European Common Market.

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    How is that cost divided? First, there is the real cost in money terms. Our net budget contribution this year will be about £500 million—perhaps more. That is 10p or more on the price of a gallon of petrol.
    Then, there is the cost of monetary compensatory amounts. My right hon. Friend the Minister of Agriculture, Fisheries and Food told me that MCAs will increase our financial contribution to the Community still further. At today's levels, it is anything between another £45 million and £200 million.
    Then there is the largest cost of all, but the one that is least recognised. We produce 70 per cent. of our temperate foodstuffs in the United Kingdom. The other 30 per cent. is purchased from other Common Market countries, but purchased at roughly twice the world market price. The Institute for Fiscal Studies, a most respected body, calculates that the additional cost to the British housewife of Continental food is about £1,500 million a year. A recent calculation made by an erudite body in Brussels showed that the effects of the farm price increases agreed last week—roughly 10 per cent.—will cost Britain another £150 million. That makes sense; 10 per cent. costs £150 million. It confirms the other figure of £1,500 million. This country will have to pay £500 million plus between £50 and £200 million, plus £1,500 million in excess of £2 billion a year.
    There are many ways in which we would like to cooperate with our friends in Europe, but why must we have this massive burden of £40 for every individual in the country, or £160 for every family? That amounts to about £3 per week. Why must we pay that tribute when no one else in the Community pays anything like as much?
    Mr. Myles: Does my hon. Friend agree that the agreement made in Brussels was not for market prices or for the price that the housewife pays, but for the support price? The support price is often below the market price.
    Mr. Marlow: I know my hon. Friend's interest in these matters, but I think that he overlooks the fact that world prices this year will be lower than the Commission estimates. The real cost to the British consumer, over and above what he could have bought at world prices, will be even greater than the figures that I have given.
    I was describing the costs of Community membership to Britain. The most devastating cost is in terms of jobs. Young people are in the dole queues. Middle-aged men with families are out of work. Elderly men, aged 55 or 60, approaching retirement and hoping to earn a little more money to increase their pension rights, are suddenly thrown out of work. We have 2½ million people out of work. How many of those people have been thrown out of work and put on the scrap-heap by the burdens that have been imposed on this country by our membership of the Community?
    I ask hon. Members to consider the sum of £2,000 million. If one takes 1 million jobs and spends £2,000 on each of them, will they not then become competitive? Will not those 1 million workers, rather than sit at home clicking their heels, produce goods that can be sold round the world? I think that it is coming to be recognised in the country that one of the main reasons, if not the main reason, for our massive unemployment, which is at a higher level than that of other EEC countries, is our membership of the Common Market under the devastatingly unfair terms that we are now tolerating.
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    There is another aspect to the problem of unemployment. There are figures on trade at the end of the White Paper. They are underestimates, in terms of our deficit in trade on manufactures, because they include precious stones and precious metals, which are simply cycled through the country and sent on. In 1977 there was a deficit, in round terms, of £1,000 million. In 1978 there was a massive increase to £2,000 million. In 1979 there was a £3,000 million deficit. Everyone in Europe complains about Japanese imports and the way that they are killing some of our industries but, as I said in an earlier intervention, our trading deficit in manufactures with West Germany is two and a quarter times as much as our trading deficit in manufactures with the Japanese.
    Let us make sure that everybody in the country realises that. When, later this year, we go into the negotiations to amend and reform the Community, in which negotiations my right hon. Friend the Lord Privy Seal will play a part—and I know that he will do his best—let us make sure that the people in Europe realise the benefits that they enjoy in being able to dump their surplus manufactured products on our market.
    The third point on cost concerns the cost in terms of inflation. CAP prices are twice world market prices. What would be the price of foodstuffs if we went back to the old system of deficiency payments? What about the money that we send to the Community by way of taxation? We could reduce taxation by that amount if we were not in the Community. What about the level of interest rates that we have to pay, and that not only cost money but keep people out of work and keep our unit prices high rather than low? When he replies to the debate will my right hon. Friend let us know how much lower the cost of living would be, could be and should be if we were not now a member of the Community, on the terms on which we are involved?
    What is to be the direction of Government policy on the CAP? My right hon. Friend and I went before the British people on 3 May 1979 on the basis of a programme. Let me read two sentences from that programme.
    "We will insist on a freeze in CAP prices for products in structural surplus."
    I stress the word "insist". That sentence applies to beef, milk, butter, olive oil and many other substances. The programme went further. This freeze, we said to the British people,
    "should be maintained until the surpluses are eliminated."
    Are there or are there not structural surpluses now? That was a sensible, wise and honest policy to put before the British people.
    The CAP, as we all know, and as even some people in Europe know, is a disaster. It gives too much to the rich and too little to the poor. It does not deal with social problems in agriculture. This country, being the largest importer of food throughout the world, is saddled with a system that doubles our food prices, and a system under which 30 per cent. of our temperate foodstuffs have to be bought from other European countries at twice world market prices. My right hon. Friend the Lord Privy Seal is smiling at that. I know that he would say that if we came out of the Common Market world market prices would go up and we should be unable to buy the cheap food that we think would be available. But why should we? As my hon. Friend the Member for Holland with Boston (Mr. Body) said, think of the sugar that we could get on the world market at much cheaper prices. As was stated in The Times

    1009
    recently, the New Zealanders could increase their production of foodstuffs by 25 per cent. without a penny of additional capital investment.
    If we organised our affairs correctly, that food would be available not only to the advantage and benefit of this country but to the great benefit of the developing countries—the Third world countries, who would have something to sell us, who would be able to get hold of our currency, and who could then come back to us to buy our manufactured goods. At the moment, however, because of the monstrosity of the CAP we are prevented from doing that.
    I come next to my right hon. Friend the Minister of Agriculture. The hon. Member for Newport (Mr. Hughes) told us that his farmers came to him, crying on his shoulder, last week. I do not know how much longer my right hon. Friend will be Minister of Agriculture. The farmers have had it relatively good for the past few years, but now they are beginning to discover that the CAP no longer suits their needs. The time will come when the farmers will gang up against the CAP and the European Community. Then what will happen on the Government Benches?
    My right hon. Friend is the Minister of Fisheries. We shall have to wait on that second point. But he is also the Minister of Food. When did we last have a Minister of Food? I have to explain that my constituency is basically urban and contains no farms. Why should my constituents have to pay twice the world market price for their food? What benefit do they derive from the Community that makes it worth their while to pay this money? Are they getting jobs?
    Mr. Arthur Lewis: Does the hon. Member not realise that he can tell his constituents that they are helping to provide subsidised food for the Russian Communists? That is what they are getting out of it.
    Mr. Marlow: Sadly, there is great truth in what the hon. Gentleman said. My hon. Friend the Member for Southend, East (Mr. Taylor), who has been so perspicacious in this matter and has so rightly and properly followed it up, discovered not too long ago that beef was going by the lorryload to feed the bloated colonial colonels of Kabul—the rapers of Afghanistan. Our beef, subsidised and at knock-down prices, is going to the Russian aggressors.
    Mr. Lewis: And the butter.
    Mr. Marlow: Yes, and the butter. My right hon. Friend the Minister of Agriculture last week told us what a magnificent deal he had achieved for Britain and for the farmers. That did not include the farmers in Newport, or in Southend, East or any of the constituencies of my hon. Friends. My right hon. Friend told us what a wonderful deal he had done for the consumer. I have been looking very carefully, but even with a magnifying glass I cannot find a good deal that has been done for the consumer. I am sorry that my right hon. Friend the Minister of Agriculture is not here. Even in his absence, however, I say that if he had been responsible for the retreat from Moscow he would have told the House what a magnificent triumph it was.
    Last week we missed an opportunity. Our representatives could have sat at the negotiations, pointing to our
    1010
    commitment to the British people not to permit any increases in prices for items in structural surplus, staying there all night, all week, all month, through the French presidential election, saying "No, we will not move. The policy is nonsense and it is damaging the interests of our people." But they did not. Sadly, my right hon. Friend the Minister of Agriculture went back on commitments that he had given to the people of this country—commitments that I had given too, and that matter to me.
    Therefore, I have asked in the House that my right hon. Friend should submit his resignation. So far he has not done so. Perhaps he is considering the point. Perhaps it will take him some time to do so. I know that my right hon. Friend has some problems over the Government's policy generally. My right hon. Friend the Lord Privy Seal and all his other colleagues have said how firmly behind Government policy they are in all its aspects, particularly the economic policy. But my right hon. Friend the Minister of Agriculture has not quite managed to make that statement yet. Not only is he perhaps a little unhappy with the way in which Government policy is developing; also, he missed his opportunity last week. It is not just a question of his having missed the opportunity; the credibility of the Government is at stake.
    I believe that we all want to attack this problem and that we all want to fight it. It is therefore essential that the next time we are discussing reforms of the common agricultural policy and of the budget we shall have somebody who can point to the manifesto, who believes in the manifesto, who is going to fight for the manifesto, and who is going to fight for the British people. Therefore, I ask my right hon. Friend, in all humility, if he sees his right hon. Friend the Minister of Agriculture, Fisheries and Food, to take him on one side and whisper in his ear that if it pains him to do what the Government are here to do perhaps while he is still thinking about it he may make that decision and come down on the right side.
    There are many other hon. Members who want to speak. I am concerned about the waste of money of my country. I am concerned about the suffering that has been caused to us by the monstrosity of the CAP and by the damaging agricultural policy that we have got at the moment. I ask my right hon. Friend to do all that he can to solve the problems that we face.
    7.51 pm
    Mr. Austin Mitchell: There is a curiously schizophrenic tone to this debate. It is as if we are on two sides but not talking about the same object and the same Common Market. The reality of the Common Market is as the hon. Member for Northampton, North (Mr. Marlow) has described it—namely, rising agricultural prices, industrial decline, not caused by the Common Market, but accelerated by it, unfair burdens and the theft of our fish stocks.
    It would be understandable if the supporters of the Market—their support is on a diminishing scale, but it still exists—said "We accept that there are problems, burdens and disadvantages. However, these are prices worth paying for the inestimable benefits of a seat at the top table, the ability to interpose ourselves between Giscard d'Estaing and Chancellor Schmidt and all the other little benefits." But they do not say that the price that we are paying in jobs, prices and burdens is worthwhile. They say that there are benefits, but they do not list them. They go on to deny the burdens. They deny that there is a trading

    1011
    disaster and an agricultural disaster. They deny the financial burden that the Market imposes on us. In doing so, their argument for the Market loses all credibility. The British people know what the burdens are and the impact of the Market.
    The schizophrenia is made worse because we are in an odd constitutional position. We have a fifth column of EEC propaganda officials, whose efforts are backed by a section of British civil servants who are being paid, directly or indirectly, by the taxpayer to discredit and attack the official policy of the official Opposition. They are being paid to gloss over and to distort the economic realities of the Common Market.
    The trade argument is a classic example of the process of distortion that is taking place. A couple of months ago it was claimed that we had a trading surplus with the Common Market in 1980. The figures have been revised, and those responsible are now in the humiliating position of having to back-track. They now say that it was really a deficit, yet the impression is being created that we are doing well in trade with the Common Market. Manufacturing trade is especially important, because that is where jobs lie. The present claims are not true and are a reversal of the facts. A false impression is being created by lumping oil into the statistics. It is interesting that one-third of our exports to Germany are oil exports. That oil would be traded whether we were in the Common Market or out of it. It is therefore statistically irrelevant.
    Secondly, the trading figures are taken for the Nine. The relevant figures are those for the Six. If gains are to be made from being in the Common Market, they will be gained in the Six and not in Eire and Denmark. We traded effectively with Eire and Denmark before we entered the Common Market.
    Then there is a concentration on the ratio of exports to imports—a meaningless ratio statistically. It is as if I went to my bank manager and said "Do not worry about my rising overdraft. Look instead at the ratio of debits to credits."
    The basic, stark facts are straightforward. Our exports to the Six rose more rapidly from 1958 to 1970 than they have done since we entered the Common Market. Imports from the Six have increased more rapidly since we entered the Common Market than before. We managed to change a surplus in manufacturing trade in 1970 with the Six—less, as the hon. Member for Northampton, North said, precious stones, which would be traded in any event—of £102 million to a horrendous deficit of £4,000 million in 1979.
    I calculated that the deficit for the first eight months of 1980 was running at an annual rate of £3,500 million. The actual figures might be slightly lower. The figures are lower for 1980 compared with the horrendous deficit of 1979 because the Government have used depression and unemployment as their form of import control. That is why there has been a slight decline in the horrendous deficit in manufactured trade. It must be accepted that the deficit is destroying jobs in Britain. It is difficult to measure the loss. However, the number of jobs destroyed by the deficit is considerable. One man's cheap import is still another man's job.
    Our surplus in manufactured trade with the rest of the world, which was substantial in 1979, and again in 1980, is now being robbed to pay for our deficit with the EEC. That is why the argument against coming out of the EEC is nonsensical. We are doing so well with the rest of the
    1012
    world that we stand to gain by protecting ourselves from EEC imports or at least by having a reasonable balance in manufactured trade with the EEC.
    The deficit in manufactured trade is one of the Government's basic problems. It is one reason why they are unable to expand the economy. There are two reasons why they cannot expand. The first is that inflation would resume. The second is that the Keynesian multiplier is alive and well, but moving to the Common Market at a fairly rapid rate of knots. If the Government were to expand the economy they would merely suck in more imports from the Common Market. The Market is keeping us in the depressed state into which the Government have helped to push us. The same propaganda machine is grinding away at agriculture. It is proclaiming that the decisions of last week were a great victory for Britain. The facts are as the hon. Member for Northampton, North, described them. In the Common Market we are paying about twice the prevailing world rate for foodstuffs. We are paying even higher prices because we are now paying an extra tax. The levy on food imports into Britain from outside the Market in the 1980 calendar year was £233 million. That burden falls directly on the British consumer, and we have added to it by accepting an obligation to pay what amounts to a tax on our imports from the Common Market.
    It is unlikely that the CAP will be reformed. If it has not been reformed after all this time, let us not kid ourselves that it will be reformed in the next few years. The Government are now enthusiastic about high food prices. Their concern is not so much with the prices paid by the consumer, but with the budget. They are using the CAP to levy high taxes on the British people, on food consumers.
    Much of the yield comes back to the Treasury, so it is a form of tax on food which, effectively, the Government are imposing through the CAP. That amounts to a total change of tune by the Minister of Agriculture, Fisheries and Food and by the Government when we remember what appeared in the Conservative manifesto, which has already been quoted by the hon. Member for Northampton, North. That manifesto makes a joke of the words that appear in the White Paper that we are discussing.
    Presumably the White Paper was written before the agricultural settlement of last week. It states:
    "The Government will continue to stress the need to restrain surplus production"—
    Presumably they will do so by encouraging it, by financing it and by giving more money to produce larger surpluses—
    "particularly in the dairy sector, and to reduce the budgetary and resource costs of the CAP"
    by putting them up. That makes a farce of the words in the White Paper, bearing in mind what happened last week. There is a direct burden on the British consumer, who has now become the milch cow of Europe. Last week's settlement imposes an extra burden of £622 million on the British consumer.
    The Lord Privy Seal mentioned fishing. It is difficult, even for the EEC's propaganda machine, to portray what has been going on in the context of fisheries policy as any sort of triumph or move towards European understanding, good will or benefit to this country. The Lord Privy Seal said that fish do not observe boundaries such as the 100 or 200-mile limit. They swim over the North Sea. That is part of the tradition of the Foreign Office in abdicating the interests of this country.

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    That attitude was characterised by the Lord Privy Seal's reply to my question on President Pompidou. Little things like self-interest do not matter and should be in the gutter. The Foreign Office believes that it is far more important than any other body. It has a tradition of noblesse oblige. Now there is more "noblesse" in the Foreign Office, and there is also more "oblige". The people who are being obliged are the Common Market partners, who have much shrewder, harder heads for those commercial interests than have our Government.
    The Lord Privy Seal was effectively saying that because fish do not observe 200-mile limits we have to give away most of our fish stocks to our Common Market partners. The annual catch in British waters within the 200-mile limit is worth about £520 million. The deal so far concluded envisages giving away most of that annual catch, which cannot be compared with oil, which, once it has been dredged up, has gone for ever. It is an annual and renewable resource which is there for every year into infinity unless we give it away. We are now binding ourselves to do that by the agreements reached in the Common Market. For the Minister and the Foreign Office to try to whip up support after swallowing that camel, while straining at the gnat of French fishing rights in the 12-mile limit, is to demonstrate exactly what sort of farce it is.
    Those French demands must be resisted. All the demands made on our fish stocks and on our waters should have been resisted far more effectively than has been done. Yet the French attitude is not just a Presidential election gimmick. The French feel that they are legally in the right. The common fisheries policy was cobbled together a matter of days before we joined. The French are in the right according to that policy. That is the essence of the problem. It is wishful thinking to imagine that that demand and that right will go away, because we abdicated our rights by the sort of deal that we accepted in 1972.
    Mr. Spearing: Is my hon. Friend aware that at the end of 1982 we go back to a common fisheries policy as agreed? Does he realise that in 1971 the right hon. and learned Member for Hexham (Mr. Rippon) tried to pretend that at that stage we would have a veto? That was the only reason why they were able to get certain people in the fishing industry to agree to what was proposed. As my hon. Friend knows, that veto does not exist.
    Mr. Mitchell: My hon. Friend is right. The legal position of the fishing industry and its needs were ignored by the Government, who were determined to rush into the Community in 1972. Because of the legal situation that we accepted, our negotiating position is weak, but our moral position is strong. We bring 70 per cent. of the fish stocks to the Common Market pool. The only solution to the deadlock that has arisen is to do what the 1979 Conservative Party manifesto promised. The Conservatives promised that if the negotiations broke down, or if they were not getting anywhere, unilateral, national action would be taken. That should now be done by imposing national conservation measures to increase negotiating pressure and to demonstrate that we are seriously determined to defend our rights.
    Sir Anthony Meyer: I am interested in the hon. Member's solution. Does he also suggest that the inshore
    1014
    fishermen of Cornwall should take unilateral action against the Humberside fishermen who are poaching in their waters?
    Mr. Mitchell: That is another indication of the nature of the Common Market argument—divide and rule. The Minister of Agriculture, Fisheries and Food is dividing the fishermen of Scotland from those in England by proposing restricted waters around Scotland, from which Humberside fishermen will be excluded. Given the decline of the Humberside fleet, the effort from British vessels outside Cornwall is there only because there is a Russian market for the fish and because the Common Market has deprived us of other fishing opportunities which we would rather take up. That amount of fishing is puny compared with the overall threat to British stocks from the overmanned over-large Continental fleets with which we are trying to negotiate. It is a gnat's bite compared with the pressure from those over-heavy and over-large Continental fleets. Therefore, we need national conservation measures and I fail to see why the Government have not imposed them.
    I had hoped, had time allowed, to cover more subjects, such as the farce of the European Assembly and the perpetual peregrination of the shades of the damned which they resemble. My right hon. Friend the Member for Battersea, North (Mr. Jay) has supplied me with a quotation, which describes a picture of Hell:
    "Wherein the damned in turn Pace the battlements and burn."
    That is probably an appropriate picture of the European Assembly.
    There is also the farce of the European passport, which is being imposed on us with no reference to Parliament. I should not want it as my national passport. I should be ashamed to carry such a document.
    There is the farce of the budget and the stream of regulations from the EEC, which the CBI has asked should be halted, having recognised that the Government will do nothing about that matter. I shall not go into those matters, as they would detract from the central argument.
    We have had 10 years of experience to show us that the EEC is not doing what its defenders said it would—namely, contributing to international understanding and to building a new Europe and a spirit of European co-operation. It always has been—and has shown no signs of becoming anything better—an agricultural protection society, which does not suit this country, which never suited us, and which we undertook to enter on unfavourable terms in the first place. That makes any negotiation a Sisyphean labour, in which we can never succeed. The terms are heavily loaded against us from the start. The situation will not change and we shall not change it. Consequently, the British economy, which already has its problems, and is already weak, will be further weakened by the burdens, the drain and the costs that are reducing this country to a tragic situation.
    I do not know why the Euro-fanatics are so proud of the benefits of the Community. We are being reduced to Europe's offshore social security scrounger, begging for doles and handouts, and—more insulting—ultimately paying for them with our own money. The only benefit today is that at last we are beginning to see a clear choice emerging politically about the Common Market. The Government, for all their periodic bouts of Euro bashing, which will come again when things become difficult for

    1015
    them, are basically loyal and are committed by the attitudes of people like the Lord Privy Seal and the majority of their Back Benchers. That is one point of view—that we should stay in the EEC.
    The other point of view is represented by the Liberals. They are enthusiastic pro-Europeans who promote every grievance from Europe, from heavy lorries to overfishing, as if the Common Market never existed, but who will continue to prate their loyalty to and enthusiasm for the Common Market.
    They are now joined by the Social Democrats or, to give them their proper name, the rassemblement du peuple Jenkins, in their new guise, as it emerged today. It was interesting to hear the party's policy enunciated. It is a policy of fanatical commitment to the Common Market. I am sorry that the hon. Member for Caithness and Sutherland (Mr. Maclennan) is not here to listen to me, because he would not accept my intervention. He was moved by what he was saying, but he was attacking a nest which he and his hon. Friends have already fouled in a bitter and unforgivable fashion. He demonstrated an attitude that his party is showing more widely. Its members care more for the albatross of the Common Market than for the party around whose neck they hung it in the first place. That is essentially their position. That is the second point of view clearly adopted by the Euro-fanatics or Euro fun party. They will be judged by the electors.
    The third position is healthier—leave with Labour. I hope that it will be a manifesto commitment, which is a more democratic and effective way of testing opinion than a referendum. When the people choose a Labour Government they will opt for a commitment to repeal section 2 of the European Commmunities Act, to abrogate the Treaty, to scrap immediately that which is harmful and to renegotiate the remainder. A referendum asking people to make the choice after that would be undemocratic, because it would be calling into question the mandate that the electors had conferred.
    Of course, these arguments will never convince the Euro-fanatics. It was said of the free trade enthusiasts that their zeal for the dogma outweighed alike their consideration of its truth and concern for its effects. No amount of argument will convince the Euro-enthusiasts, but a clear political choice is emerging and at least the British people know better. They know the burden, difficulty and drain that the Common Market has been to them and to their country.
    8.12 pm
    Mr. Keith Best: I am not normally churlish about the comments of other hon. Members, but the vehemence of my hon. Friend the Member for Northampton, North (Mr. Marlow) should not lead us to overlook his inconsistency. He says that the Common Market sucks in masses of our money which could be better spent by us, notwithstanding previous experience, and that the EEC is directly responsible for a large amount of our unemployment. He also says that we should create Government jobs, each at a cost of £2,000, for every unemployed person. I welcome him to the wets. I did not know that he believed in massive Government subsidies, but I now understand what he has been saying all along.
    Mr. Marlow: I said £2,000 for 1 million unemployed people, so the sum would add up. My other point was that it would be money that would be left in the system, instead
    1016
    of being taken out in taxation. I am not talking about Government spending. The Government and Europe would require less money.
    Mr. Best: It is amazing that people always find facts to suit their argument. My hon. Friend said not a single word about the benefits that we derive from the EEC.
    Mr. Teddy Taylor: Let my hon. Friend the Member for Anglesey (Mr. Best) tell us.
    Mr. Best: I shall do so. Let me first say that it is perhaps appropriate that another Welsh Member should follow the hon. Member for Newport (Mr. Hughes), who has no doubt gone to carry out his threat to consult his constituents and to outline to them the terrible tragedy of the EEC. I hope that he will also explain that he wishes to bring us out of the EEC and deny the £20 million voted by the EEC for steel closure areas, with the opportunity of creating 4,000 jobs. He will have a hard time explaining that.
    The right hon. Member for Llanelli (Mr. Davies) spoke with stoicism. Although he did not invite sympathy, I suspect that he craved it quietly. He was much happier as a Treasury spokesman. He is in an immense dilemma. He has to attack the EEC, yet he is a Welsh Member, and Wales benefits greatly from our membership. He must have sleepness nights wondering how he can take that attitude in the House and return, craven-faced, to tell his constituents that they will, as a result, be denied EEC benefits.
    Mr. Austin Mitchell: What are they?
    Mr. Best: Of the first allocation of the budget refunds, £97 million has come to Wales and the North-West. About £24½ million is being spent in Wales on improving the east-west routes to North and South Wales, which is relevant to the constituency of the right hon. Member for Llanelli. Part of the money is going towards the Bridgend bypass, which will make it easier for industries to set up in his constituency.
    Mr. Spearing: The Government have made it clear that the refund which the Prime Minister has obtained for two, or at the most three, years is being used only in:place of money that would have come from the Consolidated Fund in any case. Does the hon. Gentleman believe that decisions on voting money for the Bridgend bypass or the Menai Straits bridge should. be made in Brussels and not in this House?
    Mr. Best: The hon. Gentleman totally misunderstands my point. He is suggesting that we cane the taxpayer a litte harder.
    Mr. Mitchell: It is our money.
    Mr. Best: The hon. Member for Newham, South (Mr. Spearing) knows as well as anyone that money that comes from the EEC reduces the burden on the taxpayer. The money would be spent in any event, so less money is having to come from the taxpayer.
    Mr. Mitchell: Will the hon. Gentleman give way?
    Mr. Best: I shall not give way. The same point will only be made again.
    Mr. Mitchell: Will the hon. Gentleman give way?
    Mr. Dan Jones: On a point of order, Mr. Deputy Speaker. Hon. Members who have spoken without interruption should accord the hon. Gentleman the same courtesy.
    Mr. Best: I am grateful to the hon. Gentleman. I have always respected his judgment.
    We should also remember the EEC assistance for Welsh culture. I make no apology for the fact that I intend to make a Welsh speech tonight because the Principality is one of the major beneficiaries of the United Kingdom's membership of the EEC. Money comes to the National Eisteddfods such as the Urdd national eisteddfod and the Llangollen international eisteddfod and to the Royal Welsh agricultural show. That covers quite a broad spectrum.
    Mr. Mitchell rose——
    Mr. Best: I cannot give way again. The most important aspect of our membership of the EEC must be the regional policy. I find the attitude of the right hon. Member for Llanelli impossible to comprehend when he speaks of the concept of juste retour. If we adopted that attitude to Wales in the context of the United Kingdom's economy, he would be the first to fight it, bearing in mind the constituency that he represents.
    European regional development fund loans and grants to North Wales encompass a mass of projects. I shall spare the House the whole list. In Anglesey £5½ million in loan, plus a further £250,000 in grant, has been provided for the Holyhead harbour and rail terminal project. The Dinorwic pump storage scheme, on which many people in Anglesey have found employment, received £150 million in loan from the European investment bank. It is one of the largest projects ever undertaken with European backing. Again, I welcome that.
    Mr. Mitchell rose——
    Mr. Best: I must get on. What is significant about European regional development fund money is that it is for our country's infrastructure. I am afraid that we cannot be certain, on the past record of Governments of both parties, that we shall have sufficient foresight to look after the infrastructure of our nation without that extra assistance from the EEC. The statistics speak only too plainly. The amount of gross national product that we now contribute towards our infrastructure has fallen dramatically. On neither side of the House can we put our hands on our hearts and say that we were not responsible. I therefore welcome European money coming directly to help projects necessary to the future welfare of our country.
    Mr. Mitchell: Will the hon. Gentleman give way?
    Mr. Best: The hon. Gentleman has had his say. If he could not get it all in then, he will have to try to have another go at a later stage.
    In February this year, total net aid to Wales since 1975 was £96 million. Considered in terms of jobs, that is no flea-bite. Wales receives 16 per cent. of the United Kingdom quota from the ERDF. Again, that is no flea-bite for the Principality. Does anyone seriously—I stress the word "seriously"—believe that we would have the same amount of inward investment in this country, particularly in Wales, if we were not in the European Community? Does anyone seriously think that the American and Japanese companies that have come to South Wales would
    1018
    throw in their lot there if they did not realise that they had a market of 260 million people? Of course they would not. It would be nonsense to pretend otherwise.
    Mr. Body: Perhaps my hon. Friend would clear up one point. Would there be more or less money for us to allocate out of the Consolidated Fund for the kind of scheme that he has catalogued and for infrastructure and the rest if we were not making our present net contribution to the EEC?
    Mr. Best: I believe that there is no doubt that we shall benefit from membership of the EEC in the long term. [HON. MEMBERS: "How long?] All the speeches against membership of the EEC—and it is sad that we have had this argument yet again—have demonstrated myopic vision. They have looked at the immediacy of what is around us without any thought for the future.
    Let us consider the three major arguments against the EEC. First, the cost of the common agricultural policy is 70 per cent. of the EEC budget. It is said that that is a terrible amount of money to spend on trying to rationalise agriculture among trading partners and that it is a confounded waste of resources. Looked at in isolation it is easy to adopt that attitude. The arrant folly of that attitude is the failure to comprehend that the total EEC budget is less than 1 per cent. of the whole of the EEC's gross domestic product. Looked at in that context, the whole issue is put into the right perspective.
    Mr. Alec Jones: Is the hon. Gentleman saying that the percentage of money being spent on agricultural support represents the correct degree of support and that industry should have infinitely less?
    Mr. Best: I am glad that the right hon. Gentleman has actually given us some common ground. We should all like to see a smaller percentage of the EEC budget spent on the CAP. When we entered the Community, it stood at about 40 per cent. I am sure that very few people imagined at that time that it would race up to 70 per cent. Nevertheless, it is extraordinary to suggest that, just because one does not like the rules of a particular club, one must leave it. I do not understand that argument at all. Surely one tries to change the rules to one's own satisfaction.
    The second great argument against the EEC relates to the so-called wine lakes and beef and butter mountains. Nobody has mentioned that those so-called mountains amount to no more than two weeks' supply. That is the reality of the situation. It is time that the people of this country learnt some of the facts about the EEC rather than just heard the rhetoric. One must consider the insecurity of supply from world markets and how the USSR and Poland, with their deserted supply lines, must sometimes envy us. I prefer mountains and lakes to deserts. I believe that that is how the majority of people in this counry like to imagine their future.
    Finally, there is the argument about the amount of money that we hand over to the EEC. We spend 17 times more on social security than we give to Europe. That, again, puts the whole matter into perspective.
    I end on this note. Of course we need to work towards a better system in Europe. But that does not justify the chagrin of the Opposition in wishing to take us out of Europe altogether and thus deny the people of this country the benefits, some of which I have articulated tonight.

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    It is ironic that so many Opposition Front Bench Members are from Wales—the principal beneficiary of our membership of the EEC. As has been correctly mentioned, we have now a straight political choice: either in or out. The attitude of the Labour Party towards Europe in trying to take us out will deny it the opportunity of ever again taking office.
    Let us not forget the men of vision who had the original concept of the EEC. That vision was born out of the second major holocaust in this century. Are we to destroy that vision or to attempt to remove the cloud that hides its brilliance? Freedom is an expensive commodity. It is worth more than any butter or beef mountain. It is an axiom of history that the surest way to prevent nations attacking each other is by binding them together in economic union.
    My generation is potentially doomed, with the nuclear sword of Damocles hanging over its head. Our greatest benefit from the EEC cannot be measured in financial terms, because it is peace.
    Several Hon. Members rose——
    Mr. Deputy Speaker: I remind the House that interventions—even sedentary interventions—tend to prolong speeches. Some hon. Members have been in the Chamber for some time waiting to speak, so I ask all speakers to be brief.
    8.30 pm
    Dr. M. S. Miller: I shall not attempt to follow the speech made by the hon. Member for Anglesey (Mr. Best). It was akin to someone being robbed of £1,000 and being very happy to be handed back £2.
    I am not anti-European. Indeed, I have a high regard for all EEC countries. If I were asked whether we should leave the Common Market I would pose an alternative to my right hon. and hon. Friends: that we should stay in and get France to leave.
    Despite being pro-European, having a high regard for European countries and welcoming co-operation between European countries, I object to the principles of the Common Market. Its Mickey Mouse Parliament is the laughing stock of the Western world. Although I wish to co-operate with Europe I do not want the close and binding ties that the Euro-fanatics want, because I can remember the days when the countries with which some want us to bind ourselves strongly were not adherents to any form of democratic system—certainly not the system that we know today. In pre-war days there was grave doubt about their stability. Indeed, there is even now. Therefore, I do not want to be associated too closely with them. I believe that we should co-operate, but not to the extent that the Euro-fanatics want.
    Britain is the mug of the Common Market countries in terms of trade. We take everything, without raising any problems. The other countries with which we trade put up all kinds of artificial barriers. They erect their own tariff barriers, although they are not supposed to do so. Many examples come to mind.
    How could the common agricultural policy benefit Britain? How could a policy that devotes 70 per cent. of its income to agriculture benefit Britain? Britain is not an agricultural country. If the CAP took 20 per cent. or 25 per cent. of the total amount, it would not harm us quite
    1020
    so much. The mere fact that the CAP dominates the budget makes it impossible for this country to benefit, regardless of what we do in agriculture.
    If the White Paper shows anything, it is that the Government have been very busy. There are wide areas in it on which reports have been made. I do not intend to ramble through the White Paper.
    Many of my hon. Friends made brilliant speeches. It is a pity that the House is not better attended to listen to the arguments advanced by my right hon. and hon. Friends—and some Conservative Members, too—pointing out how the Minister for Agriculture, Fisheries—"Fisheries" is a misnomer—and Food has given away our fishing industry. When what has been agreed comes to pass, Common Market fishing boats will come not only to our shores but on to our beaches. We shall not be able to bathe.
    I do not intend to try to compete with the speeches of my hon. Friends. I shall concentrate on one point only in the White Paper, namely, paragraph 2.1, on the Middle East, in the section on political co-operation.
    The EEC, as we know, has within the last year put forward an initiative on the Middle East and I believe that this is another area in which the Government are making a big mistake. They fail to grasp at least some of the complexities of Middle East politics, and the initiative is based on two false assumptions.
    The first false assumption is that the Palestinian Arab issue is the heart of the Arab-Israeli conflict. The Arab approach to the Palestinian question has unfortunately been an opportunistic one rather than one of genuine concern, because during the 19 years between 1948 and 1967 Palestinian refugees languished in refugee camps in Jordan and were ignored by the Arabs and went unnoticed by the rest of the world. Only since Israel occupied the West Bank in June 1967 have the Arabs shown concern over the Palestinian people. Even today they pay only lip-service, contenting themselves with words rather than the financial assistance that they could give.
    The Palestinian cause has been taken up by the Arabs not on moral grounds but because it has given them an opportunity to couch their demands in relation to Israel in what they consider to be humanitarian terms. The fundamental commitment of the Arabs is to the doctrine of pan-Arabism, not to Palestinian self-determination, and Arab animosity towards Israel is the result not of Israeli occupation of Palestinian land but, rather, of Israeli occupation of Arab land.
    I am not justifying the occupation of territory; I am merely saying what I believe to be the situation today. Any solution to the Palestinian problem short of Israel's physical removal from the Middle East will only marginally affect Arab demands.
    The second false assumption on which I believe that the right hon. Gentleman is working is that a comprehensive peace settlement would usher in an era of stability in the Middle East. We have only to look around us to see that major developments in the Middle East are not directly affected by the conflict. A comprehensive peace settlement would neither check the growth of the Muslim Brotherhood nor settle the struggle between the Ba'athist parties of Syria and Iraq. Likewise, the potential that has been unleashed by the Iranian revolution for destabilising the entire Arab world is totally independent of any outcome of the Arab-Israeli conflict. It would have happened if Israel had not existed. In fact, the argument

    1021
    is that if Israel had not existed it would have had to be invented. A comprehensive peace settlement may be President Sadat's meat but it is undoubtedly President Assad's poison, spelling imminent disaster for his political regime.
    It is simplistic to believe that the settlement of the Arab-Israeli conflict would stabilise the Middle East, because the traditional instability of that area is rooted within the nature of inter-Arab rivalry, unconnected with the Arab-Israeli conflict. It is hardly surprising that Israel does not view with equanimity the dangerous sacrifices that it may be asked to make, which do not help the situation and which, if they go wrong, could even lead to the elimination of Israel. The adroit political timing in launching the initiative suggest that the prime movers are not particularly concerned with the humanitarian aspects of the problem, since over the past 30 years they have made no effort to solve this problem. Their efforts are directed now to ensuring the oil supplies and expanding their trade. I do not necessarily object to that, but let them be honest in their pronouncements.
    In his visit to the Gulf States last year President Giscard d'Estaing clearly illustrated the motives of self-interest that lie behind the initiative. In return for French recognition of the rights of the Palestinians to self-determination, the Kuwaitis promised to sell oil direct to France. Likewise, the United Arab Emirates have promised to supply the French with as much crude oil as they need in recognition of France's support for Arab rights. That report appeared last year in the Financial Times.
    Therefore, eager to ensure their oil supplies and noting the apparent success of the French, the logical step for the other members of the EEC, who depend upon Middle East oil for two-thirds of their requirements, was to swap their political endorsement in the form of a European initiative, in exchange for guaranteed oil supplies.
    Trade is another aspect of the problem. I well understand the difficulties of countries that are trying to expand their trade. It is estimated that over the next two decades Arab oil revenue will increase fourfold. Needless to say, big business concerns of the Nine will be straining every nerve to have their respective Governments get in on the act, anxious to cash in on idle Arab oil revenue.
    Nowhere has this been more evident than in armaments. The chronic instability of the region—again having nothing to do with Israel's presence—coupled with the conviction of some Arab States that the only way to prop up their tottering regimes is by investing in military hardware, has created an arms free-for-all situation in Europe, led by the French. Europe has been very quick to exploit it. In the past year or so the French have concluded agreements with Saudi Arabia and Iraq, and Britain and West Germany have been involved in partnership with France. The military potential of some of these countries is even greater than that of the countries that have supplied them with arms.
    I come to the so-called Palestine Liberation Organisation. Over the past year or two prominent European leaders have been wont to emphasise what they say is the moderate stance of the PLO. They cite statements made by PLO representatives. In the House a couple of months ago a PLO representative made hard-line statements that were impossible to reconcile with any
    1022
    contemplated idea of a just and lasting peaceful settlement. The statement asked just for the elimination of the State of Israel.
    Not long ago Farouk Kadoume, the head of the political department of the PLO, said:
    "First Israel must recognise the Palestinians' right to create an independent country, and then, we shall see."
    Three days later the words "we shall see" were explicitly clarified. He said:
    "The PLO will not recognise Israel even if an independent Palestinian state is established."
    The PLO has deliberately nurtured this double image, saying hard words to its own people and softer words to the Western world, in the hope that the West will hear only the moderate line.
    Over the past few years the PLO has continued to attack not troops, not military installations, but women and children. When I was in Israel in January I watched a television interviewer interviewing two terrorists who had been caught infiltrating Israel. The interview was carried out in a calm, mild atmosphere. The interviewer asked them what their task had been. They did not say that their task had been to blow up an installation. They said that it was to kill Jews—simply to kill Jews.
    The PLO has consistently refused to amend its constitution, part of which contains that aim. Articles 1 and 9 of the national covenant make clear statements of intent. Article 9 states:
    "Armed struggle is the only way to liberate Palestine and is therefore a strategy and not tactics. The Palestinian Arab people affirms its absolute resolution and abiding determination to pursue the armed struggle."
    I shall not bother the House with the details. It is clearly spelt out that, one way or another—if two or three steps are needed, the PLO will take them—that is its objective. It would like to succeed without any great difficulties.
    The EEC declaration represents not a supplement to but a departure from the Camp David accords. I am not suggesting that those accords are perfect. However, the EEC has gone further than any other party in undermining international recognition of them. It has done so because they represent the first concrete steps towards peace that the Middle East has experienced in the past 30 years. It ill behoves those who believe in peace to try to denigrate an agreement between two countries that have not known a moment's peace for 30 years. A completely peaceful relationship between those two countries is now in prospect.
    It is possible that an accommodation will be reached and that another Arab-Palestinian State will be born. However, that State must not be motivated by the elimination of the State of Israel. It may be said that we should negotiate with the PLO, but that is worse than saying that we should negotiate with the IRA because it claims to be the only group to represent Catholics in Northern Ireland.
    Mr. Dan Jones: I have also lived in Israel. I spent a good deal of time in the Negev desert. I wish to make a constituency contribution that is directly relevant to the United Kingdom and the EEC. Is the subject of Israel relevant to this debate?
    Dr. Miller: I am sorry if my hon. Friend feels that it is not.
    Mr. Dan Jones: I do feel that.
    Dr. Miller: It is for you, Mr. Deputy Speaker, to decide whether I am in order. However, section II of the

    1023
    White Paper is entitled "Political Co-operation". There is a reference to the EEC initiative. I am trying to explain why that initiative is a mistake. Given all the arguments about human rights, no one could complain that the Camp David agreements infringe any human rights convention.
    Israel has bitter memories of Europe's involvement in Middle East affairs. Before and during the Second World War every excuse was made not to lift a finger to help Jews, who were being massacred by the hundreds of thousands. As hon. Members know, that massacre culminated in the holocaust and the extermination of about 6 million Jews. Immediately after the war the wave of sympathy was not sufficient to spur the British Government into adopting a more humane attitude. We know what happened after that.
    In October 1973 Israel was attacked by Egypt and Syria. What action did Britain take? The day before war broke out Britain had an agreement to supply arms to Israel. The day that the war broke out the Government unilaterally abrogated that agreement. I wanted to know what Israel had done on the first day of the war that it had not done on the day before. It was not Israel, but Egypt and Syria that attacked.
    I go further than that——
    Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. I apologise for interrupting the hon. Gentleman, and I do not wish to comment on what was said by the hon. Member for Burnley (Mr. Jones). However, the hon. Gentleman must confine his remarks to the European connection with Israel and the PLO. He is perfectly in order, but he must refer to Europe.
    Dr. Miller: With respect, Mr. Deputy Speaker, this is what the British Government did, and the British Government are part of the EEC initiative. The British Government are part of the Nine who produced the EEC initiative about which I am talking. That is exactly my point.
    Not long after we joined the EEC the British Government even refused to allow one of their own allies to ferry war supplies to help Israel, which was being attacked.
    I know that the Lord Privy Seal would warmly enter into agreement to produce guarantees in the Middle East area that attempted to allay Israel's fears. However, in my humble opinion, all the EEC countries would find a dozen reasons for failing to comply with such pledges. Not only are the Government wrong in their whole approach to Britain's continuing EEC membership; they are wrong about political co-operation on the Middle East, which I believe is doomed to failure.
    8.52 pm
    Mr. Teddy Taylor: The speech of the hon. Member for East Kilbride (Dr. Miller) was different from most of the other speeches. It served a useful purpose because it reminded my right hon. Friend of a substantial worry on both sides of the House about the Middle East problem. The British Government have appeared to move from genuinely looking for a possible way of resolving this difficult problem to an almost unreasonable preference for one side in the dispute. Whereas the Camp David agreement achieved movement on both sides, unfortunately that is not the case in respect of the European initiative, which appears to have done nothing, apart from undermining the successful American initiative.
    1024
    There have been a number of interesting speeches on the economic aspects of the White Paper. I comment on only one. I was honestly surprised at the speech of my hon. Friend the Member for Anglesey (Mr. Best). He is one of the most able, intelligent and bright new Members in the House of Commons. I was surprised when he advanced some of the arguments which I associate with people who have a closed mind on issues such as this. He said that the Common Market was a splendid thing because lots of Common Market money had gone to Wales. One would think that the inevitable consequence was that if we were not in the Common Market that money would not have gone to Wales. Because of that, he seemed to suggest that Welshmen should support the EEC 100 per cent.
    My hon. Friend will know that for every £1 we receive in grants or subsidies from the EEC, Britain must pay almost exactly £2. In other words, every £1 which goes to Wales, Banffshire or any other part of the United Kingdom costs us £2. Therefore, logically, if we held on to the cash instead of contributing it to the EEC we would have twice as much money to spend in Wales, Banffshire and all the other places which need assistance.
    My hon. Friend may ask "What assurance do I have that if the Government had twice as much money they would necessarily spend it on worthwhile projects in Wales? Might they not waste it by spending it in Northampton or Southend?" The answer, surely, as he is well aware, is that although the location of these grants is theoretically approved by an EEC committee, the projects are submitted by the British Government. So the area where the money is spent is an indication of the British Government's priorities.
    The Government, as we well know, think highly of Wales. They appreciate what needs to be done there. That is why the money is going there. But it is a ludicrous argument to put forward as an advantage of EEC membership that we spend money in Wales. My hon. Friend must be aware that if we were not in the EEC there would be twice as much money to spend. It does not strike me, therefore, as a very strong argument.
    Mr. Myles: Rubbish.
    Mr. Taylor: My hon. Friend says "Rubbish." He is saying "Rubbish" not just to me but to the Ministers who have been supplying me with most helpful answers over the last few weeks. I asked the Chancellor of the Exchequer what was the ratio of the money that we have received from the EEC in grants and subsidies in relation to the money that we have paid in since we joined the EEC. The answer was 1·95p: £1. That shows that the pound that we get for Wales, Scotland, Southend or anywhere else costs us £2. It is not a basic argument, therefore, in support of our membership of the EEC.
    But we are not discussing the merits of joining or of leaving the EEC. Although we have had some of that from the Labour Party, it seemed to me that some Labour Members were trying to convince themselves that if the Labour Party were re-elected there would automatically be a decision to leave the Common Market. The position is far from being as clear as that, as the Opposition Front Bench spokesmen are well aware. The only indication of Labour Party policy that we have had is that a Labour Government might seek to repeal article 2(1) of the Treaty of Accession. We know that there has been a Labour Party conference decision, but we do not necessarily accept that items passed at political party conferences become policy.

    1025
    We should be looking at the White Paper and making the kind of assessment that the Lord Privy Seal tried to make on the question whether we have made good progress over the last six months; whether we have been making progress in any direction at all.
    For those who are interested in major reforms of the EEC the recent agricultural price review was probably the most disappointing event of all time in an EEC context. It seemed to confirm once and for all that there is no prospect whatever of having a major structural reform of the CAP that would be politically acceptable to all its members.
    We should have seen some reform. As my hon. Friend the Member for Northampton, North (Mr. Marlow) rightly said, the Government were elected on a manifesto which said that we would insist on a freeze on the price of all goods in surplus. What happend to that manifesto? We know that the Prime Minister, the Lord Privy Seal and other members of the Cabinet are concerned about trying to keep to the manifesto. They are constantly saying "Tories keep their promises". But this promise has not just been abandoned; it seems never to have been discussed at the EEC. It is not because the Government are crooks, rogues or rascals. It is simply because, in the discussions across the table, it has become obvious that our basic manifesto commitment was not a starter in the EEC if we wanted to get any progress in any other direction. That, probably more than anything else, is an indication that it is politically impossible to reform the CAP.
    We had a splendid paper from the Common Market Commission that said, in effect, "The most we can possibly add to prices is 7·8 per cent., and even that will need lots of safeguards such as a cut in the British green pound and double co-responsibility levies." The Commission said "That is the maximum we can possibly afford unless we are to have more surpluses, more expense, and the nearer approach of the eventual collapse of the CAP."
    But what happened to all these propositions? They were abandoned by the politicians. All the reassurances went, one by one—about the green pound and all other restrictions. We ended up with a much higher price than the Commission said was the maximum that the system could possibly afford. It stands out a mile that unless we have seven years of plague and drought, next year the surpluses in the CAP will be greater than they were last year; next year the expenditure of the CAP will be more than it was last year. What progress has been made towards reform?
    Mr. Myles: Is my hon. Friend saying that he would like to see production at levels that would occur in a year of plague or drought? We had two years of drought, not long ago, when the support price for potatoes, about which he complains, was £40 a ton and the price to the consumer was between £200 and £300 a ton.
    Mr. Taylor: I was not recommending that prices should be fixed on the basis of drought conditions. Everyone knows that no movement towards reform of structural surpluses has been made in the price review. The cost will be worse next year than it was last year. No movement towards structural reforms to deal with surpluses has been made. The prospect of achieving
    1026
    structural reforms simply does not exist, because of the actions of agricultural lobbies and the views of the French and the Germans.
    I ask the Lord Privy Seal whether he honestly thinks that progress has been made. I accept that the Minister of Agriculture, Fisheries and Food, although presenting some strange figures and estimates, not for the first time, has won certain battles for Britain within this package. On the other hand, it is the package that matters. We should be concerned that there has been no movement towards structural reform.
    We should also be concerned that exports of cheap, subsidised food to Russia in 1980 were the greatest ever. Some items had not appeared previously. I am told that 149 million litres of cheap subsidised wine at a price of 30p a bottle went to the Russians and was sold for five times the price, so helping to finance the Russian war machine. Butter was sold at between 31p and 40p a pound, again producing massive profits for the Russians. I do not see that the Lord Privy Seal can claim six months of progress.
    No movement has been made towards controlling the vast expenditure of the so-called European Assembly. There are two obvious needs. There is the gentleman's agreement whereby the Council of Ministers does not question spending by the European Assembly and the European Assembly does not question spending by the Council of Ministers. No movement has been made to remedy that situation.
    There is the crazy level of expenditure involved in the European Assembly meeting in Strasbourg and Luxembourg with the decision-making process in Brussels. A decision by the Council of Ministers in that strange sounding place called Maastricht was that the status quo should be maintained. That means, in other words, maintaining the enormous colossus in Strasbourg, maintaining Luxembourg and also holding meetings in Brussels. It is shameful that the Council of Ministers failed to offer any guidance aimed at cutting this enormous spending, which annoys many people—enthusiasts and critics of the EEC alike.
    It is a big disappointment that the White Paper makes no mention of a willingness by the Government to examine the consequences of Common Market membership for our economy, for jobs and for trade, especially at a time when we are supposed to be looking for major structural reform. Speech after speech has been made by those who argue that the Common Market is the biggest job destroyer in Britain. I have heard the Minister say that the Common Market helps jobs. We seem to be moving more towards a fanatical position. My own view is that, on balance, the Common Market has been bad for the British economy. Surely, at a time of 2½ million unemployed and when prospects are bleak, the British people are at least entitled to see the Government introduce some kind of inquiry to try to identify the effects of Common Market membership so that we can try to get the rules changed to help this country.
    The questions that I have put to Ministers have been treated in the same manner as the Government treats all questions. Their response is total, blanket commitment and enthusiasm for the EEC. I asked what had been the effect on jobs of the £6 billion deficit in trade in manufactures with the Common Market in the three years from 1977 to 1979. I was told that it was not possible to make an estimate. Yesterday in Japan the Foreign

    1027
    Secretary told the Japanese that their trade was destroying thousands of jobs in Britain, yet we are told that the Government do not know the effect of the massive deficit in Europe.
    What about the effect on the contributions? We pay £3,000 million net into the coffers of Europe—more than we have got out of it. Surely, that means something in terms of jobs. We could spend £3,000 million in Scotland, Wales and England, or on reducing taxation or bureaucracy. Surely that would help industry and jobs. We might want to give more subsidies to British Steel and British coal. We might want to reduce taxation. No matter what the purpose, I am sure that we all agree that an extra £3,000 million could be used to create more jobs in Britain.
    So what has been the effect? We are not told. What about the effect of entry on the cost of food? We have been given various estimates, all of them hedged with qualifications. The Minister of Agriculture, Fisheries and Food said in a written answer that subject to qualifications it costs the British housewife £3,000 million a year—that is, about £5 per week per family. That is a lot of money. Surely, that affects jobs and prosperity.
    We have the evidence of countries which did not join the EEC. What has happened in Norway? Unemployment there was 1 per cent. and is now 1·2 per cent. What has happened to jobs in Austria? Unemployment was just under 1 per cent. and I am told that it is now about 1½ per cent. Of course, other reasons may be involved.
    I hope that the Government will take the matter seriously and not just tell us that the situation would be much worse if we were not members of the Common Market. There is overwhelming evidence that the present rules are bad for Britain. Let us consider what changes are necessary, because changes are coming in the EEC. It is time to accept the fact that the CAP cannot be reformed and to seek ways in which national States can run their own agriculture, under article 39, in co-operation with one another.
    Sir Anthony Meyer: I note what my hon. Friend is saying about national States co-operating without the common agriculture policy. Will he tell us the outcome of his conversations with Monsieur Debré, when he was in this country, when he suggested that it would be better to have political co-operation without any CAP? Did he get a favourable reaction?
    Mr. Taylor: Monsieur Debit said that national responsibility should be built up. When I asked him about the CAP he said that it was a fundamental pillar of the EEC. I, too, would take that attitude if I were a Frenchman. Just because a Frenchman believes that the CAP is a fundamental pillar of the Community and is good for France does not mean that we should accept it.
    The Community will run out of cash, and there will have to be changes. We should not be happy about what has happened during the past six months. This is the time when we should be considering major structural changes. There has not been much sign of that happening during the past six months, but I hope that there will be more in the coming months.
    9.9 pm
    Mr. Dan Jones: I have about two minutes in which to put my case, and I shall do my damndest to do so in that time.
    1028
    The references from the EEC to this country include textiles. In 1947–48, one of the major industries in Burnley was the textile industry. It was approached by the then Labour Government who begged the people of the area to stay in textiles, although those who had been in textiles since the last century had had enough. Eventually they agreed to co-operate. At that time, of course, it was possible to export floor cloths. Today, that industry is finished. That was the reward for sticking to textiles.
    On the social side of the EEC report, I want to mention a coal yard adjacent to a residential area in Burnley. No hon. Member would live in that area for any length of time in the conditions that the people of Burnley have had to tolerate. I have made one application after another to the EEC for help, but each has been turned down, and no help has been forthcoming. Even so, the White Paper refers to the social funds available for improvement. These are urgently needed.
    Will the Minister be kind enough to examine what I have said? I am prepared to meet him personally at any time convenient to himself when we may discuss this intolerable state of affairs. As a miner, I have endured coal dust and I know that it is dangerous and leads to lung complaints. I feel certain that some of the people in the area that I have described have suffered from those complaints.
    I have now used the two minutes I promised to take for my speech. To avoid prolonging it I simply appeal to the Minister to afford me an opportunity to elaborate on the case that I have made. I have no doubt that the people to whom I have referred deserve far better treatment from the EEC than they have been given.
    9.11 pm
    Mr. Roland Moyle: I am grateful to my hon. Friend the Member for Burnley (Mr. Jones) for resuming his seat so promptly. We have had a lively if somewhat thinly attended debate, similar to the one that we had in December. To that extent the House reflects the feeling in the country. Membership of the Common Market fails to inspire the country, and the House generally reflects that sentiment on these occassions.
    An interesting aspect of these debates is the absence of the right hon. Member for Sidcup (Mr. Heath) and the right hon. and learned Member for Hexham (Mr. Rippon). One might have expected them to attend to bask in the glory that they conferred on the country as a result of negotiating EEC membership, but both have been conspicuous by their absence. I hope that they are not having spasms of conscience.
    Mr. Alastair Goodlad: My right hon. Friend the Member for Sidcup (Mr. Heath) is ill.
    Mr. Moyle: In that case I apologise to the right hon. Member for Bexley, but he was not here for the December debate, and that is worth bearing in mind.
    The Lord Privy Seal answered a question today from my right hon. Friend the Member for Battersea, North (Mr. Jay) about EEC passports. He said that there will be further opportunities for the new format of the United Kingdom passport to be debated before any change is made. May we take that as an undertaking by the Government that there will be a debate on the passport before the new form is adopted? I should like the Lord Privy Seal's assurance on that matter. If on the occasion

    1029
    of that debate the right hon. Gentleman is seeking a compromise to unite the House, may I suggest one for him? He could propose that the passport should be dark blue and that "EEC" be removed from the cover. I am sure that that proposition will unite the House.
    Membership of the Common Market is the Government's central foreign policy commitment. An impartial observer would at times find it difficult to understand that. The Government say that one of their main duties, if not the main duty, is to ensure the military protection of their citizens from external attack. However, membership of the Common Market in no way contributes directly to Britain's military security. We are members of NATO but there is no relationship between membership of the Common Market and membership of NATO. France is a member of the Common Market, but although a signatory of the North Atlantic Treaty she is not a member of NATO.
    The main motive power of NATO is the United States, which is not a member of the Common Market. It is arguable that that is as it should be—that it is not a hangover from the historic period after the Second World War when the United States was so strong and Western Europe was so weak but is a fundamental requirement.
    In this respect I disagree with the right hon. Member for Farnham (Mr. Macmillan), who called for a greater degree of military independence in Western Europe as a result of political co-operation. To detach Western Europe from the United States of America would lead to a great deal of pressure for Western Europe to build up its own massive and sophisticated nuclear retaliation system independent of the American system.
    I cannot believe, in opposition to the right hon. Member for Farnham, that the development of a further centre of nuclear decision-making would add to the world's stability. If we separated ourselves from the United States I am sure that that pressure would mount and become successful. Indeed, it is already mounting from the right hon. Gentleman before any such decision has been taken or is likely to be taken.
    I believe that both sides of the House agree on the broad principles of political co-operation within Western Europe in diplomacy and foreign policy as set out in the White Paper. The nations of Western Europe occupy much the same geographical part of the globe. Therefore, they have roughly the same spatial relationships with the rest of the world. Their civilisation has common roots and there is much common intellectual inheritance. They have the common aim of defending and promoting democracy. They have many other common characteristics. Even without being members of the Common Market there would be many interests that would compel us all to endeavour to evolve a common foreign policy.
    It is interesting to note that foreign policy is outside the Treaty of Rome. There is no requirement under the treaty to develop a common foreign policy, yet a large part of the White Paper is devoted to co-operation in foreign policy. Happily, co-operation is developing and we all agree with that. I have two reservations. There seems to be a tendency at times on the Continent of Europe to watch for a faltering on the part of the United States and to pounce into the gap when that happens. It is not bad in itself to try to supplement the lead that the United States gives in the Western world, but there must not be too great
    1030
    a divergence between the foreign policies of the two groups—namely, the United States and Western Europe. Whatever compulsion there may be to bring a common foreign policy to Western Europe and to evolve a common foreign policy doctrine, there are great gaps between the evolution of that policy and the execution of the policy in practice. There is a great deal of pious posturing that Western Europe, as yet, is unable to implement.
    The Middle East has been referred to by a number of hon. Members, including my hon. Friends the Members for Brent, South (Mr. Pavitt) and for East Kilbride (Dr. Miller). It was also mentioned by the hon. Member for Holland with Boston (Mr. Body). Nowhere else is the divergence of policy between the United States and Europe more possible and more likely to be counter-productive than in the Middle East. There is no doubt that the recent European initiatives and statements on the Middle East have had the substantial effect—I should say a beneficial effect—of sharply focusing attention on the vital interests of the Palestinians as a party in the negotiations. That is to be welcomed.
    However, the various declarations—especially the Venice declaration—do not fit in easily with the Camp David accords. The Americans have in their favour the fact that the Israelis are determined that they will not readily talk to the PLO in its present form. If anyone listening to the debate had any doubts on that score they were probably put at rest by my hon. Friend the Member for East Kilbride. It must be remembered that the Israelis are one of the two essential parties to any peace-making process in that part of the world.
    At the same time as making those declarations, I do not believe that Western Europe can deliver much in the Middle East at this time. Therefore, the aim must be to try to co-ordinate United States and European policy and not to try to demonstrate that Western Europe is better at solving the problems of the Middle East than is the United States of America.
    The latest representative of the Common Market to go to the Middle East is Mr. van der Klaauw. It would be interesting to hear from the Lord Privy Seal what has been the result of his recent visit to the Middle East on behalf of the Common Market countries.
    The rapid deployment force is basically an initiative of the United States. It would be a bold man who could declare what is the correct current foreign policy and defence solution to the situation in the Gulf, which is fraught and tense. Many of our oil supplies go through the Straits of Hormuz. If anything, the rapid deployment force is a solution fraught with a mass of problems. Not least is the relationship between action in the Gulf and the situation that might subsequently develop in Western Europe. There is also the relationship between the United Kingdom and France, which have forces in that part of the world, and some of the smaller NATO countries.
    The right hon. Member for Farnham wanted to know how Western Europe might be strengthened. The Prime Minister would be much more likely to secure her policy objectives in the Gulf if she thought a little more deeply about what she said and how and where she said it, and co-ordinated with friends and allies before she made statements in places such as Washington. Sounding off without adequate preparation leaves our friends in the Gulf with the feeling that they are being treated like the imperial

    1031
    chattels which they felt they were not so many years ago. I hope that the Lord Privy Seal will pass on that well-intentioned piece of advice.
    There are other areas where the West European countries have a substantial interest in the maintenance of peace and are exercising political co-operation. There is the war between Iran and Iraq. There is a black spot on the record there, as the French moved quickly to supply arms to Iraq the moment the American hostages were released from Iran. The lesson here is that the one area where there are considerable tensions in the political co-operation between the countries of Western Europe is in the arms trade. It would be helpful to get together on that matter so that the world was not endangered by too reckless a pursuit of the sales of arms to various countries in that part of the world. After all, Iran and Iraq are now under intense pressure. Their resources are being considerably strained by the war. If they are deprived of weapons, they cannot fight that war to its ultimate conclusion and damage to us all.
    I shall not go over the past history of the dispute in Afghanistan. The initial Western European reaction was not good. The hon. Member for Southend, East (Mr. Taylor) gave much evidence about that. However, the situation could have been restored. The Foreign Secretary made a sensible suggestion about an international conference, which is not entirely being followed through. There was also the problem of President Giscard d'Estaing, who suddenly launched forth on television with his scheme for settling the problem, without deep consultation with the rest of his allies in Western Europe. There again there was somewhat of a blot on the cooperation in. Western Europe. However, there is much cooperation in that area.
    If the Common Market is to carry on in its present form for some time, it at least has the role of conferring democratic respectability on a number of countries which seem to need it, in view of their past history.
    I do not wish to sound patronising, but I am happy to join the Lord Privy Seal in welcoming Greece to the Common Market. Its membership sets the seal on the sensible return of the Greek people to democratic government. I, too, believe that Spain and Portugal should join the Common Market as soon as possible. I understand what is meant when it is said that democracy in Spain is fragile, particularly in the wake of the attempted military coup, but in many respects it is not fragile. The great majority of the Spanish and Portuguese people wish to conduct their affairs by democratic methods in conformity with the general standards of Western Europe. However, Spain has a closed military caste, some of whose members have lived a monastic life and developed views at variance with those of almost everyone around them. If Spain becomes a member those people are less likely to have a destructive influence on the development of Spanish democracy, so I urge the Government to make sure that the Mediterranean farmers of France and Italy do not delay the entry of Spain and Portugal.
    In the internal bargaining to keep Western Europe working together, and with the success in political cooperation that arises not from the Treaty of Rome and the institutions of the Common Market but from our common interests, why must we accept the bureaucratic top-hamper and expensive budgetary machinery, dominated by the CAP, which is directly against our interests as a nation? I agree with the great majority of speakers in the debate;
    1032
    it brings us a little advantage. I believe that in international tariff negotiations we have the advantage of the general European strength, although that is not accepted by all my hon. Friends. However, the disadvantages are immense. The CAP takes about three-quarters of the Common Market budget, so little can be spent on industrial support, relieving debilitated regions and other social measures, which we need above all else.
    Sir Anthony Meyer: I hate to interrupt a most statesmanlike and balanced speech, but will the right hon. Gentleman join me in urging the Government to encourage the Common Market to develop industrial and regional policies in order to counter-balance expenditure on the CAP?
    Mr. Moyle: As the hon.. Gentleman confessed in the previous debate, he has been arguing that case for 20 years. If he will possess himself a little longer, I propose to spend most of the remainder of my speech on that matter.
    We import food, and wish to do so at the cheapest price. Before we joined the Common Market our deficiency payments system kept our prices down to world prices. We sold our home-produced food to our people at a subsidised price—much cheaper than it would otherwise have been. The CAP, as has been said, is based on the Corn Laws principle—food is not brought into Western Europe until its price has risen to the price at which Western Europe can produce it. Non-European prices have to rise to European prices before the produce is imported. In the past eight years world food prices have been either about the same as European prices or very much cheaper.
    At no stage in the eight years during which we have been in the Common Market has there been a substantial amount of food from world. markets at prices higher than European prices. In 1979–80 the Common Market price for wheat was 63 per cent., barley 61 per cent. and maize 90 per cent. higher than the world prices. Barley and maize go into animal feedstuffs. Ii will therefore not surprise the House to learn that beef and veal prices in Europe are about 104 per cent. above the world price. Sugar is about 31 per cent. higher and butter a massive 311 per cent. above the world price.
    Incidentally, I see that in answer to a question from my hon. Friend the Member for Newham, South (Mr. Spearing) the Minister of Agriculture has reiterated that the recent agricultural settlement will add only 1 per cent. to the cost of living. The Lord Privy Seal had notice of our discontent with that earlier, in an intervention from my hon. Friend. We should like to know the mathematics of that calculation. It takes a considerable suspension of disbelief to imagine how the settlement could add only 1 per cent. to the cost of living.
    All of these factors massively inflate our cost of living. There is pressure on wages to compensate for the increased cost of living and pressure on our industrial costs to compensate for wage costs. This leads to a loss of export competitiveness, particularly for trade manufacturers. I shall not stress the point again. We have been over that ground substantially and the Lord Privy Seal knows that that is our concern, not the overall trade, which includes the price of oil.
    As many hon. Members have said, that means that we have to put up with substantially greater unemployment than we need. The problem of balancing our trade and

    1033
    exporting our goods to the world has been the central economic problem in all the 15 years that I have been in the House, both before we joined the Common Market and subsequently. This whole business, however, seems to contribute towards making a solution to that problem infinitely more difficult.
    Few would deny the burden of the argument that I put forward. Members of the House therefore fall into two categories. This relates to the point made by the hon. Member for Flint, West (Sir A. Meyer). We are either reformers or deserters. I shall repeat a pro-deserter argument that I put to the House last December and to which my hon. Friend the Member for Grimsby (Mr. Mitchell) alluded. I said:
    "In the early 1960s the argument was that we should join the Common Market in order to stop the CAP. In the late 1960s it was suggested that we should join the Common Market in order to stop the CAP solidifying. In the early 1970s people said that we should join in order to reform the CAP. It is now argued that the CAP cannot go on as it is, and that it is bound to be reformed."
    Going through all this, one is reminded of the donkey with the carrot tied to its neck and of the advertisement for The Times, which reads:
    "Have you ever wished you were better informed?"
    Nowadays it is said that the budget will run out of money in 1982 and the CAP will therefore be reformed. It is also said that the CAP will never survive the accession of Spain. I repeat the point that I made during the earlier debate:
    "The CAP may be modified, but it will not be reformed. It will remain rooted in its high-price, Corn-Law-type principles. We will not be allowed to trade on the world markets and to buy the cheapest good food"—
    as we used to, before we joined the Common Market—
    "although that is in our interests."— [Official Report, 18 December 1980; Vol. 996, c. 978–79.]
    and I believe that it is good Socialism, too.
    The situation is even worse, because on 17 November the Minister of Agriculture, talking to the Conservative Brussels Association, defended the CAP in principle. On top of that, for good measure, the Foreign and Commonwealth Secretary, talking to the Ubersee Club in Hamburg on the same night, said that the common agricultural policy was part of the fabric of the Community. That seems to be an abdication of responsibility by those two Ministers, given our economic position, and almost a dereliction of duty. If the Lord Privy Seal is right in his claim that we are to try to reform the CAP, those two speeches have more or less given away our negotiating position before we have started to negotiate.
    The latest price increases have added to our problems. It was said—this is in direct contradiction to undertakings given during the general election campaign, as was pointed out by the hon. Member for Northampton, North (Mr. Marlow)—that we would refuse to countenance any further increases for products in structural surplus. We have now piled structural surplus on top of structural surplus. Cereals, beef, veal, sugar and milk—all products under the CAP in substantial structural surplus—have had further price increases. That reduces income to the budget by providing the incentive to produce more European food and less world food, which has to pay a levy when it comes into the Common Market. It is now clear that the Common
    1034
    Market does not conform to British national interests, because the budget is almost wholly dominated by the CAP.
    Last year the Prime Minister claimed that she had won a great victory on the budget. She certainly won something, but at best it was minor victory. This is not introduced as carping criticism of the right hon. Lady. I hope that she will go in for more battles of the same kind. Indeed, I have no wish or capacity to carp. But we must not delude ourselves further about the Common Market and the common agricultural policy. It was only half a victory—half a loaf—despite the right hon. Lady's claims to the contrary, because she got only half the sum that she should have got back from the Common Market had justice been done by this country's contribution. That was at the cost of a permanent strain on our relations with our Western European allies. We have produced evidence today that that strain in relations is still carrying on.
    That victory was reduced to less than a quarter of a victory, because it was a rebate for a limited period only. This time is now half spent. This time next year we shall again be in a knock-down, drawn-out battle with our allies in Western Europe to secure the same half loaf that we won last year.
    The victory was further diminished by the form that it took. Instead of allowing us to keep our money, the Brussels authorities insist on our handing our money to them. They then graciously decide to give it back to us to spend in this country on projects of which they approve. They also claim that this returned money is EEC money.
    Only a few days ago I had a press handout from the Foreign Office listing projects in all the regions of the United Kingdom being financed by EEC money. That is not EEC money. It is out money. In the days of yore it would have been raised in this country, it would have been discussed in the House and the House would have decided how the money was to be spent. This procedure bypasses our democratically elected Parliament and diminishes its sovereignty, and it should not be tolerated. That is the answer to the spurious claims made by the hon. Member for Anglesey (Mr. Best).
    People are beginning to realise that the common agricultural policy has in no way been reformed and that it will not be reformed. It is part of the essential warp and woof of the Common Market, and it is here to stay so long as we are in the Common Market. That is why the Labour Party, at its last annual conference, voted for a different relationship between this country and the Common Market in future.
    The old relationship has been tried and found wanting. We are determined to apply that new relationship on our return to office. It will be one based on friendship with our Western European allies. After all, we have much in common in foreign policy and diplomacy, and have done the ultimate by committing our defence forces to the defence of Western Europe. I am sure that our allies would not wish to do anything to compromise our capacity to maintain that commitment.
    The existence of the Brussels bureaucracy and the Brussels budget, based essentially on the common agricultural policy, are irrelevant to our main aims of security and diplomatic co-operation. Therefore, why should we put up with the rigidities of the present Common Market system when they damage our economy to a demonstrable extent? The rigid straitjacket of the common agricultural policy must be removed from our shoulders.

    1035
    The 1972 legislation, which enacted our attachment to the Common Market, was a mistake in principle which ought to be rectified as soon as possible. That is section 2 of that Act. Flexibility and the sovereignty of a democratic Parliament should be our watchwords for the future. That is why we foresee a totally new relationship for the future with the nations of Western Europe.
    Sir Ian Gilmour: The right hon. Member for Lewisham, East (Mr. Moyle) began his remarks by complaining about the absence of my right hon. Friend the Member for Sidcup (Mr. Heath) and my right hon. and learned Friend the Member for Hexham (Mr. Rippon). I think that he will admit that that was a fairly cheap remark, because he knows perfectly well that my right hon. Friend the Member for Sidcup is not well and could not possibly have been here. Looking at the House, he knows that there is not much point in noting absentees. I do not see that there is much point in noting them; it would be more to the point to note those hon. Members who are present. The right hon. Member would have done better, I think, to keep off that matter.
    Despite the very small attendance, we have heard some extremely interesting speeches and I will try to deal with as many points as I can. The hon. Member for Grimsby (Mr. Mitchell) said that there were some fifth columnists paying officials to attack the official policy of the official Opposition on the EEC. If there were such people they would be extremely clever because, as my hon. Friend the Member for Southend, East (Mr. Taylor) asked, who knows what the policy of the official Opposition is on the EEC? It would therefore be extremely difficult for anyone to attack it.
    Mr. Austin Mitchell: It is to come out of the Common Market.
    Sir Ian Gilmour: I am not sure that the hon. Gentleman is in a position to speak for the official Opposition. In a recent article by the right hon. Member for Leeds East (Mr. Healey) he talked about Britain's physical survival as well as our economic future depending literally on the skill and sensitivity with which we work within the Western Alliance and the European Community. That does not sound to me like coming out, and it may well be that the right hon. Member for Leeds, East, as the official Opposition spokesman on foreign policy, knows what the official policy of the Opposition is. Otherwise, I think that it must be conceded that there is a good deal of doubt on that subject.
    The hon. Member for Caithness and Sutherland (Mr. Maclennan) talked about nitpicking opposition, political opportunism and selective memories. That is a fair critique of some of the speeches that we heard from the Opposition—and I am afraid I do not exclude the right hon. Member for Lewisham, East.
    I shall write to the hon. Member for Burnley (Mr. Jones) about the subject that he raised and we might have a meeting. We will certainly take that matter up.
    The right hon. Member for Lewisham, East said that he did not concede that the effect of the recent price settlement would be only 1 per cent. on the retail price index. In fact, it will be less than that. We never said that it would be 1 per cent. on the RPI; we said that it would be 1 per cent. on the food price index. It is about 0·2 per cent. on the RPI. That is because the premiums and subsidies that we have obtained for this country for beef,
    1036
    lamb and butter are together worth about £300 million. They help British consumers and are not available to other member States. That is why the effect on the food price index is lower than the 3 per cent. figure that the Commission has suggested.
    I also tried to explain to the hon. Member for Newham, South (Mr. Spearing) why a 9 per cent. increase in food prices will lead to only a 1 per cent. increase in the retail food price. First, the common agricultural price regimes do not apply to all food, nor are producers' costs the only element in retail prices.
    Secondly, the effect on the British consumer is mitigated by the beef, lamb and butter subsidies. Thirdly, there will be no effect on the liquid price of milk in the United Kingdom, which is fixed by the Government and not by the Council. Fourthly, the fierce competition in the pigmeat market will prevent the Common Market price increase being fully reflected in the retail price. Similarly, the strong competition for shares in the British butter and cheese market will moderate the effect on consumers.
    Mr. Marlow rose——
    Sir Ian Gilmour: I will give way to my hon. Friend while noting that he refused to give way when he was speaking.
    Mr. Marlow: That is not quite correct; I gave way two or three times.
    My right hon. Friend says that we get back from the Community £300 million on butter and beef. Is he saying that we are getting back £300 million more than we would have got back if we had the same arrangements as last year?
    Sir Ian Gilmour: Yes. The settlement is a small net gain to the United Kingdom. The inflation rate in the Community has been ignored by some of my hon. Friends. The suggestion made by my hon. Friend the Member for Banff (Mr. Myles) that farmers should be the only people in Europe to get no price increase for their product is highly unreasonable. It is inconceivable that that should happen. For most countries in the Community the price rise is less than the rate of inflation.
    My hon. Friend the Member for Holland with Boston (Mr. Body) spoke, rightly, of the importance of our milk delivery system. Our restrictions on imports of milk are designed to protect both human and animal health. We are determined to maintain the protection provided by our health and hygiene regulations. We consider them to be fully and entirely justified.
    My hon. Friend spoke eloquently and with great knowledge on the subject of sugar. The whole House will agree with what he said about the importance of sugar to certain countries, particularly the ACP countries. Their imports are guaranteed for an indefnite period under the sugar protocol to the Lomé convention. That applies to the Community as a whole and not just to the United Kingdom. Despite the closure of the Liverpool sugar refinery, the bulk of the ACP supplies will continue to be refined and consumed here.
    My hon. Friend also mentioned Community membership of the International Sugar Agreement. It offers the best means of regular balancing of the world market. We support accession to the ISA and hope, now that agreement has been reached on the Community's internal sugar regime, that the mandate that the Commission negotiated can be agreed by the Council.
    Mr. Body: Does not my right hon. Friend agree that it will be impossible for the EEC to be admitted to the International Sugar Organisation so long as it goes on dumping up to 3 million tonnes of sugar a year?
    Sir Ian Gilmour: We shall see. I hope that my hon. Friend is being too pessimistic.
    Several attacks have been made on the fisheries policy. I dealt with our good faith when I was answering the right hon. Member for Llanelli (Mr. Davies). Much has been said about the unsatisfactory arrangements that were negotiated at the time of our entry. If those in Opposition found the arrangements so unsatisfactory, why did they not include them in their renegotiation of the terms of membership? They were not mentioned.
    The inequity of the common fisheries policy, which was agreed prior to our coming to office, is recognised in the transitional arrangements and in article 103 of the Treaty, which envisages further arrangements being made.
    The right hon. Member for Llanelli asked about zones. My right hon. Friend the Minister of Agriculture, Fisheries and Food has made it clear on many occasions that the Government's objective is to obtain an adequate zone of exclusive access, with preference beyond that designed to benefit coastal communities that are particularly dependent on fisheries. In conducting the negotiations, the Government will continue to maintain the closest liaison with the industry.
    Mr. Denzil Davies: Will the right hon. Gentleman clarify that point about the zone of dominant preference? Does his answer mean that the Government will not agree to any arrangement unless they get a zone of dominant preference from 12 to 50 miles?
    Sir Ian Gilmour: I have nothing to add to what my right hon. Friend the Minister of Agriculture said. He has carried the industry with him and has made considerable progress.
    The hon. Member for Newport (Mr. Hughes) suggested that membership of the Community was the cause of the problems that have beset our steel industry. That is farfetched, particularly as that industry has been uncompetitive in world markets because of the failure of previous Governments to take the necessary decisions. It is interesting to note that the agreement reached in the Council on 30 October—to which reference is made in the White Paper—was much welcomed by both the industry and the trade union.
    The hon. Member for Grimsby and my hon. Friends the Members for Northampton, North (Mr. Marlow) and Southend, East spoke about our visible trade balance. They tended to ignore the fact that it was much better in 1980 than it had been in 1979. The hon. Member for Grimsby complained that we used the import-export ratio. He said that it was a meaningless statistic. It is not meaningless. It happens not to suit his argument. He then said that we had a manufacturing deficit with Europe and a surplus with the rest of the world. It is fairly obvious that if a country trades with others that do not have manufacturing capacities there will be a manufacturing surplus. Therefore, that point was singularly irrelevant. If the hon. Gentleman were to compare our trade performance with the EEC with our performance with other manufacturing areas he would find that we have done better with the EEC than with Japan or the United States of America.
    1038
    As the hon. Member for Caithness and Sutherland said, it is absurd to pretend that the decline in our trade is due to our membership of the EEC. The problem is far more deep-seated than that. As my right hon. Friend the Member for Farnham said, it has been with us for many years. The hon. Member for Inverness (Mr. Johnston) made an extremely positive speech. He called for more Government initiatives in several areas. I am glad to say that we have not been as backward as he thought. My right hon. Friend the Secretary of State for Energy has put forward proposals for a Community fund to help finance investment in coal production in member States. We look forward to further Community action in support of the coal sector. Similarly, Community member States and other countries within the International Energy Authority have acknowledged a need for additional measures to alleviate the problems that might arise if there were problems with oil supplies that fell short of a full crisis. I agree with what he said about regional and social funds.
    Several speeches have been made about political cooperation. My right hon. Friend the Member for Farnham spoke eloquently about the need for more co-ordination in the defence sphere. He reminded us of the sober fact that Europe is incapable of defending itself. That will remain the case for many years. My right hon. Friend thought that the Community should have more say in security matters. As he will know, the German Foreign Minister agrees with him. Nevertheless, we must emphasise that NATO must be the primary forum for defence matters. The right hon. Member for Lewisham, East was not right to say that France is not a member of NATO. She is.
    Mr. Moyle: France is a signatory of the North Atlantic Treaty, but not a member of the organisation.
    Sir Ian Gilmour: She is a member of the organisation, but she has contracted out of the integrated structure.
    The hon. Member for Brent, South (Mr. Pavitt) and East Kilbride (Dr. Miller), as well as my hon. Friend the Member for Southend, East criticised the European initiative. There was some support for it in a modified form from the right hon. Member for Lewisham, East. The hon. Member for East Kilbride was wrong when he said that Egypt was opposed to it. As I said earlier, President Sadat has said that the European initiative is extremely important, and he has welcomed it. It is not true that he is against it.
    After all, the Venice declaration seeks to secure peace in the Middle East by getting agreement on two basic principles, namely, the security of Israel and the legitimate rights of the Palestinian people. Surely that is something on which everyone should agree. That is in everyone's interest, and it is entirely right that Europe should seek to have those principles established.
    Dr. Miller: I have no objection to the right hon. Gentleman's last comment. Perhaps he will check his notes, because I said nothing about Egypt's not wishing to have any association with the initiative.
    Sir Ian Gilmour: I apologise; perhaps the hon. Member for Brent, South said that. It is wrong to suggest that the Venice declaration is not even-handed. It is not a good argument to say that no one cared about the Palestinians before 1967. In fact, there have been United Nations resolutions every year since 1948. Even if people did not care about the Palestinians before 1967, that is

    1039
    more a criticism of people in Europe and the rest of the world. It does not mean that the issue was not alive or that it should not be solved.
    My right hon. Friend the Member for Farnham asked about Poland. I spoke earlier of our concern at the political situation there and the need for non-interference. The Community has followed developments in Poland with great concern and has been ready to do what it can to give economic help. I confirm my right hon. Friend's figures. They are of that order of magnitude—extremely large and very serious.
    On 1 April the Community followed up its December decision to provide food and agriculture products to Poland at the Polish Government's request by a further decision to make available additional amounts of food and agriculture products on special terms.
    At heart, our membership of the Community is a political reality, as it was for the founders more than 20 years ago. It was a political decision to join, made many years ago by the Conservative Party, which we constantly reaffirm. The decision was also made by Parliament and by the people of Britain. The hon. Member for Grimsby got into great democratic knots by suggesting that another referendum would somehow be more democratic.
    We cannot go on changing our minds about Europe merely because the Labour Party keeps changing its mind.
    Mr. Spearing rose——
    Sir Ian Gilmour: I hope that the hon. Gentleman will forgive me if I do not give way, but I have only two minutes left.
    This does not mean that we should not seek the best possible economic and financial arrangements within the Community, or that we should not try to track down and eliminate inequities and idiocies where they exist. There will always be some of those.
    As the debate has shown, we differ strongly from the Labour Front Bench spokesmen, who basically adopt a "Little Englander" approach. We wish to consolidate and strengthen a Community dedicated to peace and security, which is firmly based on economic structures which are to the benefit of all its members.
    Of course, we are not blind to the inadequacies of some major Community policies, but we are setting about the reform. Our record shows that we are capable of getting results and can negotiate much more successfully with our partners than did the Labour Government. Our task will be to strengthen the base of the Community, and Britain within it.
    Question put and agreed to.
    Resolved,
    That this House takes note of the Report on Developments in the European Community, July to December 1980 (Cmnd. 8195).

    European Community (Developments)

      BUSINESS OF THE HOUSE
      Ordered,
      That, at this day's sitting, the Water Bill and the Energy Conservation Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. Goodlad.]

    Water Bill
    Lords amendment considered.
    10.1 pm
    Mr. Denis Howell: On a point of order, Mr. Speaker. May I, with great respect to you, raise the question that the Opposition amendments to the Lords amendment are not to be called? It puts us in a little difficulty, for three reasons.
    First, as the Opposition spokesman, I learnt of this only at a late hour. Secondly, this matter, although not called tonight, was dealt with in Committee. An amendment moved by my hon. Friend the Member for Edmonton (Mr. Graham) specifically referred to breakages in the sewerage system and the effect upon large areas of the country. Thirdly, under the Water Act 1974 the concept of the hydrological cycle was accepted, by which regional water authorities have responsibility for water supply and the cleaning of dirty water and its being fed back into the water system.
    Therefore, in our law and in our practice the question of drainage and sewerage is now inescapably linked with the supply of clean water. When sewers are collapsing, particularly in the North-West, the effect on the clean water system is very serious indeed.
    While fully respecting your decision, Mr. Speaker, as we wish to raise these matters, which are of considerable importance, may I ask for a little tolerance in the debate on the Lords amendment in order that we may make clear to the House the relevance of the sewerage system to the water system?
    Mr. Speaker: I am obliged to the right hon. Member for Birmingham, Small Heath (Mr. Howell) for the way in which he presented his point of order. I am sorry that he did not know until a late hour that the amendments had not been selected. Part of my difficulty is that, although what the right hon. Gentleman says about the linkage in law is correct, and although water undertakers are responsible for sewerage, the Bill has no provisions whatever relating to sewerage. It is concerned entirely with the water supply. I am, however, prepared to meet the reasonable request that the right hon. Gentleman has made and to show, in the discussion of the the Lords amendment, the same degree of tolerance as the Chairman showed in Committee.
    Mr. Howell: I am much obliged, Mr. Speaker.
    The Under-Secretary of State for the Environment (Mr. Giles Shaw): With permission, Mr. Speaker, I should like to say a word of apology to the right hon. Member for Birmingham, Small Heath (Mr. Howell).
    During the debate on Third Reading, in dealing with clause 2, on the subject of water for fire-fighting purposes, I rejected somewhat strongly the right hon. Gentleman's assertion that the North-West water authority intended to make good the sum of £500,000 presently charged to users of fire-fighting equipment by charging domestic as well as measured consumers.
    1042
    As I have subsequently informed the right hon. Gentleman, his information was more up to date than mine. My Department had been informed in writing and subsequently by telephone by the North-West water authority that it intended to recover the sum only from measured consumers. However, the authority subsequently changed its mind and ultimately decided that the £500,000 should be recovered from all consumers who recieved a water supply. That clearly includes the domestic sector.
    I unreservedly apologise to the right hon. Gentleman and to the House for misleading them on that occasion.

    Water Bill
      New Clause A

        CIVIL LIABILITY OF STATUTORY WATER UNDERTAKERS FOR ESCAPES OF WATER
        Lords amendment: After clause 5, in page 4, line 34, at end insert:
        (1) Where an escape of water, however caused, from a communication pipe or main statutory water undertakers causes loss or damage, the undertakers shall be liable, except as otherwise provided in this section, for the loss or damage.
        (2) Statutory water undertakers shall not incur any liability under subsection (1) above if the escape was due wholly to the fault of the person who suffered the loss or damage or of any servant, agent or contractor of his.
        (3) Statutory water undertakers shall not incur any liability under subsection (1) above in respect of any loss or damage suffered by any excepted undertakers for which they would not be liable apart from that subsection.
        (4) The Law Reform (Contributory Negligence) Act 1945, the Fatal Accidents Act 1976 and the Limitation Act 1980 shall apply in relation to any loss or damage for which statutory water undertakers are liable under this section, but which is not due to their fault, as if it were due to their fault.
        (5) Nothing in subsection (1) above affects any entitlement which statutory water undertakers may have to recover contribution under the Civil Liability (Contribution) Act 1978; and for the purposes of that Act, any loss for which statutory water undertakers are liable under that subsection shall be treated as if it were damage.
        (6) Where statutory water undertakers are liable, under any enactment or agreement passed or made before the coming into force of this section, to make a payment in respect of any loss or damage, they shall not incur liability under subsection (1) above in respect of the same loss or damage.
        (7) In this section—

        (a) "communication pipe" and "main" have the meanings assigned to them by section 1(1) of Schedule 3 to the Water Act 1945;

        (b) "damage" includes the death of, or injury to, any person (including any disease and any impairment of physical or mental condition);

        (b) "excepted undertakers" means—

        (i) statutory undertakers within the meaning of section 290(1) of the Town and Country Planning Act 1971;

        (ii) any highway authority within the meaning of the Highways Act 1980;

        (iii) any bridge authority, bridge managers, street authority or street managers within the meaning of section 39(1) of the Public Utilities Street Works Act 1950; and

        (iv) any person on whom a right to compensation under section 26 of the said Act of 1950 is conferred;

        (d) "fault" has the same meaning as in the Law Reform (Contributory Negligence) Act 1945; and

        (e) "statutory water undertakers" has the meaning assigned to it by section 11(6) of the Water Act 1973.

        (8) This section shall come into force on such day as the Secretary of State may by order made by statutory instrument appoint.
        Mr. Giles Shaw: I beg to move, That this House doth agree with the Lords in the said amendment.

        1043
        As the House will recall, when we considered the Bill on Report we undertook to introduce an amendment to provide for compensation when individuals suffered loss or damage from escapes of water from water mains. The new clause, which was introduced into the Bill in another place. fulfils that obligation.
        When we last considered this matter we looked at the principles closely and I explained why the Government had agreed to introduce this amendment and why it should, in our view, for the moment at least, be confined to escapes of water from mains and communication pipes.
        Our intention was, I think, widely welcomed not only on both sides of the House but elsewhere, and I do not think I need take up much time in explaining it. The hon. Member for Edmonton (Mr. Graham) argued persuasively that the principle should also be introduced to the sewerage system. I agreed to his suggestion that I should receive an all-party delegation, including outside interests, such as the National Farmers' Union, the Association of Metropolitan Authorities and others, to discuss the matter further. I have written to the hon. Gentleman today about this.
        As the House will recognise, the new clause imposes on statutory water undertakers a strict liability for escapes of water. That is to say, it makes clear that water undertakers are liable except in the circumstances specified in the clause. But we have not introduced many limits. We have provided that where it is wholly the fault of the person suffering the damage, or his servant, agent or contractor, no liability should rest on the water undertakers. This is the effect of subsection (2).
        Subsection (4) provides that where it is partly the fault of the person suffering the damage—r his servant, agent or contractor—he undertakers' liability should be diminished accordingly. Subsection (3) provides that no other statutory undertakers, highway authorities or allied body should benefit under this provision. The Public Utilities Street Works Act 1950 exists to govern the relationships between these bodies and should be left undisturbed to do so. We also feel that it would be unreasonable that statutory water undertakers should have a higher degree of liability towards other undertakers than vice versa. That is the reason for subsection (3).
        We believe that it would be wrong for people to be able to benefit both under this clause and under other provisions in respect of the same damage. Subsection (6) prevents that possibility.
        Subsection (8) provides for the clause to be brought into force by order of the Secretary of State. The commencement date will be the subject of consultations with the water industry and will be set to enable water undertakers to make the necessary insurance and budgetary arrangements. Our initial view is that the provision should come into force on 1 April 1982.
        Although the Bill did not contain this provision when introduced, I think that few here tonight will doubt its importance. We are grateful to my hon. Friend the Member for Grantham (Mr. Hogg) and to the hon. Member for Edmonton and his hon. Friends for seeking to introduce it. I am sure that the Bill is greatly improved by the inclusion of this clause and, accordingly, I commend it to the House.
        10.8 pm
        Mr. Denis Howell: I express first my appreciation to the Minister for the generous manner in which he corrected
        1044
        the error in our previous proceedings about the effect of the consequential costs of eliminating water for firefighting purposes to other water consumers and in particular, for confirming what I said on Third Reading, that it had been decided, particularly in the North-West, that the cost had to be borne right across the board, which would mean an additional 1 per cent. to the domestic consumer. The Minister's apology was typically magnanimous and is fully accepted by the Opposition. We are grateful to the hon. Gentleman for correcting the record.
        We are also grateful to the Government for accepting, even though in a limited form, the proposal that the hon. Member for Grantham (Mr. Hogg), supported by the Opposition, put forward, that where water main bursts occurred that caused damage to commercial, industrial and particularly domestic consumers and, I think, also agricultural consumers, the cost should be borne by the water authorities themselves. I am aware that the National Water Council has expressed serious reservations, not least because when these bursts occur they can be of such seriousness and of such a size that the cost to the water industry in rectifying them can be enormous. This may be a new principle being embarked on in our statutes.
        I agree with the Government that it is right that the individual householder and citizen must be protected from the astronomical cost that may fall upon them through no fault of their own.
        Certainly agriculture has cause for anxiety. The industry will be pleased that the Government have accepted its point of view, particularly since the Government believe that it is virtually impossible for farmers and others to insure against such eventualities. The Opposition believe that it is impossible for the domestic consumer in towns to insure against such a calamity. The cost of insuring or rectifying the damage done by burst water mains must be accepted by the water authorities—the statutory authorities—and not by the domestic consumer. The Opposition are therefore happy to endorse the proposal that the Government made in another place in that regard.
        However, we are less than happy that burst sewers are not to be dealt with in the same way. I shall not weary the House by quoting what the Government spokesman said in the other place. In essence, he said that the principle could not be accepted because of the cost involved in the collapse of sewers. The cost is enormous. It is surely logical that if a person in one road is compensated for damage done by a burst water main, a person in the next road whose house or property is damaged by a broken sewer should be likewise compensated.
        The collapse of sewers throughout the country is an enormous problem. I am glad that the Minister said that he will see a deputation. I hope that that will prove a constructive suggestion.
        Having regard to what was said earlier by Mr. Speaker, I shall briefly explain the size of the problem. There are between 50 and 60 collapses of the sewer system every week in the country as a whole. In Manchester alone, there are two collapses each week. Our failure and inability to replace these antediluvian sewers is so great that I am told that the method of calculating the problem is now referred to in the technical jargon of "DDB" meaning a double-decker bus. So when a collapse in the sewer system—as happened recently in Manchester—is referred to as "five

        1045
        DDB", it means that the havoc created is equivalent to the size of five double-decker buses. The House will understand the enormity of the problem.
        10.15 pm
        Manchester alone needs £870 million to replace the sewerage systems that have been there since the Industrial Revolution—some of them, I am told, since the French Revolution. A very serious situation has developed. It has been calculated by one of the officers of the National Water Council that the cost to the country of replacing its ageing, dilapidated and collapsing sewerage system is £5,000 million. That illustrates the considerable extent of the problem.
        Mr. David Crouch: The right hon. Gentleman referred to DDBs. I have never heard that jargon before. It can apply only to Manchester. I am sure that no other city would have such a designation for the troubles suffered from sewers. Does the right hon. Gentleman realise that when I first went to my constituency, 15 years ago, the sewer just outside Whitstable was open on the surface and running out to sea? That has been put right by my influence—whether, also, under the influence of a Conservative or a Labour Government I forget. It was much more important to worry about whether it would be put right than about which Government did it.
        Mr. Howell: I am much obliged to the hon. Gentleman, who has made a very pertinent point. The logic of what he says is not only that the open cesspools and sewers should be dealt with where they run to the sea. Collapsing sewers that affect the gas and fresh water supplies give rise to a serious problem. Sewage gets into the clean water supply, and that can have incalculable consequences for all concerned. I think that the hon. Gentleman and I are agreed about the serious nature of the problem for convenience and for public health, and I am obliged to him for making that clear.
        Another factor is also clear. It arises from the activities of the Secretary of State and his fly-by-night accountants. They have visited the regional water authorities, looking at their books on the basis of current cost accounting. By that means they have been able to rectify their earlier accountancy instructions to the authorities, which would have added enormously to water rates this year. Magically, the water rates have been brought back down to what the Government think is a more reasonable level. However, those activities have also involved an additional cut in the amount of money available for the replacement of sewers and for the capital works that are involved. That will add to the problem.
        Our aim tonight is to highlight the extent to which it is not now possible for the Government to provide for the maintenance and replacement of our ageing sewerage system. The problem is most serious in the North-West, but London and other industrial towns, such as Birmingham, and regions such as the North-East and the North, are catching up. I do not make a party point here. Both sides of the House have a responsibility in this respect. The House as a whole must provide for the collapsing sewerage system. However, the hazard will be heightened by what the Government have been doing recently, and the problem must be tackled soon.
        1046
        In conducting research for the debate I discovered that eight years ago the country was spending twice as much on the replacement of decrepit sewers as it is spending this year, while the problem now is four or five times as great as it was then. These figures throw up in sharp relief the problem to which we seek to draw attention.
        We welcome the fact that in another place the Government met the anxiety that we expressed in Committee and on Second Reading about the collapse of water mains and the effect upon domestic, commercial and industrial users. We hope that he will accept the logic of the position that where a householder or an industrial or commercial user is affected by a collapsed sewer the same arrangements should apply. That principle, which was admirably stated by the Minister and by Government spokesmen in the other place, has been absolutely right in respect of water supply, and in logic it must be applied equally to the drainage and sewerage system.
        I thank the Minister for taking action. I hope that on a subsequent occasion he will extend the Government's clarity of thinking to cover the whole water cycle. The principle under which the water supply operates is that it is impossile to divide the supply of wholesome water from the treatment of the dirty water that follows. For example, water in the River Thames is used five or six times over during its passage along the Thames. It is used, cleaned, put back into the system, used again and cleaned again. That process takes place on four or five occasions.
        That was the principle that a previous Government established as the basis for our water industry. The hydrological cycle leads to responsibility for the supply, use, disposal and drainage of water. Logic seems to lead inescapably to the Government's accepting responsibility for burst sewer mains as well as responsibility for burst water mains.
        Mr. Douglas Hogg: My hon. Friend the Under-Secretary of State has met in full the argument that was advanced on Second Reading. The agricultural community is grateful for the way in which he has responded. I am grateful to Labour Members for the support that they have given in the course of getting the new clause on to the statute book. That is especially true of the hon. Member for Edmonton (Mr. Graham).
        I was pleased to hear my hon. Friend say that he hoped that the commencement date would be in April 1982. I hope that he is able to adhere to that date. As he will know, water authorities have on occasions been able to persuade Ministers not to bring legislation into effect. The most notable example is that some of the provisions in part II of the Control of Pollution Act 1974 are still not in operation. We are dealing with an insurable risk and there are no budgetary implications.
        I hope that it is appreciated that the scope of the new clause extends beyond damage to property. My hon. Friend has rightly provided for its extension to personal injury. This will be of importance because a number of road accidents are caused by the presence on the roadway of water escaping from mains. In the past, those involved have not been able to recover damages except on proof of negligence. That position is changed by this provision, and I think that it will be greatly welcomed.
        Mr. Robert Litherland: The difficulty facing those with constituencies such as mine in central Manchester is accepting that the cost of liability for

        1047
        damage will affect the funding, maintenance and revitalisation of the sewerage system. Those are factors that are causing all the problems. I agree with the compensation factor, but I am sure that we are all agreed that prevention is the remedy and that prevention is costly, especially in cities such as Manchester, which is one of the oldest industrial cities. Because of that, it has some of the oldest sewers. Many were built in the 1800s and 1850s. Some were built at the time of the passing of the Police Act 1792. Therefore, it does not need a mathematician to reach the conclusion that many have outlived their expected life of 125 years.
        Some of those sewers are now more than 150 years old and are still in full use. That is a tribute to the workers who built them. However, life does not stand still. There have been many changes since those sewers were constructed in brick and in many shapes and forms. There have been changes since the Industrial Revolution. There have been great changes in heavy goods vehicles and transport usage of the roads above the sewers and great changes in the deterioration below the surface. In 1981 we are faced with a losing battle unless finance and resources can be found to reverse that situation.
        The general public can comment and put pressure on their local councillors to have the public highways maintained, but how many people are aware of what lies beneath the surface? How many people are aware of the problems?
        Lately, the number of sewer collapses in my constituency has reached frightening proportions. Massive holes are appearing with monotony. The effect of those collapses in the city is depressing. Major diversions and road works caused by sewer collapse have an added detrimental effect.
        A losing battle is being fought when dereliction is taking place faster than renewal. Although the problem is underground and out of sight, it will not go away. Each day there is a new threat. One day the catastrophe of a double-decker bus disappearing down a gaping hole in the road, as envisaged by the city engineer, could become a reality.
        In recent years there have been three serious major sewer collapses, all involving major traffic diversions. Fortunately, those collapses were located before a serious highway collapse occurred. The possibility of a collapse is a serious danger when one considers the risks to life and limb from one of the oldest sewerage networks under roads carrying heavy loads of industrial traffic. As a regional centre, Manchester takes a tremendous amount of heavy traffic. It is one of the oldest cities with a deteriorating sewerage system, and the combination of this and the heavy traffic could be a disaster.
        The following factors pose a problem in my constituency: the danger, the cost to business, the delays in getting to work, and the inconvenience of congested city roads and diversions, which put additional loads on to the adjacent streets, which are often overloaded at peak hours, with resulting additional traffic congestion. Therefore, industrial and business traffic often has to be diverted over longer routes, and movement is slower because of the amount of traffic being absorbed. That is all the result of the deterioration of the sewerage system.
        Moneys have been found to revitalise the inner city areas. The urgent request is that finance should be found for what is a priority. It is no use financing surface
        1048
        environmental improvements over a decaying underground network of sewerage and water supply systems. Many of the water distribution mains were constructed in the same era as the sewers. They also have reached the end of their useful life. If a water main bursts it will cause a sewer collapse, and vice versa.
        The financing of the water mains comes from the same source and is virtually competing with the financing of the sewerage system maintenance. It is recognised that that is an immense problem. It is an offshoot from the Industrial Revolution and the rapid growth in the North-West in general and in Manchester in particular. However, moneys will have to be found unless there is to be a continuation of the problem.
        10.30 pm
        Patch-and-prop solutions over the years have only delayed the inevitable. The infrastructures are worn out and must be replaced rather than repaired. The disparity between the money spent on highways and the money spent on sewers should be rectified. It is no use walking, cycling, motoring or traveling by bus on well-maintained highways if at any moment they may collapse. There is a joke to the effect that I represent the largest and most expensive golf course in the world, with all the holes dotted throughout the city centre.
        It will be expensive to renew the sewers. The city engineer and surveyor has advised the council that if it is necessary to renew completely all the obsolete sewers in the city centre we could be talking about at least £50 million, when the provision in the North-West's proposed five-year capital budget is only £1·6 million. I mention only the problem in Manchester, but other major cities may have similar problems.
        Mr. Geoffrey Read, the city engineer and surveyor, told the highways committee:
        "It is appreciated that the Highways Committee regard the allocation of funds for the renovation of sewers to be of paramount importance and will continue at every opportunity to press the Water Authority and the Government for an improvement in the situation. After all, it was the mills. the mines and the hardworking population of this area during the Industrial Revolution that ensured the nation's prosperity and it would seem not unreasonable that the nation as a whole should, in return, contribute towards the dereliction we have beneath us to-day.
        To summarise the present situation:—

        (a) there is positive evidence as to the widespread structural dilapidation of the early part of our City centre sewerage networks—a potential danger to life and limb;

        (b) there is positive evidence of widespread inadequate hydraulic carrying capacity leading often to continual discharge of polluted liquid to our main water courses—a potential public health risk."

        I implore the Government to find the money to revitalise the sewerage system. This part of the Bill highlights the vicious circle of compensation needing to be paid because not enough finance is given to remedy the cause of the problem. I repeat that prevention is better than compensation.
        Mr. Paul Hawkins: It is a good amendment, but it will cost the ratepayers more money as the cost of insurance will be heavy.
        My hon. Friend the Member for Grantham (Mr. Hogg) stated that the definition was wide enough to cover a large number of people, but what do the terms "communication pipe" and "main" mean in subsection (7)(a)? It states that they
        "have the meanings assigned to them by section 1(1) of Schedule 3 to the Water Act 1945",

        1049
        but I should like clarification.
        In my constituency, the River Ouse runs for about 11 miles from close to my home out to the sea at King's Lynn, into the Wash. When we had the East Coast surge, a relief channel was dug alongside the river for nine miles, allowing the water coming down from Ely in time of flood to bypass the Denver sluice, which was built by the great Dutch engineer, Vermuyden, and was later reconstructed. In the opposite direction, some of this water can be channelled off to feed the reservoirs in Suffolk, which in turn feed back to the Essex reservoirs.
        The sluice has been constructed in such a way that surplus may be directed into the sea or back inland to provide fresh water for householders in Essex.
        Part of the system is open, in large canals, and part of it is in a 15-mile length of underground pipes. As the Anglia water authority knows, I am worried about the condition of Denver sluice. Three out of four of its sluices have already had to be closed because they were in bad order. If in times of flood so much water has to be put into the new canals that they overflow on to agricultural land or burst the pipes running into Suffolk and Essex, will farmers in my own and neighbouring constituencies be covered by the clause?
        That is really my only question. If my hon. Friend the Minister cannot answer it now, although he probably can, perhaps he will let me know later. It is a very urgent matter. For many years there were floods in Norfolk and the Isle of Ely in which tributaries of the Ouse, and, indeed, the main river itself, burst their banks. We have now constructed a different system and for 20 years or more we have succeeded in avoiding the great floods which used to occur every five or seven years, causing millions of pounds worth of damage.
        There is now a build-up of bad maintenance in a major part of the system, due to lack of money. I do not blame the Anglia water authority, which is pressed in all directions. I am fearful that considerable damage may be suffered by farmers with land on either side of the new canals—which I call water mains—or the underground water main, which is, in fact, a piped supply taking fresh water to the householders of Essex.
        Mr. Ted Graham: I can only tell the hon. Member for Norfolk, South-West (Mr. Hawkins) that if he does not obtain a positive "Yes" from the Minister, many of us will have been fooled, both here and in Committee, as to the interpretation and intention of the new clause.
        I re-emphasise on behalf of the Opposition two points made by my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell), who opened the debate and by my hon. Friend the Member for Manchester, Central (Mr. Litherland).
        I must say first of all, and without reservation, that the Government are to be commended for the speed and fullness with which they seized the opportunity presented to them by the initiatives taken on Second Reading, when the hon. Member for Grantham (Mr. Hogg) introduced the possibility of taking this step, and in Committee, when he and other hon. Members on both sides carefully explained to the Minister and his colleagues the urgency of the need to take it. The Minister is to be congratulated for the manner and the speed with which the clause appeared and the consultations that took place.
        1050
        It is difficult to quantify the precise number of people who will benefit, because with the commitment to prove negligence one does not know how many people give up and do not try to obtain compensation. To that extent, therefore, we are in the dark. Nevertheless, as the hon. Member for Grantham said, this will be covered by insurance and the purpose of the clause in terms of water damage will undoubtedly aid a great many people.
        Secondly, we cannot see why there has been so little speed in responding to what we regard as the twin objectives of the initiative put forward by the Opposition. The Minister has not said other than that he would consider the problem of sewage. He said that in Committee, and on Report he again reserved his position. We allowed him to do that because of the assurance in Committee that there would be a new clause. We recognised the urgency of effecting the borrowing powers provisions for the British Waterways Board. We do not wish to hold those up.
        There is an interesting aspect in the Government's priorities. They should have acted more speedily in regard to consultations. The Minister in the other place was chided by an Opposition Member about the consultations taking place earlier than had been forecast. I acknowledge that the Minister has written to me today in helpful terms. We intend to respond to his invitation on an all-party, all-interest basis as quickly as possible.
        I reinforce the point made by the hon. Member for Grantham about the operative date. The hon. Gentleman wants a categoric assurance that it will be 1 April. Will the Minister consider the operative date being earlier than 1 April? There may be pressure in another place for it to be later than 1 April next year. That is why the hon. Member for Grantham went out of his way to raise the matter. I suggest that the effective date should be before 1 April because, as the hon. Member for Grantham pointed out, the clause will have, few if any, budgetary impacts on water authorities.
        If the Minister says that he does not wish to interfere with the preparation of budgets by water authorities, I suggest that he had better think again. In February and April the Secretary of State did not hesitate to say to the water authorities "I know that you have prepared your budgets, but you must think again." He sent in his accounting Whiz kids. They reported that even though the budgets had been prepared it was possible to effect substantial savings. We know that the accounting Whiz kids transferred figures from one column to another. In effect, they forced on the water authorities reductions in their contingency funds and in the amounts they had decided to spend on capital projects.
        The Minister should be more forthcoming on the question of sewers. We may have failed to comprehend the scale of the problem because we have not seen the national survey costings. My hon. Friend the Member for Manchester, Central knows his area well. The North-West is possibly the worst area in the country.
        10.45 pm
        The Thames water authority is very little different. I have spoken to the authority within the past day or two. In view of what the Minister has insisted that it cuts from its capital expenditure over the next two years, I asked it what were the projects on which it would have made progress but would not now make progress. I was told that on certain projects, which the authority felt were essential for the protection of the health and the environment of my

        1051
        constituents and others in terms of sewerage and water, there would not now be progress, because of the actions of the Secretary of State.
        On capital, money was due to be spent on the Mogden sewage treatment works, on metering and control equipment. That has now been delayed, not as a result of the budgetary measures of the Thames water authority but on the diktat of the Secretary of State. The Crossness sewage treatment works digestion plant conversion will not now take place. The Worcester Park sewage treatment works extension, the Berwick Avenue surface water sewer, the Northern stormwater outfall at Thamesdown, and the Moor Park and Westbury foul and surface water sewer have been deferred and delayed.
        While telling the House that they are sympathetic to consideration being given to solving the sewerage problem, the Government are telling the Thames water authority, in a cavalier fashion—although the authority knows best and is willing to levy a fraction of a penny water rate to get ahead with the work—that it cannot do so. This is for the Government's political purposes and because they want to appear to be seen to cut costs.
        In the Thames water authority area there are 31,000 miles of sewers. I have been delighted to learn that the authority has a programme of investigation, which it will take two years to complete, to ascertan the extent of the damage to its sewerage system. No matter what the cost, it seriously wants to find out. I am grateful that the authority is doing what I believe every other water authority wants to do, and that is to make sure that instead of using the Bill and this clause to enable a person to claim compensation it stops the damage by renewing the pipes and the systems.
        I very much hope that when the Minister responds to this debate, having already won medals for what he has done in Committee and what he has authorised in another place in terms of liability and the need to claim negligence on the part of an undertaking in relation to water supplies, he will tell the House that he appreciates that there is an enormous problem to be considered in terms of sewerage and that he will be helpful to the deputation when it meets him.
        With those words, we give a very warm welcome to the new clause that has come to us from another place.
        Mr. Giles Shaw: With the leave of the House, I shall reply briefly to the points raised in this debate.
        The right hon. Member for Birmingham, Small Heath (Mr. Howell) and others, in particular the hon. Member for Manchester, Central (Mr. Litherland), raised the question of sewerage in connection with the indications given in the Committee that we would look at the principle of extension of the sewerage system. I should like to make two points on this. There must be in our minds a distinction between a clause which deals with liability and compensation and the question of capital renewal and replacement of an utterly obsolete sewerage system. These two things must be separated in dealing with the measure now before us.
        The hon. Member for Manchester, Central quite rightly drew attention to the enormous need for capital works and capital replacement in an area which contains a substantial amount of ancient sewerage system and in which there was, therefore, increasing risk of collapse. In law, it is a
        1052
        question whether collapse is caused by the last double-decker bus to pass overhead, by the negligence of the North-West water authority or by the negligence of the highway authority, which might not have determined the stability of the foundations. A substantial chain of questions are raised that are not easy to answer in the simple terms of a clause that extends compensation.
        I turn to the subject of costs. My hon. Friend the Member for Grantham (Mr. Hogg) suggested that there were few, if any, budgetary considerations. The hon. Member for Edmonton (Mr. Graham) also raised this point. There is a significant cost element in extending compensation under the new clause. We did our best to ask the industry for its estimate of the additional costs that it would incur through insurance cover. The estimates suggest that costs to the industry as a whole could be between £8 million and £10 million. This must be seen in the context of the overall amount of revenue that is attracted to the water industry. That amounts to about £1·54 billion. One might see a relationship between the provision of costs and 0·6 per cent. for charges. Nevertheless, it is not an insignificant element in relation to charges.
        The Government recognise that in respect of water mains, where pressure is involved, the case for damage is more substantial because o:' both force and frequency. In reply to my hon. Friend the Member for Norfolk, South-West (Mr. Hawkins), I should point out that we can define a water main. The water main is the pipe that gives the general supply, under pressure, from which consumers draw their supplies. The communication pipe runs from the main to the boundary of the consumer's premises. That pipe comes within the authority of the water undertaking.
        Mr. Denis Howell: Can the hon. Gentleman give the relative figures for collapsed mains and collapsed sewers? My information is that there is little difference between the number of bursts in clean water supplies and the number of bursts in the sewerage system. I fully accept the figures that the hon. Gentleman was obliged to give the House, which showed the enormity of the cost to the water industry. Does he accept that if the size of the cost is a factor in excluding sewers from this provision, the obligation on the householder or farmer must be overwhelming? Does he not realise that that cannot be accepted? If a statutory authority cannot accept such an obligation, we should not expect the domestic user to do so. That is neither logical nor legally correct.
        Mr. Shaw: As regards the first part of the right hon. Gentleman's question, no one knows the cost of extending the provision to cover the whole sewerage system. That is one reason why I suggest that the problem should be carefully discussed. As regards the right hon. Gentleman's second point, he should recognise that a substantial part of the sewerage system is not in the hands of statutory water undertakings. Much of it involves private building land. A private developer has the right to tap into a sewer, generally speaking. It is not certain that a water authority would cover the vast majority of breakages.
        I accept that the matter requires careful assessment That is why the offer made to the hon. Member for Edmonton is being eagerly taken up. I should emphasise that we can define "water main". Bursts occur frequently' and usually affect both domestic and agricultural premises. It will be very difficult to deal, within the same

        1053
        time scale of preparation and definition, with questions of what would happen when there were bursts within the sewerage system and where the liability should rest. The point raised by the hon. Member for Manchester, Central vividly illustrates the problems of definition.
        Hon. Members have understandably criticised water authorities for their failure to deal quickly with all the problems of their systems, but the authorities inherited a most difficult problem. The majority have moved with commendable speed in trying to bring the sewerage and water treatment systems up to a more modem condition. I pay them full tribute for their rapid progress in the relatively few years in which they have been in operation.
        This brings me to the point raised by my hon. Friend the Member for Norfolk, South-West. I guess from his description that he was referring to a system that is not so much a pressurised conduit of pure water for domestic use as a combination of factors, including the transmission not of water under pressure but of general water from one area to another. I shall write to my hon. Friend in detail about the sluice and canal system. It may not be easy to bring it within the definition of the compensation clause that we are discussing.
        My hon. Friend the Member for Grantham and the hon. Member for Edmonton asked about the commencement date. At present we intend the clause to come into force on 1 April 1982, but we must discuss the date with the authorities. They recognise that it is their duty to see that the provision is implemented as soon as possible after enactment. However, I have said that there are budgetary considerations.
        Mr. Graham: Those who suffer hurt are to be given a remedy, but as long as this prospective change is held in suspense there will continue to be, for six months to a year, aggrieved people who are denied the benefit of the legislation. It will be on the statute book, but the effective date will not have been reached. The prospect of redress, of remedy, is now held out. Although some people may want that remedy to be delayed, for their own very good reasons, I hope that good will and the greater good of the greatest number will prevail.
        Mr. Shaw: For damage due to bursts, the water authorities have traditionally offered, particularly to individuals, ex gratia compensatory payments that have not been ungenerous. I am sure that that protection will continue. We should be doing the authorities a disservice if we suggested that a serious gap was opening up between the passage of the Bill and implementation of the clause, although I understand the hon. Gentleman's point.
        I recognise that although we seek to solve one problem in the clause, other problems remain. Their complexity is such that it will not be easy to resolve them quickly. The cost of the compensation that we propose will ultimately have to be borne by consumers. We must tread with care before adding significant costs.
        While water authorities are fully in control of the mains and the communication pipes leading therefrom, they are not in the same position as regards other water disposal systems. However, I look forward to meeting the hon. Member for Edmonton and his all-party, all-interest group.
        It appears to be the wish of both sides of the House that we should agree with the Lords in the amendment and see the Bill through to Royal Assent.
        Question put and agreed to.

    Energy Conservation Bill [Lords]
    As amended (in the Standing Committee), considered.
    Energy Conservation Bill [Lords]
      New Clause 1

        VOLUNTARY CODE OF PRACTICE
        'The Secretary of State shall, within six months of the commencement of this Act, lay before both Houses of Parliament a copy of a voluntary code of practice, as agreed with the relevant manufacturers, relating to efficiency standards and energy labelling for domestic energy consuming appliances.'—[Mr. Eadie.]
        Brought up, and read the First time.
        11 pm
        Mr. Alex Eadie: I beg to move, That the clause be read a Second time.
        I do not think that the Minister will be surprised to see the new clause on Report, because it is associated with an amendment that I tabled to clause 1 in Committee. Among other things, we were unhappy about electrical appliances being excluded from the clause. As an Opposition we voted on the amendment. Indeed, as the Minister will recall, I put down a marker when we reached clause 8, which deals with the interpretation of part I.
        I have had the opportunity to read in a more leisurely way what the Minister said in Committee in reply to my proposed amendments to clause 1. He argued very strongly in favour of a voluntary code of practice. For the information of the House on Report, I must quote to some extent what the Minister said at the first sitting of the Committee, because it is central to the reason why we feel that the new clause should have his approval. He said:
        "The development of voluntary efficiency standards is clearly the first route which the Government at this stage ought to take."
        The Minister outlined certain prerequisites. He said:
        "The second is a new look at the possibility of a voluntary system of energy labelling, to give consumers the information on which to make a rational choice."
        The Minister complimented his hon. Friend the Member for Skipton (Mr. Watson) when he said:
        "I entirely accept the comments made anecdotally by my hon. Friend the Member for Skipton—an important example of the kind of difficulty that the consumer is facing. Where we can help in encouraging industry in this way, we should."
        The Minister then outlined to the Committee a third route.
        He said:
        "The third route, possibly at some later stage, is a scheme with statutory backing. We hold this in reserve, because we must make it clear that we should like to see this move forward in a way which is efficacious for industry and for the community."
        In the course of his reply, the Minister was interrupted by his hon. Friend the Member for Derbyshire, South-East (Mr. Rost), who wanted an assurance from him. It is fair to say that the hon. Member for Derbyshire, South-East and his hon. Friends were seized of the kinds of argument that we were advancing when moving the amendments to clause 1. The hon. Member for Derbyshire, South-East, in his intervention, asked the Minister to
        "assure us that this is not just verbiage in order to placate one-or two members of the Committee, and that there really is a meaningful timetable, which will lead to something in the foreseeable future."
        One could not be more forceful than that.
        The Minister replied:
        "I am sure that my hon. Friend will not make the mistake of assuming that, if I give what is clearly my support and approval of this route, I would regard that as verbiage … I have tried to indicate the rational route, the route that will be of help to
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        industry and, I hope, to the consumer and to society. I hope that what I have said will persuade the hon. Member for Midlothian to seek to withdraw his amendment. If not, I hope that I can rely on the support of my hon. Friends."—[Official Report, Standing Committee A, 12 March 1981; c. 27–28.]
        I believe that the House will support me when I say that the hon. Gentleman has made my case. I anticipate his support and that of his hon. Friends. The period of six months before the Act becomes law is generous by any standards. My hon. Friends and I cannot be accused of rushing the issue. Work can proceed on achieving a voluntary code of practice with the relevant manufacturers.
        An accusation was made (luring our debates that the Bill paid too little attention to consumers. The acceptance of the amendment can redress the matter. I have pleasure in commending it for the support of the House.
        Mr. Peter Rost: The hon. Member for Midlothian (Mr. Eadie) reminded the House that in Committee I supported the inclusion of electrical appliances either in some form of type approval or, preferably, some form of energy labelling. I am pleased to see the amendment before the House. It might produce the most desired result of all—a voluntary code of practice, as already applicable in some European countries and proposed in others.
        My hon. Friend the Under-Secretary of State, who persuaded me not to support the original amendment because he favoured some sort of voluntary code, has reacted rapidly to what may have been my rather sharp rebuke that we wanted not verbiage but action. Since the Committee stage was concluded not many days ago my hon. Friend has acted. The Department of Energy, under the leadership of my hon. Friend, appears to be moving fairly smartly towards urging the electrical appliance industry to try to agree a voluntary code.
        I have met the director of the Association of Manufacturers of Domestic Electrical Appliances. Although the association is not over-enthusiastic about a voluntary code for labelling domestic appliances, it is nevertheless persuaded that this is likely to happen and is willing to co-operate with my hon. Friend.
        I wanted simply to record that there appears to be some movement. I hope, therefore, that there will be no need for the House to accept the amendment, since it appears that my hon. Friend is determined to establish a voluntary code, even if it takes a little longer than six months to achieve.
        Mr. Tom Pendry: I intend to intervene briefly in this debate to support the new clause and the voluntary code of practice. In my constituency I have a firm called IMI Range Limited, known locally in Stalybridge as Range Boilers, which manufactures hot water cylinders of the British standard kite-mark kind. These cylinders are most efficient, but are slightly more costly than the non-British standard cylinders or screw-in, heating-element type, which are about £2 cheaper but much more expensive to operate. It is estimated that between 1·5 million and 2 million people have such cylinders installed, and that the cost to the nation is between £20 million and £26 million a year.
        More and more of these less efficient cylinders are being installed. The present annual rate of installation of non-British standard cylinders is over 100,000. A saving of £1·3 million could be made if British Standards were

        1057
        adhered to. A recent survey carried out by the University of Manchester institute of science and technology shows that the annual increased fuel cost for the average household is between £13 and £14 per year more if the less efficient cylinder is installed. Moreover, 25 per cent. more fuel is consumed when the boiler is used for water heating. The report shows conclusively, following extensive tests, that heat exchangers with greater heat transfer capability enable gas boilers to run more efficiently during hot water production cycles. In those conditions, the fuel consumption for hot water production is greater by over 26 per cent., and by 23 per cent. when the screw-in and medium-duty heat exchangers are employed.
        I am making a constituency point, because the factory has lost about 55 per cent. of its work force over the past 18 months. However, it refuses to lower its standards. It has paid a high price. It may ultimately have to lower its standards. The company looks to the Government to accept the spirit of the new clause. It could then stay in business and produce the kind of cylinder that should be used throughout the country.
        I shall not go through the report, but I shall be glad to give the Minister a copy of it. It is hot off the press. I hope that he will study it closely and make known his views on it at some stage. If we are in earnest about saving energy and reducing costs, we must pay careful attention to the important issues that I have mentioned.
        Mr. Frank Haynes: I, too, felt that we had an interesting Committee stage. The two sides of the Committee agreed on many things. I see no objection to the new clause.
        The message came over loud and clear in Committee that the Government were not able to provide the money to do various things in the interests of energy conservation, but they fell over themselves to agree to do anything that was free, or that would not cost much.
        It is all very well to keep talking about the manufacturers, but we should be talking about the consumers. It is not just a matter of persuading manufacturers to take certain voluntary steps. We must stress that those steps are in the interests of the consumer. We are talking about energy conservation. Great strides can be made in this direction. The Minister should accept the new clause because it is in the interests of energy conservation, which is related to the problems of the whole economy. It may play only a minute part, but over the years will save the country millions of pounds. In addition, it will be of great assistance to the consumer
        11.15 pm
        The Under-Secretary of State for Energy (Mr. John Moore): I am grateful to the hon. Member for Midlothian (Mr. Eadie) and other hon. Members for putting down the new clause again. We had long discussions on this subject in Committee and it was discussed in another place. It is clearly of considerable importance. I acknowledge the words of the hon. Member for Stalybridge and Hyde (Mr. Pendry). The company in his constituency is to be commended for its consistent diligence in the pursuit of energy efficiency. But it would be unwise to take the House through the detailed and lengthy discussions that we had in Committee, useful though they were. All right hon. and hon. Members present have no doubt diligently
        1058
        studied our Committee proceedings. In this clause, however, we are examining not only the arguments concerning a voluntary code of practice. The essence of the clause related not to the voluntary aspect which featured in our debates in Committee but to the time limits that hon. Members feel should be put upon the Government in committing themselves to certain courses of action.
        The problem is to decide on the best approach towards realising the scope for improvement. In Committee I said that there were several possible ways forward—voluntary efficiency standards, a new look at the possibility of the voluntary system with energy labelling, which is embodied in the clause, or, perhaps at some later stage, a scheme with statutory backing. I said that the Government intended to meet the industry and others concerned in the coming months to examine these possibilities fully. The objective had to be to establish a broad measure of agreement on the way forward to more energy-efficient domestic appliances.
        In reply to an excellent speech from my hon. Friend the Member for Derbyshire, South-East (Mr. Rost), who made similar comments tonight, I said that there would be an energetic pursuit of the matter and that the Government for their part would act without delay. Since then, as my hon. Friend seems to know, although the Committee discussions were only four weeks away I have already written to the director general of the Association of Manufacturers of Domestic Electrical Appliances inviting him—he has accepted, with other leading members of the industry—to an early meeting, which has already been arranged. Since the meeting in Committee my Department has also written to the Electricity Consumers' Council, to the Consumers Association and to other consumer organisations, including the Retail Trading Standards Association, the Retail Distributors Association and others affected, inviting them to meet me or, if they would prefer, to let us have an up-to-date statement of their views on this subject.
        I hope that hon. Members will accept that we are not letting grass grow under our feet on this important issue. I meant what I said in Committee—that the Government would pursue this matter energetically and without delay.
        Mr. Rost: My hon. Friend also said that he had been making inquiries in his Department about how energy labelling schemes were working on the Continent. Will he give an assurance that he will keep his officials busy on getting up-to-date information about how other schemes are working in other countries, so that we can see what prospects there are of a sensible, workable scheme?
        Mr. Moore: I never hesitate to ask my officials on such matters, but I assure my hon. Friend that the officials in the Department are perfect examples of excellent civil servants who are constantly efficient in the pursuit of the public good in this area. I returned yesterday from Berlin, where I had discussions with other IEA Government representatives about energy conservation, among other matters, and they were excited and impressed by our activities in this direction.
        I come now to the clause that is under discussion. I said that we would pursue these matters energetically, and I think that we are doing so. I agree with many of the remarks that have been made about the character of voluntary labelling under the clause. However, I believe

        1059
        that it is not reasonable to expect the Government, industry, consumer organisations and others to reach a conclusion within the next six months.
        First, we want carefully to consider all the possibilities. We are approaching the problem with an open mind without any preconceptions of what may be the best way forward. Secondly, we are aware that some of the technical problems are complex and that they may be difficult to settle in a matter of months. I have already drawn attention to the slow progress that has been made by international standards bodies on the development of performance standards for domestic appliancies. I emphasise that I do not wish to convey the impression that the task is impossible. I merely wish to say that it is complicated.
        Thirdly, we know from our substantial experience of consulting manufacturers and consumers that representatives of manufacturers need quite reasonably to consult their colleagues and that those who represent consumers equally reasonably need to consult representative councils or other bodies. Again, this takes time.
        Finally, we shall have to consider imports of appliances and how they are to be treated. We have already written to the European Domestic Appliance Association. Again, with the best will in the world, it will take a little time.
        I draw an analogy with the work that went into the Bill. The Government started consultations on energy efficiency standards for heat generators several months before the consultative document was issued in August 1979. By the end of October 1979 we had received most of the replies. In the early part of 1980 we were able to start putting our proposals into draft legislation. The Bill has almost completed its parliamentary stages. Even so, the work is only half complete. We now need to draft detailed orders under the Bill in consultation with manufacturers and others, such as the consumer organisations that I referred to in Committee, as clause 26(3) requires. It will be a little time before the powers in the Bill have been used to their full extent. I shall be disappointed if in the next six months we have not made substantial progress on the objectives that we have set ourselves on domestic electrical appliances.
        The Government will be pressing manufacturers and consumer organisations hard to this end. However, I doubt whether we shall be in a position in six months' time to agree a voluntary code of practice. I should be misleading the House if I suggested that that would be possible in so short a time. I am sure that hon. Members will not regard this as an indication that the Government are half-hearted in what they have set out to do. I ask hon. Members to recognise the complexity of the task.
        We are committed to examining all the possibilities, and they go wider than a voluntary code of practice on efficiency standards and energy labelling. These matters will take a little time. I hope that in the light of what I have said the hon. Member for Midlothian will feel able to seek to withdraw his clause.
        Mr. Eadie: My hon. Friends and I attach a great deal of importance to the debate. The hon. Member for Derbyshire, South-East (Mr. Rost) takes the biscuit. He started to inform the House that he had been in consultation with electrical manufacturers and that everything was going well. As my hon. Friend the Member for Ashford (Mr. Haynes) will remember, the electrical manufacturers did not want to touch anything in
        1060
        this measure with a barge pole. My hon. Friend was saying throughout the Bill's consideration in Committee that the consumer's voice had really to be expressed.
        The hon. Member for Derbyshire, South-East said that there was no need for change. The terms of the clause meet exactly his arguments in Committee. He has what he wanted. He should have allowed his hon. Friend the Under-Secretary of State to reply to the debate to ascertain whether he thought that the proposition was acceptable. I know that certain of us feel that we are fountains of wisdom, but there are some issues on which we like our colleagues on the Front Bench to express a view.
        Mr. Rost: The hon. Member is becoming agitated without cause. He is misrepresenting what he must have heard, if he had listened. I did not say that everything was going well or that I was taking over the responsibilities of my hon. Friend at the Department of Energy. All that I said was that my hon. Friend had initiated the talks. He was simply carrying out the assurances that he gave us in Committee. I was congratulating him on that.
        Mr. Eadie: My hon. Friends heard what the hon. Member for Derbyshire, South-East said. He could have fooled us.
        I accept what the Minister said in reply to the new clause. He gave a proper explanation of the Government's difficulties over time limitations. However, on behalf of the Opposition, I warned him in Committee that we would try to come back to that matter. We were concerned about something being done to give the consumer some sort of safeguard, understanding and assurance.
        The Minister attacked the point in my new clause, saying that six months was not sufficient time. He advanced a reasonable case when he said that in order to put into being that voluntary code of practice, it would mean many consultations.
        My hon. Friends and I are pleased that the Minister has given categorical assurances that that will happen. The only dispute between us is on the question of when it happens. I shall not ask my hon. Friends to go through the Lobbies on the basis of its happening in six, seven, eight or nine months. I accept the Minister's assurances I beg to ask leave to withdraw the motion.
        Motion and clause, by leave, withdrawn.

      New Clause 4

        COIN OPERATED GAS METER
        In the Gas Act 1972, Schedule 4, paragraph 7, line 19, there shall be inserted, at the end, the words—
        "(2) Under this section the meter shall be a coin operated prepayment meter, if such a meter is required by the consumer, unless the Corporation gives a written statement to the consumer showing why such a meter cannot be installed. If any difference arises under this section between the consumer and the Corporation, that difference shall be determined by arbitration in the County Court on the application of either party and the decision shall be final and binding on all parties."—[Mr. Ashton. ]
        Brought up, and read the First time.
        Mr. Joseph Ashton: I beg to move, that the clause be read a Second time.
        Mr. Deputy Speaker (Mr. Ernest Armstrong): With this it will be convenient to take new clause 5—Coin operated electricity meter——
        At the end of the Electric Lighting (Clause) Act 1899, section 52, there shall be inserted the following words—

        1061
        "(2) Under this section the meter shall be a coin operated prepayment meter, if such a meter is required by the consumer, unless the Board gives a written statement to the consumer showing why such a meter cannot be installed on the ground of safety or practicality. If any difference arises under this section as to the safety or practicality of such a meter that difference shall be determined by arbitration on the application of either party and the decision shall be final and binding on all parties.".
        Mr. Ashton: I shall try to be brief, because of the lateness of the hour, but this is an important part of the Bill.
        Since they came to office the Government's policy on the conservation of energy has been primarily one of conservation by price. That is why there has been a massive increase in the prices of electricity, gas and fuel oil, with a corresponding cut in the amount of subsidies available for insulation. That has resulted in a great increase in the number of disconnections.
        Disconnections of electricity in England and Wales in 1979 were carried out in respect of 88,790 families. In 1980, that figure shot up to 122,702, which is a 40 per cent. increase in disconnections of people who cannot pay their electricity bills because of the increase in charges, unemployment, depression and the poverty that is afflicting many people.
        In London alone in 1970 there were 16,467 disconnections. In 1980 that figure shot up to 37,648—more than double inside a year. Every day, 770 homes, on average, are disconnected because people cannot pay their electricity bills. Nothing is done for them. A scheme was put forward under which the Government juggled with grants and heating allowances for people on social security or for the elderly. However, for those not on social security who are probably low-wage earners, there is no help.
        One of the best forms of electricity conservation is the old coin-in-the-slot meter, in using which people automatically know how much electricity they are consuming. One of the tragedies of the method of purchasing electricity and gas today is that the meter is tucked away under the sink, at the top of the cellar steps, or in a similar place, so that people cannot see how fast the wheels are going round. Suddenly, after three months, a bill comes in for £150 and knocks them sideways. They cannot pay, and they have to cut back on food purchases or on hire-purchase payments. It causes distress when the big bill comes in at the end of a winter quarter and ordinary people cannot pay.
        11.30 pm
        It is the duty of the House to give some sort of help to these people. If we cannot give them financial help let us at least give them the right to demand a method of payment that enables them to budget from one week to the next. Many thousands of poor families would go to bed if it got to 10 o'clock on a Thursday night and the electricity supply went off because the meter needed more money. They would know how much they were consuming with that method of payment.
        There is no better method of energy conservation than that by which the customer pays according to what he can afford. In the gas industry in 1970, 5½ million consumers were paying by way of coin-operated meters. Ten years later that figure had dropped to 2 million—and that drop
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        occurred at a time when the number of consumers rose. Because of slum clearances and people moving into blocks of flats the method of payment has changed.
        Every hon. Member knows of cases in which disconnection has caused great distress. I had one case in November, when a blind man, confined to a wheelchair with multiple sclerosis, had his electricity cut off. He had not paid his bill. He could not read the reminders that had been sent. He lived alone except for a mentally handicapped son aged 16. His daughter lived down the street and she used to see to him, but that week she was in hospital, having a baby. The Yorkshire electricity board came down and disconnected his electricity, leaving this man alone in his house, with a guide dog and two or three lighted candles to show that the electricity had been cut off. The guide dog could have knocked over the lighted candles and set the house on fire.
        I rang the Yorkshire electricity board and chased it from the top man to the bottom. I asked "Why didn't you put in a meter?" I was told "He never asked for one." This happens time after time. All too often the bureaucracy in the gas and electricity boards goes for what is most convenient for its red tape and not for what is most convenient for the consumer. Practice varies widely throughout the country. Electricity and gas boards will say "The consumer can have a meter. There is nothing to stop him having one." Just try and get one.
        We all know of one-parent families that have come to us saying that they would like a slot meter to be put in. When the Member of Parliament or the social worker asks, the meter is installed. If such families are to be disconnected they get one. On the other hand, if the consumer is being caused a great deal of hardship in finding the £100 to meet his bill, as long as he can pay he will be fobbed off when he asks about a slot meter. Instructions to staff are to the effect that they must not encourage consumers to have meters. There is hardly a showroom in the country where there is a sign saying that meters are available on demand.
        If hon. Members examine the handout given to people who have difficulty in paying their bills they will note that it says:
        "You can have a slot meter if you have problems paying your bill and none of the other plans help."
        The "other plans" mean energy stamps, or paying so much a week, or other nice devices that satisfy the bureaucrats in the offices.
        Mr. Andrew F. Bennett: Does my hon. Friend agree that the important thing is that people should have slot meters before they get into difficulties? Is he aware that many of my constituents find, when they get into difficulties and have a meter installed, that the meter is set at such a level that they are having to pay off their debt and meet current costs?
        Mr. Ashton: That is absolutely right. It is essential that people have the meter installed before they get into debt. Otherwise they have a debt of £150 and find that they are putting 50p into the meter every half hour.
        There are problems with meters. They present a temptation to people who may break into them. The man who collects the money might be knocked on the head and his cash might be stolen. There are problems like this in certain areas. Everyone accepts that meters are not the ideal way to collect money, but they are a great help to pensioners. Old people who know that they have difficulty

        1063
        in paying their bills will not break into their meters. With some meters the same coin can be used over and over again, so that even if the tenant has to pay the bill at the end of the quarter he has some idea of how often he is using energy and so can use his appliances to the limit that he can afford.
        The new clauses do not provide that any consumer, under any circumstances, has the right to demand a coin meter. There are obviously some circumstances in which the board or the corporation has a case for saying that on grounds of safety or practicability it is not wise to install a meter. There might, for instance, be a very old lady who has a gas fire with a pilot light. If the money in the meter runs out and she puts in more money but does not light the pilot light, she may be gassed in her own home, or she may strike a match and cause an explosion. Where there was an old appliance the board would be justified in saying that it would not install a meter until the appliance had been changed. In some areas the meters are grouped at the bottom of a block of flats. They are easily accessible to anybody, and in such a case the authority would be justified in saying that it would not be right to install a coin meter. A similar argument would apply if the meter were outside the house.
        The clauses provide scope for negotiation. They may at first sight seem to be ambiguous, but they have been drawn up by the electricity and gas consumer councils, in consultation with the Child Poverty Action Group, the Right to Fuel Campaign, and many other people who are interested in helping people to pay their bills. There is an arbitration panel to deal with electricity disputes. This goes back over many years, to earlier Bills. Gas disputes have to be dealt with through the county courts because there is no such panel for the gas industry.
        What is provided here is fair to all. The authorities have to give their reasons in writing, and that is important. There is no question of the consumer going to the local office and being fobbed off by a clerk saying "You are not having one and that is the end of it. It is not our policy to install such a meter." The reason for refusal has to be given in writing. I am sure that if the reason given were not satisfactory and the consumer told the local press, or went back to the Child Poverty Action Group or the consumer council, people there would be ready to help to take the matter to arbitration or to the county court.
        We went to see the Minister, and I thank him for his courtesy in examining the case that we put from the electricity and gas consumer councils and the Child Poverty Action Group. I realise the difficulty in which the Minister finds himself. The Policy Studies Institute has issued a report on this matter. That report has been available for some months, and it is likely to be some months more before anything happens. We know from experience that some of the finest reports that are produced to show how bureaucracy and red tape can be cut and the consumer protected find their way on to shelves, where they gather dust for many years until a new Minister comes in, or a new Government come in, or some other idea is launched, and they never see the light of day.
        I ask my hon. Friends to record a definite opinion to show the Minister the feeling of the House that because of the price of energy, the need for conservation and the massive increase in the number of disconnections, it is imperative to adopt this measure to help at least 1 million or 2 million poor people, who will very much welcome this provision.
        Mr. David Alton: I support the hon. Member for Bassetlaw (Mr. Ashton). My noble Friend Lord Tanlaw made similar points in another place, and on Second Reading I pursued one or two of the points made by the hon. Gentleman.
        Many consumers would like the opportunity to pay by slot meter but have been deliberately prevented from doing so by electricity and gas boards. My local board, Manweb—the Merseyside and North Wales electricity board—has for some years discouraged people from having slot meters. Some of the reasons have been explained to the House. It can be dangerous for the consumer or the collector, and there have been muggings and harassment. However, many elderly people would like the option. They have great difficulty in coping with large bills. In the winter months bills can be as much as £70 or £80 a quarter, and these people find them difficult to pay. Elderly people sometimes have a stroke or a heart attack when they receive such bills. Many would like to pay as they go along, as they did before.
        Help is available through the DHSS and by rebates, but it is not the same as the basic self-respect and dignity of being able to pay as one goes along. Single parents also have problems, and they, too, do not want to live on handouts or to have someone pay the bill for them late in the day. They want to take action before the bill becomes too large, and a prepayment meter is the answer. When enormous gas and electricity bills build up and the rates and water rate bills come in people have nervous breakdowns and other mental disorders and families can break up. Great personal hardships can result.
        It is not asking a great deal to give people the chance to pay as they use the electricity. I hope that the Minister will accept this reasonable and commonsense amendment.
        Mr. Arthur Lewis: I congratulate my hon. Friend the Member for Bassetlaw (Mr. Ashton) on bringing forward the new clause. Although some hon. Members may see difficulties in its way, no one could be against it.
        Apart from the old, the sick and the disabled, in my constituency and others we have a large number of Commonwealth citizens. We used to call them immigrants. Many come from Africa and Asia, and they feel the cold more than we do. For them, what we consider to be a nice, warm day can be cold. I visit my constituents in their homes, and they apologise, saying that the place is cold when it is unbearably hot. They do not realise that heating the house night and day eats money. If they had a slot meter, when they were watching television at 10 o'clock at night the electricity would go off. They would realise how much money they had put in during the day and they would go to bed.
        When the electricity supply is cut off there is a danger not only to the blind, the sick and the disabled but to children. My African and Jamaican constituents think nothing of putting candles all over the place, including the children's bedrooms. The children then skylark about, and it is all too easy for a candle to be knocked over and set fire to the bedding. If people had a meter they would know that if they did not put enough money in the current would go off automatically. If they had no more money they would have to go to bed. They might have to try to get assistance the next day, but that would not matter because they would be able to get help.

        1065
        I raised the question of help for the sick, the disabled and the old some time ago. I pay tribute to the Government for having stopped those people from being cut off until welfare workers had been called in to investigate. In that respect the Government have done a good job, as have the various boards. I am now concerned about those who may have the money to pay up to a point but who simply do not realise what happens when the charges accumulate. Constituents of mine have had bills of £400. That is a ludicrous amount. But they are cold and they simply do not understand. They are cold even on a summer day. I explain to them that they will have to turn off the heating. If they had meters, many of these difficulties would be obviated. I therefore pay tribute to my hon. Friend for introducing the new clause.
        Mr. Haynes: I support the new clause of my hon. Friend the Member for Bassetlaw (Mr. Ashton). Bearing in mind the statements of the Secretary of State for Energy about the cost of energy and the charges for consumers, it is clear that there is a massive problem. My hon. Friend the Member for Bassetlaw has stirred up a hornets' nest because he happens to be a journalist. Comment in the national press has brought people to my surgery and to meetings held throughout my constituency. In the main, it is the elderly who come to talk about what they have read in my hon. Friend's columns. He covered the question of providing meters in the home. He has stirred up a hornets' nest but I congratulate him because it is a step in the right direction.
        The main issue is energy conservation, which means reducing the cost to the economy and saving energy. We must consider the awful situation in which the price of energy increases month by month.
        I wish to fire two shots across the bows and to utter two words of warning. Many constituents who come to me actually have a meter, but because of the cuts in public sector manpower the man does not come round often enough to empty it. Constituents have telephoned me at home at the weekend asking me to get in touch with the authority to get somebody to empty their meters. One is then told quite smartly that there will be a charge for providing that service for an elderly person who cannot get another coin into a clogged meter. I hope that the Minister will take note of that problem. At the same time, I agree with what is suggested in the new clause.
        One point that burns up many elderly people is the standing or standard charge. With each bill, the standard charge is increased. It is a racket, and it should be stopped. Let us be fair to the consumer. We have some responsibility in this place for ensuring that the consumer gets a fair deal. If it is a fiddle, let us bring it out into the open so that people know what is happening about the standard charge.
        If there is a certain amount of coinage in the meter, the consumer gets a rebate. Surely the meter could be adjusted so that rebates did not have to be paid. The consumer may have to wait four, five or six months for the meter to be emptied. It may be a pensioner, someone with a very low income or a single person with a family. It is a burden to such people to have to wait so long for a rebate.
        I ask the Minister to consider this matter seriously. I say that with a great deal of feeling. I know the Minister to be a compassionate man. I have discovered that from talking
        1066
        to him. There is only one thing wrong. He is a member of the wrong party. He should be with the Opposition. [Hon. Members: "Which Minister?"] I am not talking about the Secretary of State. I am referring to the Under-Secretary of State.
        Mr. D. N. Campbell-Savours: We thought that my hon. Friend was talking about the Secretary of State.
        Mr. Haynes: No. The right hon. Gentleman has only just walked into the Chamber. [Interruption.] When hon. Members are quiet, I shall continue with my speech.
        I hope that the Minister will look seriously at this problem, because it is happening in his constituency, too.
        Mr. Allen McKay: I shall be brief. I support the new clause.
        Disconnections seem to take place mainly at weekends. The Yorkshire electricity board seems to disconnect on either a Friday night or a Saturday morning, and it is difficult for people to get supplies reconnected at weekends. Whether we like it or not, the Government's policies have led to low pay and high energy costs. People are also confused because of the new water rate system.
        Two points arise on the coin-operated system. The pay-as-you-go meter system will lead to what used to happen years ago. A person without money in his pocket would pop next door and borrow sufficient to keep going until Friday. People helped each other in that way.
        The main problem is the standing charge or the charge for installing a meter. It is ironic that a person who has to ask for a meter to be installed because he cannot afford to pay in the normal way is landed with a bill for the installation. I should like that to be looked at along with other things, so that if a charge is to be made it is taken into consideration at a weekly or a monthly rate.
        Mr. Don Dixon: I do not think that anyone could add to the points that have been put by my hon. Friend the Member for Bassetlaw (Mr. Ashton), who moved the new clause. Coincidentally, however, just this week I received a letter from one of my constituents, and I want to place it on the record because it sums up how people feel, not only old-age pensioners or the sick but the unemployed, who are also finding it hard. The letter states:
        "I have just been reading the Joe Ashton column in today's edition of the Daily Star. Being one of the army of the unemployed I am finding it harder and harder to meet the ever rising quarterly bills, so I think it is a good idea to install coin-in-the-slot meters. Could you please use your vote to help the hard-pressed sick, unemployed and low-paid workers meet their bills."
        I do not think that anyone could sum up the matter better than that unemployed person, who is finding it hard to live on the pittance that he is getting from the State and who gets quarterly bills and wants only to go ahead and pay for what he has. I certainly support my hon. Friend's new clause.
        Mr. Bob Cryer: I support the new clause that my hon. Friend the Member for Bassetlaw (Mr. Ashton) moved, because of my experience, as a Member of Parliament, of the fact that the question of discretion whether to install coin-in-the-slot meters is that of the board and not that of the consumer. These clauses shift the right to the consumer, with facilities for some form of arbitration. I should like to refer to two cases that have come to my notice within the past few weeks.

        1067
        The first is the case of a man and wife and four children, with the electricity cut off, no heating, no lighting, and cooking on an open fire. In 1981 it seems an extraordinary set of circumstances. Installation of a coin meter was refused by the Yorkshire electricity board until the consumer had paid £50. He was a textile worker on a temporary short-time working scheme and therefore on a low wage, with his wife not working. Clearly he was in a very difficult if not impossible position in terms of obtaining relief and electric light and cooking facilities in the usual way.
        The other was a North Eastern gas board case, which occurred within the last few days. A single-parent family was threatened with disconnection because the mother owed the board about £50. Ten pounds was borrowed from her neighbour and paid to defer disconnection. Disconnection was threatened within seven days unless the £40 was paid. As a single parent the mother is in receipt of £37 a week, and quite clearly cannot have a slot meter unless the £40 is paid off. On £37 a week that is virtually impossible.
        I therefore strongly support the two clauses, which shift the right from the board to the consumer, but give the right to the board to levy the charge that will pay off the outstanding debt. It will be a help to people on low wages and will give the consumer greater discretion. I therefore expect the Government to accept the new clauses.
        Mr. Eadie: The House must agree that my hon. Friend the Member for Bassetlaw (Mr. Ashton) has raised a very important social issue this evening. The issue of prepayment meters is not a new one; it has been before the House on other occasions, and various solutions have been put forward. My hon. Friend, in the course of arguing his new clauses, said very fairly that in the past arguments had been advanced about the question of money being in an unsafe safe in the home. I know that in some areas the police have sometimes been called in aid to argue against the whole question of a prepayment meter.
        However, I think that the hon. Gentleman who is about to reply must agree that many people like to pay as they go. It is an old tradition—this is quite apart from the social problem—and I do not think that it is a bad characteristic. Given the cost of energy, it is more likely that people will want to pay their way as they go.
        12 midnight
        It should be pointed out that those with prepayment meters pay more for their electricity. No great favour is being done to those in this unfortunate situation. We should be concerned about that anomaly. If hon. Members feel priggish about this subject, they should remember that they pay their bills after they have used their electricity. We all pay in the form of deferred payments. To put it crudely, hon. Members get their electricity on tick.
        The Minister probably knows that area electricity boards do not have a uniform policy on prepayment meters. Some boards take a more sympathetic view than others. A board may take a more sympathetic view because of the social breakdown of the population. Some area boards may be more progressive and more understanding than others. Whatever the reason, they all apply different standards. The Minister should address himself to that fact. Why should there be different standards in different electricity boards?
        What information has the Minister received about discs? The police have mentioned problems concerning
        1068
        security in the home. It was suggested that discs rather than money could be put into meters. There would not then be any security risk. Perhaps the Minister will tell us what progress has been made. The issue raised by my hon. Friend the Member for Bassetlaw deserves an adequate reply.
        Mr. John Moore: I am grateful to the hon. Member for Bassetlaw (Mr. Ashton) for having raised this issue again, as he rightly did in Committee. It is an issue of great social importance to all hon. Members. I thank him for his courtesy in commenting on the visit that he made with members of the Child Poverty Action Group and with members of the gas and electricity consumer councils. I was happy to give time to listen to them.
        The hon. Member for Ashfield (Mr. Haynes) is always a worthy antagonist. I listened carefully to his remarks and I shall respond to any detailed points that he made. I assure him that there is no need to change parties in order to share compassion. No party has, or will have, a monopoly of compassion. I am delighted that the hon. Member recognised the compassion expressed by Conservative as well as Opposition Members. The hon. Member for Newham, North-West (Mr. Lewis) has an honourable record in pursuit of these problems. My hon. Friend the Under-Secretary of State—the Member for Kingston upon Thames (Mr. Lamont)—merits the congratulatory remarks that were made. Both sides of the House have made progress on an issue that concerns us all. However, that does not mean that I can necessarily accept the new clauses in toto.
        It is always more complex than might be imagined to change things in our society. However, I also hold a weekly surgery in an urban constituency and I recognise that hon. Members cannot be unaware of this problem. As the hon. Member for Bassetlaw said, the great majority of gas and electricity consumers have credit meters. Out of 20 million domestic electricity consumers, only 1·2 million have prepayment meters, and 3½ million gas consumers have changed from prepayment to credit meters in the past 10 years. I am not arguing about the data; I am simply putting the facts on the record.
        Prepayment meters cost consumers more. At present, the gas regions and electricity boards do not pass on the full additional cost to customers with prepayment meters. There are problems of theft from meters, and meter readers carrying cash collected from prepayment meters have been attacked. It is not practical to site a prepayment meter outside the premises. We have already discussed the advantages of externally sited meters.
        We are dealing not with the preference of the generality of consumers but with the particular problems of people who find it difficult to pay their gas or electricity bills—problems about which the Government are very concerned. They were discussed fully with the two industries. There can be no disagreement that special provisions must be available for such consumers.
        The gas and electricity industries have a joint code of practice that deals with the problems of people who find it hard to pay their fuel bills. The code sets out the range of pay-as-you-go arrangements offered by the industries to help consumers to avoid having to pay a big lump sum all at once. There are four main pay-as-you-go plans, with additional local variations in some regions.
        First, the consumer can pay an agreed amount each week or each month towards fuel bills. Secondly, he can

        1069
        buy savings stamps at gas and electricity showrooms. Thirdly, he can pay sums in advance towards the next bill. Fourthly—the key to our debate tonight—he can have a slot meter, if he has problems in paying his bills and none of the other plans help, but it must be safe and practical for a slot meter to be installed.
        I should like to explain what sort of considerations the words "safe" and "practical" cover. Gas will be cut off if the meter is not replenished, and the undertaking needs to be satisfied that a prepayment meter will not cause hazardous escapes when the gas is restored. The safety consideration also means that a prepayment meter cannot normally be situated outside a building where it might be broken into.
        A prepayment meter may not be practical for large users of gas or electricity—for instance, where there is gas central heating or where some of the supply is on an off-peak tariff. Sometimes there are practical difficulties, particularly for disabled people, who have problems of access to the meters.
        The Policy Studies Institute is carrying out a review, sponsored by the gas and electricity industries and their consumer councils, of the industries' code of practice and the practical application of prepayment methods. The institute produced its interim report last year, pointing out, among other things, the importance of prepayment meters as a means of helping people to avoid disconnection.
        My hon. Friend the Under-Secretary of State held discussions with the industries and, as a result, announced on 8 December last year that it had been agreed to amend the code of practice to make it clear that prepayment meters were now more readily available, provided only that installation was safe and practical.
        The previous condition that the consumer should be suffering real hardship has been dropped. In addition, the industries undertook to ensure that their staff at all levels were fully familiar with the code and observed it strictly.
        The revised code has been published and is widely available at electricity and gas offices and showrooms, as well as the offices of many voluntary organisations, such as the citizens advice bureaux. But I have taken note of the comments that have been made, and I ask all hon. Members who have examples of particular areas of difficulty to draw them to the attention of the Department of Energy and to the attention of my hon. Friend and myself. We should like to hear of any instances where the code is not being published and promoted properly.
        The Policy Studies Institute will complete its review later this year and its final report will be published. The hon. Member for Ashfield was worried about its gathering dust. I assure him that it will be published. The Government are taking a close interest in the progress of the work and will be consulting all the interested parties about any recommendations that may be contained in the report.
        We shall pursue with the industries any further changes to the code that might be necessary. I accept that there may on occasion be difficulties of communication, particularly in ensuring that the code is operated uniformly by the industries at all levels. That was the point that the hon. Member for Midlothian (Mr. Eadie) made. As I pointed out, my hon. Friend the Under-Secretary of State has
        1070
        already taken up the matter with the industries, and he has their assurance that every effort is being made to ensure strict observance of the code by their staff.
        I repeat that I have taken careful note of what hon. Members have said and of the individual cases that they have raised. If they will let me have any details of those cases I shall ensure that they are brought to the attention of the industries.
        Mr. David Penhaligon: With regard to the definition of practical difficulties the Minister will recognise that one of the problems arises with external meters. There is no technical reason whatever why a second meter cannot be installed in a home which has an external meter. It can be done in series with the existing one so that the people concerned can have the advantage of a slot meter. It can be a real problem in many areas, because the boards are always looking for excuses to stop installing them. The practical reason whatever why a second meter cannot be installed in the house. I can see one problem—that the consumer will begin to realise that electricity meters are not quite as accurate as the industry likes to pretend they are. Will the Minister look into the matter, as there is no practical reason why it cannot be done?
        Mr. Moore: I shall be only too delighted to have attention drawn to that question and to have it reexamined. In Committee we did not manage to integrate the debates on the outside meter, the inside meter and prepayment meter, otherwise we might have tackled the problem then.
        As I said, the Policy Studies Institute will complete its review later this year. I accept that there may be many occasions when there are difficulties of communication. I have requested hon. Members to draw attention to particular problems.
        There is, however, one further point in the new clauses upon which the fuel industries have—rightly, in my view—expressed concern. I refer to the proposal that there should be binding arbitration procedure in the event of a difference between the consumer and the fuel industry concerned.
        The installation of prepayment meters should, I think we are all agreed, be subject to a proviso that the installation is safe and practical. The fuel industries already have statutory responsibilities relating to the safety of supply, and it is not altogether easy to see how these responsibilities can be reconciled with binding arbitration in what may in some cases be an issue of safety. The Governments views on the issues raised by the new clauses are very clear and very much in accordance with the concerns which hon. Members have expressed.
        We endorse the policy of making prepayment meters available to consumers who have problems in meeting their fuel bills, provided that this is safe and practical. We shall continue to maintain our close interest in this and all other aspects of the code of practice. In particular, we shall study with care the final PSI report when it is available.
        I hope that in the light of what I have said the hon. Member will feel able to seek leave to withdraw the motion.
        Mr. Ashton: I thank the Minister for his reply but I regret to say that in view of the fact that it does not extend the rights of consumers I must ask the House to express an opinion and divide.
        Question put, That the clause be read a Second time:
        The House divided: Ayes 51, Noes 105.

        Division No. 151]

        [12.13 am

        AYES

        Alton, David

        Kinnock, Neil

        Ashton, Joe

        Lamond, James

        Beith, A. J.

        Leighton, Ronald

        Bennett, Andrew(St'kp't N)

        Lewis, Arthur (N'ham NW)

        Booth, Rt Hon Albert

        McCartney, Hugh

        Campbell-Savours, Dale

        McDonald, Dr Oonagh

        Cocks, Rt Hon M. (B'stol S)

        McElhone, Frank

        Cowans, Harry

        McWilliam, John

        Craigen, J. M.

        Marks, Kenneth

        Cryer, Bob

        Marshall, D(G'gow S'ton)

        Dalyell, Tam

        Miller, Dr M. S. (E Kilbride)

        Davis, T. (B'ham, Stechf'd)

        Newens, Stanley

        Dean, Joseph (Leeds West)

        Palmer, Arthur

        Dixon, Donald

        Pendry, Tom

        Dormand, Jack

        Penhaligon, David

        Douglas, Dick

        Powell, Raymond (Ogmore)

        Eadie, Alex

        Prescott, John

        Eastham, Ken

        Rooker, J. W.

        Ellis, R. (NE D'bysh're)

        Ross, Stephen (Isle of Wight)

        Evans, John (Newton)

        Rowlands, Ted

        Field, Frank

        Skinner, Dennis

        Foster, Derek

        Smith, Cyril (Rochdale)

        Foulkes, George

        Welsh, Michael

        Harrison, Rt Hon Walter

        Haynes, Frank

        Tellers for the Ayes:

        Home Robertson, John

        Mr. Allen McKay and Mr. James Tinn.

        Howells, Geraint

        Jones, Dan (Burnley)

        NOES

        Alexander, Richard

        Jopling, Rt Hon Michael

        Ancram, Michael

        Knox, David

        Aspinwall, Jack

        Le Marchant, Spencer

        Atkinson, David (B'm'th,E)

        Lennox-Boyd, Hon Mark

        Baker, Nicholas (N Dorset)

        Lester, Jim (Beeston)

        Berry, Hon Anthony

        Lloyd, Peter (Fareham)

        Best, Keith

        MacKay, John (Argyll)

        Biggs-Davison, John

        McNair-Wilson, M. (N'bury)

        Blackburn, John

        Major, John

        Bowden, Andrew

        Marlow, Tony

        Braine, Sir Bernard

        Mates, Michael

        Bright, Graham

        Mather, Carol

        Brinton, Tim

        Maxwell-Hyslop, Robin

        Brooke, Hon Peter

        Mellor, David

        Brown, Michael (Brigg & Sc'n)

        Mills, Iain (Meriden)

        Bryan, Sir Paul

        Moore, John

        Buck, Antony

        Murphy, Christopher

        Carlisle, John (Luton West)

        Myles, David

        Carlisle, Kenneth (Lincoln)

        Neale, Gerrard

        Clarke, Kenneth (Rushcliffe)

        Needham, Richard

        Cockeram, Eric

        Neubert, Michael

        Colvin, Michael

        Onslow, Cranley

        Cope, John

        Page, Rt Hon Sir G. (Crosby)

        Cranborne, Viscount

        Page, Richard (SW Herts)

        Crouch, David

        Patten, Christopher (Bath)

        Dorrell, Stephen

        Patten, John (Oxford)

        Douglas-Hamilton, Lord J.

        Proctor, K. Harvey

        Dover, Denshore

        Rathbone, Tim

        Dunn, Robert (Dartford)

        Rhys Williams, Sir Brandon

        Eggar, Tim

        Roberts, M. (Cardiff NW)

        Fairgrieve, Russell

        Rost, Peter

        Fenner, Mrs Peggy

        Sainsbury, Hon Timothy

        Fisher, Sir Nigel

        Shaw, Giles (Pudsey)

        Fletcher-Cooke, Sir Charles

        Shelton, William (Streatham)

        Fraser, Peter (South Angus)

        Shepherd, Colin (Hereford)

        Gorst, John

        Shersby, Michael

        Griffiths, Peter Portsm'th N)

        Speed, Keith

        Gummer, John Selwyn

        Speller, Tony

        Hamilton, Hon A.

        Sproat, Iain

        Hawkins, Paul

        Stanbrook, Ivor

        Henderson, Barry

        Stevens, Martin

        Hicks, Robert

        Stewart, A. (E Renfrewshire)

        Hooson, Tom

        Stradling Thomas, J.

        Howell, Rt Hon D. (G'ldf'd)

        Taylor, Teddy (S'end E)

        Hunt, John (Ravensbourne)

        Tebbit, Norman

        1072

        Temple-Morris, Peter

        Watson, John

        Thompson, Donald

        Wheeler, John

        Thorne, Neil (Ilford South)

        Wickenden, Keith

        Townsend, Cyril D, (B'heath)

        Williams, D. (Montgomery)

        van Straubenzee, W. R.

        Wolfson, Mark

        Viggers, Peter

        Waddington, David

        Tellers for the Noes:

        Wakeham, John

        Mr. Robert Boscawen and Mr. Alastair Goodlad.

        Waller, Gary

        Warren, Kenneth

        Question accordingly negatived.

      New Clause 7

        PROMOTION OF COMBINED HEAT AND POWER
        'The Secretary of State shall, within six months of the commencement of this Act, lay before both Houses of Parliament a copy of a voluntary code of practice, as agreed between the nationalised energy supply industries, relating to the encouragement of combined heat and power.

        (a) The code will provide guidelines for fair competition in the pricing of fuel supplied by the nationalised industries to CHP plants, and for electricity purchased from such plants by area boards.

        (b) The code will provide guidelines to promote fair competition for the marketing of heat and power from CHP plants operated in the private sector or in partnership with local authorities, and recommended the removal of institutional, contractual or monopolistic obstacles to the generation of CHP and to the sale of heat and power.

        (c) The code will provide guidelines to the CEGB on the interpretation of its statutory duties, to optimise efficiency in the conversion of fuel, by actively promoting the marketing of reject heal from its existing power stations, and to seek partnerships with industry and local authorities for CHP developments.'.—[Mr. Rost.]

        Brought up, and read the First time.
        Mr. Rost: I beg to move, That the clause be read a Second time.
        The Chairman: With this we may take new clause 3—Amendment of Electricity Act 1957—.
        'After subsection (5) of section 2 of the Electricity Act 1957, there shall be added the following subsection—
        "(5A) In executing its duties under subsection (5) of this section, the Generating Board shall promote economy and efficiency in the use of energy and shall, in particular, further the development of methods by which heat obtained from or in connection with the generation of electricity may be used more efficiently, for the heating of buildings, or for any other useful purpose." '
        Mr. Rost: The hour is late, but I hope that the House will bear with me, because although the Bill is concerned with energy conservation it omits to refer to the one area of conservation that could make a bigger contribution to energy conservation than any other. I refer to the two-thirds of the fuel that we currently throw away by the manner in which we produce our electricity—the hot water that goes up the cooling towers or into the rivers. It is equivalent to a heat loss of 60 million or 70 million tonnes of coal a year—heat from which millions of our citizens could well benefit.
        Energy prices are rising. Millions of our citizens are suffering because they can no longer afford a decent standard of heat and comfort. Yet we discard from our power stations vast quantities of energy—enough to heat every building in the country. My clause is an attempt to remove the obstacles to the development of combined heat and power—obstacles that have been removed in other countries, millions of whose citizens already benefit from

        1073
        cheap heat. There are about 3,000 district heating schemes in Western Europe outside the Iron Curtain countries. There are about three in this country.
        In Committee I attempted to insert two new clauses into the Bill. They would have changed the statutory monopoly powers of the electricity supply industry, which are one of the inhibiting factors, and would have insisted on fair tariff systems for combined heat and power. I withdrew the clauses because I received assurances, first, that the Government were already planning legislation to break the monopoly powers of the CEGB and to encourage combined heat and power, and, secondly, that, as a result of the Dr. Walton Marshall report, the Government were sponsoring a feasibility study for one lead city district heating scheme. I have returned to the subject now, however, with a clause that no Government who are dedicated to a more efficient use of energy, a better deal for the consumer, and competition and efficiency in the nationalised energy industries could possibly reject.
        The clause sets out a voluntary code of practice that will ensure fair competition within the energy industries in the production of electricity both within and outside the nationalised industries. Secondly, it will guide the CEGB on its statutory powers, so that it will help to promote combined heat and power rather than deliberately frustrate its development, as has happened to date.
        On the Continent the system of electricity supply is different. It has not inhibited private development of electricity and it has resulted in a far more efficient use of fuel, to the benefit of the consumer. Whole cities—Paris, Rotterdam, Munich and many others—have large and expanding district heating scemes. Sweden and Denmark heat huge numbers of their buildings by means of district heating. We have practically nothing of that sort. In France and Germany industries go into partnership with local authorities. Industry gets its heat and electricity cheaply because it is producing it, and citizens in nearby towns get their electricity and heat cheaply because the system of production is far more efficient than ours. We are still inhibited from developing the system, and it is time that we did more about it.
        First, the clause proposes that we overcome the obstacle within the monopoly electricity supply industry—the restrictive tariffs that prevent the establishment of effective combined heat and power schemes. Under those tariffs the CEGB pays only the base-load price for electricity that it buys from outside production and it charges combined heat and power schemes an unfair standby tariff. Other countries have removed those unfair trading practices and encouraged tariff systems that promote the more effective conversion of energy in combined heat and power. We are still allowing the restrictive nd unfair practices to continue.
        12.30 pm
        My voluntary code is an attempt to set a fair code of practice for the supply of fuels to outside producers of electricity and heat, an attempt to ensure that a fair price is offered to those who produce it, and an attempt to allow outside producers of electricity to sell it to the market outside the nationalised industry. There are institutional obstructions and unfair competition that prevent
        1074
        partnerships between industry and local authorities, and also prevent the development of combined heat and power outside the nationalised industry.
        I hope that the new clause, as posed in the form of a voluntary code of practice, will set a new standard whereby we can make real progress. Most EEC countries have already legislated to encourage combined heat and power. They already have a far greater proportion of combined heat and power. We are at the bottom of the league and slipping further behind because we still have not removed the obstacles that prevent it happening here. It is urgent that we begin to catch up with other countries. Millions of their citizens are already benefiting from heat that is distributed from power stations—the kind of heat that we throw away.
        Britain and its citizens are not short of electricity but of heat, yet the by-product of a power station is electricity. The main product is heat. It is nonsense that two-thirds of the fuel that we put into our power stations should be thrown away. The waste might have been justified at a time when energy was a low-cost item in the total production of electricity, but that is no longer so. France, Germany and Italy have legislated and provided incentives for the development of combined heat and power and for local autonomy between utilities, local authorities and industry. The disincentives have been removed.
        I give the Government an opportunity, through a voluntary code, to demonstrate their good faith in their declared intention to proceed along these lines, to ensure that our fuel is more efficiently used and that combined heat and power, which could make the greatest contribution of all to energy conservation, is not excluded from the Bill. If it were to be excluded it would be presumptuous to describe the Bill as an energy conservation measure.
        Mr. Penhaligon: New clause 3 is directed to the same issue as new clause 7. I am satisfied that the clause of the hon. Member for Derbyshire, South-East (Mr. Rost) was selected in preference to the Liberal clause. It is rather broader-based and contains a series of suggestions that I would be happy to support. I congratulate the hon. Gentleman on his activity on this desperately important issue.
        The Government's record on district heating and the use of waste heat from power generation is nothing short of pathetic. The Government have done just a little, and that prevents one from describing their activity as amounting to nothing. We have had the Marshall report, and a survey is taking place. That is an inadequate response to the enormous source of new energy that the use of waste heat from power generation represents. Some of us take the view that of all the alternative sources of energy available this is in many ways the most exciting and the one most likely to succeed. That is why we believe that a tremendous amount of attention should be given to it.
        There is not more than one power station which boasts a thermal efficiency of more than 40 per cent. There is no reasonable hope that the thermal efficiency of the conversion of heat into electricity is likely to improve on current figures in the near future. Until man has succeeded in discovering a new generation of steels which can maintain their shape and size at a range of temperatures and pressures that are beyond the imaginations of

        1075
        engineers now, there is no possibility that the maximum thermal efficiency obtained in the conversion of heat into electricity will increase in any meaningful way.
        The average thermal efficiency of the British power system is not much more than one-third. That figure is unlikely to be dramatically increased in the near future. One-third used means that two-thirds is thrown away, as the hon. Member for Derbyshire, South-East said. That is a remarkable factor of power generation not recognised by many. Out of every three lumps of coal brought in, one goes out as electricity and two go out in the form of waste heat. We are arguing that that waste heat should he used for the convenience of heating people in their factories, in their offices and in their homes.
        It is interesting to speculate that if only half of that waste heat could be saved—I do not say that that could be done next week—and could be used for useful purposes, there would be a fresh power source equivalent to the total generated power of the Central Electricity Generating Board. Such a prize should receive far more attention.
        We are all aware of the Government's intentions for the development of nuclear power, even if they appear to be afraid of discussing them on the Floor of the House. We are aware of the sort of money that the Government are prepared to put into that alternative source of energy. However, I cannot comprehend why this exciting possibility is almost ignored. The situation is worsening by the hour as the CEGB continues its policy of closing some of the smaller power stations which are nearer to towns and which are just the power stations from which a refurbishing and district heating system could come at the most economic cost. One could pump hot water a long way, but it is more sensible not to do so, nor is it necessary if there is a power station near the town.
        I am prepared to support the new clause of the hon. Member for Derbyshire, South-East. It is important that the Government should stop expressing good intent on this matter and should put some money into it so that schemes can be instigated and so that there is practical feedback on how successful the operation is.
        The most obvious place to apply that science is where new estates and offices are being developed. It is easier to make the necessary installations at that time than later.
        We have had this debate before. I look forward to the Minister's reply. I hope that he will express confidence that more action will be taken on this great and exciting possibility in the next 12 months than has been taken in the last two years.
        Mr. David Crouch: I cannot let this occasion go by without making some comment. We have already discussed this matter in Committee. Even at this late hour I have to say that this is probably the most important gap in the Bill. We lose two-thirds of a source of energy and appear to do nothing about it. Why? It is because the nationalised industries say that they cannot do anything about it, because if will cost money.
        It is important that we realise that we are losing energy in this way. It is not happening in other countries. In this country we are power-rich, from North sea oil and gas and from the coal beneath the ground. Yet we allow energy to be wasted into the atmosphere. My hon. Friend the Member for Derbyshire, South-East (Mr. Rost) has done the House a service yet again by reminding us that we cannot let the matter rest here when nothing is being done by the Government or the nationalised industries.
        1076
        Something must be done. Something has been done for over 25 years in Sweden. Something has been done in Germany and France. yet we do nothing. We say that we are not a sufficiently compact urban society.
        There are great conurbations in this country, such as Birmingham, Manchester, London, Newcastle, Cardiff, and Glasgow. Those places are sufficiently compact to use this waste heat. If we do not go forward tonight, I shall certainly raise the issue again and I know that my hon. Friend will do likewise. We are both concerned to become specialists in the study of energy matters. Hon. Members have spoken of the technical probklems facing us. We shall not let this matter drop. We shall keep after it to ensure that we conserve this energy and use it for the benefit of our people.
        Mr. Eadie: We on the Opposition Benches are aware of the arguments put forward by the hon. Member for Derbyshire, South-East (Mr. Rost) because we have discussed them in Committee. We put our views then. Because of the lateness of the hour, we believe that it would be best to allow the Minister to reply to his hon. Friend. We shall listen with great interest.
        Mr. John Moore: I welcome yet another opportunity to discuss this subject, raised by my hon. Friend the Member for Derbyshire, South-East (Mr. Rost) and taken up by my hon. Friend the Member for Canterbury (Mr. Crouch) and the hon. Member for Truro (Mr. Penhaligon). During our Committee proceedings I sought to record in considerable detail the pattern of progress on this key issue of combined heat and power and district heating. Those hon. Members who say that there has been no activity by the Government should refresh their memories by referring to columns 120–129 of the proceedings of Standing Committee A on 24 March 1981.
        My hon. Friend's new clause, like the new clauses that he tabled and subsequently withdrew in Committee, is clearly based on his view that the policies of the fuel industries in general and the electricity supply industry in particular are inhibiting the development of CHP En this country. His references to fair competition are indicative of this. Before dealing with this point in detail let me make it clear that although there is always scope for clarifying certain aspects of policy I do not share my hon. Friend's views.
        I dealt at length in Committee with the helpful way in which the industries are dealing with inquiries in respect of industrial CHP schemes and are assisting the Government in their CHP-district heating feasibility programmes. The new clause calls for a voluntary code of practice to be agreed between the nationalised energy supply industries and laid before Parliament within six months of the Bill's obtaining Royal Assent. Leaving aside for the moment the need for a code, this timetable is very tight—I would say unrealistic. However, I believe that I can demonstrate forcefully to the House that the new clause is unnecessary.
        12.45 am
        Paragraph (a) of the new clause seeks to establish a code that will provide guidelines for fair competition in the pricing of fuel supplied by the nationalised industries to CHP plants and for the electricity purchased from such plants by area boards. The policies of the gas, coal and electricity industries in this area were spelt out in considerable detail in Committee, and I am satisfied that

        1077
        the industries' policies are fair and do not hinder the development of CHP. The industries do not keep these policies under wraps; indeed, they are only too willing to negotiate with potential consumers, and I believe that it is unnecessary to make them the subject of a code of practice.
        The proposal in paragraph (b), which deals with guidelines for the marketing of heat from CHP stations and the removal of so-called institutional obstacles to CHP development, is premature. The matters that my hon. Friend raised will be for consideration during various stages of the CHP feasibility programme, and it would therefore be inappropriate to try to put together any guidelines on this until that work is completed.
        Paragraph (c) would provide guidelines to the CEGB on such matters as the active promotion of the marketing of reject heat from power stations. As I explained in Committee, all electricity boards in England, Wales and Scotland are under a duty to investigate methods by which heat obtained from, or in connection with, the generation of electricity may be used for the heating of buildings or other useful purposes. They have power to provide heat for such purposes, either alone or in co-operation with others. I do not think that it is appropriate for the CEGB to be given guidelines on how to interpret these statutory duties, although, of course, if there is evidence that it is not fulfilling them—I do not think that there is, but if there is—we shall need to consider the matter carefully.
        Once again my hon. Friend has used his great knowledge of CHP—I recognise that—and his ingenuity to enable us to have yet another debate about combined heat and power. I welcome this—it is a subject to which the Government attach great importance—but I do not think that my hon. Friend is being entirely fair when he suggests, both in his speech and by implication in the new clause, that the fuel industries are hindering the development of CHP through their policies.
        Mr. Rost: If my hon. Friend maintains that there is no hindrance by the nationalised industries of the development of CHP and district heating, can he explain why we are at the bottom of the league and why so little is going on here? Why is CHP and distrcit heating so much more extensively developed in other countries?
        Mr. Moore: I did not think that we wished to reiterate the whole of the detailed debate that we had in Committee about the institutional nature of our country relative to its current position in CHP. I had thought that in the new clause we were concerned ?? athe question whether at this time there were institutional barriers, put up by the Government or by the nationalised industries, to the development of CHP from this point forward. I am dealing with the present and the future, and not with the nature of the debates that we had on the way in which our country had reached this point relative to other countries.
        I come now to the new clause tabled by the hon. Members for Liverpool, Edge Hill (Mr. Alton) and for Truro. It is clear that its essential point is to lay an obligation on the CEGB to further the development of methods for the efficient use of waste heat from power stations. It seems to me and to the Government that it is superfluous to lay an obligation of this sort on the CEGB
        1078
        by means of new legislation, because as I explained earlier to my hon. Friend, the CEGB already has a duty under section 50 on the Electricity Act 1947 to
        "to investigate methods by which heat obtained from or in connection with the generating of electricity may be used for the heating of buildings … or for any other useful purpose."
        Under the same section, the CEGB also has the power to
        "conduct, or assist others in conducting, research into any matters relating to such methods of using heat."
        I cannot help wondering what will be the hard practical difference in amending the CEGB's existing obligation with regard to CHP in the way suggested in the new clause. An amended statutory duty is not necessary to secure CEGB co-operation in the feasibility programme. As I have already pointed out, the CEGB is co-operating fully already. Neither will an amendment make any difference to the feasibility programme, which is the essential basis for any future development of CHP district heating in this country.
        I therefore repeat what I said in Committee about our view on the possibility of future legislation on CHP. We accept that new legislation may be necessary when our feasibility work has progressed further and we have a clearer idea of its economic potential and the institutional structures that may be appropriate to exploit the potential, but it is misconceived to attempt a piecemeal approach to the subject. It is likely to be much more complicated than merely making a minor adjustment to the duties that the CEGB already has with regard to CHP, which is what the new clause attempts to do.
        I am grateful to hon. Members for giving me the opportunity to reconsider the issue. The Government's feasibility work on CHP shows that we are treating it with the seriousness that it merits. I hope, therefore, that my hon. Friend will feel able to ask leave to withdraw his motion. Neither of the new clauses that we are considering serves a practical purpose in pursuing the objective that is shared by hon. Members on both sides of the House—the objective of testing fully the potential for CHP in this country.
        Mr. Rost: My hon. Friend the Under-Secretary of State states that neither new clause will serve a practical purpose in terms of the objective of using some of the reject heat with which we warm our fish and heat the atmosphere. I was disappointed that he did not tell us what practical steps we need to take to do what other countries are doing so much more effectively in giving people heat instead of allowing them to freeze to death because they cannot afford sufficient heating.
        There is the lead city experiment, but it does not get to grips with the problem of removing the obstacles to the development of CHP in this country. There is no economic obstacles, as feasibility studies indicate that the development would be cost-effective, but there are institutional obstacles. I hoped that my hon. Friend would accept that and would give us an indication that the Government propose to take action, even if my new clause does not satisfy the needs.
        I shall continue to press the matter, which is the most important contribution that we can make to energy conservation, but, having said that, at this stage I beg to ask leave to withdraw the motion.
        Motion and clause, by leave, withdrawn.

      Clause 1

        POWER TO PROHIBIT SUPPLY OF CERTAIN APPLIANCES WITHOUT TYPE APPROVAL MARK OR APPROVED OPERATING AND MAINTENANCE INSTRUCTIONS
        Mr. John Moore: I beg to move amendment No. 2, in page 2, line 2, leave out from `by' to end of line 8 and insert
        'approved operating and maintenance instructions.'.
        Mr. Deputy Speaker (Mr. Bernard Weatherill): With this it will be convenient to take Government amendments Nos. 4, 5 and 6.
        Mr. Moore: As drafted, the Bill provides powers for the Government to require approved operating and maintenance instructions to be supplied with new heat generators, but it does not contain corresponding powers in relation to gas appliances. This reflects the fact that the EEC directive on heat generators specifically mentions such instructions while the draft gas appliances directive does not. However, recent comments made in Committee by the hon. Member for Bassetlaw (Mr. Ashton) and by the British Gas Corporation, as well as the continuing work in Brussels, have led us to the conclusion that proper operating and maintenance instructions are important for gas appliances as well as heat generators. We therefore promised in Committee that we would amend the Bill to allow the Government to require approved operating and maintenance instructions for new gas appliances.
        The amendments will fulfil that promise. They will allow the Government to ensure that users of gas appliances have clear and easily understood guidance on how to use and maintain their appliances.
        Amendment agreed to.
        Amendments made: No. 4, in page 2, line 15, at end add
        'or is accompanied by approved operating and maintenance instructions (or both).'
        No. 5, in page 3, line 22, at end add—
        `() "approved operating and maintenance instructions" means operating and maintenance instructions approved in accordance with the following provisions of this Part of this Act by any type approval body appointed under section 3 or with any relevant Community requirements by any person authorised in accordance with those requirements;'.—[Mr. John Moore.]

      Clause 2

        U.K. REQUIREMENTS FOR TYPE APPROVAL AND APPROVAL OF OPERATING AND MAINTENANCE INSTRUCTIONS
        Amendment made: No.6, in page 4, leave out line 7 and insert
        'appliance of a description specified in the order in respect of which a type approval under section 4 is in force, or has been applied for, and'.—[Mr. John Moore.]

      Clause 16

        ALLEVIATION OF CHARGES FOR ABSTRACTION OF WATER IN CERTAIN CASES
        Mr. Crouch: I beg to move amendment No. 7, in page 15, line 38, leave out clause 16 and insert—
        '16. At the end of section 60 of the Water Resources Act 1963 (exemption from and reduction of charges payable to water authorities) the following subsection shall be inserted—
        1080
        "(7) No charges shall be levied in respect of water authorised by a licence to be abstracted for use as a source of energy if and so far as such water is returned to the same source of supply".'.
        Mr. Deputy Speaker: With this we are taking amendment No. 8, in page 15, line 43, leave out from `inhibiting' to end of line 44 and insert
        `the use of water as a source of energy;".'
        Mr. Crouch: It is a very late hour. It is the remarkable extension of procedures in democracy that we have established in the House over many years which enables me to bring this matter forward at this late stage in the consideration of the Bill. The Bill originated in another place and came to this House only later. The problem was considered and well argued there, but did not succeed. Lord Strathcona and Mount Royal sought to remind the other House that in considering energy conservation and the use of the nation's energy resources the widespread and diffuse production of energy from small-scale renewable sources such as water power generation was very important. He argued very well that the generation of energy from such sources should be encouraged and that nothing should be done to inhibit such activity. Unfortunately, he did not succeed in persuading the Government to allow the matter to proceed in an entirely satisfactory way.
        My noble Friend pointed out that some water authorities had felt it necessary to impose dramatic rate increases upon those using water to generate power.
        Even though such users did not take water away but only used it and put it back so that not a drop was wasted, some water authorities, in their wisdom, and with their power and authority, saw fit to increase the charges to users of machines which generate electric power from water so dramatically as to make the whole process uneconomic and thus to inhibit its use. My noble Friend argued strongly that this was no part of energy conservation and that in a Bill of this kind such activities should be encouraged, not inhibited.
        The Bill proceeded on its way and, having come to this place, was eventually considered in some detail in the Committee of which I had the honour to be a member. My hon. Friend the Under-Secretary of State dealt with the matter in some detail in Committee. On the question of the possible inhibition of power generation by the owners of water power generators, such as water wheels, who produce renewable sources of energy in this way, he thought that nothing was being placed in the way of such activity. If he was not extensively questioned on that reply it was perhaps the fault of members of the Committee who did not spot a gap in the Bill which, to say the least, would not encourage the generation of power in that way. Indeed, having studied the matter since then, I go as far as to say that it positively inhibits the use of machinery such as water wheels to generate electricity.
        This may seem a small matter when we have been considering enormous questions of power generation, heat and energy saving, and so on, but it is not. Just as we have considered many other matters, it is important that we should not neglect this one.
        1 am
        I maintain that clause 16 as it stands carries a prejudicial implication. If a turbine or water wheel user challenges the view of a water authority that he is an abstractor—I use the word as a non-lawyer but in a legal sense because

        1081
        everything hinges on its interpretation in a court of law—he is liable to be prosecuted in a magistrates' court, and the water authority will do its best to prove that water power is an abstraction. No doubt the water authority will call on and brief learned counsel to argue its point about abstraction. I suggest that counsel will do that with great authority and force in a magistrates' court. There, in such a lowly legal place——
        Mr. Martin Stevens: Oh!
        Mr. Crouch: It is not the High Court, appeal court or the House of Lords; it is an honourable but lowish level of legal authority and decision. Does my hon. Friend the Member for Fulham (Mr. Stevens) wish to intervene? Apparently not.
        I suggest that it is unlikely that the owner of a water wheel will be able to compete with the legal weight and strength of learned counsel briefed to argue the meaning of the abstraction of water.
        Some water wheel owners who are lawyers may be able to cope. My hon. Friend the Member for Morecambe and Lonsdale (Mr. Lennox-Boyd) is a lawyer and would own to being the owner of a water wheel. I think that he would also own to being a lawyer. I cannot say whether he qualifies for the title "learned" that we give in the House.
        Mr. Mark Lennox-Boyd indicated dissent.
        Mr. Church: It will, no doubt, come later. At least, he is a producer of energy in the House and elsewhere. Others not so gifted would not be able to argue their cases in a court of law.
        Lay magistrates may incline to the view of counsel arguing the interpretation of the parliamentay drafting of the meaning of abstraction. I suggest that, as the Bill is drafted, the likelihood of conviction is real. I would argue, therefore, that even at this late hour—the late hour of consideration of the Bill in the timing of Parliament rather than the late hour of the day; "at this eleventh hour" would perhaps be a more appropriate phrase—we should amend the Bill by removing the possibility of a court, at any level, low or high, assuming that abstraction should be charged at a higher price.
        I suggest that "abstraction" is not appropriate. Persons who use old or new machinery—water wheels or turbines—to generate power from water are not consuming water and, therefore, are not abstracting the water. I should like to remove any possible misinterpretations. No water authority should be able to suggest that this is abstraction and that a higher charge should be made for such use. As a common man and not a lawyer, I believe that that is commonsense. Therefore, I urge the house to accept the amendment.
        The power user does not abstract water, and the charges raised by water authorities should therefore be without legal authority. All that I am asking my hon. Friend to do is to tell me that he agrees with me and will remove this possible suggestion from the Bill.
        Mr. Eadie: When the official Opposition gave me the responsibility of handling the Bill I went over in great detail the debates that occurred in another place and I paid particular attention to the debates and arguments to which the hon. Member for Canterbury (Mr. Crouch) referred.
        1082
        I have the correspondence from the water power users and I know that the hon. Gentleman makes a point about the whole question of legality and the bringing in of lawyers or solicitors. I must say, without wishing in any way to deride the legal profession—because a member of my family has practised law for many years—that it is better to keep lawyers out of some of these problems. We are all politicians, and have experience of this. It is far better to make sure that the law and the lawyers do not come into this. Indeed, to some extent we deserve to be criticised if we pass legislation that then becomes the subject of legal challenge and long-drawn-out legal arguments.
        My interpretation, on reading the report of the debates in another place, is a very serious one, in a sense. I have always tried to act on the basis that one's word is one's bond, and I am sure that all hon. Members have done the same. I think that it is very important that one's word is one's bond. The inference of the debates in the other place was that a promise was made. I have gone over the discussion and I believe that that promise has now been broken. That is a very serious thing to say, and I think that the Government have some responsibility tonight to try to explain why, when they gave an undertaking that something would be done, nothing has happened. I certainly believe that the hon. Gentleman owes the House some clarification.
        Mr. Lennox-Boyd: I support my hon. Friend the Member for Canterbury (Mr. Crouch), particularly in terms of his advocacy of amendment No. 8. I just want to make one or two comments by way of clarification of the past history of this matter.
        I must declare an interest, as the owner of a water wheel, but if anyone saw it he would think that it was more of a liability than an asset, and it is not in use at the moment. I am also a member of the National Association of Water Power Users, which is based in the constituency of my right hon. Friend the Member for Westmorland (Mr. Jopling) and is a very powerful and important body in that area.
        In the past some water authorities have used their powers under the Water Resources Act 1963 to penalise those people who operate water wheels and to charge them on a compulsory basis for the abstraction of water. This unfairness is manifest when we realise and understand, as anyone who considers this matter will, that all the water that is taken out by someone who is using it for power generation is put back into the river about 10 ft lower down—in height—in the stream.
        The bureaucratic hypocrisy of the imposition of rates in this way has been justified on the basis that in return for this charge the water authority will guarantee a secure source of supply of water in the river. In North-West Lancashire it is not very difficult to guarantee a secure source of supply of water, and that argument has given rise to a considerable feeling of grievance among many people. As a result of this definition of the word "abstraction" a great deal of resentment has been generated.
        I understand that my hon. Friend views amendment No. 8 with some favour. He may, however, feel that it is unnecessary in the circumstances. It should be noted that the amendment is completely satisfactory to those who represent the National Association of Water Power Users. In due course we shall know whether the Government will accept it.

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        In the past, confusion has arisen because "abstraction" has become a hated word to the National Association of Water Power Users. Therefore, its members are anxious that the amendment should be accepted, even if the legal advice is that it is unnecessary and does not take the matter much further. Of course, water power users merely borrow the water that they use; they do not consume it. To describe such borrowing as an abstraction may be more correctly described as an abstraction of the truth.
        Mr. Peter Viggers: I rise only to assure the House that support for my hon. Friend the Member for Canterbury (Mr. Crouch) on such an important amendment is not confined to the owners of water wheels. To take a broader view, we do not know which of the alternative energy sources of sun, geothermal power, water, tides, and so on, will eventually yield a major harvest, but I am confident that one of them will and that science will allow one of those alternative sources to become extremely important in terms of world energy supplies. An alternative battery may be involved. We do not know.
        It is wrong to allow one of those alternative sources of energy to be inhibited. This comparatively minor use of water power should not be inhibited by an incorrect rating or taxation system. Therefore, I urge the Government to accept the amendment. It is wrong that the water authorities should be able to assess a rate according to such use. We should take this matter clean out of their hands. Therefore I urge the Government to accept the amendment.
        Mr. John Moore: This has been an interesting example of the way in which a sensible and modest sector of our economy can bring legitimate pressure to bear through our parliamentary processess. It reminds me of one of my first days at the Department of Energy. I obtained an invitation to visit Mr. Osmond Goring. He, is an example of British ingenuity in developing low-power water usage in a lovely part of our country.
        If that, together with the pressures imposed by the National Association of Water Power Users, were not enough to persuade me, I might have been persuaded by the Government Chief Whip—my right hon. Friend the Member for Westmorland (Mr. Jopling). He has been with us for many years. Although silent, he has for many years been the protagonist of this cause. To the last he is here to ensure that everything that the water power users legitimately desire goes on to the statute book.
        Both in Committee and in the House I have had many discussions with the hon. Member for Midlothian (Mr. Eadie) on various matters, including coal. I know him to be an honourable man in every sense of the word. I hope that he will listen carefully to my remarks. I share his blissful ignorance of the legal trade. Perhaps I should say "legal profession". Even at this late hour there is some inhibition about the word "trade". However, I am sure there is no such inhibition about that word in a mercantilist party. Those of us who are not privileged to be members of the legal profession will understand the difficulties of some outsiders. I think that I shall remove all the hon. Gentleman's doubts if I put certain matters on the record.
        1.15 am
        Water power has a modest but important energy potential for our country. The small users of water would
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        like us to make the position as clear as we can. Amendment No. 7 would completely remove charges for the use of water as a source of energy
        "if and so far as"
        the water is returned to the same source of supply. When clause 16 was discussed in Committee I set out fully the Government's view on the appropriate level of charges for the abstraction—a word that I know raises many hackles—of water for hydro power generation. I said then that hydro power could make a worthwhile contribution to United Kingdom energy supplies and that the Government wished to make sure that there were as few constraints as possible on the activities of small-scale hydro power users, and in particular that they were not inhibited by charges imposed by water authorities.
        I explained that in December my hon. Friend the Under-Secretary of State for the Environment had written to the chairmen of the water authorities in England and Wales to point out the importance attached by the Government to the use of water for power generation. My hon. Friend suggested that anything seen as an obstacle to the development of hydro power should be removed. I am delighted to see my hon. Friend present tonight, showing the support that he has shown throughout on this important matter for water power users.
        My hon. Friend also said that a good case could be made for charging for such abstractions only at a minimal rate, not calculated on a volume-related basis but covering only the administrative expenses of granting the licence. I went on to make it clear that it remained the Government's view that where the water charges might have an inhibiting effect on the use of water for power generation the principles set out in the Department of the Environment's letter of last December should remain the guiding principles.
        That explanation is clear and specific. It represents an unequivocal assurance to water power users about the Government's position. We do not believe that it would be right to abolish all water charges for all hydro power users in all circumstances. The new clause on this matter, introduced in another place, recognised that it would be reasonable for a water authority to make a charge to cover any expenses that it might have incurred in ensuring the flow of water to the hydro scheme. It is also clearly reasonable that the water authority should be able to recover its administrative expenses in issuing a licence.
        Circumstances will be different in different cases. That is why the Government's approach has been to leave the matter of the precise level of charges, if any, imposed in any individual case to agreement between the water authority and the water users, subject always to the general considerations set out in clause 16 and the right of recourse to the Secretary of State contained in section 60 of the Water Resources Act 1963.
        I think that there is no disagreement in the House about the general objective that we are trying to achieve in the clause. We are trying to ensure that charges imposed on hydro power users do not make the hydro schemes concerned uneconomic. I believe that the clause secures that objective. It amends section 60 of the 1963 Act so as to require water authorities to have regard to
        "the need to conserve sources of energy … and the consequent desirability of preventing the charges in question from inhibiting"
        hydro power users
        "from abstracting water to use as a source of power".

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        It will also provide hydro power users with a power of appeal, because section 60 contains a provision enabling water users, if a water authority does not agree to waive charges or to abate them satisfactorily, to refer the matter to the Secretary of State. Therefore, once clause 16 is enacted a hydro power user will be able to take such a dispute about charges to the Secretary of State for decision.
        Amendment No. 7 goes well beyond what is proposed in the clause. It would abolish all charges for the use of water as a source of energy where the water is returned to the river from which it was taken, as it almost invariably is. I do not think that that would be reasonable.
        I hope that in the light of what I have said about the Government's attitude to water power charges for hydro power generation my hon. Friend will feel able to ask leave to withdraw the amendment.
        On amendment No. 8, my hon. Friend has raised the question whether the use of water for hydro power generation is an abstraction within the meaning of the Water Resources Act 1963. This is obviously a very important and crucial point. If a hydro power user is abstracting water he is required to obtain a licence from the water authority and pay charges. If he is not abstracting water he need not have a licence or pay charges.
        The Government are aware that this is an issue on which opinions are divided. Three of the water authorities in England and Wales do not regard the use of water for hydro power generation as licensable. The majority, on the other hand, consider that where the water is diverted from a stream through a separate mill-race or channel an abstraction is taking place. But whether or not a particular individual water power user is abstracting water is ultimately a matter which only the courts can decide in the light of the particular circumstances of the hydro scheme. It is not an issue which the House is called on to decide today.
        My hon. Friend has expressed concern that clause 16 as drafted might prejudice this issue. It might carry the implication that any use of water for power generation was necessarily an abstraction, so that the water power user would have to possess a licence and pay water charges. I can say categorically that this is not the case. Clause 16 adds a further provision to section 60 of the Water Resources Act 1963. Section 60 of the 1963 Act, as amended by the Water Act 1973, provides that
        "A water authority may, on the application of any person who is liable to pay charges to the authority for the abstraction of water under a licence under this Act, make an agreement with him either exempting him from the payment of charges or providing for charges to be levied on him at reduced rates specified in the agreement".
        Clause 16 would therefore affect only someone who is liable to obtain a licence and to pay charges to a water authority for the abstraction of water. It cannot be interpreted as creating a liability to obtain a licence or to pay charges. Whether or not an individual water power user was abstracting water and, hence, required to obtain a licence or to pay charges, is a matter which only the courts can decide. It is a question which has not so far been tested in the courts. But I am advised that the clause cannot possibly be regarded as prejudicing the question one way or the other.
        Amending the clause in the way that my hon. Friend has suggested would not, alter the position at all, and I do
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        not think that it would serve to clarify the intention of Parliament, since the intention is already clear—to make provision for the alleviation of water charges for hydro power use in particular cases where an obligation to pay such charges exists.
        I am grateful to my hon. Friend for giving the House the opportunity to look at the matter again. As I said earlier, the Government fully share his concern that unreasonable obstacles to the development of hydro power—in particular, small hydro power schemes—should be removed. The Government's position—as I said in Committee, and as was explained again in another place—is clear and unequivocal on this point. I hope that my hon. Friend will feel able to accept the specific assurance that I have given about the effect of the clause and will seek to withdraw his amendment. But, at the same time, and recognising what my hon. Friend has said, if he does not feel able to do so, as the amendment makes no difference to the substance of the clause—I understand the worries and the concern that have been expressed throughout all the discussions—the Government obviously will accept it if it is pressed.
        Mr. Crouch: My hon. Friend the Under-Secretary will realise that, as a non-lawyer, I am somewhat confused by his convoluted reply—helped, no doubt, by his legal advisers in the Department. It is quite clear that my hon. Friend and the Government are not prepared to go the whole hog and take belt and braces to safeguard the users of water power and the energy conservers, as I have tried to describe them, who are referred to in this clause.
        I had hoped that my hon. Friend would say that he was prepared to encourage rather than inhibit these users of water power because they are practising the business of energy conservation. They use water as an energy source. They derive power from it but they do not abstract the water. My hon. Friend touched on that point but seemed to argue legally that what I suggest might be wrong. I am suggesting that the courts might find this wrong and might find against the users of water power in this way and permit high, or not-so-high, charges to be made by the water authorities.
        My argument is that there should be no inhibition on people seeking to conserve energy. I am prepared not to press amendment No. 7—the whole hog or belt-and-braces amendment—to rewrite this part of the Bill so that there can be no doubt about the matter. I hope, however, in view of the plea that I now make, that my hon. Friend will realise that I feel strongly that he should recognise the views that I have expressed. There is a doubt in my mind and, I believe, in the minds of all water users. The rewriting of the clause as suggested in my amendment No. 8 is necessary to satisfy those who are not lawyers but who want to be certain in any court of law that there can be no misunderstanding about where they stand, that they are not inhibited, and that they are regarded as conservers of energy. I beg to ask leave to withdraw the amendment, but I urge acceptance of amendment No. 8.
        Amendment, by leave, withdrawn.
        Amendment made: No. 8 in page 15, line 43, leave out from 'inhibiting' to end of line 44 and insert
        `the use of water as a source of energy;":.—[Mr. Crouch.]

      Clause 20

        ENFORCEMENT OF ORDERS UNDER PART 1
        Mr. Eadie: I beg to move amendment No. 9, in page 17, line 8, at end insert—
        '(1A) The Secretary of State shall reimburse any local weights and measures authority for all additional expenses incurred as a result of carrying out its duties under the provisions of orders made under part I of this Act.'.
        The Minister will recall that I raised this matter in Committee when discussing the clause. The enforcement orders under the Bill involve local weights and measures authorites, which generally are local authorities. The hon. Gentleman will recall that I asked what cost would be incurred by a local authority in carying out a statutory obligation imposed by the Bill. This is a fair question in relation to the scrutiny of the rates burden imposed on local authorities by the Government.
        I have studied the Minister's remarks in Committee, when he said:
        "we do not expect that the Bill, as I said before, will have significant implications for local authority manpower."
        Almost the final words of the hon. Gentleman were:
        "that the local authority manpower and revenue implications were, according to their own organisations after consultation, minimal."—[Official Report, Standing Committee A, 19 March 1981; c. 86.]
        I know that local authorities will expect to be reimbursed for the minimal expense that could be involved. I am sure that no Government, as a matter of principal, would wish to impose at this time additional cost in furtherance of legislation. My amendment is simple. It asks the Government to put their money where their mouth is. I do not believe that the Government can pass the buck of responsibility to others.
        The Government cannot deny reimbursement to local authorities. If the amount is so small, why quibble?
        My amendment is an honourable position for the Government to adopt—namely, to pay the cost of their legislation. I commend the amendment to the House.
        1.30 am
        Mr. John Moore: The hon. Member for Midlothian (Mr. Eadie) rightly raised this issue in Committee and on Second Reading.
        The role of local authorities in this connection relates only to the enforcement of part I of the Bill, the type approval provisions. Part II will be enforced by Government officials, who will simply match the records of the boilers supplied with the records of boilers which have passed the efficiency test and make further inquiries about any discrepancies. Most of the work arising out of part I will be carried out by the type approval bodies. That is where most of the work will be done. Those bodies will not only have the job of testing samples of appliances to see whether they come up to the required standard and whether all the appliances of a model can, therefore, be type approved, but under clause 5 they will make sure that new appliances of a model which has been type approved continue to conform to the standard.
        The role of local weights and measures authorities will be confined to ensuring that appliances on sale in retail establishments have been approved. That will not represent a significant amount of work, because type approval will be clearly indicated by means of a type approval mark attached to the appliance. All that will be
        1088
        required is a quick visual check to see whether the appliance carries such a mark. Moreover, the checks will be carried out in the course of visits which training standards officers employed by local weights and measures authorities already make for other purposes. We do not envisage that any special visits merely for the purpose of enforcing the Bill will generally be necessary.
        For those reasons, we believe that the Bill will not lead to any significant additional expenditure by local authorities, but, even if such expenditure were incurred—this is relevant to what the hon. Member for Midlothian said—the proper method would be in the context of the rate support grant, which represents the totality of the Government's support to local authority rate-funded services, and not by way of specific and quite unprecedented provision in legislation.
        I hope that in the light of what I have said the hon. Member will seek to withdraw the amendment.
        Mr. Eadie: The Under-Secretary of State says that local authorities will be reimbursed from the rate support grant. I should have preferred that to be written into the legislation. However, the hon. Gentleman is on record as saying that if expense is involved it should come from the rate support grant. I therefore beg to ask leave to withdraw the amendment.
        Amendment, by leave, withdrawn.
        Motion made, and Question proposed, That the Bill be now read the Third time.
        1.34 am
        Mr. Eadie: We have devoted many hours to the Bill, and it is late. Nevertheless, we are entitled to make a few comments about it. I shall be brief.
        We have tried to improve the Bill. Its title promised much, but the Bill promised little. We have marginally improved the Bill, perhaps because we had a Minister who listened and responded as best he could to the arguments. However, the House should take note of the Bill's inadequacy as a conservation measure.
        The Government can surely do better than this. The message to emanate from our discussions is that we Look forward in the near future to a Bill that deserves to be called an energy conservation Bill. We are sending the Bill limping on its way. That is not its fault, for I believe that it never had proper legs to start with.
        1.36 am
        Mr. John Moore: I rise briefly to discuss the Bill that I hope to see passed on to the statute book. Contrary to what the hon. Member for Midlothian (Mr. Eadie) said, it will enable the Government to set certain compulsory standards of efficiency for space and water heating appliances. Such appliances consume about one-third of the country's energy—the equivalent of 60 million tonnes of oil a year—so obviously a large proportion of the nation's energy is covered by the Bill.
        There is proven scope for improving our performance in this area. If energy efficiency were improved by only a modest 5 per cent. in the area covered by the Bill the nation would be saved about £300 million a year. That is a sizeable and significant amount.
        The Bill also gives permanent statutory authority to the Department's energy conservation and advice schemes. I am glad that through the Bill we have been able to improve the prospects for small-scale hydro users. I have been

        1089
        gratified by the wide support given for what we regard as an important energy conservation measure, and we can all take real satisfaction in putting the Bill on to the statute book. I commend the Bill to the House.
        Question put and agreed to.
        Bill read the Third time and passed, with amendments.

    Petition

      British Nationality Bill
      1.38 am
      Mr. Ivor Stanbrook: With your permission, Mr. Deputy Speaker, and that of the House, I beg leave to present a petition from members of the British community in Caracas, Venezuela. The petition is signed by 83 persons representing 61 families with a total, between them, of 108 children who were born in 24 different countries. All of them are citizens of the United Kingdom and Colonies and are proud of it.
      The organiser of the petition is Mr. Christopher Stacy Waddy of Caracas. Briefly, the petition complains that the existing terms of the British Nationality Bill, which is now in Standing Committee, will rob the children of the petitioners of the right to pass their British citizenship on to their children born overseas. British citizens by descent will not have that right, whereas, by the Bill as already amended in Committee, British citizens by registration or naturalisation, being immigrant Britons, will have that right.
      The petition ends:
      "Wherefore your petitioners pray that your honourable House amend the British Nationality Bill to provide that relief from this disability be given to our children and other British citizens by descent so as to match the relief the House has already, by amendment to the bill as first presented, granted in respect of those children also born outside the United Kingdom to parents one or both of whom is a British citizen by registration or naturalization; and furthermore that the honourable House provide that we their parents on their behalf or our children themselves being of due age be permitted on whatever clement terms the House sees fit to impose, to register all such children as British citizens so as to fortify their claim by descent against any impediment to their assumption of their full duties and rights as British citizens:
      And your petitioners, as in duty bound, will ever pray etc."
      To lie upon the Table.

    Gatwick Airport (Noise Insulation Grants)
    Motion made, and Question proposed, That this House do now adjourn—[Mr. Brooke.]
    1.40 am
    Mr. Keith Wickenden: I am grateful to Mr. Speaker for granting me a third Adjournment debate in less than two years. Each debate has been on the subject of airports within my constituency. The House might be forgiven for drawing the inference that I am committed to opposition to airports and aviation. Nothing could be further from the truth. I frequently use airports, including those within my constituency. I frequently use them for purposes of pleasure, recreation and business and I hold a pilot's licence. Nobody could in fairness accuse me of being anti-aviation.
    1090
    I do not subscribe to the school of thought that I know some of my constituents do—namely, that the answer to all airports is to take them away. That is an unrealistic view and one that I would not support for a moment. However, those of us who use airports and who inflict environmental damage, as we undoubtedly do, on local residents in the vicinity of airports must be expected to provide compensation.
    I wish to draw attention to what I believe are the inadequacies in the Gatwick airport noise insulation grant scheme. The House will remember that the current scheme was introduced by order in the spring of 1980. At that time my hon. Friend the Member for Horsham and Crawley (Mr. Hordern) and I prayed that the order be anulled on the ground that it was inadequate in various respects. My hon. Friend joins me in the sentiments that I propose now to express.
    There are two main planks of criticism. The first is that the footprint area, as it is termed, which is eligible for grant is too small. Secondly, the level of grant is too low. I need not say too much about the first plank, because I can demonstrate the inadequacy of the footprint area for which the grant is available. If the present Gatwick airport second terminal inquiry results in the terminal being built as planned it will not fall within the area that is covered by the grant. In other words, the current scheme does not even fully cover the area of Gatwick airport. Nothing could more forcefully demonstrate the inadequacy of the area.
    I am well aware that one of the problems that my hon. Friend the Minister has in accepting my argument that the area should be increased is that whatever is done for Gatwick, which perhaps in itself would not be too expensive an exercise because Gatwick is situated in a largely rural area, could not be avoided at Heathrow. The position at Heathrow is very different. It is in a much more urban area and many houses would be affected by such a scheme. I suggest that that is not a reason for allowing Gatwick, Heathrow or any other major airport to suffer. It merely means that we must look for a different method of financing the scheme.
    As for the level of the grant, I draw attention to the fact that it is not possible fully to insulate one's property on the grants available even if it falls within the restricted area. Because of that, it is widely felt, both by local authorities and by others in the area, that the scheme is not being used as much as it could be used within its restrictions.
    My hon. Friend will know that the local authorities have several times drawn the attention of the Department and Lord Trefgarne to the inadequacies of the scheme. I hope that my hon. Friend will forgive me if I summarise those arguments in order to put them on the record. I do not expect a detailed answer to these various points at this late hour.
    I mentioned that the area was very small. That is the criticism of the councils about the area. I demonstrated that the area was small by drawing attention to the fact that the proposed second terminal would not even be within it. The village of Charlwood, which is close to the airport—one can see the airport from the village—is divided by the area. Of approximately 450 houses in the village of Charlwood, fewer than 120 are eligible for the grant scheme. The village of Hookwood is a smaller village which is even closer to the airport in many respects but falls without the usual standard instrument departure routes. The village has approximately 120 houses and is

    1091
    entirely outside the scheme. No houses qualify for the scheme. That is the most serious criticism about the area which qualifies for the grant.
    The method of calculating the grant is rather confusing. It is called yardstick costs. There is a widespread belief amongst local authorities in the Gatwick area, which is largely rural, that the yardstick costs are based on the standard semi-detached house, which is commonly to be found around Heathrow airport and not on the rather different types of properties which are more likely to be found around Gatwick.
    I do not know from personal experience whether this is a fair criticism, but it is frequently made. It is felt that the British Airports Authority, which administers the scheme in partnership with the local authorities, is too often too inflexible in its dealings with the scheme. It is a common criticism of such bodies that too often they pass on the decision making. Perhaps they have no choice. I do not wish to he unfair to the authority, which has the difficult job of administering what must be an unpopular scheme in any event.
    It is felt widely—this is particularly important in the Gatwick area—that not enough consideration is given to special cases, such as listed buildings or properties which are completely open plan inside. In that respect, there are many listed buildings which deserve special attention.
    It is felt that there is no good reason why the grant scheme should not be open-ended in time. It is felt that it should be continuous and that there should he no restriction on the work being completed or on an applicant's interest in the property. Because they will have to bear part of the cost, applicants should be able to carry out the work in their own time and within the limit that they can afford.
    A particularly serious criticism made by the local authorities is that the scheme does not permit sound insulation of the roof. In many cases, roofs let sound through at least as much as windows. It may be said that this may be covered by the roof insulation grant scheme, which is primarily designed for thermal insulation and not for noise insulation. The type of insulation that qualifies for thermal grant may not be suitable for keeping out noise.
    It is particularly surprising that the grant is not intended to cover noise from aircraft on the ground. It covers only noise created in flight within a certain footprint area. When large jet engines are maintained in maintenance areas—as they are at Gatwick on occasion—and then have to be tested, they cause a considerable noise. If an unfortunate resident of the village of Charlwood, the village primarily affected by ground noise, falls just outside the grant area, he receives no grant at all, even though the noise may be considerably more than it is from aircraft in flight.
    As the scheme operates, the difference between the amount of grant available and the maximum grant available, which is achieved by not having some optional works carried out, cannot then be put towards the extra costs of double glazing, which is estimated by the contractor and which is over and above the cost yardstick limit.
    I know that my hon. Friend the Minister has given a very sympathetic response to the local authorities who have approached him, and I am grateful to him for that. I hope that he will be able to consider these points concerning the area of the scheme and the amount of
    1092
    grants. If I ask him to consider as a matter of urgency the amount of the grant rather than the size of the scheme, it is because I recognise the difficulty that the Department has in relation to other airports, in particular Heathrow.
    One problem with the scheme is that the present Government and preceding Governments have done what we so often do in this country. They have simply nibbled at the fringes of the problem instead of tackling it head on. Much as I use the aviation services—and I suppose that I make 40 to 50 scheduled flights every year and a good many more private flights—I can see absolutely no reason why I should do so without contributing towards the relief of noise pollution which I am helping to inflict upon others. The only sensible long-term answer to the problem, which is experienced particularly at Heathrow and to a lesser extent at Gatwick, is for there to be a levy on passenger flights in exactly the same way as there is a levy on passenger flights to provide the cost of security measures.
    A levy of £1 per single passenger flight, which would perhaps be 2 per cent. of the cost of the average air ticket, would yield about £5 million a year. I do not think that this is a burden which we should expect to place upon the taxpayer. It is something that we who use aircraft for business and social purposes should expect to bear.
    If it is to be argued that the principle should be extended to others who suffer environmental damage, such as those who live close to motorways, railways and hoverports, I would agree that this is a principle which could be extended. I appreciate that that goes much fun her than what I am asking for now, which is consideration of an improvement in the scheme, ultimately in the area and, I hope more immediately, in the amount of grant available. My noble Friend Lord Trefgarne has received with great sympathy delegations who have approached him, and I am grateful to him for that. I hope that he will be able to extend his sympathy into a little practical help to these constituents who suffer day and night from this problem.
    1.55 am
    The Under-Secretary of State for Trade (Mr. Reginald Eyre): I thank my hon. Friend the Member for Dorking (Mr. Wickenden) for raising this subject on the Adjournment debate tonight.
    The problems caused by aircraft noise are, as I am fully aware, a major source of concern for those who happen to live near a major airport. Yet a healthy civil aviation industry is of crucial importance for the economic wellbeing of the nation. All Government policy connected with civil aviation has to face this problem and try to strike a reasonable balance between the legitimate needs and interests of those who earn a livelihood in the industry or who depend on its services for business or pleasure, and the equally important interests of those who are likely to be disturbed by the industry's operations.
    Clearly, the question of how best to cope with the noise nuisance caused by aircraft extends beyond the provision of grants to permit householders around Gatwick to install noise insulation. Indeed, it extends beyond the boundaries of this country, since civil aviation is, in its very essence, an international business. Fortunately, the most modern types of aero-engine are considerably quieter than their predecessors. In the long term, the most effective way of minimising disturbance is to promote the reduction of noise at source by encouraging operators to use the quietest and most modern aircraft available.

    1093
    To that end, this country plays a very active part in discussions within the framework of the International Civil Aviation Organisation and the European civil aviation conference aimed at drawing up more stringent standards of noise certification for all new aircraft types. The Government have already decided to prohibit the use of non-noise certificated subsonic jet aircraft on the British register from 1 January 1986, and similar action is being taken by other countries with major civil aviation interests in respect of aircraft on their national registers.
    I accept, however, that this is a long-term solution to a problem that today is of great concern to many people. The Government are therefore actively concerned in trying to minimise disturbance by imposing noise abatement measures on those airports, including Gatwick, for which they have responsibility under section 29 of the Civil Aviation Act 1971. These measures include the use of minimum noise routes designed to ensure that aircraft overfly the smallest number of people possible; the operation of a quota system for night movements; the maintenance of noise limits for aircraft taking off; the use of quieter approach procedures; and, of course, the provision of grants to cover the cost of noise insulation for homes near Gatwick and Heathrow.
    The existing noise insulation grants schemes at these airports are thus just one part of the Government's overall strategy for dealing with aircraft noise. The present schemes were announced on 6 February last year by my hon. Friend the Minister of State, Department of Industry—the Member for Chingford (Mr.Tebbit). They represent a considerable improvement over earlier schemes. For example, those who had moved into the qualifying areas around the airports before the new schemes came into operation on 1 April 1980 but after the original qualifying date, which was 1 January 1973 in the case of Gatwick, are now able to claim grants for the insulation of their properties.
    I am aware that there are those who argue that the boundary of the Gatwick scheme should have been more widely drawn, and I noted carefully the points that my hon. Friend made. I am afraid that, given the constraints on public expenditure, this was not possible, but it may help if I explain how the boundary of the scheme was determined. First, it was felt that account should be taken of the substantial improvement in the noise climate around our major airports that will result from the phasing out of the noisier jet aircraft and their replacement by the newer, quieter types, such as the A300, the Tri-Star and the DC 10. Although this will lead to a significant reduction in disturbance around Gatwick and Heathrow, people living close to the airports are still likely to be subjected to comparatively high levels of aircraft noise even after the mid-1980s, and these are obviously the people who are in greatest need of assistance.
    The measure to assess the impact of aircraft noise around our major airports is the noise and number index, usually referred to as the NNI. It is generally accepted that 55 NNI represents a high level of annoyance.The boundary of the insulation grants schemes is based on the lower 50 NNI contour that has been forecast for 1985, when most of the noisier aircraft will have been retired from service. It was also considered that the schemes should provide protection for householders against aircraft noise at night. The boundary therefore includes all areas
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    that after the mid-1980s are likely to be exposed to noise levels at night in excess of 95 perceived noise decibels. This is the noise level below which the current scientific evidence suggests that the average person sleeping in an uninsulated room is unlikely to be awakened.
    I know that the scheme for Gatwick has been criticised because the area is now smaller than that within the outer boundary of the previous scheme. My hon. Friend raised that point. Under that scheme there were two areas—an inner one, defined mainly by the 60 NNI contour, within which 100 per cent. grants were available, and an outer area, based on the 55 NNI contour, within which the grant level was 85 per cent. The current scheme is therefore based on a lower level of disturbance than that adopted as the criterion for even the outer area of the previous one. The fact that the area is smaller is merely a reflecton of the very real improvement that will come from the use of quieter aircraft. It is, of course, considerably larger than the inner area of the previous scheme.
    These criteria were chosen in order to concentrate the limited resources on those who will continue to suffer from comparatively high noise levels even after the new, quieter aircraft types have entered service on a large scale. This is, I suggest, a fair principle to adopt. I can sympathise with those who find themselves just on the wrong side of what may appear to them to be an arbitrary line, but I am afraid that this is unavoidable wherever the line is drawn. Furthermore, the situation at Gatwick cannot be treated in isolation. I know that my hon. Friend understands that. The Gatwick and Heathrow schemes are constructed on identical bases, and any change in one would be bound to have repercussions on the other. I do not see how one could, in equity, change the rules at Gatwick without making similar adjustments at Heathrow, where even a minor alteration in the boundary could bring significant numbers of houses into the scheme and greatly increase its cost. As I have already said, the resources are limited, and I believe that the present arrangements ensure that they are deployed to the best effect.
    With regard to the funding of these insulation schemes, I accept, of course, that it is right that the cost should be borne by those who are responsible for creating the noise that the schemes are designed to ameliorate. This is in accordance with the well established "polluter pays" principle and is, in fact, achieved under the current arrangements. The schemes are financed from the landing charges on aircraft using Heathrow and Gatwick. As these charges are reflected in the price of airline tickets, the cost of the schemes thus falls ultimately on the airline passenger. I hope that my hon. Friend will think that that is fair.
    I do not believe, however, that it is either necessary or desirable to identify this cost element by establishing a noise levy or charge, as my hon. Friend has suggested in detail, since there is no simple relationship between the amount of noise at an airport and the number of passengers using it. Moreover, the arguments for such a charge in the case of aircraft noise do not appear to be notably stronger than those that could be advanced for a similar charge to deal with the effects of noise from other sources, such as road transport. It is very difficult to see how the same principle could be extended to them.
    I am also aware that criticisms have been made of the grant levels available. Unlike the older schemes, which simply set an overall maximum figure of grant, the present schemes set maxima for each element in the insulation

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    works—so much per square metre of double-glazing, so much per unit of ventilation, and so on. This is, as I am sure my hon. Friend will agree, a more flexible system, which recognises that the costs of insulation can vary widely according to the design of the individual house. My hon. Friend emphasised that point with reference to Gatwick. Criticisms have, however, been levelled at these individual maxima.
    This is a serious matter. The intention of the schemes, as set out by my hon. Friend the Minister of State, Department of Industry when they were first announced, was that the grants available should cover the full costs of insulating all eligible rooms. It remains the Government's intention that the grants should continue to fulfil this aim. I have noted very carefully the points made by my hon. Friend and I note that he is supported by my hon. Friend the Member for Horsham and Crawley (Mr. Hordern). All this confirms information that has been reaching us from other sources and adds considerable weight to the case for an increase in the present cost limits. I am pleased to be able to tell my hon. Friend that we have been reviewing the schemes for both Gatwick and Heathrow, in consultation with the British Airports Authority, which is responsible for operating them, in order to determine what increases in the grant maxima are necessary. Although I
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    am not yet able to say what the outcome of this review will be, I hope that my noble Friend who is the Minister responsible will shortly be making an announcement.
    I trust that my hon. Friend will accept that my noble Friend and I are very conscious of the problems that aircraft noise can cause for those who have to endure it. I hope that he will also accept that the Government are actively concerned to do all that they can to reduce this nuisance. I think that it is clear from what I have said that these efforts extend well beyond the subject of this interesting and, I hope, valuable debate.
    However, I am sure that my noble Friend will he most interested in what my hon. Friend said about the noise insulation grants and the emphasis that he has placed upon the matter, and that he will be strongly influenced by the powerful arguments advanced by my hon. Friend in support of an increase in the cost limits. I can assure my honourable Friend that the Government's purpose is that these insulation schemes are to be kept under constant review and that action will be taken whenever it is clear that the grants available are proving inadequate to meet the full cost of insulation.
    Question put and agreed to.
    Adjourned accordingly at seven minutes past Two o' clock.