Commons Sitting of 23 July 1981

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS
  NORTHUMBRIAN WATER AUTHORITY BILL
  Lords amendments agreed to.

  EAST SUSSEX BILL [Lords]
  Order for Third Reading read.
  Queen's Consent, on behalf of the Crown, signified.
  Read the Third time and passed, with amendments.

  MILFORD DOCKS BILL [Lords]
  Read the Third time and passed, with amendments.

  HUMBERSIDE BILL [Lords] (By Order)
  Order for consideration, as amended, read.
  To be considered upon Thursday 30 July.

Oral Answers to Questions
  AGRICULTURE, FISHERIES AND FOOD

    Wine Surpluses
    Mr. Hardyasked the Minister of Agriculture, Fisheries and Food if the European Community has now disposed of wine surpluses in a satisfactory manner.
    The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Alick Buchanan-Smith): The European Community disposes of annual surpluses of wine by a variety of means. I believe that the best policy is to reduce the underlying structural surplus, and I am pressing the Commission to honour its commitment to do this.
    Mr. Hardy: I am delighted by the Minister's reply, but does he deny that the Community has sold 150 million litres of wine to the Soviet Union at a price equivalent to 5p a bottle? Is that supposed to be disarmament by inducing alcoholic euphoria? Does the Minister deny that it is not in Britain's interests to allow that to occur while the Community is suggesting that British industry, and the British steel industry in particular, should contract on a scale and at a pace far in excess of the industries of our Community partners?
    Mr. Buchanan-Smith: Some methods of disposal are unsatisfactory, as I have said, although the amount that has gone to Russia is only a relatively small proportion of the total exports that have gone outside the Community.
    I repeat that last year the Community agreed to several structural measures, such as grubbing up vineyards and
    478
    restrictions on new planting and on replanting. The Commission is due to come forward with further proposals this autumn, and we shall press strongly that it does so.
    Mr. Robert Atkins: Does my right hon. Friend agree that a more satisfactory method of disposing of the wine surpluses would be to encourage more people in Europe to drink such an excellent beverage?
    Mr. Buchanan-Smith: That would be a good idea.

    Milk Imports
    Mr. William Hamiltonasked the Minister of Agriculture, Fisheries and Food if he will make a statement on the threat of imported French milk to the United Kingdom dairy industry.
    The Minister of Agriculture, Fisheries and Food (Mr. Peter Walker): As our public health regulations prevent the sale of any imported pre-packed milk in this country, there is at present no threat to our dairy industry from imports of French milk.
    Mr. Hamilton: How much French milk is currently getting in and appearing in our markets? What proportion does it represent of total sales? Is that proportion increasing? Can the Minister give a categorical assurance that in no circumstances will our dairy industry be allowed to be threatened by unrestricted imports?
    Mr. Walker: I repeat my answer that, as our public health regulations prevent the sale of any imported prepackaged milk in this country, there is no threat. That milk is banned. If the hon. Gentleman has details of any milk that has come in and has evaded the regulations, I should be pleased to know of them and to make immediate investigations.
    As to the future, I think that the quality and efficiency of British milk production are such that there is no fear about the interests of the dairy industry in relation to imports.
    Mr. Peter Mills: Will my right hon. Friend bear in mind that there is no need for British schoolchildren to drink French milk? There are totally adequate supplies to meet that need. Will the Minister tell us roughly what finance we could obtain from the Community to support the cost of our school milk?
    Mr. Walker: Milk for schools is produced by our industry. Later this afternoon I shall announce details of the agreement on school milk. It will mean that the amount of milk available to schools in a full year will be doubled or trebled. It will be the greatest quantity of milk available to schools for the last 10 years. If there is a good response, it could mean an extra £20 million available to this country from Community funds.
    Mr. Mason: Is the right hon. Gentleman aware that, during his chairmanship of the Council of Agriculture Ministers in the next six months, the Commission will be considering a request from the French to make a reference to the European Court so that they can invade our market with UHT milk? If, therefore, there is a decision by the European Court in favour of the French, is the right hon. Gentleman prepared to defy that ruling?
    Mr. Walker: It is extraordinary to ask a Minister to say, prior to a court decision, whether he will defy the law

    479
    if that decision goes against him. We believe that our case with the European Court is justified and that we shall win it.
    Mr. Colin Shepherd: Further to the matter raised by the right hon. Member for Barnsley (Mr. Mason), is it not the case that if the right hon. Member for Deptford (Mr. Silkin) had not sold the pass by agreeing to the import of UHT cream, the matter would have been substantially simpler now?
    Mr. Walker: If I had to list all the difficulties that we have had as a result of past experiences and negotiations with the European Community, it would take a great deal of the time of the House.
    Mr. Torney: Is the right hon. Gentleman aware that there is a real fear in our dairy industry, particularly on the distributive side, that we shall lose the case at the European Court and that therefore French milk will come in? Is the right hon. Gentleman aware, further, of the tremendous feeling among consumers that our doorstep deliveries should be maintained? Therefore, whether we lose the case at the European Court or not, will the right hon. Gentleman consider standing up to the French and keeping out their milk?
    Mr. Walker: The hon. Gentleman's comments show a remarkably defensive attitude which implies that the French can produce better milk at a better price than our dairy industry. I do not accept that for one moment. Anyone who has known the horror of drinking milk in France knows that it is untrue.

    Poultry Imports
    Mr. Lathamasked the Minister of Agriculture, Fisheries and Food whether he is now in a position to announce action to deal with French poultry imports.
    Mr. Strangasked the Minister of Agriculture, Fisheries and Food what estimate he has made of the cutback which has taken place in the British poultry industry in the last year; and if he will announce a programme of measures to reverse its decline.
    Sir Albert Costainasked the Minister of Agriculture, Fisheries and Food what progress has been made in dealing with the problem of the import of cheaply produced turkeys.
    Mr. Nicholas Wintertonasked the Minister of Agriculture, Fisheries and Food whether he is now in a position to announce further measures to assist the British poultry industry to overcome its financial difficulties.
    Mr. Marlowasked the Minister of Agriculture, Fisheries and Food whether he is satisfied that fair competition now exists in the European Economic Community with regard to poultry products.
    Mr. Brocklebank-Fowlerasked the Minister of Agriculture, Fisheries and Food what further progress he has made in his discussions towards protecting the British turkey industry against unfair competition from French producers in the British and other European Economic Community markets.
    Mr. Colin Shepherdasked the Minister of Agriculture, Fisheries and Food what discussions he has had recently with the European Commission concerning the poultry meat industry.
    Mr. Buchanan-Smith: My right hon. Friend and I have requested the European Commission to take effective action on State aids that distort competition. We have already given £2 million in aid to assist our industry with hygiene inspection, and we are discussing with representatives of the industry possible changes in these arrangements.
    Several Hon. Members rose—
    Mr. Speaker: Order. I propose to call first those hon. Members whose questions are being answered.
    Mr. Latham: Is my right hon. Friend aware that there is no time for leisurely bureaucratic EEC minuets on this issue, and that if the French were in our position they would not care two hoots about the niceties of the matter? Will he please take action now?
    Mr. Buchanan-Smith: As I said, we have already taken action relating to this matter, which I raised specifically in the Council of Ministers on Tuesday of this week. The Commissioner said that he was due to receive a reply from France and that unless the French Government replied within the allotted time he would take action immediately.
    Mr. Strang: Is the Minister of State aware that that is a most complacent reply? It is no use harking back to the £2 million paid towards the inspection service. Thousands of jobs have been lost in the poultry industry, which is one of the most efficient sectors of British agriculture. When will the Government take effective action to save this industry from total collapse?
    Mr. Buchanan-Smith: What the hon. Gentleman says is hypocritical and without understanding of what has already been done. If he regrets the £2 million having been given to the industry and the steps now being taken in consultation with the industry to improve hygiene inspection arrangements, he simply does not begin to understand the industry's problems. We do, and we are not in the least complacent about them.
    Sir Albert Costain: Does my right hon. Friend appreciate that the number of questions on the Order Paper on this issue shows the seriousness of the situation? Does he also appreciate that many of us realise that panic measures and the statement that we have just heard do not lead to confidence in the industry to build up supplies? Can he tell the industry that what the Opposition are saying is nonsense?
    Mr. Buchanan-Smith: I am grateful to my hon. Friend. We certainly understand the position in the industry, and my right hon. Friend and I have had several meetings with representatives from the industry to discuss what we are doing. Moreover, the reply given by my hon. Friend the Parliamentary Secretary in a debate earlier this week shows the action that we are taking.
    Mr. Nicholas Winterton: I welcome warmly the financial aid that has been given to the industry and the steps taken by the Government to try to ensure fair competition for it. Will my right hon. Friend agree, however, that the poultry industry is still facing a desperate crisis and that, as my hon. Friend the Member for Melton (Mr. Latham) said, the French do not hesitate to take steps, at the drop of a hat, to help their industry? Will my right hon. Friend indicate the other areas of

    481
    agriculture to which the French are giving some form of assistance, quite illegally and outside the regulations of the European Economic Community?
    Mr. Buchanan-Smith: As my hon. Friend heard me say, we have already taken action to help our industry in several ways. I assure him that there is no way in which we shall see our industry destroyed by the French or any other country's industry.
    Mr. Brocklebank-Fowler: On the narrow point of turkeys, can the Minister offer any hope to our domestic industry, which has suffered enormously from heavily subsidised French production? Unless our industry receives help similar to that available to the French, it will decline very rapidly.
    Mr. Buchanan-Smith: I have no doubt that the British turkey industry sets an example in efficiency, modernisation and innovation to other industries, not only in Europe but elsewhere in the world. I am very conscious of that and we do not want to see that go by default.
    Although there are serious threats from French competition, the greatest worry is about future production in France under current French Government aids. The Commision is pressing action on that with the support of other European countries as well as Britain.
    Mr. Colin Shepherd: Will not the massive expansion in turkey meat production in France, the proposed massive expansion of broiler meat production for Third country consumption and the approved programme announced in the Official Journal of the European Parliament on 17 July lead to a massive capability for over-production of poultry meat within the Community? That must affect not only the United Kingdom market but the market of France and the other countries within the Community. Does not that leave ground for valuable bilateral talks to discuss how the problem could be tackled?
    Mr. Buchanan-Smith: As I said in a previous answer to the hon. Member for Norfolk, North-West (Mr. Brocklebank-Fowler), this is not simply a problem for Britain and France; it goes far wider. It is interesting that there is even anxiety in certain established sectors of the French poultry industry about the effects upon them of encouragement to expand. I must also reiterate that both this week and on previous occasions in the Council of Ministers the United Kingdom was not alone. Many of our colleagues are pressing equally hard for action about State aids.
    Mr. Jay: As the French are now imposing a levy on British lamb imported into France, why should we not impose a levy on French poultry and French milk imports here?
    Mr. Buchanan-Smith: Not unusually, the right hon. Gentleman is wrong. The French are not imposing a levy on British lamb
    Mr. Cockeram: Is my right hon. Friend aware that this problem arises partly from the fact that the French are using industrial grants under their regional policy to assist the agriculture industry? Will he take into account the fact that on several occasions over the past few months assurances have been given from the Government Front Bench that he and his colleagues did not intend to see our poultry and turkey meat industries destroyed, and that the point has now been reached where action, rather than assurances, is expected?
    Mr. Buchanan-Smith: We are certainly not prepared to see our poultry industry destroyed. My hon. Friend is correct in saying that some of the aids are of a regional nature. Equally, however, some of the aids that the French Government are giving are direct production aids such as the Commission has already pointed out are incompatible with the Treaty. It is in relation to them that action is being taken.
    Mr. Hardy: Despite the Minister's tough talk—even, recently, from a soapbox—and despite the reference to the Community, is it not clear that the French will remain determined to continue for substantial periods each year in the future, as during each year in the last decade, to sell eggs in northern markets in England at prices below the cost of production in France? Since the French will clearly disregard anything the Community may say to them, is it not time for action?
    Mr. Buchanan-Smith: The hon. Gentleman is not totally correct. For example, we have regularly exported eggs to France. The hon. Gentleman says that the French are determined to try to expand their industry, and it is clear that they are prepared to do so. Equally, we are prepared to stand by our industry, too.
    Mr. Jim Spicer: Has my right hon. Friend seen reports this morning that the French have imposed a ban on the importation of certain agricultural products in the face of falling home prices for their farmers? If he has not seen that report, will he study it and consider whether we should not take certain action in the same arbitrary way?
    Mr. Buchanan-Smith: I have heard about the report only in general terms. I assure my hon. Friend that we shall investigate it urgently.
    Mr. Mason: In order to make clear the seriousness of the decline of the poultry industry, will the Minister tell the House how many jobs have been lost in the industry during the past 12 months?
    Mr. Buchanan-Smith: If the right hon. Gentleman tables a question on that matter, it will be answered. I acknowledge—neither I nor anyone on the Government Front Bench has made any secret of the fact, in any recent discussions on the poultry industry—that our poultry industry, particularly the turkey meat and broiler sectors, is facing a serious situation. It is precisely in relation to that that we are determined to defend the industry.
    Mr. Mason: Do I understand aright? Has the right hon. Gentleman come to the Dispatch Box, having had a week's notice of the six questions that appear on the Order Paper dealing with the future of the poultry industry and the serious situation facing that industry, only to tell the House that although the industry is in, a serious state he does not have in his brief the number of jobs that have been lost in the past 12 months? Why is the right hon. Gentleman a Minister? Why does he not seek a brief? Should he not know how serous the situation is?
    Mr. Buchanan-Smith: As the right hon. Gentleman. would know if he were seriously interested in the poultry industry, jobs are not the only important issue. The question goes far wider, involving, as has been recognised in all the questions asked from the Government Benches, not only jobs but important British trade and business and the need to ensure fair competition. On all those issues we will stand up for the British industry, even though the right hon. Gentleman may not.

    Intervention Board
    Mr. Spearingasked the Minister of Agriculture, Fisheries and Food if he is satisfied with the efficiency of the United Kingdom intervention board for agricultural produce.
    Mr. Peter Walker: Obviously I cannot be satisfied with the efficiency of an intervention board where industrial action is taking place. But, with the exception of the adverse effects of the industrial action, I am satisfied with the efficiency of the intervention board.
    Mr. Spearing: Is the Minister aware that last year the intervention board spent £500 million of taxpayers' money on dubious purposes of various kinds? For example, £42 million was spent on feeding surplus milk powder to animals. In particular, is he aware that £145 million was spent on exporting surplus British grain and dairy products to countries outside the EEC? As Britain is a net importer of both grain and dairy products, how can that be efficient?
    Mr. Walker: If the hon. Gentleman studied agriculture rather more closely, he would discover that there were a number of varieties of grain, some of which we need to import and some of which we need to export.
    Mr. John Wells: Can my right hon. Friend give some assurance that the intervention board's attitude to the British apple industry will be more sound in the coming year?
    Mr. Walker: I can undertake that it will be as sound as it possibly can be.
    Mr. Myles: Will my right hon. Friend take steps to change the standards for intervention, so that we do not take all the best products into intervention and leave the rather inferior ones for the consumer?
    Mr. Walker: Intervention policy varies from one product to another. With regard to the whole intervention policy of Europe, we have been trying to stop, for example, the intervention of good meat which then deteriorates in intervention. We consider that to be an absurdity. We will always review such matters with that objective in mind.

    Horticulturists
    Mr. Adleyasked the Minister of Agriculture, Fisheries and Food what recent discussions have been held on uniformity of aid to horticulturists in the European Economic Community.
    Mr. Peter Walker: Although there are no specific limits for national aids to horticulturists, it is certainly my intention to raise the subject of national aids, and the threat which they pose to the whole basis of the common agricultural policy, with my colleagues during the United Kingdom Presidency. At the meeting that took place in Brussels this week, we obtained the agreement of the Commission to present this autumn a major paper studying the whole impact and effects of national aids.
    Mr. Adley: I thank my right hon. Friend for that reply. Does he agree that the Dutch horticulture industry appears to be using the slowness of Community machinery deliberately to destroy its competitors in this country? Will he please give this matter the utmost priority?
    Mr. Walker: Yes, Sir. This specific matter was raised by my right hon. Friend the Minister of State at the
    484
    meeting in Brussels last Monday. The Dutch Government, although they have increased the gas price, have been summoned by the Commission and told clearly that the progress in establishing a proper basis for their gas price is not satisfactory, and that is being reviewed.
    Mr. J. Enoch Powell: Is it now dawning upon the Government that uniformity of national aids is in reality an unattainable objective within the EEC and that we would be better occupied in regaining our own national freedom of action?
    Mr. Walker: No, Sir. The availability of the European market to our food and agriculture producers is a great advantage. If the right hon. Gentleman studied the considerable expansion of our food exports to the Community, he would realise what an advantage it was.
    Mr. Stephen Ross: Is the Secretary of State aware that all that our horticultural growers, particularly tomato producers, are seeking is a fair share of the home market? The fact is that Dutch imports of tomatoes continue to grow, backed up by cheap fuel—even if the price is slightly increasing—and cheap credit. That cannot continue if our growers are to remain in business.
    Mr. Walker: Yes, and that is why we introduced a package of special aid for our horticulture and why we have made a major aspect of the United Kingdom Presidency in this six months a study of the possibility of uniformity in the whole question of national aids; that affects horticulture more than most industries.
    Sir John Biggs-Davison: Is my right hon. Friend aware that my Lea Valley constituents recognise that he is doing his best but that his best is far too slow, because of the Community structure? Is he also aware that, so incensed and distressed are they, they are talking about trying to organise a boycott of Dutch imports?
    Mr. Walker: Until last week, the price of one of the major commodities, tomatoes, was substantially above last year's prices for a few weeks. A considerable volume of British tomatoes was sold in that period. But because of our close relationship with the horticultural committee of the NFU, it knows that we have given every possible aid and that if we are successful in our pressure to obtain uniformity of aids during our Presidency it will be the best help that we can give our horticulturists.
    Mr. Mark Hughes: Will the Minister at least accept that the strength of feeling among our horticulturists is considerable, and that they do not believe him when he says that he has done as much as possible? They believe that it is too little and far too late, and that there is a lack of effort.
    Mr. Walker: If they believe that, what they must think of the previous Government I dread to think. I inherited a Dutch advantage much greater than it is today, with no aids given to the industry.

    Value Added Tax
    Mr. Heddleasked the Minister of Agriculture, Fisheries and Food what representations he has received in connection with the financial difficulties experienced by farmers as a result of delays in value added tax repayment.
    Mr. Peter Walker: I have received representations on this subject from the National Farmers Union, the United Kingdom Agricultural Supply Trades Association, several hon. Members and a number of individual farmers.
    Mr. Heddle: In the event of the Civil Service unions accepting the Government's latest offer, will my right hon. Friend do all that he can to ensure that the VAT office swiftly refunds the £150 million owed to British agriculture? Does he acknowledge that enormous hardship is being heaped upon British agriculture by the unofficial strike action, having particular regard to the fact that some farmers and growers are unable to offset PAYE and schedule D payments against VAT?
    Mr. Walker: I am well aware that that has caused considerable difficulties, especially for some of our smaller farmers. Although the VAT office is not my departmental responsibility, I know that if the strike is settled my right hon. and learned Friend the Chancellor of the Exchequer, in regard to VAT repayments, and my Department, in regard to capital grants and other payments to farmers, will take every action to get the money to the farmers as quickly as possible.

    Beef, Butter and Cheese
    Mr. Teddy Taylorasked the Minister of Agriculture, Fisheries and Food what are the current rates of levy per pound on imported beef, butter and cheese.
    Mr. Buchanan-Smith: The current rate of levy, including the MCA, on imports into the United Kingdom of beef ranges from 11p to 74p per pound. For butter it is 50p per pound, and for Cheddar cheese 56·5p per pound. But, as my hon. Friend knows, all the cheese and almost all the beef and butter imported into the Community comes in under preferential arrangements at substantially reduced, or nil, rates of levy.
    Mr. Taylor: In view of its renowned efficiency, does British agriculture need this massive and grotesque level of protection against foreign competition from the Third world?
    Mr. Buchanan-Smith: My hon. Friend must have failed to listen to my answer, and, if so, I hope that he will read it tomorrow, because I pointed out to him that all the cheese and almost all the beef and butter imported into the Community comes in under preferential arrangements.
    Mr. Jay: Does the right hon. Gentleman regard this system of food taxes as one of the benefits to the United Kingdom of EEC membership?
    Mr. Buchanan-Smith: I should like to put back the question to the right hon. Gentleman. [HON. MEMBERS: "Oh."] What system would he recommend under which he would hope to ensure a fair deal and security of good supplies to the consumers of this country which at the same time would maintain a healthy agriculture industry? I believe that the present arrangements do that.
    Mr. Budgen: Do the Government support the first proposal made by the Commission for the reform of the common agricultural policy, which is that Community food prices shall, over a period of years, fall to world prices?
    Mr. Buchanan-Smith: That precise proposal is not made, but, as my hon. Friend will know, in all the price
    486
    fixing with which my right hon. Friend and I have been concerned we have endeavoured to exercise restraint on price increases.
    Mr. Strang: Do these levies ensure that British food prices are the highest in Europe?
    Mr. Buchanan-Smith: No, and, as the hon. Gentleman knows, we also obtain from Europe a number of other measures—for example, in the beef premium scheme, in the lamb premium scheme and in relation to the butter subsidy—whereby prices in the United Kingdom are helped out of Community funds.

    Common Agricultural Policy
    Mr. Moateasked the Minister of Agriculture, Fisheries and Food when he expects the Council of Agriculture Ministers to be considering proposals for the fundamental reform of the common agricultural policy.
    Mr. Peter Walker: The Council is likely to be discussing the recommended guidelines for the common agricultural policy contained in the Commission's recent report on the 30 May 1980 mandate at its meeting in October.
    Mr. Moate: Did my right hon. Friend read the speech made by my right hon. and learned Friend the Chancellor of the Exchequer recently, when he advocated reform of the common agricultural policy based upon a greater play of market forces both in Europe and internationally, reduced levels of real support and tougher financial disciplines comparable to those exercised on other public spending? Does my right hon. Friend agree with that fundamental approach to reform?
    Mr. Walker: Of course I read with interest every speech that my right hon. and learned Friend the Chancellor makes. In terms of the common agricultural policy, my right hon. and learned Friend and I have worked together on these matters over the past two and a half years, and we appreciate that the rate of growth of CAP expenditure is now around half what it was under the previous Administration and, as a proportion of the budget, has fallen substantially.
    Mr. Freud: Will the Minister accept that the common agricultural policy would work even better if we had some of the patriotic and bloody-minded customs officers that they have in France, Germany and Italy?
    Mr. Walker: I could not in any way criticise the excellent customs officers that we have in this country.
    Mr. Newens: Will the right hon. Gentleman take note that the British glasshouse growers feel a deep sense of betrayal and cannot wait for this reform to take place, because they have to compete against Dutch growers who are enjoying an advantage of between £7,000 and £10,000 an acre? Will he note that hundreds of Lea valley growers met last night at Broxbourne and demanded that the Minister should introduce a tariff immediately to give them an opportunity for fair competition? When small business men are up in arms about this, is it not time that this Government, who said that they were going to do something about small business men, got moving?
    Mr. Walker: Yes. That is why this Government, unlike the previous Government, gave a grant to our glasshouse growers and that is why we succeeded in

    487
    enforcing on the Dutch a substantial increase in their gas price. If the hon. Gentleman is complaining now, that is nothing like the complaints that he should have had during the period in which his own Government were in office.
    Mr. Body: In view of what my right hon. Friend said a few moments ago, is it now his considered opinion that in the foreseeable future there will be a uniformity of national aids throughout the Common Market?
    Mr. Walker: When one uses the word "uniformity", one must bear in mind that we have in this country, for example, the substantial ADAS advisory services that other countries do not have; we have a system of capital grants that other countries do not have. Therefore, I do not accept direct conformity on every detail. However, all our national aids are approved by the Commission. What I object to is one particular country—France—putting in £400 million to £500 million of national aids that are not approved by the Commission.
    Mr. Torney: In view of the impending disaster in the poultry and horticulture industries in this country, largely due to the question of national aids which is being discussed this afternoon, will the Minister ensure that action is taken very quickly in the reform of the common agricultural policy to see that national aids benefit Britain as well as France and other countries? If not, will he take some unilateral action about national aids?
    Mr. Walker: Yes. That is why, at the first Council meeting of the British Presidency, we obtained the agreement of the Commission that during the period of the British Presidency the Commission would have to present to the Council of Ministers a full and detailed paper on national aids. That is why my right hon. Friend the Minister of State obtained an assurance that within days, because of the failure of the French Government to comply with European requirements on national aids, the Commission would be taking action.

    Agricultural Land Grading System
    Mr. Chapmanasked the Minister of Agriculture, Fisheries and Food what response he has had to his consultation letter proposing changes to the agricultural land grading system.
    The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Jerry Wiggin): We have so far received 44 replies to the 60 consultation letters that were sent out. The replies are being analysed now and I shall be considering them without delay.
    Mr. Chapman: I am grateful to my hon. Friend for that reply. Does he agree that the slightly overkill reaction of the NFU to these modest and sensible proposals is rather depressing? Does he agree that his modest proposals will put beyond doubt the fact that grade 3 agricultural land is not third-class land, and will he pursue this matter and perhaps receive other representations from other members of the NFU?
    Mr. Wiggin: Dealing with the latter part of my hon. Friend's question, I shall have to weigh up differentially the various advice that I have been given, but the whole idea of this proposal was to support the view that he has put forward. I would rather not get involved at this stage in commenting on individual attitudes, although naturally I was a little surprised by that of the National Farmers Union.
    Mrs. Kellett-Bowman: Will the Minister accept that the minimum of 1,000 acres for so-called island sites for marginal land—[HON. MEMBERS: "Reading."]—on the contrary, I know this subject backwards—could cause considerable hardship, especially where these sites are under 1,000 acres, mainly because of compulsory purchase? Will he therefore consider some discretion in this limit?
    Mr. Wiggin: This does not truly have any relation to the question that was asked. However, I am considering the question of island sites, although not necessarily in quite the way that my hon. Friend would like.

    Agricultural Marketing
    Mr. Mylesasked the Minister of Agriculture, Fisheries and Food if he will make a statement on his policy on the setting up of a central co-ordinating council for agricultural marketing.
    Mr. Peter Walker: I am convinced that it is in the United Kingdom's interest that the marketing of food and agricultural produce should be better co-ordinated and I am actively considering how this might best be achieved.
    Mr. Myles: I welcome my right hon. Friend's encouragement to agricultural marketing. I hope that very soon he will be able to approve the setting up of this council. I also welcome my right hon. Friend—
    Mr. Speaker: Order. We know what the hon. Member welcomes. We want his question.
    Mr. Myles: Will my right hon. Friend ensure that this body has enough teeth and encouragement from theGovernment so that we can sell milk to France, bacon to Denmark and bulbs to Holland, which we are already doing?
    Mr. Walker: We shall endeavour to increase the volume of these splendid exports that are at present taking place, but we are having talks not just with the representatives of the producers but, which is very important, with our processors, manufacturers and retailers so that our objective will certainly be to have an effective body which can both substantially improve our penetration of overseas markets and obtain a bigger share of our domestic market.
    Mr. Teddy Taylor: Are there fewer or more councils, commissions and committees sponsored or financed by the Minister's Department now than there were in May 1979?
    Mr. Walker: All of them are doing a fine job of work.

    Farm Rents
    Mr. Iain Millsasked the Minister of Agriculture, Fisheries and Food if he has received further representations on the present system of arbitration of farm rents between tenants and landlords.
    Mr. Wiggin: No, Sir, but a proposal for a revised rent formula has been submitted to me by the presidents of the Country Landowners Association and the National Farmers Union.
    Mr. Mills: I thank my hon. Friend for that reply. Is he satisfied that the present system of arbitration is completely independent, since the arbitrator may be

    489
    involved with one of the parties? Will he consider a system with an independent chairman—perhaps involving a panel—to ensure true independence?
    Mr. Wiggin: The arbitrator may be chosen by agreement between the parties. Failing that, my Department may be asked by either party to make an appointment from the Lord Chancellor's panel of arbitrators. That frequently happens.
    Mr. Mark Hughes: Will the hon. Gentleman carefully study these proposals, which seem to have considerable merit, from both the CLA and the NFU, allied to the suggestion by his hon. Friend that the appointment of an arbitrator would make honourable, legal and decent what is infrequent practice in reality?
    Mr. Wiggin: I must rebut that accusation. The appointment of arbitrators is not a matter of dispute between the parties. The machinery is well established and well organised. My right hon. Friend is meeting both presidents this afternoon to discuss the proposals put forward by the two organisations.
    Mr. Stephen Ross: Does the Minister accept that it would be wrong for an arbitrator to continue with an arbitration if he were connected with either of the parties? Any arbitrator worth his salt would certainly withdraw from the scene.
    Mr. Wiggin: Arbitrators in these matters are appointed either by agreement between the parties or from the Lord Chancellor's panel, from which my Department selects names. There is no difficulty about this matter, but if the hon. Gentleman knows of a specific case I shall be glad to look into it.

    Intervention Board
    Mr. Jayasked the Minister of Agriculture, Fisheries and Food how much was spent by the United Kingdom intervention board in 1980; and how much of this was represented by subsidies for exports to countries outside the European Economic Community.
    Mr. Peter Walker: Net of receipts from levies and sales of intervention stocks totalling £116·8 million, the figure is £645·7 million, of which £198·7 million relates to refunds on exports to non-member countries.
    Mr. Jay: Has the Minister taken the trouble to find out how much of this subsidy from the British taxpayer is going to the Soviet Union?
    Mr. Walker: In 1980 the board made some modest refund payments on chicken and malt exported to Russia, together with negligible amounts on some other commodities.
    Sir Anthony Meyer: Is my right hon. Friend aware that if it were argued that it would be cheaper to support British agriculture by deficiency payments, according to calculations made by the Labour Party, and on the most likely set of assumptions, the total cost would be £1·7 billion a year?
    Mr. Walker: I have not studied in detail the Labour Party's proposal on this issue, but normally its estimates on such matters are modest.
    Mr. Robert C. Brown: Is the Secretary of State aware that my constituents in Newcastle upon Tyne. West would
    490
    not mind having to pay higher prices for food if they resulted in aid to underdeveloped countries, but that they bitterly resent having to pay these higher prices when they result in subsidising food which goes to the USSR?
    Mr. Walker: That is why Her Majesty's Government have opposed subsidised food going to the Soviet Union. Certainly, the Community has supported food aid programmes. One of the most important exports of subsidised food has been to Poland, which, on balance, I think most hon. Members would consider to be correct.

    Hill Farming
    Mr. Langasked the Minister of Agriculture, Fisheries and Food if he will consider further assistance for the hill farming sector.
    Mr. Buchanan-Smith: The rates of hill livestock compensatory allowances will be reviewed in the autumn in consultation with the farmers' unions.
    Mr. Lang: Does my right hon. Friend accept that, although the hill farming sector greatly appreciates the substantial help brought to it in recent years, the problems remain acute and the hill farming sector relies on substantial help in the forthcoming review?
    Mr. Buchanan-Smith: I assure my hon. Friend that all matters affecting the economics of hill farming will be taken into account during the review of hill livestock compensatory allowances.

  PRIME MINISTER

    Engagements
    Mr. Skinnerasked the Prime Minister if she will list her official engagements for Thursday 23 July.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I took part in the presentation of the Humble Address to Her Majesty the Queen on the occasion of the marriage of His Royal Highness the Prince of Wales. Later, I presided at a meeting of the Cabinet, and, in addition to my duties in the House, I shall be having further meetings later today. This evening, I hope to have an audience of Her Majesty.
    Mr. Skinner: When the Prime Minister speaks to Tory Members of Parliament tonight, will she repeat the famous nursing advice that she gave some time ago on television about how to get the economic patient back on its feet in a few days? Is not two years in the Tory intensive care unit dragging things out a bit? Is not the problem that the Prime Minister and her Government are cutting off the oxygen supply? If the Tory medicine is really working, why is the patient so weak?
    The Prime Minister: Has the hon. Gentleman forgotten that after two years' of Labour Government the country was on the way to the IMF?
    Mr. Warren: Might I suggest that today the Prime Minister may be able to spare some time to assist the Leader of the Opposition in making a date with the leaders of the Socialist Parties in France and Germany to hear their views on the need for the defence of Western Europe?
    The Prime Minister: I gladly advise the Leader of the Opposition to do that. One of the most outstanding features

    491
    of the Ottawa summit was the fierce, robust attitude that Mr. Mitterrand took to the defence of France and his duties to the Alliance, in both conventional and nuclear weapons. That attitude was also adopted by the Chancellor of the Federal Republic of Germany. It is utterly different from the attitude of the Socialist Party in this country, which runs away from its fundamental duty of defending the country.
    Mr. Foot: Is the right hon. Lady aware that I had a most agreeable meeting with representatives of all the Socialist Parties in Western Europe a week ago and that they all agreed to the proposition that we should urge most strongly that negotiations with the Soviet Union should take place as soon as possible? Is she also aware that they urged that we go ahead with negotiated reductions? Why was the right hon. Lady so backward in Ottawa in supporting Mr. Helmut Schmidt in those proposals?
    The Prime Minister: The right hon. Gentleman was not at Ottawa. He will see from the communiqué that we agreed that we should try to negotiate down our armaments in a balanced, monitored and verifiable way. The right hon. Gentleman has already given up his negotiating position. Why on earth should anyone negotiate with his party? It has already given up everything while the Soviet Union keeps all its armaments and nuclear weapons.
    Mr. Foot: Will the right hon. Lady care, for a change, to answer the question? Will she tell the House that she now agrees with what Helmut Schmidt said at Ottawa? I read the report of what he said. He urged that negotiations should take place as soon as possible. Does the right hon. Lady agree with that demand, and did she lend her support to it?
    The Prime Minister: Has the right hon. Gentleman not read the communiqué agreed by all the nations that, of course, we will negotiate? The difference between the right hon. Gentleman and the Government is that we believe in negotiating from a position of strength, as did all Heads of Government present at Ottawa. The right hon. Gentleman believes in trying to negotiate from a position of total weakness.
    Mr. David Atkinson: Does my right hon. Friend recall that, after twenty-eigth months in office, the Labour Government—like the previous Conservative Administration—introduced an incomes policy contrary to their election pledges? Does she accept that, as she enters into the twenty-eighth month of the life of her Government, she commands the widespread support of employers, trade unions and the majority of Labour Members for her policies to contain inflation without introducing an incomes policy?
    The Prime Minister: I believe that one of our most important achievements has been a great increase in the competitiveness of British industry and the fact that we are still exporting some 33 per cent. of our GDP. That could be done only by getting down pay settlements and keeping them more closely in line with productivity—and I hope that we shall continue along that path. Incomes policies introduce unwarrantable rigidities, which cause all kinds of problems as workers in many industries seek to unwind them.
    Mr. Dubs: What is the use of having more competitive British industry if that is happening at a time when our gross national product has been going down, when those
    492
    of other leading industrial countries have been going up and when our unemployment record is worse than that of any of our competitors? What is the point?
    The Prime Minister: I doubt very much whether the hon. Gentleman has observed that the nations whose industries are most competitive are those with the lowest inflation and least unemployment. Those two nations are Japan and Germany.
    Mr. Montgomeryasked the Prime Minister if she will list her official engagements for 23 July.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Montgomery: Does my right hon. Friend appreciate that she will have the support of the vast majority in the House and the country if she takes this opportunity to repudiate the statement by the leader of the Greater London Council accusing Britain of pursuing policies of murder and intimidation against the Roman Catholics in Northern Ireland?
    The Prime Minister: I saw reports of a statement to that effect. If they are true, I think it the most disgraceful statement that I have ever read. It is a totally unwarranted slur on our security forces, both the police and the Army, who are there to protect all the citizens of Northern Ireland and who carry out their duty with total impartiality. I should like to make it clear that the vast majority of us in the House are on the side of the law-abiding and not on the side of convicted criminals.
    Mr. William Hamilton: Reverting to the right hon. Lady's reply about incomes policy, does she maintain that the nation must keep taking the medicine, even though the offer of 6 per cent. to nurses—when inflation is running at 12 per cent.—must mean a substantial reduction in their standard of living?
    The Prime Minister: In the end, each of us in the public sector depends on the earnings of the private sector for our prosperity. The private sector will depend ultimately on whether it can produce goods and services competitively—and which people in this country and overseas will buy. There is absolutely no way out of that fundamental problem except by producing the relevant goods and services.
    Mr. Bulmer: Will my right hon. Friend find time today to study the recent estimate by the Inland Revenue of the amount of money lost to the Exchequer by moonlighting? Can she tell the House whether she proposes to take any further steps about that, and whether the figures indicate that more people have jobs than the current employment statistics show?
    The Prime Minister: That is indeed a problem in this country and a number of others where there appears to be a thriving cash economy. The Inland Revenue tries to use its staff to catch up with unpaid taxation. Undoubtedly, we should have greatly increased revenue, which would be very welcome, if we were able to discover all those not paying tax properly.
    I must make it perfectly clear that those who are not paying the tax which they should pay are putting an increased burden on the rest of us who are paying it fully.
    Mr. Freudasked the Prime Minister whether she will list her official engagements for 23 July.
    The Prime Minister: I refer the hon. Gentleman to the reply which I gave some moments ago.
    Mr. Freud: Bearing in mind the Prime Minister's concern for handicapped people, may I ask whether she will take a personal and caring look at the Manpower Services Commission's recommendations to amend the job quota for the disabled? Will she accept that a code of practice is not good enough and that this is of great concern to the voluntary support organisations?
    The Prime Minister: I saw the proposals for change, but I believe that they would be very controversial and that a number of people think that the present arrangements are better than any proposed change.
    Mr. Porter: Is my right hon. Friend aware that British information services in the United States of America appear to be seriously under-staffed in both numbers and journalistic quality? Unless that is corrected, the chances of our winning the propaganda contest in that country over Northern Ireland are remote.
    The Prime Minister: I doubt very much whether the British Embassy in Washington is under-staffed. It has a difficult task in trying daily to put over the true state of affairs in Northern Ireland. We are anxious that not only the embassy but all Ministers and hon. Members of this House who visit the United States should take time to put over on television and radio the position of the United Kingdom with regard to Northern Ireland. We are there because the vast majority of the people of Northern Ireland wish to stay citizens of the United Kingdom. We are there to defend all law-abiding citizens in Northern Ireland, and we carry out those duties faithfully and impartially.
    Mr. Cohen: Will the right hon. Lady please reflect on what she said about the competitiveness of British industry? Will she take the opportunity at some time to meet representatives from all sections of the clothing and textile industrial, to talk with them and learn from them that close to 2,000 jobs are disappearing each month because of the inability to compete with unfair competition from abroad?
    The Prime Minister: The hon. Gentleman will know that we have protection for the textile industry. The multi-fibre arrangement is in process of renegotiation. He will also be aware that the import of textiles is one of our problems because textiles are among the products frequently made by developing countries and exported to this country. We must also watch the imports from other countries which have lower-priced petroleum products than we do, because they go through into the synthetic materials. However, that position is very much better since the exchange rate was altered.
    Mr. Pawsey: My right hon. Friend has repeatedly and rightly stressed the need to create real productive jobs. Will she, therefore, take this opportunity to launch an initiative in conjunction with the TUC and the CBI to promote a major campaign designed to purchase British goods throughout British industry and to bring home to the British people the need to buy British goods in order to sustain British workers?
    The Prime Minister: If more of our people bought more of the produce of our industries, there would be more employment in the country. However, they are likely to
    494
    do so only if those goods are of the best possible value. The British housewife and wage earner are very shrewd buyers, and they will rightly continue to buy the goods which give the best value.
    Mr. Allan Roberts: Will the Prime Minister give an undertaking that, although the Secretary of State for the Environment is in Liverpool with a closed cheque book, the right hon. Gentleman's mind is open enough clearly to say that, although the Government will not give more money to the local authorities of Merseyside, they will not take any more money from them in this financial year in the way in which the Government have taken money this week from the Scottish local authorities?
    The Prime Minister: My right hon. Friend the Secretary of State for the Environment is having an interesting time in Merseyside and, of course, he is discovering all the facts and taking a good deal of time to talk to people there.
    The hon. Gentleman referred to money. Under the partnership programme, which I admit had only just started under the previous Government, the money for Liverpool in 1978–79 was £2·5 million. In 1980–81, it was £17·6 million, and again this year it is £17·6 million. The money for Liverpool under the industrial aid programme was £15 million in the last year of the Labour Government. This year, it is £33 million. The problem is not one of a shortage of money in Liverpool but one that is much deeper and more fundamental.
    Mr. Nicholas Wintertonasked the Prime Minister if she will list her official engagements for 23 July.
    The Prime Minister: I refer my hon. Friend to the reply which I gave some moments ago.
    Mr. Winterton: Does my right hon. Friend agree that, just as it is possible for us to price ourselves out of jobs and work, it is also possible for us to price ourselves into contracts and work? Will my right hon. Friend therefore say what assistance she has had from the Leader of the Opposition and from the Trades Union Congress in explaining to the people that realistic pay settlements can lead to the creation of more jobs?
    The Prime Minister: I agree entirely with my hon. Friend. Until our wage costs are the same as, or lower than, those of our main industrial competitors, they will get the jobs and we shall get the unemployment. Unfortunately, that fundamental fact does not seem to he realised by the Opposition, or, if it is, they go ahead regardless of it and fail to point out that heavily increased pay settlements, over and above productivity, will deprive people of jobs and increase unemployment. If they wish to reduce it, they should take my hon. Friend's advice.

    ADJOURNMENT (SUMMER)
    Mr. Speaker: I remind hon. Members that, on the motion for the Adjournment of the House on Friday 31 July, up to 10 hon. Members may raise with Ministers subjects of their own choice. Applications should reach my office by 10 pm on Monday next. A ballot will be held on Tuesday morning and the result made known as soon as possible thereafter.

Ottawa Summit Meeting
The Prime Minister (Mrs. Margaret Thatcher): With permission, Mr. Speaker, I will make a statement about the Ottawa economic summit conference held on 20 and 21 July, which I attended with my noble Friend the Foreign and Commonwealth Secretary and my right hon. and learned Friend the Chancellor of the Exchequer.
A declaration was issued on 21 July at the end of the conference. A statement on political questions, including the Middle East, East-West relations and Afghanistan, was made to the press by the Prime Minister of Canada on the evening of 20 July. A statement was released on hijacking and terrorism. Copies of all three documents have been placed in the Library of the House.
Five of the eight participants were attending an economic summit conference for the first time. It thus provided a particularly useful opportunity for an exchange of views on a wide range of issues. Unlike the two preceding conferences, this meeting was not dominated by a single subject. The participants were able, therefore, to cover many of the major problems, political as well as economic, facing the Western world.
The primary challenge we addressed in our discussions was the need to revitalise the economies of the industrial democracies, to meet the needs of our own people and strengthen world prosperity. We agreed that there was a prospect of moderate economic growth in the coming year, but that at present it promised little early relief from unemployment. We noted that interest rates had reached record levels in many countries and, if long sustained at these levels, would threaten productive investment. President Reagan stressed that the programme of public spending reductions at present before Congress could be expected to reduce interest rates in the United States once it took effect.
The Heads of State and of Government all agreed, in the words of the declaration, that
"The fight to bring down inflation and reduce unemployment must be our highest priority and that these linked problems must be tackled at the same time. We must continue to reduce inflation if we are to secure the higher investment and sustainable growth on which the durable recovery of employment depends. The balanced use of a range of policy instruments is required. We must involve our peoples in a greater appreciation of the need for change: change in expectations about growth and earnings, change in management and labour relations and practices, change in the pattern of industry, change in the direction and scale of investment, and change in energy use and supply."
We recognised the need in most countries urgently to reduce public borrowing; where our circumstances permit or we are able to make changes within the limits of our budgets, we will increase support for productive investment and innovation. All accepted the role of the market in their economies. We agreed not to let transitional measures that may be needed to ease change become permanent forms of protection or subsidy. We saw low and stable monetary growth as essential to reducing inflation.
We also discussed relations with developing countries. Three points were made. First, we share with the developing countries many of the problems of the world economy: the need to develop energy resources, to encourage investment, to fight inflation and unemployment and to expand trade. Second, we welcome discussion with developing countries in whatever ways or groups may be useful. We all agreed to participate in preparations for
496
a process of global negotiations provided that we saw the possibility of real progress. Third, we need to direct the major portion of our aid to the poorer countries. The United Kingdom already does so.
On trade, we reaffirmed our commitment to an open multilateral trade system and our determination to resist protectionist pressures. We endorsed the proposal for a ministerial meeting of the GATT next year. We agreed to keep under close review the role played by the industrialised countries in the smooth functioning of the world trading system. This will provide us with the opportunity to pursue the particular problems that arise, for the North American as well as for the European countries, in trade with Japan.
As to political issues, we met in the shadow of the further outbreak of fierce fighting in the Middle East, where once again the unfortunate people of the Lebanon are bearing the brunt of a conflict that is not of their seeking. Whatever any of us may have thought about the causes, we were all agreed on the need for an urgent ceasefire in the Lebanon, for an end to the loss of innocent civilian life there, and above all for a solution to the conflict between Arab and Israeli from which the violence flows. We shall continue to use all our influence, both our own and as holders of the Presidency of the European Community, to these ends.
Finally, we discussed relations between East and West and the concern that we all felt about the Soviet military threat to Western interests. We were much heartened by the strength of common purpose that was apparent. Without exception, we agreed—and agreed with real determination—on the need to maintain a strong defence capability and to insist on the need for military balance. Hand in hand with that went our readiness to negotiate arms control agreements that would ensure genuine security at a lower level of weapons and a smaller expenditure of resources.
So in our discussion we linked the two elements necessary to the preservation of the free world and of the free market economy which sustains it: on the one hand, defence and the maintenance of peace, and, on the other, the health and soundness of the world economy. Altogether it was a most important and worthwhile meeting.
Mr. Michael Foot: I thank the right hon. Lady for her statement, although she seems to have achieved the astonishing feat of saying even less in it than there was in the communiqué. That took some doing. We have already had an exchange about the arms negotiations, and I am sorry that the right hon. Lady would not tell us the Government's attitude on the matter, nor whether she and her Government are trying to assist in speeding up those negotiations, as the German Chancellor and others are seeking to do.
The platitudes about foreign aid and the meeting in Mexico were even more pious than usual—if that is not an infringement of the word "pious". Does the statement mean that the right hon. Lady will reverse the decisions taken by the Government on foreign aid hitherto? Will there be a statement on that, and on a real policy for the meeting in Mexico, during the debate tomorrow?
The first and most disappointing part of the right hon. Lady's statement was about the economic discussions. Was it really impossible for her to join those trying to do something about the high American interest rates? Must

497
she sit back and say nothing on that subject, or simply say "ditto" to President Reagan, when the German Chancellor, the French President and others are urgently seeking to do something about the problem?
Mr. Robert Atkins: How does the right hon. Gentleman know my right hon. Friend said nothing?
Mr. Foot: I am asking the right hon. Lady whether she joined the German Chancellor and the French President in pressing for a reduction in American interest rates. Everyone in this country has an interest in that. As President Mitterrand has consistently emphasised, if those rates continue at their present level, the crisis here will be intensified.
Will the right hon. Lady acknowledge that there is much truth in what was said in The Times this morning on the subject, that neither in the communiqué nor in the press conference did the leaders do more than wring their hands? It was also suggested that, instead of a proper international plan, we should have crisis management, which means that there would be more and more crises. If that is all that the right hon. Lady contributed to the economic side of the summit, why did she not stay at home and read Lord Lever's articles so that she might have been better instructed on the subject?
The Prime Minister: I am sorry that the right hon. Gentleman is so critical of the other six Heads of Government who were present at Ottawa, including the Chancellor of the Republic of Germany and the President of France, both of whom contributed to and signed the communiqué. Of course, their policies are very different from those of the right hon. Gentleman, and he is totally out of step with the other Socialist and Social Democratic countries of Europe.
With regard to arms negotiations, I have already given the right hon. Gentleman the answer. We all wish to negotiate from a position of strength and we agree that arms negotiations will start probably in November this year, when we are properly ready for them to start from a position of strength. I know that the right hon. Gentleman has given up all position on this matter and will go to Moscow—I understand that he will be going later—in the words of one of his predecessors,
"naked into the conference chamber".
As for the question of the developing countries, the agenda is to be discussed by a meeting of Foreign Secretaries at the beginning of August in Mexico.
American interest rates were high for a considerable time before President Reagan came into office. His own policies have not yet got through Congress. When they have got through, it is expected that interest rates will be reduced.
Mr. Foot: Did the right hon. Lady agree or disagree with President Mitterrand's representations about the high American interest rates?
The Prime Minister: The right hon. Gentleman did not hear what President Mitterrand said. None of us likes high interest rates, but the American President was not criticised nearly as much as the right hon. Gentleman suggests, either by other Heads of Government or by the President of France, who recognised that when fears of inflation remain strong interest rates are likely to remain high.
Mr. David Steel: Is not the Prime Minister's phraseology about defence and disarmament strange? She talks about her determination to maintain our defences and only readiness to engage in disarmament talks. Should it not be the other way round—readiness to maintain our defences but real determination to press ahead with disarmament talks?
The Prime Minister: If I may say so, that is a very facile question. We on this side are not merely ready but determined to maintain our defences. We are ready and, if the right hon. Gentleman wishes, determined to enter into arms negotiations with NATO, taking the whole of NATO with us, we believe in about November.
Mr. Julian Amery: Does my right hon. Friend agree that, when the United States is making such an enormous effort to strengthen the defences of the free world, it hardly lies in the mouth of the Opposition to criticise its present economic policies? Will she point out to the Leader of the Opposition that the declarations from the national executive committee of the Labour Party on Europe, on defence and, indeed, on Ulster threaten a sinister divide—something we have not seen for many years—in the unity of this country?
The Prime Minister: I agree wholly with my right hon. Friend. Those who are not prepared to defend this country and, I believe, have an independent nuclear deterrent as a vital part of our defence are prepared to put our way of life at risk.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to allow these questions to run until 4 o'clock and then to move on to the Business Statement.
Mr. Jack Ashley: Did any of the other participants comment, politely or otherwise, on the British Government's deplorable record on aid to developing countries?
The Prime Minister: It is not a deplorable record—far from it. Indeed, it is higher than that of some of those who criticise us. Certainly the record of France and Germany is good. If the right hon. Gentleman adds to the total the private flows of capital from this country, he will find that our record is second to none. We have a very good record of giving most of our aid to the poorest countries, which, I am afraid, is not a fact with many other countries.
Mr. Dennis Walters: Bearing in mind not only the savagery of the Israeli bombing of Beirut but the grave threat to peace which that has brought with it and the danger of the continuation of Mr. Begin's warmongering, did my right hon. Friend and her European colleagues agree to try to persuade President Reagan permantly to withhold the supply of offensive weapons, such as the F16s, to Israel?
The Prime Minister: No. President Reagan had already announced that he would defer delivery of the aircraft which were otherwise due. He pointed out that Mr Habib was in the Middle East trying to secure a ceasefire. There has, of course, been a meeting of the Security Council calling for a ceasefire and a report within 48 hours. My right hon. and noble Friend the Foreign Secretary, both in his capacity as our Foreign Secretary

499
and as President of the European Community, has called in the Israeli and Arab ambassadors to make our views known to them.
Mr. John Roper: Paragraphs 19 and 20 of the communiqué refer to the related questions of food production being increased in the developing countries and world population growth. Will the Prime Minister ensure that her Administration's policies reflect those priorities in future?
The Prime Minister: A good deal of our aid goes to helping the developing countries to increase their food production. For example, we have given £100 million in aid to Sri Lanka to build a large dam which will provide not only electricity but irrigation. That will make many lands fertile which would otherwise have remained barren.
Mr. Peter Tapsell: Is it not a fact that, despite these regular economic summits at which my right hon. Friend always plays such a constructive role, in practice the degree of co-operation on economic affairs between the countries concerned is much less than it used to be between 1946 and 1971? Although meetings of Heads of State are clearly valuable, would it not be a good idea to try to underpin them with new talks at a lower level among specialists, leading to a new Bretton Woods conference?
The Prime Minister: I think that we shall get stability of exchange rates only when there are much more stable economies and political factors in the Middle East. From time to time, a new Bretton Woods is mentioned. However, under present political conditions in the world, I do not envisage its happening. I read Lord Lever's articles in The Times, and he certainly seems to be straining after that. But when I reach a part where he speaks about certain things becoming book entries, that does not give me confidence about the underlying stability of his proposals.
Mr. David Stoddart: Is the right hon. Lady aware that her answers about aid to underdeveloped countries are not at all satisfactory? Is she further aware that we should take her far more seriously if she would announce to the House now or in the near future that she will cancel this year's 15 per cent. cut in aid and the 15 per cent. cut in aid that will be made next year?
The Prime Minister: No. One is not able to do that. It is easy to plead for more expenditure. Our country already has a great deal of expenditure and one is just not able to put up the amount of Government aid to those countries.
We have an excellent record on private flows. One thing pointed out in the communiqu6 was that much more capital would go to the developing countries if they were able to provide a code of practice that would safeguard the investments. That would probably be one of the best ways of helping them.
Having an open economy, we also help very much in flows of trade, even though that sometimes gives us problems at home.
Mr. Iain Sproat: Can my right hon. Friend tell the House more about what was discussed at the summit about Western levels of trade with the Soviet Union and about the transfer by the West of strategic
500
technology to the Soviet Union which so often appears to allow the Soviet Union to increase its effective hostility against the West?
The Prime Minister: We discussed those matters and put a brief paragraph in the communiqué stating:
"We will undertake to consult to improve the present system of controls on trade in strategic goods and related technology with the USSR."
We are concerned that sometimes technology may be sold to the USSR which enables the Russians to produce a level of weaponry which we then have to counter, and we should not have had to bear that expenditure if the original technology had not been sold to them in the first place.
Mr. David Winnick: Is it not humiliating for the Prime Minister that, under her leadership, the curse of mass unemployment has returned in the past two years? Moreover, Britain has experienced the worst street disorders and disturbances for 60 or 70 years.
The Prime Minister: The disorders and disturbances were not raised with me in any way with regard to the level of unemployment. As we pointed out, the countries that have the least problems with unemployment and inflation are the most efficient. Japan has absolutely no problems with inflation or unemployment. The Japanese Prime Minister pointed out that Japan has a self-disciplined society and that it is a matter of pride to the work force that the products are good and are delivered on time. He also pointed out that the Japanese have a very different system of labour relations and that they do not go on strike.
Mr. David Crouch: Has my right hon. Friend seen reports that one of the main objectives of President Reagan in Ottawa was to retain for the United States the leadership of the West? Is she aware that many people in this country today feel that that leadership will be greatly impaired if the United States does not take positive action to stop the Israeli Prime Minister waging all-out war on Palestinian refugees?
The Prime Minister: Doubtless my hon. Friend will have heard the statement made by Mr. Weinberger this morning. Indeed, I think that he is conscious of the problems in the Middle East—as we all are—and of trying to bring about a ceasefire. Most of us agree that the Israeli raid on Beirut was wholly disproportionate to any made on Israel.
With regard to President Reagan and the leadership of the Western world, ultimately the United States is the guarantor of the freedom of Europe. We should make it clear that we understand and are grateful to the United States for that.
Mr. John Browne: Does my right hon. Friend agree that, with an annual oil payment to OPEC of about $170,000 million a year, the Western economies are suffering not from a normal cyclical recession from which mere reflation will extract them but from a fundamental, structural, economic collapse which demands a much deeper and more thorough examination and rebuilding of economies, including a major appraisal of the acceptance of new technology; the sources, uses and conservation of energy; and the whole philosophy of subjects such as financial indexation by Governments?
The Prime Minister: There has been a considerable change in the pattern of world trade, which has affected

501
all the economies of Europe, in that the newly developing countries are now producing efficiently and well many products that we used to regard as our own preserves. They are taking an advanced view with regard to the latest technologies. They are investing a much bigger proportion of their income than we are. For example, I think that in Japan about one-third of the profits—they are profits; they are not all taken out in wages—are ploughed back into the latest technologies. I agree with my hon. Friend that that means an enormous structural change and that we have been rather slow to adapt to it.
There are other financial problems. We have gone on increasing public expenditure, assuming that we should get growth, but that growth has not come about. That, too, has caused many financial problems. Ultimately, unless we diminish public expenditure in relation to output, there will not be enough money for private industry to invest to become competitive again.
Mr. Kevin McNamara: The right hon. Lady put her signature to a declaration that said:
"We are committed to maintaining substantial and, in many cases, growing levels of official development assistance".
Are we in fact to increase our development assistance officially, and, if so, by how much? Or does the right hon. Lady's signature not mean anything?
The Prime Minister: But the communiqué did not commit us all to increased Government aid. I cannot promise increased Government aid this year. I hope that our excellent flows of private aid will continue and that they will increase from other countries, but that will happen only if the developing countries adopt a code of practice to safeguard those investments.
Mr. Stanley Newens: Does the Prime Minister agree that higher interest rates are likely to push the world further into economic depression and that, if the present high levels in the United States continue, other countries will be forced to raise their interest rates? In these circumstances, will she make clear what stand she took on this issue, or does she approve of what can only be described as beggar-my-neighbour interest rate policies?
The Prime Minister: No, I most certainly do not approve of such policies. I dislike high interest rates, and I am one of the first to recognise that high interest rates in the United States can have an impact on European economies. I point out to the hon. Gentleman that high interest rates existed in the United States for quite a time before the present Administration took office. They are trying to present policies to reduce public expenditure, which it is hoped will reduce the deficit and thus reduce inflationary pressures. Therefore, it is expected that when those policies are through—they are not yet through; they are before Congress—the high interest rates will come down.
Viscount Cranborne: Did my right hon. Friend and her colleagues discuss in any detail the impact of the volatility of exchange rates on the world economy? Is not that volatility to a larger extent a cause of instability, both economic and political, as well as an outward and visible sign of it?
The Prime Minister: I do not think that any of us likes the volatility of exchange rates. As a result of two world
502
recessions caused by sharp oil price increases, the vast sums of money that can now move round the world are far greater than any reserves that we may have to allow us to intervene to hold the exchange rate. If we were to ay to intervene with our modest reserves, we should throw them all into the hands of the speculators, and nothing would be done to achieve the stability that we all desire. That is a fact of life that we have to recognise.
Mr. T. W. Urwin: During the discussions on the separate and disparate economies of democratic countries, was any reference made to the economy of a former European democcracy, Turkey? Did the member States at the summit conference accept a collective responsibility to impress upon the military junta now operating in Turkey the importance of an early return to plural democracy?
The Prime Minister: On this occasion we did not discuss Turkey. On previous occasions we have got together to give aid to Turkey.
Mr. Michael Hamilton: Did my right hon. Friend have an opportunity for private discussions with the Canadian Prime Minister, and did three-line Whips figure in those discussions?
The Prime Minister: I did not have a private discussion with the Canadian Prime Minister on the subject that I think my hon, Friend is raising.
Mr. Ernie Ross: In relation to the political issues discussed by the Heads of Government: in Ottawa, has the Prime Minister had time today to see the statement made by the ex-Prime Minister of Israel, Mr. Rabin, in which he makes it clear that only political solutions exist? Will she now take the opportunity to instruct her right hon. and noble Friend the Foreign Secretary that the only initiative possible is an independent European initiative free from the Camp David accords?
The Prime Minister: We have always made it clear that the European initiative was complementary to the Camp David accords. Many of us take the view that the Middle East problem will not be solved without the considerable influence of the United States upon Israel.
Mr. John Bruce-Gardyne: Did not the success of the conference have much to do with the sensible modesty of the expectations put upon it? Is it not enormously to the credit of my right hon. Friend and. her colleagues that they eschewed the fatuous posturing of previous participants in such meetings, who seemed to believe that they could add a cubit to the world's stature by taking thought together?
The Prime Minister: These conferences started, I understand, simply as the seven Heads of Government meeting together quietly. They have developed into what I would call a circuit of summitry. Such a battery of journalists follows us that I must confess that it is a problem, because if some news is not given out it tends to be manufactured. However, I agree with my hon. Friend that it is a pity if Heads of Government cannot meet to discuss vital world issues without raising expectations mat there will be some colossal pronouncement at the end. The problems remain; it is just that we get together to discuss them.

Business of the House
Mr. Michael Foot: Will the Leader of the House state the business for next week?
The Chancellor of the Duchy of Lancaster, Paymaster General and Leader of the House of Commons (Mr. Francis Pym): Yes, Sir. The business for next week will be as follows:
MONDAY 27 JULY—Debate on the Opposition motion of no confidence in Her Majesty's Government's economic and social policies.
Consideration of Lords amendments to the Armed Forces Bill.
Motion relating to the British Gas Corporation (Disposal of Wytch Farm Oilfield Interests) Direction.
Motions on the coal industry orders.
TUESDAY 28 JULY—Consideration of Lords amendments to the Transport Bill.
Motion on the European Community documents 7305/81, 7306/81, 7825/81 and 7847/81 on the steel industry.
THURSDAY 30 JULY—Completion of remaining stages of the Wildlife and Countryside Bill [Lords].
Consideration of Lords amendments to the Employment and Training Bill.
Motions on the London Docklands Development Corporation orders relating to Newham and Southwark.
FRIDAY 31 JULY—Motions on the uprating regulations on social security benefits, supplementary benefit, and on child benefit, on the family income supplement regulations, and on the Pensioners' Lump Sum Payments Order.
Motion on the Supplementary Benefit (Requirements and Conditions of Entitlement) Amendment Regulations.
Subject to the approval of the motion on the Order Paper, Mr. Speaker, the House will not meet on Wednesday 29 July, and will rise on Friday 31 July for the Summer Adjournment, until Monday 19 October.
[The following reports of the European Legislation Committee are relevant to the debate on the steel industry on Tuesday 28 July:
26th report, 1980–81, HC 32-xxvi, para. 2; 27th report, 1980–81, HC 32-xxvii, para. 2; 29th report, 1980–81, HC 32-xxix, para. 1; 31st report, 1980–81, HC 32-xxxi.
The 31st report is not yet published, but typescript copies are available in the Vote Office].
Mr. Foot: May I put three matters to the right hon. Gentleman? First, can he ensure that the Home Secretary makes a statement to us next week about the serious incidents in Brixton just over a week ago? Second, will he assure us that a report will be made to the House on that matter before we depart at the end of next week?
Secondly, will the right hon. Gentleman give us the absolute assurance that the Secretary of State for the Environment will make a statement about the Vale of Belvoir? Considering how serious that could be for the energy prospects of the country, as well as for the well-being of the coal industry, can he also assure us that if, by any mischance, the Secretary of State's decision is to be against that which has been recommended, the House of Commons will have a chance to debate and vote on the matter before such an adverse decision is taken?
Thirdly, we have asked for a debate on the BBC external services on a number of occasions, and I
504
understand why it has been difficult for the Government to fix a time for it. Will the right hon. Gentleman assure us now that we shall have a debate on the matter in the overspill period after the recess so that the House can give its view? I underline the fact that we think that that is especially necessary because, when there was a debate on a kindred subject not so long ago, the House gave its decision and the Government's present proposals in some respects flout the previous decision of the House of Commons. If the House has changed its mind on the subject, let the Government come forward and see whether that is the case, but we think that it is disgraceful for the Government to go ahead on those proposals. We ask the right hon. Gentleman here and now for an assurance that there will be no decision to go ahead until we have had a chance to hold that debate.
Mr. Pym: I shall, of course, convey to my right hon. Friend the Home Secretary the right hon. Gentleman's request that he should make a statement, although I do not know whether the inquiry that he has instigated will have been completed by next week.
On the important matter of a possible statement on the Vale of Belvoir, my right hon. Friend the Secretary of State for the Environment has not yet come to a conclusion or made a decision. Until he does so, it is, of course, not possible for him to inform the House. I fully acknowledge—it is clear to everybody—that this is an important decision with important consequences. It is partly for that reason that my right hon. Friend has taken a considerable time to reach a conclusion. If there has been no decision, there can be no statement; but I share with the right hon. Gentleman and with the whole House an understanding of the importance of the decision.
The right hon. Gentleman's third point was about the BBC's external services. I note his request, but I cannot fit that debate in next week. I can only say that there is to be a debate on the matter this evening—although in circumstances in which no vote will be possible—and that the Government will take into account everything that is said in that debate. There cannot be a separate decision on the matter this evening, but there is to be a debate. A number of hon. Members have put down their names for that, and we shall take what is said fully into account.
Mr. Foot: Particularly in the light of the previous vote, we take the view that the matter of the external services could be properly settled only with another vote. A discussion is an excellent thing, and the Government can take account of what is said, but will the right hon. Gentleman assure us now that the Government will not proceed with the proposals until there has been another vote?
On the question of a statement by the Secretary of State for the Environment, the right hon. Gentleman tells us that the Secretary of State has not yet made up his mind. Will the right hon. Gentleman give us an absolute undertaking that if his right hon. Friend does not make up his mind before the end of next week, and so cannot make a statement here, no statement will be smuggled out by the Secretary of State for the Environment during the recess? We have seen his methods before.
Mr. Pym: I give the right hon. Gentleman an absolute assurance that no statement will be smuggled out. I do not think that it would be right to give him an absolute guarantee that no decision will be reached during the

505
recess, but there will be no smuggling out. If the Secretary of State reaches a decision during the next two and a half months, he might very well think it right and appropriate—and the right hon. Gentleman might agree—to announce that decision. That, however, is speculation. I do not know when my right hon. Friend will reach his decision.
The Government reached their decision about the BBC's external services in an entirely proper manner and promulgated that decision. There is no opportunity for the debate for which the right hon. Gentleman asks, nor can I give him the absolute undertaking that he seeks. The right thing for us to do is to hear what is said in tonight's debate and to take it fully into account. That will be the next stage in the story.
Mr. Foot: I am sorry to press the right hon. Gentleman once more about the Vale of Belvoir. I understand what he has now said. It seems unlikely that a statement such as we have been pressing for will be made before the end of next week. Can the right hon. Gentleman give us an absolute guarantee that there will be no decision to go ahead, on any recommendation by the Secretary of State for the Environment, before this House has had the chance to debate that recommendation?
Mr. Pym: It is difficult to visualise that there will not be an opportunity of some kind for the House to debate that, but I think that we ought to await the decision—I do not know, any more than the right hon. Gentleman knows, what it will be—and then take the matter from there.
Mr. David Crouch: I thank my right hon. Friend for the adjournment on 28 July—even if it is to last for only one day. For how long are we likely to sit on 31 July? It is not clear from the Order Paper whether we are to have a normal day's sitting or whether we may sit for longer than is normal on a Friday.
Mr. Pym: The intention is that we shall have the business I have announced for a normal Friday, ending at 2.30 pm, and then sit for five hours so that the normal Adjournment debates can take place in the same amount of time as would have been available if they had been the sole business on Friday.
Mr. George Cunningham: Can the Leader of the House assure us that, in the spill-over period, there will be a Government motion to continue the experiment of using Special Standing Committees for selected public Bills? Unless there is, that experiment will finish at the end of this Session. Many hon. Members on both sides of the House who have participated in the three Special Standing Committees have concluded that they are a valuable addition to the facilities available to hon. Members.
Mr. Pym: I am at present considering our experience of that new procedure, and I shall come to a conclusion, either in the overspill period or at the beginning of the new Session, about whether we should continue it. Although I have not yet reached a conclusion, I am aware of the hon. Gentleman's enthusiasm for such Committees.
Mr. Jonathan Aitken: Reverting to the subject of the external services of the BBC, will my right hon. Friend note that there is support in all parts of the House for a vote on the issue during the spill-over period? Will he also note that those of us who spoke and voted on
506
the issue before hoped that the Government would listen rather more than they have to the views expressed in that previous debate?
Mr. Pym: I am quite prepared to say "Yes, Sir" to both questions.
Mr. R. C. Mitchell: Can we expect a statement next week from the Secretary of State for Defence on the placing of the order for the new heavyweight torpedo?
Mr. Pym: I do not think that that is likely, but I shall consult my right hon. Friend.
Mr. Ivor Stanbrook: Has my right hon. Friend read of the lamentable and extraordinary appearance in the dock at the Old Bailey yesterday of a child of under 12? Will he consult his right hon. and learned Friend the Attorney-General with a view to making proposals to ensure that that cannot occur again?
Mr. Pym: I am not sure whether that is relevant to next week's business, but I shall convey that view to my light hon. and learned Friend.
Mr. Ted Leadbitter: Will the right hon. Gentleman bear in mind that the Select Committee on Energy, after an inquiry of more than a year, submitted its report on the programme for the nuclear industry and that after five months we have received the Government's response? Will he accept that the importance of that subject to the House is of considerable concern in the country? If he cannot give the promise of a debate next week because of the shortage of time, will he bring to the attention of his right hon. Friend the Secretary of State for Energy the need for a statement or a debate at the beginning of the new Session?
Mr. Pym: I shall certainly convey that view to my right hon. Friend. There have been a number of debates on that subject in this Session, and I have no doubt that we shall have others in the next Session. I agree that it is an extremely important subject.
Mr. Tim Eggar: When my right hon. Friend is considering future business, will he give high priority to the introduction of legislation that will remove the British Gas Corporation's monopoly right of purchase of North Sea gas?
Mr. Pym: I shall certainly give that consideration, bearing in mind the fairly widespread desire in the House that there should be less legislation.
Several Hon. Members rose—
Mr. Speaker: Order. If hon. Members will co-operate with me, I shall call all those who have been seeking to catch my eye.
Mr. John McWilliam: Will the right hon. Gentleman say whether we can expect a statement on the Beesley report on the privatisation of the telecommunications network before the recess? Will he give an undertaking that no findings by the Secretary of State for Industry will be put into effect until the House has had an opportunity to debate them?
Mr. Pym: On the hon. Gentleman's first point, it is possible that there will be a statement next week on the telecommunications industry, but I cannot give an undertaking about a debate.
Mr. Robert C. Brown: The Leader of the House will have seen early-day motion No. 522 on British Gas showrooms, which refers to Government policy being based on dogma and being unconcerned with consumer service, safety considerations or employment.
[That this House deplores the statement of Her Majesty's Government on the proposal to enforce the disposal of British Gas showrooms and end retail sales operations, believing that Government policy is based on dogma and is not concerned with consumer service, safety considerations or employment.]
Is the right hon. Gentleman aware that I addressed a meeting in Croydon last night—I apologise to the right hon. Gentleman and to the Patronage Secretary for ringing alarm bells in their ears now—at which public concern was expressed about safety considerations in the gas industry? Will he assure me that next Monday evening, when we debate the disgraceful proposal to dispose of the British Gas Corporation's Wytch Farm oil concession, he will ask the Secretary of State to take into consideration safety in the gas industry as a whole?
Mr. Pym: What would be in order in the debate on that motion is a matter for you, Mr. Speaker, not for me. The hon. Gentleman cannot lightly dismiss the Monopolies and Mergers Commission finding, but I certainly agree—as I think the House would—that safety is extremely important.
Mr. Allen McKay: I am sorry to press the right hon. Gentleman regarding the Vale of Belvoir, but it is extremely important for the men in the Leicestershire coalfield who will be completely out of work, because the lead-in for the Vale of Belvoir is 13 years and the lifetime of Leicester is 79 years. Without pre-empting what the Secretary of State will say, will the right hon. Gentleman assure the House that, if the decision is adverse to what the inspectorate put forward, no decision will be made until a debate has taken place in the Chamber? It would involve a change in Government direction as regards the tripartite agreement on the "Plan for Coal", and that would lead to a serious situation.
Mr. Pym: I fully acknowledge the importance and interest in this subject, but I cannot give a commitment about a debate before a decision is announced. That is not how the House and Parliament works. Parliament is here to call the Government and the Treasury Bench to account. My right hon. Friend the Secretary of State for the Environment will reach a conclusion on this most difficult matter and a statement will then be made. If the House is not in recess, he will, of course, make it to the House, but, whenever it is made, it will certainly be made publicly. It is no more possible for me than it is for him to speculate on what the decision will be.
Mr. Andrew Faulds: There will be an opportunity tonight, as the right hon. Gentleman has rightly said, to discuss the intended cuts in the BBC's external services. The House will be delighted to know that it will have the benefit of my views on this matter from the Front Bench. However, is not the right hon. Gentleman aware that there will be no vote on the matter tonight? Has he not yet got the message from his own side, particularly from the hon. Member for Thanet, East (Mr. Aitken), that the House must have an opportunity to pass judgment on
508
the matter? Will he arrange—and can he give us a definite answer on this—that there will be an opportunity to debate and vote on the matter in the hang-over period in October?
Mr. Pym: I think I made it clear that I well understood the circumstances surrounding the debate on this subject tonight. I have received many messages on it. Perhaps I may remind the House that the Government have decided to authorise a capital programme of over £100 million for the BBC, and the BBC is being asked to contribute and find £23 million towards it. So we are engaged in a substantial expansion of BBC services. I know that that does not satisfy some of the arguments produced by hon. Members, including the hon. Member for Warley, East (Mr. Faulds). I think that it would be right to listen to what he says in the debate later this evening, and then we shall take the matter from there.
Mr. T. W. Urwin: I wish to return to the comments made by my right hon. Friend the Leader of the Opposition about the mission currently being undertaken in Liverpool by the Secretary of State for the Environment. May we have an absolute assurance from the Leader of the House that no decisions will be implemented immediately following the completion of the Secretary of State's report based on his explorations in Merseyside? May I impress on the Leader of the Opposition the importance of ensuring that a debate takes place when the House returns after the Summer Recess, because there are areas, including the Northern region, where rioting has been of minuscule proportions but which have similar, if not equal, claim to the additional resources that may well be deservedly allocated to areas such as Liverpool? We in the Northern region wish to stake our claim to benefit from that resource distribution.
Mr. Pym: I fully understand what the right hon. Gentleman said at the end of his question. I assure him that my right hon. Friend the Secretary of State for the Environment is not considering only Liverpool problems while he is in Liverpool. He is looking at the problems from the point of view of both Liverpool and other cities where there are equally large and difficult problems to be dealt with. I think that the kind of high-pressure investigation that my right hon. Friend is undertaking for two weeks will throw a new light on different and, it is hoped, more effective ways in which we can tackle these very difficult problems.
My right hon. Friend is there for a fortnight—that is, until the end of next week. I think that the right hon. Gentleman was suggesting that after that no decisions and no action should be taken. I do not think that that response is necessarily right. It depends on what my right hon. Friend discovers there and what conclusions he reaches. It will be for the Government to consider those conclusions, and if action and decisions are appropriate I assure the right hon. Gentleman that they will be taken. No doubt subsequently, in the overspill or in the next Session, there may be an appropriate occasion to debate these matters, which I am sure will be of great interest to both sides of the House.
Mr. James Lamond: In view of the importance that the Lord Privy Seal placed on a positive and satisfactory outcome of the Madrid conference, may we take it that if that conference concludes, after many

509
months of dragging on, before the end of this Session, we shall have a statement in the House from the Lord Privy Seal about the outcome?
Mr. Pym: I shall discuss that possibility with my right hon. Friend.
Mr. David Stoddart: Reverting to the question of Wytch Farm and the order directing the British Gas Corporation to sell its interests, am I to understand that we shall have only a one-and-a-half-hour debate on this most important matter, which takes away from the corporation a profitable undertaking? Is it right that we should have only an hour and a half of debate on it?
Mr. Pym: That is the normal time for a prayer. It is an Opposition prayer, and the normal time will be allowed for it.
Mr. David Winnick: In view of Monday's business and its importance, could there not be a change in the traditional pattern, since the Minister of Agriculture, Fisheries and Food has clearly put forward views that are an alternative to the majority of opinion within the Cabinet? Will it be possible for the Minister to have the opportunity to say in the House more or less what he said on television last Friday?
Mr. Pym: No, Sir.
Mr. Tam Dalyell: The Leader of the House will recollect that he promised in March that there might be a debate on the Government's less than satisfactory White Paper on biotechnology. Is there any chance of this happening before November?
Mr. Pym: I should like to check up on that. I thought that we might: have had a debate in Committee, but if I am wrong about that I should like to investigate. I certainly have considered the matter and thought that it had been disposed of in that way. I shall check on that and let the hon. Gentleman know.

Business of the House
  WATER AND DRAINAGE RATES (PROPERTY EXEMPTIONS)
  Mr. Gerry Neale presented a Bill to exempt domestic and commercial premises without any mains water or mains drainage services provided by the appropriate local water authority from being charged water and drainage rates and to regulate the method of charging general and water rates on small business premises used partly as residential premises: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 196.]

QUESTIONS TO MINISTERS
Mr. Alfred Dubs: On a point of order, Mr. Speaker. May I raise with you a question concerning what happened yesterday evening in relation to the procedure for putting down questions for oral answer after the recess? Apparently, the Government put in a motion to the Table Office yesterday evening indicating the dates for the recess, with the result that any hon. Members who happened to be around and heard of it were able to put down oral questions for after the Summer Recess. The rest of us did not know about it. If that is to happen in future, there will be a temptation for hon. Members to hang about in the hope of getting hints of what the Government have in mind. I appreciate that this is not a point of earth-shattering importance, but a matter of principle is involved, and I ask you, Mr. Speaker, to be good enough to give it your attention.
Mr. Speaker: I am obliged to the hon. Member, who gave me notice that he would seek to raise this point of order. It is the case that the Table Office was enabled to receive oral questions for after the recess last evening once the motion making the proposed date of return public was tabled.
Several hon. Members took advantage of their right to table such questions, and I directed that the random selection process should take place at 10 pm, which was the latest time to allow the questions to be printed.
It would be unfair to those hon. Members who knew about this opportunity if I were now to change my decision, but I have sympathy with the hon. Member's contention that the tabling of a motion is not a satisfactory way of making the recess dates generally known.
I now rule that, in future, if the intended dates are not announced in the House, as is usual, the day on which a motion appears on the Order Paper will be the first day on which questions can be received. That will, I think, meet the hon. Member's point.

Adjournment (Royal Wedding and Summer)
Motion made, and Question proposed,
That—
(1) this House at its rising on Tuesday 28 July do adjourn till Thursday 30 July and at its rising on Friday 31 July do adjourn till Monday 19 October.
(2) on Friday 31 July, upon a Motion being made by a Minister of the Crown at the conclusion of Government business, That this House do now adjourn, Mr. Speaker shall not interrupt the proceedings thereon until the expiration of five hours after their commencement, and
(3) this House shall not adjourn on that day until Mr. Speaker shall have reported the Royal Assent to any Acts which have been agreed upon by both Houses.—[Mr. Le Marchant.]
Mr. Speaker: I have selected the amendment in the name of the hon. Member for Keighley (Mr. Cryer).
Mr. George Cunningham: On a point of order, Mr. Speaker. As you know, a large number of important subjects have been put down to be discussed in the second debate this evening on the Consolidated Fund Bill. I wonder whether it would be possible for you to use any influence, within reason, to persuade hon. Members not to protract this first debate excessively.
Hon. Members: Shame.
Mr. Speaker: Order. That is a fair point, because it is easy for those who have spoken to disappear, and those who have taken part in the ballot on the Consolidated Fund Bill may find that their subjects are not reached until about 4 o'clock or 5 o'clock in the morning when they should have been reached much earlier.
The Chancellor of the Duchy of Lancaster, Paymaster General and Leader of the House of Commons (Mr. Francis Pym): Perhaps I may comment on that matter, Mr. Speaker, because it echoes a note with me. We must remember that tomorrow is Friday and that the House meets at 9.30 am. That means that the Consolidated Fund Bill proceedings must conclude a little before that time, so we are slightly more limited than on some occasions. We must also remember the weight and importance of the subjects and the length of the list. Therefore, I believe there is something in the hon. Gentleman's point. It may be for the convenience of the House if, after a couple of hours or so, I were to comment on the points that will doubtless be raised in the intervening time. We can then see how matters proceed from there.
Mr. John Silkin: I should like to associate myself with what the Leader of the House has said and, indeed, with the point of order raised by my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham). It would be grossly unfair to many hon. Members, particularly in view of the limited time available to us, if this debate were to be protracted for too long. I believe that two hours would be about right.
Mr. Speaker: I am much obliged.
4.27 pm
Mr. Donald Coleman: It would not be right to adjourn as proposed without the House taking every opportunity to draw the Government's attention to the dreadful problem of unemployment that afflicts the people of this country.
512
I know that we shall be debating this problem next Monday in the debate on the motion of no confidence, but the situation gets worse by the day, and the prospect of more people becoming unemployed becomes not only a nightmare but a fact of life as each month's figures are released by the Department of Employment. The figures that have just been released show that more than 2·8 million people are jobless. That is a crime against the people of Britain, especially the young.
I want to raise another aspect of unemployment that we may not have been accustomed to take into account in the past. Unemployment is no longer a problem affecting only the untrained and unskilled. It now affects those who are highly trained and highly qualified. This week we read about young doctors who cannot find jobs, and we are, of course, aware of those who have graduated from our universities and colleges with no prospect whatever of obtaining employment. What an indictment that is of the Prime Minister and her policies. She and her Government have brought Britain to this situation.
This week I also read with horror the shock forecast that there could be 7 million jobless in Britain within the next 20 years. That forecast was made by the Remploy chief, Mr. Trevor Owen, who said that ever-rising unemployment was inevitable without a total rethink of our attitude to work. I fear that he may be right, for we are getting no recognition whatever from the Government that their policies are the cause of the escalating unemployment from which we are now suffering. Until there is such recognition and their policies are halted, the rush towards Mr. Owen's forecast will accelerate.
Since the Government came to power, unemployment in Neath has risen from 7 per cent. to 16 per cent. I was told about a week ago that, since the Government came to office, unemployment in Neath had risen by 88·5 per cent., but we now know from recent figures that that level has been passed, because unemployment continues to rise.
In debates in the House and on other occasions elsewhere I have called for a restoration of the special development status of which the Government robbed my constituency. I make no apology for doing so again today, and with even greater urgency than before in the face of the latest figures which show that Neath has the highest unemployment in West Glamorgan. The county includes Port Talbot steelworks, where heavy losses in employment opportunities have been sustained. I wonder when the heartlessness of the Prime Minister and her Government will end.
With that heartless attitude in mind, I turn to another matter. My right hon. and hon. Friends have had raised with us in West Glamorgan, and we in turn have represented to the Government, the issue of casual workers employed on a temporary basis in the Driver and Vehicle Licensing Centre at Morriston in Swansea. We have tabled an early-day motion, we have questioned and written to Ministers and we have met the Minister of State, Department of Employment, but still those people suffer injustice at the Government's hands.
Those young casual workers were taken on by the DVLC for a period of four weeks, which they were told might be extended to about 20 weeks. They were hit by the Civil Service dispute, suspended without pay for a fortnight, and then given the sack. They have been refused unemployment benefit because it was alleged that they

513
were strikers. The Department refuses to issue to them the necessary form to enable them to obtain supplementary benefit.
One of their number appealed against the Department's decision. We were told that the delay due to that appeal was the reason why the matter could not be dealt with earlier. The appellant had his appeal upheld, but the Department still refused to act, other than in a vindictive manner, since it has now appealed against the tribunal's decision. Those workers are still without money. Will the Leader of the House tell them today how they are expected to live? Is he happy that nothing is being done to end that injustice to them?
There is another matter that should be aired today before we pass the motion. The British Gas Corporation made a profit of £381 million last year. Yet, according to Sir Denis Rooke, the chairman of British Gas, the Government are forcing the corporation to increase its prices by 10 per cent. in October, following a 17 per cent. increase in April. I have received complaints from my constituents about this shocking price increase, which is crippling consumers and which the chairman seems not to believe to be justified.
The Minister for Consumer Affairs was elected to the House in 1970 on the promise by the then leader of her party to cut prices "at a stroke". But the only evidence of a stroke that we have is her reluctance to do anything about price rises—for example, the increase complained of by my constituents and by the chairman of British Gas which is being forced upon us by the Government.
Parliament goes into the Summer Recess in a worse shape than at any time since the end of the war. It is not Parliament that should be going away, but the Prime Minister and her wretched Government.
4.35 pm
Mr. Chris Patten: I do not want to detain the House too long this afternoon, but, if hon. Members will forgive me, I should like to make a case for detaining it for a short time in August. But even under my proposal I am sure that we should be able to rise and let Opposition Members get away to the grouse moors by the twelfth.
My reason for wishing to detain the House is, I am afraid, all too familiar. I should like to deal briefly with the history of the matter. My constituency—I speak as a Bath nationalist—was ripped in the most untimely way from the bosom of Somerset a few years ago in one of the saddest episodes in the history of the Conservative Party and the city of Bath.
By a fortunate chance, we had a Conservative group in charge of the destiny of Avon for the first few years of its life, but that was changed this spring when the local elections in Avon were won by the Labour Party. I want to be entirely fair to the Labour Party in my constituency—[HON. MEMBERS: "Why?"]—because I am a very fair-minded man. When it campaigned in the local elections, it did not say that it would hold down the rates, nor did it pledge that there would be no increase in the rates. It said that there would be an increase of 1p.
However, within two and a half months of winning the county elections in May, the Labour Party announced that there would be a supplementary rate of 9p. That decision was guillotined through the county council, and hon. Gentlemen will be pleased to know that it was supported at county hall in Bristol by the Liberal Party.
Mr. Michael Latham: Liberal Members are not here.
Mr. Patten: No, the Liberal Party is not represented here today. The proposal was, I suppose, an echo of the old Lib-Lab alliance. I think that the Avon Liberals have the same difficulty as the Croydon Liberals—they have not yet heard that their promiscuous party has got into bed with a new Labour Party.
That supplementary rate this autumn, which I dare say will be followed by another big rate increase next spring, will have a number of obvious effects. The local business and commercial community has made it clear that it is a stab in the back. The Labour Party talks a great deal—and the hon. Member for Neath (Mr. Coleman) has just done so—about the difficulties of industry in the recession. But we all know that Labour Members largely shed crocodile tears. The problems of industry in my constituency and elsewhere in Avon will be made far worse by the rate increase which it will have to bear.
A well-known crane manufacturer in my constituency will be faced with a bill for £20,000 as a result of that increase. An internationally famous printing company will pay an extra £6,500. A small but very successful valve manufacturer will have a bill for an extra £2,800. The chairman of the chamber of commerce in Bath said that every extra £5,000 on the rates will mean at least one lost job. Another local company has said that it will not be able to take on any apprentices this year because of the supplementary rate. Therefore, the first result of the supplementary rate will be to clobber industry and commerce in my constituency and elsewhere in Avon.
The second group that it will clobber are the single elderly, who will face at least an £18 increase in their rate burdens this winter, yet the Labour and Liberal Parties talk a great deal about their concern for the pensioner. I do not believe that there is anything more unfair or more redistributive than the present domestic rating system. In this case, it is redistributing resources from elderly and single pensioners to members of the National Union of Public Employees and to better-off families. Therefore, the pensioner ratepayer is being hit particularly hard, in addition to industry.
Thirdly, my district council is being hit very hard. That district has had a very good record on rates, having managed to hold them down year after year, and it was even able to cut them this year. However, because of the supplementary rate this autumn, it will be faced, first, with an increased bill of £20,000 on its own properties and, secondly, with the cost of putting out new rate demands and adjusting rate rebates, instalment payments and so on. It will have to take on more staff, and that will cost a great deal more money.
I believe that there is a strong case under the Local Government Act 1972—this was one of its better provisions—for the county council to make a contribution to the city council's costs in carrying through that supplementary rate this autumn.
I know that what is happening in Avon is happening elsewhere. Tonight's edition of The New Standard has a front page article about Mr. Ken Livingstone. Until recently, we had been able to regard him as a figment of the imagination, although now we shall have to start paying for him. The article says:
"GLC leader Ken Livingstone stunned London council leaders by announcing a 120 per cent. County Hall rate rise just

515
seconds from the end of a meeting. … John O'Grady, moderate Labour leader of Southwark Council, said: … 'The GLC is in a Walt Disney situation'."
That is true. There is to be a rise of 120 per cent. in London. We have not yet reached that sort of level in Avon, but some people are working on it.
In those circumstances, it is important that we should consider the future of domestic rating, and, if possible, I should like us to do that in August. I know that that raises important constitutional issues. Some people think that we should do away with domestic rating altogether and should, in effect, make local authorities agencies for the Government. I can see the attractions of that point of view, although I have never taken it.
I believe in local democracy. It is essential for local democracy to have a local revenue base. Therefore, I should like to see us controlling that local revenue base, and the powers of local authorities to levy taxation themselves, through more local democracy rather than less, or through more central control. I believe that there is a very strong case for that, using the precedent of parish councils. Hon. Members will recall that parish councils can levy a certain rate but that if they go beyond that they can do so only with the approval of a parish meeting. I should like to see that principle applied to higher tiers of local authorities.
Mr. Frank Dobson: Would the hon. Gentleman be prepared to accept the same concept of limitation to be applied to taxation increases by the present Government?
Mr. Patten: That is what we do in this House. As I mentioned earlier, when this decision was taken in the council chamber in Bristol, it was taken on a guillotine, which, of course, would never be done when discussing a taxation measure in this House.
When a local authority wishes to levy a supplementary rate or to increase rates by more than the going rate of inflation, it should be allowed to do so when it has the approval—
Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. I trust that the hon. Member for Newcastle upon Tyne, West (Mr. Brown) is not reading a newspaper.
Mr. Robert C. Brown: I was just glancing at it, Mr. Deputy Speaker, not reading it.
Mr. Patten: Perhaps I can go on. It was obviously The Daily Telegraph.
I believe that a local authority should be able to act in that way only when it has the support of a majority voting in a local referendum for such a rate increase. I go one stage further. I would apply the principle which I believe was put forward in the devolution debates in the previous Parliament by the hon. Member for Islington, South and Finsbury (Mr. Cunningham), who suggested that that majority must comprise 40 per cent. of those entitled to vote. I believe that that proposal would have a great deal of attraction all round.
First, it would attract members of the Labour Party. After all, we would be reintroducing the principle of referendums. The Labour Government had a very successful referendum—I know the right hon. Member for
516
Deptford (Mr. Silkin) will agree with this—on the European Community in 1975. They then had further successful referendums, for which we were all extremely grateful, on the devolution Bills relating to Wales and Scotland. I am sure that the Labour Party would greatly approve of this proposal because it would introduce more local democracy. Anybody who is in favour of reselection must obviously be in favour of giving the ratepayer a bigger say in local taxation. It would be popular with local industry and with local ratepayers as a whole.
I am tempted to go further and suggest the popular initiative referendum that the Swiss have, in which local taxpayers can, I believe, recall a local authority in certain circumstances. But that is a subject that we can consider another day and debate in another August. For this August, I suggest only that we deal with the scandal of the rating system—a scandal made all the worse by local authorities, such as the Avon county council and the Greater London Council, which are piling burden after burden on industry and ratepayers, even while shedding crocodile tears about the effects of the recession.
4.46 pm
Mr. Frank Dobson: I seek to oppose the Adjournment of the House until it has had the opportunity to discuss a most important matter affecting the Attorney-General.
The Attorney-General recently decided to adopt—I understand that that is the correct word—the case of Barrs and others in their legal action against Bethell and others. I put down a question to ask
"what considerations he bore in mind when deciding to adopt the case".
The right hon. and learned Gentleman said:
"I gave my consent to relator proceedings in the case of Barrs and others v Bethell and others because only the Attorney-General can sue on behalf of the public for the purpose of preventing public wrongs. The ratepayers in this case did not have sufficient locus standi to bring the action in their own right."— [Official Report, 20 July 1981; Vol. 9, c. 19.]
I regard that as a most unsatisfactory reply, partly because it sounds as though the Attorney-General was obliged to say "Yes" to the application by Barrs and others for his approval of their action. That is not so. The Attorney-General has a clear right to decide whether to say "Yes" or "No" in such circumstances, and it is to the House that he is answerable for the exercise of that judgment. That was made clear by the judgment of the House of Lords in the notorious Gouriet case in the previous Parliament.
Therefore, because of the widespread ramifications of this case, the House should examine the considerations which the Attorney-General bore, or should have borne, in mind. To explain those considerations, I shall briefly outline the case.
Barrs and others are three ratepayers in the London borough of Camden, although one of them was not a ratepayer—at least, not to the full extent—until the council took legal action to make him pay. Bethell and others are councillors of the London borough of Camden. In the action it is claimed that those councillors have used their control of the council to follow policies on which they went to the electorate—namely, that there should be no rent increases, in effect, until they are forced by the district auditor, that there should be no cuts in services and that there should be no redundancies in the direct labour department.

517
Bans and others contend that those policies were unreasonable, improper and unlawful. They say that because the policies led to increases in rates, because the council had not acted to maximise the amount of money obtainable under the new rate support grant system and also because the council had defied the Government by bringing a le gal action against the Secretary of State for the Environment.
The nub of the ratepayers' case is that the councillors have a fiduciary duty to them akin to the duty of trustees to the money for which trustees are responsible. Barrs and others went to the High Court. Mr. Justice Warner is quoted in The Times report as saying:
"Manifestly local authorities were particularly vulnerable to actions by busybodies and cranks".
He said that in the circumstances Bans and others had no locus standi in the case, and that they could continue their action only if the Attorney-General agreed to join in it.
The Attorney-General did so. According to newspaper reports, he had previously given Bans and others an undertaking that he would decide whether to join in within 24 hours of the judgment. That seems rather odd. He managed to meet his 24-hour deadline despite the fact that for most of those 24 hours he was in Strasbourg. I should like to know, and I believe that the House ought to know, what considerations were in the Attorney-General's mind when he decided to join in the action.
The affected ratepayers have other remedies. They could go to the district auditor. Not many Opposition Members approve of that office, but none the less it exists, and the district auditor is fully capable of investigating past and present expenditures of local authorities. Indeed, the district auditor is doing so in respect of certain expenditure by the council in question. Another course of action would be for people affected to seek an injunction to prevent the continuation of any current action or inaction by the local authority. It is also open to them to seek judicial review of the administrative actions of the council in respect of both past and current actions.
The expenditure on the court action by Camden council against the Secretary of State for the Environment is being shared with at least five other councils. That action was currently proceeding in the courts when the Attorney-General decided to join in the case. Moreover, the councils needed leave from the High Court to proceed with the original action. It thus seems a little odd that the Attorney-General joined himself in an action that seemed to be in contempt of the decision of the High Court on a case that was already proceeding.
Section 161 of the Local Government Act 1972 provides certain defences for councillors against accusations of illegal expenditure. Those defences are that the person involved
"acted reasonably or in the belief that the expenditure was authorised by law."
Parliament provided that defence for all councillors faced with an action by the district auditor, or, as I understand it, if anyone were seeking judicial review or an injunction. However, in this case that defence will not apply, and the Attorney-General has put his name to an action which, if successful, will set aside the protections that this House has provided for every elected councillor in the land. The main aspect of that protection is that, if a councillor acts in what he regards as good faith, his action is not challengeable in the courts.
518
This is a most serious matter—a fundamental threat not only to the 30 Camden councillors but to every elected councillor, be he Tory or Labour, throughout England and Wales. Apparently, as a result of the Attorney-General's decision, all of them can look forward to the Attorney-General endorsing and joining in actions by busybodies or cranks who allege that policies which groups of ratepayers do not like are illegal.
I believe that this action by the Attorney-General, which is dependent on public policy, is the result of a political decision which in effect backs up the efforts of the Secretary of State for the Environment to transform the whole nature of English local government. Whereas the Secretary of State for the Environment has at least the merit of bringing his proposals before the House of Commons, the Attorney-General's action may be just as drastic in its effects and has not been debated by the House.
4.55 pm
Mr. Paul Dean: I am grateful for the opportunity, before we come to a decision on the Adjournment motion, to refer briefly to one important item of unfinished business—the rating system. This matter has already been mentioned by my hon. Friend the Member for Bath (Mr. Patten) and by the hon. Member for Holborn and St. Pancras, South (Mr. Dobson). I regret that the rating system remains unreformed. Therefore, I hope that it will not be long before the Government bring forward definite proposals to deal with existing grievances.
There is now a new grievance in many parts a the country—my hon. Friend the Member for Bath referred to it a moment ago—concerning the supplementary rates which are being imposed by certain county councils. The Avon county council, which has a wafer-thin Labour majority, proposes to impose a supplementary rate of 9p. It got this proposal through with the support of the Liberals, and it will take more than £10 million extra out of the pockets of Avon ratepayers this year.
The county council is trying to blame the Government. I find its arguments wholly unconvincing. The county council must accept responsibility for its own policies and not to try to shuffle it off on to someone else. The Conservative leader on the Avon county council —Councillor Mather Bell—has categorically stated that if a Conservative county council had been elected there would have been no supplementary rate this year.
There was no warning during the election campaign of an increase of this magnitude, and it is no wonder that there has been strong opposition to it. Opposition has come from hard-pressed ratepayers, from many of the district councils in the county as well as from county councillors, and from those engaged in industry and commerce who fear that the extra burden will destroy jobs and mean less investment.
This new impost ignores the reality that wealth must be created before it is spent. It is insensitive to economic pressures on individuals and companies, it puts jobs in jeopardy and it makes it more difficult to get down the level of unemployment. It also undermines the strenuous efforts being made in Avon to provide work and training for school leavers.
If this were merely a local issue, it could be left to be settled locally. But it is not. It involves national issues, which are the responsibility of the Government. The biggest council in the country—the GLC—is now run by

519
people whose declared intention is to take on the elected Government at Westminster. I acquit the leaders of the Avon county council of any such intention. I know and respect them. But the combined effect of what the political wild man of the GLC and some other county councillors are doing would be to undermine the economic policy of the national Government, who are sustained by the national Parliament. No Government can stand idly by in such circumstances.
Mr. Michael Colvin: My hon. Friend seeks to acquit the Labour leader of Avon county council of an ulterior motive. However, does he agree that it was not until the election victory speech of Councillor Bill Graves that he suggested that there might be a 1p increase in the form of a supplementary rate to meet the additional programme spoken of during the campaign which was I think, 800 per cent. inaccurate? Does he also agree that Councillor Graves suggested to Avon's ratepayers that he would send an explanatory letter with the supplementary rate? If he was so inaccurate during his election campaign, why should Avon ratepayers believe any letter which he may send by way of explanation?
Mr. Dean: I am grateful to my hon. Friend for his intervention. It reinforces the strong sense of grievance which he expressed, which my hon. Friend the Member for Bath expressed and which, no doubt, my hon. Friend the Member for Bristol, West (Mr. Waldegrave) will express if he catches your eye later, Mr. Deputy Speaker.
Until comparatively recent times, local government generally accepted that it must work within the economic and expenditure framework laid down by central Government. Indeed, a Labour Secretary of State for the Environment, the late Tony Crosland, referred to the party being over. That phrase reverberated around the shires and county halls. Of course, he was asserting the necessity for central Government to have control over such matters. Until recently, councils have abided by that. However, if this check and balance in our unwritten constitution is to be challenged by Labour councils, the Government have no alternative but to restore the balance.
I do not believe that the powers of central Government to deal with the situation are adequate. There is evidence that existing powers sometimes penalise prudent as well as spendthrift councils. The main weakness is that often the powers can be exercised only when the damage has been done. For example, at present there is no power to stop or to moderate supplementary rate demands.
Therefore, I believe that there are two spheres in which Government action is required, and I hope that my right hon. Friend the Leader of the House will be able to comment on them during the debate. The first concerns the intensely irritating situation which results from district councils having to collect and pay for supplementary rate demands imposed by county councils.
I cite one example to illustrate my point—the Woodspring district council, in whose area I happen to be a ratepayer. That council has an exemplary record of good housekeeping and prudent management of other people's money. It has responded to Government calls for economies. Its rate increase has been a modest 3 per cent. a year, on average, since 1974. The cost of collecting the supplementary rate will be £75,000, and it is possible that such additional expenditure could put the council over its
520
expenditure target. If so, will the council be penalised by my right hon. Friend the Secretary of State for the Environment? That would be most unjust. It is bad enough that the council should have to collect and pay for an impost with which it disagrees. It would be monstrous if it were penalised for overspending as a consequence. I hope that my right hon. Friend can give an assurance on that matter.
Mr. Michael Shersby: I wonder whether my hon. Friend and the local authority concerned have considered the possibility of including the cost of collecting that supplementary rate in the supplementary rate itself, so that the cost of doing so is passed on to the ratepayers as a complete package deal. I believe that only if that is done will ratepayers realise that it is not only the extra amount but the cost of collection that will cause them hardship.
Mr. Dean: I am grateful to my hon. Friend for that helpful and constructive suggestion. I shall pass it on to the Avon council.
The second matter on which action is needed concerns control over the rate increases that councils can impose in any one year. I regret the necessity for such control, but we have national democracy as well as local democracy. Therefore, if councils such as the GLC set out to usurp the authority of the elected Government and Parliament, they have only themselves to blame for the consequences.
Facing that situation, the Government should seriously consider putting some limit on rate increases or providing for a local referendum of ratepayers for any proposal beyond that limit. I agree with the suggestion made earlier by my hon. Friend the Member for Bath. I hope that my right hon. Friend the Leader of the House can give a clear assurance that the Government are seriously considering action on those lines.
Our supporters are entitled to know that the Government will not allow Labour councils to undermine Government policy which is supported by Parliament. Ratepayers are entitled to protection from councils which attempt to use them as political footballs. Parliament is entitled to know that the Government will deal firmly and fairly with such threats.
5.7 pm
Mr. Thomas Cox: I am pleased to be able to take part in this debate. The issue to which I wish to refer is that of unemployment in South London. I do so because of the disastrous effects of unemployment there. The House will know that, sadly, in the past few weeks, there has been much social unrest in that part of London. Much of it can be attributed to the fact that there are few job opportunities for people of all ages in South London.
This week, the latest unemployment figures have been published. A total of 2,800,000 people are officially out of work, but many others are now on short-time working. They, too, face enormous problems. There was a time when one could travel throughout London from one borough to another and find work. The latest figures show that in the borough of Wandsworth 11,000 people are now out of work. In Lambeth 14,000 people are out of work, and in Merton the figure is 4,500. Those boroughs adjoin the London borough of Wandsworth. In the GLC area, there are now 283,000 out of work.
There was a time in Wandsworth when industry stretched from Nine Elms along the river frontage as far

521
as Putney. Those industries employed hundreds of people. Now, all those industries have virtually disappeared. I am sure that many hon. Members go along that river frontage and see the utter despair in that area which, not so long ago, provided enormous job opportunities not only for local people but for people from surrounding areas who came into the borough to work.
I have asked many questions recently and I find the answers to all of them extremely depressing. I am told that in 1979–80 about 280 firms closed down in London. We rightly talk a great deal about the problems of the young unemployed, but I suggest that problems exist for people of all ages. A person in his early fifties who has possibly never been out of work now often finds, through no fault of his own, that the job in which he has been employed and no doubt looked to continue for the rest of his working life has finished and with it his hopes of finding alternative work.
What concerns me deeply is that we have a Prime Minister and other Ministers who are always telling us what is wrong and what the people must start to do. It sounds wonderful, yet it means nothing. It means nothing when one speaks to people who live in South London—and I cannot believe that they are any different from those who live in North London or in any other part of the country. Despite all the evidence, they do not believe that the Government really understand the basic problems in our areas or are prepared to face those problems.
When I hear the replies to my questions, I have to agree with the views of my constituents.
A week or so ago, I asked the Secretary of State for Employment about the increased number of training centres that he proposed to open in Greater London. The reply from the Under-Secretary was "None." In view of all the unemployment and the enormous social problems that it sadly causes us, that reply only a few days ago is a clear indication of the Government's total lack of concern about the real problems that they must start to face.
Our debate last Thursday did nothing to give hope to people in London. I do not know what hope it will give to the people of Liverpool and Toxteth, or what hope the presence of the Secretary of State for the Environment will give the people of Liverpool and Toxteth. Only time will tell. But I hope that the Government are starting to understand that throughout the country a generation of young people are growing up who have done what they were repeatedly told to do at school—to pay attention, to study and, to lay the basis of an academic career that would ensure they had meaningful jobs once they finished their education They see now that, despite all their attempts to do what they have been told, once they leave school they come into a society that offers them no hope for the future.
Yet we all know—we discuss it here very often—that this is still a country of enormous wealth and a country that still has vast resources. But I cannot understand—and the people cannot understand—how the Government can appear to be content to spend thousands of millions of pounds on keeping people in idleness and unemployment. The Government have to start to convince the people that they are really concerned about the problem and are changing the disastrous policies that sadly they have pursued for so long.
522
I am sure that all London Members, whether they come from South or North London, will find that the issue most raised in correspondence and referred to most often in their surgeries is that of housing. In London, there is an urgent need to improve the present housing stock and to build more houses. Yet house building in London is now virtually at a standstill.
Where is the sense in allowing that to happen when, if the Government and the Department of the Environment allowed the renovation of existing properties or the building of new ones, we should not only provide houses but create enormous job opportunities and valuable spin-off in the provision of equipment needed for the building of those houses? Every hon. Member knows that there will come a time when those houses will have to be built and the existing stock will have to be repaired. The longer we delay, the more problems we shall ultimately face.
We in London—particularly in South London, part of which I represent—are asking the Government how they can possibly fight against the backlash of the events that they know have taken place and allow the situation to continue. The one thing that we in London do not need is reports, surveys and high-powered investigation teams coming into our area to find out what is wrong. Any hon. Member, whether on the Government Benches or on the Labour Benches, could tell the appropriate Minister just what is wrong and what we, as the respective Members of Parliament, say is needed in our areas. I only hope that the Government will start to listen to the cries that they now hear, not only from the Opposition Benches but often also from their own party.
If the Government do not pay attention to the cries for help, those of us who try hard to work with our local authorities and to have a meaningful relationship with our local police authorities—everyone accepts that the local police have a difficult task to perform—will find that our words will count for absolutely nothing. No one will believe us, and people will say "You are the elected Member. Tell us how successful you have been." Sadly, what we have witnessed in South London and in many other parts of the country over the past few weeks will start up again. I do not believe that any of us, whatever party we belong to, can allow that to happen. Whether it does happen will depend on the future policies of the present Government.
Will the Government start to work with the Greater London Council and with the appropriate authorities? Will there be meaningful discussions about how we can create employment in our areas? That will cost money. I heard a comment earlier today about the Secretary of State for the Environment visiting Toxteth with his cheque book closed. If he is to learn anything from his visit to Liverpool, he will quickly learn that that cheque book will have to be opened and some cheques will have to be signed.
Obviously, we must discuss how we shall spend that money, but unless the people of South London and throughout the country hear a response from the Government soon the future problems which, sadly, we may encounter will be the direct responsibility of the Prime Minister, in particular, and also of her Ministers.
That is the test which the Government face. Let us hope that when the Leader of the House winds up the debate he will give hope not only to areas such as my constituency, and not only to South London, but to the entire country.
Several Hon. Members rose—
Mr. Deputy Speaker: Order. Before I call the next speaker, I remind the House that it was generally agreed that this debate should last for about two hours. If hon. Members speak for more than about eight minutes, some of their colleagues will be disappointed.
5.19 pm
Sir Bernard Braine: I would not normally oppose the motion that we adjourn for the Summer Recess. Hon. Members on both sides of the House have had a gruelling time during the past few weeks, and they need a respite. Indeed, the speech we have just heard, delivered with great sincerity and out of a deep concern for the situation in South London, reflected the strain which some hon. Members have had to bear.
There is, however, in my view, a compelling reason why the House should not rise before a clear statement is made by the Government on a matter that affects directly the safety of at least 34,000 of my constituents and also concerns public confidence in the quality of the advice given in this area to Ministers.
I make no apology for raising this matter, because if I remain silent and the House goes into recess for almost three months, there will be no means of compelling a Minister to explain his actions—or, in this case, his inaction—to Parliament, and a danger that could affect the safety of a very large number of people will be allowed to continue.
I shall be as brief as possible, because I wish to respect your request Mr. Deputy Speaker, but it is necessary to describe the background to the very serious charge I am making.
On Canvey Island, in my constituency, 34,000 people live next door to the largest concentration of gas, chemical and oil storage installations in the kingdom. I shall not recite the story of our long and bitter struggle to stop the destruction of our environment by the deliberate piling of hazard upon hazard in a confined area, in defiance of the wishes and the objections of the local people and their elected representatives. The House has heard me speak on that subject before. Suffice it for me to say that five years ago our plea seemed to have been heard.
The newly established Health and Safety Executive was asked to investigate the totality of the risks to which our people were exposed. The Health and Safety Executive's report, which was published in 1978, justified our worst fears by identifying a terrifying array of risks to health and safety—each serious enough in itself but compounded by its close proximity to others.
The report showed that the risks from gas, oil and chemical installations already operating in the area were undeniable, unacceptable, and would have to be reduced. These risks embraced the possibility of explosions rupturing storage tanks and causing burning liquids to reach people's homes, spreading fire and destruction en route; of escaping ammonia killing people; and of spillages of liquefied gas giving rise to clouds of flammable mixture that could ignite and explode either over the installations or over the residential area. The report demonstrated all too clearly the fact that in the event of an accidental release of gas, nothing could be done to prevent disaster.
The report dealt too with the possibility of collisions involving tankers carrying hazardous cargoes. Also, for
524
full measure, it drew attention to the complex network of pipes crossing the area carrying liquefied gases and to the possibility of something going wrong with ammunition loading off the eastern tip of Canvey.
The report even revealed a risk that none of us knew existed, namely, the accidental release of highly toxic hydrogen fluoride, which can also kill people. Its most significant finding, however, was that the British Gas methane terminal, which receives 12,000 tons of liquefied natural gas every week and stores vast quantities of both LNG and LPG close to people's homes, constituted one-third of the total potential risk for the whole area.
The report made some suggestions for reducing those risks, not all of which, we have subsequently discovered, were practical. It also reached a conclusion that well-nigh destroyed the credibility of the Health and Safety Executive, namely, that when the HSE's suggested improvements had all been carried out and the level of risk reduced by about half, additional hazards in the form of oil refineries could be safely introduced to the island.
That was in 1978. Since then we have had several narrow escapes. There have been fires on tankers while discharging petrol and naphtha. We have had revealed the appalling neglect of elementary safety precautions at the methane terminal. It is almost unbelievable, but true, that at the very time that the Health and Safety Executive was advising the local authority not to allow, for the sake of safety, any additional planning permissions within a 1 km radius of the terminal, the management inside the terminal was taking risks with fundamental safety precautions. It was not until over a year later that the HSE tumbled to what was happening and served three enforcement notices. In my view, there should have been sackings.
Last summer saw the holding of a long-delayed public inquiry into the totality of the risks that the islanders face. It was presided over by an inspector, General Sir Richard Ward, who brought exceptional qualities of patience and understanding to a very difficult and complex hearing. His report, published in March this year, went right to the heart of the matter—although it has not yet been debated in this House—and for the first time the gravity of our position was exposed to full view. That report concluded, first, that such was the concentration of hazard in the area that no less than ¼ million people over a wide area of South Essex were at some risk.
Secondly, the report concluded that a major spill of LNG, LPG, hydrogen fluoride or ammonia
"could kill a great many people"
and that
"such a disaster would not only totally shock, but would totally undermine the country's confidence in planning and environmental policies where potentially dangerous installations were sited near built-up areas."
Thirdly, the report concluded that the risk would remain very great in spite of the improvements that the Health and Safety Executive was determined to achieve, but that even after suggested improvements had been made the people of Canvey
"were confronted with nearly 10 times the chance of being killed by an accident from the installation than by being killed in a car crash."
Fourthly, it was said that the methane terminal had a bad reputation and that there was no confidence that the necessary safety standards would be maintained, that British Gas witnesses were unconvincing, and that consideration should be given to closing down the terminal altogether.

525
No Government could possibly ignore such a report. My right hon. Friend the Secretary of State for the Environment acted with commendable speed. In a statement on 24 March he announced that a full inquiry would be held into the safety of the terminal, pending which decisions on planning permissions in respect of other hazardous industry would be suspended. That was a wise and timely decision that was warmly welcomed by everyone in South-East Essex, including the local authority.
In the meantime, however, British Gas announced its intention to reactivate the liquefied petroleum gas pipeline connecting the terminal with the oil installations to the west of the island, in Thurrock. The House can imagine our consternation in South-East Essex when we learnt that the HSE had advised my right hon. Friend the Secretary of State for Employment that it saw no reason to oppose this on grounds of safety. That advice, as I shall show, was contradictory, illogical and totally unacceptable to the people of Canvey and to me. [Interruption.] The hon. Member for Keighley (Mr. Cryer) is normally interested in matters connected with the Health and Safety Executive. I am glad to see that I have his sympathy and support.
Incredibly, the disposition of my right hon. Friend the Secretary of State for Employment is to accept that advice, and for the past four months I have been battling with him. The time has now come to reveal to the House what has been happening and to demand a clear statement and firm decision before the House rises.
I make it plain that I am not just expressing an opinion. I base my argument on fact. The HSE report published only three years ago was quite categoric about the dangers of the LPG pipeline, along its entire length. On page 20 it states:
"A pipeline from the tanks crosses the area. In the opinion of the team, it would be possible for a substantial quantity of LPG to be released from any one of the three refrigerated storage tanks, giving rise to sufficient vapour to form a large cloud of flammable mixture that could ignite and explode, causing casualties in the vicinity of the terminal. While the pipeline from these tanks remains in commission, there is a chance of failure which could cause casualties."
Here I should explain that the three storage tanks are on Canvey, and the passage I have quoted makes it quite plain that the danger was and is now on Canvey itself.
On page 27, the report recommends:
"Since it is no longer in use, the pipeline from the methane terminal containing liquefied petroleum gas could be emptied and taken out of service. This would effectively remove the potential hazard of explosion for those who live near the route of the pipeline".
If the pipeline and the three storage tanks were considered a potential danger to people in 1978, when the former was not in use, how can the Health and Safety Executive advise that there will be no risk if it is reactivated now? What has happened in the interval to invalidate what was said in the HSE report? The conclusion is that either the report was wrong in 1978, in which case an explanation is long overdue, or it was right, in which case the advice that is now being given is wrong and should be rejected.
Only this afternoon, no doubt prompted by the fact that I was seeking to raise this matter on the Floor of the House, my hon. and learned Friend the Under-Secretary of State for Employment saw fit to send me a note to answer a point that I raised with him months ago. He argued that the report really meant to say that the danger was only where
526
the pipeline ran close to the homes of people living in Stanford-le-Hope, many miles away to the west of Canvey, and since that section of the pipeline would not be reactivated there was no danger to the people of Canvey. That is complete and utter nonsense, as I have demonstrated.
In fact, a few months ago I pointed out to my hon. and learned Friend that the pipeline also ran close to homes on Canvey, but his advisers chose to fudge the issue by saying that on Canvey people were living further from the pipeline than they actually were. I had the distance checked by the local authority. I told the local authority: "This is what the Department is saying; please measure the distance." This was done. The Minister was wrong. Subsequently, my hon. and learned Friend wrote to me saying that he was sorry that he had been misinformed. What he had not grasped then, and what he has not grasped now, is that the situation on Canvey is such that, pending the outcome of the proposed inquiry into the future of the methane terminal, nobody has any moral right—neither the Government, British Gas., nor anyone else—to add the slightest additional risk to those that my constituents already face.
Since the Government have decided to delay all other planning decisions affecting hazardous industry on Canvey until the proposed inquiry into the closing down of the methane terminal takes place, it would be wholly reasonable not to proceed with the reactivation of the pipeline. Not only is the credibility of the Health and Safety Executive at stake, but also that of the Department of Employment. The HSE has not only contradicted itself but has assumed that no one will notice. It has gravely misjudged us in South-East Essex. This is not a game. It is a deadly serious matter affecting the safety of very many people.
There is, of course, the wider question of whether the blunders that the HSE has committed and seems hell-bent on continuing to commit, where Canvey is concerned, do not reveal a structural weakness in the Health and Safety Commission as well as its executive arm. The House may not know that the Health and Safety at Work etc. Act provided for a commission of nine members, but only eight have ever been appointed. It is high time that something was done to shake up this cosy arrangement, possibly by appointing to the vacancy a person who has at heart the interests not primarily of industry or the trade unions but of the public at large and who is a qualified safety expert.
I ask my right hon. Friend to note that the House has never debated the workings of the Health and Safety Commission since its inception. It is high time that it did so. I hasten to add that if this body did not exist, it would have to be created. I do not underestimate the value of the routine work that it has been carrying out over the country as a whole.
For the time being, however, I ask my right hon. Friend to give me an assurance that the Secretary of State for Employment will make a statement about the LPG pipeline before the House rises, and that, in the light of what I have said, he follows the lead already given by the Secretary of State for the Environment in regard to new hazardous undertakings and directs that British Gas does not proceed to reactivate the pipeline before the inquiry has been completed into the future of the terminal. Nothing less than that will satisfy me or my constituents.
5.35 pm
Mr. Robert C. Brown: There are three issues on which I feel so strongly that I wish to oppose the Adjournment of the House.
The first is the unemployment in the Northern region in general and in Newcastle upon Tyne, West in particular. The Department of Employment press notice in relation to the most recent unemployment figures shows that there are now 211,900 people fully unemployed in the Northern region, which puts the rate at 13·9 per cent. In Newcastle upon Tyne the rate is 16 per cent. overall—I am not talking about the village in the West Midlands—and in parts of my constituency it is running at 20 per cent.-plus.
Unemployment alone, therefore, would be sufficient reason for us to be in the House on Wednesday for a debate. I have nothing against the Royal Family. I am not anti-monarchist, and anyone who wants to watch the Royal Wedding on television can do so, but there are sufficient of us interested in the problems of our constituencies to be here on Wednesday, instead of having a holiday for the Royal Wedding.
I cannot overstress the fact that in parts of my constituency unemployment is running at 20 per cent.-plus. The position is even worse when one considers long-term sickness, disability and so on. I can think of one or more areas in my constituency where probably 40 per cent. of the people are subsisting on social security—and if anyone believes that living on social security is a luxury, let him apply for the Chiltern Hundreds and try it. It is no fun.
Earlier you called me to order, Mr. Deputy Speaker, because I was reading a newspaper. I apologised and explained why. Because of the inefficiency of The Journal in Newcastle, the Post Office or the House authorities, I did not get a copy of The Journal until five minutes beforehand. In the "Opinion" column the editor talks about setting an example—and this is the second reason why I oppose the Adjournment of the House. He states:
"In February 1980, Mr. Reg Prentice, then the Social Security Minister, launched a £3 million campaign against people who fraudulently claim welfare benefits."
I abhor anyone fraudulently claiming benefits. However, that exercise required 1,000 extra staff. The article continues:
"it was believed that about £50 million could be saved."
It goes without saying that even in the parts of my constituency where 40 per cent. of the people are living on social security, that was applauded because they deplore people who fraudulently claim social security benefits. The article states:
"According to recent Government statements, the campaign is already proving more than cost-effective, and the very knowledge of its existence may well have deterred many from 'fiddling'."
That is good. The editor went on:
"How much more serious, however, is tax evasion? According to the Commons Public Accounts Committee, tax evaders cost the Treasury around £4 billion."
The Treasury consists of all hon. Members and their constituents—the taxpayers of this country. The article continues:
"the practice is so widespread that MPs believe there is a real danger of tax evasion becoming socially and morally acceptable".
The editor of The Journal in Newcastle underestimates the problem. Tax evasion has been a respectable practice for many years and the higher up the social echelon in the establishment a person is, the more respectable tax evasion
528
becomes. No one should make the mistake of thinking that the lad paying tax on the PAYE system is in the privileged position of being able to engage in the luxury of tax evasion.
Mr. Robert Atkins:Will the hon. Gentleman clarify whether he means tax evasion or tax avoidance? Tax avoidance is legitimate and should not be confused with tax evasion.
Mr. Brown: The hon. Member for Preston, North (Mr. Atkins) wants to draw a distinction between tax avoidance and tax evasion. I do not think that there is much difference between tax avoidance and tax evasion. There is nothing especially clever about a man who can employ an expensive tax avoidance consultant to enable him to avoid paying tax. I do not rate him high as a decent member of society. I put him no higher than the man who deliberately sets out to avoid or to evade paying tax.
The article goes on:
"The Inland Revenue told the committee that they are at present unable to recruit additional investigative staff because of the Government's restrictions on the size of the Civil Service."
It is an absolute condemnation of the Government that, because they place a restriction on the size of the staff of the Inland Revenue, the taxpayers are being milked to the tune of £4,000 million a year. It is a damned disgrace.
The editor of The Journal continues:
"this is one case where extra staff should be employed. As the Committee rightly say, 'It is clear that with the annual tax loss running at some £4 billion, there must be areas where the deployment of additional resources would be likely to produce direct returns of many times the staff costs involved'."
The Leader of the House will be doing the House and the nation a service if he asks his right hon. Friend the Secretary of State for Social Services to dispense with the services of the people who sit in cars trying to see whether a woman who is cohabiting with a man is getting a few quid more from social security. Such people should be transferred to the Inland Revenue, to catch some of the big fish. I do not condone the actions of anyone who tries fraudulently to gain £1 a week from social security, but it is damnable that the Government are prepared to recruit staff to harass people who are thought to be wrongly claiming a few pounds a week extra from social security while the Vesteys of this world are evading the payment of millions of pounds in taxation and the Government are not prepared to lift a finger to stop it.
The third issue on which I feel just as strongly is that which I raised on business questions—the safety of gas appliances. I hope that when we debate next week the disgraceful order that is intended to force the British Gas Corporation to divest itself of Wytch Farm, the Leader of the House will ask his right hon. Friend the Secretary of State to make a statement on the safety of gas appliances. Because of the unsatisfactory nature of the reply that I received, I intend to pursue this issue on the Adjournment because it should be discussed, if need be next Wednesday.
Mr. Deputy Speaker: Order. That will be the hon. Gentleman's opportunity to do it, rather than on a rather short Adjournment debate.
Mr. Brown: I shall be delighted to discuss it next Wednesday, but the House will be adjourned because of the Royal Wedding. I shall be deprived of the opportunity of discussing the matter then. That is why I insist on discussing it now to seek reasons why the Government will not take my point on board.

529
The decision by the Department of Trade to force the British Gas Corporation to dispose of its showrooms will have grave repercussions throughout the industry. The Minister for Consumer Affairs has been blind to those repercussions, or has sought to fob off the issues with bland reassurances. That is not enough. In the debate on the report she said:
"No solution that failed to maintain safety … would be acceptable".
That might have been reassuring for me if she had not then asserted, on the basis of who knows what evidence:
"gas appliance installation technology is comparatively low technology ."—[Official Report, 17 June 1981; Vol. 6, c. 1040–45.]
I worked for 30 years for the gas industry. The Minister for Consumer Affairs shows that she knows nothing about the British gas industry or any other gas industry in making such a stupid assertion.
Mr. Bob Cryer: The only shop floor that the Minister knows is Harrods.
Mr. Brown: The union tried to nail that point, but, having told the Minister the facts in a letter dated 25 June, it is still today, 23 July, awaiting a reply to that letter. That is the sort of attitude that the Treasury Bench takes to responsible trade unions. A month after a major trade union, the General and Municipal Workers Union, wrote to the Minister, it still has not had the courtesy of a reply. That is scandalous.
Conservative Members seem to share the Minister's hopes that gas safety will be satisfactorily assured in the private sector, dismissing completely the statistics on gas safety as partial evidence presented by the corporation.
It is worth repeating the figures. The ratio of risk of serious damage caused by faulty workmanship between British Gas and other installers is 1: 36. In other words, there is about 36 times more prospect of having one's premises damaged by explosions or otherwise with a private installer than if the installation is carried out by the British Gas Corporation. Given that the majority of gas installations are carried out by British Gas, that is a record which is hard to beat and it cannot be waved away as propaganda or by relying, as the Minister did, on assurances from Dr. King, while ignoring his qualification about adequacy. The Minister did not refer to the requirements of adequacy and she has refused to spell out what they were.
Any number of academics will queue up to say that this or that is adequate. If we put 50 economists in a room we would get 50 views on the economy, and that is true of academics generally.
The Minister recognised that the central heating installation market is potentially the most dangerous, but is the Leader of the House aware that of the 96,000 potentially dangerous installations reported in 1979 a significant proportion were concerned with central heating and the majority of incidents were connected with central heating?
For all the Minister's belief that the Confederation for the Registration of Gas Installers is adequate, when British Gas contracts out to a Corgi dealer it always inspects the completed work. There is no such inspection when the whole job is carried out by private enterprise.
Although the Minister pays lip service to the statutory codes, she seems to be unaware that Corgi states only that its installers are in receipt of the codes and have insurance
530
cover. That does not mean that, as in the case of British Gas, an individual worker is properly trained or can do the job. There are all sorts of cowboys operating in this area.
The private sector cannot maintain the work force required to ensure the full servicing and safety cover that has given the corporation one of the best safety records in the world. British Gas is able to provide that cover only because of its sheer size and the integrity of its operations. The private sector simply could not, and would not, compete when it costs more than £25,000 to train one service engineer. Bland assurances that the corporation could maintain that sort of work load when the primary impulse of the purchase of appliances has been divorced fly in the face of commercial logic.
All that has been put to the Minister for Consumer Affairs. She was obviously not listening when the unions met her on 23 June. They gave her the example of two serious incidents in the Birmingham area arising from private sector installations. Yet it was not until that example was repeated in the ATV programme "Left, Right and Centre" on 20 July that she wrote for details. That is a condemnation of a Minister who is supposed to represent the consumers' interest.
There are serious implications for emergency cover in the Government's decision. British Gas will remain responsible for emergency cover and it will need to retain a significant work force. At present, it has about 31,000 people employed on customer services. They deal with all aspects of customer service work, including installation, servicing and emergency work. Most serious observers do not doubt that emergency work is all that will be left, after a period, as a result of the Government's decision.
In that case, one of two things will happen. Either emergency work will become more expensive, as will regular servicing contracts—they are bound to go skyhigh—or the work will become less efficient. That is in direct contradiction to the report of the same Dr. King whom the Minister prayed in aid. He recognised that an efficient and thorough safety service depends on there being no financial disincentive.
There would be greater cost if the Minister is right when she says that employment implications are not worth bothering about. But not many people believe the Minister. If the Opposition and the unions are right and there are severe employment implications, there will be fewer people who can carry out emergency work. The unions wrote to the Minister on that matter on 1 July.
Mr. Deputy Speaker: Order. I am sorry to interrupt the hon. Gentleman, but I hope that he will allow me to say that taking 20 minutes in a short debate is a selfish abuse of the available time. I have no power to limit the hon. Gentleman's speech, but I hope that he will note what I have said.
Mr. Brown: I accept your strictures, Mr. Deputy Speaker. I feel as keenly about this issue as other hon. Members may feel about other topics, but I apologise to them for taking so long. I am coming to the end of my remarks.
As I said, the unions wrote to the Minister on 1 July and, again, have had no reply. That is the core of my agony. A major union has consulted the Government and has not had even the courtesy of a reply. That is no way to conduct the government of this country.
Part of the corporation's marketing operation is concerned with testing appliances, not only for efficiency

531
but for safe operation. No one believes that manufacturers will fall below European safety standards—and that will remove some the of worst fears and consequences—but it is unlikely that all the safety testing currently carried out by the corporation will continue when appliances are sold through the private sector.
Does any hon. Member seriously believe that Comet warehouses or Michael Parrish in Newcastle will set up an organisation akin to Watson House for safety testing? The Government's decision, which was taken to appease the worst of Tory doctrinaire bullying, may bring the ordinary member of the public danger, disease and perhaps even death.
I am sorry that I have taken so long, but I feel extremely strongly about this issue. I tried to raise it during business questions and I received an unsatisfactory answer from the Leader of the House. That is why I felt that I had to raise it again.
Several Hon. Members rose—
Mr. Speaker: Order. Since, by agreement of both sides, this is approximately a two-hour debate, I shall call two hon. Members from the Government side in order to hold the balance and make the time more equal.
5.58 pm
Mr. Toby Jessel: I am grateful for the opportunity to speak in the debate. I am reluctant to see the House adjourn for the Summer Recess before the Government make a further statement to confirm their policy against the construction of a fifth terminal at Heathrow airport.
I wrote this week to my right hon. Friend the Prime Minister to express the deep concern of my constituents—a concern which is shared by the constituents of my hon. Friends the Members for Putney (Mr. Mellor), Brentford and Isleworth (Mr. Hayhoe) and Ealing, North (Mr. Greenway).
The Government have clearly announced that a fifth terminal should not be built at Heathrow, but doubt has been cast on the issue, first by the terms of reference of the forthcoming public inquiry into the Stansted—
Mr. Ronald W. Brown: On a point of order, Mr. Speaker. I understand why you have taken the strictures to delay myself and other Opposition Members from being called, but the hon. Member for Twickenham (Mr. Jessel) had his name down on the list, on this very subject, for debate on the Consolidated Fund (Appropriation) Bill. He took his name off that list. Surely, it is unreasonable that I should have to sit here while he is called to speak.
Mr. Speaker: Order. The hon. Gentleman has raised a fair point of order. I made the appeal earlier so that we could get on to those who had taken part in the ballot for the Consolidated Fund. I supported both Front Benches in their appeal for a short debate. I hope, therefore, that the hon. Member for Twickenham (Mr. Jessel) will bear in mind what the hon. Gentleman said.
Mr. Jessel: I accept your implied rebuke, Mr. Speaker, and that of the hon. Member for Hackney, South and Shoreditch (Mr. Brown). In practical terms, however, there would have been little chance of being able to speak, in view of the position that I drew in the ballot for the
532
Consolidated Fund—No. 43. Frankly, there was no chance of being reached, so I thought it better to try to catch your eye now. However, I aim to sit down by about five minutes past six.
In view of the terms of reference of the Stansted inquiry and the current campaign of British Airways against Government policy against a fifth terminal, and in order to maintain the confidence of the communities round Heathrow, I felt that a Government statement should be made saying that they intend to stick to that policy, which was clearly stated by my right hon. Friend the Secretary of State for Defence when he was Secretary of State for Trade. On 17 December 1979, announcing the Government's airport policy, he said:
"We have also given careful consideration to the possibility of constructing a fifth terminal at Heathrow … However, we estimated that it would take at least 12 years to complete such a project, and it would impose added burdens on the surrounding area; these considerations have led us to the view that a fifth terminal should not be provided."—[Official Report, 17 December 1979; Vol. 976, c. 36.]
Two months later, in the debate on 21 February 1980, he said that it should not be built. That was confirmed by my hon. Friend the Member for Chingford (Mr. Tebbit), another Minister in the same Department, in November of last year. There was a package involving a fourth terminal at Heathrow, a fifth terminal not being built, and there being an expansion leading to a third London airport elsewhere. That package announced by the Government reflected the fact that aircraft noise remained a sensitive issue in the communities living round Heathrow.
Mr. Harry Greenway: Does my hon. Friend agree that the lives of people in Ealing, Twickenham and other areas are already gravely damaged by the amount of aircraft noise that they have to suffer and that, if there is any more, as will occur if there is a fifth terminal, life will become insufferable and almost intolerable?
Mr. Jessel: I fully agree. I have raised the matter on more than 50 occasions during my 11 years as a Member of Parliament. However, I shall not repeat all that now.
It should be noted that the British Airports Authority, which owns Heathrow airport, is strongly opposed to the construction of a fifth terminal. At least as much attention should be given to the considered opinion of that authority as to that of British Airways.
The Stansted inquiry inspector has been told that he can consider alternatives to Stansted, such as Maplin or a fifth terminal at Heathrow. That causes fears in the area round Heathrow, which I hope are unfounded, and gives the appearance of reopening the airport planning strategy. I hope that the Government will be in a position to confirm that anything that the inspector or anyone else says at the Stansted inquiry will not bind the Government to the basic strategy of airport planning. The word "planning" has two meanings: the basic airport strategy of where one has the airports and, by contrast, the question of planning permission to put up buildings, which is a matter for the Department of the Environment. It has to be looked at in an entirely different sense, and should not imply anything as regards the basic question of where airports should be sited.
6.4 pm
Mr. William Waldegrave: I join my colleagues from the county of Avon in urging the

533
Government to consider bringing in emergency legislation, and even extending the Session to do so, to deal with the mounting crisis of the rates. My colleagues have ably outlined the situation that exists in Avon.
We all know in our heart of hearts that a fundamental instability exists in the present relationship between local and central Government. People vote against the sitting national Government, but that has nothing to do with what the local parties say in local elections. However, we know perfectly well that that results in an imbalance. For example, in the middle of the last period of the Labour Government, under pressure from external events that Government came near to following a rational economic policy in trying to limit the growth of public spending. Of course, since the Labour Party was in power nationally, it had Conservative local councils to help it in that policy. The right hon. Member for Stepney and Poplar (Mr. Shore), the responsible Minister, told local authorities in 1976 that they
"will know that the present economic situation makes it imperative that the Government's plans for public expenditure are not exceeded".—[Official Report, 2 June 1981; Vol. 5, c. 779.]
In saying that, the right hon. Gentleman knew that he could count on responsible Conservative councils, because of the vagaries of the electoral system, to help him to do that.
In London we face a total misuse of the local democratic system to try to attack the overall economic policy of the country. This country has no written constitution, and the relationship between local authorities and the Government rests on the exercise of moderation and good sense, as does so much else in Britain. At least in this respect we now see that unwritten constitution coming under extreme pressure.
In Avon the new council has introduced a 9p supplementary rate, which was in no way foreshadowed in the election campaign there. There was talk of greater expenditure, and during the campaign we heard briefly of a 1p rate—
Mr. John Silkin: Was the doubling of VAT foreshadowed by the Conservative Party during the general election in 1979?
Mr. Waldegrave: It is unusual to be bowled such a slow ball by the right hon. Member for Deptford (Mr. Silkin). The shift from income taxes to expenditure taxes was at the heart of the Conservative Party's campaign.
I come back to the situation in Avon. We now face a complete smokescreen there. We should have some respect for the council if it said "We have been elected as a high-spending council, and we are therefore putting up the supplementary rate", but that is not what it is saying. It is looking for every smokescreen that it can find. It says that it is the fault of central Government, but that can easily be disproved, because we can demonstrate, as my hon. Friend the Member for Somerset, North (Mr. Dean) has shown, that if the Conservatives had been re-elected in Avon we should not have had to introduce that supplementary rate. The council says that it has to do with changes in the rate support grant, but that is simply not true. Even on the weak basis of local democracy—I believe that people vote in local elections not on local issues but on national issues—the council is trying to disguise the issue behind smokescreens of irrelevance.
We have now reached a point at which rates and the whole relationship between local authorities and the
534
Government are due for radical reform. A large part of the contributors to rates—that is, businesses—have no direct control over them. We see minorities of electorates in mid-term electing councils which then act in ways not foreshadowed in their election campaigns. The whole system has been brought into disrepute.
I fear that there will be nothing for it but to do away with the present system of rates. In the short term, until we are able to do that, we shall have to take action to limit the power to introduce supplementary rates. Such legislation exists in Scotland. I urge the Government to consider taking that action, even to the extent of continuing this Session slightly longer. In counties such as Avon the local CBI, BEAMA, local business men and others have told me that jobs 'will be destroyed at the very moment when Opposition Members, in all their interventions this afternoon, tell us that the creation of employment is more important than anything else.
6.10 pm
Mr. Ronald W. Brown: I shall not talk about rates because we can discuss that during the Consolidated Fund debate. All hon. Members have the chance to do that and I am surprised that they do not intend to take advantage of discussing that matter at 4 o'clock in the morning.
I wish to raise the issue of a constituent, Mr. Arif Tohid, who is in Pentonville prison. One might say that there are many prisoners in Pentonville, but my constituent has been there since February 1980, and that would not be surprising if he had been sentenced to five or six years' imprisonment for committing a crime. In those circumstances, it would not be unreasonable for him to have been there for 17 months. However, Mr. Arif Tohid is not guilty of anything. The only crime that he committed, if crime it be, was to overstay as an immigrant. He is in prison without having had a fair trial and without the normal human relations and rights. He has been incarcerated by the Government since February 1980.
I do not wish to rehearse the arguments and the merits of the case. However, this is my chance to say that the man should be released pending a decision by the European Court of Human Rights. The case has been before that court since August last year. The Government were unable to give a reply to the questions put to them by the court and demanded six or seven weeks delay. It is not my constituent's fault that the matter is taking so long.
I have raised the matter regularly with the Home Office. I do not want to enter into the merits of the argument, but it is ironic that a Select Committee report published today draws attention to the large numbers of people held in prison, and this man is in prison for no reason. The Government have claimed that if they let my constituent out he would disappear again. He did not disappear in the first place. He overstayed, but he was staying with his family, all of whom are in Britain. I have given assurances to the Government that Mr. Arif Tohid will not disappear again—even though he never has disappeared. He has a wife and a baby. At Christmas I asked the Government to let him out just for the holiday, but they would not even do that.
The Government could afford to review the case to see whether the man should be let out of prison. I have had correspondence with the National Association of Prison

535
Visitors. The chairman wrote to me and expressed her concern. A noble Lady is a member of the body and she intends to raise the matter in the other place.
I address myself only to the human rights part of the issue. This man should not be incarcerated in a top security gaol when all that he has done is to be subject to a deportation order simply because he overstayed. It cannot be right that a man should be held in a top security prison for that reason. I ask the Leader of the House to ask the Home Secretary to use his discretion.
The only argument for keeping this man in prison is that he would disappear. I have given assurances that he will not disappear. In accordance with human rights and justice, it must be right that until we receive the European court's decision he should be allowed out to be with his family. We should not leave him locked up when he has done nothing that demands such treatment.
6.15 pm
Mr. John Stokes: We should not adjourn for the Summer Recess until we have debated the relationship between the Church and the State in England. Some hon. Members might consider that an abstruse subject, but I believe that it is highly relevant to many of today's problems which I believe are moral and spiritual as much as social and economic.
The relationship has not been mentioned since I touched on the subject in my motion of 10 April, although it was mentioned briefly by my hon. Friend the Member for Dorset, South (Viscount Cranborne) when we recently debated the 1662 Book of Common Prayer.
From the time that Christianity was introduced to England, the Church has played a great part in the nation's affairs. It converted our first great kings to Christianity. Churchmen, being well-educated people, were engaged in the administration of the kingdom. In the Middle Ages it could be said that the Church and the State were one. Even after the Reformation the connection was still close. It was assumed that everybody should be a member of the national Church. I am not, of course, in favour of persecution, but I think that there was something to be said for fining those who did not attend church regularly. Gradually the close connection has weakened over the centuries until now one almost hesitates to say that England is a Christian country. In addition, in recent years, Parliament has delegated some of its functions in ecclesiastical matters to the General Synod.
The questions that arise are "Why has England become so much less Christian, with all the consequences that may follow from that?" and "Would it be to the nation's advantage if control of Church matters were again wholly vested in Parliament?" Such a thought years ago would have horrified me as a loyal Anglican, but having recently seen some of the activities of the General Synod I am beginning to wonder. The Synod seems to be involved in inessential matters such as whether there should or should not be women priests, easier divorce, and even homosexuality and lesbianism, instead of concentrating on and defending the fundamental tenets of Christianity.
This House is at its best when debating ecclesiastical matters. During the recent Prayer Book debate I was much moved by the fact that my colleagues—not only Anglicans but dissenters, papists, Jews and atheists—were helpful and courteous and extremely anxious to do the right thing
536
by the Church and the nation. It was the failure of the Synod and the bishops to support the old Prayer Book which first alerted me to the dangers in the new arrangements. When we heard that the Prayer Book was hardly studied at all in our theological colleges, that sounded an alarm signal. At least it appears that that matter has been put right. Most of us are extremely glad that at the Prince of Wales's forthcoming wedding the marriage service will largely follow the old order of the Book of Common Prayer.
I used to think that the bishops' and Synod's objection to the Prayer Book was only to the old words. Gradually I came to see that it was something more fundamental. They objected to the forthrightness of the Prayer Book and the stating in stark simplicity of the great religious truths. They wished to replace them with the mealy-mouthed phrases of the new services.
That brings me to my next point—the failure of the bishops, not only in the other place but generally, to preach the gospel fearlessly and to proclaim the great historic truths of Christianity. It hurts me to say this because I am a firm believer in the apostolic succession, the order of bishops and the vital importance of having bishops in the second Chamber—which is of crucial importance to our constitution—but, instead of insisting on personal holiness and the higher standards of personal conduct for individual Christians, the bishops seem to be more concerned with promoting vague and general social issues.
It is so much easier to think that reading The Guardian daily and believing that the Brandt report came down from Mount Sinai rather than living a godly life is a passport to Heaven. In an age of permissiveness and materialism, the bishops hesitate to denounce such things. They have made no condemnation of the DHSS and the DES for allowing such organisations as the Family Planning Association and the Brook Advisory Centre to disseminate what most of us believe is pornography that encourages licentiousness among our schoolchildren.
The Christian ideal of chastity before marriage and fidelity thereafter is seldom heard. The bishops have not protested about the growing proliferation of sex shops in our towns and cities. They are faint patriots. They appear to be almost embarrassed by patriotism or any commendation of our long and glorious history as a nation. They have never even given credit to the English people for their tolerance and forbearance towards so many of the newcomers in our midst. During the recent British Nationality Bill debate in another place, their conduct was deplorable. It took someone as good a Christian and as famous a man as Lord Home of the Hirsel to put matters to right. The bishops' constant over-emphasis on immigrants and immigration and their neglect of the needs of their English flock are affronts to many. I cannot understand why they support missionary work abroad but not, apparently, among the immigrants at home. Their obsession with the Third world, when our home economy is in such a shocking state, is almost bizarre.
At least the Roman Catholic hierarchy and priests do all that they can to maintain the integrity of the family. We do not hear the same from the Anglican bishops. Children are neglected by working mothers who come home tired and give them £5 to get out of the house. They are not condemned. The attitude is that there is something to be had for nothing, and that the State or the boss will pay. That attitude has been encouraged, not condemned, by the

537
Church. Youngsters out of work, unable to keep up the payments on the hire purchase of their television sets, refrigerators or cars, are amazed that the State will not underwrite those personal commitments. The bishops are silent on all those matters.
It took the recent riots to make people realise that this wretched, permissive society, which emerged a generation ago, has finally blown up in our faces. Have the riots been condemned by the bishops of Liverpool and Manchester, or by any other bishops? If so, I have not seen their words quoted. The bishops have not praised the police for their remarkable restraint in the face of such provocation. Not a single rioter was seriously injured, but scores of policemen were hurt. Would any other police force in the world deal in that way with rioters?
We never hear today the words of the Prayer Book which I used to hear every week, namely, that government is for the punishment of wickedness and vice and the maintenance of true religion and virtue. Instead, every sort of excuse is made for rioters and looters. My hon. Friend the Member for Coventry, South-West (Mr. Butcher) said in a recent debate:
"At present the Church seems to be providing discos and table tennis rather than values or any form of self-discipline."
My hon. Friend the Member for Ealing, North (Mr. Greenway), whom I see in the Chamber, has much experience in dealing with youngsters. In the same debate he spoke of the duty of the clergy to get across a stronger set of values to the community. He said:
"there has been a colossal breakdown of religious education and the teaching of values in schools"—[Official Report, 16 July 1981; Vol. 8, cc. 1460, 1489.]
As I said at the beginning of my speech, the crisis in England is not social and economic but moral and spiritual. The old order has gone with the squire and the parson. Certainly the parson has gone as well as the squire. I fear that the Church has failed in Parliament. It has failed with parents and in our schools. Instead, it has concentrated on a wishy-washy social gospel which for all I know might make a manifesto for the Social Democratic Party.
It is so much easier to advocate huge public spending rather than giving charity oneself. That spending is now so colossal that the debts piling up will have to be paid for by our children and grandchildren. The old values of loyalty, love of parents and of country, of discipline and self-restraint are required. The attitude "Have what you want and riot or strike if you don't get it" has not been condemned. The easy-going perils of the permissive society that Mr. Roy Jenkins once called the civilised society—how he must regret that phrase—are responsible not only for many of our ills today in industry and elsewhere but for the recent bloody riots.
Unless the bishops can grasp those points, abandon their old ways arid give a lead in an effort to return to decency and morality, I see little hope for England. If the bishops fail to lead their clergy and flock, even this imperfect House of Commons may have to return to do the job for them. It may sound far-fetched—I hope that it is—but the warning is there to see in the bloodshed and burning buildings of Moss Side and Toxteth.
Mr. Speaker: The hon. Member for Keighley (Mr. Cryer) was out of the Chamber when I said I had selected his amendment. He may wish to move it now.
6.27 pm
Mr. Bob Cryer: I beg to move, to leave out
`on Tuesday 28 July do adjourn till Thursday 30 July and at its rising'.
I was not in the Chamber when Mr. Speaker said that he had selected my amendment because I was part of a delegation supporting a tough multi-fibre arrangement—which is vital to textile areas such as mine—at a meeting with the Secretary of State for Trade. I do not wish to follow the eccentric philistinism of the hon. Member for Halesowen and Stourbridge (Mr. Stokes), who is vaguely amusing except for the underlying implication of racism which is always present in his remarks.
The debate is limited to two hours. That clearly shows the need for additional parliamentary time. I tabled my amendment so that on 29 July the House can debate some of the issues that will be facing not the fabulously wealthy couple who will inundate the nation through the media's concentration on the trivia on that day but the thousands of other young couples who are facing marriage without a home, possibly because of the Government's cuts in housing. Only 30,000 council houses have been built this year, compared with more than 100,000 in the last full year of the Labour Government.
Many youngsters cannot find jobs. They face not a fabulously wealthy existence with a house provided, but difficulty and deprivation because of the Government's policies. I hope that the Royal couple—I send good wishes to all young couples getting married this year, not only that exclusive couple—will have a thought, in the midst of the pomp and circumstance, for the remainder of the nation and those who face enormous difficulties.
I suggest that those are the sort of topics that would be entirely suitable for debate by Parliament on 29 July. In any event, I want more time allocated to Parliament before it rises for the recess. If we sit for that additional day we shall still have a long enough holiday from 31 July to 19 October. Surely that is long enough for Parliament Let there be time to debate the problems of unemployment which, in my constituency—the figures were announced on 9 July—stands at 3,916. That is 12·8 per cent., which is above the United Kingdom level of 11·8 per cent., and also above the regional level of 12·7 per cent.
Despite such figures, the Government are phasing out intermediate area status for Keighley by August 1982. I ask the Minister whether he is prepared to restore full intermediate area status to Keighley before August 1982. When I put that question in a parliamentary question, the Minister replied:
"While I am always ready to consider evidence of significant long-term change in an area's circumstances relative to the rest of the country on the evidence now available I am satisfied that retention of intermediate area status for Keighley is not at present justified."—[Official Report, 15 July 1981; Vol. 8.]
The Keighley travel-to-work area has unemployment that is higher than the national average. Indeed, it is higher than the regional average. However, the Government continue with their absurd economic course of removing the lowest tier of economic assistance when the area is facing economic depredation and diminution. There are 3,916 adults unemployed and nearly 500 of them are youngsters who left school and went on the dole. The prospects are not bright for them.
The achievement of the Conservative Government between May 1979 and June 1981 was to increase

539
unemployment in the Keighley travel-to-work area by 182·7 per cent. The latest figures show that the percentage has increased. There are over 1,000 people in the area aged 45 years and over who are unemployed. What will be the prospect for them on 29 July? As they get on in years, will they have a bright prospect of obtaining jobs? That is not likely under the Government's policies.
At least 150 further redundancies have been notified in the Keighley travel-to-work area. Those redundancies will increase an unemployment level that is already above the regional and national averages. On 14 July there were 1,037 potentially redundant jobs covered in applications that were current under the temporary short-time working compensation scheme in the Keighley employment office area in May 1981. In addition to the enormous number who were unemployed in the Keighley area, there were over 1,000 who were supported in work only because of the temporary short-time working compensation scheme, which has been cut by the Government to below the standard that applied when the Labour Government introduced the scheme.
There is an urgent need for debate. The level of unemployment in my constituency is unacceptable. The area is suffering economic hardship. There is a strong case for the retention of full intermediate area status for Keighley. The Government have a case to answer.
We need time to discuss these issues. We should not adjourn the House for such an enormous period. There is a strong case for discussing on 29 July not merely two people who are getting married but all those who face marriage this year, in desperation and difficulty. They face a lack of job opportunities and a life of misery on the dole because of the Government's policies. It is time that we debated these issues and time that the Government faced them.
Mr. Speaker: Mr. John Silkin.
Mr. Robert Atkins: On a point of order, Mr. Speaker. Under what Standing Order or under what procedure has an agreement been made between the two Front Benches that has the effect of excluding Back Benchers from participating in the debate? You said at the beginning of the debate, Mr. Speaker, that an agreement had been reached that had the general assent of the House. It was not my understanding that it had general consent. Does the agreement have force? I understand that the rights of Back Benchers in this debate have never been restricted before. May I ask you, Mr. Speaker, where we stand?
Mr. Speaker: The hon. Gentleman makes his interpretation of what happened earlier and I have made mine. I had the impression that the House was in general agreement that the debate should continue for two hours. There seemed to be a general idea along those lines. There is no Standing Order that can be quoted in this instance. Of course, it is always possible for someone to move, That the Question be now put. We have had a debate which has been as long as earlier debates on the Adjournment motion.
6.35 pm
Mr. John Silkin: It is perhaps a matter of regret that the motion had to be moved immediately before the Consolidated Fund (Appropriation) Bill, which itself
540
will be slightly curtailed because tomorrow the House will meet at 9.30 am. Many hon. Members have spent a considerable amount of time getting their names in the ballot and featured in the list of debates to take place on the Consolidated Fund (Appropriation) Bill. The Leader of the House responded to a suggestion that was made by my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) and I intervened to agree with the Leader of the House.
Mr. Alexander W. Lyon: Is my right hon. Friend aware that at one stage one of the few topics selected for the debate on the Consolidated Fund (Appropriation) Bill had been introduced by me and that I subsequently withdrew it? One of the debates that appears on the list will feature London, and three London Members have spoken in the current debate. If they had not spoken, others who wanted to participate would have been able to do so. As Standing Orders do not apply and as we were not consulted, I see no reason why hon. Members should not continue to pursue the debate even after those on the Front Benches have replied.
Mr. Silkin: The Leader of the House is to be congratulated on the way in which he has undertaken an especially difficult job. I thought that it was the general view of the House that we should go into the Summer Recess on 31 July. A mixture of good Chief Whipdom and a certain amount of magic has made it possible. However, the margin is tight. Because of that, I do not propose to make a long speech. My speech will not be as long as some of those which have been made by both Labour and Conservative Back Benchers. I shall do my best to reply briefly.
A number of interesting constituency issues have been raised. I hope that the Leader of the House will be able to deal with some of them, if only shortly. My hon. Friend the Member for Holborn and St. Pancras, South (Mr. Dobson) expressed his worry about the action of the Attorney-General. I believe that the Attorney-General entered the Chamber during the debate. I hope that the Leader of the House will be able to respond to my hon. Friend's intervention.
My hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown) introduced an especially important constituency issue. I do not suppose that the Leader of the House will be able to provide a full answer. However, he may be able to provide some indication.
The hon. Member for Essex, South-East (Sir B. Braine) raised constituency complaints which I seem to have heard before. They go back over some period. I am sure that the right hon. Gentleman knows the answer by heart.
The hon. Member for Twickenham (Mr. Jessel) spoke on behalf of a number of hon. Members and addressed himself to the problems caused by London airport. I have heard those before, too. I imagine that the Leader of the House will be able to reply to them.
The general theme falls into two different categories. There have been a number of complaints about local government, or rather about the action of newly elected Labour councils that are full, vital and young following a mandate from the people, unlike the rather tired old Government that Conservative Members happen to represent. The complaint that they express is rather curious. The hon. Member for Bristol, West (Mr. Waldegrave) made the unfortunate point of not having

541
received notice during the election campaign that rates would be increased. I recall the Daily Mail including an article on Labour's "Dirty Dozen". For such an article to appear in that newspaper carries no great blessing on the part of the Conservative Party. There was the "terrible" complaint by the Labour Party during the election campaign that a Conservative Government would double VAT. That was denied as a lie by the Conservative Party at that time.
Mr. Waldegrave: Is the right hon. Gentleman saying that it was a scandal that the Conservative Government increased the rate of VAT without saying during the election campaign that that was what they intended to do? The newly elected Avon council has acted in a similar way. Presumably that is a scandal.
Mr. Silkin: I did not say that. I said that the Conservative Party denied that it would—
Mr. Chris Patten rose—
Mr. Silkin: I shall deal with the hon. Member for Bath (Mr. Patten) next. I thought that the hon. Member for Bath preferred to change the whole basis of local government, as all his hon. Friends seem to wish to do. He wanted to change it to a referendum system. He seemed to think that I was in favour of referendums. I have been in favour of only one referendum in my life. I do not like referendums. I was in favour of the referendum of the people of Gibraltar in 1967 when they announced that they wanted to remain British and did not want to go to Spain.
Mr. Chris Patten: Am I right in recalling that the right hon. Gentleman was a member of a Cabinet which produced referendums on Scotland, Wales and Europe? The right hon. Gentleman said that he was in favour of democratising the Labour Party. Why is he not in favour of letting ratepayers have a greater say in the affairs of their local councils?
Mr. Silkin: I am in favour of letting local ratepayers elect their councils. They appear to have done so—
Mrs. Elaine Kellett-Bowman: They are regretting it now.
Mr. Silkin: If so, we have had proof recently of what they are feeling about the present Government. I believe that the hon. Lady is on a bad wicket. She must not tempt me or my speech will be even longer.
The important theme was unemployment. That is a doubly important theme because it ties up with the theme about which Conservative Members were talking in an interesting way—namely, that the basis of creating employment is affected by the amount of public spending that it entails. Even under the present Government, just over one-third of public expenditure goes to private industry. Hon. Members should be made aware of that if they are not already aware of it. The more we cut back, the more unemployment there is and the more private enterprise is destroyed. It is time that Conservative Members took that on board.
My hon. Friends the Members for Neath (Mr. Coleman,), Tooting (Mr. Cox), Newcastle upon Tyne, West (Mr. Brown) and Keighley (Mr. Cryer) made vital points. Those were points of substance not only in their constituencies but in all constituencies. As I heard the figures that they gave, they could have been talking about my constituency, which has an unemployment rate of 20
542
per cent. In that is all the difficulty, evil and trouble that we now have to face. I should not say "all". That is unfair. There are other factors, too. However, that is one of the greatest factors that we have to face. I accept that many Conservative Members feel as disturbed about unemployment as I do. Where they perhaps differ from my hon. Friends is that they are unwilling, or perhaps unable, to grasp the remedy for unemployment. That remedy is massive State intervention. They will not face the difficulty that sooner or later a Labour Government will have to face with great disadvantages, because the longer that remedy is delayed the worse unemployment will become.
I promised faithfully not to speak as long as other hon. Members. I shall not break that promise. Despite what hon. Members have said and despite the amendment moved by my hon. Friend the Member for Keighley, I do not believe that hon. Members really want to oppose the Adjournment of the House. Even the hon. Member for Halesowen and Stourbridge (Mr. Stokes) does not really want to spend a long, hot summer pursuing all the bishops in the country.
6.44 pm
The Chancellor of the Duchy of Lancaster, Paymaster General and Leader of the House of Commons (Mr. Francis Pym): There is no doubt that a number of the subjects that have been raised have been balloted for on the Consolidated Fund (Appropriation) Bill and could be raised later. The House might wish a Select Committee to consider that matter in due course.
The important issue of unemployment can be raised under the Consolidated Fund (Appropriation) Bill. I agree with the right hon. Member for Deptford (Mr. Silkin) that that is a most important issue. It was raised by the hon. Members for Neath (Mr. Coleman), Tooting (Mr. Cox), Newcastle upon Tyne, West (Mr. Brown) and Keighley (Mr. Cryer). There is no doubt that it is raising the greatest anxiety at the moment. The only remedy proposed is to throw more money at the problem. I believe that that is too facile a solution. I have no doubt that more resources will go in that direction, but by itself I do not believe that that is enough.
We must understand the causes of the problem and consider carefully the true remedies. The basic causes are not our policies. They are not even mainly the world recession, although that is an important factor. The deep causes are low productivity and overmanning, which, in relation to our competitors, have been excessive, coupled with poor industrial relations—although I know that they vary from industry to industry—and many restrictive practices, which some other countries have been able to reduce. Today there are many obstacles in the way of employers taking on more people.
I do not want to dwell on the issue at length, but it is important that it should be seen in the round. To tackle it and to create real jobs, we want the recession to end, but we must also look at the new industries and the new opportunities for making things at competitive prices which British people and people abroad want to buy.
The Government have already taken a number of initiatives, particularly in relation to youth unemployment, which, among all our problems, is the most worrying. We are giving early consideration to yet further opportunities and ways in which we can help the young unemployed.

543
With regard to the problems in the inner cities, my right hon. Friend the Secretary of State for the Environment is on a special mission in Liverpool which will be relevant to all cities. However, we must join with industry in looking for the right, best and appropriate opportunities to create the new jobs which will keep people in work in the future. We delude ourselves if we say that it is just a matter of spending more money. I am sure that more resources and money come into it, but, by itself, that is too facile a view.
I share the anxiety of the House about that problem. I am sure that during the recess we shall continue to be anxious and that we shall return to the subject after the recess. It is fair to remind the House that the Government have provided two days in their own time for debate on the subject.The Opposition have provided time for debates. We shall return to that subject, amongst others, on Monday next. Therefore, I believe that it is fair to say that the House has devoted an appropriate amount of time to what is currently our greatest difficulty.
Three of my hon. Friends representing seats in Avon raised the important matter of rates, particularly supplementary rates and people's anguish about them. There is no doubt that that is an unfair system. A number of years ago my party committed itself to altering the rating system. It was an election commitment in 1974 to do so in the lifetime of a Parliament. However, in 1978 we were so concerned by the state of the economy that we had to say that we did not believe that it would be possible to fulfil that objective in the lifetime of one Parliament, although we were still keen to do so.
That is still the position. However, because of the circumstances and pressures being brought upon the domestic ratepayer and industry in the way described by my hon. Friend the Member for Bath (Mr. Patten) and others of my hon. Friends, we are at present actively considering the whole question of rating. We are doing so in two parts. First, we are asking what we can do to alleviate the position in the short run, and, secondly, we are preparing to begin in the autumn another substantial public debate on what are the most attractive, or least unattractive, alternatives to the rating system.
Although I cannot answer the specific questions put by my hon. Friend the Member for Somerset, North (Mr. Dean), I assure him that the points raised are in the mind of my right hon. Friend the Secretary of State for the Environment, who is taking the lead in considering the whole matter.
I must tell my hon. Friend the Member for Bristol, West (Mr. Waldegrave) that I do not think it is practical to legislate on the subject of rating this Session. Obviously, we have work to do next week, and there will not be adequate time during the overspill period to complete consideration of any such legislation. However, we are keeping in mind the possibility of legislating next Session. We wish to make the most rapid progress that we can, because the British people feel that this is an unfair method of raising money. Consequently we want to find a better method as soon as we can.
Almost all the points that were raised will come up in the debate on the Consolidated Fund (Appropriation) Bill later this evening. The hon. Member for Holborn and St. Pancras, South (Mr. Dobson) and others spoke about the case of Barrs and others and the response that we have
544
received from the Attorney-General. My right hon. and learned Friend will be present tonight to respond to that debate, which I believe is the ninth order of priority. At this stage, I can say very little more.
I am aware of the essence of the history of the case raised by my hon. Friend the Member for Essex, South-East (Sir B. Braine). I do not pretend to be aware of it in detail, but I share his view that safety is a deadly serious matter. I undertake to consult with my right hon. Friend the Secretary of State before the House rises. My hon. Friend will know that I cannot commit my right hon. Friend to make a statement before the House rises. However, I am prepared to raise the matter with him to see whether any progress can be made.
My hon. Friend the Member for Twickenham (Mr. Jessel) is due to initiate the seventeenth debate this evening, and as it is slightly more doubtful that that debate will be reached I should like to reply now. As my hon. Friend knows, the Government have on a number of occasions said that a fifth terminal at Heathrow should not be provided. That remains our policy. However, it is open to the objectors in the Stansted inquiry to suggest alternative sites for airport development if they still wish, and there is nothing to stop British Airways on that occasion arguing in favour of a fifth terminal.
I cannot pretend to be aware of the details of the case raised by the hon. Member for Hackney, South and Shoreditch (Mr. Brown), but I am quite prepared to ask my right hon. Friend the Home Secretary or the Law Officers, whoever is appropriate, to review that case. I know enough about it to say that options are open to the person concerned. I do not know the details, but I am prepared to convey to my right hon. Friend what the hon. Gentleman has said.
The House enjoyed the characteristic speech of my hon. Friend the Member for Halesowen and Stourbridge (Mr. Stokes). His was a fitting speech with which to deal in concluding my reply to the debate. We might, with advantage, contemplate during the recess what my hon. Friend said—indeed, contemplate Church affairs, ecclesiastical matters and even his strictures on the clergy. I remember that about 20 years ago a Conservative Member had his name picked out of the hat first for Private Members' motions, and chose as his subject the state of the Church of England. My hon. Friend might, with advantage, repeat that next Session if his name comes out of the hat first. At any rate, he made an agreeable speech.
I am grateful to the right hon. Member for Deptford (Mr. Silkin) for what he said. I appreciate that the hon. Member for Keighley would like us to sit on Wednesday. The House will be open to him, and perhaps he will still come even if the rest of us are not present. That is up to him. I do not have the slightest doubt that it is the wish of the House not to sit on Wednesday 29 July. The good wishes of the whole House, which some of us conveyed to the Royal Family today, go out to the Royal Family on the great event that will take place on Wednesday.
I hope that the House feels that the proposal tabled by my right hon. Friend the Prime Minister about the Summer Recess can be agreed to.
Mr. Alexander W. Lyon rose—
Mr. Speaker: Before I call the hon. Gentleman, which I shall do, let me say as courteously as I can that I do not think it is in the interests of the House if hon. Members

545
who have been drawn low in the ballot withdraw their motion and make the speech they would have made in the Consolidated Fund Bill debate during the debate on the Summer Adjournment. I honestly believe that that is not in the spirit in which we usually practise our affairs.
6.55 pm
Mr. Lyon: I hope that your remarks, Mr. Speaker, were not directed at me, because I do not wish to raise any such Adjournment subject. I want to talk about Operation Countryman and, in particular, about the case of Mr. John Campbell.
Before doing so, I enter a protest about the procedures that we have followed today and the fact that my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) disappeared as soon as he got the consensus of the House that this debate would be limited to two hours. Obviously, my hon. Friend did not want to speak, but I do not see why we should be restricted in that way. I appreciate that I shall not be privileged with a reply by the Leader of the House to the point that I wish to raise, but I want to put it on the record so that the Home Secretary can see it.
I again protest that this is not the way in which to change the procedures of the House. If there is a need to change our procedures, the matter should be considered properly by the Select Committee and put before the House.
The point I wish to raise arises from two matters that have occurred in the past week. Therefore, I have had no opportunity to raise it before. It relates to the Operation Countryman investigation by outside police officers into alleged corruption in the Metropolitan Police. At the time that it was going on, I asked the Home Secretary, as the police authority for the metropolitan area of London, to undertake that the investigation would be given absolute priority and that there would be no possibility of internal obstruction from the Metropolitan Police. He gave such an undertaking.
On Monday night a "World in Action" film made it perfectly clear that the man in charge of the operation, the chief constable of Dorset, seemed to deny that the Metropolitan Police had not intervened in the Operation Countryman inquiry. As a result of a statement he made later in the week, it was perfectly clear that that was what he intended to say in the "World in Action" programme. In other words, a serious investigation into corruption in the largest police force in the country was made impossible by the non-co-operation of senior officers, backed by the Metropolitan Commissioner and the Deputy Commissioner.
There could be nothing more serious at the present time, when we are talking about the effectiveness of the police in our inner cities, than that there should be corruption at the highest level of the Metropolitan Police, which cannot be dealt with effectively because of internal obstruction.
I illustrate the nature of the malady that arises by referring to a particular case that completed its appearance before the courts only this week. A man called John Campbell has campaigned for many years about the nature of vice and corruption in the Shepherd Market area of London. On a number of occasions, and in considerable detail, he has complained that the corruption and vice in that area is aided by police officers from the local
546
police station. He has made that complaint on so many occasions to the investigation branch of the Metropolitan Police that he was reluctant to make any further complaint to it.
Mr. Campbell therefore came to me about 18 months ago and told me of the facts of the case, which has recently reached court. Four women arrived outside his premises in the early hours of the morning and banged on his door. When he went to the door, he discovered that they were prostitutes who had objected to his campaign. They tried to force their way into the house, but he beat them back with a brolly. They then complained to the police that he had assaulted them and that they simply wished to go to his restaurant.
The complaint brought two police officers to Mr. Campbell's premises. At the door, he was asked for his explanation. He explained that the women were being offensive and that he was defending himself against their attack. Nevertheless, he was arrested. Due to his past experience of the Metropolitan Police, however, he had had the perspicacity to conceal upon his person a tape recorder which recorded the conversation between him and the police.
In due course, Mr. Campbell was charged with assault upon the women. The police officers tendered written evidence in order to commit him to trial. The statements were a lie. They did not contain the defence that he had put, which was in the tape recording, and they included assertions which he had never made and which could have been interpreted as admissions of guilt.
Mr. Campbell came to see me, bringing with him the tape recording and the written statements and asked me what he should do. I told him that if he went to the Attorney-General, the Attorney-General would say that there might be an explanation from the police and that would have to be tried. If it went to the Attorney-General and found its way back to the police, they might change their story. I said that I could take it to the investigation branch of the Metropolitan Police. He said that he did not trust them because he had made complaints before and had then been harassed by Vine Street police and he thought that that would happen again.
I therefore said to Mr. Campbell that the only way I could see was for him to go to Operation Countryman, which was currently investigating corruption in the police. I called in the senior officers in the Operation Countryman investigation and put to them in general terms the nature of the complaint. This was just after their remit had been reduced by the Home Secretary because of complaints from the Metropolitan Commissioner that the investigation was going on endlessly, and they asked me whether I knew that they could investigate only three allegations of corruption and could not take this matter on. I said that I did not know that. They said that the complaint would have to be taken to the Commissioner. I said that I could not do that because the man in question did not trust the internal investigations of the Metropolitan Police and would not allow me to pass it on. They said that in that case they would have to indicate the nature of the complaint to the Metropolitan Commissioner. I received a letter from the Deputy Commissioner asking for the full nature of the complaint, but I was not able to transmit it.
After that, the man went for trial. When the evidence was heard, the judge was so horrified at the differences between the police evidence and the tape recording that he threw the case out at the end of the prosecution case and

547
awarded the man costs, which amounted to about £18,000. If the man had not had the means to sustain himself up to that moment, he would not have been able to get justice.
If that is the position in the most important police area of this country, it is an appalling disgrace which the House should remedy, because the Home Secretary is the police authority for London and is accountable only to the House. Yet the House will rise next Friday without our having the opportunity to raise the matter with the Home Secretary or to debate the outcome of this disgraceful operation.
The Metropolitan Police have now got beyond any kind of control. They are not controlled by the Home Office or by the Home Secretary. They are a law unto themselves. Because they were recently commanded by Sir Robert Mark, who had great gifts as a presenter of their case, they have been able to acquire a standing in public opinion which is belied by the internal history of the Metropolitan Police. Unless they are brought under control, there will be a recurrence not only of corruption but of the bad policing which in my view has more to do with the riots in Brixton and in some of our inner cities than anything that the bishops have done, as suggested by the hon Member for Halesowen and Stourbridge (Mr. Stokes). This issue must therefore be debated at an early moment before the House rises for the recess.
Question put, That the amendment be made:—
The House divided: Ayes 14, Noes 125.

[288

[7.05 pm]

AYES

Clark, Dr David (S Shields)

Richardson, Jo

Cunliffe, Lawrence

Robinson, G. (Coventry NW)

Dobson, Frank

Ross, Ernest (Dundee West)

George, Bruce

Skinner, Dennis

Hamilton, W. W. (C'tral Fife)

Stallard, A. W.

Lyon, Alexander (York)

McKelvey, William

Tellers for the Ayes:

Maynard, Miss Joan

Mr. Robert C. Brown and

Powell, Raymond (Ogmore)

Mr. Bob Cryer.

NOES

Aitken, Jonathan

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

Alexander, Richard

Clarke, Kenneth (Rushcliffe)

Ancram, Michael

Clegg, Sir Walter

Atkins, Robert(Preston N)

Colvin, Michael

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

Corrie, John

Baker, Nicholas (N Dorset)

Costain, Sir Albert

Beaumont-Dark, Anthony

Cranborne, Viscount

Benyon, Thomas (A'don)

Dean, Paul (North Somerset)

Biggs-Davison, John

Dorrell, Stephen

Boscawen, Hon Robert

Dover, Denshore

Boyson, Dr Rhodes

Dunn, Robert (Dartford)

Brinton, Tim

Durant, Tony

Brooke, Hon Peter

Dykes, Hugh

Brown, Michael(Brigg & Sc'n)

Eggar, Tim

Buck, Antony

Eyre, Reginald

Budgen, Nick

Faith, Mrs Sheila

Butcher, John

Fenner, Mrs Peggy

Cadbury, Jocelyn

Fletcher-Cooke, Sir Charles

Carlisle, John (Luton West)

Fookes, Miss Janet

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

Fox, Marcus

Chapman, Sydney

Freud, Clement

Garel-Jones, Tristan

Onslow, Cranley

Goodhew, Victor

Page, Rt Hon Sir G. (Crosby)

Goodlad, Alastair

Page, Richard (SW Herts)

Gow, Ian

Patten, Christopher (Bath)

Grant, Anthony (Harrow C)

Proctor, K. Harvey

Greenway, Harry

Pym, Rt Hon Francis

Gummer, John Selwyn

Rathbone, Tim

Havers, Rt Hon Sir Michael

Rhodes James, Robert

Hawkins, Paul

Rhys Williams, Sir Brandon

Heddle, John

Rossi, Hugh

Henderson, Barry

Shepherd, Colin (Hereford)

Higgins, Rt Hon Terence L.

Silvester, Fred

Hogg, Hon Douglas (Gr'th'm)

Sims, Roger

Hurd, Hon Douglas

Speller, Tony

Jessel, Toby

Spicer, Jim (West Dorset)

Jopling, Rt Hon Michael

Spicer, Michael (S Worcs)

Kellett-Bowman, Mrs Elaine

Sproat, Iain

Kilfedder, James A.

Stainton, Keith

King, Rt Hon Tom

Stanbrook, Ivor

Knight, Mrs Jill

Steen, Anthony

Lawrence, Ivan

Stewart, Rt Hon D. (W Isles)

Lee, John

Stewart, Ian (Hitchin)

Le Marchant, Spencer

Stradling Thomas, J.

Lennox-Boyd, Hon Mark

Taylor, Teddy (S'end E)

MacGregor, John

Tebbit, Norman

McNair-Wilson, M. (N'bury)

Temple-Morris, Peter

Major, John

Thomas, Rt Hon Peter

Marten, Neil (Banbury)

Thompson, Donald

Mates, Michael

Thorne, Neil (Ilford South)

Mather, Carol

Trippier, David

Maude, Rt Hon Sir Angus

Wakeham, John

Mellor, David

Walker, B. (Perth)

Meyer, Sir Anthony

Wall, Patrick

Miller, Hal (B'grove)

Waller, Gary

Mills, Iain (Meriden)

Watson, John

Mills, Peter (West Devon)

Wheeler, John

Moate, Roger

Wickenden, Keith

Molyneaux, James

Wolfson, Mark

Morrison, Hon C. (Devizes)

Young, Sir George (Acton)

Murphy, Christopher

Myles, David

Tellers for the Noes:

Neale, Gerrard

Lord James Douglas-Hamilton

Neubert, Michael

and Mr. John Cope.

Newton, Tony

Question accordingly negatived.
Main Question put and agreed to.
Resolved,
That—
(1) this House at its rising on Tuesday 28 July do adjourn till Thursday 30 July and at its rising on Friday 31 July do adjourn till Monday 19 October,
(2) on Friday 31 July, upon a Motion being made by a Minister of the Crown at the conclusion of Government business, That this House do now adjourn, Mr. Speaker shall not interrupt the proceedings thereon until the expiration of five hours after their commencement, and
(3) this House shall not adjourn on that day until Mr. Speaker shall have reported the Royal Assent to any Acts which have been agreed upon by both Houses.

Adjournment (Royal Wedding and Summer)

  BUSINESS OF THE HOUSE
  Ordered,
  That, notwithstanding the practice of the House relating to the interval between the various stages of Bills of aids and supplies, more than one stage of the Consolidated Fund (Appropriation) Bill may be proceeded with at this day's sitting.—[Mr. John Stradling Thomas.]

Fiji (Gift)
7.15 pm
The Chancellor of the Duchy of Lancaster, Paymaster General and Leader of the House of Commons (Mr. Francis Pym): I beg to move,
That an humble Address be presented to Her Majesty, praying that Her Majesty will give directions that there be presented on behalf of this House a gift of a Clerk's Table to the House of Representatives of Fiji, and assuring Her Majesty that this House will make good .the expenses attending the same.
As hon. Members are aware, there is a very happy parliamentary and Commonwealth tradition that gifts are offered by this House to Parliaments of Commonwealth countries on the occasion of their independence. Today, I am moving two motions to give formal authority for such gifts.
The first is somewhat unusual. Fiji became independent, within the Commonwealth, in 1970, and a gift was offered to its Parliament at that time. However, Fiji was then hoping to build a new parliamentary building and asked if we would defer our gift. Over 10 years have passed and the Speaker of the House of Representatives of Fiji has agreed that Fiji would now welcome a gift from the House of Commons, although the new Parliament has not yet been built. And I am sure the whole House will agree that it is only right and proper that this long-delayed gift should now be presented. After consultation with the Speaker of Fiji, it has been agreed that the gift should be a Clerk's Table, to be placed in the Chamber of the House of Representatives. Photographs of this good example of modern British furniture-making will be on display in the Library from today.
I commend the motion as an expression of the good will of this House to the House of Representatives of Fiji. Since
550
that country became independent, relations between us have always been warm and friendly. It is a fortunate fact that the annual conference of the Commonwealth Parliamentary Association is to be held in Fiji in October this year. It is proposed that our gift will be presented immediately after that conference, which highlights its significance as a symbol of Commonwealth friendship. I am sure that all hon. Members will join me in wishing happiness and continuing prosperity to the Parliament and people of Fiji.
7.17 pm
Mr. John Silkin: I gladly associate the Opposition with the motion. Anyone who has had the good fortune to visit Fiji will know how warm and friendly relations remain between that country and Britain. Although from time to time we have been known to be a little bruised after contact with Fijian rugby teams on the field, all of us are delighted to join the right hon. Gentleman in wishing Fiji well.
Mr. Speaker: I had the great honour of being the guest of the Fijian House of Representatives and its Speaker in the autumn of last year. I know how much they value the thought that the House will present this gift to the people of Fiji, 80 per cent. of whom are Methodists.
Question put and agreed to.
Resolved,
That an humble Address be presented to Her Majesty, praying that Her Majesty will give directions that there be presented on behalf of this House a gift of a Clerk's Table to the House of Representatives of Fiji, and assuring Her Majesty that this House will make good the expenses attending the same.
To be presented by Privy Councillors or Members of Her Majesty's Household.

Vanuatu (Gift)
7.20 pm
The Chancellor of the Duchy of Lancaster, Paymaster General and Leader of the House of Commons (Mr. Francis Pym): I beg to move,
That an humble Address be presented to Her Majesty, praying that Her Majesty will give directions that there be presented on behalf of this House a gift of a Speaker's Gavel and Desk Set to the House of Assembly of Vanuatu, and assuring Her Majesty that this House will make good the expenses attending the same.
I look forward, Mr. Speaker, to your next intervention. I am equally happy to move this Address in perhaps more usual circumstances than the last. It is for the presentation of a gift from this House to the House of Assembly of Vanuatu. I am sure that all hon. Members were glad that the difficulties experienced in the final year of the New Hebrides were peacefully overcome and that the new State of Vanuatu has been successfully launched as an independent democracy within the Commonwealth.
To mark this happy progression, and after consultation with the Speaker of the Assembly of Vanuatu, the gift of a Speaker's gavel and desk set has been agreed upon. I am sure that the whole House will wish to express the warmest good wishes for the future of the Parliament Commonwealth and people of Vanuatu.
I should perhaps add that, after these humble Addresses have been approved, a further motion will be moved for leave of absence to be given to two hon. Members who will make both these presentations on behalf of the House.
7.22 pm
Mr. John Silkin: Once again, I gladly join the Leader of the House in associating the Opposition with the humble Address that he has put before the House. The Opposition wish the people and the Assembly of Vanuatu a happy and peaceful future.
7.23 pm
Mr. Christopher Price: In spite of the fact that most of the people of Vanuatu are either
552
Presbyterian or Anglican, I think it is right that another hon. Member should add his good wishes to the people of Vanuatu. I happen to be one of the two hon. Members—the other being my hon. Friend the Member for Eton and Slough (Miss Lestor)—who have been presented with the independence medal of Vanuatu. On the occasions when I get dressed up, which is hardly ever, it is the only medal which I have to wear. I wear it, however, with some pride. It is worth recalling that had it not been for the persistent action of this House the different attitudes towards these matters of the British and French might have delayed independence which had been promised and which was properly due following full democratic elections last year.
I am happy that the independence gift should be a gavel. I understand that a gavel has been chosen because the somewhat damp and rainy atmosphere of Vanuatu precludes our sending anything that contains metal as it might corrode. Since, however, the gift is a wholly wooden gavel, it is perfectly suited to the environment of Vanuatu.
I wish to echo the good wishes to Father Walter Lini and members of the newly elected Parliament. This is one of only two, excluding Canada, recently independent bilingual Parliaments in the British Commonwealth. I wish it well. I hope that now that Vanuatu is independent it will play its part in closing the unhappy divide that existed for more than 100 years between the English-speaking and French-speaking peoples of the Pacific.
Question put and agreed to.
Resolved,
That an humble Address be presented to Her Majesty, praying that Her Majesty will give directions that there be presented on behalf of this House a gift of a Speaker's Gavel and Desk Set to the House of Assembly of Vanuatu, and assuring Her Majesty that this House will make good the expenses attending the same.
To be presented by Privy Councillors or Members of Her Majesty's Household.

Orders of the Day

  Consolidated Fund (Appropriation) Bill
  Order for Second Reading read.
  Motion made, and Question proposed, That the Bill be now read a Second time.

  Aston University
  7.25 pm
  Mr. Hal Miller: I wish to consider the severe reductions proposed in the grant for the university of Aston by the University Grants Committee. It is with some diffidence that I make my maiden intervention in an education debate but I am reassured by the presence on the Front Bench of my hon. Friend the Under-Secretary of State, whose robust common sense and sense of humour have endeared him to so many hon. Members. I am moved to intervene because of the disastrous effects on the university of Aston of the cuts proposed by the University Grants Committee. These have effects not only on Aston but on the West Midlands region as a whole.
  The scope of the debate is confined to Aston and the effect of the cuts on the West Midlands. My purpose is not to challenge the amount of finance that the Government have determined should be made available for higher education, although I note that we do not yet seem to have grappled with the higher education sector as a whole. I may refer in closing to the position of the polytechnics. My purpose is to insist on the West Midlands dimension of this decision. This region is affected by the fastest growing rate of unemployment in the country, particularly among youths and coloured people. It is a region locked into an industrial structure that has been weakened by the regional policy pursued by successive Governments for a number of years to the extent that it now shows serious signs of being in long-term decline.
  It is not clear whether the University Grants Committee has considered the West Midlands dimension. This is one of the difficulties to which my hon. Friends may be referring in their remarks. The difficulty is how to bring any political in fluence—I do not mean party political influence, but a regional influence—to bear on the University Grants Committee in such matters. If the University Grams Committee cannot, or will not, consider this dimension, my colleagues, I am certain, will join with me in insisting that the Government must take some account of the matter.
  I support firmly the University Grants Committee in its adoption of the principle of selectivity when making its recommendations and its determination to reward excellence and underpin points of growth. It is against those benchmarks that I wish to argue the case for reconsideration of the grant proposed for Aston. I would like to start with the charter that established the university in the first place. It states the aims of the university as being to
  "advance, disseminate and apply learning and knowledge by teaching and research for the benefit of industry and commerce and of the community generally and to enable students to obtain the advantage of a university education."
  The provisions of the charter are reflected in the composition of the student body—39 per cent. in the
  554
  engineering department, 34 per cent. in the science department, 15 per cent. in the management department, and 12 per cent. in the social and human studies department. This is, indeed, the sort of university that one imagines that the Government would wish to encourage. It is certainly needed in our region.
  I have referred to my hon. Friend's robust common sense. I cite in evidence his remarks in a recent broadcast that Aston is exactly the type of university that the country needs, educating graduates with industrially relevant degrees and experience. Indeed, the Government in their White Paper stated their wish to give protection to the support of basic science, an activity that underpins further development and is a particular strength of the United Kingdom.
  Other hon. Members will no doubt wish to explore in more detail the extent and nature of the cuts. Here. I refer briefly to the financial implications and the student numbers. The financial implications are severe. The loss to the university budget will total £5 million over three years. This includes, in effect, the reduction of income from overseas students, loss of interest and other items. The exact financial loss of grant is a reduction from £12·02 million to £9·86 million over the period. However, passing reference must be made to overseas students. It is not reasonable to expect that Aston will be able to recruit, at the new level of fees, the previous number of overseas students.
  The fees at the university of Berkeley in California, one of the leading universities in the world, are $3,500 a year, whereas the fees at Aston, at the new level, are £3,500 a year. So there is a disincentive to overseas students to take advantage of the courses available at Aston. The cut amounts to about 25 per cent. on the annual budget.
  With regard to student numbers, I wish to refer only to the science and engineering departments, because these are the ones that give me the greatest cause for concern. The home student numbers, including the EEC, are to be reduced from 3,250 to 2,560. That is a cut of about 700 engineering, science and management students. That course would seem to be exactly contrary to everything that we should be trying to pursue. Indeed, it is contrary to what I have understood, from the White Paper and from my hon. Friend's own remarks, that the Government were trying to pursue.
  If it is objected that the decision by the University Grants Committee reflects adversely on the excellence of the Aston academic attainment, I point out that there is evidence that of all university graduates in the country the Aston graduate is the most acceptable in industry. Aston is at the top of the league for placing its students, as shown by a table in the Financial Times in October 1980.
  The excellence of Aston is further evidenced by the industrial research that has been commissioned. The income from research amounts to about £2·2 million a year, and by no means all of that is from the Science Research Council. Indeed, the University Grants Committee apparently takes into account only grants from the Science Research Council when considering supporting further work and student numbers, and ignores industrial research, which is usually more academically demanding and certainly just as valuable to the industries of our region, which are seeking to renew themselves and to change themselves into more scientifically advanced

  555
  industries. I cannot, therefore, understand the basis on which the reductions in student numbers in those departments have been suggested.
  The excellence of the departments is further evidenced by the fact that the number of applicants for places on their courses is now 12 for every place available, as opposed to the national average of nine applicants per place. The excellence of the departments is recognised not only by industry but, much more importantly, by students. That is a firm indication of where they see their best prospects and should surely provide a valuable pointer when considering policy.
  The university has done pioneering work on sandwich courses. Nearly 60 per cent. of Aston degree students are on sandwich courses. It is the best way of providing that greater equality of opportunity that I have always understood to be the cornerstone of our policy in education. Here is a university that is providing that opportunity, that is grounded in industrial experience, and whose work is particularly applicable to the need of our region.
  When discussing the needs for our region's industry to change its nature, so that it can become an area of growth, with a higher technological content, the university can be seen to have a key role to play. The vice-chancellor has strongly propounded the idea of an industrial science park. I am glad to report that the idea is now gaining ground locally. The Redditch corporation, in its attempt to win further clients for industrial land in Redditch, has recently sent teams to the United States and has found a response from high technology firms, particularly in electronics. One of the main features has been the proximity of Redditch to the University of Aston. American firms, based on their own experience, place great value on being near to centres of research and centres that produce technically qualified students.
  The vice-chancellor and his team have not been sitting idle. Indeed, by April this year the vice-chancellor had already produced a document providing for a revision of the academic plan. I have a great respect for the attainments, will-power and energy of the vice-chancellor. But even in that plan, which contemplated severe cuts and introduced suggested measures to deal with them, the university, on the worst assumption, could not bring itself to believe that its loss of income would be as great as is proposed by the University Grants Committee.
  We are not dealing with an academic body that is trying to defend a vested interest, that has no regard to the needs of its community, or has not taken a searching look at itself. We are dealing with a university that is producing the kind of student that industry and the region require.
  The Government should take account of what the effects on the university and on the region will be if the representations which are being made to the UGC are not successful. It may be that the provision of higher education in the country as a whole needs to be reviewed, and I should have hoped that the Government would be thinking of such a review—perhaps by way of a Royal Commission—but account must be taken of the polytechnics, as I said earlier in my speech. But all that is for the future. What matters for the present is the cuts proposed in this year and the two following financial years
  556
  for Aston university, which deal a severe blow to the prospect of our region. That is why I have ventured to raise the subject today.
  7.39 pm
  Mr. Tam Dalyell: The hon. Member for Bromsgrove and Redditch (Mr. Miller) has presented a formidable case to the House, and it would be an unwise Government who did not pay attention to such a powerful case put by one of their own serious Back Benchers.
  As is known to your office, Mr. Deputy Speaker, I put in for a debate on the Consolidated Fund (Appropriation) Bill on the situation at Aston, Bradford, Heriot-Watt, Salford and Stirling universities, but it was considered improper that a debate of that kind should be initiated by me from the Opposition Front Bench. Therefore, I am glad to follow the hon. Gentleman.
  However, I shall be brief, because I have often suffered in the middle of the night or early in the morning from long speeches on the Consolidated Fund (Appropriation) Bill by hon. Members who are fortunate enough to come top of the ballot. Long speeches are unfair to our colleagues who are to speak later on other subjects.
  Before I knew that the debate on Aston was to take place, like the hon. Gentleman, I talked at length to Professor Crawford, the vice-chancellor, to friends at Aston, Drs. Coxhead, Greenshields, Rothman and Fred Steward, and also to my hon. Friend the Member for Birmingham, Erdington (Mr. Silverman) and to my friend of 20 years, my colleague on the Wildlife and Countryside Bill, my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell). I have had long conversations with my right hon. Friend on the matter, and he regrets deeply that he is not here this evening, but he has a prior engagement as Shadow Minister responsible for sport.
  First, will the Minister make explicit what Aston has done wrong? If there is something wrong with Aston, Bradford, Salford and Heriot-Watt, he should tell us candidly what it is. I should make it plain that, like my hon. Friend the Member for Derby, North (Mr. Whitehead), I attended the Select Committee on Education, Science and Arts this morning and heard the vice-chancellors give their evidence for 1¼ hours, but after three minutes, when it was becoming clear that the UGC, giving its evidence second, was on very delicate ground, I thought it right to withdraw so that there should not be any misunderstanding or question of abusing the Select Committee when speaking from this Dispatch Box this evening. I make it clear that I am not privy to what Dr. Parkes may have said to the Select Committee this morning.
  Are we suggesting that somehow the technological universities are to be regarded as second-rate? I am afraid that this is the consequence—it may not be the purposeful consequence—of the actions of the UGC. Aston, like Salford, focused on the needs of industry, and it was our understanding that that was precisely its remit. Is not the decision on the "technological" universities contrary to the Government's—indeed, successive Governments'—declared policies of bringing industry and the academic world closer together? I use the term "technological" in inverted commas as I realise most universities have powerful science faculties. The Minister has a case to answer here. Is this not contrary to the policy stated by successive Governments—not least by many members of his Government? It is no good saying—I do

  557
  not think that he would, because he is a brave man—that it is a matter for the UGC, because one cannot pass by on the side of the road like the biblical Levite. At Question Time, the Minister was specifically asked twice by me whether he agreed with the policy of the UGC; on the second occasion I read his answer as unequivocally "Yes". Therefore, we must be clear that this is not only UGC policy but UGC policy endorsed by the Government. If there is any denial of that, we should hear it from the Minister.
  Many of us feel—without being strident about it—that this is a perverse perception of the national need. This is where our bread and butter lie. The claim is not that Aston gets the most brilliant students. I believe that the league of graduate placements can be overplayed. I am, frankly, very careful about the graduate placement table. It may be argued that in universities where they teach medieval languages, philosophy and so on it is difficult to place graduates—and I do not run down those subjects. However, whether or not the university is top of the table, at the end of the day the success of Aston, Salford, Bradford and Heriot-Watt seems to be considerable by one relevant standard of measurement, among other criteria.
  Who was consulted before the strategy was devised and spatchcocked together in a hurry? I am breaking no confidences, but I went to the Salford press conference at the launching o the Campus in the Institution of Electrical Engineers. In reply to a question from a journalist, Dr. John Ashworth made it clear that he had not been consulted, yet he is the Government's chief scientist. He may not occupy exactly the position as Victor Rothschild or Solly Zuckerman, but, nevertheless, he is the chief scientist in the CPRS. As vice-chancellor-designate of one of the universities most affected—Salford—he should have been consulted about the strategy. If he was not consulted, were the Government's general strategists consulted?
  Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. I draw the hon. Gentleman's attention to debate No. 40, which deals with the Government's university expenditure programme. Anything on that debate would not be in order in this debate.
  Mr. Dalyell: I return immediately to Aston. The Aston case raises the whole question of the relations between the Government and the UGC. In the past, the UGC has always dealt with questions of expansion. It may have been slowed-down or faster expansion, but it was always expansion. This for the UGC is a novel situation; contraction is completely new. No UGC has ever had to face that.
  That brings us on to very delicate ground, as I know well. Is not the UGC, which has hitherto been sacrosanct, in a rather different position now? I am careful in these matters, so I put it no higher, but should not the Government consider an indication to the UGC that it must operate on more industrially relevant criteria? That is one problem that the Aston case raises.
  Mr. Iain Mills: Is not the hon. Gentleman suggesting, by implication, that the UGC is not suitably representative of those interests that would best benefit universities such as Aston?
  Mr. Dalyell: I have been careful about that. Let me declare a personal friendship with Professor Gowenlock,
  558
  professor of chemistry at Heriot-Watt. In a sense, Heriot-Watt can be bracketed with Aston, Salford and Bradford. I shall not be led down the avenue of some press comments into saying that the members of the UGC are incompetent to do the job. That is not my attitude. I do not believe that they are men of malice. I suspect that it has been an enormous agony for many of them. However, can the job be done by people on a part-time basis?
  Perhaps the Minister can tell us when the UGC and UGC committees last visited Aston in detail. A bitter complaint from technological and, indeed, other universities is that the UGC and UGC committees have not been near them in detail, sometimes for a whole decade. I do not doubt that the members of the UGC are hardworking people but, in reply to the hon. Member for Meriden (Mr. Mills), one wonders whether momentous decisions will be made about the future of university departments and whether that will be done on the basis of little study on the ground. In that sense we must look at the whole thing in a new light.
  It is not only the sciences and technology that are affected. It is outside the scope of the debate, but the linguistic department at Heriot-Watt, with excellent graduate placement which potentially forms an important export service, is also at risk. I am conscious that not only science and technology are at stake in the technological universities.
  I hope that the Minister will be able to shed light on the question of tenure. We are told, not least by Brian Flowers, that in 1983–84 an enormous bill will land on the desk of the Government if we are not careful. The universities cannot possibly afford to pay that bill for breach of contract and the end of tenure. Have the Government thought about how much the bill will eventually be for the redundancies? The vice-chancellor of Aston and every other vice-chancellor must consider that. Who will pay that sort of bill in 1983–84? Will it be the universities or the Department of Education and Science? What does the Treasury say about it?
  It would be useful if the Minister would expand on the subject that he has touched on before about whether pant of his strategy is to suggest that more use be made of the vacant places that we all know exist in the polytechnics. The other day I went to the polytechnic of the South Bank. I was appalled that in the department of polymer sciences, which one would have thought was relevant—
  Mr. Deputy Speaker: Order. The hon. Gentleman is straying into the general debate which should take place later on the universities. This debate is exclusively related to Aston.
  Mr. Dalyell: The question of the polytechnics is part of it.
  I understand that the Government are saying that whatever happens to Aston, Salford, Heriot-Watt and Bradford, we are protecting the sciences, because we have kept up the level of commitment to the Science Research Council, the Agricultural Research Council, the Medical Research Council and other research councils. That is a profound illusion because the truth is that if one has a dual support system to maintain a healthy scientific capacity, one must maintain both legs of the stool. The notion that somehow one protects science in Britain by keeping up payments to the research councils and running down the

  559
  university departments is a complete, basic, dreadful and catastrophic misunderstanding because science does not work like that.
  To give an example from Aston, I wonder how much detailed thought has been given to the decision about the biological sciences in Aston. I went to Eastbourne the other day to a gathering of 1,000 delegates interested in biotechnology. I understand from Professors Malcolm Lilley, Geoff Holt, Ken Murray and Brian Hartley, Michael Stoker and others working in biotechnology that they think highly of the work done at Aston. It is the learned peer opinion that matters. What sense does it make, just as Aston is about to make great progress and blossom forth—I do not refer only to Harry Rothman and his colleagues—that such a department should face execution?
  If there are to be any executions, we should know more about them. The Opposition ask that there should be some stay of action until the matter is fully considered and that we do not undertake actions that we are bound to regret if we succumb to haste and hurry. Great mistakes can be made unless we consider carefully a thought-out strategy rather than trying to save money in a hurry, spasmodically and haphazardly. Without being strident, we ask the Government to think, think and think again.
  7.55 pm
  Mr. Anthony Beaumont-Dark: I want to comment on this strange decision by this strange body of men. I can see that there is a need for national economies and that the universities cannot stand aside from playing their part in the need to conserve national resources.
  Had the bureaucracy of the United Kingdom been cut as I thought that it would be cut, many of the sacrifices now being made in a necessary part of education might not have been necessary. But the University Grants Committee said that reductions to universities had not been applied evenly. Aston would agree with that. The UGC said that it would make greater reductions to some universities and smaller reductions to others. One or two reasons were given for that in areas that the UGC thought were important. It thought that a change in the distribution of students away from the arts and towards science and engineering was important. So do I and so does Aston, yet Aston university is suffering.
  The UGC thought that an increase in student numbers in engineering and technology, despite an overall decrease in numbers, was important. So do I and so does Aston, yet Aston is still being cut. There should be an increase in the numbers reading mathematics and physical sciences. I am sure that we all think that those subjects are important. Aston does, yet Aston university is being cut. There should be support for important new advances in biological sciences, which is precisely what Aston university suggested when it went to the Royal Show. It was inundated with inquiries about the new developments and, without being asked, over 300 people signed a petition against the nonsensical decision that the UGC has made about Aston. There should be an increase in the numbers reading business studies, and Aston university agrees about that. How strange it is that Aston, which
  560
  complies with the criteria of this learned body of men, should, along with Salford, be the university that suffers most.
  I am not as generous as others. I believe that one out of 20 of the academics on the UGC coming from technological universities is the wrong balance. However, I agree that no Government can set up a quango, continue that quango and wash their hands of the result and the follies that such people perpetrate. People on a quango look on themselves in a rather different light from those who have to be elected, as we do to this House.
  There is no doubt that the seed corn area of Britain is in the Midlands and in Birmingham. There are two great universities in that area—the university of Birmingham and the university of Aston. In my view, if this country is to get going again, the graduates from those universities will get industry moving forward on the proper lines. That is why 90 per cent. of graduates in technical subjects from those universities are snapped up by industry. That is why there is such a clamour for places. My hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) pointed out that there are 12 applicants for every place.
  Of course there is duplication of effort in education and in our universities. However, it is far easier to get a course in Finnish, Serbo-Croat, Russian, medieval history or social studies than to get a place at Aston. You can bet your bottom dollar—or bottom pound in this case—that such courses are duplicated ad nauseam. Surely, in an age when the United States, Japan and Germany are expanding in technology—I heard today that one Japanese company spends more on micro-engineering than is spent in the whole of this country—universities such as Aston need to be encouraged. We cannot afford to allow our most important technological university to be treated in such a way.
  We need the sort of education provided by the universities at Aston, Birmingham, Salford and Bradford. The best courses in engineering are surely the sandwich courses which do so much to bring together the realities of industry and the theories of academics, so that graduates can play a useful part in industry as soon as they leave university. My brother-in-law did a course in Aston and was immediately useful to GEC. That is what we need.
  Aston provides the best courses for engineering students. That is why industry backs the university and why I have had 154 letters protesting at the Government's decision—not all from academics bleating their own case, but many from people who use the university's services. Of the university's 130 PhDs, 112 are in science and technology. That is good for the country.
  Of the 5,500 students at Aston, only 600 are studying social sciences and the humanities, yet the UGC decided that Cambridge and Oxford should be cut by only 3 per cent. Good grief! Apparently, if medieval history is not taught to the full, the country will crumble. Is that what the country needs? I am interested in medieval history, but I am much more interested in our industry being able to survive and thrive. If that happens, we can afford all the medieval history, Serbo-Croat and other courses that undergraduates want to read.
  The learned gentlemen of the UGC should realise that if this country is to go forward, to be industrially sound and to expand, it needs the graduates that universities such as Aston, Birmingham, Salford and Bradford turn out. We shall never go forward while we have the stupid attitude that the only good undergraduates are those who study

  561
  esoteric subjects. We must learn to honour those who study engineering and science more than we honour the theorists. The engineers and scientists will build the future and make the money on which the spirits of others can grow. Whatever the UGC quango wants to do, this or any Government who turn back and take the view that the Astons of this world must be penalised while the theorists go marching on will be doing this country a disservice.
  Like most hon. Members, I have the greatest respect for my hon. Friend the Under-Secretary of State for Education and Science, hope that, even if he cannot do something for this year, he will ensure that the universities at Aston, Salford and Bradford can look forward hopefully to next year and that he will ensure that by 1983–84 the folly of the 20 unwise men on the UGC will be put right and engineering can again be placed, where it should be—in the forefront in this country.
  8.5 pm
  Mr. Bruce George: The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) and I do not agree on many things, but there is a coincidence of interest on this issue. As one who graduated in a subject that, if not esoteric, may not qualify for the hon. Gentleman's sympathy—political studies—I must voice a protest on behalf of social scientists and arts students, because they also play a part in our economy and society. However, that is a minor dissent from the hon. Gentleman's analysis and I wholeheartedly agree with the rest of it.
  I am not a Birmingham Member. My constituency lies adjacent to the city. About 200 years ago Birmingham was described as a little hamlet near Walsall. Unfortunately, things have changed, but I worked in Birmingham polytechnic which was situated next to Aston university. It was a testimony to the failure of the binary system that a polytechnic should be sited next door to, indeed joined physically with, a technological university. I speak with some experience of Aston, having attended many meetings with staff and students from the university.
  I have received many letters from former students and existing staff. The fact that complaints are made by the staff of an institution should not devalue their worth. I believe that the UGC has made the wrong decision. It may be said that what is happening to Aston is trivial when set against the wrongs of the Government in virtually every other area of education and policy, but one can extrapolate from the Aston case that the Government have done the wrong thing at the wrong time. Our future depends on the quality of our education system, and not just the education of the under-fives or of children between 5 and 11 years. Most important for our future are the quality and numbers of highly qualified graduates that we can produce.
  At the time of the Robbins report about 20 years ago, higher education was elitist and almost the prerogative of the wealthy and the middle classes. We realised that we were losing from higher education enormous numbers of ordinary people and their children. The decision on Aston university could contribute to a return to the era of elitism.
  I am pleased that about 15 hon. Members are here to fight for the future of Aston university. If Oxford or Cambridge had been involved, we would have had to be here two hours ago to get a seat, the Strangers' Gallery would have been full and the civil servants' box would certainly have been full. I do not think that any hon.
  562
  Member in the Chamber is a graduate from Aston, but we all know the important role played by such institutions, not only in the education system but in society generally.
  I defend the role of arts graduates, but we must recognise that Aston is not an ivory-towered institution churning out graduates with irrelevant degrees. We realised some time ago that we were behind almost everyone else in higher education and that we needed to upgrade the colleges of advanced technology into technological universities and the colleges of commerce and technical colleges into polytechnics.
  We realised that British degrees were much too academically oriented and that we needed not only to turn out more graduates with a vocationally oriented degree but to accept that we could not develop learning only within academic institutions. We accepted the need to develop sandwich courses and to send students into industry, commerce and national and local public administration.
  That is the rationale of the polytechnics and institutions like Aston university which have a good record in training students for the sort of degrees that we require, including administration, management science and technology. Within a short period, the university has rightly come to be held in high esteem. All sorts of subjects at Aston and other universities will be undermined. There will be less money for fewer students. The cutback will certainly affect women badly, because more of them now go to university than ever before. No doubt women's organisations will rightly lament that fact.
  The Minister said recently that he would not drop the issue because there would be fewer 18-year-olds anyway. That view was challenged by the general secretary of the Association of University Teachers, who said that the Government had been hoodwinking the public. In the 1980s there will be 25 per cent. more 18-year-olds than the 1970s. The Government have got it wrong, as they have got other things wrong. The timing was wrong. The scale was wrong. The whole decision was wrong.
  The hon. Member for Selly Oak was unfair to the UGC', which is really doing the Government's dirty work for them. It was put in an unenviable situation, but the blame must lie largely with the Government. I deplore the overall decision regarding cutbacks, and I deplore the particular decision about Aston. It comes at a time when the 18-year-old generation is approaching its peak. It is a battered generation. The unqualified cannot find jobs, and a perverse egalitarianism is working on behalf of the Government, because now they have turned their attention to the most able of the rising generation, whose chances are being squeezed just like the chances of their less qualified brethren. They, too, are more likely to face a future without jobs.
  Opposition to the proposals comes from many sources. I hope that the universities which have been hit less hard will not shirk from supporting Aston and Salford, perhaps by saying "We escaped. If we fight too hard, it may be unfortunate for us."
  The budgets of Aston and Salford will be cut by 25 per cent. Aston will have to withdraw the offers that it has made to many students. Apparently, it will have to shed 1,000 of its 4,670 students. I understand that it has already made 2,000 offers to students. So some of the offers will have to be withdrawn, because the places simply will not exist.
  Applied psychology will continue at the present level, and, according to the New Scientist, the physical sciences

  563
  will probably slightly expand. However, that is the only good news for Aston university. The rest of the news is dire. There are to be a decrease in the mathematical sciences and reductions in pharmacy, architecture and biological sciences are to be discontinued, and engineering is to be reduced in an area such as the West Midlands. Imagine Aston university having to reduce the number of engineering students, and having to consider merging engineering perhaps with Birmingham university. That is almost mind-boggling. London university, the School of Business Studies, will apparently receive more money. That may be an award for its support for monetarism.
  Letters that I have received from Aston university show the dire problems that are facing universities such as Aston and Salford. It is tragic that the technological universities are suffering most. The hon. Member was perhaps right when he said that they are under-represented on the UGC. If an analysis were made of the number of Oxford and Cambridge graduates, that could be a factor.
  One question should be asked: how rational was the process of cuts? I suspect that it was done very irrationally. I have received a letter from the vice-chancellor of Aston university, in which he said:
  "The universities are now in the Alice-in-Wonderland situation of 'sentence first, verdict afterwards'. A reasonable progression would have been: first, a thoughtful report on the state of Higher Education in Britain, providing a blue-print for further development, and perhaps leading to a 'verdict' that the university system merited the 'sentence' of a significant reduction in recurrent grant support.
  Instead, the economic sentence was imposed first. Only then was the University Grants Committee asked to review the entire university system, in just a few months, and to 'rationalise' the cuts by modifying the system very significantly. It has done so with no blue-print for Higher Education at hand that we are aware of, and with no public discussion of its criteria for evaluation and change, and how they might be applied."
  That is the kind of situation that has emerged. Perhaps the arts bashers will be happy that English, history, and sociology will get the chop. However, one should bear in mind what else is to happen. It should be remembered that to the UGC the social studies include business management, economics, geography, accountancy, law and psychology as well as sociology. The UGC letter envisaged a small increase in the number of students reading business studies. It should be an enormous increase.
  Mr. Deputy Speaker: Order. Is the hon. Gentleman relating his speech entirely to Aston, because that is the only subject of this debate? Item No. 40 deals with the general position of universities.
  Mr. George: I accept your ruling, Mr. Deputy Speaker. I thought that I was leaning over backwards to concentrate on Aston.
  At present in Aston there are studies in economics, accountancy, law and psychology, as well as sociology, and undoubtedly those studies will be affected. Science at Aston university and other universities will increase insignificantly, and there will be reductions in engineering, technology and architecture. The letter from the UGC says that there will be "significant reductions" in architecture and town planning. That is a very good department at Aston university. Perhaps the Government
  564
  think that there is some justice in that, because they have done little to encourage building. Perhaps fewer architects will be required.
  Subjects allied to medicine will suffer, too. The whole range of vocationally oriented subjects at Aston university and other technological universities will be clobbered.
  I wish to ask a number of questions. How will the redundant staff be paid off? What will happen to research in universities such as Aston—not research on trivial and insignificant subjects, but research in engineering, technology, and matters which are vital for the regeneration of British industry? How was the UGC decision arrived at, and what criteria were used?
  I deplore the cuts, and I deplore the fact that universities such as Aston are already suffering as a result of the reduction of overseas students, who themselves—the ones who have been able to come—are subject to a great rip-off. I hope that the Government will realise that the future of our society depends on a large number of highly qualified students. We are already among those with the lowest proportion of students going on to universities. We have one of the lowest percentages of university graduates in the Western world. I hardly think that this decision by the Government will enhance the quality of education.
  Therefore, on behalf of Aston university, Salford university and many other universities which are affected and may be affected in the future, I ask the Government to reconsider. There may be justice in universities suffering cuts, the same as anyone else, but for universities such as Aston this blow could be devastating. It is located in the heartland of what was an industrial area, the West Midlands, and I believe that this is a further ignominious blow to this region that I am proud to represent, I hope that, as a result of representations from both sides of the House, the Government will reconsider.
  8.19 pm
  Mr. Jocelyn Cadbury: I wish to add to the important points that have been made by hon. Members on both sides in defence of Aston university. First, however, I want to make two confessions. One is to the hon. Member for Walsall, South (Mr. George). I was a graduate of Cambridge, and I should undoubtedly have been among those packing the Benches in defence of that university, had it been threatened. My second confession is to my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark). I was one of those who read an esoteric subject at university. I was a social anthropologist. I confess that the subject has no immediate practical use. However, I can say in its defence that there is an automatic check on the numbers of anthropologists. If an anthropologist does field work in New Guinea, there is a sanction. If the natives fall out with him, they eat him.
  The proposed drastic reductions in grant for Aston university must be examined in the context of the erosion of Britain's industrial base since the war. More specifically, we must view the proposals in the light of the shortage of high calibre engineers in British industry. To underline the seriousness of the shortage, I shall quote from the Finniston report. Referring to the views of employers, it states:
  "Concern was repeatedly expressed to us from all sides (i) that there were two few high-calibre engineers and hence intense competition for them; (ii) that the remaining body of graduate

  565
  engineers lacked the qualities of practical application and understanding of industry associated with those who came through the old part-time route".
  Finniston was saying that not only was there a shortage of engineers but that many engineering graduates lacked an understanding of the practical needs of industry. That means that companies have to spend valuable time giving further training before the graduates can make a useful contribution.
  The irony of the proposed cuts for Aston university is that Aston is the very university that has responded directly to national needs. It has taken the lead. Aston is a technological university par excellence. Out of 4,400 home students, 1,600 are reading engineering. Aston has pioneered the idea of the sandwich course. That gets at the root of the problem of giving students studying engineering a practical grounding in industry. Aston was ahead in that field.
  Aston's response to industry's needs is not confined to engineering. About 700 students are taking degrees in managerial and administrative studies. Fewer than 600 undergraduates are studying the social sciences and the humanities. The balance at Aston is in the right direction for a technological university.
  The result of the lead that Aston has taken in producing the qualified people industry wants is that Aston graduates have the highest success rate in the country for obtaining employment. They are at the top of the employment league. In the period 1975 to 1979 only 4·9 per cent. of Aston graduates failed to find a full-time job within a year of graduating. That compares with the university of East Anglia, where 25 per cent. of graduates failed to obtain jobs in the same period. The figure for Sussex university is 21 per cent., for Warwick 20 per cent., and Kent 19 per cent. The difference is that Aston is producing the graduates that industry wants and that the country desperately needs. That is why in 1980 Aston received 12 applications for each place, compared with the average of nine.
  Not only is Aston producing graduates that industry wants but it has an excellent reputation in the Midlands for co-operating wit h industry. I have a long list of companies with which Aston has undertaken joint projects. It includes companies such as Fisons, GEC Power Engineering, British Leyland, Conoco, ICI and corporations such as the United Kingdom Atomic Energy Authority and the Post Office.
  Under the enlightened leadership of the present vice-chancellor of Aston, Professor Crawford, who comes from Stanford in California, where they understand the need for universities to co-operate with industry, Aston is pursuing the idea of a science park, to which my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) has already referred. Surely that is one of the keys to bridging the gap between industry and the academic world that has so bedevilled our country in recent years. The science park around Stanford in California was the beginning of "Chip Valley". All the companies that now dominate the would of electronics started from the science park there.
  What is the reward for Aston's extraordinary success? Under the UGC's proposal, Aston is to suffer the second largest reduction in students. Salford, another centre of technology, leads and Aston comes second. Which faculties are to be affected? It is also incredible that out of 1,000 places which Aston is to lose, 690 will be in
  566
  science and engineering. Engineering is bound to suffer at Aston because it makes up such a large proportion of the total number of students.
  The proposed cuts threaten the viability of Aston. If they are allowed, they will deal a body blow to its prestige that has been so carefully built up by previous vice-chancellors and is now being further enhanced under the dynamic leadership of Professor Crawford. We are in danger of reducing technological universities to second-rate status. That is extremely dangerous.
  Mr. Dalyell: Even if the UGC did not mean to do it, does the hon. Gentleman agree that that is the net effect of what it has done? People will deduce that the university is second-rate. The deduction in the public mind will matter.
  Mr. Cadbury: I agree. The cuts are bound to have that effect on people at school planning to go to universities. They will make deductions from what has happened and fill in the forms accordingly. They will downgrade Aston as a result of the cuts.
  It might be unfair to single out universities that have not been as successful as Aston in terms of the employability of graduates. However, one cannot help noting that some universities with the lowest success rates in terms of their graduates being employed are experiencing the least damaging cuts. For example, East Anglia university, which produces the least marketable graduates, is to suffer a reduction in students of only 3·2 per cent. in the period 1980 to 1984 and only a 9 per cent. cut in grant.
  York university has no faculty of engineering but it is to lose only 0·3 per cent. of its undergraduate places. It seems that universities with no engineering faculties have come off extraordinarily lightly. That is not what the nation needs.
  We have all heard hair-raising stories about the bizarre subjects that can be studied in our universities. I have a relative who was at Kent university and took a degree in drama and the cinema. I know that the cinema is an important aspect of our cultural life, but I am not convinced that taxpayers' money should be used to send youngsters to universities to watch movies. I am sure that there are many examples of subjects at which we should take a hard look because of the wastage of taxpayers' money.
  I accept that we must be aware of the concept of academic freedom. We must also remember that Britain is facing an economic and industrial crisis. We know that one of the causes of the erosion of our industrial base is the shortage of high calibre engineers. We need them to design the products to sell in the world markets. I cannot help but ask whether the members of the UGC appreciate that fact. Is that body accountable to no one? If the Government, leaders of industry and trade union leaders see clearly that university education appears to be heading in the wrong direction, at what stage can the UGC's policies be called into question? I appreciate the Minister's dilemma, but I hope that he will attempt to answer those questions when he replies.
  I wish to raise a final point about the totality of higher education. I accept that I must: tread carefully to stay in order. Why do other sectors of higher education appear largely to have escaped the cuts that are concentrated on universities? Polytechnics have already been mentioned. I cite the example of so-called colleges of higher education—
  Mr. Deputy Speaker: When polytechnics were mentioned earlier, the Chair ruled that as there is a later debate, the universities programme, it was out of order to discuss them in this debate on Aston university.
  Mr. Dalyell: On a point of order, Mr. Deputy Speaker. It may be unusual for me to come to the aid of a Conservative Member, but some of us see the Aston problem as linked clearly with the polytechnic problem.
  Mr. Cadbury: I agree with the hon. Gentleman but stand corrected. Those other areas should have been considered. However, I shall leave the matter there.
  No one can deny the vital contribution that Aston university is making to the national need for high-quality engineers. We have only to talk to Midlands industrialists to verify that. The remarkable success of Aston graduates, which puts them at the top of the employment league, speaks for itself. If the proposed reductions in grant are carried out, they will represent one more major step towards the deindustrialisation of Britain.
  I hope that my hon. Friend the Minister will do what he can to ensure that reductions in grants are spread more fairly across the whole area of higher education. I hope that the UGC will listen with an open mind to what has been said in the debate and reconsider its proposals. The university of Aston must be spared, in the interest of the regeneration of British industry.
  8.33 pm
  Mr. Terry Davis: I agree entirely with what has been said by other hon. Members from Birmingham and the West Midlands about the disastrous effects of the UGC's proposals for Aston university. I do not agree with everything that was said by the hon. Member for Birmingham, Northfield (Mr. Cadbury). In particular, I do not follow him in his criticism of courses dealing with drama and the cinema. It is possible for such courses to make a valuable contribution to the cultural life of Britain and to industry, by helping the ailing film industry which is an exporter, and therefore to benefit the country's economy.
  Both sides of the House agree about the effects of the UGC's proposals on industry, especially in the West Midlands. Several hon. Members have already said that Aston university has been top of the league in finding jobs for its graduates. That has not been a flash in the pan. Aston has been top of the league for at least three years in succession. It is a consistent record of achievement that we should beware of damaging.
  In the West Midlands we are very conscious of the decline in our industry, especially the engineering industry. It is natural that hon. Members on both sides of the House should be anxious about the effect of the proposals on industry in both the West Midlands and Britain as a whole. It is important to remember that universities serve not only the regions but the whole of Britain.
  It is not insignificant that fewer than 600 students out of a total of 5,500 at Aston are studying social sciences and humanities. I assure my hon. Friend the Member for Walsall, South (Mr. George) that I am not pouring scorn on the graduates who have studied arts and humanities. I am sure that they make a tremendous contribution to Britain's industry. However, I believe that we need more engineers and more technically qualified graduates if we are to solve the industrial problems of Britain.
  568
  Everyone who has participated in the debate has referred to the effect on industry and to the effect on Aston's provision of graduates for industry. Industry does not depend on the universities only for qualified people. It also depends on universities for the research to provide the products of the future, and I want to draw the attention of the House to the effect of these proposals on research at Aston.
  The letter that was sent by the UGC to Aston university called for the discontinuation of activities in biological sciences. In fact, two letters were sent to the university. The first letter described the proposed cuts. The second letter, which may be described as a standard letter, called for new developments in biological sciences and referred specifically to developments with a high potential value for the economy.
  I am told by those at Aston university that their department of biological sciences has concentrated particularly in its research programme on the sort of project that has value for the economy. I have obtained a list of projects that are closely concerned with industry. For example, there is the only biodeterioration centre in the United Kingdom. "Biodeterioration" is a technical word. It means research into damage to products, premises, processes and systems of all sorts caused by living organisms including bacteria, fungi, yeasts, insects, animals, birds and plants.
  There is also a positive side to the research at the biodeterioration centre. There is what is called biodegradation, which is the upgrading of wastes by living organisms and hence the improved control of environmental pollution. There has been research into the contamination of fuels and metalworking fluids by fungi and bacteria, into the fouling of stone and paintwork by algae, into insect and fungal attack on stored grain, into rodent damage in factory premises and into damage to buildings and roadways by plant growth. I could list many other projects, and most are of direct benefit to industry.
  Mr. Dalyell: About a year ago I was asked by a technical journal of the chemistry industry to review a book of Harry Rothman's on biotechnology that covered some of the subjects mentioned by my hon. Friend. Harry Rothman is a member of Aston university. I asked a number of qualified people at other universities to give me their opinion on the quality of work undertaken at Aston. The work was highly regarded. In the view of those who are competent to give an opinion, the standard at Aston is very high. I substantiate what my hon. Friend says.
  Mr. Davis: I am grateful for my hon. Friend's support. The biological sciences department at Aston is one of only two university departments in the United Kingdom that has a unit engaged in research that will specifically support the fish farming industry. That is an industry of the future.
  There is a mycology section which is leading development and research in the mushroom industry and into industrial fermentation.
  For the past 20 years there has been research into the biology of water pollution and effluent treatment. These are projects that have value to industry as well as value to the British people in improving their standard of living. I am told that all these projects are at risk as a result of the UGC's proposals.
  There are some other projects as well. In the biological sciences department at the university of Aston research is

  569
  being done into health matters. As I take a special interest in health, I should like to describe three of the most valuable research projects. Again, I am told that they are at risk as a result of the UGC proposals.
  Firstly, some research is being done into diabetes, which is one of the fastest growing diseases in the Western world. It has been estimated that 3 per cent. of the population of this country have suffered or will suffer from diabetes, and that this proportion will double in the next 20 years. At Aston, research is being done into both the cause and the treatment of diabetes. That research is supported by the Medical Research Council, the Science Research Council and pharmaceutical organisations, with the result that half the money for that research comes from sources other than the UGC. The fact remains that the UGC is responsible for funding the other half of that research. If half the money is removed, will the research continue? I doubt it.
  Secondly, research is being done into cancer. Scientists are investigating the mechanisms which control cell division. Their research is directed to the prevention of cancer. That research is supported by the Cancer Research Campaign, the Royal Society, the Welcome Foundation and several other organisations. One-third of the money comes from bodies other than the UGC. That means that two-thirds of the money comes from the UGC. Thirdly, research is being done into immunology. That is funded to the extent of three-quarters by the UGC. I am told by the scientists working at the university of Aston that all these projects are at risk as a result of the proposals.
  It is not only the department of biological sciences at Aston which is affected. That department has been told that it must close. A cutback is also suggested at the department of pharmacy. I know that some people think that pharmacy is about training people to work in chemists' shops. However, we know in the House that pharmacy is even more important than that. The department of pharmacy at the university of Aston has recently been awarded £1·6 million by the Cancer Research Campaign after a careful survey of the whole country to identify the institution that was best qualified to conduct the research with that money. This research is intended to find a drug that will kill cancer cells. Work has just started on the project, and the scientists at the university of Aston are extremely concerned that their research will stop as a direct result of the proposals by the UGC.
  There have been several references to the UGC. Only a few days after the proposals were made public, a member of the UGC Was quoted in The Birmingham Post as saying:
  "We could have cut the universities equally and had uniform misery for all. But we have tried to preserve the best in the system and put the burden on less satisfactory."
  That is inconsistent. Look at that quotation from a member of the UGC and then look at his action in apparently supporting the UGC proposals.
  Mr. Dalyell: Name him.
  Mr. Philip Whitehead: Name him.
  Mr. Davis: As I am asked to identify the gentleman who was quoted in The Birmingham Post, it was Mr. Ferguson. I do not know how long he has been a member of the UGC.
  570
  There is not only an inconsistency between what members of the UGC say to the newspapers and their actions but there is also an inconsistency between the UGC's proposals and what the Minister says.
  The Under-Secretary himself made a speech less than 24 hours after the announcement of the UGC proposals for the university of Aston. He was quoted in the press as saying that he had warned of the gap between research in universities and the workshop floor. He called for a partnership of academic life and business. If ever there was an example of partnership between academic life and business, it is in the university of Aston.
  8.45 pm
  Mrs. Jill Knight: As no other hon. Member has already done so, let me make it clear that there is perfect understanding of the need to make cuts. We know perfectly well that for many years we have been living beyond our means and that the only way to proceed is either to borrow money, which must be paid back at an expensive rate of interest, or to print more money, which only leads us further down the road to inflation.
  I therefore hope that my hon. Friend the Under-Secretary, for whose expertise I have tremendous respect, will accept that those of us who object to the actions of the University Grants Committee in relation to Aston do not do so because we imagine that there is some bottomless coffer of money which can be tapped and poured endlessly on Britain. We understand the need to make cuts extremely well.
  Mr. Whitehead: The hon. Lady will, I am sure, agree that, apart from her legitimate constituency interest, the cuts that have been made extend to universities other than the university of Aston.
  Mrs. Knight: On three or four occasions, Mr. Deputy Speaker has drawn the attention of hon. Members to the fact that we are debating Aston. It is therefore to Aston that I direct my attention.
  Mr. J. F. Pawsey: I am sure that my hon. Friend is aware that the number of students taking engineering, mathematics, physics and hard technological courses will increase. I am equally sure that she is aware that the number of students will reduce to about the same number as existed in 1977–78 at the time of the Labour Government.
  Mrs. Knight: I shall not follow that line of argument.
  I am particularly troubled that the future prosperity of Britain depends utterly on the success of industry. We who represent the West Midlands do not hesitate to say that the West Midlands is the industrial heart of Britain. Our success in the future, and the only way in which we shall be able to overcome the difficulties that we now face, depends on the ability of the West Midlands, of all areas in Britain, to be prosperous.
  Success will not come from Brighton, Basildon, Bridlington or Bristol. It lies utterly within the West Midlands, and unless we can promote and encourage the prosperity of industry in the West Midlands the future will be bleak.
  Industry throughout that great area is strengthened, sustained and vastly aided by the expertise of those who have acquired technical skills at Aston university. That being so, it is difficult for some hon. Members to

  571
  understand the proposals of the UGC. To many of us, it is obvious that, to recover from the current economic recession, British industry must improve its performance in innovation, design, production and management. That will require well-trained scientists, engineers and managers from relevant industrial courses.
  We shall also desperately need new ideas for products and processes from applied research and development. There can be no argument about that. Bearing all those points in mind, some of us find it incomprehensible that the Government's policy, applied by the Department of Education and Science through the UGC, has been to cut back most severely of all on the technological universities, such as Aston, while leaving the traditional universities relatively unscathed.
  We have already heard that there is an aura of the untouchable about academic subjects. With all the respect in the world towards those subjects, however, they do not provide the skills which will pull the country back to prosperity. There is no doubt that Aston has an internationally high reputation for science, engineering and management training. All over the world one can meet graduates and people who respect what Aston has given.
  Aston has closely maintained industrial links. That is perhaps the basis of its success. Indeed, many of the staff came to the university from industry, having first had a basic training in industry. We have heard that many students are on sandwich courses, so there is a tremendous balance between learning and industry. Much training at Aston involves industrial projects, and a great deal of research has arisen from industrial collaboration.
  Aston has a top position in the United Kingdom for graduate employment. Although this has been mentioned before, it should be stressed because that reputation has continued for many years. Unit costs are also low. Aston cannot be faulted as being other than extremely economical in its working, because there is a very high student-staff ratio.
  I am therefore led to ask the Minister how the plan for university grants will provide the technologists that British industry so badly needs when the technological universities are to suffer the severest cuts in funding.
  I wish to make only one further point, as I do not wish to repeat what has already been expertly put, although I support almost all of it. It seems incredible that the University Grants Committee members have apparently never visited Aston at all. Do they sit in some ivory tower reading down rows of lists and deciding that this shall be the outcome of their deliberations? Do they ever talk to industry? Do they ever try to find out exactly what Aston has done? If they do, how can they possibly justify their suggestions? I understand that the imposed cut of 22 per cent. in home-based students must be implemented by 1983. This is extremely important. In effect, it means that those students cannot be admitted after October, because they will still be in the university in the 1983–84 session. The cuts are therefore not graded, as we have been told elsewhere, but are immediate.
  I take the view of many of my hon. Friends and many Opposition Members that the cuts proposed by the University Grants Committee are arbitrary and inconsistent with any logical reasoning or Government policy. A glaring example is that the university of Warwick—one of the least successful universities, according to the
  572
  Financial Times list—has been advised to increase the number of engineering students. How can it make sense to have good students, unable to enter Aston with its admirable history and performance, go to a university from which their chances of employment are far less favourable judging by its track record?
  For all those reasons, and supporting my hon. Friends, I beg the Minister to think again.
  8.55 pm
  The Under-Secretary of State for Education and Science (Dr. Rhodes Boyson): I have been thinking for well over one and a half hours while listening to hon. Members speak on this subject, introduced by my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller). There can be no doubt about the feelings of those in the area involved. To remain within the bounds of order, I must not stray too wide of the subject before us. The best course to adopt is to take up several of the points made and to return later to the main theme. I shall touch on the position of the University Grants Committee and answer, as frankly and clearly as possible, the questions asked by the hon. Member for West Lothian (Mr. Dalyell), which were also asked about two weeks ago at Question Time.
  My hon. Friend the Member for Bromsgrove and Redditch referred to employment prospects and to the table that appeared in the Financial Times. I commend any institution that turns out graduates who can find employment. The percentage of sandwich courses and students on them is a factor in this matter. However, I do not wish to go through a pecking order of subjects. This morning, Dr. Parkes attended the Select Committee. I was not there and the hon. Member for West Lothian left after a short time for honourable reasons. One consideration is the amount of research engendered in the university. It is a question not only of university grant research but of all types of research, including industrial research.
  I shall try to meet the specific points that have been made. I am informed that all types of research—and not just Government-sponsored research—are involved. I shall take into consideration the points mentioned by the hon. Member for Birmingham, Stechford (Mr. Davis) and others. The hon. Member for West Lothian and my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight) referred to the visits made by the UGC. During the past two years we have not known whether the funding would be level, plus 2 per cent., minus 2 per cent. or minus 5 per cent. Soon after we came to office, the UGC began an analysis of each institution and the courses being offered. Most of the conversations were held in London. In the past two years, considerable analysis has been made of the universities and the courses being offered.
  In the past five years, visits have been made by the UGC to the following departments at Aston university: physical sciences, social studies, the arts, technology and business management. I take the point that has been made about redundancies. Obviously, people are concerned about them. The earlier UGC letter said that it wanted the returns on the possibilities involved by January 1982. Therefore, I cannot comment further now. Nevertheless, it is a matter of considerable concern.
  My hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) spoke with great gusto and fire and kept us well awake. The balance has been considerably altered from the arts to the sciences. It may not have been altered as much as some would have liked,

  573
  but, on the other hand, it may have been altered more than others would like. I have all the figures, but I shall mention only a few. In two years the figure for physical sciences will be increased by 7 per cent. The figure for engineering and technology will be increased by 2 per cent. The figure for business studies will he increased by 3 per cent. I could give similar figures for mathematics and medicine.
  Mr. Dalyell: I heard the Minister say that redundancies were a matter of great concern. So they must be to everyone. Many of those who would have taken voluntary retirement, envisaging redundancy, are withdrawing their applications for voluntary retirement. That is only one aspect. The particular aspect on which I should like an answer is the size of the bill and who will pay it. Following all these legal test cases on tenure, there will be a massive bill of £250 million or more.
  Dr. Boyson: The simple answer is that no one knows. I am not a prophet. Aneurin Bevan once said:
  "Why look at the crystal ball when you can read the book".
  At some stage, if some form of direct redundancy is required, we shall know the answer. At present we do not know. There are no figures that can be given. I may be pressed, but that is the only answer.
  Mr. Whitehead: Does the hon. Gentleman accept that it has been said that if there were 3,000 redundancies there would be £250 million to be found? Does he not agree that such a figure would bankrupt some universities if they had to find it without a supplementary grant?
  Dr. Boyson: I realise, Mr. Deputy Speaker, that that question is no: related to Aston. I would not want the hon. Gentleman to lead me into spending more time discussing redundancies about which we can do nothing. I have seen all kinds of estimates. It depends which newspaper one reads. There are no hard facts. I prefer dealing with hard facts.
  Mr. Terry Davis rose—
  Dr. Boyson: I shall give way a third time on redundancies but not after that.
  Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The debate is becoming a little general. I suggest that hon. Members concentrate on Aston university.
  Mr. Davis: Will the Minister say how many redundancies will take place at Aston as a result of these proposals?
  Dr. Boyson: I follow your guidance, Mr. Deputy Speaker, and take this matter no further. The answer is that no one knows.
  I pass to the general issue and particularly the university of Aston. Many hard things have been said about the University Grants Committee. I wish to deal with its credibility. Its chairman is an ex-vice-chancellor of City university, a technological university. Dr. Parkes was its distinguished vice-chancellor. Many of the technological universities are so recent that members of the UGC would not have been able to attend them unless they were still under 40. They would have had to attend them in a previous incarnation.
  The hon. Member for Walsall, South (Mr. George) is worried about the percentage of working-class students going to university . I am worried also that the figure has been falling while the number of university places has
  574
  been increasing. The percentage has been falling. I should like the House at some time to discuss the issue. It should be a matter of concern to hon. Members on both sides. I am not saying this in any spirit of antagonism towards the hon. Gentleman. This is a non-party issue that must at some stage be debated. We have not succeeded. The percentage of intake from the working-class in the 1970s has dropped, despite university numbers increasing.
  Mr. John McWilliam: Does the hon. Gentleman agree to that debate on the basis of the reply to the Select Committee on Education, Science and Arts report on higher education, which indicated a possible solution?
  Dr. Boyson: I suggest that the hon. Gentleman raises this matter on business questions. It is a matter for the Leader of the House. I am interested to see how this debate has widened and how influential the hon. Member thinks all those hon. Members present are. There is one odd thing about Aston—and I am endeavouring to be neutral in the facts and figures I present. I am informed that last year there was a drop of 10 per cent. in the intake at Aston. I should like to know why the intake dropped last year, irrespective of the decisions made this year.
  My hon. Friend the Member for Birmingham, Northfield (Mr. Cadbury) raised the question of the science park. I know the one at Stanford university, where I spent a lot of time last year, and its connection with Silicone Valley. The link between universities and business and the future of the country must be strengthened.
  I want to try to put the debate into perspective arid to show where we stand in relation to Aston. I must keep clear of the general debate on universities but the overall sum that we can allocate to higher education is a Government decision, and always has been. It is the direct responsibility of the Government in power. Then it is a matter of division across the binary line.
  Hon. Members on both sides of the House have referred to the difficulties that arise from the polytechnics being cheek by jowl in many cases with the universities and to the difficulty of bridging between the two. Before many days have passed, a Green Paper will be issued by the Government on this question. We should not look at one side of the binary line without looking at the other side as well. I agree that there is an urgent need for a procedure of rationalisation, as there is often competition between the institutions in an area. Some kind of body is needed on the maintained side which can be in dialogue with the UGC on the university side.
  Once the overall sum has been fixed, it goes to the UGC. Ever since 1919, when the UGC was established, the Secretary of State has accepted the advice of the UGC, just as he did three or four weeks ago. It might help to concentrate our minds if we were to consider what would be the alternative to the UGC. If the UGC is not to do the division, who is to do it? The UGC has been used as a dartboard recently. Is the division to be done by this House? I think it was my hon. Friend the Member for Selly Oak who referred to a quango. I know that he does not like quangos. Are we to have another quango here? We have not the skill or knowledge in this House to decide how to divide the money between universities or between faculties. Are we to act in parallel with the UGC?
  Mr. Beaumont-Dark: The Minister appears to be saying that he and his officials are a quango. I thought that Ministers were appointed in order to perform a task.
  Dr. Boyson: I must take this further, because my hon. Friend has raised an important point. There are 45 universities. In the maintained sector, there are 396 institutions at which students can get degrees. Knowing the degree to which hon. Members rightly seek to look after their constituency interests, if we had to decide in this House the money that is to go to every university and to every faculty, it would take the whole of the summer to do it. It is just not possible for us to do it in this House. Somebody has to make the decision, and I can see no alternative to the UGC.
  Mr. Cadbury: Would it not be possible to have on the UGC people representing industry and perhaps the trade unions in order to give it a better balance than it has at present? Is not that an alternative?
  Dr. Boyson: My understanding is that such people are already represented on the UGC. That is my impression when I meet the UGC. With the general agreement of this House, the UGC was set up in such a way as to have the right balance. The present complement of the UGC was not decided by the present Government or by the Conservative Party. It was done by general agreement. Practically all the members of the UGC, including the chairman, were appointed by the Labour Government.
  I warn the House that unless we can find a better way of dividing up the sum of money than we have at present, we had better stick to the UGC. If we abandon the UGC without having a proper alternative, we shall have major chaos in the organisation of education throughout the country.
  Mr. Ronald W. Brown: I am following the hon. Gentleman's argument, and there is much in what he says, but will he issue a warning to the UGC that its credibility is getting less and less, especially when it proposes to spend more than £15 million in building the scheme for Barts, London Hospital and Queen Mary college when it is not necessary? What is at stake tonight is the UGC's credibility.
  Dr. Boyson: The hon. Member has already been in contact with me, and I believe that he spoke recently in the House on this important matter. I have received letters from Government and Opposition Members about it and I had a conversation with others about it yesterday. Since it is basically a matter between the senate of London university and the UGC, I should prefer not to comment further.
  Mr. Dalyell: The Minister will agree that I was extremely careful not to attack the UGC or its members. My impression is that they are overworked, in agony and harassed by the situation in which they find themselves. But is this not partly because they have had to do the job in such a hurry? Does it not lead to the conclusion that the problem should be put in cold storage, at least for a while? Why the haste for all these decisions? For goodness sake, give us more time. That raises another question: is it reasonable to expect a body, most of whose members are part-time, to do such a job in a totally new contracting, not expanding, situation?
  Dr. Boyson: I take the hon. Gentleman's point. He was very careful in what he said, and I was well aware of it.
  576
  I cannot comment on whether there should be more full-time members. If I were to do so, I am sure that I would be attacked by at least one of my hon. Friends.
  The question of timing and the birth rate was referred to by the hon. Member for Walsall, South. As I understand it, the peak of the 18-year-olds will occur next year—1982–83. Over the next 10 years there will be a 30 per cent. decline. If there is not, they must be hidden somewhere in the bullrushes, like Moses. These figures are accepted. They have not been invented by the Government along the way. At some stage there would have to be a degree of rationalisation, but the need for curtailing expenditure has speeded that up. The hon. Gentleman thought that it would have been much easier to do over a longer period, and I do not disagree with him.
  Mr. Hal Miller: I should like to pick up my hon. Friend on the age distribution. I have with me a chart of estimated legitimate live births by social class of husband for the years that would yield 18-year-olds over the period to which my hon. Friend referred. Far from showing a decline, the chart shows an increase in classes I and II—professional managerial—from which, regrettably, the bulk of university applicants still come. I hasten to add that the chart was produced by Aston university. It does not seem to me that there is such a decline in applicants to be expected for Aston university as my hon. Friend so confidently predicts.
  Dr. Boyson: I am not a great expert on legitimate and illegitimate births. We know that various estimates were drawn up well before this year. My hon. Friend has briefed himself very well for this debate, but throughout the 1970s there were estimates that presumed that many more children would go up to higher education than did. We have always been wrong. I could never be a Socialist, because Governments are nearly always wrong. Even Labour Members think that Governments are wrong. Every estimate of the number of 18-year-olds who wanted to go to university or take advantage of higher education was always wrong.
  Every three or four years each Government, of whatever colour, cut back the intended increase because the numbers were not increasing. In the 1970s, there was a drop in the participation rate of 18-year-olds going on to higher education from 14 per cent. to 12·4 per cent., despite vacancies in the institutions. Therefore, although I recognise what my hon. Friend the Member for Bromsgrove and Redditch says, I am doubtful about long-term trends.
  I come back to the crucial issue of who is to decide how to spend the sums that the Government allocate. If the Government interfered in the UGC's decision by saying "We accept everything but A", there would be a problem not only with Aston, Salford or Keele—there would be a Pandora's box in every faculty. The Government would have to decide each aspect in detail.
  I have not heard any vice-chancellor publicly state that he wishes to replace the UGC by another body. The vice-chancellors merely argue about particular decisions which may be against their interests.
  The technological aspect is particularly important, so I point out that 30 universities have increased their technical numbers, five are being held constant and seven are decreasing.
  The UGC takes a national view—although I appreciate that Aston has a national significance. Four universities

  577
  draw largely only from their own areas historically—Strathclyde and Glasgow in Scotland and Bangor and Aberystwyth, because of their teaching of Welsh—and so need faculties in most subjects, apart from the very obscure. All the others take students from throughout the country who go to stay there. Of course, one could argue that living away costs a tremendous amount in our university budget, and savings may be made by having another system. However, I do not make that case.
  The UGC has tried to ensure that faculties are available with the necessary highly expensive equipment and libraries—and librarians and translators if we are to keep up with Japan and the rest of the world—so that we have a sufficient number of good faculties throughout the country.
  Mr. Whitehead: If one follows that to its logical conclusion—the policy of looking at courses and faculties and not at institutions—may not some of the institutions die? Are we not near that point with the technological universities?
  Dr. Boyson: I do not believe that we are near that point. In some cases there may be heavy pruning, but the confidence in the various departments within universities, such as Aston, is such that I do not believe that they will die, although that is only my personal view. They have the support that we have seen tonight, and I cannot see them dying.
  We accepted the UGC's advice. We may not have gone through it with a magnifying glass or microscope and considered each recommendation for every faculty—I do not believe that any Government would do that—but the Government accepted the package. We are not defending or attacking any particular faculty. The UGC spent a lot of time on the matter. The hon. Member for West Lothian believes that there should be more full-timers. However, the UGC has made what it believes to be the right judgment nationally, and that has been accepted by the Government. When I said that that was what it meant, it did not mean that we had investigated every course but that we accepted the overall recommendations of the UGC.
  Dr. Alan Glyn: Surely it is the job of the Government to lay down the general principles on which the UGC should work. It is up to the UGC to decide, whether we like it or not, what it does in individual cases. In deciding that, the Government interfere with every decision that the UGC makes.
  Dr. Boyson: I welcome the support that my hon. Friend has hastened to give me. He is quite correct. That throws light on the problem. It is the job of the Government to make money available. Obviously we need more technology and engineering, and such matters come within the UGC's remit. I quote from The Times of 7 July about the new vice-chancellor who has been appointed to London university, Professor Quirk, a great language scholar. In the interview with Philip Howard, he
  "congratulates the University Grants Committee for the way they have managed their virtually impossible task:
  They have taken extraordinary care within their abilities and the financial restraints, to ensure that the best remains the best, and possibly even improves; that universities continue to serve
  578
  the wide range of studies; and that modest increases are made in such necessary fields as technology. They have let thecuts come where they will do the least damage.
  Of course the cuts will be painful, but the increase by 100 per cent. in the sixties was painful also. If we can arrange them with the same care as the UGC in our individual universities, they can be healthy rather than damaging. The loss of 10 per cent. from the body academic, if carried out with care and deliberation, can be as beneficial as the loss of 10 per cent. weight from the body Howard'."
  My last quote of the evening is the one that I promised the House. [Interruption.] I heard not an intervention but some loud thinking from my hon. Friends the Members for Bromsgrove and Redditch and for Edgbaston.
  Mrs. Knight: I hope that my hon. Friend will address himself to the important point that many of us made. Industrial success is vital to the country, but the success of industry depends on the quality of the students going to Aston university. Will my hon. Friend deal with that important matter?
  Dr. Boyson: My hon. Friend, as always, has asked a straightforward question. The Government feel that we must depend on the efficiency of the education system not only in science and technology—that point has been made by many hon. Members—but in the widespread subjects in the university system. We are not saying that such work should be carried out in one area of the country rather than another as people travel from one place to another. We asked the UGC to carry out such work nationally and it has done so. I realise that tonight's debate has related to Aston university, and we may talk about other areas such as Manchester as the debate continues. We are concerned about the link between industry and the universities. The importance of that link has been underlined. The UGC has made its decisions nationally. It has made what it believes are correct decisions and I do not think that any other body could have done better.
  Mr. Dalyell: I agree that no other body could do this work as well as the UGC, but it is equally true that the UGC might do a better job if it were given more time. If anything has come from the debate, it is, for heaven's sake, to allow time before the irrevocable decisions are taken. Time is of the essence.
  Dr. Boyson: The decision would have been easier if there had been more time, but only rarely in life do we have time in which to make decisions. Most are forced on us by circumstances. When the birth rate fell, decisions had to be made about rationalisation. The economic climate meant that they had to be taken quickly. The UGC was pressed for time, but it did the best that it could in the time available.
  Professor Laurence Martin, vice-chancellor of Newcastle university, in the week before 17 July, said: "The UGC is more perfect than the DES"—
  how about that; perhaps I should not use such quotations—
  "and much, much more perfect than the House of Commons Select Committee."
  Despite the hard feelings about certain universities, I believe that the UGC made the best decisions for the country in the national light. The Government must support those decisions.

  BBC (External and Transcription Services)
  9.26 pm
  Sir Anthony Kershaw: I am grateful for the chance to raise the question of the proposed reductions in the external services of the BBC. We have two assets in the BBC—the English language and its high reputation, based on its activities during the Second World War, which it has managed to maintain.
  We are to be asked to approve reductions in expenditure on the overseas services at a time when our country has reduced political power and when there is an increase beyond imagination of the power of the spoken word that reaches out beyond frontiers and speaks to each man in his own tongue.
  The BBC is an objective organisation in transmitting news. Its activities have been supported on many occasions by the House and it is appropriate that we should take seriously yet another attempt to cut its services. The proposal is to cut seven languages and the transcription service. I believe that I carry a majority of hon. Members with me in saying that that is regrettable.
  This is not the first time that a cut has been proposed. In 1979 the House forced the Government to retract after they had made similar proposals. This is also not the first time that Parliament, under Governments of both parties, has cut the BBC overseas service. It has already suffered six cuts in eight years—in stark contrast to other countries, both allies and others. I understand that we are about eleventh in the league of broadcasters, just ahead of North Korea and Albania.
  The Select Committee on Foreign Affairs examined the BBC's estimates for 1981–82 and concluded that no cuts should be made in its activities and that increases devoted to audibility should remain. The two most important places that we singled out were Hong Kong, to give audibility to China, Japan and Korea, and the Seychelles, to give audibility to East Africa.
  When we were taking evidence it was known to our witnesses that further cuts, those that we are debating, were proposed in the next Estimates. The Committee took it as a discourtesy that it was never informed of that proposal.
  No doubt it will be said in debate by my hon. Friend the Minister of State, whose difficult task it is to defend the Government in this matter, that spending is in fact increasing, because the capital programme is up by £4 million, whereas the cost of the language service is down by £3 million. Thus, there is £1 million extra expenditure. I suggest that that is a debating point. The capital programme only restores the cuts that were proposed in 1979, and most of the capital programme referred to so generously in the Government's proposals is in the form of promises. We understand that we shall have £100 million during the next 10 years. We shall see.
  The Prime Minister said, in defending this proposal, that it is no good having programmes if the audibility is no good. I regret that the Prime Minister was advised to say something of that nature, because there is no correlation between the capital increases that we are offered and the cuts that we know we shall suffer. Some of the frequencies that are to be cut are already extremely
  580
  audible, and some of the ones that are to be boosted are to be cut. To speak so loosely, as if they were opposites in the argument, implies a lack of study of the subject.
  The frequencies that are abandoned will, of course, be lost and we shall not be able to regain them. They will be taken over by other countries, and even if later we think better of it and decide to try to get ourselves on the air again, we shall discover that that audibility has been lost.
  Even more important than frequencies, because I assume that the mechanics can be overcome in due course, the audience will be lost. Audiences cannot be so easily resuscitated. Once given up, they are difficult to regain. Perhaps it would not be too tactless to remind the Foreign Office that in the last series of cuts that were proposed in 1979, which the House prevented, it was proposed that Turkey should be cut out. That did not happen, because of our efforts. The following year the Foreign Office came back with a request that Turkish broadcasts should be increased. Such changes cannot be made easily, they are very ineffective and inefficient when they are made, and audiences are lost.
  Perhaps it would be of some interest if I were to detail some of the services that it is proposed to cut out. The first is the French service. That broadcasts for 21 hours a week and it costs just under £300,000. The audience, which, of course, is sophisticated and easy to assess, is about 2 million or a little less in France and 350,000 in Belgium, as well as an audience in Switzerland. The research shows that two-thirds of that audience is under the age of 35.
  I understand that the Lord Privy Seal thinks that it is useless to broadcast to our sophisticated neighbour. I suppose that he imagines that they will buy papers, or take Hansard, and read what we are talking about. However, I assure him that that is not true. Even if it were true, it does not apply to the Burmese programme. I doubt very much whether the Burmese get the Stroud News and Journal very often in Rangoon.
  It is nonsense to say that we do not need to speak to our close friends. Of course, we need to do that. The difficulties of the negotiations of the Common Market and the ever-present difficulties of the world economic situation demand that we should be able to talk to our neighbours. Apparently, they demand summit meetings in places like Ottawa. Communications with our closest and most sophisticated allies are very important.
  Italy falls into more or less the same category. We broadcast for only seven hours a week to Italy at a cost of £200,000, but I understand that the audience is about 1 million every time. Italian speakers in Switzerland also hear it.
  We also broadcast seven hours a week to Spain. The Warsaw Pact broadcasts 80 hours a week to Spain. That service costs us less than £200,000 a year and attracts an audience which in 1976 was estimated at just under 1 million. After the debacle over the honeymoon in Gibraltar, the Lord Privy Seal should want more, not less, broadcasting there.
  Britain is the only country in the world that broadcasts to Malta in Maltese. Censorship in Malta is not exactly what the House would approve of. Although we broadcast for only seven minutes a day, it is much appreciated. It is a source of uncensored news that is much valued. As Malta was our ally in the last war and at other times, it seems a pity that that service should be abolished to save a few pounds.

  581
  The BBC has been broadcasting to Brazil for 43 years. It is the largest and potentially richest country in South America. It is regarded as economically and politicaly so important that it was one of the first countries that the Foreign Secretary visited when he was appointed. Each day more than 1 million people listen to the BBC in Portuguese in Brazil.
  Burma is an isolated country to which we broadcast seven hours a day. We have a staff of six people. We cannot rely upon sophisticated sampling techniques in Burma, but it is estimated that that service attracts the biggest overseas BBC audience.
  There have been many letters in The Times about Somalia. Our service there costs £170,000 a year. I understand that it almost takes the place of the morning or evening service in that country. It is a great pity that we propose to cut the service to that country, which is vital strategically and has a long tradition of listening to the BBC.
  The transcription service is less well known in Britain than it should be. The proposal is to abolish that service. It employs a staff of 117 at the BBC. They have an output representing 785 hours per annum. I have a document which explains what the transcription service does. The BBC is the largest international distributor of radio programmes in the world. In the financial year April 1980 to March 1981, it sold 43,550 records and tapes to over 850 broadcasting organisations in 99 countries. It represents over 36,000 hours of British broadcasting and more than 5,000 British actors, musicians, scientists, politicians and others take part. It is, therefore, a large service. We do not see it in Britain but we should be aware of it.
  It is the only transcription service in the world for which charges are made. Because of its excellence, it is the largest such service. Overseas radio stations transmit what they buy. The studio quality is excellent because short wave transmissions are used. It is much appreciated.
  We have the largest library of broadcast programmes amounting to 30,000 hours of the best of British music, drama, literature, science and education. There are over 500 new programmes a year, of which 40 per cent. are original. Topical tapes bring the British scene to places overseas. They are sold. I understand, for example, that the tape of the wedding next week has already been bought by 46 radio stations.
  The news that the transcription service is to be abolished has provoked indignation and dismay all over the world. Messages have been sent from the United States, Canada and many other countries. The Caribbean, which otherwise has been abandoned by British radio, feels that the transcription service is the only direct voice. The topical tapes are sold to 89 stations in 65 countries.
  An enormous amount of support for British art, festivals and theatres comes from people who have gained knowledge of them through BBC tapes. Messages of support have been received from many countries, including the United Arab Emirates, Bahrain and Barbados. The manager of the Barbados radio station says that he is amazed, surprised and shocked by the announcement. He considers the action most unreasonable and says that it clearly shows a lack of interest in the New Commonwealth. Saint Helena claims that the school broadcasting system will have to be closed if it does not receive material from the BBC. The Cook
  582
  Islands in the middle of the Pacific say that 70 per cent. of their programmes are provided by the BBC, and they do not know what they will do without them.
  The Solomon Islands say that it will be a heavy blow to the world's largest broadcasting service, as well as to British prestige in the developing countries. They wrote:
  "Who now will move to fill this void? We wait with apprehension."
  I do not know whether the director-general of the New Zealand station is a relation of the hon. Member for Derby, North (Mr. Whitehead), but he thinks that the closure will be utterly disastrous. Australia is horrified to hear of the proposed cuts to the BBC. It wrote:
  "What has Britain left if you tamper with the B BC? Our listeners are reacting with dismay to this news."
  It is clear that the news has horrified a great many of our good friends around the world. Some of the countries are not large. They rely on the tapes as their opportunity of culture from the old country, which otherwise would not be available.
  All that disruption is to happen simply to save what Lambeth council would spend in a few hours. It will cause 200 redundancies at the BBC. The skilled teams will be lost and dispersed. The British influence will be lost. An impression will be given that we do not care about the places that I mentioned. Britain's position in the world will be diminished. All that will happen for a small saving that could be found elsewhere. The Government are mistaken, and should think again.
  9.43 pm
  Mr. Phillip Whitehead: I congratulate the Chairman of the Select Committee on Foreign Affairs, the hon. Member for Stroud (Sir A. Kershaw), on his extremely careful and lucid exposition of the case. He put it in the manner in which hon. Members on both sides of the House wish to put it to the Minister. He went into great detail about the areas that wall be cut. His exposition will shorten and simplify my speech.
  This is one of those sad moments, such as the debate on overseas students' fees, in which we have seen the wilful surrender of Britain's position and influence in the world in the mistaken pursuit of quite piddling economies. The debate is a rerun of the controversy of 1979 when the Government were forced to retreat on their proposals for cutting BBC programme services. They have to satisfy themselves with £2·7 million taken from the capital programme.
  Some of us believe that the Minister has not forgotten his defeat on that occasion. He is back with vulpine intent and determined to win where he was forced to retreat before. The thoughts uttered by the Select Committee this week, which I believe will be echoed on both sides of the House tonight, should again give him pause for thought and reconsideration. We are being presented not merely with a rerun of the 1979 argument, when the Government were conclusively routed by their critics on both sides of the House, but with the seventh cut for the BBC's external services in eight years. How mad can the Government get?
  These services are the voice of Britain overseas. They are far better value for money than many of the overpaid and pampered diplomats whom in the past we have sent abroad. The services which were to be chopped in 1979, if the Minister had had his way, were French, Italian, Greek, Burmese, Maltese, Spanish and Turkish. The Minister has returned and he is replacing the cutting of the

  583
  Greek services with the Portuguese services to Brazil and the cutting of the Somali services instead of the Turkish services.
  These proposals have been unanimously hammered in the press. Each newspaper, according to its particular point in the spectrum, has seized some item of expenditure that is odious to its own tenets by way of comparison. The Guardian has said that if these services are axed the sum that will be saved will be just about enough to buy three tanks. The Daily Telegraph, putting it rather differently and in its own language, has said that the amount that the Government are trying to save in reducing the external services of the BBC is about as much as the taxpayer gives to British Leyland every day before lunch. These are trifling sums whichever metaphor one uses. They are trifling in every area but one, and that is in the broadcasts to these countries overseas, the reception that they have, the friends that Britain has made and influence that has been disproportionately exerted as a result.
  This is a retrograde step which will diminish both the range of the services and the general esteem in which they are held. We are used to Treasury Ministers who do not know their Parsee from their Pushtu sniffing around the BBC looking for various cuts. We are used to the Hooray Henrys from the Foreign Office reporting back that within the areas that they serve in the diplomatic corps the BBC services overseas are difficult to pick up. All too often that is because these diplomats—we have all met them—do not speak the vernacular and are not familiar with how to operate a short-wave transistor. In its report, the Select Committee called attention to the number of diplomats overseas who do not speak the vernacular of the country in which they serve. Someone said last week that they substitute that lack of knowledge by going on to the rooftops and speaking English very slowly and very loudly.
  We are not accustomed to a Foreign Office Minister trying to tell us of his munificence in the atmosphere of the cuts and saying that there is more money for the BBC's overseas service than ever before and that the 33 remaining services will be heard better because of the seven that have been axed.
  What is the truth about that? The hon. Member for Stroud has dealt with that in part. Many of the projects that are incorporated into the "exciting" capital sum that will be dangled before us over the next 10 years are those that have been delayed already, and sometimes for a long time before 1979. We know that £53 million of the sum stated is to be allocated after the current PESC period ends in 1985. We shall be interested to know who has made the allocation. Has the Treasury given approval item by item to the £53 million, much of which is to be expended after 1985? Has it made allowances for the rate of inflation until 1990? Has it made allocations for the capital projects? Of course it has not. We know that it is all jam tomorrow.
  Last week Mr. Gerard Mansell, a distinguished acting director-general of the BBC and the immediate past managing director of the external services—among his other claims to fame he was my first boss when I went to work in the external services 20 years ago next month—wrote to The Times last week to challenge some of the assertions that have been made by the Minister. He went over the ground that I have covered and went on to say:
  584
  "It is a misunderstanding of the true position to suggest that it is better for 33 services to be heard well than for 40 services to be heard inadequately. The BBC External Services hive a larger following, worldwide, than any other international broadcasting organisation. This would not be the case if audibility was not at the very least acceptable in large parts of the world for those for whom the services are intended, as I know from my own extensive travels over many years."
  He went on to say that
  "Some of the services to be abolished are themselves well heard, as witness the Somali Service, with its vast following from the President down. Others, like the French Service will not live to see the benefit of investment originally intended for them."
  He also asked, if the service to Russia is, as is now suggested, inadequate, why is it that the Russians go to such lengths to jam it? The jamming of services to the Soviet Union, which was instituted only about a year ago, was essentially because that service was getting through to the Soviet Union all too effectively. I support the improvement of the transmissions to those parts of the world, but not only to those parts of the world. We are in danger of neglecting broadcasting to our friends and of broadcasting only to those States that we see as hostile to us in a way that may alter the perception of BBC overseas services, as in the past they have been seen to be something more than a Government propaganda operation.
  We must broadcast to our friends of today who may, because of a coup d'etat of tomorrow, become imperilled or more in need of our service, because none of us has a crystal ball.
  Mr. Gary Waller: A little while ago the hon. Member mentioned the Turkish service and he also said that things can change rapidly. Is it not a fact that in 1979 the Government intended to axe the Turkish service, yet a short time after its reprieve it became necessary to increase the Turkish service? My hon. Friend the Minister may say that even if it had been axed it would have been possible to bring it back into existence. However, is it not a fact that if it had been axed it would have been almost impossible to bring it back quickly to the existence that is so valuable today, bearing in mind events that have taken place subsequently?
  Mr. Whitehead: The hon. Member is right and leads me to my next point, which is that in the period before and after I worked for the external services there were various proposals from Governments to close down services. In 1957, the Portuguese service was closed—that is Portuguese to Portugal. Now, because of some curious quirk or a personal whimsical preference of the Minister of State, we are to go on broadcasting in Portuguese to Portugal but not in Spanish to Spain. We are not to carry on broadcasting in Portuguese to Brazil, which is a larger country, where we have many important trading links.
  We closed down the Portuguese service in 1957 and we did not reopen it until 1963. A price was paid for that. I suppose that this is ancient history, but I hope that no one will mind my relating it. The price that we paid was twofold. First, we had to rebuild our listenership and recover the frequencies. Secondly, we had to assemble a cadre of skilled broadcasters. When the Portuguese revolution broke out in 1974, the Portuguese service was by then back on the air and was able to cope, but there was a good deal of disaffection and some trouble. There had to be some dismissals from the Portuguese service at the BBC, in part because the continuum of that service had been broken by the time it had been off the air. Perhaps

  585
  as a result the coverage was less good at that tense time when Portugal could have gone back either to a Fascist State or towards an East European style of totalitarian State, if Senhor Cunhal had had his way. A sophisticated interpretation, in the classic BBC sense, of what was going on in Portugal was needed at that time.
  In 1963, when I worked for the BBC, the Thai service was closed down. There was a rumpus about that, because people did not need a crystal ball to see that services to Thailand and South-East Asia would be crucial as the American imprint upon South-East Asia grew. Whether one accepted the domino argument or the other argument about the tragedy of American involvement in South-East Asia, it was clearly necessary to have broadcasts to that part of the world.
  Mr. Macmillan's Government of the day turned around almost as soon as the Thai service had gone off the air. The excuse of a Royal visit to Thailand or a Thai Royal visit here was used to reinstate the service. In that case, there was not too much delay. However, the hon. Member for Brighouse and Spenborough (Mr. Waller) was quite right to say that, had the Turkish service come off the air and stayed off the air, as the Government wished and intended in 1979, it would have been extremely difficult to get the frequencies back and to reassemble the trained staff at the moment when, following the military coup in Turkey, it was necessary to broadcast to that country in a more intensive manner.
  The hon. Member for Stroud has already dealt with the other services that will be closed. But I do not look at Spain today and see a country that has now emerged into the untroubled sunlit uplands of multi-party democracy to which we do not need to broadcast. I see a country with which we have disturbing differences. As has been said, the events over Gibraltar this week show how much mutual incomprehension still exists. Most of all, I see a country where the King is in daily threat and where elements within the military intend to kill the King. There is no question about that, because he foiled the last coup d'etat. Any hon. Member who has been in a country where a coup d'etat has taker place will know that what happens first is that the military surrounds and takes over the television and radio stations.
  The Minister of State will be able to check this out from his officials who sit at the Spanish desk and who so distinguished and covered themselves with glory over the incident of the Royal honeymoon and Gibraltar. They ought to be able to tell him that during the recent attempted coup in Spain there was a pretty bleak moment when the Spanish television and radio services were off the air. Many hundreds of thousands of people in Spain, either directly or otherwise, knew that the King had denounced the coup and had called on Ministers to go to the Zarzuela Palace and said that civilian rule should be maintained simply because they had heard it on the BBC. We are throwing all that away for a few thousand pounds a year. It is quite monstrous.
  There is a question mark over many other countries. No one quite knows what will happen after the next Maltese election, if it takes place. No one quite knows the extent of our services and interests in Burma, but it is a fact that we are the only Western broadcasting service transmitting to Burma.
  Mr. Kevin McNamara: Is my hon. Friend aware that at present, when the Burmese
  586
  service is being cut, the Foreign Office information department is circularising hon. Members about the importance of Burma's outlook and its economy?
  Mr. Whitehead: I am grateful to my hon. Friend for that information. It links up with what I am saying. It is certainly true that when the BBC official responsible for that department of external broadcasting was last in the Far East he was received by General Ne Win virtually with the honours of a Head of State. There is no question but that General Ne Win and the ruling circles in Burma take the BBC external service seriously.
  The same is equally true of Somalia. I am now trying to speak in terms that will instantly recommend themselves to the Minister of State. The cuts are proposed in the wake of our attempts to wean the regime in Somalia away from the influence of the Soviet Union. We have tried to build up a counter-balancing force in the Horn of Africa against Soviet penetration in Ethiopia and against Soviet-backed attempts to use the Ethiopians to overrun the Ogaden and Eritrea and even perhaps to establish hegemony in that whole area. Our principal friends and perhaps allies for the future in that area are therefore in Somalia. Somalia is in a position to benefit from investments made in the last few years in improving transmitters broadcasting to that country. To wipe out the service to Somalia, again, is an extremely retrograde step.
  Mr. Tam Dalyell: Having been in Burma, albeit 13 years ago, and knowing the Ne Wins very well as well as many other people in Burma, I believe that the cutting of that service is a matter of considerable consequence.
  Mr. Whitehead: I am grateful to my hon. Friend for his support. Indeed, I am buoyed up by the support that I am receiving from all parts of the House. I see still on the Minister's face the flicker of sceptical disbelief for which he is well known. The hour is still early. I hope that many of his hon. Friends will have heavier methods of persuading him than are open to me.
  In conclusion, I was talking the other day to a senior official from the People's Republic of China who was over here with his Minister. He is in a position to be a considerable friend to this country when he goes back in matters economic, the placement of trade contracts, and so on. He was educated in Shanghai and spoke English. When he could, he listened to the BBC external services in English and also in the vernacular. He and others like him very much welcome the Select Committee proposal that the Hong Kong transmitter should go ahead quickly, paid for out of the Contingency Fund. Absolutely unsolicited by me, he said that he had read with great regret that BBC services all over the world were being cut. He said that we could not know what it was like to live through the early years of the Maoist regime, to keep one's head down for that period only to be overwhelmed after that by the cultural revolution, literally never knowing from one day to the next whether one would be lynched by the Red Guards. Throughout that period, the links with the West and the fact that he could listen to Western broadcasts which gave him some idea of what was going on in the world were of crucial importance to him
  The Minister of State will no doubt say that services to China are not being axed, so that that gentleman will be all right. So he may, but what about people in an equivalent position in countries to which we are ceasing

  587
  to broadcast? As has been pointed out, if we lose a frequency we are in danger of not getting it back, and if we lose a listener we many lose more than a friend—we may lose a country as well.
  588
  I believe that these services are value for money and should be sustained. It is a foolish and retrograde step to attack them in the way that the Foreign Office has done, and I hope that this debate will persuade the Minister, even now, to think again.

  BBC (External and Transcription Services)
  10.2 pm
  Sir Brandon Rhys Williams: When one considers the size of the Consolidated Fund and the comparatively small saving that the Government hope to make through cuts in the BBC world service, it becomes clear that we are touching large issues but that the sums of money involved are negligible by comparison.
  This debate must be relevant to the conflict of ideologies that divides Eastern and Western Europe along the Iron Curtain, but it is also a matter of British culture, trade and world standing.
  Two recent developments make the debate particularly relevant. The first is the course of events in Poland over the past few months. I believe that historians will compare the importance of this year in Poland with 1940 when Hitler failed to invade Britain although he could have done so, and thereby, in effect, lost the war. The decision by the Russians, at any rate so far, not to invade Poland in recent weeks could well mean that they will find that they have lost the ideological war with the West, but it is up to us to keep our courage up and to be robust.
  This is not the moment to lose our self-confidence. We saw what happened in China after the death of Mao Tse Tung and the dramatic changes that have taken place in a few years even in that very slow-moving half-continent. No doubt those changes were partly prepared by the Western broadcasts that were received on the mainland of China during those years. In the next few years there could well be equally rapid changes in Eastern Europe and the Soviet Union. Again, those changes will have been partly prepared by the fact that the BBC and other Western broadcasts have been regularly heard in the Comecon and Iron Curtain countries.
  The other relevant development is that this year the Government have been forced to make an enormous addition to the lees charged to overseas students who come to study in Britain. We have not yet begun to realise the effect that that will have on our former dependencies and on all the countries with which we have export connections and long-standing trading links.
  As recently as May 1980 my right hon. Friend the Prime Minister said that a massive propaganda campaign of a kind we had never mounted as yet was needed to influence opinion in the Soviet Union.
  The Foreign Office has responded to my right hon. Friend's initiative by presenting niggling and futile cuts in the BBC world service, which will achieve few savings but which will inflict great damage.
  At long last. the Government intend to do what is necessary to improve the transmission and capital equipment that underpins the main overseas service. However, the mood of the Foreign Office is wrong, and has been shown to be wrong again and again by the way in which it continually makes niggling attacks on the world service. It is right to update the equipment, but the proposal of the Foreign Office to make offsetting savings in the service is dubious. It is behaving like a firm that has found that it is losing sales and then proceeds to cut its expenditure on advertising. If the firm increased its expenditure on advertising, it would probably recover the
  590
  sales that it had lost. It is particularly ill-advised to cut Britain's voice on the world service when we know that the product is excellent.
  Mr. Geoffrey Johnson Smith: I know that my hon. Friend wishes to be fair, but he will be aware that in 1980–81 there were increases in the number of foreign language broadcasts. Is it not right to point that out? My hon. Friend gives the impression that a rather stupid Foreign Office is unmindful of the value of broadcasting and has been setting about the BBC's external services with a will to destroy them.
  Sir Brandon Rhys Williams: I may have given the impression that in recent years the world service has been diminished, but that impression must be shared by almost all of those who listen to the world service abroad. For various reasons I travel abroad to America and so on. Even when I take quite sophisticated equipment with me to listen to the BBC and to keep in touch with events, I often find it very difficult to hear programmes. However, Moscow radio and other broadcasts, such as those made from Albania, Egypt and India have increased in audibility. Those broadcasts can be heard quite easily, even when using portable equipment that can easily he carried in luggage. The BBC seems to become fainter and more remote all the time. Although there may have been increases in the amount of expenditure on the services, they still do not reach the listeners.
  We are now debating cuts in the service. Do the Government intend to defy the House on this issue? Is this debate futile, or are the Government prepared to listen arid to withdraw the proposals to make cuts in the world service? Earlier this week it was fortunate for the Government that the House did not proceed to a Division when the hon. and learned Member for Leicester, West (Mr. Janner) sought to introduce a Ten-Minute Bill to set up a Royal Commission. If there had been a Division, the House would have made its feelings clear. I am sorry that the hon. and learned Gentleman is not in his place. A pressing engagement must have kept him away. I should like to pay tribute to him for the campaign that he has mounted on this subject. I was glad to include my name among the sponsors of the Bill. It would be advisable to set up a Royal Commission, if that would help to guide the Foreign Office. I believe, however, that a positive initiative should be taken now.
  I should like to draw the attention of the House to a recent Home Office study, published in May, entitled "Direct Broadcasting by satellite". It deals with the rapidly developing technology of beaming sound and television signals to satellites which are able to reflect the signals down over a wide area, thus producing an enormous improvement in the quality of reception and making possible the carrying of television broadcasts live over large distances.
  The study contains some interesting and stimulating information. It would be a tragedy for the British electronics industry if these developments were not followed up and if the French, the Germans, the Japanese, the Americans and the Iron Curtain countries were left to pioneer the technology of transmission by satellite while we lag behind because we have not appreciated the importance of the development.
  The document to which I refer contains a map showing the areas of Europe that can be reached if reception is

  591
  assisted by a 2-metre aerial. There must be many people who could afford some kind of makeshift 2-metre antenna. The map shows that such an aerial would extend reception of planned domestic Western European services right over Eastern Europe to the borders of the Soviet Union. It is impossible to believe that clandestine aerials would not be set up all over Eastern Europe, to receive television broadcasts intended for France, Germany and Luxembourg.
  It would be far better if programmes devised specifically for Eastern European audiences were sent out. The programmes might include irresistibly interesting matter that the Governments of the countries concerned would not jam because it was in their interest to receive them. I am thinking of technological information and industrial guidance, apart from news.
  I wish to put this debate in the context of our whole attitude about ourselves, and our economic difficulties. We are allowing ourselves as are other Western countries, to get into a depressed attitude of mind of under-investment, economic nationalism and money illusion and allow these matters to creep into Government thinking. This results in wrong decisions being adopted in a panic of self-denigration. We need to make ambitious plans to extend the world service and not simply to do what is necessary to keep it audible. We should be thinking now about progress in television. I have already described the advantages for our electronics industry. There are many other aspects that should be considered.
  These proposals are, of course, expensive. The initiative need not, however, be exclusively British. Why have we joined the European Economic Community, if not for the sake of better co-operation with countries of Western Europe that have similar interests? The French and the Germans are acting together in satellite technology. We do not seem to have got in on the act. This is a matter that the Foreign Office should seek to correct.
  The planning of television news, technological and language services, particularly to Eastern Europe, but also to Africa and elsewhere should be a shared venture with EEC countries. We should identify our motives. It is not simply a matter of altruism and wanting people to know the truth because we consider that this is in the interests of greater humanity. There are significant aid and trade implications in maintaining our voice at an audible level and extending it to a much wider audience.
  We should build on what we have and not seek to demolish it. There are a number of things of which we can be proud in the manner in which the world service has developed. It seems to me that we should now launch what I venture to call "The World University of the Air".
  We have to look again at the way in which we offer aid to overseas students. We should not leave it to Communist countries to fill the gap that will be left in the educational programmes of these students. We have an established academic connection with many countries overseas, and we must not let that wither away.
  The BBC world service does not provide only news, entertainment and so on. There is the English language service, which already includes television courses, and these courses are made available for transcription. My hon. Friend the Member for Stroud (Sir A. Kershaw), who so ably opened the debate, referred to the transcription services, and I have to ask who will fill the void if these
  592
  transcription facilities are not made available from the BBC. Deutsche Welle has excellent services, and on the whole they are trustworthy and interesting, but Moscow radio has improved the quality of its services in the last few years out of all recognition. I am afraid that we shall leave gaps that will be filled by Iron Curtain countries if we persist in abandoning the transcription services or reducing their range.
  Another development in this country that can be regarded as a success is the Open University. I should like the Government to extend its scope across the language frontiers. This could be seen as part of our contribution to the Lomé convention. We owe it to the former dependencies to offer them all that we can in the way of advice and technology. It is in our interests to do so. We should seek to provide direct transmissions of cultural and technological courses to Europe and Africa, South America, and other places where formerly we had strong connections. We should try to make local arrangements for tutorials as a follow-up. I realise that that is a longer range service, but possibly much could be done by arrangement with the local educational institutions. We should offer the courses on tapes for local transmission, and even for domestic purchase and study.
  I have said enough to give the House an idea of what I mean by "The World University of the Air". I see it as a European venture, if only because we would probably need the co-operation of the French, Spanish and Portuguese in due course to make the necessary services available in all the different languages of the Lomé convention countries. But I ask the Minister, in connection with these niggling cuts that the Foreign Office has brought forward to the House, not just to think again, but to change his whole approach.
  Mr. Speaker: Mr. Andrew Faulds.
  Hon. Members: Hear, hear.
  10.17 pm
  Mr. Andrew Faulds: I am grateful for that reception—
  Mr. Speaker: I can guarantee that everyone will be called.
  Mr. Faulds: I was not trying to intervene too early, Mr. Speaker. I was trying to keep my end up, with massive support from my Benches.
  Some of us may feel that we have been this way before. Governments of different complexions on occasion seem to have had too little appreciation of the invaluable contribution of the BBC's external services to the worldwide dissemination of balanced and responsible reportage of world events.
  The BBC has established—and we all know this to be a fact—ever since Lord Reith set its standards, a world-wide reputation for honesty and reliability. Yet seven times now in the past eight years, Governments of one party or the other have tried to cut the BBC's overseas broadcasts. Adequate funds have not been made available either to ensure a proper coverage of the world's vernacular languages or to ensure clear audibility of the range of languages in which we broadcast.
  There have been consequent problems of maintaining a consistent policy, with cuts required one year and the same services restored the next—a point that has been made by a number of colleagues tonight.

  593
  The BBC broadcasts about 670 hours a week to the outside world both in English and in 40 or so other languages, but its foreign output is considerably smaller than that of the Soviet Union, with about 2,000 hours a week, and a slightly smaller figure of about 1,900 hours a week put out by the United States. China, West Germany and the Warsaw Pact countries all put out a larger radio coverage. Instead of cutting down our output, we should be expanding it in this important battle of the air—this battle for men's minds across the globe. The BBC should be given the opportunity and ability to tell the truth, as it has done and continues to do, in more languages and to more countries. It is ironic that it is this and other Foreign Services, with their particular responsibilities for Britain's interests, who seem to be the ones who want to restrict the dissemination of the British voice abroad.
  I should like to look briefly at what the projected cuts entail, as one or two other hon. Members have done. The Burmese service is to go. It is the main means of communication between Britain and Burma, because diplomatic activity is limited and foreign publications in that country are largely unobtainable. As hon. Members will know, Burma has placed a strange self-isolation on its people since the war, but there are signs that it is now preparing to open up, as was said earlier. When trade and cultural contacts may again be possible, this country plans to retreat. It is an extraordinary time to choose to do that. The evidence is that the Burmese actually welcome that voice. The BBC has the largest audience of the external broadcasters to that country, beating—thank goodness this is the case—Radio Moscow and Radio Peking in that area of the world.
  The Brazilian service is also to go. Brazil—and this was also said earlier—has the sixth biggest population in the world and has immense natural resources on which the industialised nations have their eyes. It is a country of great potential power and wealth. Our influence through the dissemination of news and views is to be withdrawn. Here again the BBC has the biggest audience of any foreign broadcasting organisation, beating—again, a pleasant fact—the Russians and the Warsaw Pact countries.
  Then the BBC's Somali service is to go. There are Somali-speaking people in Ethiopia, Djibouti and East Africa, and there are Somali communities in the Middle East as well as the Somali's themselves who listen to the service. The Horn of Africa, as again was stated earlier, is a vital area in the great contest between the ideologies of East and West. The Soviet Union has made enormous penetration into the region. There are a number of liberation movements in the area fighting for independence from the pattern of the colonial carve-up whose political development and orientation is not yet settled. They are still open to influence, yet in that area at this time we choose to withdraw the vital influence of the BBC.
  Those three ill-advised cuts in those three countries are apparently the quite haphazard result of an arbitrary decision to choose a service—one in each continent—and close it down. Had the exercise been carried out blindfold and with a pin, it would probably have had less damaging consequences. It is always possible, of course, that it was done that way—the Foreign Office's new tea-time game.
  However, in addition to all the implications of that damage, the BBC's French, Italian and Spanish services are all to go, just at a time when we in this country, with Northern Ireland and the commotion on our streets, need
  594
  to present an acceptable picture of ourselves. Yet we withdraw that influence from Europe. There is reason to believe—and this should disturb us—that some of the listeners to the programmes that will be dropped are the opinion-formers in the media in those countries.
  We intend at the same time to silence the BBC Maltese service, when the world service in English is no longer rebroadcast in that island, for obvious reasons. Then there is the cessation of the BBC's transcription service which for years has flooded the radio stations of the world with British material. Perhaps I should declare an interest in that because in my former profession, when I was younger and even lovelier—
  Mr. John Wells: That is not possible.
  Mr. Faulds: It is not possible, I know—I used to turn an honest penny from contributions to that excellent service.
  A large number of radio stations throughout the world rely for a large proportion of their output on purchases from the BBC's transcription service. The transcription service provides two types of programmes. In BBC shorthand there is the topical, such as news and current affairs, and the timeless—that is, British literature, drama, music, science and education, and programmes on all aspects of British life. All that enormously valuable contribution to an appreciation of our culture and heritage is to be thrown away.
  Sir Anthony Royle: I have much sympathy with what the hon. Gentleman has been saying. He has criticised the Foreign and Commonwealth Office for the decision to cut services in certain places. It is not good enough to criticise the cuts without producing alternatives. Is the hon. Gentleman saying that he would cut nothing and keep the external services going as they are at present—there is an arugument for doing that—or is he saying that the cuts are in the wrong areas and that we should keep the French and Spanish services for the reasons that he stated? I should be grateful if he would answer that.
  Mr. Faulds: I can answer the hon. Gentleman quite simply. The saving of £3 million is not worth the damage to those services. I should like to see them maintained and, as I said earlier, I should like the money to be increased so that there are more languages and more coverage for the BBC to put out its reports of the British view throughout the world. I do not hold with the necessity for cuts in this area at all. I hope that I have made my views clear to the hon. Gentleman.
  But, what worries me about the cessation of the transcription service is whether any thought has been given as to the likelihood of who will step in to replace the empty programme spaces in thousands of radio programmes from hundreds of radio stations across the world. Last year, in 1980, 36,000 hours of British radio were broadcast abroad which were purchased from the vast resources of the transcription service library. Should we perhaps wonder and worry about who will move in on those options? All these damaging acts, about cuts in the external services in seven languages, the truncating of the transcription service, to save all these £3 million annually—a piddling amount in national terms.
  The consequentional effects of the cuts have perhaps not been thought through either. I have been given

  595
  technical advice. These are not imaginative interpretations of my own. If the transmitters used for these services are turned to other services, the savings will not be made. Perhaps the hon. Gentleman would comment on that possibility when he winds up the debate. The disruption of listening times and frequencies may well lose listeners whom we shall not recover. The rearrangement of services may not actually improve audibility, which apparently is the purpose of the whole operation.
  Mr. Johnson Smith: Has the hon. Gentleman any idea what the effect of withdrawing the subsidy on the transcription service would have on the price of that service?
  Mr. Faulds: I am afraid that I cannot give an answer to that question because I have not made an estimate, but the figures are small. The total cost of that service is about £1 million a year, about £480,000 to £490,000 is recovered from sales—
  The Minister of State, Foreign and Commonwealth Office (Mr. Nicholas Ridley)indicated dissent.
  Mr. Faulds: —so we are talking of an overall cost of about half a million pounds, something of that nature.
  Mr. Ridley: I did not wish to intervene, but perhaps I should give the figures. The income of the transcription service is about £410,000 and the cost is about £1·4 million, so that the net cost is just under £1 million.
  Mr. Faulds: I am a fraction of £1 million out, but that does not affect the value of my argument that the damage is not worth the small intended saving.
  Another danger of the developments being pursued is that it seems almost certain that other broadcasting organisations will not allow the BBC to dispose of the vacated frequencies as it sees fit. If the Minister believes that we shall have them at our call when we want them he is wrong. It will in all probability be impossible for the BBC to recover any of those lost frequencies.
  The Government have been somewhat disingenuous in trying to make their case, which appears to be that the cuts would ensure better audibility for the BBC's other services. The Prime Minister had a go at that the other day, and the Minister of State had an even feebler try at the same story. Cutting the seven services will in no way ensure that the other 33 will be more audible. That is a simple statement of fact.
  The claim that the new capital investment programme of £102½ million is proof of Government concern about this matter is pretty unconvincing. The Government are merely restoring an earlier cut from 1979 in the BBC's capital investment programme. More than half that intended programme of £102½ million—about £53 million—relates to expenditure after March 1985, and—and this is the sobering fact—is beyond the limit of the spending plans of the Public Expenditure Survey Committee. There is no promise of such expenditure and no such promise could be made. There is only a statement of readiness in principle to make those moneys available.
  The audibility excuse for the cuts can be dismissed as a pretty unconvincing cover for unacceptable intentions. The audibility argument is even less convincing when we consider the transcription service cessation, because every single transcription recording is a first-class product and
  596
  can be heard quite easily in more than 100 countries across the globe at perfect studio quality. The audibility argument on the transcription service is a total nonsense.
  What is the Foreign Office at? It should be defending its interests—our interests—against the unsubtle scythe wielded by the Treasury and the Prime Minister. They have both wrought havoc enough.
  The board of governors of the BBC, who know the value of the vernacular services and the transcription service, even if the Government do not, is profoundly disturbed. The board issued a statement to its staff on 2 July and its view is worth putting on record. In part, it said:
  "The Board believes that the new cuts proposed would seriously damage the international effectiveness of the BBC's External Services, at a time when other countries throughout the world are increasing their services … The Board felt bound to ask whether the financial savings involved—3½ per cent.—really justified the dimunition of the external broadcasting effort—8 per cent.—which the cuts would represent. They earnestly hope that through discussion a way may be found to preserve those services currently threatened with closure."
  "Through discussion" is where we come in. That is what the House is all about.
  We all know that many hon. Members on both sides of the House are as profoundly disturbed as the governors of the BBC. That has been made patently clear during the debate. We have had a couple of opportunities to voice our views on the matter—the Ten-Minute Bill of my hon. and learned Friend the Member for Leicester, West (Mr. Janner), who I hope will contribute later in the debate, and this debate tonight—but we have not had a chance to vote on the issue. The Government have been a bit reluctant to give us that opportunity. That is what we must have.
  I believe that the collective wisdom of the House, on a free vote, will overturn the Government's misguided and ill-advised intentions. It is incumbent on the Government to give us a chance to make our judgment in the overspill period before the next Session and before a final decision is taken on these matters. I hope that the Minister of State will give us that commitment.
  If the Government do not provide such an opportunity, the Opposition must force on them a Supply day debate. [HON. MEMBERS: "Hear, hear."] I am grateful for the support of Conservative Members, though I am surprised that they did not urge this necessity on the Minister of State, because he has a little more immediate pull in the matter. If the Government do not provide time, I think the Opposition must use a Supply day so that the mounting opposition which has been voiced from both sides of the House against these intended cuts will make the Government change their ludicrous decision.
  10.35 pm
  Mr. Nicholas Baker: If I take a slightly different line from the hon. Member for Warley, East (Mr. Faulds), I hope that it will not be thought that I underestimate the importance of the external services or that I think that the cutting of any services is anything but a grave matter. However, we should discuss the matter in the real world. I accept that it was important to raise the matter two days ago in a Ten-Minute Bill, but I am bound to say that it was discussed in a way that tended—unusually for the hon. and learned Member for Leicester, West (Mr. Jenner)—to be emotional, rather than rational. I did not find it particularly persuasive.
  My hon. Friend the Member for Stroud (Sir A. Kershaw), whom we all respect, and to whose experience

  597
  in these matters we bow, mentioned paragraph 28 of the Select Committee's report. He said that the paragraph, which was quoted by the hon. and learned Member for Leicester, West, pointed out that two assets are underestimated in this country. One is the English language. My understanding is that tonight we are discussing the use not of the English language services but of the Vernacular services, and part of what is happening in the BBC is that the world English language service is to be strengthened.
  The other asset that paragraph 28 said is valuable and being underestimated is the BBC. I strongly disagree with that. Having participated in our last debate on broadcasting, when we sang the praises of the BBC and its importance, I cannot agree that that is an accurate reflection of the views of hon. Members.
  Mr. Nigel Spearing: The effects of the transcription service are to be reduced in scope, not because the price is going up but because the service is to be axed and will disappear. Surely that shows a lack of appreciation of the quality and value of the product. Therefore, the paragraph that the hon. Gentleman mentioned is, alas, correct.
  Mr. Baker: I believe that the transcription service will not be devalued or disappear. I want to question my hon. Friend on that matter. My understanding of the financial arrangements of the proposals is that money is to be applied to the capital side. I want to say something on that subject, because I have a more direct constituency experience of capital expenditure than perhaps some other hon. Members in this debate.
  We should remind ourselves that this is a foreign policy matter and not a matter that is local to broadcasting. We as a community have decided that our Western democratic society, based on Christian values and respect for individual freedom, needs to advertise, sell and promote itself, and has a message that needs to be broadcast to other countries. The countries that matter most are those that do not know or respect individual freedom, or which are struggling to achieve it. They should be the priority targets for such broadcasts.
  It is for that reason that we believe in dispatching what is our propaganda for our standards and way of life. The material of our propaganda is the truth, or as near as our broadcasting authorities can get to it. We have an organisation that our society trusts to dispatch that truth as propaganda, and that organisation is the BBC. It does not have a tame or minor role. I therefore differ from the conclusion of the Select Committee.
  We cannot discuss this issue in isolation from the economic performance of the country. For whatever reason, our economic performance is poor. We have to discuss constraints on defence spending and other important matters. It is difficult to argue that the reasons for supporting this programme are so supervening that they now justify increasing expenditure on these services in the way that many of us would want.
  Mr. Waller: Will my hon. Friend also take into account the size of the market? Does he accept that in the past 15 years the number of sets available in the world has increased five times? Would not any organisation consider that? Should not the Foreign Office take that into account when considering the amount available for the BBC's overseas services.?
  Mr. Baker: I take that point. Not only should the market be considered, but also the effectiveness of the services. They are designed to have an influence and an effect on people. We must try to measure that.
  If money is limited, the emphasis on capital spending is right. The argument has been made that there is no increase in expenditure. However, as I interpret the figures, there is an increase in expenditure.
  Mr. Faulds: The hon. Gentleman might have missed the point. Of course there is expenditure, but we are talking of the restitution of cuts.
  Mr. Baker: That is the argument of the BBC, but it is not a strong argument, because the cuts in 1979 were made, whether one likes it or not. I happen to have had a constituency reason for being pleased in 1979 that cuts were made in capital expenditure. That was because of a damaging planning proposal to erect a transmitter adjacent to my constituency. I thought that the matter was ill-considered and that the BBC went about it in the wrong way. That is why I was relieved that the pause took place . The evidence that new equipment is needed is overwhelming.
  Mr. William Shelton: The 1979 cuts were in proposed increases, not in moneys to be spent.
  Mr. Baker: My hon. Friend is right. It is important to give the BBC a guarantee for the future. The uncertainty caused by Governments who plan ahead irresponsibly is damaging.
  I come to the question of audibility. The evidence is not clear. When discussing the proposal to erect a transmitter near my constituency, I was assured by the BBC of the ineffectiveness of the broadcasts to Eastern Europe and to the south of the Soviet Union. The broadcasts are not getting through. That means that some of the money is being spent badly. It makes sense to apply our resources to the capital programme, to ensure that the broadcasts get through.
  If the services form part of the foreign policy, they must be subject to reappraisal. I understand the difficulties for those who work for the external services, but just as world affairs change, so the foreign policy of Britain will change. The peoples to whom the world service broadcasts are bound to change. We have become too crystallised in our attitude. We assume that because we have an institution there is some God-given right which says that it will always last. We must be adaptable in circumstances where we cannot simply spread external services around the world in the way that many of us wish.
  Mr. Spearing: Not spreading, cutting.
  Mr. Baker: We broadcast to countries that are hungry for the truth and thirsty for news of freedom, whether behind the Iron Curtain or in Africa. That is important. I cannot see the same degree of importance for broadcasts to other countries within the EEC. I suspect that our desire to preserve them is for historical and old imperial reasons. The services in Pushtu and Turkish are important, and will continue to be so, but they are not in the same category as the French, Italian or even Spanish services. We can only guess at the effect that the Spanish service had during the coup. The risk of a coup in another European country must, we hope, be less than disaffection or coups in countries behind the Iron Curtain or Africa. I attach much greater importance to the countries that need the service.

  599
  I ask my hon. Friend the Minister for his evaluation of the Somali service. Most hon. Members are more worried about that than they are about the European services.
  My next point relates to the uncertainty from which the BBC suffers. My hon. Friend the Member for Streatham (Mr. Shelton) rightly pointed out that the cuts in 1979 were in planned increases. I am aware that the Government intend to make capital available through the grant-aid system, not only for the PESC years, but for four years beyond. I, and, no doubt, the BBC, hope that the Minister is not simply promising jam tomorrow but is making realistic plans. The worst thing for the BBC and those who work in the services must be the continual chopping and changing and uncertainty. We cannot exempt the BBC or the services from the economic facts of life, but we can plan for them within the resources available.
  I hope that the Minister will say something about how the transcription services can be marketed. There is a good case that they can be sold, and therefore not lost, but marketed on a self-financing basis. This is a matter of concern to us, and we look forward to hearing what my hon. Friend the Minister has to say.
  10.49 pm
  Mr. Kenneth Warren: Tonight, the voice of the House will be heard in many parts of the world for many hours longer than it is often heard. The House values the external services of the BBC. In the presentation of the Government's case for changing the amount of time given to them, we may not have understood that the Government are responsible, not the BBC. I hope that that will be made clear when my hon. Friend the Minister replies to the debate.
  I have heard the BBC in many parts of the world. I remember that during the seven years that I served on the Council of Europe I could not hear it clearly even in Strasbourg. We need to have a clearer definition from the Foreign Office of the places that it feels should hear the voice of Britain, rather than continue with the static statement "This is where they have been heard and this shall be the change".
  I think that for Malta and Italy it makes not one iota of difference that there is to be a small change. I am not sure about Burma, as I am not an expert. Recently I was in Western China and I heard the most immaculate English spoken in Xian university, though none of the professors and students had ever been out of China. They spoke beautiful English because they had heard it on the BBC. The selectivity of the Foreign Office should be more visible and should be stated to us. We should not have to wait for a late-night debate before being able to consider who should hear and who is heard. That applies to capital expenditure and the future of the Hong Kong transmitter.
  The Foreign Office policy options should not merely include what the Foreign Office or the House would wish. It would be valuable if the Foreign Office could consider organisations such as the British Tourist Authority, which has a vested interest in knowing what is being said around the world about the United Kingdom and to whom it is being said. That could there be a source of funding for the service that the BBC provides so excellently.
  Whatever the Foreign Office may decide about to whom the service should be directed, it should be conscious of the substitution that will take place if it
  600
  withdraws its service from certain areas. I am concerned that in the war of words, which is as great as the war of bombs, we should heed what the Russians decide to do when they substitute their service for ours. The cost to the Foreign Office should not be considered in one Vote as an absolute cost to the British Government.
  We should seek a co-ordination of policy throughout the resources of the Government. That applies to the linguistic services that are brought together. They should not be dispersed at a stroke. Those who can speak Burmese and those who can speak Maltese may be small in number, but they are important in the determination of our foreign policy. I support those who question the veracity of withdrawing the service to Somalia at a time when that country is so tried by the oppression that it is having to face in a Russian-dominated Ethiopia.
  We should not have to wait until something happens to the detriment of the external services. We should have announcements of changes so that they may be debated long before it is necessary to implement them. This is not the time to conduct post mortems. We should be looking forward to next year and to developing the external services. The external services are wonderful. We should not harass or harangue those who have responsibility for them so long after the decisions have been taken.
  10.54 pm
  Mr. William Shelton: I shall refer to the finances and responsibilities of the external services. I am sure that the whole House will agree that the overseas services of the BBC are a great enterprise and the envy of many countries. I remind the hon. Member for Warley, East (Mr. Faulds), who sits on the Opposition Front Bench, that Britain is the fifth largest international transmitter when account is taken of the number of hours broadcast and the number of languages that are broadcast. Even after the cuts, we remain the fifth. Some hon. Members made remarks about the size of Albania. What was said was not true. We are still in the big league.
  Mr. Faulds: There may be some disagreement about the figure. My understanding is not that the BBC is the fifth. I believe that it is much further down the list than that. But perhaps the Minister will put us properly in the picture when he speaks.
  Mr. Shelton: I look forward to hearing my hon. Friend the Minister because I understand that the BBC is fifth, both in hours and in languages. There is widespread international respect for its integrity. It has been influential in great events—sometimes not necessarily on the side of the angels. I cite Iran as an example.
  That does honour to the BBC and the Foreign Office, which pays for the services. In 1981–82 there is a total of about £58 million plus another £12 million for monitoring and relaying. Therefore, of course there is disappointment in the BBC, in the House and I am sure in the Foreign Office at the cuts.
  It is my understanding that the Government have agreed to finance a capital programme of over £100 million over nine years so that the worn-out equipment can be replaced and audibility improved. That merely means that when we switch on the radio the programme sounds better. My hon. Friend the Member for Kensington (Sir B. Rhys Williams) was talking about audibility rather than the spread of broadcasting in different vernaculars when he was saying

  601
  that one can hear certain programmes from Albania on the transistor radio. That is a matter of audibility, which must be improved. The Albanian Government are arranging the financing over nine years to do that. That is the good news.
  The bad news is that there will be cuts of about £3 million a year—£27 million over the 10-year period—to help pay for the capital investment programme. I have not the remotest idea what happened when my hon. Friend the Minister went to see the Chancellor of the Exchequer, if that is the way it is done, but I imagine that it is unlikely that the Chancellor said "My dear fellow, have you £100 million in cuts? Of course, you don't have to make any cuts. You can go on spending exactly what you like." I suspect that the Foreign Office obtained its £102 million—it is probably a surprise it got it—only by agreeing to the sum of about £27 million. In the present economic situation, it is most improbable that the Treasury will see its way to increasing the Foreign Office Vote for the external services of the BBC by £100 million with no cuts.
  I remind my hon. Friends that again and again we say that the Government must reduce expenditure, but whenever an individual item of expenditure is suggested, we always say that it is paramount that education, social services or the BBC external services must not be touched as they are sacrosanct. We always justify that by saying that it is not much money, anyway. It is, in fact, about £30 million over 10 years.
  Most hon. Members will have received the magazine mentioned by my hon. Friend the Member for Stroud (Sir A. Kershaw) entitled "Britain's Dwindling Voice", which is a briefing from the Association of Broadcasting Staff and the National Union of Journalists. I wonder how much it cost and who paid for it. I wonder whether the BBC or the trade unions paid for it. On the first yellow page, it makes an interesting statement:
  "The sympathetic reception we have received from all parts of both Houses of Parliament has been heartening, and there seems no doubt that no one is really happy about cutting External Services."
  The implication of that is that not even my hon. Friend the Minister is really happy about the cuts. That is a travesty of the facts. I am sure that he will tell us that he is not happy about the cuts. No one wants these cuts to be made. I am deeply unhappy about them. I signed early-day motion 167 because I wanted to bring pressure on the Treasury for the future. I hope that that early-day motion will have that effect. But I do not believe that anyone in the Foreign Office wished to make cuts for no reason. Surely such cuts are due to economic and financial circumstances.
  As my hon. Friend the Member for Stroud said, the document gives figures for the weekly output and cost per year of the services that are being cut. By using my pocket calculator, I arrived at the interesting conclusion that our transmissions to France—21 hours—cost £270 per hour, whereas transmissions to Italy—seven hours—cost £576 per hour. Some hon. Members may argue that transmissions to Italy are more expensive because we transmit for fewer hours. My answer is that transmissions to Spain, which has the same number of hours as Italy, cost £497 per hour, or £79 per hour less than those to Italy.
  There may be good reasons for such enormous differences in the hourly cost of these overseas transmissions, but disparities such as that must raise questions about possible internal economies within the
  602
  BBC overseas service. Perhaps my hon. Friend the Minister of State will say whether internal economy has been considered.
  My second point relates to areas of responsibility. It is my understanding that the BBC has complete editorial control and freedom over what goes into the programmes supplied by the Foreign Office and that the Foreign Office, which pays, decides foreign policy priorities. That is right and proper. But it is also my understanding that the BBC does not seem to recognise, accept or agree this breakdown n in areas of responsibility and that it has been seeking lo challenge the judgment of the Foreign Office on the relative importance to Britain of different countries. In a way, it is trying to usurp the role of the Foreign Office. As a result of saying that, it is possible that I shall never again be invited to appear on "Nationwide".
  What would the BBC say if the Foreign Office attempted to dictate the contents of its broadcasts in the same way as the BBC seems. to be attempting to dictate to the Foreign Office where it should broadcast? The BBC seems to be taking too much upon itself.
  That judgment is not only based upon the lobbying and the document but is reinforced by an interesting telephone conversation I had today with a member of the BBC secretariat who noticed that my name was linked with this debate. I shall not reveal his name, so that he does not get into trouble. He was courteous, friendly, helpful and revealing in what he said. He stressed the great importance of the vernacular broadcasts to Europe that are being cut. He said that these should continue because Northern Ireland was so badly reported. in Europe and because, as other hon. Members have said, there may well be some internal threat to Spanish democracy. Whether or not he is right, surely it is not for the BBC to decide such matters. That should be the responsibility of the Foreign Office. That judgment should be made by the Foreign Office, and probably the BBC should not challenge it.
  My contact also said that the BBC broadcast in 40 languages and had always covered every major region of the world. He told me that stopping the broadcasts in Portuguese to Brazil was a breach of long-established policy and harmful to exports, as they were always mentioned in such broadcasts. Here again, it should be for-the Foreign Office to decide.
  Mr. Whitehead: As the hon. Member for Brighouse and Spenborough (Mr. Waller) said earlier, in 1979 the BBC tried to tell the Foreign Office—the hon. Gentleman would say dictate—that there should be a service in the Turkish vernacular, and in 1980 the Foreign Office asked the BBC to expand that service. Does not that suggest that there is no monopoly of wisdom on the question of where we should broadcast?
  Mr. Shelton: I certainly would not deny the right of the BBC to express its opinion., as no doubt it is requested to do, to the Foreign Office, but in my view it is going beyond that to ring up Members of Parliament such as myself to sponsor perhaps—I may be maligning it—this very interesting booklet and to run the campaign that it seems to have been running.
  The nice man from the BBC finally said to me—and he repeated this twice—that the BBC would love to talk to the Foreign Office about all this, "provided that it was a genuine dialogue". If that is really the opinion of the BBC, I can only say that it is absolute cheek.
  Mr. Spearing: Does the hon. Gentleman realise that when the Foreign Office witnesses came before the Select Committee and gave the evidence on which the Select Committee has commented they gave no hint that there would be any further announcement relating to BBC services? No one would expect them to reveal the nature of those announcements, but, in view of that rather curious attitude to the Select Committee, does he not concede that dialogue between the BBC and the Foreign Office may have been impossible?
  Mr. Shelton: My hon. Friend the Minister may care to comment on that. I understand that the dialogue with the BBC has been going on for eight months. The talks to which the gentleman from the BBC referred today were not talks in the past but talks in the future. He said that the BBC did not want a confrontation with the Foreign Office but that it would love to have talks with the Foreign Office—that is, today, tomorrow or the day after—provided that it is a genuine dialogue. I repeat, what cheek. Now I shall probably not even be invited by Radio London.
  Sir Brandon Rhys Williams: I would echo a word used by my hon. Friend—the word "revealing". Is he not revealing that in his view the BBC is a servile body whose function is to serve the Foreign Office and never to answer back?
  Mr. Shelton: I think that my hon. Friend misunderstands the division of areas of responsibility in overseas broadcasting. As I said initially, the BBC has complete freedom to say what it wishes within the time slot—the editorial content—but the Foreign Office has complete control over what countries receive the broadcasts and for how many hours. I understand that that division of responsibility is enshrined in the charter setting up the external services. I am saying that, just as the BBC might wish to have Foreign Office advice as to content of programmes but would deeply resent any attempt by the Foreign Office to influence the content of the programmes, the Foreign Office is no doubt interested in having the advice of the BBC about which countries and how many hours but would deeply resent any attempt by the BBC to twist its arm and influence its decisions through any kind of lobbying.
  Finally, I think that the whole House, the Minister of State and indeed all the Ministers at the Foreign Office would have been deeply grateful and would have given a rapturous reception to the capital programme without any cuts, although I am not saying that if more money had been available it would automatically have been spent in the way in which it was spent last year. Hon. Members may not be aware that there has been an increase in three services—in Farsi, Turkish and Russian—and a new broadcast in Pushtu. There must be flexibility. As the economic and political situations in different countries change, so the broadcasting must change. Of course my hon. Friend the Minister would have welcomed a bigger budget, but surely all of us must recognise, even if we do not all entirely agree, that in the present situation we are very fortunate to get what we did. I suggest, therefore, that my hon. Friend's role has been more that of the hero in this than that of the villain in which he seems to have been cast.
  604
  If cuts have to be made, it is for the Foreign Office or the House to decide where the cuts should be made and where the increases should be made, not for the BBC.
  10.49 pm
  Mr. Geoffrey Johnson Smith: I very much agree with my hon. Friend the Member for Streatham (Mr. Shelton). As the BBC is full of enterprising and intelligent people, who are far from servile or diffident, it is bound, occasionally, to get a little exercised about what happens as a result of Government policy. On this occasion it is right to say that some of the words spoken by, or inspired by, the BBC have gone over the top. This exercise is by no means the one that we had a few years ago, when hon. Members from both sides of the House rose up in wrath against the Government, and the Government gave way. On this occasion there is not the same enthusiasm to go over the top against the Government. We know why that is so.
  Cuts are being made in the revenue, but the Government have also pledged themselves to making a sizeable increase in the capital expenditure programme for the BBC's external services. Although this is a peculiar hour for a debate, more hon. Members would be in the Chamber if there were the same degree of anger and resentment at the Government's policy on this occasion as on the previous one. In fairness to the Government, hon. Members must accept that this time they have more of a case—[Interruption.] After the hon. Member for Derby, North (Mr. Whitehead) had spoken, he left the Chamber for some time. When the hon. Member for Warley, East (Mr. Faulds) was speaking from the Opposition Front Bench there was one other Labour Member in the Chamber. No other Opposition Member was present. That justifies my contention.
  Mr. Faulds: We all know that there are pressing engagements that pursue hon. Members at all hours. Therefore, the hon. Gentleman should not make a judgment about our nearly empty Benches and say that that shows that hon. Members are not concerned about this issue. One problem this time is that we have had two years of this obdurate Government. We are beginning to realise, with deepening depression, that no reasonable arguments or cases have any effect on the Prime Minister's extraordinary determination not to change course by a fraction of an inch, regardless of the damage that she does. That may be one of the reasons for there being fewer hon. Members in the Chamber tonight.
  Mr. Johnson Smith: The hon. Gentleman has misunderstood the determination of hon. Members. We have all been Members of Parliament for long enough to know that, if sufficient passion is aroused, hon. Members come to the Chamber, whatever the hour. Indeed, this debate did not start at a particularly late hour.
  Mr. John Wells: This is the first time that I have attended a broadcasting debate, and I am determined to make the Minister change his mind.
  Mr. Johnson Smith: If more hon. Members felt like that, more of them would be in the Chamber. I do not wish to strike too discordant a note. I greatly respect the value of the external services and the dedication and enthusiasm of the BBC's employees. I pay tribute to the BBC's director, who feels strongly that the Government have not given him as good a hand as he felt he had every right to

  605
  expect. There would be no hon. Members in the Chamber if we did not respect the fact that the BBC is genuinely concerned about the Government's decision.
  I respect the views put forward by the hon. Member for Derby, North and by others who are anxious about the Government's policy. I have no wish to turn my back on the force of those arguments. However, I hope that the Minister will make it clear that this is a Foreign Office decision. It has a certain amount of money to spend. Like every Department, it must occasionally cut its expenditure or rearrange the thrust of it. That also happens when other parties are in office. On this occasion the Foreign Office has looked at the value of broadcasts and decided that it is right to ask the BBC to accept cuts in revenue in return, over a period of years, for a considerable growth in capital expenditure.
  Some hon. Members imagine that the most effective way of influencing people in France or in the developing countries is to expand the radio service. The hon. Member for Warley, East made that point. The hon. Member for Derby, North believes that there should be a considerable expansion of services. My hon. Friend the Member for Kensington (Sir B. Rhys Williams) also said that we should expand our services, particularly to our friends, and that if we did not do so they would become just propaganda services. That view commands respect across the Floor of the House.
  I am not sure that radio is as powerful as some hon. Members argue when the Foreign Office has to consider how best to achieve its objective of influencing and persuading people that there is some value in our point of view and our way of life. There are no doubt arguments within the Foreign Office about whether it is better to sponsor certain conferences. The Government also have to consider whether money would be better spent by the British Council than on hotted-up broadcasting to Spain or Malta.
  In league terms, involving the number of hours of broadcasting compared with the Russians, I believe that we are going down the wrong path. We are ignoring the quality of broadcasting. We are attaching too much importance to tie nature of broadcasting itself. There is also a danger that we shall ignore the many subtle tools open to Governments.
  Mr. Whitehead: Listeners to the BBC service to Brazil, which is about to be axed, total about the same number as the readers of all the serious newpapers in Brazil. Is that not an influence that could not be obtained through Foreign Office diplomats?
  Mr. Johnson Smith: I do not wish to be drawn into a judgment about the nature of some of the cuts. From what I understand of the situation, I am not happy about the decision over Somalia. I am also not sure about Burma. What do the figures of listeners alleged to listen means? When the BBC says that 1·9 million or 2 million people listen to the French language programme, is it claimed that this is the number listening at the time the broadcast goes out? Or is the BBC saying that, in the course of a year, that is the number reached by the broadcast? Some people may listen only once or twice a year. I suspect that when a particular transmission goes out there is not an audience of 2 million listening simultaneously.
  Mr. Whitehead: The figure is explicit. Regular listeners are defined as those who listen at least once a week. That was the case in the Brazilian example that I quoted.
  Mr. Johnson Smith: I beg to doubt the efficacy of figures based on listening once a week. I am not sure how such statistics are compiled. My hon. Friend the Minister of State may be able to clarify the situation. Even if the figures are valid, I believe that the claims made for the value of listening to one programme once a week are exaggerated. The impression is given that 190,000 people are sitting in the jungles of Brazil listening to the programmes. That is not true, I suspect.
  My next point concerns what they listen to. 'The document supplied by the ABS and NUJ gives no indication of the make-up of programmes. A large proportion of those that I have heard while abroad contain a mixture of news and music. Much of the music is of the pop variety. I suspect that this has a connection with the so-called interest of young people in France in French language broadcasts. We are broadcasting "Disques demandés"—type programmes. There may be some argument where pop music is regarded as a tool of Western civilisation and where the young cry out for contact with the West. It is a way of sucking people into one's orbit.
  That reason is sometimes adduced for broadcasts of this kind to Eastern European countries. Attracted by the music, it is claimed, the listeners will eventually hear the truth emanating from the BBC, which comes as a refreshment to those accustomed to the tired platitudes of totalitarian Governments. That is the simple philosophy behind putting in the sugary type of programme. but I should need a lot of convincing that we are spending taxpayers' money wisely by broadcasting "Disques demandés"—type programmes to the French, who are already saturated with that sort of stuff.
  Sir Anthony Kershaw: My hon. Friend is extremely persuasive. He has nearly persuaded me that all the BBC external services are absolutely useless and ought to be abolished at once.
  Mr. Johnson-Smith: I regret that my hon. Friend should have listened so inattentively. What I am suggesting is that it is correct for the Foreign Office, when deciding how it should spend its money, in this field and others—
  Mr. Spearing: Our money.
  Mr. Johnson-Smith: Our money, I agree. It is right for it to decide whether it is better to spend the money on other things or on broadcasts to other countries. I shall not get into a passionate rage because it is stated that the Government believe that there is not much value in French language broadcasts for 21 hours a week to metropolitan France. If it had then been said "What is more, we intend to abolish French broadcasts from the BBC to Francophone Africa", I would begin to question the policy of the Foreign Office, but it has not done that.
  I know that great play has been made over the fact that there was an attempted coup d'etat in Spain, but do hon. Members on each side of the House seriously expect me to believe that seven hours' broadcasting to a few hundred thousand people in Spain—I do not know how many listen at one time; it might be a tiny audience—will somehow have a magnetic effect on Spanish opinion or a stabilising

  607
  influence? Most of the opinion-formers in Spain, Italy, France, and other countries that are Catholic and have not too high a respect for our policy in Northern Ireland have many other sources of information, far more compelling than some of the programmes that go out on the external services.
  Mr. Faulds: The hon. Gentleman slightly misunderstood the argument about Spain. The point was made that if, in the circumstances of a coup, the media of that country were controlled by the military, or by whoever had taken over, there would be considerable value in having a foreign voice coming in. That was the argument in regard to Spain.
  Mr. Johnson-Smith: We cannot expect the Foreign Office to base its programmes or to spend our taxpayers' money on the idea that somehow it must broadcast because such is the value and power of the few hours' broadcasting a week that it may save a country not only from a coup d'etat, but from going to the dogs, to civil war and to bloodshed. I honestly believe that hon. Members' in all sincerity, exaggerate the power of those broadcasts.
  As for the broadcasts in French, I sometimes think that there is still a hangover from the war, and that some of us are thinking in terms of Occupied France and Nazi-dominated or Vichy-dominated radio. The way that it is put is that the French are a long-suffering people who suffer badly at the hands of their Governments, who control broadcasting, so that they do not have the same freedom as "us Brits". That is why it is so important for us to broadcast the truth and to dispel the fog of prejudice that exists in the minds of the French over our attitude to the sheepmeat regime. We have to educate the French as to the honesty of our opinion. We have to save the European Economic Community. We have to save the French from their selfish, prejudiced views. That is the sort of story that is put around, and it is tasteless arrogance.
  Mr. William Shelton: Is my hon. Friend aware that the French external broadcasts are very small in comparison with ours, are directed almost entirely to French-speaking ex-colonies, and that the French Foreign Office has not exactly been unsuccessful in the last 10 years?
  Mr. Johnson-Smith: My hon. Friend is right.
  The document from the ABS and NUJ says:
  "A key factor in the popularity of the BBC's French service is its known independence from the State. There is a widespread feeling in France that the news provided by the French media is often biased in favour of the Government of the day. This was apparent during the days of President Giscard d'Estaing, since when there has been a big shake-up among key figures in broadcasting and in SORIRAD, the Government-financed organisation which has interests in many commercial operations including, Europe No. 1 and Radio Monte Carlo."
  There is more of that besides.
  Through its broadcasts, the BBC explains both sides of the coin on EEC matters and the complexities of such controversial topics as fishing limits and lamb exports. Let us imagine the scores of well-educated French officials, business men and intellectuals tuning in religiously to the BBC to get the British view—I put it that way because I know that the BBC is editorially independent—of the lamb war or the arguments over fishing. As the majorjity of them, we are told, are under 35, I do not believe that that
  608
  is what happens. That is not to say that there is no value in broadcasts, but I am far from convinced that we must stick with broadcasting in the French language to France.
  My right hon. and noble Friend the Secretary of State for Foreign and Commonwealth Affairs is quoted by the Italian paper Corriere Della Sera—I do not know whether it is true—as saying:
  "No one can persuade me that in a country like Italy, where there are hundreds of private radio and TV stations, that the nightly broadcasts of the BBC can have an audience larger than a few enthusiastic sleepwalkers."
  I should not be surprised if the Foreign Secretary—if he is quoted correctly—has hit the nail on the head.
  We must overcome this new form of neo-imperialism, this idea that somehow the British have a monopoly of truth and that we have the most excellent and exquisite weapon for delivering the truth. It is a good weopon, but let it be used in the places where it can be used properly. If we think that we are losing influence in France because we do not have a BBC external service, what in the blazes are all the other people doing going across to France—all the newspapers, political and intellectual contacts that we have and all the other forms in which we can do the mutual influencing?
  Mr. Whitehead: Will the hon. Member remind the House of one other editorial in Le Monde in 1979, when there was the previous attempt to cut the French service? That paper remonstrated with us in a way that no British newspaper would do if we suddenly heard that there would be no French language broadcasts to this country. French intellectual opinion, reflected by that Le Monde editorial, showed that BBC broadcasts were welcomed and that their continuance was desired.
  Mr. Johnson Smith: Let us hear more about the nature of those broadcasts. Le Monde may have said that, but I have yet to hear a tremendous outcry in France. If we took a straw poll in France today, I wonder how many people would know of the existence of the programmes and how many of those would miss them if they do not take place.
  I have said enough on that score. If hon. Gentlemen do not accept my argument, they do not need to and I shall move to another aspect of it.
  We must accept priorities in this area as in other policies. The grant-in-aid in 1980–81 was higher, in real terms, than in 1979–80. The Foreign Office has been asked to reduce its payroll and has done so. We know that the BBC is not required to make the manpower savings that the Civil Service has to make. It is not unreasonable for the Foreign Office, when looking at its budget and making its dispositions, to take the view that the BBC has to make sacrifices and make some of its staff redundant because that has happened to other Departments of State, too.
  The BBC is saying that the revenue cuts are real. They will hurt now at the rate of £3 million a year, and in the PESC period up to 1984–85 the BBC will suffer £6·6 million in revenue cuts. In return, all, that it will receive will be an increase in capital expenditure over the previous programme of £4 million. One is a real cut, and the other is an increase of £4 million. If one considers all the comparisons, it is true that in the short-term the BBC is worse off, but the Government have said to the BBC "The capital programme is an escalating, expanding one. In the PESC period, you are starting projects which we believe are worth while, and they will go on expanding through the decade." "That is why in 10 years," the Foreign Office

  609
  says, "we shall have an expenditure of £100 million." That is what the BBC describes as "jam today", but by inference it really means "pie in the sky". What further reassurance does the BBC want that the Government's long-term offer is genuine? What further reassurance does the Minister feel that he can give?
  I look at the problem from this standpoint: has the BBC any capital project that it would like brought forward? Is there any scheme on which it would like to start sooner, if only it had the money, and which, once started in the next year or so, would be difficult to stop or put into cold storage after work on it had begun? If it has no such project, we must assume that the BBC's external services have all the money for investment that they can cope with between now and 1984–85. If that is so, the BBC is in no different position from that of any other publicly financed corporation or Government Department. There must be a limit, given the way that we organise matters in Parliament, to how far ahead a Government can give a cast-iron, copper-bottomed guarantee.
  If the BBC cannot handle a bigger capital investment programme between now and 1984–85, or feels that the one that it has already provided for is miserable and inadequate, or does not even want additional finance to back any initial planning stage that it has for any new scheme, in my view it is not right to describe this long-term programme as "jam tomorrow", especially as the Government do not dispute the need for an expanding capital investment programme; on the contrary, they believe it to be vital.
  I believe in the Government's sincerity about that, and that is why I do not join those right hon. and hon. Members on both sides of the House who belabour my right hon. and hon. Friends with their strictures.
  11.33 pm
  Mr. John Wells: I welcome the BBC's extra capital expenditure which has been provided by the Foreign and Commonwealth Office.
  As chairman of the Anglo-Spanish group and of the Anglo-Finnish group in the House, I am delighted that the BBC's Finnish service is to continue, but I deplore the cut in the Spanish service. A number of hon. Members have quoted widely from the document which has been circulated to us, so I shall not bore the House by reading out all the Spanish details. But perhaps I might take my hon. Friend the Member for East Grinstead (Mr. Johnson Smith) to task for saying that there were about 250,000 listeners to the Spanish service, because my reading makes it very nearly 1 million listeners. Perhaps my hon. Friend and I wear different spectacles.
  Mr. Johnson Smith: Not at all. I accept what my hon. Friend says. But is it his understanding that when a programme is being transmitted 1 million people are listening at that very moment?
  Mr. Wells: Of course not. But my hon. Friend implied that at the peak there were 250,000 listeners, whereas my understanding is that at the peak there are 1 million. There is rather a difference.
  All hon. Members have reiterated that the BBC is independent of the Government and that the BBC does the editorial work whereas the Foreign Office chooses the countries. However, in the past week we have seen the deplorable ineptitude of the Foreign Office in all matters
  610
  Spanish. I shall go no further into detail, but every hon. Member knows what I mean. I hope that we shall see a few appointments from the Spanish desk in the Foreign Office to posts of tenth secretaries in the Central African Republic in the next few weeks. There can have been no greater mess-up in our country's diplomatic relations in peacetime.
  The BBC and the Foreign Office are at variance in their judgment over matters Spanish. I put my money on the BBC in this instance. This is an area of which I have some knowledge. Some members of the Anglo-Spanish group—at our request, not the BBC's—went to Bush House to witness the Spanish Broadcasts to Spain and to other countries. We were impressed by their merits.
  The Minister has told me elsewhere—and no doubt he will tell the House later—that Spanish newspapers feel that they could get along very well without us. They feel that we are somewhat patronising in thinking that we have a monopoly of the truth. That is what his officials advise him. That is their reading of some of the Spanish newspapers. But I have very little confidence in my hon. Friend's advisers in matters Spanish. I question their understanding of the matter.
  I bear in mind what has been said by hon. Members on both sides of the House, particularly the hon. Member for Derby, North (Mr. Whitehead) and my hon. Friend the Member for Stroud (Sir A. Kershaw), about the failed coup. It may have been a 10-hour wonder, but there was great merit in the support by the British broadcasting service to Spain of news as accepted and understood by the world. In any coup or takeover the broadcasting services are attacked first. Therefore, a continuing, reliable broadcast from a third nation, whose broadcasting service is respected, can only be for the good.
  I hope that there will be a reprieve, however modest, and that there will be a continuing presence in Spanish broadcasting. It costs only £180,000 a year; it is only an hour a day; and the staff number only 13. I know that small amounts add up. All these amounts of £180,000 can run into millions of pounds. But I plead with my hon. Friend to maintain our wavelengths and our position there in however modest a way.
  My third point concerns the need for a continuing presence into France. I believe that we shall have a great and exciting thing with independent broaadcasting of sound radio in the county of Kent in the foreseeable future. At present, we have the excellent BBC radio service called Radio Medway, which exports its services to a foreign country called Essex. I hope that before too long we shall have independent radio in Dover, which will export its services to a foreign country called France. A little hop across the water can do no harm. I hope that the Foreign Office will look kindly at the independent broaadcasting services in Kent when they get going. This is important for the future.
  Like several of my hon. Friends—in particular my hon. Friend the Member for East Grinstead who is trying to look forward, not back—I hope that the Minister will urge his Department to look forward. I urge him to make some promotions into the Central African Republic as quickly as he can.
  11.39 pm
  Mr. Greville Janner: I apologise to the House for my absence during the early part of the debate. It was due to an unavoidable engagement.

  611
  Some hon. Members have for many months been involved on efforts to support the BBC in its work. We believe that the external, transcription and world services provide a service in the best sense of that word. They are powerful voices for this country. They provide a cost-effective and excellent entrée into the minds of people in other lands, and, in the case of the world service—as a by-product—into the minds and the ears of very many people in this country, too.
  This is one of the rare campaigns in this House that enjoys the support of hon. Members from all parties. There are a few sad exceptions, and we have heard from them. On the whole, there is near unanimity in the voice of this House. When an early-day motion is taken round and hon. Members are eager to sign it, from both sides of the House, we know that we have a reflection of a most powerful view. When this happens, in most cases the Minister concerned is grateful for it, because he is doing his best to rake in from the Treasury, in hard times, money that is difficult to come by.
  In this case, however, the Minister, who takes advantage of the transcription services to the Caribbean and elsewhere, apparently enjoys the wielding of the axe. When he is tackled the Minister does not say "Look, we are very sorry that these most excellent services have to go, but we have discussed this with the BBC and it agrees that we are doing our best to save them." Not at all. He says "There are no cuts." That is his answer. I have had the great joy of debating with him on radio and that was his answer. "Cuts? Monstrous!"
  If we look at the total expenditure, if we use our statistics along with "lies, damned lies" we can say "Lump together the expenditure transferred from previous years on capital outlay on audibility, and put that together with the other expenditure and we are actually spending more." Behold the magic of the Treasury, in allowing us more rather than less. But the fact is that seven services are being cut. If that is not a cut, the word has no meaning in any language, whether in English, French, Somali or Spanish. We may be grateful that the Foreign Office does not interfere with the content of programmes as it does with their existence. Conversely, it appears quite wrong to me that the Foreign Office should decide on the existence of services any more than it decides on their content.
  What the Foreign Office has said is "We have decided that these services will come to an end. The BBC can have its limited independence, limited that is to the contents, but if we decide that a service is to go, that service goes and it is our decision. What is more, we do not give a tinker's cuss for the will of this House." I find this offensive. When a change of this sort is to be made in the voice of Britain, the voice of hon. Members should at least be heard. Otherwise there is no point in us making our views known. It is no good saying "Fine, the voices of hon. Members are being heard at a quarter to midnight in a debate on the Consolidated Fund Bill". Were there to be a vote tonight, even at this hour, even at this stage in the Session, I have no doubt that the House would show the Government, by a substantial majority, that these cuts in the language services and the destruction of the transcription services are against the will of the House.
  Mr. Spearing: Earlier the hon. Member for East Grinstead (Mr. Johnson-Smith), who has unfortunately
  612
  left the Chamber, suggested that the attendance for the debate was such that the House did not really care. Bearing in mind that this debate was not known about until mid-day yesterday, and the fact that hon. Members may have taken on other engagements, what view does my hon. and learned Friend have about the attendence for the the debate and the time that it has already taken?
  Mr. Janner: Having addressed the House on previous Consolidated Fund Bills, when the only other Members present were a Minister and a Government Whip, I think that the attendance at this debate has been remarkable and so have been the careful contributions to it. The early-day motion, which has been signed by nearly 170 right hon. and hon. Members—almost half of them Conservative Members—is a clear demonstration of the view of the House.
  There has been no opportunity for a vote. The nature of debates on Consolidated Fund Bills prevents us from voting tonight and we could not vote on my Ten-Minute Bill because the Government decided not to put anyone up to oppose it. I accept the assurance of my hon. Friend the Member for Newham, North-West (Mr. Lewis) that neither the Government nor anyone else had any part in his remarkable epic speech on the Bill. We could have had a vote if the Government had decided to force one, but in the knowledge that they would have been defeated they decided not to oppose the Bill and I obtained the unopposed leave of the House to introduce it.
  We know that there will be no time for a vote during the overspill period in October. The Queen's Speech will be in November and the vote at the end of the debate will have its broad and overall effect, but it will not refer to this matter. No doubt far more important and immediate matters will be before the House then and the earliest date that we shall be able to vote on this important matter, affecting our relationship with seven countries and, through the transcription service, many more, is December. The dismantling of the services will begin well before December. The transcription service can last until April and some services will be able to retain some staff beyond December, but the BBC and its staff are in an awful position.
  The Minister knows that when there is a vote—and there will be a vote—the Government will lose. They have no support of any size on their own Benches and none, except one hon. Member of some size, on the Opposition Benches. The Minister knows, or should know if he is prepared to open his eyes, that the Government will be defeated on this matter in due course.
  Having regard to the feeling of the House and being by nature a democrat—I give the Minister the benefit of that happy doubt—the hon. Gentleman ought to say that the Government will look at the matter again, take note of the early-day motion, the Ten-Minute Bill and the fact that he managed to assemble a mighty crowd of two to support him tonight and accept that the House totally opposes the unjustifiable decision foisted on the BBC.
  The decision will weaken the Minister's own Department, which has enough problems in dealing with world affairs without losing the muscle that we can provide for it. He should at least agree to ask his colleagues at the Foreign Office to reconsider the decision. I hope that he will not swing his axe with joy, while claiming that there have been no cuts. Seven services and the transcription service are going.

  613
  I hope that the Minister of State will give the BBC, those who work for it, those who believe in it and, above all, those who listen to it, both here and especially overseas, an assurance that the Government have heard the voice of Parliament, even before there is a vote to make it clear to him that his decision is one of almost unparalleled unpopularity and an almost amazing lack of cost effectiveness. The decision should be revoked or at least reconsidered in the light of our debate.
  11.49 pm
  Mr. Gary Waller: I had not intended to take part in this debate, but I was encouraged to do so because a number of matters have been raised, including those by my hon. Friend the Member for East Grinstead (Mr. Johnson Smith), who I am sorry is no longer in the Chamber, which need to be put in perspective.
  I entirely support the view that public expenditure has to be cut. I am not in dispute with the Government on that issue. I realise that it is easy to say that, and at the same time to say "Yes, but this is one thing that we should not cut". However, we should not wield the axe in-discriminately. We must think in terms of how the money can be used most effectively. In my view, the BBC overseas services are one of the most cost-effective arms that this country possesses. I say that particularly because of the large increase in the numbers of people throughout the world who are able to listen to radio. I was surprised by what my hon. Friend the Member for East Grinstead said. If one compares radio as a medium with conferences and all the other propaganda weapons that are open to the Government, radio comes high in the list. I do not lay too much emphasis on the word "propaganda", because it is important that the BBC should not be seen in that light.
  I do not regret that not everything that is heard on the BBC overseas services is news and current affairs. I returned from the United States yesterday, and I felt that the British way of life and form of government benefited just as much from programmes which have nothing to do with foreign affairs, current affairs and news. Feature programmes and serials that are popular in this country, and sometimes even more popular in the United States, do just as much good for this country as news and current affairs.
  It is true, of course, that the Foreign Office must decide on the countries to which the BBC overseas services will broadcast. However, no one is better placed than the BBC to judge which services are most listened to. The number of letters that are received from countries throughout the world attest to the popularity of programmes.
  It is also important to bear in mind, for instance, that other countries are increasing their broadcasting to Spain at a rate of knots. It is surprising to learn that China broadcasts twice as many hours a week to Spain in Spanish as does the BBC. Albania broadcasts approximately three times as many hours, and the Soviet Union the same amount. Clearly, they regard the Spanish listening figures as important, and so should we.
  Let us consider the number of people who are able to listen to these programmes. In South America, for instance, there is a great increase in the numbers. In Latin America and the West Indies, between 1955 and 1979—the most recent year for which I have figures—the number of sets increased from 13 million to 96 million.
  614
  My hon. Friend the Member for East Grinstead threw doubt on the numbers who listen at particular times of the day. It is difficult to have a definite idea of the numbers involved, but there is no evidence that people are listening less to the BBC than they did in the past. Moreover, there is definite evidence about the large number of sets. Radio is increasing greatly in importance as time goes by, and there is no reason to doubt that that will continue in the future.
  Let us consider the efficiency of the BBC overseas services. Over the past 10 years there has been an 11 per cent. drop in staff. Its increase in productivity—just in relation to the numbers of hours broadcast—has been 12½ per cent., and that takes no account of the increase in the market—something to which I attach great importance.
  It is clear that many countries are paying a great deal of attention to radio. Britain should be foremost among them because Britain's voice in the world still has an ear. Many people still tune to the .BBC knowing that they will hear the truth. They cannot always be sure of hearing the truth from their own broadcasting services.
  It might be that people at the top of Government do not tune in to the BBC, at this hour, for example. It is not because people at the top tune in that events in Poland have changed. One of the reasons why changes have taken place in Poland and in other countries behind the Iron Curtain is that the ordinary people are able to listen to the BBC and other Western broadcasts. Perhaps they believe them more than their own services. Radio is important. That is why, taking into account the value for money, the Government should think again and consider the consequences of their decision.
  11.56 pm
  The Minister of State, Foreign and Commonwealth Office (Mr. Nicholas Ridley): Perhaps I can share a joke with the hon. and learned Member for Leicester, West (Mr. Janner). He said that the voice of the House should be heard on the matter. That applies to him, too. If he had heard the voice of the House tonight, he would not be so certain of his ground. I shall share another joke with him. He referred to our joint radio broadcasts. Perhaps he did not know that it was broadcast at 6.30 in the morning to ensure that the audience was not as great as it might have been if it had been broadcast at the normal time.
  The hon. and learned Gentleman must be a little careful in the assumptions that he makes about the views of the House, especially since we have, in his absence, had such an extraordinarily good debate. I congratulate and thank my hon. Friend the Member for Stroud (Sir A. Kershaw) on raising this subject and for giving us this opportunity to speak on it. It has been an important debate and it has taken us a long way forward in our thinking.
  Nobody has questioned the excellence of the BBC"s external services. If there is any doubt about it, I reiterate that there is no question of a reduction or change in the world service in English. As my hon. Friend the Member for Dorset, North (Mr. Baker) said, it will be enhanced because as a result of greater transmitter power the service will be heard more clearly throughout the world. There was a certain amount of heavy breathing from Opposition Members who seem to reflect the BBC's views rather than having thought about the difficult problems.

  615
  I shall answer as many questions as possible. I do not want any hon. Member to feel that he must interrupt me, because I hope that I shall cover all subjects mentioned, although I fear it might take some time.
  When we debated the subject on 13 November 1979, when the Government backed down, as it were, the number of hon. Members who stressed the importance of improving the audibility of the BBC's transmissions impressed me. The right hon. Member for Stepney and Poplar (Mr. Shore), who was the Shadow Foreign Secretary, said:
  "We are far behind others in the technical capacity and volume of our overseas broadcasting stations."—[Official Report, 13 November 1979; Vol. 973, c. 1243.]
  The message of the debate was that we must put right the audibility. The strange letter from Mr. Mansell appeared to go uneasily with his frustration that he could not construct the station at Henstridge, Dorset—referred to by my hon. Friend the Member for Dorset, North (Mr. Baker)—because of planning delays. Why did he want that station if he said that the audibility was adequate? I assure him that many people who tell me about the audibility of the BBC would not agree with what he said.
  Unfortunately, the result of the debate two years ago was that the capital programme was postponedyet again. Two years were lost because the Government did not tackle the capital within the cash limits applied to the BBC. The planning permission delays at Henstridge and other technical delays at Orfordness did not do so much damage as may have been expected, because it was impossible to spend the money due to the technical difficulties. Therefore, the effect of the past two years has been that, although the capital programme was delayed, it was as much delayed by the technical problems as by the hostility of the House to the Government's proposals.
  In the past 18 months we have discussed the question of audibility with the BBC. Indeed, we have discussed, in a series of regular consultations, the whole range of problems that the House has discussed tonight. I shall call it a dialogue, if that is preferred. There is no question but that we have explored every possibility in dialogue with the BBC. The Government concluded, on the urging of the BBC, that audibility was the top priority. As if we wanted confirmation of that, the Select Committee, of which my hon. Friend the Member for Stroud is the distinguished Chairman, published its report. I restate what I stated yesterday, namely, that it recommended that the capital programme had been cut too often by too much and the time had come to spend more money on it. I absolutely agree. That is precisely what the Government are doing.
  We have two small difficulties with the Select Committee which I must mention; my hon. Friend was kind enough to mention them. The new Far East station and the new East Africa station may not be brought forward as much as the Select Committee wishes, partly because they are not part of the BBC's priorities—and there must be an orderly sequence in the spending of the money—and partly because, in both of those cases, there are considerable technical difficulties that make an early start difficult. Those are the reasons why they may not start until 1985, rather than any desire to get out of the obligation to complete those relay stations.
  The Select Committee also criticised us—several hon. Members referred to this, including the hon. Member for
  616
  Newham, South (Mr. Spearing)—because we did not warn it about our impending decisions on the Government's future expenditure plans for the service. I must give some dates. The Foreign and Commonwealth Office officials who gave evidence before the Committee were there between 3 and 5 June this year. The Government's decision was taken on 22 June and communicated to the BBC on 23 June. We allowed two days before announcing the plans to Parliament on 25 June, out of courtesy to the BBC and because we were required to do so. It would have been quite wrong to have told the Select Committee, even if a decision had been taken, before the BBC had been told. We are required to make a decision after consulting the BBC. Even then, at the time of the hearings, the Government had cone to no such decision.
  Mr. Spearing: If the hon. Gentleman reads Hansard, he will find that I did not make the aspersion that he has implied. I did not say that the Select Committee should be acquainted privately—of course it should not publicly—with the result. I said that some intimation might have been given that conversations were in progress and that a future decision of some sort had to be made. It was the lack of that intimation to which the Select Committee took exception.
  Mr. Ridley: I do not think that I can accept that. When Governments take a decision, they take it after consulting all their parts internally. The decision is not a decision until the Government have taken it. The fact that one Department may want something and another Department wants something else cannot be described as a decision of which intimation should be given until the Government finally decide what to do. The decision was taken on 22 June.
  We decided that audibility must be our top priority. We decided to make new money available in substantial amounts to the BBC's external services. The capital programme for the rest of the decade is worth £102 million at 1981 prices. There has been a suggestion that this is merely a restoration of previous plans. Far more will have to be spent on Bush House modernization—nearly twice as much as was contemplated—because of the discovery of blue asbestos in the ducts. There is a much larger programme of plant replacement throughout the world. In addition, there is the new Far East relay station, which has never been included in any previous programme. The cost of this total and enhanced programme is far greater than anything that has ever been discussed before.
  Never before has the BBC's capital programme been authorised. It has always been done on a year-to-year basis under the PESC programme. That is not a satisfactory procedure. The programme will take eight or nine years to complete. The PESC programme extends for only four years. It has never been possible to deal with the problem properly in the PESC system. When a nationalised industry is building, for example, an electricity generating station, authorisation is given for the capital programme and certain projects within that on a rolling basis. That is not the same as the PESC programme. That is why expressions such as "pie-in-the-sky" are not justified, as my hon. Friend the Member for East Grinstead (Mr. Johnson Smith) rightly said.
  Mr. Faulds: Is the hon. Gentleman really claiming that the BBC can place total reliance on the expectation that after 1985 the rest of that money will be forthcoming?
  Mr. Ridley: The BBC can place as much reliance upon it as the Central Electricity Generating Board can place reliance on its being enabled to complete a capital project that has been authorised. There is one condition, which is that the required savings must be found.
  If anyone is interested in the details of the programme, may I point out that it consists of 14 powerful transmitters in the United Kingdom with satellite feeds to all the overseas relay stations and additional relay stations for East Africa and the Far East. This is on top of existing work to complete four new transmitters in Cyprus and a 500 kw medium wave transmitter in Orfordness.
  We considered the services of the external broadcasting units. It is the Government's duty to choose which services they want to increase and which they want to decrease, to start or to finish. It is a decision that must be taken on foreign policy grounds—namely, the foreign policy interests of the United Kingdom. That has been stressed by many hon. Members.
  There are between 2,500 and 9,000 languages in the world, whichever way one likes to count them. The question must be which of those languages we should broadcast in. After the changes, we shall still be broadcasting in 33 of those languages. However, it is a question not just of sticking with the existing languages but of deciding what is appropriate from time to time in terms of our foreign policy.
  I shall suggest some of the things which I believe are not appropriate to decide the matter; then I shall suggest some of the things which I believe are appropriate. I do not believe that the views of the BBC staff are an appropriate consideration in the matter because those are internal union views and not matters of British foreign policy. Nor do I believe that the importance of the market is a big consideration. Japan, the fastest growing commercial nation in the world, does one-third of our overseas broadcasting hours. It does not consider that its commercial interest will be served by a massive increase in its external broadcasting.
  The hon. Member for Warley, East (Mr. Faulds) mentioned that Brazil has an immense population and immense resources. Those are not good arguments. They are nothing to do with British foreign policy. That does not seem to me an intelligent way of looking at the matter.
  Mr. Faulds: The point which I was trying to make was that in terms of the political importance of Brazil, which is developing into the great nation in South America, surely to cut our contacts and news and views dissemination to that country is politically short-sighted?
  Mr. Ridley: That may or may not be so, but that is not the only argument which the hon. Member advanced. It is a question of what is in our foreign policy interest.
  I must agree strongly with my hon. Friend the Member for East Grinstead. The idea that because we broadcast in Spanish to Spain we averted a military coup or because we broadcast to Portugal we will affect the destiny of the Portuguese democracy is claiming far more than the BBC would claim for itself. We got much closer to it when my hon. Friend the Member for Kensington (Sir B. Rhys Williams) quoted in aid Poland. There is a clear interest in British foreign policy that the Poles should have access to the truth and., as my hon. Friend the Member for Dorset, North called it, the British free way of life. That is
  618
  absolutely essential. However, we are not cutting broadcasting to Poland. Indeed, we are increasing it in Russian.
  The hon. Member for Derby, North (Mr. Whitehead) said that he had met someone from China who stressed the importance of the BBC external services to the Chinese through the times of the cultural revolution. That is so. But we are not cutting the BBC services to China. We shall enhance them by building a Far East relay station. Therefore, I am trying to concentrate on what is in our interests.
  Mr. Whitehead: Does not the Minister agree that it is in our foreign policy interests that we have close links with what is still an emerging democracy in Spain and what is still an emerging State from the Communist orbit in Somalia, a country which the Minister has not mentioned?
  Mr. Ridley: I do not, because I have already said that I do not believe that those are high priority services in British foreign policy interests. By the nature of the Government's decision, that must be what we think.
  Many hon. Members talked about audience figures. I must stress the total unreliability of the audience figures we have, particularly for the more remote countries. In addition, hon. Members did not say how many people listened nearly every day, every week or once a year. Figures are bandied about without saying what they mean. Let me give an example of how the audience figures are compiled. In 1976, a survey in Spain revealed that, of 3,000 people questioned at random, only three listened to the BBC regularly. It would be hard to imagine anything less likely to be accurate or specific than the grossing up of such a tiny base sample.
  That is not a major consideration. I do not accept that what the Russians do is a strong criterion either. The BBC is not a quantity service, it is a quality service, and it is listened to because of its quality. That is what matters, and the Russians cannot claim that quality.
  Sir Anthony Kershaw: But if we have no quantity, we also have no quality.
  Mr. Ridley: But there are 9,000 languages. Would my hon. Friend choose a different number of languages from what we have chosen? It is impossible to broadcast in every language to every person. The cost would be absolutely prohibitive. What is more, we have the great advantage that English is becoming the world's most popular language, and we are increasing the power with which the world service in English can be heard.
  Every hon. Member has argued about one or other of the vernaculars that we have chosen. It is not possible to prove that our judgment has been right. Equally, everyone has his own favourite. My hon. Friend the Member for Maidstone (Mr. Wells) has a special interest in Spain and Finland. He has won one and lost another. It is significant that already we do not broadcast to a large number of countries in Western Europe—for example, the Netherlands, Norway, Sweden and Denmark. Yet no one can say that our interests or democracy have suffered or that the truth is absent from those countries because of this omission.
  With the exception of a few minutes from Italy, not one European country broadcasts to us in our language, and nor do the Americans, with their enormous number of broadcast hours. There has been a general acceptance that

  619
  it may not be right to go on assuming that our friends and allies in Western Europe are somehow deprived of the truth and that we must supply it to them.
  Sir Brandon Rhys Williams: In mentioning Sweden, the Netherlands and Denmark, has not my hon. Friend mentioned countries where English is widely understood and where English language broadcasts are widely received? However, in mentioning Spain, Italy and France, has not he mentioned countries where many people do not understand English sufficiently to follow the news?
  Mr. Ridley: Equally, in mentioning Brazil, Burma and Somalia we are mentioning countries where English is also largely understood.—[HON. MEMBERS: "In Somalia?"] Both English and Arabic are well understood in that part of the world.
  I turn to Somalia, as this has been the service about which the House has felt that the Government were perhaps mistaken. Every service has its protagonists, of course. Whichever service we had chosen, that would have been the case.
  There are in fact only 7 million Somali speakers in the world— far less than the BBC's five other vernacular services to Africa. As I have said, English and Arabic are well understood in many parts of that country.
  Mr. Faulds: How can the Minister sustain the claim that there are only 7 million Somali speakers in the world? Is he referring only to those in Somalia, or is he including the Somali communities in other parts of the world? Does he mean those in Djibouti or East Africa? I do not think that he can back up those figures with the facts.
  Mr. Ridley: I said that there were only that many Somali speakers. If my information is wrong, I shall bow to the hon. Gentleman's greater knowledge, but I believe that there are only 7 million Somali speakers.
  Mr. Faulds: In all Somali communities throughout the world?
  Mr. Ridley: That is what I am saying, but the hon. Gentleman may know better.
  I turn next to the transcription services. I should make it clear to hon. Members that it is not the Government's intention that those services should cease. The BBC can perfectly well continue them. We merely seek to end the subsidy from the grant-in-aid from the taxpayer. These are not services which are in the interests of British foreign policy, although they may be in the interests of other Departments of Government or other people. It is therefore not right that the Foreign Office should have to subscribe to the losses made by those services.
  If developing countries wish to acquire the material, they may use the aid funds which are provided on a large scale. The BBC can perfectly well obtain funds from other sources to some exent, and we very much hope that they will succeed in being able to keep the bulk of the transcription services going—
  Mr, George Cunningham: Wind him up, for goodness sake.
  Mr. Ridley:—by means of charging their customers or getting money from other sources.
  In this context, I should say to my hon. Friend the Member for Kensington that there is no question but that
  620
  "English by Radio" will continue. It is already self-financing, as we should like the transcription services to become, too.
  There are then the transcription services, which we have decided should be increased. They are Russian, Turkish and Farsi. A new Pushtu service is also starting next month. As a result of these, there will be a small increase in costs incurred. I emphasise that there should be this flexibility. It has been suggested that the pattern of language broadcasts should be static for all time. The case of Turkey was cited in aid. The House chose a good example, because that is a country in which priorities have changed. I believe that we were right two years ago to suggest that the Turkish service was not necessary, and I believe that we are right now to suggest that it should be increased. [Interruption.] Indeed, further changes may well be made in another year or two, as events change. As several of my hon. Friends have said, there must be this flexibility in the way in which we view our foreign policy interests and where it is necessary to broadcast and where it is not.
  There is a strange argument that if a service is once stopped or diminishes it will be impossible to start it again. Yet when we asked the BBC to start the Pushtu service again it took it no time at all to find a frequency, to find a transmitter and to find Pushtu speakers, and the service is going on the air in record time. I congratulate the BBC. In practice, it has no difficulty in starting up a service again.
  Mr. Faulds: The Minister is as wrong about this as he is about many other matters. The Pushtu service has not been started up again. It is a new service.
  Mr. Ridley: That is better still. The hon. Gentleman has illustrated my point that there is no difficulty in starting up a new service.
  Mr. Waller: Does not my hon. Friend accept that people are loyal to a service? Once that service is ended—even if there is a remote possibility of starting it up again—people will begin to listen to another service in their language. They may listen to the Russian or Chinese service. It is surely mistaken to imagine that one can turn on a tap and people will start listening again.
  Mr. Ridley: I do not believe that audiences cannot be recaptured in the same way as translators.
  Our study resulted in making net savings from current operations of about £2·6 million a year at 1981 survey prices. Over the remaining nine-year period of this decade that will save about £23 million at 1981 prices. As the capital programme is £102 million, that leaves £79 million to come from the Government. Some of that was included in the Public Expenditure Survey Committee provisions but a large proportion of it was not. For instance, in the two years 1983–84 and 1984–85 combined there is an increased total of new money from Government of £13 million. As the programme develops for the next five years, that will grow every year. Broadly similar amounts of new money will be available in those later years. This whole programme can be considered to be approved by the Government unless the BBC is unable to make the current savings. If hon. Members decided to put off those current savings, the effect would be to postpone the capital programme still further and to delay audibility to a point at which the BBC would probably lose nearly all its audience.

  621
  By putting the transmitters right, the BBC will be able to reach far more people in the world. More people will be able to hear it. As a result of making this our priority, the audience will grow more than it would if we continued to broadcast every vernacular with insufficient audibility for people to hear.
  Mr. Spearing: The Minister has just made an important statement. Is he denying that a debate on a motion—perhaps on a Supply day—could express a view not only about the reinstatement of the cut services but also about maintaining, at the same time, the capital? With due deference, Mr. Deputy Speaker, any other suggestion would be a contempt of the House.
  Mr. Ridley: It is not possible, by means of a motion, to force the Government to spend still more money. It is wrong to say that this is the seventh cut in eight years. This is not a cut. It is a considerable net increase. The last so-called cut in 1979 was a postponement of capital spending. The five so-called cuts under previous Governments were mainly small, resulting in a reduction of only 30 hours a week. They were largely matched by increases in funding, which the BBC has not mentioned in its propaganda.
  I have spoken already this week about the suggestion of my hon. Friend the Member for Kensington that we should move quickly into world broadcasting of television by satellite. My hon. Friend mentioned the Home Secretary's report. We must await the comments on that document which have been invited by the end of the month.
  This is an immensely expensive area. I assure my hon. Friend that his remarks are taken seriously by the Government. We have to study the implications, which are major and complex as well as expensive. I do not believe that we can go faster than the technology and our friends will allow. I have only one slight quarrel with my hon. Friend's view of the future. I believe that it is possible to transmit television programmes to countries with which we have a friendly reciprocal arrangement. If, however,
  622
  a country did not wish to have television programmes transmitted to it at this time, it would probably be difficult to surmount the obstacles that would be put in our way. As a means of foreign policy, it may not be so effective as the external services, which should remain our priority.
  I turn finally to a point made with great force by my hon. Friends the Members for Hastings (Mr. Warren), Streatham (Mr. Shelton) and East Grinstead. It is true that, under the licensing agreement, the BBC has complete editorial freedom and that the Government do not interfere at all. This is a contributory factor to the high esteem in which the BBC is held abroad. It is not only that this; is contained within the licensing agreement; it has also been demonstrated that this is true.
  In return, the Government have a duty to prescribe the priorities in terms of hours and languages broadcast and between the capital and revenue services. I believe that foreign policy considerations must dominate the decision. Rightly or wrongly, the Foreign Office and Foreign Office Ministers are the people in the position to get the facts in deciding the priorities both because of reports from our embassies throughout the world and because of our knowledge of our priorities and what we are seeking to do.
  It is an instrument of Government policy. I agree that it is political. Hon. Members may criticise our political priorities in the matter. It must be something that we decide. I believe and commend to the House the fact that it is right to increase the grant-in-aid to the BBC external services and right that the priority in the increased grant for a secure nine-year programme should be given to make the BBC audible. I also believe that the House should agree that the Government must decide and be flexible about our priorities in the broadcasting of vernacular services and that, on this occasion, we have got the matter about right.
  Mr. Greville Janner: Before the Minister sits down——
  Mr. Ridley: I have sat down.

  Local Authorities (Partnership Expenditure)
  12.33 am
  Mr. George Cunningham: I wish to raise a specific point in relation to the distribution of block grant by the Department of the Environment to local authorities—a point relating specifically to the partnership agreements between the Government and a number of local authorities, and particularly my own local authority, the London borough of Islington in association with the neighbouring borough of Hackney. Now, as in the past, the Islington borough council is extremely grateful to my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) who, when Secretary of State, initiated the partnership programmes. I am sure that all beneficiaries and other authorities will join in the congratulations for an imaginative initiative.
  It is a topical time to be considering the matter—the Secretary of State is in the area of one of the partnership authorities, Liverpool—and it is an appropriate time, if only because the Secretary of State will have to do something when he has finished his listening period in Liverpool. The proposal that I am putting forward tonight is one sensible thing which should have been done some time ago and which could be put into a package of measures very relevant to recent events.
  This is not the first time that I have raised the point. It was discussed at some length at a meeting at the Department of the Environment between representatives of Islington borough council, myself and Lord Bellwin on 1 October last year. At that meeting, I think that we persuaded the Minister of State that on another issue we were right on facts and he was wrong, and I hope that as a result of this debate and the correspendence that has taken place on the issue we can satisfy him and the Secretary of State—and the Minister of State who is with us tonight—that we have reason on our side.
  Any discussions about rates have suffered enormously from the change in the system, because some hon. Members had just about got used to understanding the old system when we went over to the new one, and block grant distribution methods are of such complexity that it usually takes hon. Members a year or two to begin to understand them.
  The Secretary of State has on occasion said that he is open to persuasion that changes are required. There are some rather obvious changes that are required, as illustrated by headlines that have appeared recently. It is, for example, the case that when, let us say, the GLC or the ILEA announces a supplementary precept, or any other precept, on the London boroughs, it is usually expressed in net terms. For example, the ILEA has recently announced a supplementary precept of 3·2p. But that is a net figure, and in order to collect that amount of revenue Islington borough council, because of the effect on the block grant of imposing that increase, would have to levy a rate of 4·7p.
  The reason for that, of course, is that in London—I am not sure that this applies outside London—the block grant, although calculated separately for the precepting and the rating authorities, is distributed only to the rating authority, and the upper tiers, the GLC and the ILEA—and
  624
  the Home Office in respect of the Metropolitan Police precept—are to some extent insulated from the block grant consequences of the precepts that they make.
  That is contrary to the principle of direct accountability that was supposed to be behind the new system. I realise that that point is a little to the side of the subject matter of this debate, but it is well worth the Minister of State's looking at it, because it is in conflict with the principle of accountability, and I hope that the Minister will look at it at leisure.
  Islington's position on block grant can be put baldly like this. This is before we come specifically to partnership expenditure. In 1980–81, Islington's total expenditure—including that in respect of others—was about £103 million, and our grant from the Government was £42 million. So we were getting about 40 per cent. of total expenditure from the grant, which over the years has been about the normal average percentage.
  In 1981–82, our total expenditure as at this moment stands at about £112 million, and our grant expectation—subject to some qualifications that I shall make later—is about £31 million, which means only 28 per cent. of expenditure being met from the block grant—an enormous reduction from the previous figure of 40 per cent. But those figures do not take account of the penalties and the clawbacks, which reduce the figure of £31 million block grant to £25·3 million block grant, which means that the block grant will be meeting only 23 per cent. of total expenditure, compared with a figure of about 40 per cent. over the years and as recently as 1980–81.
  I mention that background, because that is the enormously serious change that we have endured. It is against that background that we come to the specific partnership point. In Islington, approved partnership expenditure in the present year is approximately £6 million, of which roughly £2 million is capital and £4 million revenue. The £2 million capital partnership expenditure is not really relevant to the argument tonight, so we are left with the £4 million of revenue expenditure. That is money that is met 75 per cent. by the Government and 25 per cent. by Islington borough council on the rates.
  At the moment, Islington is in excess of the penalty threshold in the year 1981–82 to the tune of £1.4 million. But the rise in partnership revenue expenditure over the relevant period, that is from 1978–79 to 1981–82, has been £2.4 million. Both those figures are 100 per cent. partnership expenditure, that is, the part that is met by Government and the part met by the borough council. The whole of the excess over the threshold is accounted for, and more, by the rise in partnership revenue expenditure. If the partnership revenue expenditure rise were excluded from the calculation, Islington would be £1 million below the threshold. If we deducted only the Government's 75 per cent. of the £2.4 million figure, Islington would be approximately £500,000 below the revenue threshold. It means a lot to us. It is the partnership expenditure only that has put Islington over the top of the penalty line.
  I contend that it is of the nature of partnership expenditure and the intention behind it that it should be additional to other expenditure—additional in the sense of being additional to one authority in relation to other authorities. I do not imply that it must be free of Government expenditure control. Of course it must not. The Government will take partnership expenditure, both by themselves and by the local authorities, into account

  625
  when they are deciding the total of public expenditure. It will be a line in the PESC calculations. That goes without saying. But the partnership idea makes no sense if it does not result in a relatively greater expenditure in those areas that are partnership authorities compared with those that are not.
  I accept that many of the projects and purposes upon which partnership expenditure goes are projects and purposes that could be financed out of normal local authority expenditure, but I make two points on that. First, some of those projects and purposes are not the same as those financed from normal mainstream finances. Secondly, even in the case of expenditure that is the same as that which is financed normally, we have additional expenditure on that kind of project and purpose, and it was the intention of the partnership programmes to ensure that certain purposes were met which would not otherwise be met and that certain kinds of expenditure which might otherwise have been restricted were less restricted as a result of this new programme of money provision.
  The fact that in Islington's expenditure under the partnership schemes there is expenditure of a kind which is very similar to items on the mainstream budget is not an argument against my case.
  Let us imagine a situation in which a partnership authority went just up to but not beyond the penalty threshold, and the local authority, in agreement with the Government, decided that a certain project of a significant size under a partnership scheme ought to be initiated. The effect of that, under present arrangements, would be to push the authority into the penalty area, and a penalty would be imposed upon it because the Government thought that a certain project was a good one, the local authority agreed, and that project was initiated. I have only one word to describe such a situation. It is absurd.
  The most explicit formulation of the present position that I have seen was given in a letter at official level to Islington borough council dated 15 April 1981:
  "Ministers have repeatedly said that if an authority decides to increase expenditure in one particular area within the current expenditure definition, counterbalancing savings must be made in other areas."
  So far as it goes, that is sensible. It is not possible to work local authority expenditure control on any other basis as a general rule. But the letter goes on:
  "This argument applies to the case of Partnership expenditure as much as to any other element of current expenditure."
  That is where I say that that is absurd.
  There is no point in having this programme unless in some sense it is seen as an addition which does not have to be compensated for by reductions elsewhere.
  Mr. Anthony Steen: As I understand it, the hon. Gentleman is making two points. The first is that the partnership money should be taken out of the prescribed levels and should be completely separate. The second is that, if it stays in, because it is under the urban aid programme and the 25 per cent., the more money the Government give, the poorer the less well-off local authorities will become.
  Mr. Cunningham: I am not sure that I have understood the second part of the hon. Gentleman's question. But I understand the first part, and the answer is "Yes". Although the Government must have control over partnership expenditure, as over other expenditure—and not only as to the individual project, but as to the total—it makes no sense to put the partnership
  626
  expenditure in with all other local authority expenditure and to assume that when the partnership expenditure is increased, other expenditure must be decreased. Manifestly, that makes nonsense of the concept, and the Government can give up that notion without giving up the control of public expenditure generally or local authority expenditure generally.
  Mr. Steen: The second point was that partnership money comes under the urban aid programme. The whole concept of partnership in the White Paper "Policy for the Inner Cities" was that it would be financed in an additional urban aid programme. It was lumped together with the urban aid programme and called partnership money. Therefore, a little of the urban aid programme was called partnership funds, but they were still under the 75–25 per cent. formula. Therefore, the greater the 75 per cent. that the Government give, the greater will be the 25 per cent. that the local authorities give. The poorer local authorities, which got the partnership money anyway, became poorer the more the Government gave of the 75 per cent. Does the hon. Gentleman see what I mean?
  Mr. Cunningham: I think I do, but I do not think that there is a way out of that. It: is important that there should be a local authority contribution to the expenditure to instil a degree of responsibility in the projects put forward. The more expenditure there is—unless it is financed 100 per cent.—the more these particularly deserving local authorities will have to raise to meet their part of the total. But, in order to instil financial discipline and responsibility into the initiation of projects which come from local authorities, there should be a minimum percentage—whether 25 per cent. is right or not—for the authorities to meet out of their own resources.
  I should like to refer to another sentence in a letter from Lord Bellwin to me dated 25 November last year. I had put to him the question: what happens when an additional project is chosen which puts an authority over the top of the penalty threshold? He said:
  "If an authority were to bring itself within the scope of the transitional arrangements"—
  in other words, the penalties—
  "by taking on an additional partnership project, it would have increased its volume of planned expenditure. It would have the choice of making an offsetting reduction elsewhere in its budget."
  That is an illiterate way of saying that it would have to make an offsetting reduction elsewhere in its budget if it did not want to incur the penalty. The Government are clear that this is the consequence of the present method of doing things. I assert that that is absurd and not in the spirit of the intention of the initiation of the partnership idea.
  I am less certain whether my argument in respect of partnership expenditure should be extended to all other expenditure of a similar type where the Government meet 75 per cent. and the local authority meets 25 per cent. But perhaps I am now speaking very much as a representative of a partnership authority. There are specific grants which are not intended to be discriminatory as between one authority and another, but partnership money is absolutely discriminatory. The whole purpose was for it to discriminate.
  The degree of Government control over partnership expenditure is very high and detailed compared with most other forms of local authority expenditure. Each project has to be approved by the Government. I have been told—and I can hardly believe it—that when Islington

  627
  receives requests from firms for small grants, rent-free periods, or other matters of that nature, individual applications of that sort have to be approved by the Department of the Environment, or at least there is a trend towards requiring individual approval of such applications—not programmes—for assistance of this kind.
  The Department of the Environment has all the control that it needs over the total and the detail of partnership expenditure. It does not need this belt and braces method of controlling it in its own right in detail, at the same time pushing it in with general local authority expenditure in the way that it does now.
  Again, Lord Bellwin acknowledged the extent of the Department of the Environment's control in his letter to me of 25 November last year. He said:
  "I would not dispute that partnership expenditure is particularly subject to Government control, in the obvious sense that Ministers are personally and permanently involved in the decision-making process in each partnership area. This clearly differs from their much less direct involvement in spending on the other services supported by specific grants. Moreover, as you say, the ultimate control over all partnership spending does lie with Ministers."
  So the Minister is acknowledging that, in respect of partnership expenditure, there is a different regime of control from the one that applies to other expenditure, and that in itself would justify the change that I am urging tonight.
  What kind of thing is this money used for in the case of Islington, which I expect is fairly typical of the practice in other partnership authorities? Out of the £6 million total to be spent this year on both capital and revenue, the three biggest classes of use are employment, housing and social services. Employment-related expenditure accounts for more than a quarter of the total. Housing, which is mainly capital, accounts for about £1 million out of this £6 million. Social services account for rather more than £1 million.
  Looking at individual projects, and now only individual projects in their revenue expenditure, Inner Urban Areas Act rent-free periods are likely to account for about £300,000 in the present year. The borough's employment office, which is so much needed in an area where the rate of unemployment is pushing 15 per cent., accounts for something approaching £100,000. Unemployment is difficult to assess, because people can register in more than one unemployment benefit office—either they live in another area and register in ours, or they live in ours and register elsewhere.
  Assistance to firms is likely to be about £500,000. Housing neighbourhood management will be about £400,000 and race relations-related projects will be about £110,000. I pick out of that housing neighbourhood management, likely to cost about £400,000. That clearly is an example of expenditure of a nature that could be met out of normal local authority revenue. It is not different in kind in the way that employment expenditure is different in kind from the rest. But part of the idea behind the partnership proposal was that there were some parts of the country that had problems, not least housing problems, that did not need a different kind of expenditure, but needed far more expenditure than could otherwise take place. That is what justifies the expenditure of £400,000 or so on housing management.
  628
  Let me now try to anticipate, and I hope rebut, some of the arguments that the Minister will bring forward and with which we have become so familiar over the months. He will say, first, that there are no sharp lines of division between different forms of local expenditure, that at any rate urban aid and partnership expenditure can certainly be compared with expenditure that is subject to other specific grants, perhaps transport-specific grants. I would dispute that, on the ground that the transport-specific grant, for example, is one that applies throughout the country and was never intended to provide a benefit and increased expenditure for some selected areas as compared with other selected areas.
  Secondly—and I hope that the Minister will not make this point, because we have heard it so often and it it totally irrelevant—it may be said that it would mean that the Government would lose control of public expenditure. Of course the Government must have control of all expenditure, and they would say that they must have exact control of all local expenditure. I do not agree, but even if I put myself in their position for the moment, I maintain that they can have control of all local authority expenditure, while still making the change that I am recommending, and which has been put to the Department of the Environment by Islington borough council.
  Would the change undermine the Government's control? No, it would simply apply it by a different method. I make that point, because in a letter to me of 25 November 1980 Lord Bellwin made a great issue of it. He talked of the need for the
  "same overriding constraint of our policies of public expenditure as a whole"
  being needed in this area. He said that
  "these grants remain within the overall framework of the Government's public expenditure plans."
  At the end Lord Bellwin said that the Government must
  "ensure that local authority spending is consistent with its own spending plans."
  He said all that as if it was the answer to my proposal. But all that it totally irrelevant to my proposal, because he can have all that and still alter the arrangement.
  I suggest that for the purposes of assessing whether a local authority has passed the threshold for having a penalty imposed in its block grant, partnership money should be excluded. Either 100 per cent. of the money—the Government bit and the local authority bit—should be excluded or, at least, the 75 per cent. Government bit should be excluded. There can be arguments about which approach is right.
  If the partnership money were excluded, the Government would retain complete control over how much was spent on partnership, and no one has questioned their control of that, and, under the present arrangements, complete control—though they should not have it—over all the rest of what local authorities spend. It is only a question whether they have control one way or another way. The way that we do it now negates the purpose of partnership; the way that I suggest it should be done would retain the purpose of the partnership, while retaining complete control for the Government.
  As I said at the beginning, we should consider this specific point in relation to recent events—the riots and the now acknowledged need to renew our interest and activity to assist the inner city areas with their severe problems. The Secretary of State is in Liverpool and will have to put together a package of measures to assist these areas. Therefore, he has the impulse to do something at this

  629
  stage. He has a small change here which can easily be done. It has been pressed on him by me, Islington borough council and by the AMA, with which there have been discussions. I strongly advise the Minister that this is the time to make the change and that it positively begs to be made.
  It is clearly a change that should be made in respect of 1982–83 and thereafter, but, in the light of recent events, it is essential that it should also be made in respect of 1981–82, even if that means, as I acknowledged that it may, some additional expenditure compared with what would otherwise have been made.
  1.4 am
  Mr. Anthony Steen: I shall not detain the House for long, but I feel that the important matter raised by the hon. Member for Islington, South and Finsbury (Mr. Cunningham) calls for comment from this side of the House. It demonstrates that an overall urban strategy is needed by the Government—if not a Minister for urban areas, at least a strategy for urban areas.
  This Government, like all Governments in the past, suffer because one Government Department does one thing and then another Government Department does another and negatives the thrust of the first Government Department. In this case, it is worse, because the pull and push back both come from the same Government Department. One part of the Department of the Environment says that it must revitalise the urban areas, and another part is clawing back the funds which the other part gave.
  The Government have inherited this situation. In my view, the partnership is a misnomer, and begs the question. First, it is no partnership. Partnership means that all parts of the community come together for the benefit of the community. Yet the one aspect of the partnership set by the Labour Administration is that it excludes the private sector, and it also excludes the community, the neighbourhood groups and the voluntary organisations. It should be made clear that here partnership means Government, local government and the health authorities. It does not mean the community or the neighbourhood. It is certainly no partnership.
  If I have a criticism, it is that the partnership is no more than the topping up of the urban aid programme, and the piece that it has topped up has a huge bureaucratic administration which controls, administers and organises the tiny piece at the top. For the rest, the ordinary urban aid principles apply. The local authority submits its list to the Department of the Environment, missing out the bureaucracy of the partnership committee, and then the Department of the Environment merely sends it back to the local authority, disapproved or approved, and pays over the 75 per cent. for the schemes that have been approved. But for the tiny piece of topping-up partnership money, there is a bureaucracy—in some areas, I am told that as many as 60 people attend the meetings—made up of local officials, health authorities, local authority and Government, and various civil servants from Whitehall, who determine how that tiny piece is to be used. It is nonsense in Toxteth in Liverpool, which is part of a partnership area, that the black groups, the community groups, the neighbourhood groups and the settlement houses there are all excluded from the partnership, as are the private sector, private industry, private finance,
  630
  insurance companies and building societies. That Leaves solely the Government, local government and the health authorities to control that small piece.
  The important issue that the hon. Gentleman raised is the tip of an iceberg. It raises a series of other questions. It should be put in the context of the Government's approach to urban areas. It is not just an inner city problem, but an outer city problem as well. The problems of the vast council estates on the edges of the great industrial cities are as serious and as great as those of the inner areas. However, whenever one talks about urban areas or cities, people immediately think of the inner city. The inner city is the flashpoint at the moment, but as most of the population has deserted the inner city—except in the case of London—and has gone to the outer areas, the Government would be unwise, in considering partnership and the urban strategy, not to look at the flashpoint of the future. I believe that that flashpoint will be the vast soulless and apathetic council estates on the edges of the city, on former green field sites, where there Is no community, little neighbourhood and where the family unit has been destroyed.
  The hon. Member for Islington, South and Finsbury raised matters which are specific and important for Islington but probably equally important in the other partnership areas.
  I hope that the Minister will not only deal with that specific point but will tell the House about the problems of partnership. I hope that he will re-examine the programmes which I have always thought to be of little consequence. In practice they have involved many people in deciding how to spend a small amount of money. The schemes were little more than window-dressing by the last Administration to convince the electorate that the Government cared about the inner cities. In fact, they have done little either to bring more money into the inner cities or to involve the community. It must be involved if the problems of inner neighbourhoods are to be tackled effectively. We cannot expect partnerships to work if they exclude the people for whom they aim to provide and if they are administered by a bureaucracy, central or national, which tells the community what it thinks is good for it.
  The argument is that, since the local authority puts up 25 per cent. of the money, it will vet the applications. The system does not work like that. Often local authorities are told that for 25 per cent. they can have a new scheme because the Government will provide 75 per cent. of the cost. I know of one local authority which has told voluntary organisations "Raise the 25 per cent. and we shall put your application forward. It will cost us nothing since the Government will provide the other 75 per cent."
  Clearly that was not the Government's intention. The whole matter must be reviewed. The partnership was never a partnership and has outlived its useful purpose. The Government must embark upon an urban strategy which considers the city as a whole and does not depend on a little extra public money to top up an already expensive urban aid programme which does not involve the people, the community or private sector in the decisions which affect the people living there.
  I hope that the Minister will in his answer give some hope to people living in both the inner and outer city.
  1. 12 am
  The Minister for Local Government and Environmental Services (Mr. Tom King): I shall first respond to the points made by my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen) because he has taken the debate wider. I should like to comment on the present structure of the partnership programme and the way in which the arrangements work. The Government have sympathy with the partnership concept.
  The hon. Member for Islington, South and Finsbury (Mr. Cunningham) set out the objectives. The Government have endorsed and supported those objectives, although they were initiated by the Labour Government. The mechanisms are becoming complicated and bureaucratic. They involve much paper work and many committees and they are losing sight of the objectives in the original concept.
  Anyone starting such a project is bound to run into problems. Our aim is to find ways of simplifying and streamlining the system. We have sought to streamline the partnership arrangements. We have sought to involve the voluntary and private sectors. My right hon. Friend the Secretary of State has been especially active in trying to involve, for example, the chambers of commerce in the economic part of the urban programme because they have a major contribution to make.
  My right hon. Friend is currently in Liverpool, both as a senior member of the Government and as the chairman of the Liverpool partnership. That enables him to discuss with the county council, the city council and a whole range of other bodies in the city the issues that they face. His unusual position as chairman of the partnership, has given him the opportunity to discuss matters more widely and with much greater freedom than might fall to another Minister without that responsibility. I understand what my hon. Friend the Member for Wavertree says. I understand why he is anxious to stress not only the absolute inner city issues but the peripheral problems of the major cities, of which we are conscious.
  I turn to the speech of the hon. Member for Islington, South and Finsbury, which was on a specific aspect of the treatment of urban programme funds, possible treatment under block grant, and any proposals for hold-back of grant that might apply in any targets or spending levels that the Government seek to achieve. We are referring to the question of the treatment of such urban programme funds for 1981–82, which comes under Class XVIII, Vote 1. We are not dealing with 1980–81, which is a separate issue. He will understand why I cannot make any comments on that matter.
  I accept the hon. Gentleman's fair presentation of the arguments. It was extremely well researched, as we expect from him. I understand that, although as the hon. Member for Islington, South and Finsbury he has an interest in a certain authority that is a recipient of partnership funds, he was seeking to make his point not exclusively in connection with that but with the general principle of the treatment of urban programme funds. He made certain general points about the principles on which they should be treated. He correctly said that the issues have been raised by the Association of Metropolitan Authorities, not on behalf of any individual authority, but on the general principle for all authorities in receipt of urban programme funds.
  632
  The hon. Gentleman referred to the complexities of block grant. I never allow a moment to pass without defending the logic, clarity and simplicity of the block grant system, which I am sure appeals to an intellect of his capacity. He is familiar with the previous system. He knows that it was not of such clarity as to make it comprehensible to the layman. He referred also to the problems that arise under block grant with the complexities of the precepting arrangements. There are real problems in precepting. The concept of two tiers of authority in which one authority is the rate collector for another is one that introduces complications and confusion about accountability. I understand the difficulties that arise.
  Mr. George Cunningham: Is the Minister able to tell me—I genuinely do not know the answer to this—whether the arrangement that applies in London also applies outside London whereby the block grant, although calculated for the various tiers, is distributed only to the bottom tier? Is that the situation generally throughout the country, or is it special to London?
  Mr. King: I have an awful feeling that someone will say "You have forgotten the Isles of Scilly" or something like that, but, leaving out irrelevancies of that sort, it is true to say that the arrangement is exclusive to London. It was done at the request of the GLC. The arrangement applied previously and it was felt that the issue would be confused if the arrangement were changed. It is a matter of judgment whether it is the best arrangement.
  Mr. Cunningham: Recently when ILEA, for example, decided to precept to the tune of 3.2, that was the figure that was announced publicly, even though the grossed up figure that one would need to levy would be in Islington's case 4·7.
  Mr. King: London poses particular problems. In the rest of the country only two authorities are involved. In inner London there is the GLC, ILEA, the Metropolitan Police and the London boroughs. One cannot blame London ratepayers if they become confused about where their ire should be directed, for example, following the announcement of substanial rate increases. It is confusing. In the rest of the country there are only two authorities—the district, or borough council, or the metropolitan district, and the county council. That is much simpler, but even that is not perfect.
  The hon. Gentleman referred to penalties. There has been no decision on whether to impose penalties. My right hon. Friend the Secretary of State said that if the excess expenditure over the Government's public expenditure targets were of the order that the original budgets indicated he had in mind to propose to the House a hold-back of grant of £450 million. Until we receive the revised budgets—the closing date is 31 July and they take some time to assess and quantify—we shall come to no decision whether there will be any hold-back, or penalties, whatever term the hon. Gentleman chooses to use. Even then Ministers will not make an arbitrary decision. The issue will have to be submitted to the House. The implications and consequences will have to be presented clearly and the House will have to take a decision. Much depends on the outturn whether there will be any hold-back or penalties.
  The hon. Gentleman's arguments are directed to the inclusion of the urban programmme—revenue

  633
  expenditure—within the target. He fairly accepted that it is public expenditure. It is not a different form of money that counts in the overall range of the Government's public expenditure concerns. We have heard the point which the hon. Member made and we recognise that it has certain force. It is a specific direction of public funds identified and supported by Government to a significant extent—the 75 per cent. level mentioned by the hon. Member—in recognition of what are felt to be particular areas of need on a scale greater than in other authorities.
  Having made his arguments that this should be excluded from the normal criteria of targets, the hon. Member then said that certain arguments would be advanced by me which he thought he would deal with in advance so that I would not need to deploy them. I was not going to use any of them, but I am willing to allow the hon. Member the freedom of the air to put up some arguments and knock them down again.
  The hon. Member has made certain points about the way in which the urban programme funds should be fairly treated in any assessment of penalties and hold back for this year and the way in which the baseline and the target levels should be calculated. He mentioned the urban programme. He will not be surprised to hear that a range of authorities have mentioned to us many different reasons why, in their case, or in the case of their class of authority, there was an issue of general principle. That could be a question of target levels or baselines which were inappropriate because of a general issue which should be taken into account in the treatment of such baselines or target levels.
  I have made it clear that we have taken no decisions on that matter yet, nor shall we consider those issues until we have the revision of budgets. If that is satisfactory, there will be no question of any hold-back in any case. If the revision of budgets does not produce sufficient evidence that the outturn for local government will be in line with the public expenditure figures which the Government have suggested in their public expenditure White Paper the country can afford, we shall have to consider the issue of hold-back. We shall then have to consider the issues of principle that have been raised and the general application which might affect groups of different authorities.
  Mr. Steen: Perhaps my right hon. Friend can help me on this point. With regard to the urban aid programme in the partnership authorities, am I right in thinking that the partnership funds, although under the urban aid programme, are treated in a different way because they are subject to the partnership committee's decisions, whereas the other part of the urban aid programme which existed before the partnership committee came along and has gone on expanding is not subject: to the partnership committee?
  Mr. King: Not as far as I am aware. If that is incorrect, I shall write to my hon. Friend.
  We shall consider the matter, but we shall not: take decisions until we know the outcome of the revision of budgets. However, we are willing to listen to representations on general points of principle such as those the hon. Member for Islington, South and Finsbury has raised. He put his case fairly. There is an obvious point of principle, which it is fair to raise. I regret that I am unable to give an assurance as to what our judgment will be. However, I can say that we shall consider the points as objectively as we can. I understand why he has taken the opportunity to raise them.
  Mr. George Cunningham: Perhaps the Minister can be a little more helpful on timing. He said that no decision would be reached until better figures came in from the local authorities at the end of July. Are local authorities likely to have an answer by, say, the beginning of September? Decisions will have to be taken by them around that time. Would it be unrealistic to expect an answer by the end of August?
  Mr. King: It would be optimistic to think in terms of the end of August. However, we are anxious to provide this information at the earliest possible date, for the reasons that I know are at the back of the hon. Gentleman's mind. I cannot give him an undertaking. He will appreciate that we cannot anticipate the quality of the returns, and there may be a number of queries that need resolution and clarification. A lot of work will have to be done, and decisions will have to be taken. I can give no assurance about dates. I entirely understand why the hon. Gentleman emphasises the importance of an early answer, and we shall be anxious to make the earliest possible announcement. However, it is not possible to indicate the time scale tonight.

  Manchester (University Education)
  1.31 am
  Mr. Fred Silvester: We come now to another subject in the debate. I have deliberately sought to raise the issue of university provision in the Manchester area as a whole rather than as it affects any particular university.
  There is a danger of getting matters out of perspective by concentrating on the now famous case of the University of Salford. I had the pleasure of listening to my hon. Friend the Under-Secretary earlier, when he talked about the University of Aston. Therefore, I have some idea of his general views about universities of that kind. But I hope that he will regard my remarks not simply as a re-run of the earlier debate, because some of the arguments advanced then are not appropriate to the Manchester area and some of the arguments that I wish to make were not made in that debate.
  I refer to the Manchester area rather than to any particular university because the Salford case has received all the limelight and the campus campaign has received publicity in the newspapers. It is not meaningful to consider the case of Salford in isolation, because university provision in the Manchester area is provided not only by the University of Salford, but by the great University of Manchester Owens, the Manchester Business School and the University of Manchester Institute of Science and Technology. Together, they form a large collection of academic expertise.
  If one looks at all that provision in total, the first conclusion that must be drawn is that a great deal of nonsense is talked about the present revision. For example, I have seen some newspaper reports to the effect that we are doing down the North, which shows that such matters often attract a traditional reflex action. Let us begin by getting the position right. If one considers the proposals of the University Grants Committee for the Manchester area in total, one must accept that we have come off quite well. Two of the four expanding institutions are in Manchester. That should go clearly on the record before we go any further. An expansion of 42 per cent. in student numbers is proposed for the Manchester Business School by 1983–84, and student numbers at UMIST are to go up by 7 per cent. The University of Manchester Owens is to decline by 220, or 2 per cent., which is lower than for other universities. It is only at Salford, where the cut is 30 per cent., that the main problem has a risen. It is important to say that.
  In view of local press comment, in which people have naturally concentrated on the position in relation to science and technology, it is also important to say that although there has been an overall cut of 2 per cent. in the University of Manchester, there is actually to be a small increase in the number of students reading science and technology, and in the four institutions combined the proportion devoted to those subjects will rise from 50 to 51 per cent.
  I shall deal with Salford in a moment, but it is important to begin by recognising that the decisions of the UGC have in a sense been a recognition of the achievements of those other institutions.
  I take, first, UMIST. I can appreciate why UMIST has done well out of the proposals. It has run itself with extremely tight financial control, and at a time when other
  636
  universities have been freezing academic posts I believe that it has introduced no fewer than 10 professorships in important new subjects, such as robotics. It has a flourishing postgraduate body, comprising about one-third of the people there—the highest proportion of any university in the country—and it attracts vast quantities of research work from the councils.
  As a result of that, not only is the total full-time student population of UMIST rising, but the UGC is making greater provision for part-timers and for full-time equivalent people from industry. I had not realised this before, but I was told when I was there on Wednesday that it is also getting greater capital and furniture grants than ever before.
  I emphasise those points because it is important to understand that in the Manchester area the situation is not all one way. I am also building up this picture because it helps to understand the way in which the UGC is operating. UMIST has been the faculty of technology of the University of Manchester for 90 years, so its tradition is of long standing. What it has managed to achieve—and, as I have said, I regard this as remarkable in the circumstances—has been brought about against the background of Government policy on overseas students. I believe that UMIST has the highest proportion of overseas students of any university in the country. The proportion has dropped from 31 per cent. in 1979 to 29 per cent. this year, and I am told that overseas student applications for next year are 40 per cent. down, but UMIST thinks that it will just about manage.
  As my hon. Friend the Minister knows, UMIST is charging very high fees to overseas students—above the Government's norm—because it says that it is so good that people should pay that. Nevertheless, one must realise what one is doing in this respect. Although I think that UMIST is very good, knows what it is doing, and will tackle the issue wisely, it estimates that by 1983–84 the proportion of overseas students could be down to 14 or 15 per cent., which is the national average. That is a shame, because for 90 years—this is not a new-fangled thing—UMIST has specifically set out to provide a high level of specialised training and has set up courses of particular importance to overseas countries. Indeed a high proportion of senior engineering academic staff in universities east of Suez, if I may loosely refer to them in that way, come from UMIST. That is a great tradition.
  If the UGC is looking for centres of excellence—and the Government are supporting it in this—this is one centre of excellence that we should consider. This is not a general point about overseas students, but a point specific to UMIST and perhaps to Imperial college. Where we have deliberately set out to establish universities with a particularly skilful approach to courses of particular relevance to overseas students—and these are high-powered students, not people coming in at low grades—this should be regarded as a specialism in its own right. The Government have not done that. I should like my hon. Friend the Minister to consider that. UMIST is getting its share of the £2·8 million scheme, but that is not enough to maintain the quality of specialty that it has had.
  I turn to the subject of the Manchester Business School, which does extraordinarily well in terms of income for services rendered in research and from business. It is being allowed an increase in students. My hon. Friend has been as helpful to the school as he can in other ways. I have mentioned the Manchester Business School only to give

  637
  a sense of completeness. I have no complaints about it, or on its behalf. One may as well say the nice things as well as the nasty. I am pleased that the Government are supporting the school. It is not only a good business school, but does useful work with the Manpower Services Commission and with business start-ups. It is spreading its expertise around.
  The University of Manchester Owens is receiving a 2 per cent. cut, which represents a drop of 220 students. It regards that as manageable. The university is a tightly run ship and has cut its costs by 6 per cent. during the last four years. No doubt it will manage well. The size of its science and technology department is being marginally increased. It is clear that it can meet the Government's criteria and that it will emerge an efficient university. It would be difficult to say that it will be better for the exercise, but it will be as good, and perhaps slimmer. Like other universities, it is trying to get itself into the right climate for the next decade.
  Manchester university is so big that its features are common to many other universities. The Minister will realise that not everyone in the academic world is against his proposals. There is a strong belief that the time has come for some rationalisation of the universities. There is great good will and support for the Government in their endeavours. People are not at all unreceptive. However, there is a danger of throwing the baby out with the bath water. It is difficult to use an example, because there are so many from which to choose. However, we are asking people to go too fast to do the job properly.
  The University of Manchester—I assume that the same applies to all the universities—has been asked to report by 1 January on the staff redundancies that it expects in the next two years. This morning I attended the Select Committee, and I have listened to the debates. The UGC may have been working on this idea for about 18 months, but that is not true of the universities. Last May, Manchester university was working on a proposal to cut 3 per cent. per annum. It is extremely difficult to switch suddenly to this situation. If the university has to it will report by next January on staff redundancies, but to ask it to do so is not the best way to achieve the necessary concentration on the best parts and the removal of the worst parts, which is what we all wish to achieve.
  My hon. Friend the Under-Secretary of State is well aware of the effect of speed. Even those who support strongly what my hon. Friend is trying to achieve, and who understand the necessity to make cuts in public expenditure, recognise that there is a dis-economy when the speed becomes too rapid. This is a matter to which I shall return in relation to Salford.
  There is not the money available to enable rapid adjustments to be made. Last year, the University of Manchester spent £750,000 on health and safety measures to cover such risks as laboratories blowing up. A sum of £50,000 has been allowed in the budget for next year. It will not require many Bunsen burners to go wrong before the £50,000 is used up. There is no fat in that situation.
  My remarks about Manchester Owens university are even more true when applied to Salford. I understand why the UGC made the decision about Salford. I am not one of those who criticise the UGC, nor do I believe some of the far-fetched comments about the UGC and its motivations. Such comments are not only inaccurate but,
  638
  in many cases, unworthy. By comparing the institutions in the Manchester area, one can begin to see how the UGC's mind is working.
  I should like to view Salford with as clear an eye as possible. It takes a lower A-level intake. It has a higher failure rate than UMIST, Manchester and quite a number of universities. It has a lower proportion of first and upper secondclass degrees. It carries out some interesting practical research for industry in such matters as tidal energy. It is also true, however, that it attracts a smaller proportion of research money, especially from research councils, than other universities. These are legitimate measures of excellence between one university and another. They lie within the criteria that the UGC apparently adopts. On that basis, one sees clearly how Salford emerges as a university that is perhaps for the chop.
  It is not that the UGC specifically excludes regional considerations. I do not quarrel with that approach, except for Scotland and Wales, because people from all over the country attend our universities. In any case, Manchester, overall, has done very well. Salford is caught full blast in the traditional criteria applied by the UGC to universities. My hon. Friend the Under-Secretary of State will rightly say that he is sorry, but the UGC is set up to make the decisions, that he does not make them, and that no Government will overturn UGC decisions.
  My hon. Friend has already stated in the Aston debate that the Government will not attempt to carry out the UGC's job for it, because the politicians would make a worse fist of the matter. I agree with that, even though I dislike bodies for which the Government carry the can but do not control. If my hon. Friend or I had to sit down and perform the task, we would do it worse than the UGC does. It is not true, however, to say that the Minister has no responsibility for Salford and that he can hide behind the UGC.
  There are at least four ways in which the Government exercise control over UGC policy and how it affects Salford. First, the Government have a view about manpower policies. We cannot isolate the universities from that. We talk about it in all sorts of ways. We talk about the 16 to 18 age group. We talk about the schools. We talk about the universities. We talk about the youth opportunities programme. We talk about new training initiatives, and so on. We have a view about manpower policies. We say that we are deliberately trying to encourage that kind of education that is closely related to industry. We are trying to get away from the pure to the applied. That is what Finniston was all about. We talk about all those things ad nauseam.
  The proof of the pudding is in the success of Salford graduates in getting jobs. We all use the Financial Times figures. They are very instructive. Salford has been fourth in the list for the last nine years. A higher proportion of Salford graduates than the national average go into employment rather than further education, and a higher proportion than the national average go into the wealth-producing sector of industry and commerce. An even higher proportion go into the high technology industries.
  There are figures from Salford relating to the number of graduates who have not obtained a job after six months. For Salford's engineers the figure is 1·6 per cent.; for all other universities' engineers it is 4·6 per cent. For Salford scientists the figure is 6·9 per cent.; for all other scientists it is 9·7 per cent. For Salford's language graduates the

  639
  figure is 9·7 per cent.; for all other language graduates it is 11·5 per cent.; for Salford's business graduates it is 9·1 per cent.; for all other business graduates it is 10·7 per cent.
  There is one thing that is clear from the melee of statistics. It is that Salford has a very good record in getting its graduates employed, and that industry likes what Salford produces.
  That is talking about the end product. The UGC is talking about the input. It is perfectly reasonable to talk about A-levels, but Salford has deliberately set out to attract students with lower A-level grades. There are probably other factors involved, but Salford has deliberately said "When we look at a student coming from the sixth form who has been studying traditional sixth form subjects, many of which are not very closely related to what industry, particularly on the technical side, requires, we look at the student and his mental outlook and attitudes, and take that into account as much as the A-level grades."
  It is of great importance that we recognise that the whole ethos of Salford is different—and deliberately different, not accidentally different—from some of the other universities. It is different from UMIST, for example. It is important that the Government should know what Salford is seeking to promote.
  The Government do not tell the UGC whether a particular university or faculty is doing its job well. That is the UGC's job. But it is Government's job to make sure that the UGC takes into account a criterion which it says is of great importance.
  It surely cannot be a coincidence that the universities that have fared badly with the cuts are the ex-colleges of advanced technology. I know that some have fared quite well, but those that have come out at the bottom are the ones that have been following the kind of philosophy that I have mentioned. That must cause us all to pause.
  Salford was an admirable college of advanced technology and was much respected in that role. Some of us believe that it should never have become a university. There is a strong argument that that was a mistake, but we are starting from where we are and not from where we would wish to be. There is a view, though it cannot be proved, that someone somewhere has made the mental decision that it was a mistake and that in due time Salford will cease to be a university. Its functions will revert to their previous role.
  The relationship between polytechnics and universities must be resolved. That is a matter for the Government. Places such as Salford are being squeezed piggy-in-the-middle in the debate. The relationship must be sorted out with speed, and I do not believe that that is a job for the UGC. I was pleased to hear my hon. Friend say that he is about to publish a Green Paper. I look forward to receiving it. I hope that it will not come too late to help places such as Salford.
  My third point is that even if the Government support the UGC, as they do, they have an overall responsibility to ensure that things are done with justice and openness. Whatever the UGC does, it does not convince people that the grounds on which it has made its decisions are set out clearly and rationally. The Select Committee and all the talk that we are hearing may eventually drag from the UGC not only what are its criteria they are gradually becoming clearer—but what is its total strategy?
  640
  Let us imagine ourselves in the position of those at Salford. They set out 14 years ago to establish what was thought to be a new worthwhile form of institution. They have gone about it as best they could, with much devotion and intelligence, and with some imagination and flair. They obviously have the backing of many local people and businesses. They have involved many people. They have gradually created a new institution of great value. Now its grant is to be reduced by over 40 per cent. over three years. One cannot expect people who have constructed something of that kind not to react. It is not an adaptation. It is Solomon and the child. In those circumstances, it is unreasonable to ask people to accept those decisions without knowing exactly—I mean exactly—why and what the end product will be. It is the end product that matters most of all.
  The people at Salford understand that if civil engineering is the specialty somewhere and it is heavily capital-intensive, that is fine. Other specialties are set up in other places, but what is left for Salford? The UGC, for all its virtues, has not made clear in any form its strategy for the universities, where the centres of excellence are to be concentrated and where the subjects that will leave Salford will go. It is not enough for the Government to say that that is not their responsibility. The justice and the openness leave the Government with a residual responsibility that they cannot ignore.
  I return to the subject of speed, which is the Government's province and not that of the UGC. Earlier this evening my hon. Friend said that he would like more time. We all agree that, economically speaking, time is not on our side. We must get on and make these adjustments as rapidly as we can.
  In the debate on the Consolidated Fund Bill, we all know that hon. Members can never propose cuts in Government expenditure, because there is always a special case for keeping every item of it. I understand that. I go further and say that the universities have brought a lot of this difficulty on themselves, because they were warned long enough ago, and a lot of them decided to take no action until it became really painful.
  However, there is a corollary with which my hon. Friend has to deal. I agree that the correct way to deal with this problem is to make the cuts unequally and in different proportions in order to keep the centres of excellence, but, if my hon. Friend says that, it follows that the scale and speed of change are also unequal. Whereas it may be reasonable to say to the UGC or to the university spectrum as a whole "Surely you can manage a cut of 11 per cent. by 1983–84", it is not reasonable to say to Salford "Surely you can manage 44 per cent. by 1984". It is a different order of magnitude and a totally different beast.
  I ask my hon. Friend not simply to say, as he did about Aston "You are asking the Government to do the UGC's job, and we have no intention of doing that because it would be awful". I agree, but there remain residual responsibilities on the Government—and I have cited four of them, though there may be others—that have a direct bearing on these institutions. Salford does not believe that it is being treated fairly or rationally. We shall lose much of the benefit of what my hon. Friend seeks to do overall unless we can put that right.
  2.2 am
  Mr. John Roper: The hon. Member for Manchester, Withington (Mr. Silvester) showed very

  641
  clearly the importance of the complex of higher education institutions in the Greater Manchester area. The moderation with which he made the case for Salford made the case very much more effective, and I look forward, as he does, to tie Minister's reply. The hon. Member for Withington knows the problems well from his constituency experience. It contains probably the highest proportion of the students and perhaps of the staff of the University of Manchester and of University of Manchester Institute of Science and Technology than any other constituency in the Greater Manchester area. He also had the opportunity this morning of hearing what transpired in the Select Committee.
  I should declare an interest, because I have served for the last seven years on the court of the University of Salford and have seen a good deal of its development. When I was first appointed to the staff of Manchester university some 20 years ago, I lived in what is now the constituency of the hon. Member for Withington. Therefore, I have had some opportunity to see the development of the four institutions to which the hon. Gentleman referred.
  It has been a remarkable development. There are the two old institutions which were there in 1961 and, as we were reminded, for more than a century in the case of Owens and for nearly 90 years in the case of the UMIST. We have also seen the development of the two newer institutions. Previously, the University of Salford was the college of advanced technology and before that the Salford Royal college. But they have developed in the last 20 years into bodies which have received grants from the UGC, and, as has been said, the Manchester Business School has been a remarkable success.
  The University of Salford has had a remarkable growth. It benefited greatly during the past decade from the work of its former vice-chancellor, Dr. Horlock, who has come to be vice-chancellor of the Open University. The period of rapid expansion that we have seen over the past 20 years has provided many problems as well as opportunities for the universities. The point made by the hon. Gentleman about the speed of change, whether of growth or of shrinkage for the universities, is real and should not be overlooked.
  As has been said, these four institutions are part of our national provision for higher education and they should be seen as part of that national network. None the less, they have a regional impact—particularly the University of Salford. Having originally been the college of advanced technology of Salford, it has always had close links with the region. Therefore, we need to look at the regional as well as the national impact of the measures that we are considering.
  Leaving aside the University of Salford, the development on the south side of Manchester of the campuses of the University of Manchester, UMIST, the Manchester Business School and the Manchester polytechnic, together with associated buildings, such as the BBC's, has been one of the most remarkable transformations within the city of Manchester. Although one might criticise the architecture of some of the buildings, it has been a good development which has done a great deal of good for the city as a whole.
  I should like to mention UMIST briefly before going on to the University of Salford, to which, like the hon. Member for Withington, I should like to give most attention. I endorse what the hon. Gentleman said about
  642
  the role of UMIST, of the University of Manchester's science and technology and electrical engineering departments and of Manchester Owens university's physics, chemistry and civil engineering departments in training people who become the professors in universities throughout the world. That cannot be underestimated It is an extraordinarily good investment by this country. There are provisions to assist students in this work, but I hope that we shall not see a continuing drop, as has been forecast, in the number of overseas students taking advantage of these courses at Owens and at UMIST.
  I suppose that within the Greater Manchester area attention has been focused in the past two weeks on the proposals for the University of Salford. Cuts of 30·9 per cent. in student numbers, of 500 to 525 in the number of staff—many of them my constituents—and of 41 per cent. in the university's budget over the next three years are dramatic. There is no doubt that they have caused widespread concern—much wider than the university itself.
  I have had letters from constituents who have no direct association with the university. I have had one from the area dean of Farnworth. He was called a rural dean, but he is now called an area dean because Farnworth cannot now be described as a rural deanery in any normal sense of that word. The area dean has written to me saying that he feels that this is a problem not just for the university and those who work in it, but for the wider community of Greater Manchester.
  The University of Salford suggests that it has been one of the more cost-effective universities in terms of unit student costs among the technological universities. It has produced a ranking, weighting students in different ways. Among the technological universities, Salford comes out in the middle at £1,804—well below the average for the technological universities, which was £1,925, and considerably below that for all English universities at £2,029. It appears that Salford has been a fairly cost-effective university.
  In trying to judge its effectiveness, one must recognise that a university has many outputs. It does not merely have the output of first degree students, although that is an important output. There is also the output of higher degree students and of research work for the research councils. In the case of Salford, perhaps more importantly, there is the close research collaboration with industry large and small. In all of these areas Salford has had a remarkable record. The first degree students have a high reputation in terms of employment. The University is fourth or fifth in the league table for employment of students. There is the interesting fact, in an area such as languages, that Salford students are trained to have a knowledge of languages that is directly applicable. There is not very much by way of literary studies, not that I am criticising such studies, but there is the practical application of languages which is why, I think, Salford students have such a high employment record.
  With postgraduates from the university, one of the impressive things has been the development of sandwich courses so that people can go on with an MSc while working in industry in the North-West. Perhaps most impressive of all has been the development of research with industry in the North-West. The reaction that we have seen, particularly in the last week, from the wide range of firms in the North-West and nationally that have benefited

  643
  not merely from the graduates of Salford university but from research collaboration with it shows the success that the university has had in that direction.
  We should also consider the relationship that any university has with its locality. It is quite remarkable that town and gown relations, which are not always perfect, are extremely good at Salford. The leader of the Salford city council in a letter this week has said:
  "I would like to stress the city council's view that there appears to have been a fundamental failure to appreciate the adverse effects of such grossly disproportionate cuts upon the long-term recoverability of our science-based and technological industry. One is bound to state that that alone is a cogent reason for ensuring that the continued development of a successful technological university should be maintained, so far as the national economy allows."
  That is an important rider. It is worthy of notice that the city of Salford has put a great deal into campaigning for the maintenance of what it believes to be its own university.
  If we were to discuss, as the House may do a little later, the reasons for our economic problems, we should find a great deal of disagreement. There would be general agreement, however, that in our recovery from our present difficulties we shall need people with engineering and technological skills, the sort of people that the University of Salford has been so successful in producing.
  There is considerable concern throughout the Salford area about the UGC's proposals, not merely the size of the cuts but the fact that there is a reference in the UGC letter to substantial decreases in numbers in the biological sciences and significant decreases in numbers in the physical sciences and engineering. The cuts are being made not in what might be termed the "frill" subjects but in the central subjects of a university concerned with science and technology. This is certainly felt locally to be directly contrary to the needs of industry and our economic recovery and survival.
  The university has demonstrated clearly the possibilities of partnership with local industry. It has developed an industrial centre and there are plans for a science park around the university. The debate and particularly the moderate way in which the hon. Member for Withington outlined the problem have been useful in drawing attention to the problems that the university faces in the light of the sudden cut and dramatic surgery proposed by the UGC. I hope that the proposals, which are considered locally to be serious mistakes, will be reconsidered by the UGC.
  I accept that the Government are not directly responsible for how money is shared out, but I hope that they will take into account what has been said by the hon. Member for Withington and will ensure that Salford people feel that their case has been fairly heard and understand why they have been singled out for what appears to them to be such unfair treatment.
  We have developed in the past 15 years a useful university at Salford. It would be unfortunate if, because of a general problem of adjustments in our universities, it should be made to bear more than its fair share of the consequences of present economic difficulties. I hope that the Under-Secretary will be able to tell us what can be done to reassure those in the university who feel bruised by the recent announcement.
  2.17 am
  The Under-Secretary of State for Education and Science (Dr. Rhodes Boyson): This is our second university debate tonight. The first concerned the West Midlands and now we are discussing the Manchester area. I pay tribute to the moderate way in which my hon. Friend the Member for Manchester, Withington (Mr. Silvester) put his case. If there is a good case, one does not need to bang the table all the time. The concern felt by my hon. Friend and the hon. Member for Farnworth (Mr. Roper) came out in their speeches.
  I do not have to declare an interest, but I spent four years at Manchester university. Two of my degrees are from the university and one of my daughters followed me there and studied the same subjects.
  I am glad that my hon. Friend the Member for Withington did not make out that the Manchester area had been badly dealt with compared with the rest of the country. That is not the case. We do not need to go through the figures, because no one has queried them, but the region that has suffered the greatest proportionate cut is the South-East. I was informed today by the UGC that the South-East faces the heaviest percentage cut.
  I join in the tributes paid to UMIST, with its long history, Manchester Owens university, the business school—I met representatives of the school only two or three weeks ago to discuss bursary problems—and Salford university. The final sentence in the hon. Member for Farnworth's speech was important. Morale matters and if it were felt by the universities facing the heaviest cuts that those cuts were a preliminary to closure the effect on morale could be disastrous.
  My hon. Friend mentioned the criteria used by the UGC and I shall refer to that matter later. The committee has looked at faculties in the light of national need and demand. It has not been a question of saying that certain universities must be run down as a means of facilitating their eventual closure. That was not the UGC's intention. As the hon. Member for Farnworth said, one sometimes wonders why decisions are made, and one asks questions about them. It was not a question of an attack upon universities as universities. It was a matter of rationalisation and the preservation of the best, of excellence, as against what Lord Annan called the equality of misery if everyone has an equal cut throughout the country, irrespective of meaning.
  I come to the criteria and the interesting four points which were mentioned, two of which I can take a little further, and two of which I can muse about. There was the question of Government manpower planning, and the effect upon the region. The remit of the UGC is the remit of the preservation of excellence and facilities. It was not part of its criteria—as I understand it, and it certainly was not laid down by the Government— that it should have to bear in mind the effect of any of its decisions, say, on employment prospects in a particular area. It is difficult enough for the UGC to carry out its tasks without burdening it with a lot of other matters, but clearly the effect on the area, as we witnessed in the debate on Aston university, is of concern to politicians and people in the area. I do not blame the UGC for taking objective decisions-on other bases. However, it was right to raise the matter in the House.
  The second point related to across the binary line. It is a matter of particular importance. In many ways, higher

  645
  education in Britain has grown like Topsy. From time to time we must ask ourselves: Do we like the way that it has grown? The UGC provides us with a vehicle for control, properly used by academics in the university sector and where academic freedom is preserved. The more the Government are told that they should say this or that to the UGC, the more we lessen its academic freedom in the judgments that it makes. Obviously, opinions exist outside the UGC, and even Ministers make speeches saying that technology may be a good thing. Members of the UGC may even listen to those speeches from time to time. But the UGC, over 62 years, has built up a considerable degree of expertise in this matter.
  There is no equivalent in the maintained sector. It is astonishing that there are 396 institutions, including the polytechnics, outside universities in which it is possible to get a degree. The courses have developed for different reasons in different areas. The Government believe that there is a desperate need for some vehicle in the maintained senor which could carry out the rationalisation that is carried out by the UGC in the university sector. In times of expansion it may have been simpler, but even in times of expansion it is right to know what and where to expand. Nothing would be more stupid than to close down a university faculty in one region and for another institution to start that course three or four miles away, or even several hundreds of yards away. To be fair to the maintained sector, in one or two cases a course was to start at the polytechnics, and, to and behold, there was a great demand at the university for a similar course. I shall not mention the cases, but there have been such occasions which makes one suspect that the motives for starting such courses were not purely objective intellectual motives.
  As my hon. Friend said, this coming week a Green Paper will be published containing suggestions regarding what should be in the maintained sector. Once we have a body, it is particularly important that there should be a dialogue across the binary line between the maintained sector and the UGC.
  My hon. Friend the Member for Withington also raised the important question of knowing the total strategy and why decisions have been made. He referred to A-level intakes, courses and research money from industry and research councils. People do not mind judgments if they know what they are about. If they do not like the judgments, they dislike them less if they know the basis on which they are made.
  I have considerable sympathy with the universities about the question of speed. As I have said often, with the 30 per cent. drop in 10 years, once the fall comes after 1982–83 in the 18-year-old age group, it will be essential to have some form of rationalisation. Apart from that, like bad businesses or even in our own lives, we have to have a stocktaking and ask whether the organisation is right. It is time to take stock of our education.
  The speed has been accelerated by the economic climate. The need to curtail Government expenditure has
  646
  acted as a catalyst. We believe that the change must be made at speed, but it is difficult for the universities because their form of government is not geared to taking quick decisions. The universities resemble co-operative societies in the way that they have to consult groups before decisions are made. I do not intend to attack the co-operative societies or the universities. I was once a director of a co-opertive society in the Rossendale valley, in Lancashire. However, neither type of body is famous for coming to quick decisions. The Government are aware of the difficulties that they have caused.
  Mr. Silvester: The savings that the Government will make are small in relation to universities at the sharp end. Is it not possible to consider a longer time span for the larger cuts, even if the existing time span for the smaller cuts is maintained?
  Dr. Boyson: I take the point. My hon. Friend argues with such moderation that I have to be careful in my reply. He has a winning way with words. I shall try to answer him in straightforward manner.
  The global sum within which the universities have to work was given to the UGC by the Government. It had to sort out that global sum. It is difficult to decide whether the changes should take place over four years of five years just because the cut is twice as high as the average cut. It is more difficult to make a big cut than a small cut. There are difficulties of adjustment, tenure, and recruitment, whether undergraduate or postgraduate. I cannot make any commitment.
  I hope that some people read the reports of the debates that we have because not many are listening to it. The UGC was constrained by what the Government said. I. am aware of the great difficulty facing the institutions that have to make the heavy cuts.
  I am grateful to hon. Members who have paid tribute to Manchester, which has always been a great centre of education. In the nineteenth century it was involved in political expansion. In the middle of the night, one says all kinds of things, but I have actually signed a contract, when I run loose again, to write a book, for reading here and in America, on Manchester in 1846.
  Manchester has a great history, especially in working class movement, free trade, non-conformity and the many patterns of political thought and liberalism. It has four institutions that are well known in Britain and throughout the world. We should be proud of that. It is the Government's desire not to damage the higher education system, but to work within the money available and the rationalisation that is required to ensure that we move to a higher education system that will be as fitting for the 1990s as was the system for the 1950s and 1960s. With the advice given by hon. Members during the debate, I am sure that Manchester will lead the way, as it has done so often in the past.

  The Economy
  2.31 am
  Mr. John Tilley: I shall be brief, for two reasons. First, 18 of my hon. Friends have said that they wish to speak in the debate. I am sure that they will be with us shortly. Secondly, I and the whole House wish to ensure that the length of the Consolidated Fund Bill debate does not endanger the important business for tomorrow, namely, the debate on the Brandt report. The scope of the debate could cover development aids, as that is clearly part of the Government's economic policy.
  Although the debate that I am initiating has a wide scope, the House will not have missed the fact that those who have said they wish to speak are all London Labour Members. We are concerned to show the effect of the Government's economic policy on the capital city and its inner parts, which are represented mainly by Labour Members. I intend to draw the attention of the House to only a few aspects of the Government's economic policy that concern my constituency of Lambeth, Central.
  There is a parallel with the debate tomorrow on the Brandt report. Overseas aid and urban aid share the characteristic of being just enough to salve the consciences of the donors, but nowhere near enough to solve the problems of the recipients. That is true for my constituency, which includes a large part of Brixton.
  We are told that the Government still have an inner city policy. The Prime Minister is fond of quoting how many million of pounds are going to Lambeth through the various forms of that policy. I think that all hon. Members who intend to speak will say that that money is not enough. There is no doubt that the Government's economic policy, and the deprivation that it has caused and intensified, was a major contributory factor to the various riots and disturbances that have occurred throughout the capital during the past few weeks, and in my constituency in April. While it is possible that police mistakes may spark off certain incidents—they may light the fuse—the explosive material was prepared by the Government. There is no doubt that the basic material of the explosions is youth unemployment.
  It is an especially fitting time of year to discuss unemployment, because it is the end of the school year for the Inner London Education Authority. It should be the beginning of a new life, with new opportunities, for the youngsters leaving our schools. In reality, it is the end of hope and the beginning of despair. The figures that I obtained from the careers office in Lambeth on Thursday reveal the effect that the Government's economic policies are having on the young people who are leaving school at 16 years of age. There are registered as unemployed 1,245 in the 16 to 19-year age group. Of those, 924 are school leavers, in the sense that they have not had a job since leaving school. On Tuesday, the last day for which records were available, there were 13 job vacancies in the borough. For every 100 young persons who are unemployed in Lambeth, there is one vacancy for them to fight over. That is a graphic illustration of the position in which the Government have put those young persons as well as the entire community of Lambeth. If the Government do not act swiftly, further tragedies will occur. They will occur partly as a result of the economic policies that they seem determined to maintain.
  648
  Much has been said about the parallel between what has happened in our cities in the past few weeks and months and the events that took place in the inner cities of the United States in 1967. There is still one major difference. In the United States riots, 83 people died. No one has died in the disturbances that have arisen in Britain. However, I fear that that may happen if there are further disturbances. I fear that my constituents, or the constituents of my hon. Friends who represent other parts of inner London, will suffer, and suffer more than mere injuries, if there are further outbreaks of rioting.
  It was clear that the Prime Minister's reaction to the first outbreak of rioting in Brixton was to punish Brixton. Her economic reaction was to say "If you give them the money when they riot, everyone else will riot". She punished Brixton economically. The rate support grant, which had already been cut, was cut yet again for Lambeth, and further constraints were put upon the council in its attempt to tackle some of the deprivation.
  The Prime Minister's punishment did not work, because there were riots in many other places. It seems that the Prime Minister has found a new method of punishing areas where disturbances take place. The Secretary of State for the Environment was dispatched to Liverpool for two weeks. I read on the tapes tonight that he will stay for a third week. Presumably that is a warning to inner London that if there are any more riots in the area it will get him for at least a month.
  The Government must be prepared to adapt their economic policy to the needs of the inner cities and to remove the deprivation. There is the risk that further disturbancies will arise if the deprivation is not removed. Yet the Government stick to their policy of attacking local authorities and cutting services in ways that will make the situation worse.
  The issue about houses, health and social services and so on is not merely that they are needed by people in the constituencies that I and my hon. Friends represent, but that they provide a great deal of employment for the local communities. In my constituency, the biggest single employer is King's College hospital, which provides an important health service and also many jobs for local people, yet the Government are insisting on these cuts and on attacking the role played by the voluntary bodies in the inner city programme, which has been a new development in the last few days.
  The startling document issued by the Secretary of State—I realise that the Minister cannot answer directly for it—in which he says that his officials will give special attention to vetting, monitoring and checking the activities of voluntary bodies, has created a great deal of distress in my constituency simply because we now find that those who care about the community and want to help are being rejected and are as demoralised and frustrated as the unemployed youngsters to whom I referred earlier.
  The Government must consider a radical change and a radical reversal of many of their economic policies before they begin to destroy the fabric of society in a way that cannot be put right. It is not simply a matter of the Opposition hoping that those to whom we are least opposed in the Cabinet will win the battle at present going on. The Prior plan—the idea of a boost for employment creation—while better than the punitive attitude of the Prime Minister, is merely sticking plaster to try to mend the broken limbs in many communities and the economies of the inner cities. It is nowhere near enough, compared

  649
  with what is needed. We need a massive transfer of wealth and power to the inner cities which I and my hon. Friends represent. We need a reflation, which I fear the Government will never produce, and which only a Labour Government can achieve. I and my right hon. and hon. Friends will work for that objective because that is the only real hope for the inner cities, which we hope to regenerate.
  2.43 am
  Mr. Thomas Cox: Once again it is to the Consolidated Fund that London Labour Members of Parliament have had to turn in an effort to discuss the affairs of London. It is a disgrace to London and London Members that successive Governments have refused to appoint a Minister who has direct responsibilities for London. There is rarely a time when we are allocated a day and can discuss the affairs of London. We have Welsh and Scottish Question Time, and days for regional debates, but we do not have days for London debates. Until we have a minister with responsibility for the day-to-day affairs of our capital city, the problems, sadly, will increase. That is why I am sure that there are many hon. Members on both sides of the House who are prepared to join together in a determined effort to see that in the not-too-distant future there is a Minister who has direct responsibility for the affairs of London.
  I note the comments made by my hon. Friend the Member for Lambeth, Central (Mr. Tilley). I am more than somewhat surprised that the Secretary of State for the Environment has to go to Liverpool. He could have got all his information about the problems of the inner cities here in London. He could have saved his time and train fare. If the right hon. Gentleman has taken any notice of what has happened during his time as Secretary of State, he must be in no doubt about the kind of problems that exist in London. When he returns from Liverpool, and if he is honest with the House and his collegues, I cannot believe that he will say that the problems there are any different from those in London.
  There are many causes for the sad events of recent weeks. Without doubt, topping those causes is the Government's neglect of the major issues that face cities such as London. Employment, housing, social services, transport and the environment—all key services in a city such as London—have worsened in the last two years.
  We all welcome the Chief Secretary to this debate on London—
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. I apologise for interrupting the hon. Gentleman, but this is not a debate on London. It is a debate on the Government's management of the economy. The hon. Gentleman must relate his remarks to that, because the Minister will not be able to answer specifically on London.
  Mr. Cox: Thank you, Mr. Deputy Speaker. However, this debate will focus on the Government's economic record and its effect on London. I, and my colleagues, are merely trying to draw attention to the disasters of the policies pursued by the Department, of which the right hon. and learned Gentleman is a Minister.
  We are not simply trying to attack the Government. What we have to say has been brought home to us week after week either in correspondence from constituents or by the delegations which complain bitterly about the effects that the Government's economic policies are
  650
  having either on our citizens or on London. We are asking the Minister to justify the policies that have been pursued during the lifetime of the Government.
  During the Government's period of office, I cannot recall receiving any letter or indication to the effect that our people are delighted with the Prime Minister's policies or that they have been of benefit to them. We are repeatedly told by the right hon. Lady that she supports the policies pursued by the Treasury, but none of us is in any doubt that she tells the Treasury exactly what it must do. Sadly, the effects of those policies can be seen all around us.
  Unemployment in London has now reached 280,000 and it is going up month by month. Firms are closing, and little or no major industry has come into the area. As a direct result of the Government's economic policies, more and more people are leaving. Very soon the population of London will consist to a large extent of elderly people who, for one reason or another, are unable to leave.
  Yet London, given the right kind of help from the Government, and especially from the Treasury. could become a major industrial area. There is land available for development. There is a work force. One of the great assets of this city is hardly used to the extent that it should be, namely, the River Thames, which could bring in and take out materials and equipment and add greatly to the wealth and the role of this city. But until the Government are willing to enter into partnerships with the Greater London Council and with the boroughs to establish industry, be it private or public or in the form of co-operatives, sadly, there will be very little progress. That is why we sought to have a Treasury Minister here today to outline to us, in view of the deep concern about this, what help is to be given in the coming months on the issues that I have described.
  There are many other issues that deeply concern us. There is not only the question of employment. There is also the question of making cities such as ours far more attractive places in which to live. To me, the inner and outer areas of this city are a million miles apart. Those of us who come from the inner areas have enormous problems compared with those from the outer areas.
  One of the great problems that we face is that of housing. The Government's cuts—again, forced upon the Department of the Environment by the Treasury—have been disastrous. Many local authorities cannot build, because they cannot get the money. Housing associations cannot improve properties that they already own because they cannot get the money. The financial cuts, which must total hundreds of millions of pounds, have resulted in more and more people living in deplorable accommodation when they had hoped, often for many years, that in the foreseeable future they would be able to enjoy a better place in which to live and to bring up their families.
  One must ask the Treasury Minister here today whether the Government are satisfied, after two years, with their housing record in this city, be it in private or public developments. I am repeatedly asked at advice services and in correspondence exactly what is to be done about helping those people to find somewhere to live and to bring up their families as they would wish, and as I am sure that every one of us, if we were in a similar position, would seek to do.
  The appalling effects of the Government's cuts in the housing programmes of the boroughs and of the Greater London Council have only just started to emerge. I shall

  651
  concentrate briefly on their effect on the housing prospects of single people in London. I speak as a member of the all-party group of the Campaign for the Homeless and Rootless. As we all know, London's overall population will continue to decline. The number of single people needing housing and the number of one-person households will continue to increase. That is nothing new. That has been the pattern for over a decade. It is estimated that in 1986—in only five years' time—about 37 per cent. of all households in inner London will be single person or one-person family households. The Government, the GLC and the borough know that. The sad fact is that, despite that increase in that specific type of housing problem, the Government—because of the Treasury's restriction on such development—are not making the improvements that are desperately needed.
  Another problem that is causing enormous difficulties is that of the single homeless. In every inner London borough this gives rise to great hardship and causes local authorities many problems. It is no good the Minister saying that such people must try to help themselves. According to figures that I saw recently, in the first quarter of this year a first-time buyer in Greater London needed an average income of £10,500 if he wished to get a mortgage. For many people, particularly the single homeless, that is out of the question. They simply do not have the money for the essential deposit. Sadly, in the past two years that problem has worsened.
  Against that backgrond, are we expected to allow the problems to continue to increase? Is anyone in the Treasury given the job of adding up the cost of unemployment, poor housing and of yongsters who are in care because their parents are out of work or are unable to find the accommodation that they want? There are elderly people in our hospitals because local authorities are not employing the social workers who should, and would no doubt like to look after them. They would rather look after them than see them kept in hospitals because the necessary after-care services are not available.
  In the London borough of Wandsworth there has been a deliberate cut in such services. When we have taken this issue up with the controlling local authority we have been told that it is subject to the restraints and cuts imposed by the Government and that it is not in a position to develop—even if it wished—the services that are urgently needed. One has to ask the Minister whether this is really part of the Government's economic programme and strategy. There cannot be anyone outside the House nor, for that matter, many inside, who see such action as meaningful, economic policy.
  I believe that a great deal of employment could be created, which would bring great benefits not only to those who found jobs but to those who would enjoy services that urgently need to be improved in London. The list is endless. It includes housing, education, transport, social centres and industrial development. Yet hon. Members who question the Government are repeatedly told, especially by the Secretary of State for the Environmment, that cuts are needed. On seeking the reason, hon. Members find that this is the diktat of the Treasury.
  Treasury Ministers must begin to understand that hon. Members have had enough of the policies that have been forced on us, the people we represent and the areas we represent. The Chief Secretary to the Treasury, who is to
  652
  reply to the debate, was, some years ago, the Conservative candidate in North Kensington. I wonder whether he ever visits the area, walks around and sees the conditions that exist ther. Can he say, in all honesty, that the policies of the Government, of which he is a member, have produced benefits for North Kensington?
  My belief is that we are at the crossroads. If, even at this half-way stage of their period of office, the Government are sincere about seeking to work with the Greater London Council, the boroughs and industry, there may be some hope. If, however, there is to be no change in the policies that have been pursued for the past two years, the outlook is sad and dreary for the people of London. I hope, therefore, that the Minister will say that there is an awareness of the problems to which my hon. Friend the Member for Lambeth, Central referred. My hon. Friend represents a constituency in the borough adjoining the borough of Wandsworth, part of which I represent, and which has suffered an overspill of some of these problems.
  I hope that the Chief Secretary will say that the Government are aware of the damage and the dangers that the Government's policies have produced and that they will be changed. No one will be more pleased than Ito give a warm welcome, even to the Prime Minister, if a meaningful change takes place. If the Government state that they had gone too far, that they need to reconsider and to seek the co-operation of those who are essential to the well-being of the capital city of our great country, this debate will have been worth while.
  3.5 am
  Mr. Christopher Murphy: This part of the debate relates to that most important of subjects, the management of the economy. May I therefore draw the attention of the House to how in particular employment is, and should be considered to be, a fundamental part of that management?
  The Conservative Government came to power pledged to overcome inflation, and I believe that if they continue to carry out their policies firmly this objective will be successfully achieved. The Conservative Government also came to power pledged to encourage genuine new jobs, and I believe that, if they maintain their economic stance with conviction, this too will be successfully achieved.
  Employment opportunities are largely dependent upon ending the inflationary spiral, and this must be at the heart of the management of the economy. Such opportunities will be expanded only by being competitive—producing goods and services that consumers want at prices consumers can afford, while realistically increasing productivity and reducing excessive wage demands.
  Such a strategy inevitably, albeit unfortunately, takes time to come to fruition, and it is important that we should recognise that fact as we tackle the underlying economic malaise of our country. The Government are having to operate against the background of a world-wide recession, and with an inheritance of unsound money and a legacy of industrial unrest.
  In looking at the management of the economy, I wish to refer to my own constituency, where after two years of Conservative Government around 95 per cent. of people in my local travel-to-work area are employed. This is the best level in Hertfordshire, the best level in the South-East, and almost the best level in the country. The

  653
  Manpower Services Commission offices have filled well in excess of 10,000 vacancies in that period, and in the region of 400 jobs remain unfilled.
  These achievements mask the additional difficulties resulting from a record level of school leavers, the increase in which has been over 1,200 in that same period. Further, the county has continued to see a substantial growth in population, which has added to the pressures for obtaining employment.
  Clearly, whatever may he the problems of the management of the economy, Welwyn and Hatfield has been fortunate to have commerce and industry, both large concerns and small, determined to invest during the current difficult times in order to gain advantages in he near future. It has also been fortunate that the local work force has proved equally determined to be adaptable and responsive to changed circumstances. It is essential, however, to recognise that, even in a relatively prosperous part of the country, nobody can assume himself to be immune from the economic factors of life. In particular, young people are finding increasing problems in obtaining favourable career prospects.
  As part of their management of the economy, the Government are providing very important assistance via the youth opportunities programme. This will continue to be of major significance in providing work experience and employment training for many school leavers in the short term. But I also believe that there would be considerable value in investigating the concept of finance going directly to employers to stimulate additional vacancies. The communiy enterprise programme for unemployed people of 19 and over is another key innovation to assist with measures of real benefit, such as the job release scheme and the temporary short-time working compensation scheme.
  But there is a further development which I believe needs close examination, and that is the concept of national community service, which should be welcomed by parents and young people alike as a means of ensuring a more adaptable work force which also has more breadth of vision. That would mean the Government providing, perhaps for a 12 months period on leaving full-time education, a non-compulsory vocational opportunity for boys and girls to take part in developing social responsibility by giving practical help in our society, thus benefiting themselves and others. But it must be emphasised that such a scheme should in no way diminish the role and importance of existing voluntary service organisations.
  In reviewing the management of the economy we should all recognise that, even with an upturn in the economic fortunes of our country, we shall continue to see the consequences of the new industrial revolution that is currently under way—perhaps, more accurately, it should be called the technological revolution. Equally revolutionary, therefore, may have to be the methods by which we adapt to an era of reduced employment opportunities, and, although problems of this magnitude demand answers with great understanding, I remain convinced that we have good grounds for optimism.
  3.10 am
  Mr. Clinton Davis: It seems that the hon. Member for Welwyn and Hatfield (Mr. Murphy) is not familiar with the problems that we face in the inner city areas. Perhaps it is typical of the attitude reflected by
  654
  the Conservative Government because they seem unconcerned about these problems—yet they are of national interest and it would be folly to ignore them.
  It is an excellent feature of the debate that we have a Treasury Minister of considerable standing present to listen to the pleas being made by London representatives for the Government to change course with their inner city policy, if they have a policy at all. I hope that the Minister will be able to take heed of what is being said by a number of Opposition Members who represent deprived areas.
  Mr. Murphy: I rebut the hon. Gentleman's suggestion that the Government are uncaring about the inner city areas, not least because of the action that they are taking. I had the privilege to represent the Conservative Party as a candidate in the East End of London in the seat of Bethnal Green and Bow and have, from first-hand experience, considerable knowledge of the difficulties in the inner city areas that have suffered from Labour Governments and Labour-controlled councils.
  Mr. Davis: The hon. Gentleman did not do very well in Bethnal Green and Bow. Perhaps that was because he was making speeches such as the one we have just heard.
  I assure the Minister that, while it is true that some responsibility falls on the shoulders of successive Governments, my right hon. Friend the Member for Stepney and Poplar (Mr. Shore), in initiating the partnership schemes, broke through a whole area of neglect, realising that the inner city areas had to be rescued from the blight into which they were falling.
  However, the position has dramatically worsened over the past two years. It is seen in our constituency correspondence and in our surgeries. The hopelessness and frustration are welling over in a tidal wave of bitterness among the young people in particular some of whom feel that they are unwanted by society, they are not cared about and are bent upon "revenge"—which is what one young black man said to me the other day in the midst of a disturbance in Hackney. That may be a misplaced feeling. I certainly do not support lawlessness and the sort of violence that has erupted in our inner cities, but we have to understand and to try to come to grips with the feeling permeating the minds of so many youngsters today, especially black youngsters.
  Today, nearly 13,000 people in Hackney are unemployed. In May there were 10,780. It has been a rapid escalation. More than 14 per cent. of adult males are unemployed, and that is a percentage which has more than doubled over the past two years.
  The figures of young people registered as unemployed on 9 July 1981—though not all were registered—were released the other day by the careers service, Hackney division, of the Inner London Education Authority. We have 1,464 youngsters between 16 and 19 years of age chasing 25 jobs, 21 of which are in the Barbican area, one in Hackney and three in Stoke Newington.
  That is the measure of the problem with which the Minister has to grapple. He must also realise that the proportion of unemployed people amongst the black community is infinitely worse and that the position is deteriorating. Indeed, the unemployment position in Hackney is worse than it was at the height of the 1930s depression.
  It cannot be argued, although I have no doubt that the Minister will so argue, that excessive wage demands are

  655
  depriving people of employment opportunities. Male manual workers in Hackney are the lowest paid in London. We also have a large number of home workers who are appallingly exploited in the clothing and footwear trades and who eke out the barest living.
  That is the reality, and this erosion of jobs affects all the substantial employers of labour in my constituency. Lesney Products and Co. Ltd.—Match Box Toys—Metal Box Ltd. and British Oxygen have all laid off workers on a grand scale, because all are effected disastrously by this Government's economic policies. Yet the mournful dirge that we hear from the Prime Minister every Tuesday and Thursday—except when she is not here, when we are somewhat relieved—is "Blame everybody else, but never blame me. I am immune from blame. It is the workers demanding excessive wages. It is the impact of world trade." It is this, that or the other, but never any fault of the Government.
  Does the Chief Secretary accept any responsibility or blame for the deteriorating economic situation which has afflicted the country over the past two years? I suppose that we shall get more patronising lectures, more complacency, more Friedmanite dogma and more hypocritical claims of sympathy for the unemployed. It does not cost anything to offer sympathy. But we want action instead of the scorched earth policy being applied in the inner cities, especially East London.
  I do not say that idly. The Government have ravaged the resources available to councils such as that of the London borough of Hackney. They assert glibly that it is a spendthrift council, and that excuses the reduction of expenditure by £17 million in 1981–82, with a further £2 million penalty likely to follow.
  Let me acquaint the Minister with the facts of life afflicting this so-called spendthrift council. Our local resources are stretched beyond their limit. We have the largest housing waiting list in London, with 16,000 people. We have the worst overcrowding. We have have large numbers of people living in squalid bed and breakfast accommodation. We have the second highest proportion in London of children in care.
  These are the facts with which we have to live. Members of Parliament have to live with them only in the sense that they try to help the thousands of constituents who write to them or come to see them in their surgeries. When the Secretary of State for the Environment thinks that he punishes the Hackney council, he does nothing of the sort; he punishes the 190,000 people who live there. He must come to terms with that situation.
  The right hon. Gentleman went to Toxteth and said "I have not got an open cheque; I do not propose to throw money at these problems." I do not suggest that we shall solve these problems, even if substantial amounts of money are spent, in a short time. But, unless the right hon. Gentleman opens his cheque book, we shall not begin to solve them. The people of the shire counties, who have derived some benefit at the expense of London as a result of an act of political pillage, must recognise that they, too, are part of the inner city problems.
  We need new initiatives to give new life and hope to places such as Hackney, not to squeeze life from those areas. That was the message of the present Minister of Agriculture, Fisheries and Food some years ago. But it was more than a message that came from my right hon.
  656
  Friend the Member for Stepney and Poplar, because the partnership scheme that he initiated was capable of bringing new life to the London borough of Hackney. Unless such help is provided now, the local authority can only mitigate the worst features of the blight to which I have referred.
  The London borough of Hackney has been trying, with its hands tied behind its back by this Government, to involve the community in a number of new schemes which will involve the community in directing those schemes in large measure.
  There are two joint venture schemes being developed: a city technology centre, and a fashion centre. Both await approval by the Department of the Environment. If they are denied that help—as seems likely—they will be able to proceed only by assistance through the urban aid programme as non-statutory sector projects. They would have to do that through the Hackney business promotions centre setting up two subsidiary limited companies and then making the application. A relating minor cost is involved, but the Secretary of State would say that Hackney was being spendthrift.
  Many additional emergency proposals have been suggested by the council. I recite them from a submission that has been made to the Association of Metropolitan Authorities by the chief executive of the London borough of Hackney. The first is:
  "Relieve designated inner city partnership and programme areas of the imposition of formula rate support grant penalties"—
  that is an absolute prerequisite
  "2. Restore full urban programme status to Lambeth and Hackney;
  3. Target section 11 grants"—
  under the Local Government Act 1966—
  "in our direction and urgently revise the criteria;
  4. Give us designated authority status for derelict land grants;
  5. Give us a bigger share of MSC funding and revise the rules, as suggested, particularly to cover more extended apprenticeship schemes."
  My goodness, how we need apprenticeship schemes in Hackney. They have largely disappeared over the years.
  Instead of a positive response from the Prime Minister, we are told that it has to wait until we have the CS gas, the plastic bullets and so on. What a miserable response. I cannot help contrasting it with the response of President Johnson in 1967 when he was faced with infinitely worse problems. He said in his address to the nation:
  "The only genuine, long-range solution for what has happened lies in an attack—mounted at every level—upon the conditions that breed despair and violence. All of us know what those conditions are: ignorance, discrimination, slums, poverty, disease, not enough jobs. We should attack these conditions—not because we are frightened by conflict, but because we are fired by conscience. We should attack them because there is simply no other way to achieve a decent and orderly society in America."
  Why could not the Prime Minister, why could not a single Minister from the Treasury Bench, have responded in like terms to the problems that are imposed upon us now? They have significantly failed in that respect. Instead we get the nauseating response of a purblind Prime Minister who challenges the Leader of the Opposition to say whether he supports the use of CS gas.
  We have to do much more than just the emergency programme I have outlined. We must also do something about the minds of people. When I hear the voice of hate, illustrated by the right hon. Member for Down, South (Mr. Powell) the other day, which reflected no more and no less than the cattle truck mentality, when he gives

  657
  respectability to the odious forces of hatred that parade themselves on the streets in East London, one realises how serious a matter this is. All of us in this House must join in rebuking the voices of hate.
  Equally, we have to avoid taking a path of blind coercion in answer to the lawlessness that has stalked our streets over recent weeks. Repression and lawlessness thrive on each other. Both of them represent a challenge to our democracy—which we should nourish and cherish—and both of them play into the hands of those whose voice is the voice of hate and whose psychology is that of the cattle truck.
  These are the people who search for scapegoats and talk about CS gas and rubber bullets. That is wholly irrelevant to the problems we face day in and day out in London. We need to foster co-operative ventures, and we need to provide real help for ethnic minority businesses, which play a part in our society. We hear a great deal about support for small businesses from the Government. There is a problem of how to get finance to these beleagured businesses.
  We have to do something about rebuilding apprenticeship schemes. The London borough of Hackney is trying to work out a pilot scheme with the GLC that will provide nine or 10 places. That is a very small response to a major problem. Unless the Government are prepared to intervene and provide us with assistance and bear the main burden we shall not get much more than that scheme off the ground.
  I share the view expressed by my hon. Friend the Member for Tooting (Mr. Cox) that it is absolutely right that those of us who care about the problems of inner London should have taken this opportunity to get a Treasury Minister to become acquainted, for the first time, with the facts. Perhaps the right hon. and learned Gentleman was a candidate for North Kensington some time ago. I hope that he still cares about the problems of North Kensington and I hope that he will do more than just show care. I hope that he will show, although I doubt that he will, some positive assistance to relieve the thousands of people in inner London who have to live with these problems day in and day out.
  Mr. Deputy Speaker: Before I call the next hon. Member, I should say, once again, that this is not a debate on London and it is unfair to expect the Minister to answer questions about the problem of immigration or anything of that kind. The debate must centre around what has been balloted for, and that is the Government's management of the economy.
  3.29 am
  Mr. Stuart Holland: The state of our economy is well recognised to be chronic. Unemployment is on trend for 3 million, youth unemployment is higher than at any time in the 1930s and inner London has more unemployed than the whole of Wales—classically considered to be a problem region of the economy. What we are seeing is part of a wider problem of more and less-developed regions in a capitalist economy which is in crisis. We are dealing in the London context with a city region. Just as in the post-war period we have been trying to offset and remedy the problems of less-developed regions as a whole.
  The tragedy is that, as a result of the Government's policies, the whole country qualifies as a less-developed
  658
  region of the European or world economy. The point has been well made by some of my hon. Friends that real wages in Britain, far from being the cause of the crisis—as is claimed by Ministers—are virtually the lowest in Europe. The rate of capital accumulation in this country has slumped and we have seen a collapse of manufacturing investment with a net decline of up to one-tenth a year for several years, resulting in the inglorious present situation that the level of manufacturing investment is approximately that of 1968.
  Part of that reflects a decline in the base of traditional industries in the economy. That is indubitable. Part reflects the lack of new modern industries and, in particular, new investment in what have been the modern industries of the past 10 or 20 years.
  A further factor is certainly the outflow of capital from this country, and yet another is the new technological unemployment that we face. That is having an impact on services as well as industry. For the first time, service employment, in both the private sector and the public sector, is in net decline.
  Let us take account of new technologies, such as those based on the new generation of mini-computers, word processors and data processors. We can no longer rely on service employment absorbing those who have been displaced by technological progress in manufacturing. The forecasts are extremely dire in this country, France and Germany. Authoritative reports from the Manpower Service Commission, the Nora report in France and the Siemens report in Germany forecast the possibility of between a 30 per cent. and 40 per cent. decline in office, clerical, data processing and related staff in those countries over about 15 years.
  A report prepared for the Central Policy Review Staff in 1978 forecast that if available robotics are introduced widely in industry Britain could within 30 years be producing all its future material needs with only 10 per cent. of the existing labour force—a prospect of up to 90 per cent. technological unemployment.
  That is a scenario of the possible, not the certain, but it is also a scenario of the wholly unacceptable. It is likely, even if it occurs in a modified form, and we see increases in unemployment of 10 to 15 per cent. on top of present levels, to aggravate the grave social tensions that our society and economy are already suffering.
  The main factor in the level of unemployment and the main reason for such substantial unemployment in Britain and its inner cities is Government policy. The Government still do not seem to have learnt that, contrary to Tory myth, public spending does not drain the private sector, but sustains it. We have not heard a reasoned case from the Government Benches on this subject, and I am glad that the Chief Secretary to the Treasury is present. I hope that he will reply to the issues that. I have mentioned.
  Conventionally, public expenditure is expressed as some 50 per cent. of total spending in the economy, but that 50 per cent. normally expressed against gross domestic product includes 20 per cent. of the total which is a transfer payment—mainly social security payments, but also the important category of aids to industry and to agriculture. The real public spending figure and the real claim on resources—a phrase much favoured by monetarists—is not 50 per cent., but 30 per cent. of total spending. Even in that category, two-thirds of that spending is in effect a transfer payment. That is not

  659
  stressed in much conventional reasoning on the economy, but it is important to develop the point and get it across to some Conservative Members.
  While public spending is nominally 50 per cent. of GDP, public enterprise in the economy is only about one-tenth of GDF. That means, in practice, that whether the public spending takes the form of social security benefits or spending by central Government or local government on capital projects or wages and salaries, on average nine-tenths will be spent in the private sector rather than in the public sector of industry. Even making allowance for the fact that the figures that I cited on the public sector include the main nationalised industries rather than para-governmental organisations, it is clear that, on average about £85 in every £100 spent in public spending benefits and thus sustains private spending in the economy.
  Moreover, the very factor which the Prime Minister time and again claims to lament in Britain—the rise of public spending in the post-war economy—has sustained rather than drained resources. We have heard much about Milton Friedman, Nobel Prize winner. We hear less, for example, about Sir John Hicks—as it happens, also a Nobel Prize winner, not one of the more radical Keynesian economists; a cautious man, not given to exaggeration. When he tried to explain the dampening of economic cycles in post-war Britain relative to the 1930s, and why we had not again entered a slump syndrome such as we witnessed and suffered then, he stressed that the main difference had been the rise in long-term investment and capital expenditure projects, especially in the public sector. Short-term reactions to income changes of an accelerator or decelerator kind constitute the main mechanisms of the private enterprise trade cycle. But public spending—until this Government took office—was not directly influenced by short-term changes in the expectations of private entrepreneurs or private managers, and therefore permitted the long-term accumulation of social overhead capital and economic resources in the economy.
  A further point of considerable significance to what the Government are doing relates to another basic mechanism in the economy—the multiplier mechanism. Public sector multipliers, whether they are on income, employment or investment, are higher than private sector multipliers. I hope that the Ministers will address themselves to what I am saying, rather than have it pointed out to them by officials afterwards in Hansard, since it crucially affects the issues in this debate.
  Public sector multipliers, that is, the multiplication of income going into the economy from public spending, being higher than the injection of income from private spending, inversely means that with public expenditure cuts, the contraction of income in the economy is also considerably higher.
  The CBI, concerned with the level of interest and exchange rates, has until recently been asking for further public expenditure cuts. There have been qualifications, but there is still pressure on the Government, especially from small and medium sized enterprises, which do not recognise that they are the main beneficiaries of public spending in the economy.
  I shall give a specific example which is directly relevant to one of the gravest social problems facing, for example,
  660
  a city region such as London. In London nearly 500,000 homes are recognised as being unfit for human habitation, lacking basic amenities or in need of major repair. Nearly 500,000 construction workers are unemployed in the country as a whole. The Government say that they cannot afford public spending on housing because that would take resources away from the private sector. Who builds council houses? According to a reply to a question tabled to the Secretary of State for the Environment, in England and Wales 93 per cent. of council houses have been built by private rather than public enterprise in the last five years.
  In practice, it is improbable that the logic of this argument will penetrate the Government Benches. But for every £100 of public spending cuts in council house building, in England and Wales, on average £93 is taken out of the private sector. That means that £93 is drained from the private sector because of public expenditure cuts.
  The argument is common sense to anyone who looks dispassionately at the case, but has not gained acceptance within the Government or the Cabinet. Perhaps it will gain acceptance as the small and medium sized firms in the construction industry suffer a chronic collapse because of the moratorium on council house building.
  A further factor in the Government's justification for not being able to spend resources and thereby generate new jobs and income in inner cities or problem regions is, allegedly, the link between money supply and inflation. One of the oldest arguments in economic theory is that too much spending causes inflation—that excessive spending causes price inflation.
  The argument has to be related to two factors. They are basic Keynesian arguments. One is the level of transactions in the economy and the other is the velocity or speed of the circulation of money. Keynes stressed the importance of the level of transactions because if people had reduced incomes or if they were apprehensive about economic circumstances they could tend to save rather than spend money. We have seen that phenomenon in Britain in recent years, with high savings ratios combined with inflation.
  The irony is that Milton Friedman, flying back from receiving his Nobel Prize and stopping off in London, was able to say on television that inflation starts in one place and one place only—national treasuries. When faced with professional argument on the relation between money supply and prices, he gives a different answer. It is to be found in the proceedings of a debate between Milton Friedman and James Tobin in the United States. When challenged on his facts and figures, Friedman said that he was not claiming that increases in the money supply accounted for more than about half of the increases in prices in the economy. "About half" is not the sort of message that we have recently had from Government Ministers. "About half" would mean, in effect, that if the Government attach importance to money supply, especially public spending, as a cause of inflation, they could have had only half the public expenditure cuts in the economy without any net loss in the price index or inflation. It is staggering that any modern Government should accept the simplisms of monetarism in the way that this Government have.
  There are many factors in inflation. There have been commodity increases, oil price increases, wage increases, cost increases, the cost to the domestic economy of the dramatic devaluation of sterling in the mid-1970s and

  661
  other factors. But one factor that has been neglected by the Government is monopoly pricing. The trend to big business is now so marked in the British economy that when only two or three firms dominate any individual market they can, to a considerable extent, compensate for falling sales by raising prices.
  That mechanism takes account of the external factors in the inflationary process, and the extent to which those factors must be absorbed. In the 1930s monopoly concentration in industry was about only 20 per cent. rather than half as it is now. Whereas in the 1930s sales fell but prices fell faster than sales through the decade, we are now seeing sales falling and prices increasing. It is an element that makes it imperative that the Government should not only reflate public expenditure in the economy, but adopt a policy of price controls for the new monopolistic leaders in British enterprise.
  We can spend our way out of the slump. But, with the shattered expectations of business because of uncertainties caused by Government policy and domestic inflation, we must ensure that as the economy recovers big business does not simply pocket the revenue generated by the spending in the form of higher prices rather than reduce prices as its unit costs are reduced by higher sales.
  We are told by the Government that foreign trade constraint is a reason for our not being able to have public spending. But two-thirds of our trade is dominated by multinational companies. About 220 companies represent two-thirds of our visible export trade. Nearly all of them are multinational in operation. They produce in different countries rather than simply export to them. The old international division of labour between different firms in different countries has given rise to a new multinational division of labour between the same firms in different countries. In effect, they have become their own competitors abroad and are unlikely to follow through exchange rate changes on foreign markets even if the Government manage to maintain sterling at its now relatively low level.
  Some firms will benefit from a relatively low exchange rate. They are the 10,000 regular exporters in the economy that are mainly national rather than multinational. They mostly export goods rather than enterprise. But they represent only about one-third of our foreign trade. The Government can hardly rely on exchange rate changes to promote recovery and claim that only when we have that recovery in foreign trade can we afford public spending.
  Also, if we are talking about foreign constraints, what about the outflow of capital from this country? We have Ministers going to inner city areas in Liverpool and saying that they cannot open a cheque book and spend money to solve the problem. What about the £1 billion every three months that leaves the United Kingdom in the form of capital outflow following the abolition of exchange controls by the Government? Can the country afford that? It says we cannot afford the spending in the domestic economy, yet it can afford to lose about £4 billion a year on capital outflow as a consequence of the abolition of exchange controls by the Government.
  Further, and perhaps most importantly, while other countries have a major energy constraint and are limited by that in increasing public spending, Britain is the only industrialised country with self-sufficiency in energy, whether in oil, natural gas or coal. Japan has an energy constraint. It is 95 per cent. dependent on imported energy. Germany has an energy constraint. It is 85 per
  662
  cent. dependent on imported energy, as is France. But Britain is not. We have major resources in energy as in skill and technology. This country is either at the technological frontiers of new discovery or within reach of them. In many instances it is ahead of the world. There are no necessary constraints for a recovery of public spending, and this spending would generate jobs and incomes in not only the public sector but in the private sector.
  It is striking that the Prime Minister can return from Ottawa convinced that everything that she has heard confirms her view that what she now calls the middle road monetarism of herself and Chancellor Schmidt is accepted by the world leaders. She managed to refer to the nuclear weapons policy of the new French Government of Francois Mitterrand and the Socialist Party but not to the fact that the French Government totally reject the basis of the economic policy that the British Government are pursuing. The French Government are basing their policy on a reflation of spending, a restructuring of industry and a major redistribution of resources. That is a redistribution, whether between social classes or between inner city areas and other regions, that the British Government should be undertaking.
  My constituency is part of the borough of Lambeth. It has about 15,000 unemployed people and there are about 15,000 on the housing waiting list following a period of council house sales in outer London and following the moratorium on council house building. Male registered unemployment is 15 per cent. in Lambeth as opposed to 9 per cent. for the GLC area as a whole. Unfilled vacancies have risen by 50 per cent. since June 1980. The unemployment to vacancies ratio, which in June 1980 was 11:1, has soared fourfold to nearly 40:1. We have had a 15 per cent. increase in youth unemployment since June 1980 and disabled unemployment is especially high.
  The problems which these factors cause have been argued in the House by some hon. Members to relate to ethnic minorities in the community and to the problem, though the right hon. Member for Down, South (Mr. Powell) did not dare speak its name, of race.
  The fact is that registered unemployment rates for black and white people in, for example, Brixton are far higher than for London as a whole. We have considerable unemployment among black people. In Lambeth black unemployment amounts to about 7 per cent. of all black unemployment in London compared with about 10 per cent. in Brent and Ealing and 8 per cent. in Hackney. Those are areas in which there have recently been grave civil unrest and civil disturbance.
  When the right hon. Member for Down, South claims that the ethnic minorities alone cause that problem, he fails to recognise the relationship between high unemployment and grave civil disorder, which characterised the 1930s, in particular in Germany. It is elementary in modern historical analysis that there was a correlation between the rise of the Nazi party in Germany and the rise in unemployment. Shortly before the Nazi seizure of power in 1933, both unemployment and the vote for the Nazi party fell. While one cannot generalise and say that there is a one-for-one relationship anywhere, the most notorious case in recent modern history shows that there was a correlation between unemployment and the rise of the Nazi party, even though the Nazis themselves claimed race to be the problem.

  663
  It is scandalous that during our recent debate on civil disorder the right hon. Member for Down, South refused to allow more than one or two interventions—
  Mr. Deputy Speaker: The hon. Member is going wide of the debate on the economy. He must return to that subject.
  Mr. Holland: With respect, it is important to my argument that when the economy already is in a major crisis, and with the prospect of a rise in technological unemployment, we are likely to face grave civil unrest. The counter argument put by the right hon. Member for Down, South is that the grave civil unrest is the result of ethnic minority problems. In crude terms he is saying "We have seen nothing yet." But in a debate on the economy the House should consider the arguments anticipating grave civil unrest because of rising unemployment rather than race.
  It is tragic to find the oversimplification of the arguments which we have had recently from Members such as the right hon. Member for Down, South. He also has made false claims about the immigration policy of the French Government and thus misled the House. I shall not go into detail on that, but those who wish to see how unfounded his statements are should refer to reports of the debates in the French Assembly on unemployment and immigration of either 9 July or 14 July, where the record is put straight and where the situation is wholly different from that argued by the right hon. Gentleman.
  What are the Government planning to do about the incidence of unemployment in the areas of the economy where it is gravest? In inner city areas there is a programme of further cuts in rate support grants and penalties on councils such as Lothian—the staggering sum of over £50 million. There is an anticipated further cut in the rate support grant for the London area as a whole of about £240 million to £250 million—again, a staggering sum. There is also a shift in resources from inner city areas to the shires. Yet it has been known for years to all those interested in the area—other than Government Ministers—that the cost of social facilities and their provision, such as building and construction costs alone, in an inner city area, can be three to four times the cost of their provision in a suburban area.
  We thus need more spending, and rate support grant for that higher spending in inner cities because of their structure—in part due to congestion costs—irrespective of social factors. By cutting public expenditure in the inner cities, the Government are taking resources away from areas of multiple deprivation.
  The housing programme is an example. The Government are cutting the housing investment programme in London at a time when the inner city areas of London need more rather than less housing expenditure. The argument is relatively simple. Many estates in constituencies such as mine were built in the 1930s and 1940s. They are now coming to the end of their natural life cycle. In other words, instead of needing further repairs to a roof or the clearing of a drain, they need new roofs, new drainage and internal modernisation and improvement. When the Government cut resources from the housing investment programme, they end the possibility
  664
  of a cycle of housing renewal in such inner city areas. That poses grave problems for inner city boroughs and throws their housing policy into crisis.
  The Government's offer to areas of high unemployment in the inner cities is enterprise zones. When the concept was introduced in the House, the Chancellor of the Exchequer cited Professor Peter Hall of the university of Reading as having created the scheme. He also asked why we could not create Hong Kong in Glasgow or, presumably, Singapore in Streatham. The reason why the Government's policy is so unsoundly based in that respect is that we cannot do so unless, as in Hong Kong and other South-East Asian countries, we have wages that are a quarter or a fifth those in Britain.
  That cannot be done unless you want virtually no social services or welfare society; virtually no public health service; virtually no trade unions or genuine trade union rights; or a 50-hour week or more, as is the case in Hong Kong and Singapore. That would worsen unemployment outside the enterprise zones, especially in a period of rising technological employment. It also cannot be done unless you want to consider the employment of child labour, as is still notoriously the case in Hong Kong—a Crown colony—and unless you also want to consider—
  Mr. Deputy Speaker: Order. I do not want to consider any of those things.
  Mr. Holland: I apologise, Mr. Deputy Speaker. It cannot be done unless Ministers wish to consider police repression, as is the case in South-East Asia and Latin America, bordering on Fascism. That was recently cited in a report in The Guardian on Hong Kong, where in cases of civil disturbance the police shoot first with live ammunition and ask questions afterwards.
  Tragically, while most people in their right mind would dismiss such options—either in respect of inner city disturbance or direct or indirect repression on wages or labour—as a response to economic crisis, it appears that this is the road down which the Government are going. Their increased expenditure centres almost exclusively on the police and armaments.
  What is the feasible way out for the Government in relation to the economy? First, they must reflate the economy, for the reasons that I have given in relation to the fact that public spending sustains rather than drains the private sector. Secondly, they must reverse the cuts in rate support grant in inner city areas because, again, the spending generated by rate support grant benefits directly those receiving the income and indirectly those who receive it when it is spent. Thirdly, they must face the issue of capital outflow—the £1 billion per quarter, or £4 billion per year, going out of this country at a time when we are told that we cannot possibly have as much as £1 billion reflation—which is only one-half of 1 per cent. of national income—for the regeneration of inner city areas and problem regions.
  In addition, we need homes and housing programmes, not office development. I have given the figures on this. In London alone, nearly ½ million houses are in need of repair and modernisation while nearly ½ million workers are unemployed.
  A further factor should be considered by the Government and may I believe, shortly come before the House. Instead of a policy of enterprise zones, instead of trying vainly to recreate the conditions of exploitation

  665
  obtaining in some less developed countries, the Government should support those councils which wish directly to intervene in the economy through municipal enterprise. This mechanism has major potential for the regeneration of employment in inner city areas.
  In this context, there are councils such as Sheffield which are interested in the extension of municipal enterprise agencies, and in London there is the Greater London Enterprise Board. Given the powers, and a clear endorsement of those powers by the House, that board could be in a position to spend £200 million to £300 million per year in the Greater London area within two or three years. This would be on direct job creation schemes, overcoming some of the problems of small and medium sized enterprises which are so gravely afflicted by the economic crisis—that is to say, the firms which not only find themselves squeezed by larger enterprises in the system but which have not the export ability or organisation to penetrate foreign markets in a period of intensified economic crisis.
  The enterprise board proposals made by the current Greater London Council administration include the provision for direct municipal enterprise, that is to say ownership of an individual company by the council's enterprise board. They also include provisions to promote co-operative development. In addition, there are provisions to assist private enterprise where the private sector cannot help itself—for example, in the promotion of exports in foreign markets. This would be by joint export representation of small and medium sized firms which cannot themselves afford representation in markets such as Scandinavia, Latin America and elsewhere.
  If the Government will not change their minds on other issues, I hope that they will at least be prepared to give a different response when these proposals are more widely argued, and when the GLC may wish to come to the House for wider powers. If they do not give those powers and support positive initiatives of this kind while intervening negatively in response to economic and social crisis in the inner city areas, they should not be surprised if the reaction to the slump syndrome in this country, to which they by their own policies have contributed so greatly, is the aggravation of grave social tension in the country as a whole.
  4.10 am
  Mr. Ronald W. Brown: My hon. Friend the Member for Vauxhall (Mr. Holland) has pinched half of my speech. Although I supoort his view of the enterprise boards, many of the London boroughs have already started to do a great amount of work in this area. Many of the business promotion groups such as we have in Hackney have done a great deal to recover as much as possible from the disasters that have befallen us since the Conservative Party took over n 1979. We should pay tribute to such work.
  From time to time, Mr. Deputy Speaker, you have pointed out that this is not a wide-ranging debate, but London has one-sixth of Britain's population, therefore, not surprisingly, it plays an important part in our economy. We welcome the Chief Secretary to the debate. In previous debates we have been given the monkey rather than the organ grinder. We now have the organ grinder with us and we are looking forward to great things from him. Inevitably, other Ministers have argued that if only they had control of the Treasury they would help us out. As they
  666
  have had only a certain amount of money, they have said that it was a case of transferring money from A to B, and B to C. Somehow, London has always been the loser. Therefore, we are delighted to welcome the Chief Secretary to the debate. We expect great things from him. His view should be clear.
  The rate of unemployment in London is unacceptable. This evening's edition of The New Standard illustrates that point. It states:
  "In London alone 12,330 teenagers are chasing 761 job vacancies".
  No one in his right mind would regard that as acceptable. We are told that unemployment stands at 2,800,000, but, we all know that that is a fraudulent figure. The real figure is 3 million or more. The statistics for June have been read out. They show the number of those who have not reregistered. Therefore, we know that the figure is much nearer 3 million.
  Things would not be so bad if I thought that the Government had some strategy and that unemployment fitted into some future grand design. However, the Government are destroying not only jobs but whole industries. The textile, clothing, footwear, and furniture industries are in trouble. I have had each of those industries in my constituency. I have spent the last two years doing the round of Ministers, pointing out that each of those industries was fading away. Ministers are very kind and helpful, but they say that the Treasury controls the money and will not help. I hope that the Chief Secretary will tell us his strategy and why the destruction of the textile, clothing, footwear and furniture industries is part of the grand design.
  According to today's edition of the Financial Times, the Prime Minister addressed the 1922 Committee last night and said:
  "I still believe we will be successful in our economic and other policies, but it is now or never, and we must go through with it".
  I do not know what "it" is. If that means destroying industry after industry, the right hon. Lady has mislead herself and the 1922 Committee by saying that her policies will be successful. She then said:
  "I believe we are coming through it now".
  What is "it"? I know which part the right hon. Lady is coming through. I also know what is happening, from one end to the other, in Hackney. The situation is disastrous. Is that what she means by
  "I believe we are coming through it now"?
  In a pertinent phrase, the Prime Minister was reported to have said:
  "Next year we will see an improvement."
  The right hon. Lady has been saying that since 1979. I recall appearing in a television programme in 1979, a few days before the election, together with the hon. Member for Basingstoke (Mr. Mitchell), representing the Conservatives, and Baroness Seear, for the Liberals. There was a hand-picked audience of 400 of all the political parties. I took the opportunity to describe what I thought would happen in the event of a Conservative victory. I am scandalised when I think of the outrageous predictions that I made. The hon. Member for Basingstoke was most upset.
  I told the audience that by 1980 there would be 2.5 million unemployed. One could hardly imagine a more unreasonable and disgusting remark. I also said a most disgraceful thing—that by 1980, VAT, then 8 per cent., would have been increased to 15 per cent. I predicted

  667
  increases in the price of tobacco, beer and spirits, rent and rates, electricity, gas and water. The hon. Member for Basingstoke upbraided me for making these outrageous and totally untrue allegations. My reply was that £4,000 million could not be given back to taxpayers without taking such action. The hon. Gentleman described my view as nonsense. The tax reductions, I was told, would provide a great incentive and the Government would be heading hell-for-leather towards growth. I replied that his view was nonsense, but he was adamant. The electorate bought the hon. Gentleman's story rather than mine.
  I cannot today accept the recession argument. The hon. Gentleman was anxious to inform me during that television programme that there was no such thing as recession. I was accused of always finding fault and describing anything that happened to go wrong as a recession. I do not understand, therefore, what the Prime Minister means when she talks about the problem of recession. According to her acolytes at the time of the election, there was no recession. It is no worse now than it was then.
  Hon. Members are entitled to be told why people were misled in 1979. Those who forecast what would happen up to 1981 were described as tellers of untruths by Tory pundits at the time. An explanation is required when it transpires that we were right and they were wrong. The Treasury is leading the attack on the fabric of society. Its attack is based on a wish to get rid of the Welfare State that has existed since 1945. There is no house building in Hackney, despite a waiting list of 16,000 families. People are told that they must look after themselves. The Government seek to establish the concept of the shorthold, the equivalent of the old furnished tenancies of past years.
  People are also told that they cannot receive a pill for every ill and that they must look after their own health. For those who cannot afford to pay, there will be the infirmary. For those who are hungry and have no money, there is the workhouse—except of course, that there is today no workhouse. Two weeks ago a massive queue of 500 people formed in Hackney. I asked the photographer from the local newspaper whether he would care to take a photograph of the queue and publish it alongside the photograph of the Conservative election poster of 1979, for which hundreds of actors had to be paid because there were insufficient unemployed wanting to be paid. They were able to get actors to do the job. But on Friday a week ago there were 500 people there who were not acting. They were genuinely unemployed.
  Why were those people queueing in Hackney outside the town hall? They were there because of the refusal of the Department of Employment to pay them their unemployment benefit. The Department of Employment sent them to the Department of Health and Social Security. When they went to the DHSS, they found that they were not to be paid there either. They were finally forced to go elsewhere to try to find some means of support. It was only because we were able to intervene and get the local authority to come to the aid of those people that they got any money. I pay tribute to Hackney council. This very day claimants are obtaining only a proportion of the money to which they are entitled.
  I hope that we shall hear from the Chief Secretary what money he is making available for those people to be properly paid, because they are entitled to have their full
  668
  benefits, which they are not getting. Rather than tell us a long story about how inflation has got to be reduced, he must tell us exactly how people are to live. There is no point in having long discussions about the state of the country and what causes civil turmoil if the Government deliberately go about creating the circumstances that bring it about.
  Young people leaving school today want jobs, but what has the Treasury done? It has decided that they cannot sign on at the employment office until after 7 September. The theory is that it is possible that they will deliberately leave school today, sign on for benefit until 7 September and then return to school. I do not know what the Treasury believes it is doing, but in Hackney I have been to the headmistresses and headmasters of the schools, who tell me that many of the young people left school at Easter in order to beat the ban that was put on them to stop them claiming their benefit. The result was that those young people failed to obtain their O-levels and A-levels because they left school before they should have done in order to obtain their benefit from the employment office. Those who have not left will not be able to get a job, nor will they be able to get any sort of subsistence. The numbers of unemployed in Hackney are very high, and even when the unemployed were in work their earnings were very low.
  There are now large numbers of young people roaming the streets, with no means of support. I wonder what the Chief Secretary thinks will happen. Does he need it to be spelt out for him before he can understand the sort of thing that will be brought about by this policy? I find it impossible to understand the mentality. It is no good claiming that it is only the minutiae or that it is somebody else's responsibility—that it is the responsibility of the Department of Employment or of the DHSS. It is the Treasury's responsibility, since it has drawn up the grand design and fitted everybody in.
  When I hear about the Secretary of State for the Environment going to Liverpool, I recall the saying that we have in Hackney:
  "Wiv a ladder and some glasses You could see the 'ackney Marshes, If it wasn't for the 'ouses in between".
  All the Secretary of State needed in Marsham Street was a pair of binoculars, and he could have seen the whole of the problems of the inner cities. He could have seen them from his office, without all the facade and pretence of going to look at the problems in Liverpool or Toxteth. He could have done it at any time.
  The problem has been with us for a long time, but it is in London where the right hon. Gentleman has never bothered to take an interest. He knows about London because we have argued and discussed it in the House many times and he and his Ministers have replied to debates. They know about the problems, and that is confirmed by Hansard, but how did the Secretary of State approach the matter? First, he withdrew £400 million from London, which was his contribution to helping the inner city problem. In Liverpool he says that his cheque book is closed. If it is closed, why did he take money away? He has had his cheque book open and he has been throwing money away to the shires.
  There is no credibility in the Secretary of State going to Liverpool, because everyone knows what he will say when he returns—that the journey was unnecessary. If he stays for two, three or four weeks the story will be the same. I could write the headlines when he returns. He will

  669
  be crying about the problems, but at the end of the day he will not give any help, except by taking money away from London again.
  We are already hearing stories to the effect that the Secretary of State will impose further penalties on the London boroughs. He is at present in the courts because in the eyes of the eight London boroughs he has acted unreasonably. If by some chance he should escape on a technicality and he has not, in the eyes of the judge, acted unreasonably, I guess that he will redistribute that money to Liverpool. Therefore he will impose penalties on Hackney, for example, and the GLC. He cannot take much more from the ILEA, because he does not give it any money now. Once more London will suffer by not having sufficient money to carry out its work.
  The Treasury has an obligation to tell us how it believes that it is possible to control the problems in the inner London boroughs and how it believes we can recover from the disasters that we face. I do not believe that we can recover in a year, or even two years.
  What is the strategy? What does the Prime Minister mean when she says that next year we shall get inflation down? Down to what? It was only 8 per cent. when the Government took office. Are they saying that it will go down below 8 per cent.?
  Mr. Clinton Davis: It was 8·5 per cent.
  Mr. Brown: It may have been 8·5 per cent., but that was all it was. When it was increased to 20 per cent. by the Government—
  Mr. Clinton Davis: More.
  Mr. Brown: Indeed, it was more; that is true. But now it is a great virtue. The Government are starting to bring inflation down, as if they had done something great. It is put up and brought down, and that is a virtue. Even if it were to come down to the point where the Government began to push it up, what would we gain? How can it be argued that we have inflation under control? It was under control before.
  As the Minister knows, his Department brought out what I call the new Tory fiddle factor. The RPI was showing the wrong answers to the questions being asked. It was showing that the Government were pushing the rate of inflation up too high, so they produced a new figure, the TPI, to pretend that matters were not as bad as they really were. We had to take taxation into account. Where is that figure now? What is happening? There is still a large gap and the TPI shows a different picture from that shown by the RPI. One has a clear intimation of the way that the Treasury operates. It pretends that what is fact is not fact but that it is all mythology. Therefore, when we talk about bringing down and controlling the rate of inflation, we discuss what is, in effect, a piece of jiggery-pokery.
  The Chief Secretary has an opportunity tonight to explain to the House the Treasury's strategy for developing the country, what is this inflation that Ministers talk about, and why it went up from 8 per cent. to above 20 per cent. They think that they are bringing it down to 11 or 12 per cent. They are not quite sure. It may go up again in August and then come down in September, when we shall see the light at the end of the tunnel.
  Only two months have passed since every Minister had his small package. I referred to it during our last debate
  670
  on London. There was evidence that every Tory hierchical man was given a package which he was to go out to sell. We had Ministers going round the country talking about the recovery that was there, and Ministers in the other place and Tory Party members up and down the country all told the same story. Suddenly it has fallen apart. We do not hear it any more. I am glad that I put it on record at the time to show exactly how this piece of party political claptrap was being organised and orchestrated to try to pretend that our circumstances were not as bad as they appeared.
  That is why we have reached the stage of treating this Government with contempt. They have done nothing but cheat. They misled the people in 1979 deliberately. Those of us who tried to show the facts were accused of telling untruths, when we had put matters fairly and squarely before the people.
  The Government have pretended that the present circumstances are not of their own making but have come from outside, when we know that they are of their own making. It is no good their talking about unemployment in America and in France. We were saying that in 1978, and in the Hansard volumes of those days we can read the reactions of the then Tory Opposition. They screamed that it was no good blaming everyone else, including the weather and God, and that it was all the fault of the Labour Government and their inadequate policies. I did not accept that then, but I am prepared to accept it now, because all our ills are of the Tory Government's making.
  The Tories gained power by deliberately cheating the people; and the country will never forgive them for their behaviour. I do not know how much the Government think that they have profited by it, but we have to hang on to our belief that unless we can get the country back into economic shape, there is no future at all for our people.
  I hope that this debate will at least highlight to the country exactly where the responsibility lies and on whom the responsibility can be pinned for the Treasury's insistence on pursuing its monetarist policy. It is the economics of the madhouse, and our country is being destroyed in the process.
  Somehow, the Government have to be stopped. Either they can be stopped in this House in a democratic way or, if we are not careful, they will find themselves being stopped in another way, and we shall then have another discussion about how it all came about.
  The responsibility is clearly and squarely on the Government's shoulders, and in that Government it must be the Treasury that takes the maximum responsibility for pursuing this total absurdity of a policy. It must be clear to the Chief Secretary that the nonsense that he and his right hon. Friends are pursuing gives them no mandate in the country. I do not believe that they have the right to run the country into the ground. There is no mandate for the Government to destroy industry, to destroy the social fabric of society, to turn people into a state of total despair and frustration, and to ensure that our young people leave school quite unable to get work and totally unable to do anything of merit. Not only those with no skills, but those with the highest skills are finding it almost impossible to get jobs. Therefore, it is a recipe for disaster.
  I hope that the Government will take the view that they must now turn back from this nonsense and realise that their responsibility is not to their doctrinaire Tory politics., but to the country. They are at the helm. The country demands and deserves better treatment than it is getting.

  671
  The Government must do something to provide the jobs, homes, schools and hospitals that people want. Give them a chance, and this country can become great again.
  4.35 am
  Mr. Peter Shore: I intervene briefly, not to bring the debate to a conclusion, but to pick up the line of argument that has been developed forcefully by a succession of Opposition Members.
  I do not think that the subject of this debate is in any way out of line with the speeches that have been made. Indeed, if they were out of order, you, Mr. Deputy Speaker, would have rebuked hon. Members. The debate is entitled "The management of the economy", whereas my hon. Friends have been speaking about the mismanagement of the economy. It is not a joke. If the Chief Secretary had listened with sympathetic understanding to the speeches that have been made, he would not have found anything humorous in them.
  The implications of the mismanagement of the economy in this first great recession of the post-war period are felt far more strongly in our major urban areas than anywhere else in the country. No one who drove around England in the late 1970s and early 1980s, despite the fact that the recession was growing in those years—but it has intensified enormously in the last two years—could have any doubt but that, contrasted with the recession of the 1930s, the cities have taken the brunt of the recession. The recession of 50 years ago was more widespread; it was reflected throughout the countryside as well as in our great urban areas. That is not so today. It is heavily concentrated on our cities.
  We are concerned about unemployment and the location of unemployment, which is very much a problem in the inner cities. We know only too well how unemployment is affecting the whole country. It is no longer a question of the North-South division; it is a virtually countrywide phenomenon. The unemployment figure published earlier this week of 2·8 million is vivid and fresh in our minds. Looking at the figure in more detail, it is interesting, but deplorable and unusual, to note that in Greater London, which is given separately, 304,000 men and women—8 per cent. of London's working population—are now jobless. The point we need to stress is that made by my hon. Friends the Members for Tooting (Mr. Cox), Hackney, Central (Mr. Davis), Hackney, South and Shoreditch (Mr. Brown), and Vauxhall (Mr. Holland). They have spoken of the same thing—unemployment, blight, deprivation—in the inner city areas.
  I have some knowledge of and acquaintanceship with this problem because when I was Secretary of State for the Environment four years ago it was clear to me that the inner cities needed a new policy and a new emphasis in Government policy. It was for that reason that we set up the special partnership arrangements. It is interesting to note that, on the best and most objective analysis of the city areas in the greatest need, seven were selected for special partnership arrangements, three of which were in London. There were schemes set up in Manchester, Liverpool, Birmingham, Newcastle and Tyneside, and in inner London there were schemes for Lambeth, Islington and Hackney boroughs and the London docklands area, including my own borough of Tower Hamlets, and
  672
  Southwark and a great part of Newham as well as parts of Lewisham and Greenwich. These areas almost selected themselves because on all the indices of deprivation—and we used as many as we could—they clearly suffered a scale and intensity of deprivation and unemployment greater than elsewhere.
  It was perfectly plain, looking at the unemployment figures for the areas, that they were exceptionally high. My hon. Friend the Member for Hackney, Central referred to 16 per cent. unemployment in Hackney. In Stepney and Poplar, unemployment among men today is 25 per cent.—an extraordinary and appalling figure. While these figures have, in nearly all cases, doubled during the period of this Government's misrule, they were startlingly high figures four or five years ago.
  For these reasons, we deliberately attempted to direct resources to what we considered to be the areas of outstanding need. That is why we used the needs formula in determining the rate support grant and that is why substantial additional resources flowed to the areas where inner city problems were at their most serious. For the same reasons we made available greatly increased inner urban area grants for the partnership areas, introduced the Inner Urban Areas Act, and gave substantial powers to local authorities in those areas particularly to assist industry.
  What has happened in the last two years is a clear indication that there has been a massive switch in the direction of local authority rate support grant. My hon. Friend the Member for Hackney, South and Shoreditch spoke of a figure of £400 million.
  Mr. Nigel Spearing: That was a conservative figure.
  Mr. Shore: That is a massive figure. There is still a little uncertainty because the formulae that have been used are still under challenge. Nevertheless, large resources have been moved. It is not only from London. The other partnership areas, indeed all the major city areas, have suffered from the deliberate redirection of rate support grant to the shire counties. That is a political decision and a bad decision. The formula used was a bad formula and it is one of the most disagreeable aspects of general Government policy.
  As we are debating the mangagement of the economy on the same day as we have had a statement on the conclusions of the conference of the Seven in Ottawa, it is right to make a connection and to ask one or two questions. The declaration that came out of the Ottawa summit is not likely to excite its readers, but there was a sentence in it to which the House's attention should be directed. Paragraph 4 of the Communiqué states;
  "The fight to bring down inflation and reduce unemployment must be our highest priority and these linked problems must be tackled at the same time."
  I wish to make two points about that. The first is the obvious one that in the communiqu?é inflation and unemployment are placed on a par as problems of the highest priority. That is perhaps a significant development.
  Earlier this week we completed the Third Reading of the Finance Bill and, in dealing with the relative importance of employment and inflation, the Chief Secretary said:
  "We have put at the forefront the goal of reducing inflation by responsible monetary control because by doing that we are tackling the problem that has been at the heart of our trouble."

  673
  I stress the point by quoting what the right hon. and learned Gentleman said later:
  "Taken as a whole, the provisions in the Bill are designed to consolidate our progress in reducing the rate of inflation and to carry forward our anti-inflationary strategy."
  There is no question about what has priority in the Finance Bill, but that is clearly not the same as the statement in the Ottawa communiqué.
  The second point about the communiqué is that not only are inflation and unemployment problems of equal priority, but they are linked problems that must be tackled at the same time. It is clear that, in the view of the Government and the Chief Secretary, they are not to be tackled together. It is the Government's erroneous belief that we cannot do anything about unemployment until we have dealt with the problem of inflation. The Chief Secretary and other Ministers have said that time and again. The right hon. and learned Gentleman said on Third Reading of the Finance Bill:
  "It will, of course, take time for these policies"—
  the anti-inflation policies—
  "to bear fruit in terms of higher output and productivity and lower unemployment."—[Official Report, 20 July 1981; Vol. 9, c. 80–81.]
  It is clear that in the Chief Secretary's mind the order of priority and timing is to deal with inflation first and unemployment second. The Ottawa communiqué says that they are of equal priority and must be dealt with at the same time. It would be interesting to know whether that represents a change of policy or whether the words of the communiqué are virtually worthless and meaningless. I look forward to the Chief Secretary's reply. That pleasure may be ours. I hope that he will have something encouraging to say.
  There is one other matter that I want to put to him, because it is relevant to this debate. Those of us who are concerned about the national economy are much preoccupied with the stimulus that might be given, if economic circumstances improve, to industry and, thus, to job creation. It is the lack of jobs and the destruction of jobs that have been so devastating, nowhere more devastating than in large cities, and no more so in the large cities than in this capital city of London. Therefore, we want to know the outlook for the British economy and British industry.
  I shall again link my comments with the Ottawa summit. Before the meeting took place we were told that one of the major purposes of Ottawa was for the European countries to talk to the United States Administration, meet President Reagan for the first time, have serious economic conversations with him, and to try to persuade the Americans not to pursue policies of exceptionally high interest rates. I believe that the current main lending rate in the United States is 22 per cent. That is extraordinarily high by any standards. The United States has used methods of monetary control which have relied heavily on large and short-term movements in interest rates.
  The Government have tried to justify their economic strategy for this year—indeed, it is the only justification for what we consider to be a massive fiscal deflation—on the ground that, by deflating the economy through fiscal measures, there was the possibility that interest rates could be brought down. The achievement of an interest rate of 12 per cent. is something in which the Government take some pride. I must say that I thought it a somewhat modest achievement, but nevertheless that is the achievement to which they lay claim.
  674
  What is happening to interest rates in this country? The MLR remains at 12 per cent. However, the Chief Secretary knows very well that interest rates, other than the minimum lending rate, have gone up and show signs of going further. The last time that I looked at the short-term rates—the three-month rate and others—they were not 12 per cent. but 14½ per cent. In effect, interest rates, although not yet bank lending rates or the MLR, are now moving substantially above the MLR. I should like to know whether the Chief Secretary's earlier hopes of first reducing the MLR to 12 per cent. and then getting further reductions in interest rates have now been abandoned, and whether we are entering a period in which our interest rates will rise again.
  If that is so, we shall have the last of the series of failures in the Government's handling of the British economy, with inflation still running at a level above that which the Government inherited, with unemployment well over double what it was two years ago, with industrial output between 18 per cent. and 20 per cent. lower than it was two years ago and with our GNP about 6½ per cent. or 7 per cent. lower than it was two years ago. If interest rates, instead of being at the same level as two years ago, are going higher, that is the final and conclusive evidence of the total failure of the Government's economic policy and of their mismanagement of the British economy.
  4.55 am
  Dr. Oonagh McDonald: The Government have provided, particularly from the mouth of the Prime Minister, two excuses for the decline in industry and for the decline in the economy. One is that the British worker is pricing himself out of a job. The other is the low level of productivity. I shall examine the two excuses in relation to the shoe industry, which is only one of a number which are suffering greatly at the hands of the Government and the way in which they are handling the economy.
  Let us take first the question of the British worker pricing himself out of a job. The Prime Minister ignores the way in which other workers are obliged to work in different parts of the world. Let us compare the production of leisure shoes in Britain and in South Korea. When one compares the basic working week in South Korea and Britain one begins to understand the differences in output and the lower unit costs. The basic working day in South Korea is 10 hours. The basic working week is, therefore, much longer than it is here. Wages average £16 a week, Continuous production means that the factories work a 160-hour week. In Italy for shoes such as moccasins the, outwork is done by women and, notoriously, by children under 14 years of age.
  When such factors are taken into account, it is nonsense to say that the British worker is pricing himself out of a job. I do not believe that the Prime Minister wants to put the clock back and lengthen the working day or reduce the age at which children can enter employment. Therefore, to make glib statements about the British worker is futile and does not get to the root of the problem.
  Shoe imports pour into Britain. It is not simply a question of lower wages and therefore lower unit costs in terms of the wages element. There are other subsidies. Taiwan gives preferential rates of credit and lower shipping costs apply. The ex-factory price of South Korean shoes might be £3·20 whereas the ex-factory price of similar shoes would be £7 if made in Britain. That means that there is an enormous difference in the retail

  675
  price. For that reason, the shoe industry has suffered greatly from imports, of cheap and high quality shoes, many of which come from Italy.
  In making their excuses, the Government fail to take on board the fact that the shoe industry faces one of the most unfair trading climates faced by any major British industry. Most of Britain's competitors have introduced import controls in one form or another. For example, the chairman of the federation of shoe manufacturers recently pointed out that Italy has introduced an import deposit scheme on British imports, even though it sells 60 pairs of shoes in Britain for every one pair that we manage to sell in Italy. Three-quarters of the footwear capacity around the world is protected, while Britain, with a low tariff barrier, freely admits shoes from any part of the world.
  The Government in their management—or mismanagement, as my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) said—of the economy choose to disregard that fact entirely and fail to impose import controls to protect industries that urgently need protecting. Their decline is the cause of serious unemployment in parts of London and also in my constituency.
  I hesitate to describe the shoe factory in my constituency as large. The numbers employed there have declined rapidly during the past two years from more than 1,000 to 667, with 100 more on redundancy notices. Those may come into effect in November of this year. Fifty per cent. of the work force are on short-time working of two days a week. Yet that company has recently invested £500,000 in equipment to make specialised products. It has done that entirely from its own resources because in March the Government brought to an end the special scheme to aid capital investment projects.
  The Government are ignoring the cries from British shoe manufacturers for a special incentive scheme to improve the design of British shoes to enable us to compete more effectively with the Italian and Spanish shoes. The industry is in rapid decline, and 6,000 jobs were lost in 1980 alone. The Government have refused to take on board the demands for a special scheme.
  The industry is suffering not only from the Government's failure in those respects, but from the overall impact of Government policy, such as raising VAT from 8 per cent. to 15 per cent. It is also suffering from the pressure of consumer spending. It sold more shoes in 1978 when a Labour Government were in power, and when consumer spending had reached a high level. Since this Government came to power, having made promises to put money in the pockets of individuals so that they could choose how to spend their resources, consumers have had less and less to spend. The impact of the sharp decline in consumer demand has been felt not only in the footwear industry but in other industries in my constituency. It has, left the industry with a sharp reduction in its work force and sales, with the expectation of more redundancies to come.
  Due not to any particular effort by the Government but rather to President Reagan's efforts, the pound has declined against the dollar. That has eased certain aspects of industry. It has eased the paper industry. It has eased the difficulties of those who have to import raw materials, especially those that are priced in dollars. The main problem is that the value of the pound has not declined
  676
  against European currencies. The shoe industry, like other industries, has to compete with European currencies. It is suffering from the Government's policy of pursuing a high-level pound.
  The Government refuse to accept any responsibility for the level of the pound. They say that it is all due to market forces. They try to ignore the assessment of market forces when the pound begins to decline against the dollar. They refuse to do anything about the level of the pound against the European currencies and refuse, therefore, to help British industry to export to the great and wonderful market which we are supposed to have in the European Community and which, unfortunately, we are unable to exploit.
  No doubt the Treasury, which is wrestling with the Department of Employment over its demands for more money, will say that the Department of Employment has already overspent on schemes which help the footwear industry as well as other industries such as textiles and furniture, which are suffering especially. It has overspent by about £200 million on the temporary short-time working compensation scheme. The Government have made the scheme far less effective. They have reduced the proportion of wages met out of the scheme from 75 per cent. to 50 per cent. That is creating special difficulties for firms such as the footwear firm in my constituency. Compensation at 75 per cent. would mean the retention of more jobs in that firm. The reduction in the payment of compensation from 12 months to nine months and delays in the processing of applications which firms make for compensation all create more and more difficulties and mean that more and more jobs disappear.
  The Treasury is determined to pursue its short-sighted policy. It would rather pay out unemployment benefit and social security benefits than invest in jobs, in support schemes for industry directly, or through the existing employment measures which have been reduced in their effectiveness. It would rather fend off the demands of the Department of Employment for money and pay youngsters to lounge around the streets and get into serious outbreaks of rioting and disturbances. It would rather pursue that blinkered policy than look for effective means of preserving jobs and getting Britain through the recession from which many countries are suffering.
  We plead with the Chief Secretary to listen, to open the eyes of the Treasury and to consider more effective ways of spending money in the immediate future so that jobs can be preserved and people can be kept out of civil disturbances and riots on the streets. That is what we ask the right hon. and learned Gentleman to do, and that is what we want him to tell us in reply he will do.
  5.9 am
  Mr. Nigel Spearing: The keynote of the speeches of my hon. Friends is impending disaster. One is reminded of the stalling speed of an aeroplane. I shall draw to the attention of the Chief Secretary matters as they are seen from my constituency in East London. If what I say appears slightly naive and perhaps on occasions mistaken, the right hon. and learned Gentleman must understand that I am expressing the views of many of my constituents. I hope that he will correct any factual errors when he replies and perhaps comment on some of the matters to which I refer. They knit together and enlarge upon some of the factors that my hon. Friends have mentioned.

  677
  We are talking about the Treasury and its responsibility for the efficiency of the national economy. The Vote for the Treasury in the Consolidated Fund is to ensure that it looks after the national economy properly and is accountable for it. The Chief Secretary and the Chancellor of the Exchequer have two main tasks: the economic management of the country as a whole, and the management of public money in particular. It so happens that their theories knit the two together. What they do not have responsibility for—the Treasury never has had, except in the figure of the Prime Minister as First Lord of the Treasury—is the effects of their actions on the ground. Other Ministries in Whitehall—Environment, Industry and so on—have to meet the results. If the Treasury gets the theory wrong, someone else sweeps up the bits.
  The Government's theory when they swept into power, as outlined by some of my hon. Friends, was that we should reduce public expenditure and make those resources available for private industry and enterprise in the economy, and it would blossom and flourish like the rose. All we had to do was ensure that the money supply was kept in control, which meant that inflation would be kept under control as well. In brief but blunt terms, that is what the Conservatives said to the country in 1979.
  As recently as February 1980, the Prime Minister said to Mr. Brian Walden on television that she would have liked to see public expenditure cut by another £2 billion a year so that the money could be invested in productive industry. That is what she was saying, even 18 months ago. I do not know where she has been as First Lord of the Treasury, to assume that any reduction in public expenditure would result in investment not only in the United Kingdom, but in productive industry. There are no grounds for saying that. The right hon. Lady must be living in cloud-cuckoo-land to make such statements. She believes that the smaller the size of the public sector in the economy and the larger the market economy, the better. However, that is taken one stage further by the Prime Minister and her Government. The market economy is not just to be let loose in Britain, but is to be seen on a world-wide basis. We are to play our part in that and we must produce, become more efficient and pay our way in an international rat race.
  If I have misinterpreted or in any way gone wrong, I hope that the Chief Secretary will intervene or, when he replies, will say where I have perhaps not got it right. That is how the economy is seen by the man in the street. Today, in our democracy, the man in the street is being asked to make sacrifices and he has to try to understand these matters. I believe that he understands them more than the Government realize.
  At once in my area we are confronted with enormous and strange anomalies. The Beckton area of my constituency was about to be converted into virtually a pocket-sized town. There was to be private housing and public housing in a mix agreed even by the Tory GLC at one time. Now all that is in the melting pot, and land which was to be used for public building will be given to the new docklands corporation by an Order in Council coming before the House next Thursday. Instead of having a certain number of public sector houses, we are told that we shall have some in the private, or perhaps housing association, sector. We have been told that priority may well be given to people in my constituency and Newham who wish to live in them, to purchase or to rent from the housing association.
  678
  I and my constituents believe that it may well be virtually the same sort of house. But money for the housing association will come from public funds. Even if it came from private funds, it would still be money, and the bricks would be the same bricks, and unemployed people in the area ought to be building those houses irrespective of who will own them.
  The Government are all against the public sector and all in favour of the private sector. Assuming the private sector housing is built, what is the difference in terms of the strain on the economy? Indeed, the money might well come out of the same pockets, because it could well come from pension funds which we are told are now bulging at the seams. But that money comes from wage earners—the same pocket from which taxes are collected. Why, therefore, do the Government make the great distinction between these two sectors, particularly in the case of Beckton?
  The anomaly between what is done by the private sector and the public sector, although important in terms of our own development, appears to many of my constituents to be arbitrary and unrealistic in economic terms. They do not know why they should say that one is good and the other bad. I hope that the right hon. and learned Gentleman—because this is the Treasury's theory—will state the difference between the two sectors in terms of the country's economic resources. We know the difference in terms of political philosophy. I am asking about the difference in terms of pure economics.
  My hon. Friends have pointed out that manufacturing industry throughout the country has been decimated. It has, certainly been decimated in London over the last few years, and the decline has rapidly set in. I shall not delay the House by going through the number of organisations and firms that have closed in my constituency, but no one yet knows how many young people leaving school this summer will get jobs. It is on the cards that in my constituency or elsewhere—probably both—youth unemployment in September or October will be up to by 30, 40 or 50 per cent. of school leavers, largely because much of existing industry has disappeared and that which is left cannot take people on because it is struggling along. The right hon. and learned Gentleman knows that just as well as I do. No doubt the same thing has been happening in the Chief Secretary's constituency, particularly on Teesside and Tyneside. It is the estuaries of Clydeside, Merseyside, Tyneside, Teesside and Thamesside—the Victorian areas of industrial enterprise—that are feeling it worst at present.
  My constituents are saying "We are not prospering as an industrial nation because we are importing so many cheap industrial products". They feel that the Government's attitude to laissez-faire economics is responsible and that their philosophy is to encourage such imports as part of the market economy.
  The assumption behind all this—I have had extensive correspondence about it with Ministers at the Department of Industry—is that it is quite all right because the fact that each country has its own advantages which it develops means that the resulting trade makes everyone better off. Ministers do not accept that some countries may have permanent advantages over others and that one cannot just do as the Prime Minister says and compete oneself into efficiency, for the very reason that my hon. Friend the Member for Thurrock (Dr. McDonald) pointed out. There are countries—not Third world countries or LDCs, which

  679
  are the concern of the Brandt report which is to be debated here in a few hours' time, but the newly industrialised countries—where the social, political and financial regimes meet in such a way that, combined with new industrial techniques, they will always undermine the older industries, at least on a free world market basis of competition.
  The idea that Britain should concentrate on those industries "at which it is most efficient" and export those may not, therefore, turn out to be correct because there may not be enough of those industries to do it. When it is pointed out that it cannot be done, the Prime Minister says that we must become efficient and compete. Some of her hon. Friends who are pressing on the question of wage levels argue that we should compete by reduction of wages, but no realistic reduction of wages, which are already low, would bring down costs in this country in such a way that it would be possible to compete. It just cannot be done.
  The Chief Secretary, although he is a lawyer, surely knows enough about economics and enough about this country to know that that cannot be done. Indeed, there is a great plot to try to keep from the country the fact that in many cases our wage levels are already low. I intervened in a recent speech by the Secretary of State for Employment when he claimed that increases in unit labour costs in this country had been very high. But unit labour costs include the productivity factor, which means that one is not just dealing with the cost of labour.
  To a large extent, we know why productivity in this country is low. It is because there has not been the investment in industry that there ought to have been. The Minister will say—and I perhaps have to agree—that that is because in the free market economy there are insufficient profits for the money to be available. If there are insufficient profits in manufacturing industry, where has the money been going? It has been going into land speculation, which produces very little. It merely bids up the cost of land, which must have an effect upon inflation. Indeed, I believe that it is possibly one of the major ingredients in inflation, but very little attention has been paid to it. It is simply a cess on the future. In a sense, the ownership of land is a future tollgate into the economy, but it does not produce anything. It is simply a matter of speculation and, I believe, an inbuilt inflationary factor. If the Treasury wishes to find the sources of inflation, it should look at land prices which over the past few years have consistently risen at a much higher rate than inflation. I believe that there is an inflationary mechanism there to which regular economists have not paid sufficient attention.
  What is this country being reduced to economically? It is being forced back on the few industries left which may be competitive in higher or middle technology and on its basic raw materials—oil at the moment, which will run out, and then perhaps coal. The economy of this country is becoming more and more akin to that of a primary producer rather than to that of an overall balanced industrial state, and the Government are presiding over that slide.
  In that process, it is the older areas which are hit first and most deeply, and it is those older areas which have the most worn-out social and industrial infrastructure. It is little wonder that they are beginning to curl up at the edges
  680
  like leaves and that it is those areas that are experiencing social troubles. The situation is even worse than that. Perhaps the Chief Secretary will pay attention. He and his Government are taking more money out of those areas than out of others. As has been said, £400 million is being taken out of London and out of many of the areas that I have mentioned. It is not a laughing matter. I am glad that the Chief Secretary seems to agree about that. At some stage he must face the consequences of the Government's nonsensical economic theories.
  Last night some people from my area spoke to me. They said that they did not agree with the things that were happening in the streets but that things were such that one day some people would say that the prospect of a general election was too distant. The Chief Secretary should understand the situation. If Eton and Harrow and the other 20 top public schools faced the prospect that 50 per cent. of their school leavers would not find jobs this summer, the Chief Secretary's hon. Friends would have a very different attitude.
  In Britain there is social insulation. As a result, when there is a short circuit, sparks fly. That is what has been happening in Merseyside. The Chief Secretary jerks back and does not seem to understand what I am talking about. That proves the point. Social perceptions in Britain are so separated from each other as a result of our educational and social backgrounds that no one realises that something is amiss until there is a short circuit in the machinery. In the last few weeks, we have blown the fuse in Manchester and on Merseyside. It is a great pity that Conservative Members did not listen to what we said and that a fuse has had to blow before they would look at the machine.
  The Secretary of State for the Environment has gone to Liverpool to see what is wrong with the fuse. He has been busy hotting up the circuit in such areas by taking money from the rate support grant. The London borough of Newham has been told that it is overspending by £8 million per annum. It has been told that it must cut the figure of £82 million to £74 million. To do that it must cut the very services on which these people most rely. Old people's home helps, library hours and so on are being cut. In cash terms, things are being cut to the bone. In the past year the borough, in an attempt to meet the Secretary of State's limits has even reduced its labour force by 7·8 per cent. by means of early retirement. By now, the Chief Secretary must know that those limits cannot be met. If they are, the social effects will be too great.
  The Secretary of State for Education and Science has sent a circular to local education authorities saying, on a quite unrealistic mathematical hypothesis, that they must close schools. In my area people are rightly pointing out that the Government have taken away our docks, ship repair industry and virtually all the staple industries of the area. They point out that the Government are now trying to close their schools. In order to save small amounts on caretaking and lighting, the Secretary of State is trying to do that. At the same time, he is destroying many of the community schools that fulfil one of the last remaining wholesome community institutions in our urban areas.
  The local authorities cannot be blamed because the Government are pressing them. However, confidence lessens. Conservative Members may rub their hands at the thought of having put their political opponents at a disadvantage. However, in the long run this action will rebound on the country and, in particular on them. It cannot be regarded as a successful political ploy.

  681
  I am not saying that the industrial base of the country was previously in a wholesome state. My argument is that the Government's economic theories have increased the difficulties that may have existed and have accelerated what may have been a deep and underlying trend. As the industrial base of the country shrivels, social tensions mount, especially in the areas about which I have spoken.
  This has been a debate partly about London and partly about economic management. I started by saying that the effects of economic management and Treasury theories are shown by actions on the ground. I have informed the Chief Secretary of where, in my experience and the experience of my constituents, the Government's theories are leading us. I hope that the right hon. and learned Gentleman, a logical and courteous man, will say whether I have represented at any stage the theories of the Treasury and the Prime Minister. The right hon. and learned Gentleman may feel that I have exaggerated in one or two respects, but I challenge him to say whether the picture I have painted of the economy and the inner urban areas is at fault.
  5.31 am
  Mr. Ted Graham: At 5.31 am and after three hours' debate, I do not intend to speak for too long. On a recent night, I was present in the House until a similar time. I echo the delight of my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown) at the fact that the Chief Secretary is in his place and that he has never left if since the debate began. We do not wish to say anything derogatory about his colleague the Under-Secretary of State for the Environment who normally graces these occasions. As the Chief Secretary will have noted, most of the speakers have been London Members. It is a pleasure also to have heard a contribution from our chief economic spokesman, my right hon. Friend the Member for Stepney and Poplar (Mr. Shore). London Members take a special interest in the economy as it affects London. Our job is to make sure that the interests of the people of London are protected within the limited powers available to Opposition Members.
  I wonder if the Chief Secretary and his colleagues, after two years in office, can feel satisfied that they occupy the exact position that they forecast in May 1979. My hon. Friends have demonstrated I believe, that after two years in office, the Government are responsible for a number of records. There is record stagnation in the house building programme throughout the country. There is not merely record unemployment but record mounting unemployment. No one can forecast where it will end. The Government refuse to say—rightly, I believe, because they simply do not know what to do to solve the problem.
  The Government are also responsible for record bankruptcies. The inflation record is no better than that inherited by the Government when they came to power. I have no doubt that the Chief Secretary will point to certain factors, present in 1979, for which the Government cannot be held responsible. As we move well into the mid-term of a Government we are entitled to look for some justification of their policy and for the delivery of their election promises. But on the economic front, the Government have failed time and time again to justify the bright promise that the Conservative Party gave to the electorate.
  No one would expect miracles from any incoming Government, but I suspect that many of those who voted
  682
  for the Conservative Party in May 1979 expected a miracle of a kind. To be fair, they were not promised miracles; they were promised improvements on the position at 3 May 1979. Goodness only knows, my Government did not do the electorate many favours during their five years in office, but in comparison with the past two years those five years will be looked upon as the good old days, not only by my constituents but by the people of this country.
  From the Government and from the Minister we are looking for some hope, but not in the terms of the Prime Minister last night to the 1922 Committee—that it may not have happened last year or this year but that next year it will happen. The Treasury colleagues of the Chief Secretary have already told us not that it will be next year but that the upturn has already started. We have seen very little evidence of it yet.
  As my hon. Friend the Member for Vauxhall (Mr. Holland) pointed out, so much that affects the private sector is crucially affected by the Government' policies on public expenditure. The house building programme has been slashed by 50 per cent. in the past two years. Estimates suggest that £14 billion needs to be spent on a backlog of repairs in housing, both local authority and private. I will not insult the Chief Secretary by saying that figures of that magnitude emerged after 3 May 1979, but I want him to show that he understands the problem. I want him to give us an indication that there is some hope, because the pervading mood among my constituents, when I speak to trade unionists, to industrialists, to managers or to any group, is one of pessimism and despair.
  My constituents and my constituency may be different from many others, but I doubt it. There is a mood of pessimism. The Chief Secretary may say that it is not right that people should despair, but I can speak from experience of their feelings.
  I should like to say something about the consequences of the Government's economic policy, particularly in regard to the environment. Reference has already been made—not least by my hon. Friend the Member for Newham, South (Mr. Spearing)—to the disastrous effect of Treasury policies, which are also Government policies, on the environment. We are meeting at a time of considerable concern in local government about the true intentions of the Government in respect of local government.
  The arguments are not about money; they are about power. The Government have decided, as a matter of policy, that they cannot afford to leave to locally elected men and women the right and the opportunity to govern their affairs in the way in which they and others for the past 100 years have sought to meet the needs of their local people.
  I quote an article from my local newspaper, the Enfield Gazette, which is headlined "Latest cuts a bitter pill'. There is listed a series of events. This is not the first cut but the second cut this year and it is not the first year but the third year in which there have been two rounds of cuts which have not been wished on my constituents by the councillors, but have been forced on the council by the Government.
  The article states:
  "Top spending department, education, has been told to find cuts amounting to £257,000.
  Parents using the council's full-time day facilities for children will find the charges doubled from October.
  The opening of Clay Hill House for the mentally ill in Enfield will be delayed by three months.

  683
  Many repairs to council-owned buildings will be put back. Only the most necessary will be budgeted for."
  We know that that means not only painting but renewal and also the non-renewal of electrical wires and such things, which can be dangerous.
  The Chief Secretary should take careful note of what is happening in local government. A strong supporter of his Government—my opponent when I was leader of the Enfield council—Councillor Young, the present leader of the council, is also quoted in the Enfield Gazette:
  "Councillor Young, like many of his Conservative colleagues, feels particularly bitter about this round of cuts because they have never been a high spending borough"
  That can be said again. Enfield has been one of the lowest spenders and has been bottom of many league tables in pupil-teacher ratios, spending money on books and so on. Councillor Young says:
  "We have seen boroughs spending far more than us escape this time round … Mr. Young led a delegation from Enfield to plead the borough's case with Local Government Minister Tom King".
  I was at that meeting and I know the type of response that he received. He said:
  "If the council do not succeed in making the full £1·5 million of cuts they will fall foul of the Government and lose valuable grants. They would then be forced to levy a supplementary rate."
  That is not a Labour-controlled council but a Conservative-controlled council which is doing its level best to conform to the Government's criteria.
  It is not merely councillors in the London boroughs who are concerned. Only last month, the newly-elected leader of the Association of County Councils, the leader of the Cambridgeshire county council said:
  "I am loyal to the Conservative Government but I will fight for the right of local Government. The ACC is the tool of the county councils, nothing less, nothing more and if the county councils want us to take a certain line of action I will respond. However loyal—and most are loyal to the Conservative Government, the ACC is a body for the county councils to use."
  I wonder whether the Government have taken it on board that whatever their economic imperatives they have forced them so determinedly and dogmatically that in effect they have lost not only their enemies, which we are, but their friends. They take no notice of us and they have not hesitated to inflict problems, damage and misery on our constituents. I believe that they should listen to their Conservative friends and local government.
  I believe, in a hackneyed phrase, that the local authorities are saying "Enough is enough." They can see by the Government's Lothian and Scottish legislation and the press releases, which are fairly well authenticated, that the Government are turning the screw more and more tightly on councillors such as Councillor Young and those in other Conservative-controlled authorities.
  I hope that the Government realise that what they are doing to local government and to our people not only is not to their credit but is sowing the seeds of greater unrest in London and throughout the country. An appalling decision is having to be faced by councillors, and this at a time when we read in our newspapers about possible supplementary rates and about the agony of councillors. Some of us attend meetings of local councillors, and we see them literally in agony trying to reconcile their mandate from the electors with the blunt statement of the Government that there are limits. There are limits to money, of course, but the local authorities need some understanding by the Government of their difficulty in
  684
  trying to reconcile the two imperatives of which I have spoken. What is more, the Government should know that these problems affect not only local councillors and not merely the leaders of the Labour-controlled GLC but the leaders of the Tory-controlled Enfield council and the county councils alike.
  The Chief Secretary has been given the opportunity by this debate to respond fully to the arguments of hon. Members. He has been given the opportunity primarily by London Members, but no Conservative London Member has contributed to the debate. I hope that the people of London will note that, when given the opportunity to speak on behalf of London, Conservative Members decided to leave it to the Chief Secretary and one other Conservative to represent the Government side of the House in this important debate.
  I hope that the Chief Secretary will respond to what I consider to have been a sober statement of the facts in London by my right hon. and hon. Friends. The position is desperate. We want not merely a response but an understanding that the Government have a strategy which is capable of being implemented successfully and carried on, and the assurance that it will not last only until a general election. When Labour regains power, as I believe we shall at the next general election, the problems facing us will, regrettably, be of 1945 proportions. I can assure the Chief Secretary that, if his Government do not take the opportunity to change their policies between now and then, a Labour Government will not hesitate to do so.
  5.47 am
  The Chief Secretary to the Treasury (Mr. Leon Brittan): The hon. Member for Edmonton (Mr. Graham) said with characteristic sincerity and courtesy that he sought a measure of hope from the Treasury Bench. However, I am sure that he will agree that no useful purpose is served by not presenting a realistic picture of where we stand and what the prospects are, and that true hope derives not from a rosy-tinted account but from a realistic picture, provided that that itself leads to the possibility of improvement.
  When the hon. Member talked about the bright promise of the Conservative Government's entry into office, I especially respected the fact that he made it clear that it was not the Government or those seeking to become the Government who presented any kind of extravagant promises. It was made clear at the outset that we took the view that the country's problems were deep-seated and would take a long time to put right.
  The hon. Member asked whether we were satisfied with the progress that had been made in that direction. It is a fair question. One is never satisfied. I do not pretend that our economy is in the shape that I should like to see. However, perhaps the hon. Gentleman would care to say, as a loyal supporter of the Labour Government, whether when his right hon. and hon. Friends were bundled out of office in 1979 after the winter of discontent they felt satisfied with the progress that they had made in their period in office. I make that comment to put matters in perspective.
  The debate has concentrated on London. Hon. Members who have taken part in the debate represent mainly London constituencies and have talked about London's problems. They did so under the guise of a debate on the Government's management of the economy. I make no complaint of the fact that they have particularly

  685
  described London's problems as they see them. They are entitled to do that. London's problems are not the same as those of the rest of the country, but they represent the problems of a substantial section of the country as a whole. Therefore, it is fair to look at them in considering where we stand generally.
  I know that I shall be forgiven for not dealing in detail with the problems of the Metropolis as such. But inevitably, when describing the various social problems in London, those who took part in the debate were, in effect, asking for more money to be spent. Apart from the somewhat abstruse theoretical arguments of the hon. Member for Vauxhall (Mr. Holland), which I did not for the most part find wholly persuasive—it seems to me that others did not find them wholly persuasive either—the suggestion essentially was that money was required.
  I do not deny that there are causes and objects in London, as elsewhere in the country—certainly in my constituency—on which money could usefully be spent. It has never been part of my case, as a supporter and protagonist of the Government's policy, to say that there is no need to spend any money and that there is nothing worth while on which to spend money. We do not say that at all. We say that we have to ask ourselves: can we, as a nation, afford to spend the amount that hon. Members have implicitly asked us to spend?
  What are the consequences of spending substantial sums—even more than we already spend? Let us not forget that Opposition Members talked about cuts. There have been cuts in certain areas, but the total level of public spending has not diminished. I am sure that Opposition Members, being fair-minded, would wish to bear that in mind at the same time.
  Mr. Clinton Davis: Will the right hon. and learned Gentleman give way?
  Mr. Brittan: I should like to make my speech. I did not seek to intervene in the debate earlier, and the hour is late for an extended debate. I listened with some patience to what has been said throughout the night. I do not think it is too much to ask the House to listen to the answer.
  When considering this matter, we have to ask: what are the consequences of levels of expenditure of the kind asked for? What is the way out from the recession in which we find ourselves?
  I should at this point refer to what the right hon. Member for Stepney and Poplar (Mr. Shore) said about the Ottawa communiqué. We can and do have an honest disagreement about the right policy to follow, but no useful purpose is served by any misunderstanding. I think that the right hon. Gentleman was reading more into the communiqué than it bore. I am not talking about the textual criticism. There is no useful purpose to be served in scrutinising it with that sort of magnifying glass.
  The right hon. Gentleman said that the communiqué stated that the fight to bring down inflation and unemployment should have the highest priority. Because the Government adhered to that phrase, the right hon. Gentleman made two proposals. The first was that there had been a change, in so far as the Government were a signatory to that communiqué, in that inflation and unemployment were placed on a par in terms of priorities. He also suggested that they should be tackled at the same time, whereas previously that had not been the view.
  The right hon. Gentleman prayed in aid one of my speeches in support of the opposite proposition and
  686
  suggested that this, if it was now the Government's position, showed a dramatic and recent change. That is not the case, because, although the right hon. Gentleman quoted my speech—I was flattered that he thought it merited a "revisit"—it is not quite the way I put it. I have readily said, if not in that speech in many others, that I regard unemployment as a terrible blot on our society. Representing the constituency that I do, I see no question of my not taking that view. I have even gone further and said that if I thought that there was an effective way in which we could tackle unemployment directly I would not be reluctant to go along that path. Placing inflation and unemployment on a par is no novelty for me.
  The question is: what is the way to bring about this desired object? What I said in my speech, to which the right hon. Gentleman was good enough to refer, but riot in the passage that he quoted, was that I did not think that inflation and unemployment were alternatives, so that we could choose whether to turn our fire on one or the other. Rather I regard inflation as the cause of unemployment and in giving priority to the battle against inflation, which is what the Government are doing, they are not saying that they regard unemployment as less important. They are saying, rightly or wrongly, that tackling inflation will be the best way, over a period of time, to deal with unemployment. That is a view which, I recognise, not everyone may share, but it is right to be clear about what we are saying.
  Mr. Shore: I want to get this clear. I take what the Chief Secretary says about parity of importance. In his view, one has to precede the other. The right hon. and learned Gentleman is entitled to say that he does not read the Ottawa communiqué in the same way as I do, but what was interesting was that the words of the sentence are that
  "the problems must be tackled at the same time".
  The suggestion is that it is a two-pronged attack on those problems. My clear understanding of what the Chief Secretary and other Ministers, including the Prime Minister, have said is that in their view we have to deal with inflation before dealing with unemployment.
  Mr. Brittan: I think that it is a question of semantics. [Interruption.] There is a real difference of opinion as to what should be done, but it does help to clarify the debate if we can deal with it in a serious way. I say that it is a matter of semantics because, if one adopts the view I have explained, that the right way to tackle unemployment on anything other than a short-term and ephemeral basis is to deal with the fundamental problem of the economy that is caused by inflation, we are at the same time tackling the problem of unemployment. That is the point and it is true.
  It is also right—[Interruption.] I know that the right hon. Gentleman does not agree with me and I am not expecting a conversion on his part at this hour in the morning. The object of the exercise is that we should both have the the opportunity to explain our position and that is what I am now seeking to do.
  Mr. Clinton Davis: Will the right hon. and learned Gentleman explain the logic of his position? The Government claim that inflation has been reducing, but unemployment has been rising inexorably. How does the Chief Secretary make sense of that?
  Mr. Brittan: That is not a very taxing question. Inflationary pressures have existed in the economy for a long time and the consequences of squeezing them out will

  687
  obviously be extremely difficult in the short term, but that does not contradict the central proposition that I was seeking to make.
  On the question of alleviating unemployment, as opposed to curing it, the cure must be applied in the way that I have described, but the considerable sums that the Government have spent on special employment measures have shown our concern to alleviate the problem. Those measures must be looked at in the right way. They are essentially palliatives and will not produce permanent jobs, but they are important to those of us who have a social concern, which may not show itself in the way that Labour Members show their concern, but is none the less real for that. I am prepared to disagree with the right hon. Member for Stepney and Poplar, but I am not prepared to have my concern regarded as less sincere because it leads to different policies.
  The palliative measures are important because we have to try to assist in that way while recognising that there is a trade-off. If we spend money on such measures we are pre-empting resources, creating pressure on interest rates and making it more difficult for money to be spent on long-term measures. However, in present circumstances it is necessary to spend money on short-term measures and we are doing so.
  The Government's response to riots and their consequences has been responsible. It has been widely regarded as right that we should reassert support for the forces of law and order and give them the assistance that is necessary to enable them to deal with the problems that face them. Hon. Members have vividly described some of the social problems in our cities and they will only be worsened if the very fabric of the inner cities is allowed to be destroyed in disorder. Therefore, it is right that we should give that priority in the short run.
  However, it is also right to go on to examine the cities' social problems. The right hon. Member for Stepney and Poplar may pooh-pooh that approach. He may say that one has only to look from Marsham Street and one can see the social problems, and that it is not necessary to go to Liverpool to do that.
  But Labour Governments have been in power for longer than Conservative Governments in recent years and some humility is sometimes called for. A wide variety of policies have been followed in urban areas and the sort of events that we have seen in our inner cities in recent weeks do not come about overnight, or even within two years.
  There has been a cumulative series of events and policies which have involved the expenditure of not inconsiderable sums. It is incredible that Labour Members
  688
  can suggest that, in so far as there has been a diminution in the sums spent—and they are still considerable—that has led to the disorder. That is a facile analysis of the situation.
  It is reasonable for the Government, having dealt first with law and order, to investigate whether the money is being spent in the right way, whether efforts have been properly co-ordinated and so on. That seems to me to be an entirely reasonable and civilised approach.
  Finally, I come to the question of hope in the outturn, which the hon. Gentleman mentioned. All the economic indicators show that in the coming year or so we are likely to see a gradual move out of recession. I do seek to present the situation in extravagantly optimistic terms, but it is the Government's task to make sure that British industry and the British economy can take advantage of the emergency from recession when it comes.
  Mr. Spearing rose—
  Mr. Brittan: No, I shall not give way. It is vitally important—
  Mr. Spearing: Will the right hon. and learned Gentleman give way?
  Mr. Brittan: No, I shall not give way.
  Mr. Spearing: The right hon. and learned Gentleman is obviously replying to my speech.
  Mr. Deputy Chairman (Mr. Ernest Armstrong): Order. The Minister is obviously not giving way.
  Mr. Brittan: The measures on the supply side that are required to make sure that we are in a position to emerge from the recession in the best possible shape to take the opportunities that arise are vitally important. The signs that productivity is up, and the signs of a new attitude and realism on the part of industry are very real and should not be underrated. At a time when the world economy is in extreme difficulty, by tackling the problems that have faced us for 20 years at their root, as I said in the speech which the right hon. Gentleman quoted, we have produced a situation in which, when we emerge from the recession, we shall do so in better shape and with a better chance of facing world competition than we have in the past.
  Mr. Spearing: On a point of order, Mr, Deputy Speaker. May I apologise for what may have appeared to you to have been disorderly conduct? However, the Minister has been asked a number of questions of a serious character and he has not replied to a serious speech. I apologise for being disorderly in those circumstances.
  Mr. Deputy Speaker: I am grateful to the hon. Gentleman.

  Prisoners (Parole)
  6.3 am
  Mr. Nick Budgen: I am pleased to raise the next subject for debate, the extension of parole to shorter sentence prisoners, and to do so particularly after a speech from my right hon. and learned Friend the Chief Secretary, because to some extent my speech is directed towards him, and it follows on some of his remarks about riots.
  Recently, in May this year, the Home Office published a review of parole in England and Wales. To demonstrate that my loyalty and subservience to the Home Secretary is total, I shall read the preface that is immediately above the Home Secretary's signature:
  "The review has now been completed and this document presents the outcome. It not only provides a historical survey of the payrole system and a description of its present working, but also examines some possible changes in its scope and methods of operation. In particular, it raises the question of how some equivalent of parole might be provided for prisoners sentenced to terms of imprisonment of eighteen months or less. The Government has as yet come to no conclusion on that question, or on whether any other changes are desirable, but I believe that it will be most helpful to Parliament and the public to have this document available as a basis for informed discussion of these matters".
  I cannot pretend that I am capable of raising much in the way of informed discussion at this time in the morning, but I hope that I can get a little on the record, possibly to assist the Home Secretary and perhaps even the Tory Party conference when it discusses law and order.
  I wish to prevent the simple cry that the Tory Party believes in stiff sentences. That is not a matter for us. I also do not want this Government to go down in history as the Government who opened the doors of the prisons by Executive action that might later be supported by legislation.
  It is certain that the aftermath of the riots demonstrated above all else that the people of Britain felt that almost the most important duty of the State was to safeguard them and their property from internal violence. They made it plain that they required the support of the police and perhaps, if the worst came to the worst, the support of the Army. They look to the judiciary in the excercise of its discretion and independence, if necessary, to impose deterrent sentences on those properly convicted of crimes connected with the riots.
  Ironically, in the aftermath there are proposals designed to open the doors of the prisons by Executive action and to release persons who have been properly sentenced to periods of imprisonment before they have completed the whole of that sentence, even subject to remission. That seems a remarkable proposition because I believe that the principal justification for it is that of expense. I yield to no one in my desire to reduce the public sector borrowing requirement. I am, I hope, not a person who spends time promising tax cuts or increases in public expenditure to curry favour with a part of the electorate.
  If one believes, as I do, in a limited State and a limited role for the Government, that does not mean that one believes that the Government should be weak or lacking in efficiency or generosity in carrying out the essential functions of Government. One of their essential functions is the provision of proper prisons. In terms of the enormous size of public expenditure, that does not involve a great proportion of public expenditure.
  690
  The most recent public expenditure White Paper shows central Government expenditure running at £58 billion at 1980 survey prices. Page 91 of the White Paper, table 2.9, shows that in the year 1981–82 capital expenditure on prisons is expected to be £29 million and current expenditure on prisons £286 million. It is interesting that between 1980–81 and 1981–82 capital expenditure will have fallen slightly by £1 million. That shows that expenditure on prisons, although a significant sum, is not vast compared with the £1 billion spent on the miners, £1 billion on the railways and, over a number of years, £2 billion on British Leyland.
  If we tell the man in the street that, on occasion, it may be necessary to allow judges or magistrates to send people to prison, and that there is a risk that they will be prevented from doing so because of considerations of expense, and that Parliament may, if we are not careful, fetter the discretion of the judiciary, many will say that the provision of proper prisons as an integral part of the State's duty to provide law and order is under-rated in the value judgments of those who rule us. We should be prepared to spend more on prisons.
  There are disadvantages in interfering in the discretion of the judiciary. I do not wish to make a major point about what the Tory Party said in its election manifesto. I am not a believer in the manifesto—
  The Minister of State, Home Office (Mr. Patrick Mayhew): It is very important.
  Mr. Budgen: It is important, but a Government are riot under an obligation necessarily to bring into legislative form every comma in their manifesto. I do not entirely agree with the doctrine of the manifesto in every form. It is an important document and guide to the spirit that pertains in the party as it seeks to obtain power. In our manifesto under the passage "Deterring the criminal" we promised:
  "we want to see a wider variety of sentences available to the courts. We will therefore amend the 1961 Criminal Justice Act which limits prison sentences on young adult offenders"
  The spirit behind that promise was that it was wrong to fetter the discretion of judges, and that there might be occasions when judges would wish to send young offenders to prison.
  The proposal being made in the review of parole goes completely against the spirit not only of what was said before May 1979 but of that detailed promise in the manifesto. It also goes against the spirit of what the Home Secretary said in his much-admired speech at the beginning of the recent debates on the riots:
  "Some of the charges will result in custodial sentences. It must fall to me to ensure that I provide for necessary facilities so that the sentences can be properly fulfilled. As the House will be aware, the prison population had been increasing even before recent disturbances began. It now stands at the figure of 45,500. The prison system is under great pressure and I warmly appreciate the prison service's response in dealing with the additional numbers who have been committed to its custody and the inevitable strains that the present level of population places upon it. We are discussing with the staff the measures that are now required.
  Within the system, arrangements are in hand to provide extra detention centre places at Lowdham Grange in Nottinghamshire and at Erlestoke House in Wiltshire and these will be ready next week. I have also made arrangements with my right hon. Friend the Secretary of State for Defence to use military camps to provide additional prison accommodation. The first of these will be at Rollestone on Salisbury Plain and others will be brought into use if they are required."—[Official Report, 16 July 1981;Vol. 8, c. 1403]

  691
  My right hon. Friend has demonstratd that if there is the political will to provide additional prison places it can be done. The argument of expediency is merely a matter of the Home Secretary, or his authorised deputies, being unprepared to face the Chief Secretary and the Chancellor and get the money. If there is a proper sense of urgency and of political pressure, the places can be found.
  I hope that the Government will not introduce these proposals, which would be to introduce legislation to allow for, as they put it, the automatic paroling of shorter sentence prisoners. I say, "as they put it", because I contend that the scheme is not really parole at all. The essence of parole is that it involves a second consideration of the circumstances of the man who has been sentenced by a quasi-judicial body that is ultimately responsible to the Home Secretary, and, in the light of the new circumstances, a consideration whether the prisoner may be released.
  It is proposed in the review of parole—I refer to the proposals that are set out in paragraph 53—that there should be automatic release of shorter sentence prisoners. That does not embody the essential characteristic of parole. To describe the proposals as an extension of parole is dangerous. If they are introduced—I hope that they are not—and if they become unpopular and the object of considerable criticism within the country, it will be not only criticism directed against this so-called extension of parole but criticism that will rub off on to the whole of the parole system. It will undermine what was thought to be a considerable experiment with great risks when it was first introduced but which has now become an established feature of our penal system, and one which in my opinion we should not run the risk of jeopardising by leaving it exposed to too much public criticism.
  This is a fortunate moment to be considering the review, because yesterday, in its fourth report, the Home Affairs Committee commented upon these proposals. I regret that it took a different view from me about the matter. At paragraph 96, it is suggested that it would
  "support the proposals to amend the parole system and to apply it to sentences of between six months and three years".
  The Committee took the view that the widest possible consultations were necessary to decide the lower and the upper limits of eligibility. It was concerned that there might be a tendency of the courts to increase further the length of sentences to take account of the automatic release that might occur after one third of the sentence had been served.
  Yesterday also, there was an interesting report in The Daily Telegraph, in which it became plain that the Magistrates' Association was opposed to the proposals. It was opposed on the ground that the scheme
  "would drastically reduce the sentencing powers of magistrates, change the nature of parole and have serious effects on the resources of the probation service."
  The opposition of the Magistrates' Association is no minor matter. I suppose that all of us who think about the criminal law are a little inclined to overestimate the importance of the red judge and the professional judiciary in these matters. However, in reality, the bulk of criminal cases are handled by the lay justices. They are perhaps the most vital element in our system of the judiciary. They provide contact with public opinion and with the experience of ordinary life, which in many instances members of the Bar do not have to the same extent; they
  692
  are the broad base and the grass roots of the judiciary. If their view is that such a scheme is undesirable, their view, although I do not describe it as a veto, is nonetheless an important inhibition on the introduction of such a scheme.
  Therefore, I hope that the Home Secretary will, as his first method of dealing with the serious problem of overcrowding in prisons and the conditions of utter squalor and degradation in so many prisons, try to increase the prison budget. I hope that he will not attempt to reduce the prison population by turning his back on most of the important promises that we made about law and order at the last election. Although I do not say that this is an attack on the independence of the judiciary, it is a substantial reduction of the discretion of the judiciary.
  We, the politicians and legislature, interfere with the judiciary at our peril. We ought not to make generalised statements about whether prison is a good or a bad thing, or whether it is good for certain types of person. The judiciary ought to have a proper level of professional competence. It also ought to have a diversity of opinion that is not forced upon it by the passing prejudices even of a legislature. I hope that we shall not fetter its discretion, because many disadvantages could arise if we were to do so.
  Such an approach might be self-defeating. It might simply lead to the judiciary imposing longer sentences, taking into account the fact that there would be automatic release after a third of the sentence had been served as well as the fact that parole existed in any event. It might undermine public confidence in the parole system. It might create resentment among the magistracy generally. Ironically, it might also lead to an increase in costs, because if the magistracy felt that its powers were so severely fettered that it was unable to deal with the bulk of those who either were found guilty or pleaded guilty, it might tend to commit a much greater proportion of persons for sentence to the Crown Court, and that would lead to a second expense.
  Many important reservations ought to be aired about this proposal to cut sentences by automatically releasing persons who had served only a third of their sentence. This is an important and highly contentious proposal. It has not yet been fully debated. I dare say that this debate will pass completely unnoticed. I hope that it does not. I also hope that public opinion is brought to bear upon the Home Office.
  6.32 am
  The Minister of State, Home Office (Mr. Patrick Mayhew): I wholly agree with the concluding words of the speech of my right hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen), as does my right hon. Friend the Home Secretary. It was with the express purpose of attracting expressions of public opinion on this subject that the proposal set out in the review of parole was put forward in that form.
  My right hon. Friend has from the outset made it abundantly clear that that proposal, floated in that rather tentative form, was designed to attract the sort of expressions of opinion that my hon. Friend has contributed this morning in a valuable speech. My right hon. Friend will read it with great interest, not least because it began with an expression of my hon. Friend's subservience to the Home Secretary.
  The proposal for a scheme comparable with parole for shorter-term prisoners who are not eligible at present for

  693
  parole is canvassed in a general review of the working of the parole scheme, which, as my hon. Friend reminded us, was carried out by the Home Office and published on 14 May. The review examines the way the scheme has worked since it came into operation in 1968, and considers a number of possible changes in its scope and methods of operation.
  The review notes that the rule that prisoners must serve at least 12 months before being considered for parole has the effect of excluding all those serving sentences of 18 months or less. It comments that, while parole has proved to be one of the more imaginative developments in modern penal practice, it cannot be said to have reached its full potential while this group, who make up almost half of the sentenced prison population, are excluded.
  For this reason, a number of suggestions have been made, most recently by Lord Justice Waller to the effect that the lower limit for the parole scheme should be reduced. The review concludes, however, that it is not possible to extend parole in its present form to shorter-term prisoners because there would not be sufficient time for the lengthy process of assessing their suitability for release while in custody which is the reason for the present 12-months rule.
  It seems reasonable to suppose, however, that a period of supervision outside prison which yet constituted part of the sentence might prove of value in the case of shorter-term prisoners, too. The review therefore suggests another method of achieving a similar effect. I entirely agree with my hon. Friend that what is proposed in the review is not an extension of parole, for the reason that he gave. There is not the element of selection which is a characteristic of parole.
  It must be firmly stated that the courts need, and will continue to need, strong powers to enable them to deal severely with serious crime. The present Government have never needed reminding of this and recent events have served only to emphasise the point. Accordingly, it is right to make it clear at the outset that the proposed innovation tentatively proposed in the review of parole would have no application at all to sentences exceeding three years.
  I was glad that my hon. Friend referred to the manifesto, because I believe that our policies there set out in the sphere of law and order are important and certainly should not be diluted or diminished in their application. As we said in the manifesto, long sentences are not necessarily the best way to deal with offenders who do not represent a serious threat to society.
  The nature of what is now put forward for discussion is that the central concept of parole, which is release under supervision, should become an integral part of shorter sentences. In brief, an offender sentenced to a term of, say, between six months and three years would, on completion of one-third of his sentence in custody, be released under the supervision of a probation officer for the middle third of his sentence, which would be held in suspense. Remission for good conduct would continue to operate as at present for the final third of the sentence, with any loss adding to the period in custody.
  The period of supervision would carry conditions as to the offender's behaviour, and if he failed to observe any of them he could be dealt with by the court. If he committed a further imprisonable offence while under supervision, the court could reactivate the remaining part of the suspended period in addition to any other penalty that it might impose.
  694
  This proposal is expressed in the review of parole only in broad outline. Clearly, many details would require further thought—for example, the range of sentences to which such a scheme might apply. The review itself suggests a lower limit of perhaps six months with a view to providing a sufficient minimum period of supervision. For a six-month sentence, it would be two months. An upper limit of three years would minimise anomalies which would otherwise result in relation to the parole scheme.
  Another important question is whether there should be a measure of discretion, for example in relation to offenders who had previously failed under supervision. The review notes that there are arguments for and against the approach of allowing the court discretion to disapply the scheme in the case of offences or offenders of a particular category.
  I have already mentioned that the proposal was put forward in tentative terms only. My right hon. Friend the Home Secretary explained in his foreword—which my hon. Friend has cited—that the Government had not yet reached a final view on the proposal, but that they hoped that the review would serve as the basis for informed discussion of these matters.
  To that end copies of the review were circulated widely to the judiciary and to professional and other interested bodies on publication.
  That is still the position. We shall, of course, pay close attention to reactions to the review—both within the House and outside—in deciding whether to ask Parliament, in due course, to approve a scheme along these lines. In that connection, the parliamentary all-party penal affairs group has already expressed its approval of the proposal. In addition, the Select Committee on Home Affairs sees many advantages in the proposal and has expressly endorsed it in its report on the prison service, published yesterday. The Committee also drew attention to some detailed points about the implications of the proposal—which we shall examine closely—including the question whether there should be some discretion vested in the courts to disapply the provision in certain cases.
  As my hon. Friend said, one of yesterday's newspapers carries a report containing grave reservations about the proposal on the part of the Magistrates' Association. However, these are early days. Although some misgivings have been expressed, it is fair to say that on the whole the proposals have been welcomed. We have noted, in particular, the observation made by the Lord Chief Justice. In the press he was reported as commenting shortly after the review was published that the proposal could prove successful and worthwhile, as had been the case with the innovation of parole. In reaching a decision, we shall of course take particular account of the considered views of Lord Lane.
  The Magistrates' Association is concerned that the effects of the proposal might unduly encroach on the sentences available to magistrates. I gladly take this opportunity to emphasise that what is envisaged would not be a reduction in sentence lengths as such. Rather it would be a question of restructuring the nature of sentences so that part of the sentence is served in custody and part under supervision in the community. Thus, a six-months sentence would comprise two months in custody, two months under supervision and two months, subject to good conduct, remitted.

  695
  This two-month supervision would be as much a part of the sentence as the period spent in prison. The period spent under supervision would be conditional on co-operative behaviour. The offender would, as I have explained, be liable to be returned to custody for the unexpired portion of his sentence if he re-offended. Similarly, if an offender merely breached the requirements of supervision he would be subject to an appropriate sanction.
  In the review of parole we envisaged that the sanction would be a fine. We have since thought further about that and would wish the courts to be able to order up to, say, 30 days return to custody for such a breach. We fully recognise that a scheme on these lines is not parole as such.
  Nor, I must say to my hon. Friend, would this suggestion constitute the opening of the doors of the prisons by Executive action. If this proposal were to attract the approval of Parliament, it would involve not executive action but legislative action. When my hon. Friend said that great care must always be taken not to restrict or fetter the discretion of the judges—a sentiment with which I have considerable sympathy—he was not, I feel sure, implying that Parliament ought not to express its views and embody them in legislation on the nature of sentences that should be available to the court.
  Mr. Budgen: I was expressing, no doubt rather badly, my belief that it is necessary for Parliament to set maximum and minimum sentences for various offences. Within that range, I do not say that Parliament should not, but rather that Parliament should be reluctant, to interfere with the discretion of the judiciary.
  Mr. Mayhew: With that sentiment I agree. We would not be interfering here with the discretion of the judiciary because it would be open to the judiciary to set what sentence length it chose. It seems a serious defect of the penal system that the benefits of the principal feature of parole—supervised liberty conditional on co-operative behaviour—are withheld from half the prison population. Anomalies arise at present, for example, where a prisoner sentenced to three years is released on parole after 12 months on the same day as a co-accused, sentenced for a lesser offence to 18 months imprisonment, is also released after 12 months.
  Apart from that, the prospect of release on supervision followed by supervision under licence may well be as influential upon those serving sentences of less than 18 months as parole is for longer sentence prisoners now. It is widely held that it is the initial impact of the prison sentence that has most effect. Clearly, the courts must continue to determine the length of sentence according to the seriousness of the offence and they would still be able to do so. This scheme preserves the powers of the court to differentiate in this matter while maximising the impact of the initial period of custody.
  My hon. Friend rightly said that the most important, or almost the most important, duty of any Government is to defend the community from attack upon itself and upon its property. I wholly agree. We have to seek to ensure that our penal system and our system of criminal law are best geared to that objective. Nothing that lies behind the thinking of this proposal implies that an abandonment of that concept of duty on behalf of the Government.
  696
  This leads me to wider considerations. My hon. Friend, with his knowledge of the criminal justice system, will, I am sure, agree with me that it is not sensible to look at one part of it in isolation. Changes in one area often have important implications elsewhere. The possible effects of this proposal in relation to parole and the prison system are of fundamental importance. On the former, it is arguable, as the review suggests, that if the proposed new scheme were to apply to all sentences up to three years, that would strengthen the parole scheme by allowing it to concentrate on longer term and more serious cases which call for closer scrutiny.
  On the latter, the House will need no reminding either of the appalling and increasing pressure on the prison system, graphically described in today's report by the Select Committee, or of the determination of my right hon. Friend the Home Secretary to relieve it. The prison population is now over 45,000. My right hon. Friend has repeatedly warned that this level of imprisonment is dangerously high—much too high in relation to the capacity of our prisons, with a certified normal accommodation of under 39,000, and much too high to permit the prison service to play its full part in the defence of the community.
  My right hon. Friend has therefore welcomed the lead given by the Lord Chief Justice in the Court of Appeal in the cases of Upton, Bibi and others, to the effect that, if it is necessary at all, courts should in each case seek to ensure that a prison sentence should be no longer than is absolutely necessary. We shall be assessing the apparent effect of those judgments on sentencing practice. However, we must expect the effects to be gradual, and it is clear that the trend in the prison population is still moving upwards.
  It is not correct to suggest, as my hon. Friend did, that the principal argument advanced in favour of this proposal is that of expense. We are committed, having inherited no prison building programme when we took office, to a limited programme of new prison building. Two new starts a year are planned from this year onwards. But, as the Home Affairs Select Committee recorded in paragraph 22 of its report, this will produce 5,000 places in the 1980s, at a cost of just over £30 million over the next five years, but will not add to the total number of places available in the period in which they come into force because of the places that are being lost through dilapidation in the prisons.
  The substantial effect on the numbers in prison that the proposal for early release could have, as noted in the review, is therefore an important factor, but not the sole factor by any means. The review properly sounds a note of caution because there are so many other factors to take into account. It suggests, however, that the reduction could range as high as 7,000 places. A reduction of that magnitude would be a valuable contribution, and that is also something that we shall have to keep well in mind in considering the proposal.
  I return briefly to the point raised by the Select Committee and others, that the proposal will impose an additional work load on the probation service, and that any additional resources which are necessary should be made available to the service. That is something of which we are keenly aware. The requirements can be met.
  Questions about crime, about criminals, and about the effective protection of the public from both, are profoundly complex and controversial and perhaps not

  697
  best explored in the relatively early hours of the morning. Nevertheless, I think I can still manage to say that I am grateful for the opportunity to explain the nature of the proposal for early release which is floated in the review of parole. It is one upon which the Government have taken no decision, since we wish to consider what is said about the proposal by others.
  The Government have, however, in any event no intention of curtailing the discretion vested in the courts in their jurisdiction to sentence offenders. It would remain open to them to set what length of sentence they thought fit—subject, of course, to the present right of appeal. What lies behind the proposal is a recognition that for the less serious offender a period of supervision in the community in the course of his sentence may exercise a beneficial influence on the offender's future conduct and prove entirely compatible with the safety of the public, as is so in the case of parole.
  That, of course, is not the beginning and the end of the matter by a long chalk, but it would be idle to deny that the proposal is made more attractive at this time by the reduction which its implementation would make in a prison population at present so high and therefore so overcrowded as to amount to a public scandal—and an exceedingly dangerous one at that.

  Employment Opportunities
  6.54 am
  Mr. Ray Powell: It is with trepidation and anxiety that I open this debate on measures to promote and preserve employment opportunities. These issues deserve the time and interest of this House, at whatever time of the morning or night.
  No problem is more important to the people of this country than unemployment. It eats at the roots of our democracy. It bedevils all economic theories. It creates violent behaviour in peace-loving people. It escalates the problems of mental stress, marriage breakdown, child battering, wife battering and mob violence and demoralises people to suicidal tendencies. Therefore, all hon. Members should recognise that the people are becoming disillusioned daily by the Government's actions, and distressed and dismayed by the increases in the unemployment figures. To those without jobs for long periods, the feeling of absolute demoralisation encourages actions that are usually totally foreign to the individual.
  The opportunity to work, to contribute the fruits of one's labour to the support of oneself or one's family, to benefit society and the community by the use of one's skills and talents, is essential to the dignity of every human being. To achieve that, we must uphold our pious hopes and dreams. We must face realities and introduce policies that will ensure employment for all our people. Thai is why I wanted to participate in the debate this morning.
  Today unemployment is registered at the astronomical figure of 2,851,623— 171,153 higher than last month, which means that one in every eight of the working population is unemployed. We accept that there are many more not registered that are not included in the total recorded so that the true figure is well over 3 million—even as high as 3½ million. That should stir hon. Members to action. It should stimulate our thoughts to remedies and not just to pious political platitudes.
  For two years I have listened to the words of right hon. and hon. Members on the Government Benches, blatantly boasting of a passionate concern for those of our people without jobs. Within a month their policies have resulted in a further 250,000 being put out of work. Where is the compassion? Why do they persist in their expression of extreme concern for our society? Why do they persist in telling the nation that they will provide area help and special measures to cure the curse of unemployment?
  The Conservatives said that to get elected. They bribed and cajoled and deliberately employed Saatchi and Saatchi in a compaign that promised commitments that they knew they had no hope and no wish to fulfil. Therefore, when the people rebel and take to the streets to demand that they fulfil promises made only two years ago, the Government run for cover behind water cannon, CS gas, armounx1 vehicles and so on and put all the trouble-makers in Army camps and other places of detention.
  The Government were not elected on policies to make 3 million people workless. They were not elected to create the social unrest that they have deliberately set on course.
  I do not share in acquiescing in the deliberate attempt to undermine, pressurise, exploit and demoralise into passive acceptance the people whom I represent. We shall fight the Government—who have no mandate for the policies that they have introduced—on the streets, on the hills, in the vales of Wales, the Highlands of Scotland or

  699
  even the heartland of England. We will win, because the people are not prepared to slip back to the conditions prevailing half a century ago.
  I repeat the warning that was given by the Select Committee on Welsh Affairs some 12 months ago of risks of further serious social disorder as a result of the high and chronic levels of unemployment, especially among young people.
  I have listened to the Prime Minister, the Secretary of State for Industry and the Secretary of State for Employment all stressing the aid that is given to industry and the assistance that is given to alleviate the problems of unemployed young people. I have read of the sums of money that will be allocated to provide temporary jobs. It all appears very impressive, and at a Tory tea party it would receive a standing ovation. Even in some Tory regional conferences it would raise a cheer. But those who attend such gatherings are usually well fed, well clad and blessed with company directorships or something similar.
  The realists are the hundreds of thousands of people who were on the Liverpool-to-London march, the Cardiff march and the many other demonstrations against this Government that have occurred in the past two years. They know the score, because they are the people suffering the aggravation, the discontent and the degradation brought about by this reactionary, anti-union, anti-worker and anti-caring Government.
  I often wonder whether the Secretary of State for Employment, having delivered a speech in his usual gentle, unassuming and kindly manner expounding his caring and sharing philosophy, expects Opposition Members to give him a standing ovation, or whether he expects a flood of mail from the 1 million young people seeking work, jubilant because the measures that he is to introduce will give them the chance to get on the youth opportunities programme and receive the princely payment of £23·50.
  Is not the Secretary of State aware that young people on the YOP usually are worse off than on the dole? Is he not aware that parents are helping their children to go to and from work and contributing to the extra costs of lunches, and so on, out of their incomes just to ensure that their sons and daughters have jobs to go to, be they temporary or otherwise? Is he not aware that unscrupulous employers are using the scheme to exploit young people at the expense of others in full-time jobs? Is he not aware that the TUC has expressed grave concern about this matter?
  Despite the past co-operation of the unions—NALGO, NUPE and the TUC—to assist in the implementation of all these schemes, we still find them inadequate and in real need of fresh and positive thinking. But what hope have we, when this Government have met the TUC only twice in two years? What is the reason for that? Do the Government want confrontation with the unions, and not consultation, or are they afraid of the arguments?
  Yesterday, the Manpower Services Commission published its annual report. I quote the chairman, Sir Richard O'Brien:
  "Unemployment will go on rising in the coming year."
  The Commission was
  "unable to meet the needs of the labour market in its employment and training services."
  700
  He goes on to say that at least 350,000 would have been added to the unemployment figure had not the special employment and training measures been introduced. What would the unemployment figure have been then?
  The report highlights the concern of the commission about the serious decline in the number of apprenticeships, reporting a fall of 10,000 and the redundancy of 2,000 apprentices. It further calls for all 16 to 17-year-olds to have some training, if not continuing in further education, and expresses the wish that employers should rethink their approach to this matter, showing them and the Government that the provision of skilled manpower in the right numbers and skills and at the right time is essential to the nation's economic well-being. The report refers to South Wales as the area suffering the greatest hardship—the black spot of the Principality. It is referred to with figures substantially gloomier than last year's. Not only are 60,000 more people out of work, but jobcentres have 25 per cent. fewer jobs to offer.
  Wales, renowned as the land of song, has very little to sing about after two years of this Government. The jobless in Wales shot up by nearly 11,000 last month alone, and this figure is only the tip of the iceberg. There are even worse figures in the pipeline. There are now 161,107 jobless in Wales—a post-war record—representing 14·8 per cent. of the working population. The increase of 10,755 last month included 4,000 adult jobless and 6,724 school leavers. There are now 15,148 young people jobless in Wales.
  A further rise in school leavers' unemployment is inevitable next month and in September, because many young people still have to leave school and are unlikely to register as unemployed immediately because they cannot get State benefits until the normal end of the summer holidays. Previously the money was available when they left school. These youngsters, I am sure, will remember this when they get the vote in two years.
  There are 17·1 per cent. of the male and 11·3 per cent. of the female working population without jobs in Wales. In some areas the figure is much higher. Parts of my constituency have 25 per cent. out of work.
  The escalation of unemployment throughout the Principality and the country is a major reason for mounting an attack on the Government's policies. I applaud the decision of my right hon. Friend the Leader of the Opposition to censure the Government. I would give him every support if the demand extended over weeks of the recess, because the need is there—the need for debate, the need to find solutions, the need to rid ourselves once and for all of this cancer in our society. This scourge of mass unemployment demands the time and attention of all hon. Members, even at the expense of their long holidays.
  Tomorrow, or perhaps today, the Secretary of State for Employment will meet the Wales TUC. They hope to discuss the state of the economy and the conditions of industry in Wales, but I am sure that the main topic will be unemployment, especially youth unemployment. I warn him before the talks that 40,000 more young people will be coming on the register and seeking work within the next few months. Whatever agreements he has already reached with her ladyship will have to be amended if he is to find jobs for those already seeking work without those that I have just mentioned.
  The right hon. Gentleman wrote to me this week with the customary letter telling me that he would be visiting the Ford plant at Bridgend. I hope that he will find the time

  701
  to visit industrialists on the opposite industrial estate at Bridgend and discuss their problems. Their firms are not multinationals; they are the small businesses that the Government promised to help, promised to start—promised as the answer to all of our problems. They are the ones that are going to the wall, the ones with cash flow problems brought about by high interest rates and a calamitous fall in consumer demand. They are the ones to whom the right hon. Gentleman should find time to talk.
  Perhaps the right hon. Gentleman will find time to visit Maesteg in the Llynfi valley area, where his ruthless Government's policies have absolutely ripped the heart out of a town that only two years ago was bouncing with prosperity. Shops were busy and full of goods, the market was packed with produce and there were waiting lists for stalls and shops. Two years of a Tory Government has put paid to all that, with between 20 per cent. and 25 per cent. unemployment, and closures and redundancies on a massive scale. Only last week there was an announcement from Revlon that a further 400 jobs are to go, reducing the labour force from 1,700 to fewer than 300 in two years. That is the state of one small town in my constituency.
  The fault for all this can only rest on the suicidal monetarist policies of the Government. The Welsh Development Agency's managing director, Ian Gray, warned recently in his annual report for 1980–81 that an increase in the number of empty advance factories in Wales was inevitable over the coming years. Empty space was now up to 10 per cent. of the agency's portfolio, as compared to 6·7 per cent. last March. Mr. Gray further reported that 23 companies in which the WDA had investments totalling £1·6 million had ceased trading or gone into receivership. What a dismal outlook for thousands out of work in Wales.
  Some of us look for solutions too. Having expounded at some length on the cause of the problems, I firmly believe that the unemployment figure could be drastically reduced if we immediately introduced voluntary retirement at age 60, with payments of at least 50 per cent. of earnings during the five years to 65. This would help those of 60 and over in poor health to be financially able to retire voluntarily. It would greatly assist the opportunities for firms to employ young people, and could set the pattern for reducing the retirement age permanently.
  Many of us on the Labour Benches also believe that money for numerous MSC schemes could be directed to local authorities where apprenticeship and training could be organised in the well-established facilities which are already becoming redundant as a result of local government cuts. With extra help local authorities could provide not only the training and skills needed but jobs in numerous areas of the social services where cuts have created such tremendous strains.
  Let me list for consideration by the Government the alternative strategy that might create jobs. We are continually asked for alternatives, although the Prime Minister was named "Tina," which represented her philosophy that "there is no alternative."
  I list my suggestions for public investments and national planning aimed at revitalising our industry. They are, public sector regeneration of the building programme, a curb or stop on private capital going out of the country, selective import controls to protect jobs, especially where there is unfair competition from subsidised imported goods, expansion of British Steel's capacity to meet the
  702
  demands that these new schemes will create, higher public spending on social and community services, lower income tax for the mass of working people, lower direct taxes such as the national insurance surcharge, higher capital spending to modernise the nationalised industries and lower interest rates. Let us also build a Channel tunnel. I sincerely hope that on Monday when the right hon. Lady makes a statement, she will reconsider her dogmatic attitude and consider the points I have mentioned.
  A young person of 24 came to my surgery on Saturday.
  A graduate with a first-class honours degree, that young person has been out of work for more than 12 months. We have in my constituency doctors and nurses, graduates and skilled persons seeking work, with little if any hope after all their years of study and hard work. That situation must be changed.
  I end with the words of a young person from Maesteg writing about 1981:

  "The pupils are dispirited and difficult,

  The Schools are short of Books and Teachers,

  Paperworkers and Teachers are unemployed.

  The sick are sicker and dying,

  The Hospitals are short of Doctors and Nurses,

  Doctors and Nurses are unemployed.

  The old are poor and cold,

  The Gas and Electric made profits,

  The prices are going up again.

  The unemployed are disillusioned and multiplying,

  The factories are cold and empty,

  The Government doesn't care."

  7.16 am
  The Under-Secretary of State for Employment (Mr. Peter Morrison): I also met a young person, of about 18 or 19, in my constituency at the weekend and he said to me "Thank goodness that we at last have a Government who understand about living within their means." He realised that a country cannot go on living beyond its means.
  It was interesting to hear the hon. Member for Ogmore (Mr. Powell) reiterate what the Leader of the Opposition has said about the programme that the Labour Party would introduce in the unlikely event that it was returned to power. But how would a Labour Government pay for that programme? It is all very well to call for lower interest rates and higher capital expenditure, but they would be printing money and if they did so on the scale that the Leader of the Opposition would like, inflation would take off. The hon. Member must understand that that would result in unemployment on a much greater scale.
  That is how the Labour Government went from 1974 to 1979 and I hope, for the sake of the hon. Gentleman's constituents, that he will think carefully about that programme before advocating it so readily. It would not be in his constituents' interests. Past actions along those lines are the reasons why his constituents find it difficult to get jobs.
  The Government's aim is to create conditions in which output, and therefore employment, can grow. Output is no longer falling, but new growth cannot take place until world conditions are right. Every country is suffering from a recession and we are no longer markedly worse off than many.
  We must put ourselves in the position to make the most of the upturn in world demand when it comes. Market forces necessarily encourage structural change and create new jobs. Many new jobs are created and many of the unemployed find jobs even during a recession. The hon.

  703
  Gentleman may not know that in every month for the past three months at least 280,000 have left the unemployment register. The picture is not as bad as the hon. Gentleman has made out.
  We can help the market to work by keeping down inflation and controlling public expenditure. We can remove unnecessary obstacles and reduce the amount of form filling that is required. We can provide incentives and services to encourage adaptation, new growth and labour market efficiency. We must make ourselves more competitive to ensure future jobs. Productivity is improving, but we are concerned to minimise the painful effects of necessary change.
  I come now to the special employment measures. To hear the hon. Gentleman talk, one would not think that we had any special employment measures. We are spending over £1,000 million on measures to avoid unnecessary redundancies and provide real help to those who are worst affected by unemployment. New jobs are being created. We estimate that in private sector establishments which have expanded in the past year employment has increased by about ⅓ million. Not all those new jobs are an increase in employment as such, but they are jobs which would not have been there before.
  I come next to international comparisons. The rise in unemployment over the past three months, compared with the previous three months, shows an increase of 9 per cent. in the United Kingdom. In France—which Opposition Members frequently quote, for perfectly understandable reasons—there has been an increase of 11 per cent., and in Holland the increase has been 14 per cent. So we are not doing too badly in that respect.
  I believe—I do not know whether the hon. Gentleman agrees with me—that our future employment prospects lie basically with the small firms. They will provide more jobs than any other sector of the economy. The hon. Gentleman did not mention the Government's measures to encourage small firms. We have the business start-up scheme and the loan guarantee scheme. To provide tax relief, we have the relaxation of corporation tax and capital transfer tax. The rules on unfair dismissal, industrial tribunals and maternity leave have been relaxed, particularly for small firms. Moreover, planning control has been relaxed, and tax allowances on premises have been increased. Those are all ways in which we have helped small firms and which will, as a result, provide jobs.
  I come now to the special measures. The youth opportunities programme provides a range of opportunities for unemployed young people in training courses and work experience schemes. It includes courses to prepare young people for work through employment induction courses,
  704
  short training courses, work introduction courses, work experience schemes on employers' premises, and training workshops.
  The weekly tax-free allowance, to which the hon. Gentleman referred, is £23·50. He says that it is too little. He should remember that it is £8·25 more than supplementary benefit. He should remember, too, that more than 10,000 young people are joining the scheme a week. If he thinks that that is too little, why are they joining? They join because they realise that the Government are offering them something that they want. If he wants the allowance to be increased, he should realise that there would be fewer opportunities for those young people. If the allowance were increased substantially, young people would be debarred from places in the future.
  The scheme has been expanded to provide 450,000 opportunities in 1981–82. That is 180,000 more than were planned for 1980–81, and more than double the opportunities that were available in 1979–80. The emphasis in this expansion is placed on work preparation courses, good quality work experience schemes and training workshops, but all elements in the programme will be expanded and developed.
  The job release scheme provides jobs throughout the working community. In 1981–82 we are spending £129 million. That means that at the end of June 1981, 53,900 people were being supported by the scheme. Because of the domino effect through the working labour force, that helps young, middle-aged and older people.
  More than 550,000 people were covered by the temporary short-time working compensation scheme at the end of June 1981. The cost to the taxpayer and Government was £365 million. That is another example of how the Government care and help people who otherwise would be unemployed.
  The community enterprise programme aims, until the end of March next year, to provide 25,000 filled places. That is another example of how the Government care. It will cost the taxpayer £95 million.
  We are supporting 25,000 first-year apprenticeships and other forms of long-term training at a cost of £30 million. As the Secretary of State said in an announcement on 21 July, that help will be increased by £9·3million in 1981–82 and by £11 million in 1982–83 because we are so concerned that the level of apprentices has dropped substantially.
  Within the remit of a good housekeeping budget—we must have a good housekeeping budget if unemployment is not to rise even higher—the Government are spending a large sum, about £1,000 million, to ensure that people who are out of work, or who might become out of work, are helped on a substantial basis. I hope that when the Opposition make their criticisms they will have constructive ideas about an alternative strategy. I have not heard of such a strategy so far from the Leader of the Opposition.

  Immigration Appeals
  7.27 am
  Sir Charles Fletcher-Cooke: It is nice to be able to welcome a document from the Home Office. I refer to the review of appeals under the Immigration Act 1961 discussion document which, although coloured blue, is a Green Paper. It was published about Easter. It is a good and liberal document in that it seeks to help those wishing to appeal against immigration decisions by the Home Office. In my experience and that of my colleagues, it has had a generally beneficial effect upon the day-to-day operation of the appeal tribunals and the adjudicators in London, at The net House and elsewhere. Without wishing to appear patronising, I must say that already the tribunals are much more polite and more likely to listen than before.
  They are still strict about granting adjournments. They are probably right in that because, although there is sometimes hardship for the immigrant who might be illiterate, and so on, there is no doubt that a minority of appellants abuse the system by using it to delay their inevitable departure. I do not mind the harshness and rigidity on the question of adjournments, although it is ironic that when the Home Office finds difficulty in meeting the time scale—I refer to paragraph 36 of the document—it wants to relax the time limits. If that is to be granted, what is sauce for the goose must be sauce for the gander.
  Paragraph 15 suggests that appeals against the refusal to revoke deportation orders should be abolished. That is wrong. There are not many such cases. It is right that those who have had deportation orders made against them, and been deported, should, after a certain number of years, be allowed to appeal from abroad for the revocation of the orders. If a person has a deportation order against him he can never return to Britain, even if circumstances have changed and he has urged his offence by effluxion of time and by behaviour. That is a minor point.
  The major point in the document is that the immigrant who finds himself classified as an illegal entrant, and hence subject to removal from Britain, has no right of appeal to the authorities unless he first leaves the country. In practice, in many cases that means no right of appeal at all. Children or youngsters who have been here for many years suddenly find, because they, or more probably their parents, many years ago lacked candour—that is the expression used in the courts—when they first entered Britain, that they are turned out with nowhere to go and without any chance of appeal to the adjudicator, the appeal tribunal or, at least in theory, to the courts.
  I say "in theory" because in practice—this is one criticism of the present system—such is the inhumanity and injustice of the position, the courts strain themselves to accept jurisdiction on what are flimsy grounds relating to judicial review, but nobody should blame them, because otherwise the injustice would be terrible.
  I have in mind a case that is well known to the Home Office. Four years after two boys had been happily and satisfactorily at school in Britain, they were told to go without any appeal because five years previously their mother, an illiterate woman, when she applied for the relevant entry certificate at a consulate or High Commission abroad, did not disclose that certain circumstances had changed. She was not asked a question, and she did not volunteer the information. She and her
  706
  children came to Britain. They were happily educated. They are able citizens. Now it is held that under the law they are illegal immigrants. But for the final mercy of the Home Office, in law they would have been turned out to go to a country with which they no longer have any connection, even if they could get there. They would have no real chance of appeal to the immigration tribunal because, under existing law, they could not do that while they remained in Britain.
  That contrasts with the overstayer, who may be much less worthy. I refer to the man or woman who comes here on a limited permit for six months but who stays and stays and takes employment contrary to his permit, but who can appeal to the adjudicator and, often, can go further than that, to the appeal tribunal. Such is the pressure upon the bodies concerned, as is well instanced in the document to which I have referred, that it is probable that extensions of time will be granted, amounting sometimes to many years. The contrast is odious.
  The plea that I am making, which apparently is sympathetically considered in paragraph 19, is not directed to those who are found to be would-be illegal immigrants when they present themselves at the port or the airport. I think it right that the present conditions should prevail and that they should have to return whence they came. At that stage it is fairly easy for them to do so. They should do so before they are allowed their appeal.
  My plea is directed to those who have been admitted, who have been here some time and who, for almost technical reasons, are subsequently discovered to be illegal immigrants. It seems cruel beyond belief that they should have to go home, and that practice should be stopped. It should be stopped because it distorts the purity of the procedural law on the judicial review of public authorities in that the courts, out of mercy, will accept jurisdiction for judicial review when on a proper legal basis they should not do so.
  I hope that paragraph 19 can be put into force. The document reveals that the Home Office has an open mind on a delicate branch of its jurisdiction, the treatment of immigrants whose status is doubtful and who wish to have their case heard by an independent judicial authority. In my experience these authorities have become better arid better. They started off being very rough and they are now in their stride. There is much greater confidence in them among their clientele. The Home Office is to be much praised for this liberal attitude, because when the recommendations for mercy or for special treatment are made by the tribunals they are almost always followed by the Home Office. It should act in this rather large and important matter of giving the illegal entrant a chance to appeal before he is sent back if he has been in the country for a substantial period.
  7.38 am
  The Minister of State, Home Office (Mr. Patrick Mayhew): With the leave of the House, Mr. Speaker, I thank my hon. and learned Friend the Member for Darwen (Sir C. Fletcher-Cooke) for what he has said about those who staff the appeal tribunals and for his references to the Home Office generally. Not much is said in public by way of complimenting the Home Office, and we are grateful for anything of that nature that is passed our way. I know that what my hon. and learned Friend said about the staffs

  707
  of the tribunals and those who serve them was well justified and will bring them pleasure. I am grateful to him.
  The present appeal arrangements are based in the main on recommendations made by the Wilson committee in its report that was published in 1967. They were introduced in 1969 and subsequently re-enacted. By and large the present system has worked well. I was pleased to hear what my hon. and learned Friend said about the progress that has in his experience been made. But it is under strain as a result of increases in the number of appeals being lodged, and there are delays in hearing cases.
  It therefore seemed right that we should take a careful look at how the system was working, with the aim of finding ways in which delays could be reduced and resources used more efficiently. That is why the Government decided to carry out an internal review of the system. There is no doubt that we must continue to have an independent appeals system to review immigration decisions, some of which can have a radical effect on people's lives and expectations. Any such system must be fair and just. At the same time, however, it is right to consider whether the present rights of appeal are working sensibly.
  The review's starting point is that the existing rights of appeal set out in part II of the Immigration Act 1971 form a broadly acceptable basis for the future, but the document discusses some modifications which could lead to a fairer and more reasonable system.
  We have examined in the document the conflicting arguments for removing a right of appeal from people who come on a short visit. We have put forward ideas on whether it is justifiable that people holding entry clearances who are refused leave to enter should have an automatic right of appeal to the tribunal from an adjudicator's decision, whatever the merits of the case. In other cases appellants have to seek leave to appeal to the tribunal, and it might be reasonable for those with entry clearances to have to seek leave as well.
  My hon. and learned Friend raised particularly the question whether there should be a right of appeal at all
  708
  against the refusal to revoke a deportation order. I note carefully what he has said about the argument and conclusions suggested in paragraph 15. That will be carefully considered.
  We have therefore considered on a broad basis ideas that would lead to a reduction in delays, which are the principal cause of strain on the system. However, the document also looks at suggestions for increasing rights of appeal, although those would, of course, place extra work on the appeals system.
  We have particular sympathy with the point which my hon. and learned Friend made the major feature of his speech—arguments in principle for a right of appeal before removal of illegal entrants who have lived here for many years. That can give rise to real injustice. There are difficulties in granting a right of appeal, for example in determining what the appropriate time limit would be and in trying to establish, in the absence of documentary evidence, precisely when an illegal entrant arrived. The problems involved in that suggestion are set out in the discussion document and we would greatly welcome views on the matter. I am grateful for my hon. and learned Friend's opinion. He sees from the document, in paragraph 19, that we have much sympathy with what he says. I must emphasise, however, that the Government are determined to deal firmly with illegal entry and other breaches of the immigration laws.
  At this stage of the morning, I think I may be forgiven if I take the matter shortly and perhaps I would not be forgiven if I took it otherwise. The issues raised in the discussion document are complex and important. I am much encouraged by what my hon. and learned Friend, with his great experience of these matters, has had to say about its general tone and thrust, and especially by what he said about the Home Office record in dealing with recommendations, as it were, for mercy. I know that the Minister of State, my hon. Friend the Member for Aylesbury (Mr. Raison), takes the greatest personal care over these matters. The Government will take fully into account the comments that we receive from all interested organisations and from hon. Members before coming to any firm conclusions on the important matters with which the document deals.

  Universities (Government Expenditure)
  7.43 am
  Mr. David Ennals: The Minister and I had a sneaking hope that this debate would have been included in item No. 1 last night, but the rules of the House must be preserved. I feel much fresher at this time of the morning than I would have done last night, and I hope that the same applies to the Minister.
  I did not hear all that was said in the debate on Aston university, but I shall mention some of the other universities affected by the Government's cuts in funds available to the University Grants Committee. I wish to put them into a broader perspective.
  No one can doubt the gravity of the present economic plight of our country. I am not suggesting that all our problems starred in May 1979, but in almost every respect they have become dramatically worse since then—for example, a massive slump in output and a massive increase in unemployment. However, I am not so pessimistic as to believe that as a country we cannot pick ourselves up from our present plight, if not under this Government, then under a Labour Government.
  The Government seem to be determined to undermine many of the essential means of our recovery, not just by their monetarist policies and devasting cuts in demand but by actions that damage the development of training and skills, especially of the younger generation. I cite as examples serious reductions in the number of apprenticeships, the damage to the structure of the industrial training boards and now the damaging effect of the proposed expenditure cuts on the universities.
  In the debate on this issue on 8 July, the Secretary of State made light of cuts which the Committee of Vice-Chancellors and Principals estimates to be about 15 per cent. between 1979–80 and 1983–84. He said that we should not believe all we read.
  What does the right hon. and learned Gentleman say to the comments of Sir Alec Merrison, the Vice-Chancellor of Bristol university and chairman of the Committee of Vice-Chancellors? According to newspaper reports Sir Alec said that
  "the Government 's proposed grant reduction would create a crisis without precedent"
  in the history of Bristol university. He added that
  "Bristol would lose more than £10 million over the next three years. It was a situation the university could neither manage nor accept."
  He said that
  "the university will lose up to 15 per cent. of its 2,400 academics and support staff in all areas, including science, engineering and medicine. The Government's figures meant that many of these losses could conic only through forced redundancy."
  He described the policy as "short-sighted and destructive", and went on:
  "The redundancy bill in universities, which would be inevitable if the Government kept to its present policy could amount to £250 million, which could only come from the Government."
  What does the Minister say to the former Minister of Education, the former chairman of the UGC and the present Vice-Chancellor of Leeds university, Lord Boyle? He warned that cuts would make redundancies inevitable and that the university council said that they would have a "serious effect" on teaching and research. He then said:
  710
  "The gravity of the situation can hardly be overstated. The university must reduce its expenditure by nearly £5 million per annum by 1994, and the rate at which this must be done makes redundancies inevitable".
  Leeds and Bristol are to be hit much less than the three universities that concentrate on science and technology—Salford, Aston and Bradford. I want the Minister to consider the problems of the University of East Anglia, which at first sight might appear to have done reasonably well on the UGC's hit list.
  The number of students would be cut only from 3,760 to 3,640 by 1983–84, but the real situation is very different. In April this year, the UGC authorised the University of East Anglia to purchase Keswick college—a teacher-training college—and on 1 August this year, the college and its 400 students will be incorporated in the university's new school of medicine. That must be financed, but no additional funds have been found by the UGC. It presents the university with a grave problem, bearing in mind the fact that the decision to incorporate Keswick in UEA was approved by the UGC.
  We are therefore actually talking about a 12 per cent. cut in student intake—which means at least 400 fewer students per year—and a 12 per cent. cut in cash As the vice-chancellor, Professor Michael Thompson, has made clear publicly, this will have a serious effect on UEA, which already has to bear the consequences of a 35 per cent. fall in applications from overseas students as a result of the Government's full cost policy. Like most universities, therefore, it is taking two blows as a result of decisions taken by the Government.
  UEA is distinctive as a regional university. It is 60 miles from Cambridge and 80 miles from the University of Essex, with no local polytechnic and thus a significant proportion of part-time students. It also has a high academic standard. This year there were 15,000 applicants for 1,500 places, which shows how popular the university is. It also has some sound and excellent research projects. Nevertheless, it will be hard hit by the Government's decisions.
  The Government's action in slashing the funds available to the University Grants Committee has nothing to do with education, only with cuts in essential expenditure. In my view, it is educational vandalism. This is the first Government in 500 years to wield the axe on growth in university education and the first to go back on the recommendations of the Robbins committee. In view of the redundancy pay that will be involved, I do not see how the Government will save any money at all in the lifetime of this Parliament.
  I must make it clear that 1 am not blaming the UGC, which I believe has been placed in an intolerable position, but I agree with early-day Motion 524 tabled by my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell), my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) and myself and supported by hon. Members on both sides of the House. It reads as follows:
  "That this House finds totally unacceptable in terms of public accountability the defence by the Secretary of State for Education and Science of the decisions of the University Grants Committee to withhold funding of certain universities, and especially Aston University in Birmingham"—
  I would not say especially Aston, but other universities as well—
  "without any consultation with the universities concerned; asserts that such decisions must be open to public scrutiny and representation and insists that Ministers have a duty to ensure that

  711
  such opportunities are provided both for university authorities and for Members of Parliament; believes that such principles of public accountability have nothing to do with principles of academic freedom which it is anxious to maintain and which are in fact undermined at the universities concerned by the arbitrary decisions of the University Grants Committee; and calls upon Ministers to guarantee that discussions with them and with the University Grants Committee will be genuine in the sense that those taking part will not be rigidly bound by the decisions already announced."
  In conclusion, I very much hope that the Minister will feel that he should have discussions with the University Grants Committee, which in my view can only have misunderstood the situation in relation to UEA and the incorporation within it, already agreed, of what will be the new department of education. I look forward to an encouraging reply from the Minister.
  7.53 am
  The Under-Secretary of State for Education and Science (Dr. Rhodes Boyson): With the leave of the House, I shall reply to the third debate on universities in this long but interesting evening.
  I should first declare an interest in that my elder son-in-law took a degree at East Anglia university and got engaged while he was there. I therefore visited it not only to see the university but also to see what kind of future son-in-law I was acquiring.
  Sir William Clark: What was he reading?
  Dr. Boyson: My hon. Friend the Member for Croydon, South (Sir W. Clark), who is always interested in scholastic studies, asks what discipline my future son-in-law was in. He was reading English. However, in view of the urgency of other matters this morning, I leave that matter there and shall seek to reply briefly to the right hon. Member for Norwich, North (Mr. Ennals).
  The situation with regard to university degree courses has changed beyond recognition since the war. There are now 10 times as many people taking degree courses in Britain as there were in 1939. We have six times as many universities and another 200,000 students in 396 other institutions in which degrees can be taken. There comes a time when one must consider whether things are being done in the right way. One must consider whether, instead of being properly created, the system has, like Topsy, "just growed".
  A previous Labour Government—not the last one—made an analysis in 1969. Indeed I am sure that the right hon. Member for Norwich, North was a member of that Government. At that time, Mrs. Shirley Williams issued 12 or 13 points—which were reported in The Times—that universities were advised to follow. All of them were stricter than our actions in the past year. The only difference is that the previous Labour Government did nothing about the situation. A statement was issued to the effect that something should be done. Apart from the decrease in the pupil-teacher ratio, nothing was done. The idea of loans and of tying jobs more closely to university
  712
  courses were all included. [Interruption.] People listened but did nothing. It costs nothing to listen. Indeed, it is very nice to listen. However, the main thing is to make up one's mind and to do something. We were landed with having to do something at some stage.
  We must face the fact that 1982–83 will be the peak for 18-year-olds. After that year the figure will fall. In the following 10 years, there will be a 30 per cent. drop in the number of 18-year-olds in Britain. That means that either a lower standard will be set for those entering degree courses, or there will be a decrease in the number of degree courses available. The very fact that we faced economic stringency acted as a catalyst. We had to act more quickly than we would otherwise have done.
  With the 8·5 per cent. cut in real terms within three years, the UGC has undertaken rationalisation. There is a movement towards the technical and physical sciences and away from the arts. In three years' time 7 per cent. more students will be reading physical sciences, 3 per cent. more will be reading mathematics, 2 per cent. more will be reading engineering and technology and 5 per cent. more will be reading medicine. That compares with a 12 per cent. decrease in social studies. Most people will agree with that switch in the subjects being studied. That does not represent an attack on the other subjects. However, this country's future lies, as the right hon. Gentleman, said, in turning out technologists and engineers as well as in training 16 and 19-year-olds to create the finished goods that have been discovered in our universities.
  The right hon. Gentleman referred to overseas students. At present there are 7 per cent. more overseas students in our universities than were allowed for in the quota allowance of the previous Government for this year. There are 13 per cent. more in higher education as a whole and 7 per cent. more in universities than would have been funded under the previous Government's plans. The right hon. Gentleman gave two quotations from university vice-chancellors. I shall give him two back. Like trains passing in the night we get off at the handiest station and read the newspaper that we have to hand.
  The Financial Times states:
  "This shift, however small, in the emphasis of higher education towards the sciences seems a desirable outcome of the University Grants Committee's proposals, as a first step in reducing United Kingdom higher education to a size and shape the country can afford."
  London university's new vice-chancellor, a distinguished linguistic scholar, was interviewed by The Times. He congratulated the University Grants Committee on the way that it had managed its task and said:
  "They have taken extraordinary care within their abilities and the financial restraints, to ensure that the best remains the best, and possibly even improves; that the universities continue to serve the country and to preserve the wide range of studies; and that modest increases are made in such necessary fields as technology. They have let the cuts come where they will do the least damage."
  I thank the right hon. Member for Norwich, North for raising this issue. We have confidence in the Government and in the work done by the UGC. We believe that there was a need for rationalisation and that it is going in the right direction.

  Public Sector Borrowing Requirement
  8 am
  Mr. Bowen Wells: I rise as tail-end Charlie, conscious of the pressures on the time of the House and particularly on my right hon. and learned Friend the Chief Secretary to the Treasury who has been replying to debates during the night. It would perhaps be better if I began with the two conclusions that I wish to put. I should like my right hon. and learned Friend to make certain that the public sector borrowing requirement and the constraint; on borrowing do not affect profitable investment by the public sector in projects that will bring great benefit to this country in the medium and longer term in jobs and the production of machinery and plant.
  I also wish to put the case of the Commonwealth Development Corporation that, if it borrows overseas and repays overseas and simply remits to this country the profit of the investment, this should not be included in the calculations of the public sector borrowing requirement. Those are my conclusions, but I must, in fairness, follow the argument through. The definition of the public sector borrowing requirement was given in a letter of 7 May 1981 that I received from my right hon. and learned Friend the Chancellor of the Exchequer. My right hon. and learned Friend said:
  "the PSBR measures the net cash transactions or financing flows between all bodies in the public sector and all of those in the private or overseas sector. In deciding whether a transaction adds to the PSBR, the key issue is whether a body concerned is in or out of the public sector. This is determined by criteria relating to control and ownership, in that order."
  I accept that definition. I also accept the argument of my right hon. and learned Friend the Chief Secretary in the debate on 9 April 1981 that by fiddling around with the definition of PSBR one does not gain anything. However, there also arises the related issue of loan guarantees. These guarantees to public bodies outside the public sector such as ICL have been defined as not falling within the PSBR until such time as the guarantee may have to be honoured.
  One has to examine why the public sector borrowing requirement is regarded as so important to the Government's strategy. I accept the argument that, if the public sector borrowing requirement is permitted to rise, one expects interest rates to rise by the pure laws of supply and demand. However, one must reflect, as I am sure the Government do, that last year, when the public sector borrowing requirement rose significantly above the Government's forecasts, there was a reduction in minimum lending rate. It must therefore be concluded that to allow the public sector borrowing requirement to rise in certain circumstances does not involve a mechanistic relationship with interest rates.
  There is also the argument that, if one permits increased borrowing on the public sector borrowing requirement, this increases the money supply and causes us to run into dangers of increasing inflation. I share the Government's concern about inflation. I believe passionately that inflation must be brought down. That is essential to Government policy.
  The other argument is that, if public sector investment is allowed to rise, this will crowd out the private sector. In that concept there is the idea that a certain amount of money is available and that, if the public sector takes it,
  714
  the private sector cannot. I believe that this is, to some extent, a fallacious argument. The economy is dynamic. If one invests profitably, that expands the whole of the economy.
  Therefore, to take a very rigid attitude on investment by the public sector in that sense could automatically produce a reduction in the wealth of the nation. This particularly applies to British Telecom, which wishes to modernise and expand its profitable business by increasing its borrowings.
  Here I give credit to my right hon. and learned Friend. The Treasury has, in spite of great difficulties, increased the amount of investment available to British Telecom, but is has not gone far enough. The chairman of British Telecom has made an eloquent appeal to the Treasury to relax matters still further and permit it to borrow further so that it can invest in profitable projects which will improve service and increase the ability of British business to service its customers and to give an efficient service to the world.
  In addition, the manufacturers of plant for British Telecom will be able to increase their production, and therefore to increase employment and export opportunities. To restrict British Telecom and public sector profitable enterprises simply by reference to the public sector borrowing requirement is very short-sighted, although I can see that from a Treasury point of view an investment in current expenditure in the year that we are talking about is precisely the same in its terms.
  We must think about what that investment is meant for, and I do not think that the Treasury can simply deny itself the opportunity to think about what the investment is and why the public sector borrowing requirement is increased. I welcome the intention of the Treasury to make the public sector borrowing requirement: figures clearer to show how the PSBR has risen and whether it is going into current or capital expenditure.
  Having looked at those definitions, I turn to the position in which the Commonwealth Development Corporation has found itself. Here I remind the House and my right hon. and learned Friend of his speech to the House on public expenditure on 9 April 1981:
  "There are at least two criteria which any new financing arrangement would have to meet. First, it should introduce a market discipline for the management of the industries concerned. It should also tap new sources of finance and avoid adverse effects on interest rates and to private industry. I am afraid that so far it seems to me that methods of financing which meet those criteria have yet to be found. But I assure hon. Members that the Government themselves are as anxious as anyone to find them, and we shall continue to look actively for them."—[Official Report, 19 April 1981; Vol. 2, c. 1133.]
  My purpose tonight is to bring it to my right hon. and learned Friend's attention that the CDC's representations to him meet those criteria. The CDC is a profitable organisation and will return to the Treasury only slightly less than it draws down this year. It is profitable and well managed and its investments increase British trade. So it meets the first of the criteria that my right hon. and learned Friend laid down in his speech. It is profitable and it produces the discipline necessary on the management to make profitable investments, quite unlike many public sector organisations which I need not mention.
  It also aids British exports, but possibly the most important thing for the Treasury is that it is proposed to find a totally new method of financing its expenditure that will not have the adverse consequences on the public

  715
  sector borrowing requirement that are so feared. The reason for this is that the CDC is unique, in that it operates exclusively overseas, it would be borrowing overseas, and it would be investing overseas. Having said that, it therefore cannot, within the public service borrowing requirement definitions that I read out to the House at the beginning, be brought within the public sector borrowing requirement definitions by any ordinary method of argument.
  I ask my right hon. and learned Friend carefully to consider the CDC proposals for investment and try to exclude from his mind the normal arguments connected with public sector borrowing requirement restraints about the CDC, which is proposing to borrow overseas, repay overseas and not involve this country. Therefore, it will not squeeze out the private sector or increase the money supply. It will not tend to increase interest rates in this country.
  The CDC has found a unique way of financing itself which will not affect those matters that the Minister and I fear—which in other circumstances I should not for one moment advocate—that we might damage the prospects of Government's prospects for decreasing inflation.
  I ask the Minister to consider this matter afresh and to make certain that the CDC can expand itself and expand British exports and profitable investment overseas. I ask him to take those matters into account.
  8.10 am
  The Chief Secretary to the Treasury (Mr. Leon Brittan): I readily accept what my hon. Friend the Member for Hertford and Stevenage (Mr. Wells) has said about there not being a mechanical relationship between the public sector borrowing requirement and the money supply, but I differ from his view that the consequence of investment, because it is likely to be profitable, is almost irrelevant to the PSBR. The PSBR need not be taken into account if that is so.
  That is not how I would put it. Within the concept of the borrowing that can be allowed in the public sector one accepts that one is trying to borrow money for an investment that will be profitable, but one cannot allow for the effect of its profitability until after that has taken place.
  For that reason, I am not prepared to accept the analysis that my hon. Friend has put forward. Rather than take the time of the House in repeating material relating to the general definition of the PSBR and its role in the regulation of our affairs, it would be most useful if I dealt with the two cases about which my hon. Friend was concerned—British Telecommunications and the Commonwealth Development Corporation.
  We are aware of the problems posed by an industry such as BT which has a large and profitable investment programme. As my hon. Friend was good enough to mention, we have taken steps to alleviate the position but the scale of those steps is not appreciated. We have incorporated into the White Paper a sizeable increase in the industry's fixed asset expenditure from £1·3 billion in 1980–81 at 1980 survey prices to £1·6 billion in the current year.
  That increase accounts for over half the increase for all nationalised industries. It is in that one way that one accommodates such matters. One takes into account the factors mentioned by my hon. Friend, but within the
  716
  context of the global total that can properly be allotted to the nationalised industries—as nationalised industries they cannot compete with the private sector on equal terms because they have the advantage of an express or implicit Government guarantee—some marshalling process must be carried out just as it is in other countries with different systems.
  Quite apart from the increase to which I have referred, since the White Paper we have agreed to a £200 million increase in the corporation's external financing limit for 1981 and 1982 despite the difficult general circumstances. We are currently looking at the industry's medium-term investment in financing plans and will treat its needs as sympathetically as the difficult public expenditure position allows. It would be unrealistic not to regard it as being within the public sector, as it plainly is.
  As for the Commonwealth Development Corporation, my right hon. Friend the Minister for Overseas Development has made it clear when the House has discussed the CDC on previous occasions that the Government are aware of the corporation's work over the years to promote economic development in the poorer countries through its investments on concessional terms in many economic sectors, especially in agriculture.
  I was asked about the future financing of the CDC and whether the corporation would be allowed to borrow abroad at full commercial rates for relending abroad, mixed with other funds, at less than full commercial rates to what often were less than fully commercial projects. At the moment, the practicality of this scheme might be questioned, given the high level of interest rates on many foreign currencies. But, because such transactions fall outside the United Kingdom economy and would not effect our money supply or interest rates, it is argued that they should be defined out of the PSBR.
  I cannot agree that they are unique in this respect, but I cannot agree, either, that to tinker arbitrarily with the measurement of the PSBR purely as a matter of presentation and with no effect on the realities of the proposal is justified. Borrowing by any corporation in the public sector is public sector borrowing by definition and in reality.
  If the CDC were to borrow commercially, it would be borrowing on the credit of Her Majesty's Government. It is not a question of definition, but one of reality. In addition, it is Government policy to reduce and not to increase the size of Britain's official overseas debt. An increase would occur if the course envisaged was pursued.
  I emphasise that no decision has been taken, but the matter raises issues which go well beyond definitional changes. It is for that reason that I cannot readily acquiesce in what my hon. Friend suggests, although I am grateful to him for giving us the opportunity to consider it afresh.
  Question put and agreed to.
  Bill accordingly read a Second time and committed to a Committee of the whole House; immediately considered in Committee, pursuant to the Order of the House this day; reported, without amendment.
  Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 93 (Consolidated Fund Bills), and agreed to.
  Bill accordingly read the Third time and passed.

Statutory Instruments, &c.
Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &c.)
Statutory Instruments, &c.

  BUILDING SOCIETIES
  That the draft Building Societies (Authorisation) Regulations 1981, which mere laid before this House on 30th June, be approved.—[Mr. Newton.]
  Question agreed to.
  Mr. Deputy Speaker (Mr. Bernard Weatherill): It will probably be for the convenience of the House if I put one Question to dispose of the five motions remaining on the Order Paper.
  Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &c.)

  INCOME TAX
  Ordered,
  That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Air Transport Undertakings and their Employees) (China) Order 1981 be made in the form of the draft laid before this House on 5th June.
  That an humble Address be presented to Her Majesty, praying the Double Taxation Relief (Taxes on Income) (India) Order 1981 be made in the form of the draft laid before this House on 5th June.
  That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income)(Mauritius) Order 1981 be made in the form of the draft laid before this House on 5th June.
  That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Switzerland) Order 1981 be made in the form of the draft laid before this House on 5th June.
  That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Thailand) Order 1981 be made in the form of the draft laid before this House on 5th June.—[Mr. Newton.]
  To be presented by Privy Councillors or members of Her Majesty's Household.

Rates
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Newton.]
8.18 am
Sir Julian Ridsdale: I wish to draw the attention of the House to the increasing burden of rates on the domestic, commercial and industrial ratepayer and especially to the threatened increase of 120 per cent. in the Greater London Council rate next year and the new supplementary rates which are being levied not only in the GLC area but in other parts of the country.
I hope to show that only an immediate reform of local government finance will overcome a system which is putting a great strain on ratepayers who comprise only 17 per cent. of those who vote in local elections.
The chief difficulty is that in inflationary times rates are not a buoyant tax. Because of that factor, local government does not have the tax base that it wants. Therefore, it has to rely increasingly on subsidy from the central Government for what are national charges or get the money from a small sector of the local government electorate—the ratepayers.
I want not to abolish rates entirely, but, by giving alternative forms of revenue to local government, to ease their incidence which, I am sure, will be a benefit to the inner cities, where it is becoming increasingly difficult not only to live as a householder but to trade as a small business man. Many householders have been forced to leave the inner cities and a number of shops and small businesses are being forced to close down because of increased rates.
Ratepayers are now facing supplementary rates bills which extravagant local authorities are forcing upon them. We must give local government a wider tax base in addition to rates. For example, a sales tax would be of great benefit to London and seaside areas. If the Government are not prepared to do that, then education, the police and fire services, for example, should be made national responsibilities paid for by the Exchequer.
I have been trying for nearly 20 years to get a reform of local government finance. I have had three Private Members' motions. The first, in 1962, achieved the setting up of the Allen committee. The result was the rent rebate scheme, which has been of great help to those on small fixed incomes. But, despite the Royal Commission, Green Papers and promises in election manifestos, that is about as far as reform has moved.
Ratepayers in various London boroughs face increases of about 52 per cent. this year. Others have fared little better, though, because of a redistribution of the rate support grant, those in rural areas have fared better than those in urban areas this year. But that does not mean that they may fare better next year. The general pattern, with the supplementary rates bills now coming in, is one of great strain on and unfairness to ratepayers, be they domestic, commercial or industrial. Essex faces a supplementary rate or cut in services. Indeed, this situation faces the country in general.
As I have said in the House on many occasions, a great deal of the increase is due to the rising cost of education. It has increased from when I first came into the House in 1954 from £400 million to £1,500 million in 1967, to £3,000 million in 1972, to £11,000 million this year.

719
In 1972, in my third Private Member's motion on local government finance, I pointed out that one of the chief problems was to know the right way to finance education. Admittedly, Government grants meet 60 per cent. of this expenditure, but, as I said then, there is still a huge amount to be collected through the rates. At that time—1972—it was £1,943 million, of which £843 million was the domestic ratepayers' share. The figure for this year is £7,800 million, of which the domestic ratepayers' share is £3,400 million. In 1972, I said that, rather than have this huge subsidy through the rate support grant for local government it would be better and fairer to relieve the domestic ratepayer of paying the education charge and to make that amount, or some part of it, a national charge.
I asked then, and I repeat today: is it right to disguise the way that the money is raised for education and to put such a heavy cost on industrial, domestic and commercial ratepayers? I said then that we would never contemplate getting money for defence by means of a tax on property. Yet that is what we are doing for education. Now we have 452,000 teachers and only 330,000 people in the Armed Forces. The bill, at £11 billion, is about the same in each case. But is it right that ratepayers should pay for this huge army of teachers?
In 1972 I said that I knew the argument about a change in the system taking away from making education a local interest. I said then, and I believe it now, that my experience as a private school governor had led me to believe in a duality of governors—some from the centre and some from the local authority. Such a system gives much better value for money. I am sure that that would be a much better system than the present one, which involves subsidy, further subsidy and disguising the whole cost of education and other charges to the electorate.
The supplementary rate being levied by the Inner London Education Authority this year shows the absurdity of the system, whereby economical councils are having to pay for the extravagant authorities such as ILEA. In addition, the hard-pressed ratepayers have to pay for the police, costing £1,400,000 in 1979 and more today. Add to that the fire services and the burden on the ratepayer begins to be apparent. This is not all. Water and sewerage charges, being connected to rateable values, mount up too.
The new GLC puts the burden of its extravagant concessionary fares scheme on the ratepayers, utterly disregarding the fact that other parts of the country, such as my constituency in North-East Essex, cannot afford such luxuries. Of course it would be far better to have a national concessionary fares scheme. I hope that such a scheme will follow the reorganisation of local government finance. Alas, faced with such a situation, councils all over the country have been cutting back on capital spending especially on sewerage which, in my constituency and in certain areas of London, is becoming an acute problem. Combined with the sewerage charge is the water rate, the incidence of which is causing grave concern, not only in my constituency but across the country.
It is easy to state the problems but not so easy to find the solutions, especially at a time when the gross domestic product is declining. I have the following advice to give to the Government; immediately appoint a Minister of Cabinet rank to deal with the reform of local government finance; bring forward the publication of the Green Paper
720
as soon as possible; give instructions that the Minister produce positive proposals by the time of the next Budget; beware of introducing a local income tax because this will put the matter back on the doorstep of those who are having to face the problem of the increasing rate burden; broaden the base of local government finance so that councils do not have to rely solely on rates as their means of finance. If we do not do this we shall kill local government altogether.
The Government should also consider very seriously taking the burden of charges for education, the police and the fire services from the shoulders of local government and its ratepayers. There should also be a limit on the amount of rate rises that councils can inflict on the ratepayers. Perhaps a mix of all these proposals will be the right solution.
I recognise that this means new legislation. I underline the need for urgent action. We have waited for too long and the problems are becoming worse, as we face supplementary bills coming in from local authorities, and the threatened vast increase of 120 per cent. in the GLC rate. I hope, most earnestly, that the time has come for early reform.
8.29 am
The Under-Secretary of State for the Environment (Mr. Geoffrey Finsberg): After a hard day's night the rating system is still a subject which is of immense concern to millions of business men, large and small, and to many millions more who contribute towards the cost of local government as domestic ratepayers and as taxpayers. Perhaps I should mention that I am advised that 48 per cent. of electors are ratepayers and not 17 per cent. as my hon. Friend the Member for Harwich (Sir J. Ridsdale) suggested, though that does not alter the burden of his argument.
The Government agree with my hon. Friend that much of the present rating system is in urgent need of reform. My right hon. Friend the Secretary of State certainly ensures, as my hon. Friend wished, that the rating system and other issues in local government finance receive the attention that they merit from all concerned, including his colleagues in the Cabinet.
It has been our policy, in considering the whole of local government finance, to address ourselves not only to the amount of expenditure incurred by local authorities, but to the consequences when that expenditure is excessive. We must also look at the way in which local revenue is raised through the rates and the extent to which the present system produces inequities for the ratepayer.
My right hon. Friend the Secretary of State therefore announced on 2 June that he intended to issue a consultation document in the autumn on the alternatives to domestic rates. I can assure my hon. Friend that the Government indeed mean to see that that document is published as early as possible and that once consultation is complete we shall be looking to produce positive proposals.
It is not easy, however, to examine the impact of possible alternative systems—and it is, of course, essential to ensure that a thorough study of all feasible alternatives is undertaken and effective consultation carried out before the Government's firm proposals are made.
For the time being, we have been examining the broadest possible range of alternatives including some of those which my hon. Friend has mentioned and at this

721
preliminary stage none of them is being ruled out. I shall certainly draw the attention of my right hon. and hon. Friends to what my hon. Friend has said including his points about the funding of certain services such as education and the police.
Whatever system finally emerges from the Government's review as a replacement for domestic rating will clearly have a most significant function to perform in financing the activities of local government. Domestic rates produce a very substantial revenue—£3·6 billion in Great Britain in 1980–81. The replacement of domestic rates would be a radical and substantial reform which would have to produce a system capable of lasting a long time. Our consultation document in the autumn will include those options which, in our view, appear most to merit further and closer consideration as possible ways of doing that job.
It is obviously most important that any solution chosen should have the maximum of public support. We therefore intend to consult very widely on the options, and the views of all interested parties, including of course my hon. Friend, who has done so much over the years to draw the House's attention to the problems of local government finance, will be welcomed.
In the meantime, the Government have taken action within the framework of the present rating system to provide useful, if less radical, help in some areas including the introduction under the Local Government, Planning and Land Act 1980 of a measure of domestic rate relief for more mixed hereditaments. That will be of immense help to many more small businesses, and especially small family businesses run from the home.
As I have explained, the consultation process in the autumn will be concerned with alternatives to domestic rates. The Government have never envisaged that non-domestic rates should be abolished. It is clearly impossible to divorce consideration of one sector from consideration of the other, and we shall keep the problems and needs of business ratepayers very much in mind during the review that we are undertaking.
Indeed, I assure my hon. Friend that whatever shape the final reform of domestic rates takes, there should be no question of an increase in the burden which the non-domestic sector is asked to bear.
The question of non-domestic rating must be seen in the context of the Government's much wider policies towards industry as a whole. The objective of those policies is the establishment of a prosperous and competitive industrial and commercial base to generate the wealth to provide jobs and finance effective public services. Prominent among those policies are, of course, a financial strategy to bring down both inflation and interest rates; and the reduction of the demands of the public sector on the private sector.
I take entirely the point that my hon. Friend made in his speech when he dealt with the possible effect of excessive rate demands on both domestic and non-domestic ratepayers. We all know the problems that an unexpectedly large expense can cause for household budgets. Excessive rates, as my hon. Friend says, also pose a problem for businessmen; both for those in large firms who are trying to maintain levels of profitability and for those in charge of small businesses who are struggling to establish themselves or to continue as viable concerns.
My hon. Friend has spoken of a freeze on rates; and he suggested that the Government might step in to veto the levying of supplementary rates.
722
I am not in a position to offer such simple solutions, but I can assure him that the Government recognise very clearly that local authorities must be prevented from crippling commerce and industry by the imposition of ever-larger rate burdens as exemplified by the new power-crazy dogma-ridden Marxist GLC, whose supplementary rate and whose reported plans for next year's rate are an affront to common sense and an intolerable burden on ratepayers both commercial and domestic. I warned the people of London before the GLC elections that the election of a new Labour GLC would mean that the rates would double in two years. Sadly, I have been proved right.
A comment was made yesterday by the Labour leader of Southwark council, who described what is happening at County Hall as a Walt Disney situation. I assume that Mr. O'Grady, the Labour leader of Southwark, was not referring to Mr. Kenneth Livingstone as Snow White, so I have to assume that he was thinking of him as one of the dwarfs. I can only call him Dopey, the dwarf of County Hall, who is totally out of touch with reality. The tragedy is that his lack of touch with reality will cause even more job losses in London, unless his colleagues knife him in the back as he knifed his leader, Mr. Andrew McIntosh. Those who live by the knife frequently find that their colleagues exert and extract the same penalty from them. Certainly, his removal in a democratic way by his colleagues would help the ratepayers of Greater London and would help sanity in local Government.
Our public expenditure plans require a reduction in the volume of local authority current expenditure by 5·6 per cent. compared with 1978–79. This overall reduction by local government is a vital part of the wider public expenditure reductions that are needed to restore the health of the economy, and make more room for productive investment in the private sector.
In the past, local authorities of both parties have always accepted that it has been central Government's responsiblility to set expenditure targets for local government as a whole—to say, in other words, how much the country could afford to spend on the services provided by local authorities—and local government has prided itself on achieving those targets.
I speak with personal knowledge, having served for 25 years in local government. During all those years, whatever the political complexion of central Government was, we in local government listened to what they said, believing it to be in the national interest.
This year, however, initial budgets prepared by local authorities nevertheless showed a planned expenditure some £800 million or 5·3 per cent above this target level.
On 2 June, my right hon. Friend the Secretary of State accordingly asked all authorities in England to review and revise their budgets, and warned that if the response was not satisfactory, he proposed to ask Parliament in the autumn to reduce the total rate support grant for 1981–82 by about £450 million.
My right hon. Friend the Secretary of State is waiting to see the revised budgets and is considering representations about the proposals before taking final decisions on the supplementary report that he will be laying before Parliament in the autumn.
We recognise the problems faced by local authorities and the achievements already secured, but we hope that they will be able to achieve additional savings. We need help from all authorities in this objective if the public

723
expenditure targets are to be achieved. In the end, of course, what must not be forgotten is that any reduction in a council's expenditure is of direct benefit to it's ratepayers.
In addition, if local authorities reject these calls for economy, it will be necessary for the Government to consider further measures, including the possibility of legislation next Session, to bring home to individual local authorities and their electorates the consequences of high spending policies.
I note what my hon. Friend said about the desirability of increasing public investment at the expense of current spending on wages and administrative expenses, and I accept that capital expenditure by local authorities has fallen substantially in recent years as a proportion of their total spending. But the previous Administration was prepared to accept this to safeguard public sector jobs. We have asked local authorities to reduce their current expenditure to a level 5·6 per cent. below 1978–79 levels, in real terms, in view of our overriding commitment to a substantial and sustainable reduction in public spending generally. In so far as they are unable to achieve this, we may be obliged to reduce the provision for capital spending to safeguard our overall public expenditure targets.
724
In the meantime, there is a great deal that domestic, industrial and commercial ratepayers can do to ensure that their interests do not go by default when expenditure and the rates are considered at local level.
Business interests can ensure via their chambers of commerce or the CBI that their views are made clear to elected members and fully represented in councils' deliberations. A regular dialogue with the business community can make local authorities much more alive to the problems and needs of commerce and industry. Local authorities which do not encourage and take part in that dialogue are not serving their electorates sensibly .
Domestic ratepayers also have ways of ensuring that their views are expressed with due emphasis either directly to elected members, through ratepayers' groups and associations, or, in the last analysis, the ballot box.
I believe that my hon. Friend has again done a service to the House in focusing our minds on the crucial rates issue at the end of a long parliamentary day. He is pushing at an open door. The Government have made it clear that they intend as rapidly as possible in the autumn to produce a Green Paper for consultation. In the light of the result of that consultation they will not hesitate to act.
Question put and agreed to.
Adjourned accordingly at eighteen minutes to Nine o'clock am.