Commons Sitting of 25 March 1981

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS
    BARNSLEY BOROUGH COUNCIL BILL
    Read the Third time and passed.
Oral Answers to Questions
  TRANSPORT

    Channel Tunnel
    Mr. Whiteheadasked the Secretary of State for Transport when he expects to respond to the Transport Committee's report on the Channel link.
    Mr. Ron Lewisasked the Secretary of State for Transport when he expects to respond to the Transport Committee's report on the Channel link.
    The Secretary of State for Transport (Mr. Norman Fowler): I welcome the committee's report, but before responding to it I shall wish to study fully the various proposals that are being put to me by potential promoters. That will clearly take a little time. I hope to be able to reach decisions of principle before the end of this year.
    Mr. Whitehead: Has the Secretary of State noticed that the Committee broadly endorsed the principle of a single track rail tunnel along the lines of that proposed by the two railway organisations? Does he feel that he ought to publish a White Paper, as the Select Committee recommended, so that the House may draw its conclusions on the thinking that will lead him to that decision in principle?
    Mr. Fowler: We shall consider that proposal. I shall deal with that question in my response to the report. Like the hon. Gentleman, I welcome the general endorsement not only of the principle of the Channel tunnel, but of the Government's policy towards it.
    Mr. Lewis: Does the right hon. Gentleman accept that British Rail's proposals are broadly in line with those of the Select Committee, but on a much smaller scale than that accepted in 1975? Does the right hon. Gentleman recall his statement in the House on that occasion, that the the BR proposal was viable and was the right scheme to speed up the cross-Channel link? Will he act quickly and approve the scheme?
    Mr. Fowler: We have eight schemes to consider, including the British Rail scheme. The hon. Gentleman
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    mentioned the Select Committee's endorsement of the BR approach, but the Select Committee has gone nearer the 7 metre scheme than the 6 metre scheme. There is clearly nothing between us in principle on the Channel tunnel or on its importance for the railway industry.
    Sir Albert Costain: Does my right hon. Friend appreciate that those of my constituents who were against the first Channel tunnel scheme are mainly in favour of the British Rail proposal, but all of them want an early decision?
    Mr. Fowler: I shall take that on board. If we can find a commercially viable scheme there is no reason why that scheme should not go ahead, but with private capital.
    Mr. Prescott: Will the Secretary of State confirm that it is still his policy to finance the project by genuine risk capital, and not with Government guarantees? Do future Government guarantees extend to minimum earnings on the tunnel, because the bankers to whom he is talking wanted that on the last Channel tunnel project?
    Mr. Fowler: As I have just said, I confirm that we believe that there is a commercially viable scheme here. There is no reason why that should not be supported by private risk capital. I remind the hon. Gentleman that on the last occasion the Labour Government cancelled the project because of a lack of public finance. We were not prepared to leave it there. We are currently considering the eight schemes, and will shortly consider a ninth. I shall then be in a much better position to answer him more fully.
    Mr. Moate: Will my right hon. Friend confirm that the private risk capital for such a venture will not be guaranteed by the Government? Can he confirm also that the investment will not involve any diversion of British Rail funds that would otherwise be used for other more important British Rail investment projects?
    Mr. Fowler: Yes. We are talking about private risk capital, as I have made clear from the beginning. The second part of my hon. Friend's question relates to one of the matters that we shall bear in mind when considering these schemes.

    Hastings and St. Leonards (Bypass)
    Mr. Warrenasked the Secretary of State for Transport if he will make a statement on discussions between his Department and. the East Sussex county council about possible bypass routes to enable A259 traffic to avoid the towns of Hastings and St. Leonards.
    The Under-Secretary of State for Transport (Mr. Kenneth Clarke): There have been no recent discussions with the county council. Work on this scheme has been suspended, but it will be resumed when we can name a realistic date for its construction.
    Mr. Warren: I know that my hon. and learned Friend is aware of the lamentable state of funding for trunk route projects in the part of the country that I represent, but may I draw his attention to some simple solutions to his problems? Will he consult the county council and utilise the spine road funded by the Hastings borough council, because that would supply at least half the route of a bypass round this busy town area?
    Mr. Clarke: The spine road suggestion by the county council is interesting. We are always happy to consult the

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    council and to co-ordinate its plans with our own. I hope that there will be some ways in which we can help before we are able to resume work on the Bexhill and Hastings bypass.

    Drivers (Vehicle Insurance)
    Mr. Dormandasked the Secretary of State for Transport if he will now introduce legislation to make it compulsory to display on a vehicle a certificate stating that the necessary insurance has been paid; and if he will make a statement.
    Mr. Kenneth Clarke: I see no need to impose this obligation, which presents considerable practical difficulties. Insurance certificates are checked when licences are renewed and the police have powers to require drivers to produce them at any time.
    Mr. Dormand: Is the Under-Secretary aware of the great difficulties and distress caused to innocent people by accidents caused by uninsured drivers? Is the hon. and learned Gentleman not exaggerating the administrative problems involved? Would it not be simple to fix an insurance certificate to windscreens, just as tax certificates are fixed on windscreens at present?
    Mr. Clarke: I agree that a great deal of distress is caused when uninsured drivers are involved in accidents. The difficulty is that there is no standard form of insurance, and a disc would not indicate the conditions of the insurance cover. In addition, most insurance is not tied to one vehicle. The hon. Gentleman has put forward an attractive idea, but I repeat that it appears to involve considerable practical difficulties.
    Mr. Arthur Lewis: Is it not the case that between 7 and 8 per cent.—in some cases up to 10 per cent.—of drivers have no excise licence? When I first raised the matter 25 years ago I was told that such evasion was not prevalent. Now we are told that it is out of hand and cannot be dealt with. Would not drivers ignore an insurance disc, just as they ignore the excise licence?
    Mr. Clarke: We are having what we call blitz campaigns in co-operation with local police forces throughout the country. I am glad to say that they are producing good results. We are also closely examining our arrangements for enforcing vehicle excise duty, and I hope that we shall be able to produce better results with less use of manpower and at less administrative cost.

    M54 (Telford)
    Mr. Hawksleyasked the Secretary of State for Transport if he will make a statement on the M54 motorway to Telford.
    Mr. Kenneth Clarke: Tenders for the first two contracts were invited on 10 February and 9 March. I hope to invite tenders for the remaining two over the next three months. Construction work under the first contract should start about June. We hope to open the road in late 1983.
    Mr. Hawksley: I thank my hon. and learned Friend for that answer, which will give great comfort to many of my constituents who are looking to the road to help the investment that is necessary in the new town of Telford. Is it possible, even at this late stage, to consider the representations of some local contractors that they should
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    be included in the contract list? There are some fairly large contractors in my constituency who would be able to provide many jobs if they were successful. They are asking whether they could be considered for the contracts.
    Mr. Clarke: I shall consider that point on the two contracts for which we still have to invite tenders. However, much as we like to help local employment, we must have a wide range of considerations in mind when deciding on the suitability of contractors to be invited to tender for such major projects. We will help if we can.
    Mr. Cormack: Is my hon. and learned Friend aware that, whatever comfort may be brought to the constituents of my hon. Friend the Member for The Wrekin (Mr. Hawksley), considerable annoyance will be caused to my constituents because the road will go through my constituency? Is my hon. and learned Friend further aware that my constituents believe that the project is a scandalous waste of public money and that an extra £20 million is being needlessly spent? Is he aware also that the motorway will provide a new and natural boundary for the conurbation and will destroy much fine agricultural and scenic land? All in all, it is the most despicable decision that the Government have ever made.
    Mr. Clarke: My hon. Friend has pressed each of those points on me for as long as we have been considering the project. It was a difficult decision, and it was impossible to satisfy both my hon. Friends. The debate about the road had continued inconclusively since the early 1970s. Telford has the highest rate of unemployment in the West Midlands. Many industries went there because they were promised a new road, and they believe that their survival depends upon better communications. I believe that the motorway will be a valuable capital investment. Someone had to make a decision, and the time has come to get on with it.

    Railways (Electrification)
    Mr. Andersonasked the Secretary of State for Transport when he expects to give his response to the findings of the rail electrification review.
    Mr. Fowler: I hope to be able to make a statement on railway electrification in the next month or two, after I have completed my consideration of the findings of the review and the British Railways Board's corporate plan.
    Mr. Anderson: Is the Secretary of State aware of the clear acceptance in the joint review of the advantages of main line electrification and the growing consensus and bipartisan view agreed by the TUC and the CBI, of the beneficial effects of rail electrification on industrial production for home and export markets? Will the right hon. Gentleman take on board the fact that we expect a positive response from the Government on this important piece of public investment?
    Mr. Fowler: Of course I take that on board. We have had the report only since Christmas and we are talking, on the largest option, of expenditure of between £750 million and £775 million. We are justified in taking some weeks to consider the matter, but I take on board what the hon. Gentleman has said.
    Mr. Dorrell: Has my right hon. Friend seen the statement of policy published by the British Railways Board this afternoon? Does he welcome it as a major

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    contribution to the development of rail policy during the 1980s, and does he recognise the important part that electrification will play in achieving the targets set out by the board in that statement?
    Mr. Fowler: I have only just seen that document. It is being published by British Rail at 2.45 pm. The timing may not be altogether coincidental. Obviously, I shall need some time to study it. I commend to the House the accompanying statement by Sir Peter Parker. It is right to emphasise that the future of the railways can be a good one, but it must be a future that is earned by the railways. It is not something that the Government can provide.
    Mr. Bradley: Is the right hon. Gentleman aware that it will be impossible to embark on the electrification of some of the lines recommended in the report until some of the major, costly and time-consuming resignalling schemes have been completed? What consideration is he giving to that investment aspect of the problem?
    Mr. Fowler: That is why we are dealing with the consideration altogether and not seeking to treat electrification as a separate issue. We are dealing with the investment needs of British Rail over the next four or five years.
    Mr. Waller: Bearing in mind the excellent rate of return provided by rail electrification, will my right hon. Friend give careful consideration to Sir Peter Parker's call in the document published today for an easing of the annual self-financing limit of BR, by the injection of private capital in the way that Sir Peter requires?
    Mr. Fowler: We are concerned to develop any opportunities for genuine private investment in the railway system. I am sure that the Opposition will wish to endorse that.
    Mr. Stott: Does the Secretary of State recall that when he last answered questions in the House I drew his attention to the unanimous conclusion of the working party that an early decision on electrification was essential if British industry was to benefit from it? We hope that the right hon. Gentleman's decision will be made within a month rather than a "month or two". Can he indicate whether he has consulted his right hon. Friends the Secretaries of State for Employment and for Industry to ascertain from them how many jobs would be created in the regions and how many companies throughout the country would benefit from an early decision on electrification if the Government went for the biggest option?
    Mr. Fowler: We hope to make the decision in the next two months. I have made that clear. We estimate that about 2,000 new jobs would be created in the railway manufacturing industry if the electrification project went ahead. That impact and the effect on the private sector railway industry are matters that we shall have closely in mind.

    Railways (Investment)
    Mr. Flanneryasked the Secretary of State for Transport what was the total investment in British Railways for 1977, 1978, 1979 and 1980, respectively; and what is the projected investment for 1981.
    Mr. Fowler: The figures for 1977 to 1980 are £215 million, £245 million, £301 million and £337 million
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    respectively. All figures are at outturn prices and exclude expenditure on continuous welded rail which was removed from the Railways Board's investment ceiling in February 1980. The current public expenditure White Paper shows the board's forecast for investment in 1981–82 as £382 million.
    Mr. Flannery: Does the Minister realise that the railway unions and railway workers generally—I have riot had a chance to see the plan that has apparently emerged today—are watching the situation with great care? They are aware of the possibility of line closures and of a definite deterioration in the right of way. Does the right hon. Gentleman not think that action should be taken to ensure the safety of the public and also to ensure that the work force of British Rail is retained, without the fear that many of them will lose their jobs almost overnight?
    Mr. Fowler: The hon. Gentleman has asked a number of questions. His basic inquiry is about future employment in the industry. I am sure that he agrees that the highest productivity possible is essential if the railway industry is to have a future. That is crucial to the report that has been produced by British Rail today.
    Mr. Nicholas Winterton: In relation to the projected expenditure, will my right hon. Friend indicate what consideration has been given to British Rail's investment in part of the infrastructure of the Channel link, particularly at terminals in London and outside Folkestone? Does he agree that the best way for this excellent project to proceed, to the benefit of employment in the construction industry, would be through some form of co-operation between British Rail and the European Channel Tunnel Group, which has put forward an excellent proposal for the Channel link?
    Mr. Fowler: I do not wish to discuss individual projects. These are before the Government at the moment What is basic is that there must be the closest co-operation between British Rail, SNCF and the private sector in terms of building the tunnel.
    Mr. Walter Johnson: Is the Secretary of State aware that vital maintenance and repair work is being held up on British Rail by the lack of finance? A safety factor, therefore, comes into the consideration. It is time that the Government made up their mind about what sort of financial aid is to be available. The situation is urgent. Will the Minister make a statement?
    Mr. Fowler: I do not think that I can add to what I have said about the urgent consideration that is taking place on the finances of the railway industry generally. I am sure that the hon. Gentleman, with his knowledge of the industry, will confirm that the safety record of British Rail is extremely good. Last year, I believe, was the best on record.
    Mr. Bill Walker: My right hon. Friend will be aware that much of the rolling stock in use in Scotland is reaching the end of its practical life. Although the railway unions and British Rail in Scotland admit that there is no risk in the use of that stock and that passengers are not at risk, I wonder whether my right hon. Friend has proposals for replacing that rolling stock.
    Mr. Fowler: I am grateful to my hon. Friend. The rolling stock requirements of British Rail in Scotland and

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    elsewhere are part of the whole discussion on the future of the railway industry. I shall bear in mind what my hon. Friend has said.

    Humber Bridge
    Mr. Brothertonasked the Secretary of State for Transport what is the latest estimated volume of traffic that will use the Humber bridge.
    Mr. Kenneth Clarke: I understand that the traffic consultant to the Bridge Board has estimated that 4,000 vehicles a day will use the bridge on opening, rising to 14,000 in 10 years' time.
    Mr. Brotherton: Assuming those figures to be correct, will my hon. and learned Friend say what will be the outstanding debt, including borrowing charges, on the bridge in the year 2000? Will he say when he expects this, the most beautiful of all white elephants, to have finally paid for itself?
    Mr. Clarke: The Bridge Board assures me that it thinks the bridge will eventually pay for itself. I cannot give an estimate of the total outstanding debt at the turn of the century. The bridge has cost £88 million so far, so it ought to look good and do some good for someone on the north side of the Humber.
    Mr. Kenneth Carlisle: Is my hon. and learned Friend aware that much of the extra traffic generated by the bridge is likely to pass through the city of Lincoln? We therefore welcome the Government's decision to build a bypass round the city and urge the Minister to make sure that the project is completed as quickly as possible.
    Mr. Clarke: I hope to be able to announce that we shall publish the draft orders—the detailed design for the new road—within the next few days.

    Ayrshire Railway Lines (Electrification)
    Mr. Foulkesasked the Secretary of State for Transport what consultations he plans to have, and with what bodies, before decisions on progress on the proposed electrification of the Ayrshire lines are made.
    Mr. Kenneth Clarke: The proposed electrification of the Ayrshire lines is a matter for Strathclyde regional council as part of its responsibility for local transport. It is in touch with my right hon. Friend the Secretary of State for Scotland about the scheme.
    Mr. Foulkes: Is the Minister aware that because of the division of responsibility between the Strathclyde PTE, the Secretary of State for Scotland and British Rail, which has a responsibility, there is total confusion about this project? All are waltzing around in circles and no decision is being made. Will the Minister cut the Gordian knot and say how, by whom, and when a decision will be made, before the existing rolling stock falls apart?
    Mr. Clarke: British Rail agrees with the need for electrification. The responsibility for financing electrification lies with the Strathclyde PTE. The Government, I understand, have approved that as part of the capital allocation to Strathclyde district council. Consultations are taking place between Strathclyde regional council and the Secretary of State for Scotland on the details of financing, but the responsibility is that of the Strathclyde PTE.
    Mr. Allan Stewart: Does my hon. and learned Friend agree that the electrification programme south of Glasgow should be seen as a coherent whole, including the commuter lines in my constituency and elsewhere?
    Mr. Clarke: That is the responsibility of the PTE for the Strathclyde region. I hope that it will discharge its responsibility by looking at the overall transport needs of the area.
    Mr. Speaker: Order. This question relates to Ayrshire.
    Mr. Stephen Ross: We have electricity on the Isle of Wight, too, Mr. Speaker. In all this prevarication about the future electrification of the railways, is it not important to come to a decision quickly before firms with the specialist knowledge to do the work go out of business? That is the view that I hear.
    Mr. Clarke: My right hon. Friend has confirmed that the Government will come to a decision in two months. This is one of the most critical decisions that the Government have to take for the future of the railways. The problem in Ayrshire is slightly different. It is a question of the Strathclyde PTE reaching conclusions on how to finance the electrification that is wanted.

    Public Service Obligation Grant
    Mr. Fosterasked the Secretary of State for Transport how the public service obligation grant is calculated; and how it is allocated to each branch line.
    Mr. Fowler: The public service obligation grant is assessed as the forecast shortfall between total passenger revenue and the total costs attributable to the passenger business. The grant is paid towards the passenger railway as a whole. It is not allocated to particular services or branch lines.
    Mr. Foster: Does the Secretary of State agree that the public service obligation grant is totally inadequate to avoid the closure of branch and rural lines? Will he explain how I can assure my constituents that the money provided to support the Bishop Auckland and Darlington line and other lines under threat in the North-East is spent for that purpose?
    Mr. Fowler: On the last question, the hon. Gentleman has been assured on a number of occasions. As for the inadequacy, as he claims, of the PSO grant, I remind him that the nation spends almost £2 million a day on direct passenger support. I do not regard that as inadequate.
    Mr. Anderson: Is the Secretary of State aware that there is some anxiety in South Wales that the area is not getting its fair share of the PSO grant? As the situation has altered since the 1974 Act, will he consider opening the books a little to permit proper debate about the allocation?
    Mr. Fowler: I am in favour of having the maximum amount of information published and divided down. I have put this point to British Rail over a number of years. The Railways Board has developed its avoidable cost concept. We shall have to see how far that gives us information. I agree with the hon. Gentleman's point.
    Mr. Michael McNair-Wilson: Is my right hon. Friend satisfied that the PSO grant is the best way of assessing the social cost of the railways?
    Mr. Fowler: Yes. I think that it is the best way. To go back to the previous question, it is possible to make

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    divisions in it to make it more comprehensible; in other words, not to have quite the same block grant method as at present. Any improvement that can be introduced to make British Rail and its units more accountable is something that we should pursue.

    Roads (Maintenance)
    Mr. Edwin Wainwrightasked the Secretary of State for Transport if he will make a statement on the effects on road maintenance of the proposed motorway and trunk road maintenance expenditure contained in the public expenditure White Paper—Cmnd. 8175.
    Mr. Fowler: Next year my Department plans to spend £118 million on maintaining trunk roads and motorways. This is the largest sum ever earmarked for this important service and is £16 million more than last year
    That increase will enable us to renew substantial lengths of our older motorways, many of which have already carried a larger tonnage of traffic than they were designed for 20 years ago.
    Mr. Wainwright: Does the Secretary of State realise that many of those involved in road transport believe that insufficient money is being spent on motorway and trunk road maintenance? Does not the right hon. Gentleman realise that inflation reduces his increased figure by a large amount? Why has trunk road maintenance expenditure been reduced during the past two years from £61 million to £37 million? Is there not a possibility that the condition of the trunk roads is so bad that it may cause danger to traffic?
    Mr. Fowler: I do not agree with the hon. Gentleman. We are spending more than has ever been spent before on maintaining trunk roads and motorways. I refer the hon. Gentleman to the national road maintenance condition survey for trunk roads which shows that there has not been the deterioration suggested by the hon. Gentleman.
    Mr. Cormack: Will my right hon. Friend tell me when I was last able to travel along the M1 and the M6 without being held up by extensive roadworks? Will he tell me when I shall next be able to travel along the motorways without being held up? Why does he not spend the additional £20 million that he is squandering in my constituency on improving the M1?
    Mr. Fowler: The new motorway will help my hon. Friend's mobility problems. He must face the fact that we are seeking to reconstruct the M1 because it has reached the end of its design life. It is sensible to do so. No one could criticise us for seeking to preserve the valuable investment that we have put into that motorway.
    Mr. Roy Hughes: Does not the Secretary of State appreciate that one day the Government will make a U-turn and promote economic growth and stimulate the economy? Is he aware that that will result in a greater movement of goods by road and rail? Would it not be a good idea to increase investment now, both in road maintenance and road building, to prepare for that eventuality?
    Mr. Fowler: I do not think that the hon. Gentleman heard my reply. The Government are spending more than any other Government have ever spent upon maintaining trunk roads and motorways. Surely that is proof of the commitment for which he is asking.

    Double Track Railway Lines
    Mr. Ernie Rossasked the Secretary of State for Transport what is the latest figure for the total mileage of double track railway line converted to single line over the past five years; and what are the main reasons for conversion.
    Mr. Kenneth Clarke: I understand from the British Railways Board that 65 miles of double track railway line have been converted to single track during the past five years. The main reason is to reduce costs by bringing track capacity into line with traffic levels.
    Mr. Ross: Does the Minister accept that moving from double to single track will interfere with the frequency of the service? Does he agree that a fast, efficient and reliable train service is the best way to promote an increase in passenger and freight transport? That would be best served by double track.
    Mr. Clarke: I do not have great technical expertise in these areas. Whether it delays the services depends on the volume of traffic that wants to move along the double or single track. The reductions are part of a sensible process to ensure that we are investing in facilities that actually match the traffic demand and avoid wasteful expendture on over-provision of track.
    Mr. Lang: When my hon. and learned Friend considers the electrification of the Ayrshire lines, will he also consider electrifying the single track line to Stranraer as part of a coherent whole?
    Mr. Clarke: In the recent review of electrification proposals some account was taken of these local electrification schemes, which are primarily the responsibility of the Strathclyde PTE. My right hon. Friend the Secretary of State for Scotland is anxious to hold discussions to ensure that the Strathclyde PTE can finance justifiable projects.
    Mr. Cryer: Does the Minister accept that the main criteria of both the single and double track service are that the service should be efficient and reasonably speedy so that it attracts and retains passengers? Has not investment in British Railways now reached a stage where the diesel multiple unit stock is no longer fast and efficient due to maintenance problems? Is the hon. and learned Gentleman aware that because of the cost difficulties of maintaining the track British Railways are having to cut speeds so much in some areas that services cannot be maintained? Does he realise that, although we spend a great deal of money on Britsh Railways, rail transport is a good bargain and more money is needed to maintan services?
    Mr. Clarke: The Government have not reduced the investment ceiling for the British Railways Board. We have maintained it, and are continuing to discuss with British Railways their investment needs. There may be a need to renew the diesel multiple unit fleet, but British Railways have not completed their design for the new unit. Such problems must be overcome before we can talk in the terms adopted by the hon. Gentleman.
    Mr. John MacKay: Does my hon. and learned Friend accept that one way to increase the efficiency of both double and single track railways would be to move to radio-controlled signalling, which would cut manpower and costs and greatly improve the efficiency of the train service?
    Mr. Clarke: British Railways have carried out a great deal of research on that aspect. I am persuaded that it would be a valuable way to cut costs, especially for some of the smaller rural railways. Experiments are under way and there is, for instance, an installation of radio signalling on the Bedford-St. Pancras electrification scheme. I am sure that British Railways will explore that method to reduce costs and to maintain services.

    Roads (Winter Maintenance)
    Mr. Sheermanasked the Secretary of State for Transport what measures he is taking to evaluate the effects of the decision to cut salting and winter maintenance of roads to ensure that people are not being killed or injured as a result.
    Mr. Fowler: There was no decision to cut salting this winter. My first concern is always the safety of those using our trunk roads and motorways but I am determined that we should get value for money from winter maintenance spending. I have, therefore, agreed with Sir Derek Rayner that these operations should be examined and I expect a report later this year on the scope for improving both safety and value for money.
    Mr. Sheerman: Is the Secretary of State aware that the Government's decision to cut back overall maintenance which was conveyed to local authorities during September and October meant that local authorities had to make the cutback in that financial year? Is he further aware that it was too late to cut back in any area other than winter maintenance and gritting? Does he appreciate that West Yorkshire and other local authorities in the North found it difficult to make the savings, and had to cut back on the very areas that are being denied by the Secretary of State?
    Mr. Fowler: There has been an increase from £5½ million spent last winter to £6½ million spent this winter on maintenance. In other words, about the same level of expenditure has occurred in real terms. I am sure that the hon. Gentleman will agree that we want to achieve the maximum efficiency in operations. That is why I have asked Sir Derek Rayner to consider the matter.
    Mr. Bill Walker: Does my right hon. Friend agree that he should congratulate the men who, winter after winter, operate the clearing schemes on the Highland roads in Scotland? They keep open the roads in appalling conditions.
    Mr. Fowler: I am sure that my hon. Friend is right. The men carry out an extremely difficult job which, as my hon. Friend said, they do extremely well.
    Mr. Ron Lewis: Does the Secretary of State recall the correspondence from Cumbria county council about road maintenance and the severe cutbacks that the council experienced this winter? What does he intend to do about that matter?
    Mr. Fowler: I cannot add anything to my previous remarks. There has been no cut. I suggest that the hon. Gentleman checks with the Cumbria county council to see my reply.

    Road Signs
    Mr. Michael McNair-Wilsonasked the Secretary of State for Transport whether he intends to introduce any new road signs.
    Mr. Fowler: Yes. The revised traffic signs regulations, which I hope to lay before the House by Easter, will introduce some new signs and road markings.
    Mr. McNair-Wilson: As it is the International Year of Disabled People, and as the Highway Code does not include any signs specifically for the disabled—for example, to warn motorists that they are approaching a crossing that is regularly used by the disabled—will my right hon. Friend include among the signs that he intends to promote one relating to the disabled?
    Mr. Fowler: We recognise, especially in this year, the needs of the disabled. The new signs will include a warning sign for a crossing point frequently used by the disabled. I hope that that will prove helpful.
    Mr. Stephen Ross: Will the Secretary of State look at clause 2 of the Disabled Persons Bill promoted by the hon. Member for Caernarvon (Mr. Wigley) to determine whether he can give some power to local authorities to adopt legal rights to prevent members of the public deliberately parking on double yellow lines in areas reserved for the disabled?
    Mr. Fowler: That is something that the Government have suggested.
    Mr. McQuarrie: When my right hon. Friend is considering the new road signs, will he bear in mind the areas where certain languages—for example, Gaelic and Welsh—are spoken? In order to prevent vandalism, will he ensure that the new signs appear in both English and the language of the area?
    Mr. Fowler: I shall take that point on board when considering the matter.

    Stocksbridge (Bypass)
    Mr. Allen McKayasked the Secretary of State for Transport what progress has been made towards the completion of the Stocksbridge bypass and associated road works.
    Mr. Kenneth Clarke: We intend to complete the detailed design work and publish draft orders later this year. We hope to be ready to start construction in 1982–83, but this will depend on resources being available.
    Mr. McKay: Is the hon. and learned Gentleman aware that the closure of the Manchester to Sheffield line via Woodhead will cause a spur from British Steel, Stocksbridge to Sheffield 12 miles long? Is he aware that neither British Rail nor the BSC intends to maintain it, and that, therefore, the only way that steel can be moved from British Steel, Stocksbridge is by road, with all the problems that that will involve? Will he consider asking British Rail to delay that closure until the bypass is completed?
    Mr. Clarke: With some ingenuity, the hon. Member has got back to the subject of the closure of the Woodhead tunnel line. As he knows, that is the responsibility of the British Railways Board. It is a freight-only line, and it is for British Rail to decide the future of that line, which is losing a lot of money when the traffic can be carried on other lines.

    Road Construction (Expenditure)
    Mr. Knoxasked the Secretary of State for Transport how much has been spent on new road construction in the last three years; and how much he anticipates will be spent in 1980–81 at constant prices.
    Mr. Kenneth Clarke: Expenditure on trunk and local road construction in England at 1980 survey prices was £660 million in 1977–78, £650 million in 1978–79, and £695 million in 1979–80. In 1980–81 I expect that the outturn for motorway and trunk road construction on the same price base will be about £320 million. It is too early to make a reliable forecast of the outturn for local roads for which the provision was £324 million.
    Mr. Knox: In view of the contribution that better roads can make to our industrial competitiveness, does my hon. and learned Friend agree that Government capital expenditure should be increased in this area more rapidly than has been the case?
    Mr. Clarke: At present we are maintaining spending on trunk road construction up to the cash limits, and as a result we are making good progress with our programme. There is not much slippage of major schemes. We are bearing in mind the need to maintain the Government's capital investment programmes, and we try to manage the road programme so that it makes its contribution.
    Mr. Booth: Does the figure that the Under-Secretary has just announced indicate that there has been a massive underspend on trunk road construction in England during 1980–81? If so, how does he reconcile the figure of £324 million with the statement made by his right hon. Friend on 23 July last when he claimed that the Government's expenditure on English trunk roads was higher than during the last two years of the Labour Administration? The figure he has given suggests that trunk road construction during 1980–81 will be lower than at any time during the past 15 years.
    Mr. Clarke: It is not an underspend in the sense that we are spending up to near our cash limit. The problem is the result of a technical revaluation of the figures to get them back to volume terms. We intend to adjust the cash limit for 1981–82 to compensate for that. We are not underspending the cash that is available to the Department, and we are maintaining full progress on the trunk road programme.
    Mr. Nicholas Winterton: Could there be a reallocation between capital projects on new local roads and money available for the maintenance of local, non-trunk roads? What progress is being made on designating routes for heavy vehicles in rural areas, because many small local country lanes and roads are being severely damaged by heavy vehicles?
    Mr. Clarke: It is for local authorities to decide how to allocate their spending between local road construction and maintenance. They are free to use the money that we give them, for example, by way of transport supplementary grant as they judge best for local priorities. I like to see local authorities extending the areas that are free from heavy lorry traffic. I do not know of any recent spectacular extensions in rural areas, but a large part of North London has recently been made free of heavy lorries. That shows what can be achieved when the road system is improved to provide alternative routes.

    Rural Bus Services
    Mr. Iain Millsasked the Secretary of State for Transport if he is satisfied 'with progress on the setting up of new rural small bus services under the provisions of the Transport Act 1980.
    Mr. Fowler: Yes, Sir. I am impressed by the efforts being made by local authorities, local bus operators and a range of voluntary organisations to improve transport services in rural areas.
    Mr. Mills: I thank my right hon. Friend for that reply. Is he aware that in my constituency the Transport Act 1980 has allowed the setting up a small bus which travels in the Marston Green area twice a week, fitting in flexibly., in line with the Act? Will he join me in congratulating councillor Peter Kellie for arranging this rural bus service?
    Mr. Fowler: Yes, certainly. More generally, the Act makes it easier for independent operators to obtain licences. I hope that the opportunities provided by the Act are more fully grasped.
    Mr. Prescott: While the 1980 Act may have produced "Kellie's bus" the evidence shows that more and more rural services are closing down all over the country. In view of the Budget decision to raise petrol prices by 20p, and since people in rural areas will be denied any services, will the right hon. Gentleman carry out a survey to discover the facts about transport facilities for people in rural areas?
    Mr. Fowler: I shall certainly consider such a survey. However, the hon. Gentleman will realise that the decline in rural bus services has taked place over the past 25 years, under the old licensing system. We have introduced new opportunities. I am glad to be able to tell the House that there are signs in places such as Exeter, Somerset, Dorset, Leicestershire, the Grimsby area and Bexhill of new services developing. I am sure that that is what needs to be done.
    Mr. Cormack: Is my right hon. Friend aware that the recent increase in petrol prices will make it increasingly difficult for elderly people in rural areas to get out? Will he set up a committee to consider the establishment of a national scheme for concessionary fares for elderly people?
    Mr. Fowler: I shall not set up a committee to do that, but clearly one of the purposes of the Act is to provide new opportunities for providing transport for the aged and for all the people who live in country areas. I remind my hon. Friend that a national concessionary scheme would have serious implications for public expenditure.
    Mr. Skinner: Was not the Minister indulging in a bout of hypocrisy when he replied to my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) about the increased price of petrol and running down of rural bus services, particularly when the Tory Party, during the 1979 general election campaign, said over and again that it intended to remove all the past ills, set up rural bus services where none existed, and to improve bus services where they were weak? None of those things has been done. Why will not the Minister acknowledge that the Government must now reduce the prices of such items as petrol and increase subsidies in order to get these rural bus services on the move?
    Mr. Fowler: The hon. Gentleman's diagnosis is entirely incorrect. The Transport Act 1980 created new opportunities for licensing conditions. Whatever else may divide us, it is surely a matter of common sense not to put obstacles in the way of new bus services being set up.

    A1 (Northumberland)
    Mr. Beithasked the Secretary of State for Transport what representations his Department has received from the North Northumberland coroner about proposals for a dual carriageway on the A1 in Northumberland.
    Mr. Kenneth Clarke: The coroner has written to my Department to suggest that the A1 between Alnwick and Berwick-upon-Tweed should be improved to dual carriageway standard. This followed an accident at a site which will be bypassed by stage 2 of the Alnwick bypass which is in our main trunk roadbuilding programme for 1982–83.
    Mr. Beith: Does the Minister realise that this is the second time that the North Northumberland coroner has made representations to his Department on that subject, and that there has been a series of fatal accidents on the A1 between Morpeth and Berwick? Does the Minister realise that the great weakness of the road, on which a lot of money has been spent on ill-advised works, is that it does not provide opportunities for safe overtaking? Will he ensure that the money spent on the A1 is used to make that road safer?
    Mr. Clarke: That is our intention. We use the moneys on improvements to eliminate danger spots and to allow proper overtaking opportunities for traffic. The second stage of the Alnwick bypass is important because it is a bad accident spot. The hon. Gentleman will be pleased to know that the European Commission today announced a fresh programme of payments to this country under supplementary measures proposals which includes express provision for improvements to the A1 north of Newcastle upon Tyne.

    Railways (Investment)
    Mr. John Evansasked the Secretary of State for Transport when he next expects to meet the chairman of British Railways to discuss the future financing of the railways.
    Mr. Canavanasked the Secretary of State for Transport whether he will meet the chairman of British Railways to discuss investment programmes.
    Mr. Fowler: I meet the chairman regularly to discuss a wide range of topics. I expect to meet him again shortly.
    Mr. Canavan: In view of the advantages of electrification in terms of running costs, speed, environment and energy conservation, will the Government ensure that British Rail gets enough investment for an early go-ahead for the programme of electrification of lines, including lines in Scotland as far north as Stirling, Perth, Dundee and Aberdeen?
    Mr. Fowler: As I have already said, we are currently examining the whole question of electrification, and we would expect to reach conclusions in the next two months.
    Mr. Bagier: The right hon. Gentleman will surely have had time since 2.45 this afternoon to examine the
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    document that British Rail has issued. Does he appreciate that the schemes outlined by British Rail make sense in terms of the public transport system? Can he hold out any hope that the bulk of the requirements set out in that document by BR will be met by the Government?
    Mr. Fowler: I think that I would like to be able to direct a little more concerted attention to the plan than that which I have been able to give it since 2.45 this afternoon. Clearly we shall examine it, but I hope that the ever bigger bids that BR makes do not obscure the immediate needs, which is what we should be concentrating upon. I hope that the message will also go out that this is a question not just for Government, but for the whole railway industry. The highest premium must be placed upon maximum efficiency and productivity.

  CIVIL SERVICE

    Pay
    Mr. Kenneth Lewisasked the Minister for the Civil Service what progress has been made in discussions with the Civil Service unions on establishing a formula for future regulation of salaries and wages within the Civil Service.
    Mr. Chapmanasked the Minister for the Civil Service if in future negotiations on Civil Service pay, the drop in numbers of non-industrial civil servants will be a factor in determining the increase in pay.
    The Minister of State, Civil Service Department (Mr. Barney Hayhoe): My right hon. and noble Friend the Lord President of the Council and I told the Civil Service unions on 23 February that the Government intend to review the present arrangements for determining the pay of non-industrial civil servants with the object of establishing as soon as practicable an agreed and ordered system. Further meetings have been held since then, and we have been able to assure the unions that the review will cover matters of concern to them such as independent fact finding, comparisons with outside terms and conditions, and arbitration, as well as all other relevant factors. Future arrangements for negotiating and determining non-industrial Civil Service pay will, of course, depend on the outcome of the review.
    Mr. Lewis: Since the Government have already increased the original offer to the Civil Service, does my hon. Friend recognise that it is important that this should be the final offer and that it should not be increased? Does he also recognise that the public do not appreciate strike action by civil servants? Will my right hon. and hon. Friends bring together the leaders of the unions and ask them to consider whether it is not in their interests, as well as those of the country, that they should have a new formula for next year and that they should accept that?
    Mr. Hayhoe: I can give my hon. Friend the assurance that the 7 per cent. offer is the most that can be found from the Civil Service cash limit this year, and that the Government will stand clearly upon that figure. The unions have been told that there is no more money this year. Settlements generally in outside industry have been falling into single figures, and it is only right that the Civil Service should play its part in this general restraint. I do

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    not believe that there is public sympathy for the claim being made by the leaders of the Civil Service unions for a higher increase this year.
    Mr. Chapman: Has there been complete co-operation by civil servants in the Government's planned reduction in their numbers from 730,000 to 630,000 by 1984? Will my hon. Friend reaffirm that the pay of a civil servant ought to be based upon the skill and importance of the job and upon what the country can afford, and should in no way be measured by the numbers of people working in any particular Department?
    Mr. Hayhoe: I can assure my hon. Friend that the Civil Service has been co-operating with the Government in reducing the numbers, both by finding more efficient ways of tackling work and by giving up work which is no longer necessary. Of course, my hon. Friend is right to say the pay of the Civil Service, as of others, should be commensurate, not with the numbers in a Department but with the work being done.
    Mr. Alan Williams: May we have a categoric assurance of the Government's intention to return to an agreed system of pay for the Civil Service for the next pay round? Does the hon. Gentleman recognise that the arbitrary and unilateral abandonment of the PRU was a major factor in making many civil servants decide to support a strike? In view of the damage being caused by the disruption, and in view of the Chancellor's appeal on Monday, is there not an appalling lack of urgency in coming forward with firm and specific proposals for an alternative system? Will the Minister confirm that there is within Whitehall a dilatory working party which is dawdling along meeting only once a week?
    Mr. Hayhoe: It comes extraordinarily ill from the right hon. Gentleman, sitting as he does on the Labour Benches, to criticise us for suspending the pay agreement. In the past 10 years that agreement has been operated on five occasions—four times under Conservative Governments, and only once under Labour. So we on the Conservative side will accept no criticisms or strictures from the Opposition on that matter. I can confirm that it is our intention to return to an ordered and agreed system as soon as practicable. I hope that it will be possible for 1982. The sooner there is a return to normal working the sooner discussions on these matters can proceed and the faster the new agreement can be made. There can, however, be no certainty at this stage that it would be available for 1982.
    Mr. Chris Patten: Are the Government prepared to discuss with the Civil Service unions the negotiation of "no-strike" agreements in return for indexed pensions and for an agreed form of arbitration backed by the force of law?
    Mr. Hayhoe: I have seen the extremely interesting letter from my hon. Friends the Members for Bath (Mr. Patten) and Bristol, West (Mr. Waldegrave) in The Times to-day, with the suggestion that they made. Certainly the subject of "no-strike" agreements and any possible linking is not excluded from the discussions which can be held.
    Mr. Woolmer: Does the Minister accept that in no sense are the civil servants indulging in a political strike? Is he aware that it is action by a large group of workers which is deeply and genuinely angry at the unilateral way in which the Government have acted as employer? Will he confirm that the unions would be prepared to go to
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    arbitration tomorrow, and that it is the Government who are refusing to do that? Does it not come ill from Conservative Members to suggest "no-strike" action and other ways of overcoming problems when the solution is in the hands of the Government, who have unilaterally broken the agreement?
    Mr. Hayhoe: I do not believe that this is a political strike. As far as I am aware, no one from the Conservative side has suggested that it is. What a sorry day it would be for the country if the civil servants or any other group indulged in industrial action purely for political ends. I hope that that would be condemned on the Labour Benches as firmly as it would be on the Conservative Benches.
    Mr. Cryerasked the Minister for the Civil Service how many civil servants receive pay which is below the national average wage.
    Mr. Hayhoe: About 356,000 or 67 per cent. of non-industrial civil servants are currently paid below the latest estimate of national average earnings for full-time adults of £120·80 per week for last November.
    Mr. Cryer: Does not that reply demonstrate the strength of the civil servants' case and the reason for their strong feelings about their wages? Is it not true that, in the wake of the miners' settlement, civil servants must take the view that the Government understand only the strength of industrial muscle which they now have to demonstrate in order to bring the Government to the negotiating table? What does the Minister feel about the example afforded to civil servants receiving less than the national average wage by the chairman of the National Westminster Bank who has been awarded a 31 per cent. increase? Will he condemn that increase in the private sector as well as condemning the civil servants' claim?
    Mr. Hayhoe: I shall instead point out to the hon. Gentleman that when his Government were in office a rather higher percentage of civil servants were receiving less than the average wage than are now doing so.
    Mr. Neubert: Does my hon. Friend agree that it would be entirely appropriate to raise the question of "no-strike" agreements when determining the Civil Service pay? Can he give a more urgent response than the one he gave to my hon. Friend the Member for Bath (Mr. Patten) and remember the damage that was done at the time of the Post Office dispute when £100 million of public revenue was lost as a result of this kind of action?
    Mr. Hayhoe: I said in an earlier answer that the question of "no-strike" agreements was not excluded. However, the Civil Service unions have not said that such a proposal would meet with their approval.
    Mr. Alan Williams: Has the Minister seen the letter which was sent from the present Prime Minister's office during the election, in which it was said that the Conservative Party could
    "see no reason why the restored and revised research system should not continue to provide the basic data for pay settlement"
    in the Civil Service? Why was that commitment given when votes were needed and abandoned as soon as the votes were received?
    Mr. Hayhoe: That commitment was subject to the statement made by my right hon. Friend the present Secretary of State for Employment, who, after approving the use of pay research, said:

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    "Naturally, we cannot give blanket approval in advance to the way the new Pay Research Unit is working, nor an unqualified promise to implement its future recommendations. No responsible Government or Opposition can make commitments of that kind."
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    We are implementing the statements which we made before the last election concerning Civil Service pay research.

European Council (Maastricht Meeting)
The Prime Minister (Mrs. Margaret Thatcher): With permission, Mr. Speaker, I will make a statement about the European Council meeting in Maastricht, which, together with my noble Friend the Foreign and Commonwealth Secretary, I attended on Monday and Tuesday
The discussions at the meeting covered a wide range of issues—both Community issues and those relating to foreign policy co-operation. There was no formal communiqué but a number of statements were agreed and the Presidency, on its authority, drew certain conclusions. I have placed copies of all those texts in the Library of the House. The main themes of the meeting were the economic and social problems confronting the Community, fisheries, and Poland
On the first subject, all those present emphasised the need to continue the fight against inflation through the pursuit of sound monetary policies. We agreed on the need to encourage productive investment, particularly in the sectors of high technology and innovative enterprise. We all share the deep concern at the high and rising rate of unemployment, particularly youth unemployment, in member countries. We determined to make the best possible use of existing funds and financial mechanisms, among other things, in providing advanced technological training and education for youth. The clear and unanimous view was expressed that short-term demand stimuli would be ineffective
On fisheries, there was an attempt to deal with outstanding agreements with Canada and the Faroes in isolation, but the measures to improve the fish marketing arrangements that were offered as a quid pro quo did not, in my view, provide sufficient protection to our industry. I insisted, and it was agreed, that it would be much better to deal with those external fisheries questions in the context of an overall fisheries settlement, as we have been trying to do for so long. It was therefore decided that the Fisheries Council should meet on Friday of this week to try to reach agreement
In our view, agreement on an overall settlement was close in the Fisheries Council last December. If each and every member now has a genuine willingness to settle, it should be possible to find solutions. For our part, we are seeking early agreement on a basis that will secure the vital interests of our own fishing industry. The Heads of State and Government decided unanimously to confirm the status quo in regard to the provisional places of work of the European institutions
The third main subject was Poland, where the events of the past few days had naturally caused us concern. Our message once again was that the problems of Poland are for the Polish people to resolve; any other attitude than this could have the gravest consequences for international relations in Europe and world-wide. We expressed the readiness of our Governments to continue, in conjunction with others and within the limits of our means, to contribute to the recovery of the Polish economy, thereby complementing the efforts of the Polish people themselves.
The Council adopted statements on a number of other political subjects. We took note of the progress registered so far by the Netherlands Presidency in following up the
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Venice declaration of June 1980 on the Middle East. We endorsed the statement made last week by the President of the United Nations Security Council in support of the United Nations force in the Lebanon, to which some of our European partners contribute. We pledged our support for any initiative likely to contribute to the restoration of Afghanistan as an independent, non-aligned and neutral State. Finally, we congratulated the people of Spain on their defeat of the recent challenge to democracy in a country that, in due course, we look forward to welcoming as a member of the European Community.
This meeting enabled the Heads of Government to have a businesslike discussion and to reaffirm their determination to work together in tackling the major issues facing their Governments.
Mr. Michael Foot: The Opposition share the concern about the situation in Poland that was expressed at the summit meeting. We agree that that is a matter entirely for the Polish people to settle themselves. We trust that there will be no attempt from elsewhere to influence the decisions that they wish to reach.
I concur fully with what the right hon. Lady and others said about Spain at the summit meeting. We, too, congratulate the people of Spain on having rejected that challenge to their newly found democracy. I am sure that this country wishes to do everything in its power to sustain the democratic institutions that have been established there.
Fisheries questions played a big part in the meeting, according to the reports on the discussions. The Opposition reiterate what we have said on many occasions, namely, that so long as the Government sustain the legitimate interests of this country they will have our fullest support in the efforts that they make in that direction. We shall watch carefully to ensure that that occurs.
We were rather concerned about the interview on those matters that was given by one of the Government spokesmen earlier in the week. He seemed to suggest that the Government were in some way departing from the undertakings that they had given to the House. I hope that the right hon. Lady will reaffirm that the Government stand by what they confirmed to the House before and that there will be no departure from those undertakings when the meeting takes place on Friday. We entirely agree with what she has said to the House on many occasions, namely, that this matter should be dealt with on its merits and should be separate from any other question. We trust that that is the line that the Government will continue to take.
Other more general questions arose at the meeting. I listened to the right hon. Lady's statement and I have read the communiqués. Does not she think that, considering that the Heads of Government met to discuss those matters in the gravest economic situation that the Western world has had to face since 1945, her communiqué and statement today are pitifully inadequate to deal with a mass unemployment problem of this scale? Does not she recall that at the summit meeting that took place only a few months ago an undertaking was given that
"the institutions of the Community should examine ways of improving incentives to innovation"—[Official Report, 3 December 1980, Vol. 995, c. 399.]
and would continue to use the Community's instruments to reduce structural unemployment. Since that statement and previous summit statements were made the situation

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has continued to deteriorate in an appalling manner. The deterioration has been worse in this country than in other countries. No doubt that put the right hon. Lady at some disadvantage in the meeting. However, does she now say that the Government and those whom she met at the summit have no more concrete measures than those to put before the country and the world? There has been a promise that there will be a meeting of Finance Ministers and others. That was one of the things that were arranged at the summit. What fresh proposals do the Government have for dealing with unemployment on this tragic scale?
The Prime Minister: I am grateful to the right hon. Gentleman for his support of the European Council's stand on Poland and Spain. My right hon. Friend the Minister of Agriculture, Fisheries and Food has made a practice, which he will continue, of taking with him representatives of the fishing industry when he negotiates on a common fisheries agreement. That will ensure that he carries the fisheries industries with him at all stages of any agreement that may be concluded. It would not have been right for me to negotiate in detail on a common fisheries policy. My purpose was to prevent third party agreements being concluded in isolation from the main common fisheries policy. Had I agreed, it would have harmed our fishing industry, which is already suffering from imports without the risk of yet more. The conclusion of those agreements would inevitably have meant more imports.
We are all suffering from unemployment. Some EEC countries have a higher percentage of unemployment than we have. The meeting confirmed that the main course of action on which we are embarked is the correct one, and that short-lived stimuli are not effective. We must have longer-term policies. The conclusions were that we are suffering from, first, a world recession due to the rise in oil prices—which was $11 a barrel when I took office and which OPEC has now increased to about $36 a barrel—and, secondly, structural changes, as goods are produced in other countries that were once produced here. We must relieve the effects of those structural changes and concentrate investment on productive industries instead of always on the industries of yesterday. Those were wise conclusions.
Mr. Foot: Will the right hon. Lady answer my last question, concerning the proposed meeting in June of Finance, Industry and Labour Ministers? When will she present to the House measures other than those that have caused a record increase in unemployent over the past year?
The Prime Minister: The "Jumbo" Council, as it is called, is expected to meet in June, and it is hoped that the Commission will make strenuous efforts to put proposals before it. The level of unemployment is higher in the Community than it was in the previous oil recession, when the average was 4½ per cent. It is now 7½ per cent. We are concerned to produce long-term solutions and not just short-term stimuli.
Mr. Iain Sproat: Is my right hon. Friend aware that there will be a warm welcome in the fishing industry for her steadfast refusal to be pushed about by the French and the Germans? Will she lose no opportunity to remind our EEC partners that, given the
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high percentage of fish that we contribute to EEC waters, our provisionally agreed quotas are extremely generous to our partners? Will she give a categorical assurance to the House and to industry that at no time did she come to a bargain in advance of Friday's meeting—no compromise, sell-out or trade-off—to the disadvantage of our fishing industry?
The Prime Minister: I give my hon. Friend that assurance. I spent most of my time on fisheries matters saying "No" vehemently. I reminded my colleagues at the Council that we contribute some 60 per cent. of the water and the fish to the Community, and that we required a square deal from the EEC.
Mr. Robert Hughes: What changes have there been that will make possible an agreement on Friday? If the French are unwilling to accept a system that would benefit our industry, how can there be agreement? Was the hope expressed not merely a way of passing the buck to avoid continual disagreement at the summit?
The Prime Minister: It was thought that we were close to agreement at the Fisheries Council in December. We were working hard, in accordance with the agreement of 30 May, to conclude a common fisheries agreement by the end of December. We were close to it when one nation abruptly terminated the negotiations, but that country now appears anxious to conclude an agreement and is ready to go back to a Common Fisheries Council.
Mr. Julian Amery: I welcome wholeheartedly the support given to constitutional government in Spain, but can my right hon. Friend assure us that she is asking the Foreign Secretary to make it clear to the Spanish Government that Spain's admission to the European Community or NATO depends on the blockade of Gibraltar being lifted?
The Prime Minister: My noble Friend had an arrangement with the Spanish Government about improving the situation between Gibraltar and Spain. I am sure that he will pursue it.
Mr. Donald Stewart: In view of the serious misgivings in the fishing industry arising from recent reports, will the Prime Minister reaffirm that there will be no surrender of the dominant preference in the 12 to 50-mile zone?
The Prime Minister: All detailed negotiation is for my right hon. Friend the Minister of Agriculture, Fisheries and Food, who has carried the fishing industry with him at every stage in the negotiations. We could not conclude an agreement unless it was acceptable to the fishing industry.
Mr. Maurice Macmillan: In the discussions on the European economies, was mention made of the possibility of the United Kingdom joining the European monetary system, or will it be discussed later, among Finance Ministers?
The Prime Minister: At present there is no question of our discussing joining the EMS, which is suffering from the devaluation of the lira. Although we should ultimately like to join, it is not yet appropriate.
Mr. James Johnson: Does the Prime Minister accept that only a few weeks ago the French were the villains of the piece, and were in the

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dock? What has happened in the meantime to make us the odd man out, so that we are being castigated by our EEC partners?
The Prime Minister: The other EEC members wished us to conclude two agreements with third countries—with Canada, which would have benefited German fishermen but would have harmed our industry, and with the Faroes, which would have benefited those fishermen and would again have harmed our industry. They wanted us to conclude those agreements separately from the common fisheries agreement. Both would have meant substantial imports for this country, directly or indirectly, of fish that might have displaced other fish in Europe. I could not possibly conclude those agreements without the establishment of a proper common fisheries policy to give our fishermen confidence in the future, so that they would know where they could fish, and would know that their income was assured. We were in the dock for not agreeing to conclude those third-party agreements.
Mr. Peter Emery: Was the question of the massive over-production of steel within the Community dealt with? While Italy, Germany and Belgium have increased steel production, Britain has massively reduced it. Can my right hon. Friend assure us that at the next ECSC discussions we will not be called on for further reductions?
The Prime Minister: In a brief discussion on steel, one Head of Government was critical of subsidies for steel, except those, such as we give, to try to change the structure of the industry and to get it into a competitive condition. The new quotas have not been agreed. For the time that quotas have been agreed, it is worrying to note that production appears to have outstripped by about 8 per cent. what was expected from adding all the quotas together, which means that some countries must have produced more. Our concern is to have quotas that everyone is seen to stick to firmly.
Mr. A. J. Beith: British fishermen will support the Prime Minister in her refusal to conclude an agreement on third country fishing rights in the absence of a common fisheries policy, but is she aware that there is concern about her publicly quoted statement about access and the Minister of State's interview with the press? Is she aware of the industry's fear that ground is being given on dominant preference and on areas within the 12-mile limit?
The Prime Minister: I do not think that I made many comments about access, although clearly we must have preferential access. My comments were that we have provisionally agreed quotas and we must be able to fish up to the quotas that we have agreed.
Mr. Kenneth Warren: Given the way in which our fishermen helped to save the future of Europe at Dunkirk, would it not be right and proper for today's European leaders to accept the honourable proposals put forward by Her Majesty's Government to safeguard the rights of our fishermen today?
The Prime Minister: I tried very much, in the spirit of what my hon. Friend said, to point out the massive resources in fish that this country brought to the Community, which were even greater when we went out to a 200-mile fishing limit. But I think that it would have been better if, when the Hague agreement for a 200-mile
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fishing limit for the seas around the European coasts was concluded, the Labour Government had achieved a better deal for this country.
Mr. Kevin McNamara: In case there is any confusion, will the right hon. Lady confirm, first, that we have not agreed to any third party agreements unless there is a common fishing agreement and, secondly, that that common fishing agreement will insist upon a 12-mile exclusive zone and a 50-mile dominant zone for British fishermen?
The Prime Minister: I shall explain to the hon. Gentleman precisely what took place. Two third party agreements—the EEC-Canada agreement and the EEC-Faroes agreement—were discussed. It was suggested that those should go ahead without a common fisheries policy. I refused to allow them to go ahead on that basis, and I understood that all other Heads of Government were also anxious to have a common fisheries policy. We therefore agreed that the Fisheries Council should meet on Friday. Nothing further was said or laid down about conditions.
Mr. Robert Hicks: Will my right hon. Friend confirm that she made it clear to her European colleagues that any eventual fisheries agreement must include a phasing out of the historic rights of certain nations in the six to 12-mile band around the coasts of our islands?
The Prime Minister: I did not get involved in detailed negotiations on particular aspects of the fishing agreement, nor is it appropriate that Heads of Government should or could. For that, the Fisheries Ministers and their officials must be there, as well as representatives of the fishing industry. These detailed matters are not appropriate for Heads of Government.
Mr. Nigel Spearing: Is the Prime Minister aware that the House understands her position in relation to third party agreements on fisheries? Does she also understand that, in view of the questions from the right hon. Member for Western Isles (Mr. Stewart) and my hon. Friend the Member for Kingston upon Hull, Central (Mr. McNamara), the answers that she has given will only lead the interests concerned to the conclusion that the Government have now departed from the policy of the House and their own previous policy of giving dominant preference in the 12 to 50-mile band? Is she aware that unless and until that is denied, the House and everyone else must conclude that that is so?
The Prime Minister: The hon. Member is talking nonsense, and that undoubtedly suits his own purpose. I have made perfectly clear what happened, and have explained that at each and every stage we have taken representatives of the fishing industry with us. We cannot conclude an agreement unless it is satisfactory to the fishing industry.
Mr. Albert McQuarrie: First, I congratulate my right hon. Friend on her determination to stand firm on the question of any negotiation of a common fisheries policy and her continued statements that fishing will not be sold down the river by the Government in exchange for any other terms from the EEC? Will she confirm that it is right that the common fisheries policy should be negotiated by our right hon. Friend the Minister of Agriculture, Fisheries and Food, and that in no way will he give way on any matter on which she stood firm in the

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negotiations last week? Lastly, will she confirm that when her right hon. Friend goes to Brussels on Friday he will go in the knowledge that the House will not accept any common fisheries policy under duress from either the French or the Germans?
The Prime Minister: I am grateful to my hon. Friend, and I endorse his confidence in the ability of my right hon. Friend the Minister of Agriculture, Fisheries and Food and my hon. Friend the Minister of State with responsibility for fisheries to conclude a good deal for our fishing industry. Their task would have been much easier had the Labour Government done better in fisheries policy and negotiated a better agreement on fish when they agreed to extend the limit to 200 miles.
Mr. Ron Leighton: Will the Prime Minister explain what are the powers and status of this so-called Council, and what basis there is for it in the treaties? Is it not clear from the shambles of a meeting that took place that our membership of the EEC has not helped employment in this country, but rather the reverse? As we derive no benefit from membership, should not the right hon. Lady say "No" not only to the fishing policy but to our membership of the Common Market?
The Prime Minister: I disagree with the hon. Gentleman. I think that we have derived benefits from membership. If the democracies of Europe cannot stick together in a Community it augurs ill for the future of democracy in the world.
Mr. Speaker: Order. I propose to let these questions run until 4 o'clock.
Mr. Alex Pollock: I congratulate my right hon. Friend on her firm stand on fishing, which she has consistently pursued since the election campaign of 1979. Has she seen the report in today's Daily Mail, which suggests that the next meeting of Ministers has been brought forward to enable a climb-down by the British Government? Will she take this opportunity to confirm that there is no question of reaching a settlement involving a sell-out of the Scottish inshore fleet?
The Prime Minister: I refute what appeared in the Daily Mail, which I happened to see and at which I was astonished, in view of the fact that some of its representatives must have been in Holland, although they would not have been in on the meeting. I am happy that my right hon. Friend the Minister of Agriculture, Fisheries and Food will negotiate a good and acceptable settlement on fisheries. I can only point out that we have until the end of 1982, when certain other things would happen to the fishing industry if we failed. It is therefore vital to restore confidence in the future and to do it now.
Mr. Bob Cryer: Is the Prime Minister aware that while she was away a Bill was passed for the benefit of Lloyd's insurers, which gives massive legal immunities to those people? Does she accept that if those
934
immunities were granted to the British trade union movement it would become on a par with the Polish trade union movement, which she supports? Is she prepared to do that? Secondly, does she accept that her comments about the meeting on unemployment suggest that neither the British Government nor the other EEC Governments can cope with the rising tide of unemployment? Does she feel that our membership of the EEC has in any way helped to combat the high level of 2½ million unemployed that we now have?
The Prime Minister: The hon. Gentleman will not be surprised that the first matter was not discussed at the summit. With regard to the latter subjects, I can only point out to him that those countries that have virtually beaten inflation have a far better record on unemployment than those that have not.
Mr. David Myles: I endorse the words used by my hon. Friend the Member for Aberdeen, South (Mr. Sproat). Indeed, I would have used them myself. Is my right hon. Friend aware that fishermen are becoming weary of waiting and that they want a suitable fisheries policy to be concluded?
The Prime Minister: I agree very much with what my hon. Friend said. I believe that we were within sight of an agreement in December. It was not our fault that an agreement was not concluded; it was the fault of another country, which withdrew from the negotiations. I believe that we now take up where we left off and 'that there is a good chance of reaching an agreement, which I believe all members of the Community wish to have.
Mr. Dennis Skinner: Does the Prime Minister recall that when the last Labour Prime Minister returned from these visits to the Common Market summits the right hon. Lady used to criticise him heavily for reading out what I considered then to be cliché-ridden statements and generalisations about the way in which the Common Market could resolve the problems of unemployment and inflation? Does she recall the occasions when she told my right hon. Friend that he was wasting time and Government money by trotting out to these various capitals? Apart from the fact that the lady is for turning, is not the truth of the matter that the Common Market is mainly responsible for the fact that 1 million people have been thrown out of work—
Mr. Speaker: Order. The hon. Gentleman is advancing an argument rather than asking a question.
Mr. Skinner: You can bet your life I am.
The Prime Minister: I remember telling the right hon. Member for Cardiff, South-East (Mr. Callaghan) that discussion between Heads of Government, rather than what was contained in the communiqués, was one of the main values of such meetings. Everything that the hon. Gentleman said confirms me in that view. He spoke of economic policy clichés. There are certain fundamental truths in economics; it is just that people like the hon. Gentleman will not acknowledge that fact.

BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 10 APRIL
Members successful in the ballot were:

Mr. John Stokes

Mr. George Foulkes

Mr. Nigel Spearing.

Gaelic language
4.1 pm
Mr. Bill Walker: I beg to move,
That leave be given to bring in a Bill to promote broadcasting in Gaelic, and to require local authorities in Gaelic-speaking areas to promote the use of Gaelic in drama and music.
The Gaelic language and culture are an important part of Scotland's history. They are a priceless treasure, which should be nurtured and protected from the ravages of time. The different parts of the United Kingdom—the old kingdoms—have each made a substantial contribution in many and varied ways to the art, music and literature of these islands. We who have inherited these treasures from our ancestors have a responsibility to ensure that our children and our children's children have access to the literary and cultural traditions of these islands.
It is right that from time to time we in this place should divert our attention away from the pressures of modern society and remind ourselves of our great and historic past. That is why I wish to draw attention to the need, as I see it, of promoting and protecting this proud and ancient literary treasure. I wish to do so in a non-partisan manner.
It is more than 1,000 years since Gaelic was the everyday language in the northern part of these islands. Up to the seventh century, the Gaelic language was spoken in many parts of Scotland as well as in Ireland and the Isle of Man. Yet this priceless treasure—an important part of Scotland's heritage—has survived.
Mr. A. J. Beith: No thanks to the hon. Gentleman.
Mr. Walker: Today the language is still in common use in the Western Isles, and can be described as a real living force in Argyll and Northern Scotland. It is taught in many schools throughout the Western Isles and Argyll and the northern parts of the Highlands. It is available for study in many of Scotland's universities. However, in the more populated areas of Scotland it is kept alive only through the activities of Gaelic societies and other voluntary groups or via television and radio programmes.
It is my belief that the most effective and efficient use of the media—used in a way which will not give offence to those who do not have an interest—is to monitor Gaelic broadcasting. If that is coupled with the encouragement of voluntary groups we shall ensure the survival and the development of the language.
As well as the language, there is a treasure trove of Gaelic songs. Last year the national Mod, which I attended, was held in my constituency—in Perth, the ancient capital of Scotland. Although not in the Highlands, the city of Perth is the gateway to the Highlands, and Perth has Gaelic societies and a Gaelic choir. Not surprisingly, the Mod was well supported.
If the Bill becomes law, it will not impose Gaelic or Gaelic culture—[Interruption.].
Mr. Anthony Fell: On a point of order, Mr. Deputy Speaker. Is it not normal to allow a Ten-Minute Bill to be presented without interruption? There has been a constant stream of interruption from the Liberal and Scottish National Benches.
Mr. Beith: Further to that point of order, Mr. Deputy Speaker. I hope that you will recognise the unusual nature of this situation. The hon. Member for Perth and East

937
Perthshire (Mr. Walker) opposed a Bill which would have done some of the things to which he has referred, but is now seeking to introduce a totally ineffective means of achieving the same object.
Mr. Deputy Speaker (Mr. Bernard Weatherill): That is a point of argument. If the hon. Gentleman wishes to oppose the Bill, that is a matter for him later. At the moment we are merely hearing what the Bill proposes.
Mr. Walker: I emphasise the fundamental difference between this Bill and the previous Bill. If my Bill becomes law it will in no way impose Gaelic or Gaelic culture on anyone who does not wish to participate. It cannot and should not give offence—that is vital and important—nor can it be used for narrow political purposes.
There is substantial evidence that, when assisted and encouraged, Gaelic societies and choirs have support in many parts of Scotland. In particular, there is strong support in those parts of Scotland where in earlier times the language was in everyday use. What greater priority can the Mother of Parliaments give than the priority to protect and preserve our native culture?
In a recent debate, the Under-Secretary of State for Scotland said:
"The Government take the view that the main instrument for developing Gaelic in every sense must be the strength and initiative of Gaelic speakers themselves, acting with external assistance and support where that is necessary and appropriate."—[Official Report, 13 February 1981, Vol. 998, c. 1115.]
I believe that my Bill will be seen in Scotland as a real attempt—within the general parameters of what the Government believe to be the best way—to protect and develop the Gaelic language. I hope that the House will acknowledge that and give me leave to bring in the Bill.
I now turn to the provisions of the Bill. The first part requires the Secretary of State for Scotland to set up a broadcasting committee consisting of members of the BBC and the IBA. I believe that it will be possible to establish such a committee in a way which will involve no cost to the public purse.
938
The Bill places a duty on the committee to co-ordinate and develop Gaelic television and radio; to comment and give guidance on the amount and balance of Gaelic broadcasting and scheduling; to monitor the extent to which Gaelic television and radio are watched and received by audiences; to report to the Secretary of State for Scotland; and to offer advice on matters within the committee's remit.
I have no wish to foist Gaelic on people who have no wish to listen to, or watch, the programmes. That is why I believe that such a committee will ensure a better balance in the broadcasting of the language.
The second part of the Bill places a duty on local authorities in Gaelic speaking areas, as defined in the Bill, to promote through voluntary bodies the use of Gaelic in drama, music, prose or poetry groups. Many people in Scotland look to the United Kingdom Parliament, the Parliament of the Union, to introduce sensible and modest measures to promote Scotland's culture and history. The purpose of my Bill is to introduce such measures to help ensure the survival and encourage expansion of the Scottish Gaelic language and culture.
This modest Bill, which is supported by hon. Members on both sides of the House, can make a positive contribution to the promotion and preservation of this important treasure—the Gaelic language and culture of Scotland.
Question put and agreed to.
Bill ordered to be brought in by Mr. Bill Walker, Mr. Dick Douglas, Mr. Peter Fraser, Mr. Ernie Ross, Mr. Albert McQuarrie, Mr. George Foulkes, Mr. Michael Ancram, Mr. Allan Stewart, Mr. Ian Lang, Mr. John MacKay and Mr. Alex Pollock.

GAELIC LANGUAGE
Mr. Bill Walker accordingly presented a Bill to promote broadcasting in Gaelic, and to require local authorities in Gaelic-speaking areas to promote the use of Gaelic in drama and music: And the same was read the First time; and ordered to be read a Second time upon Friday 15 May and to be printed [Bill 100].
Orders of the Day
  Local Government (Miscellaneous Provisions) (Scotland) Bill
  As amended (in the Standing Committee), further considered.
  Local Government (Miscellaneous Provisions) (Scotland) Bill
    Clause 1

      POWER TO CHANGE YEAR OF REVALUATION
      4.13 pm
      Mr. Donald Dewar: I beg to move amendment No. 1, in page 1, line 17, at end add—
      `(5) No order laid under subsection (3) above shall have the effect of postponing the valuation due to take place in 1983'.
      The purpose of the amendment is to probe the Government's intentions about the quinquennial revaluation, which is due to take place in Scotland in 1983. Will it go ahead? If the Minister cannot give an answer today, perhaps he can give an assurance that any announcement will be made in good time and will give the assessors' departments of local authorities adequate time to prepare.
      On Second Reading the Secretary of State said:
      "There is of course a strong case for regular revaluations of property to ensure a fair distribution of the rate burden".—[Official Report, 9 December 1980; Vol. 995, c. 1219.]
      Scotland has a very good record. There were revaluations in 1961, 1966 and 1971. There was then a postponement until 1978 because of local government reorganisation. However, compared with England the record is good. England managed a revaluation in 1963 but did not reach the starting gate again until 1973. It has already abandoned the 1982 revaluation.
      As a result, it may be thought that there is no need to worry about progress in Scotland. However, we have recently had winks, nods and nudges from the Minister, suggesting that Scottish rating law is on the brink of great things. In the long term, the abolition of domestic rating is a cherished Conservative aim. Indeed, it recently received the Prime Minister's imprimatur at Question Time. The last Conservative manifesto said that the abolition of domestic rating and rate reform would have to have a lower priority because high priority would be given to cuts in direct taxation. Given the success that the Government have had with their highest priority—as instanced in the Budget—we have reason to believe that the subject of rates may receive promotion in the near future.
      Hon. Members will note from column 26 of the Official Report of the First Scottish Standing Committee on 13 January that there is an internal review involving the Scottish Office. The imminence of a report is the main reason why the next quinquennial revaluation may be postponed. Perhaps I could draw the Minister's attention to the words that he uttered in Committee:
      "I do not wish to mislead the hon. Gentleman or his hon. Friends … I must say, without qualification, that no conclusions have yet been reached on the question of timing of the abolition of the domestic rating system."
      I hope that I have not drawn the wrong conclusions. I take it that the Government are committed to the abolition of
      940
      the domestic rating system, although it may not be possible in the next few years. Therefore, the background is unsettled.
      In column 8 the Minister admitted that two years was a reasonable period of notice to allow for the very heavy work load that falls on assessors' departments in the run-up to a revaluation. The Minister said:
      "We appreciate that the period of two years which the hon. Gentleman mentioned is a reasonable period for those required to undertake the work connected with a revaluation. It would therefore be the Government's intention to announce at a reasonably early stage whether there was to be a revaluation and, if so, whether it was to be a complete revaluation or only a partial one."
      The Minister will probably point out that the postponement of the 1978 revaluation was announced in May 1977. That announcement was made rather late in the day, and I am sure that the Minister would not want to follow that precedent. He has conceded that two years would be a reasonable time. Indeed, the Minister said:
      "I have to tell him that the Government have not yet made a decision on the question of revaluation for 1983. However, we recognise that it is necessary for us to come to a decision within the next few weeks or months, for the very reasons that the hon. Gentleman has indicated."—[Official Report, First Scottish Standing Committee, 13 January 1981, c. 8–28.]
      That was said on 13 January. The Minister spoke in terms of
      "the next few weeks or months."
      It is nearly the end of March. If we are not entitled to a firm indication whether the revaluation will take place we are at least entitled to know when we shall be told. In that spirit, I commend the amendment.
      Mr. Hugh D. Brown: As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said, in Committee we rightly probed and criticised the Government. Given the time that has elapsed without any comment from the Government, the amendment is reasonable.
      I am deeply suspicious of the Government's motives. Their economic policy has failed. Their housing policy is non-existent. The chairman of the Conservative Party in Scotland told us that there had been great wastage in the Lothian region because somebody had got two letters at the cost of 11½p each. That is the level to which the Government have been reduced. Given that things will probably become worse, I suspect that the Government will come up with a pre-election gimmick for the postponement of the revaluation.
      Therefore, we are at least entitled to a statement today. We were promised that a statement would be made in the near future. The near future has arrived. I understand that the Government are faced with pressing problems. Nothing that they touch seems to go right. However, they should come clean not only in the interests of ratepayers and of those who work in valuation departments but in the interests of the country's political health. The Government should make a statement as soon as possible. In the circumstances, this is a reasonable amendment.
      Mr. Russell Johnston: As we are politicians we should look at this issue in that light. Being realistic, does any hon. Member really think that there will be a revaluation in 1983? It is absurd to contemplate such a thing. The Government are already under a strain and they will not make even more difficulties for themselves by introducing a revaluation in the year of an election or in the year immediately preceding one.

      941
      The hon. Member for Glasgow, Garscadden (Mr. Dewar) pointed out that work was beginning to get under way in assessors' departments all over Scotland in preparation for the revaluation. There is a statutory obligation to hold a revaluation. Until the Government say that it will not be held, assessors' departments must prepare. They have no alternative but to do so. The English revaluation has been cancelled. It is increasingly difficult, if not impossible, for assessors' departments to do any forward budgeting. They are still waiting for some revaluation appeals from 1978 to be heard. The situation is entirely unsatisfactory.
      The hon. Member for Garscadden referred to the statement made on 13 January, to the effect that we would be told about revaluation within weeks or months. For the well-being of local authorities, now is the time to clear the situation from the point of view of the assessors. If at the same time the Minister is able to say something about the Government's intentions in regard to the reform of the rating system, that would be welcomed by the House.
      Mr. Gordon Wilson: I was very interested in the rather cynical but somewhat realistic appraisal of the situation by the hon. Member for Inverness (Mr. Johnston), who suggested that the Government would be unwilling to have a revaluation in a year in which we were close to a general election. However, occasionally Governments have to do unpopular things, such as allowing equity to be created. The object of a revaluation is to make sure that the rates for one property are in line with those for other properties and that any changes that have taken place in the intervening years are accounted for. If the revaluation does not go ahead there will be thrown up unfairness in what is a somewhat artificial system.
      All of us would like to see a large-scale change in the rating system. The problems that have appeared during the last year in particular may have encouraged the Government to think that perhaps they ought to do something about that as well, although the problems are largely self-inflicted, because they have deprived the local government system of adequate finance to carry out its work.
      In relation to revaluation the assessors will work out the median rents upon which they will base the valuations of domestic property. They will also assess and record the rents in the commercial sector in relation to shops, and so forth, on which they will base their final figures. It is a long and involved exercise, as those of us who have had experience of the valuation appeals system know full well.
      In England revaluations have frequently been postponed, and the only result is to increase the distortion within the system. In Scotland we have a fairly good background in keeping to regular revaluations, largely because these are done through the regional assessors and not, as in England, through the Inland Revenue, which was the position as I knew it at any rate until a few years ago.
      I also suggest to the Minister that the period of revaluation should be adhered to because, although it is something that people do not welcome, it is a matter of equity that properties have to be revalued in line with changing circumstances and changing values. I also point out to the Minister that one of the problems that assessors
      942
      are facing is that domestic properties upon which they have relied for their evidence of levels of rents, namely, the smaller flats, are largely being turned into owner-occupied properties. Therefore, the base of evidence available for a system that is structured on rental evidence is now very narrow.
      It may be that the Department will have to produce legislation that will seek to assess properties on the basis of capital value, since in many instances there may be more accurate evidence available. The Minister should also be aware that local authority properties are frequently valued on the basis of rents in the private sector. If the private rental sector continues to diminish, as it has been doing over the years, there will be less and less evidence on which the huge pyramid of revaluation can be constructed.
      Mr. David Lambie: I should like to intervene briefly in order to put to the Minister the questions that I put to him this morning in the Committee dealing with the statutory instrument on rating. He said at that time that I was out of order in asking them. I hope that I shall be in order this afternoon and that he will answer the questions.
      Unlike the hon. Member for Dundee, East (Mr. Wilson) and the hon. Member for Inverness (Mr. Johnston), I do not believe that regular revaluation evens out anomalies. The last revaluation in Scotland created anomalies for industrial and commercial premises in my area in the district councils of Kyle and Carrick and Cunninghame. Not only did it create anomalies for industrial and commercial premises; because the assessor in Strathclyde maintained a bias against the peripheral areas of Strathclyde and increased the valuations there out of all proportion to what they should have been, and out of all proportion to the valuations in other areas of central Strathclyde, my ratepayers were hammered. Unfortunately for the Secretary of State, some of my ratepayers are also his ratepayers.
      I put it to him that when we shared platforms and met the ratepayers not many years ago we were both on the same side, because we had a Labour Government. It is very easy to be a spokesman and to agree with irate ratepayers when one is in Opposition. I am in the fortunate position that where I see a Government discriminating against my ratepayers, whether they be a Labour or a Tory Government, I speak up. I am asking the Secretary of State for Scotland to speak up and to make the speeches that he made two years ago to the ratepayers of Ayr and Troon, when we were both together at the barricades defending the ratepayers against the assessor for Strathclyde regional council.
      I want the Secretary of State to do the same as the Secretary of State for the Environment did when the Tory Government took power. He went to a conference of the Tory Party with a notice of valuation and advised all the ratepayers in England and Wales to tear up their assessments. I am asking the Secretary of State for Scotland to advise the people in Scotland to tear up their assessments and to let us get back to first principles. Let us carry out Tory Party policy and do away with the rating system altogether.
      The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): The hon. Member for Central Ayreshire (Mr. Lambie) has for the third time this week

      943
      called upon the country and the public in Scotland to support Tory policies and to get a better deal by voting Conservative. We welcome that remark. I pay tribute to the hon. Gentleman for being objective. He said quite correctly that he has been just as willing to oppose Labour Governments when they were wrong as he has been to oppose Conservative Governments. The fact that he appears to have voted more against his own Administration than he has against the Conservative Government is a pretty good indication of the objective truth of these issues.
      If the amendment proposed by the hon. Member for Glasgow, Garscadden (Mr. Dewar) were accepted it would require the 1983 revaluation to go ahead, which would negate the purpose of clause 1. I appreciate from his remarks that he is really using this as an attempt to probe the Government's intentions and to see what the position is in terms of that revaluation.
      As the hon. Member and the House will be aware, under the Bill in its present form the Secretary of State has a choice, if he wishes to use it, either of cancelling the 1983 or any subsequent revaluation, or, as an alternative to allowing it to go ahead, of providing for a partial revaluation of certain classes of lands and heritages under the normal valuation system. I am not yet in a position to advise the House what my right hon. Friend has concluded. When he is in a position to make an announcement the House will be informed and will have the opportunity to pursue the matter at that time.
      The important point that I would make is that any decision by my right hon. Friend either to cancel the 1983 revaluation or to replace it by a partial revaluation has to be approved by the House. It is subject to an order-making procedure. Therefore, the House will have an opportunity to debate the matter and, if it comes to a different view, to decide against the wishes of the Government. That safeguard is written into the provisions—a fact that I know is welcome to the House.
      The other point that the hon. Gentleman raised—the hon. Member for Inverness (Mr. Johnston) and the hon. Member for Dundee, East (Mr. Wilson) made the same point—was that it takes a considerable time for those who have to carry out the revaluation, and therefore it is reasonable that they should have proper notice if a revaluation is not to go ahead. We are still more than two years from the date of the next revaluation. As I indicated in Committee, it is our intention that in the near future we shall be able to indicate our conclusions on the matter.
      4.30 pm
      I say again to the hon. Member for Garscadden and his hon. Friends that it is not bounden upon them to criticise the Government for not yet having come to a decision. I misled the hon. Gentleman this morning. I rebuked him and told him that the Labour Government had decided that the 1978 revaluation should go ahead a mere 11 months before it went ahead. I was wrong. I should have said 12 months. The hon. Member will appreciate that there was a short period before those who were responsible for the previous revaluation knew for certain that it was to happen. I can give the hon. Gentleman the assurance that there will be a much longer period before the next revaluation, during which those responsible for it will know of the Government's conclusions.
      I hope that the hon. Gentleman will feel able to ask leave to withdraw the amendment.
      Mr. Dewar: It has not been a particularly useful or illuminating debate. In view of the strong language used by the Minister in Committee I had hoped for something more definite on Report. I do not intend to push the matter to a Division. That would be totally inappropriate. I merely give the Minister notice that we shall be closely monitoring the situation and that we expect him to live up to his promise and produce news in the near future. On that basis, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 2

      POWER TO EXCLUDE CERTAIN LANDS AND HERITAGES FROM VALUATION OR REVALUATION
      Mr. Rifkind: I beg to move Government amendment No. 2, in page 2, line 10, leave out 'any' and insert `every'.
      Mr. Deputy Speaker (Mr. Bernard Weatherill): With this is will be convenient to take Government Amendments Nos. 3 and 4.
      Mr. Rifkind: The purpose of the amendment is to make it clear that an order requiring a partial revaluation—that is the revaluation of certain specified classes of land and heritages only—must apply in respect of every new valuation roll as regards the classes of property to be revalued. This will mean, for example, that an order could not provide for dwelling-houses to be revalued in Fife and not in Tayside. The hon. Member for Glasgow, Garscadden (Mr. Dewar) will recall that when we discussed this issue in Committee I accepted in principle that partial revaluation orders should apply uniformly throughout Scotland in respect of the classes of property to which they applied. This simple amendment is intended to put the matter beyond doubt.
      Government amendments Nos. 3 and 4 give effect to an undertaking that I gave in Committee to bring forward a proposal to ensure that the method of adjusting the net annual value of property in a partial revaluation would be such as to preserve the ratios between the rateable values of the specified and unspecified lands and heritages as regards each valuation area and not, as the Bill stands, in respect of Scotland as a whole. The hon. Member for Garscadden will recall that when we discussed the issue in Committee I agreed that if the adjustment factor were calculated by reference to the all-Scotland ratio there could, in some areas, be significant shifts in the distribution of rate burdens between classes of ratepayers. That was not the intention of the clause and the amendments will avoid any such effect.
      Mr. Dewar: These amendments are not merely acceptable; they are welcome to the Opposition. They are technical, and I do not want to weary the House. They are an adequate response to the issues that were debated at length in Committee, on the initiative of my hon. Friends. Government amendment No. 4 makes it clear that ratios between valued and unvalued categories of property will be preserved when there is a partial revaluation. The fact that the ratios are to be kept constant within an assessment area, rather than in Scotland as a whole, is a substantial change. It was with some satisfaction that I read the terms of the amendment.
      Amendment agreed to.
      Amendments made: No. 3, in page 2, line 40, at end insert
      '; and the order may prescribe different such methods as regards different valuation areas.'.
      No. 4, in page 2, line 46, leave out 'Scotland as a whole' and insert 'each valuation area'.—[Mr. Rifkind.]
      Mr. Rifkind: I beg to move amendment No. 5, in page 3, line 24, leave out `(6A)', and insert `6D)'.
      Mr. Deputy Speaker: With this it will be convenient to discuss Government amendments Nos. 6 and 7.
      Mr. Rifkind.: In Committee, in response to an amendment introduced by the hon. Member for Glasgow, Garscadden (Mr. Dewar), I undertook to reconsider the most appropriate form of parliamentary scrutiny for an order under clause 2(a)(i) requiring a partial revaluation. On reflection, I take the hon. Gentleman's point that such an order is sufficiently important to require the positive scrutiny of both Houses of Parliament. The amendments give effect to my reconsideration of the hon. Gentleman's arguments. The amendments do not affect the parliamentary procedures for orders under what will be section (6B), which prescribes the method of adjusting net annual values at a partial revaluation. Such orders will continue to be subject to the negative resolution procedure.
      Mr. Dewar: I welcome the amendments. They put into effect changes that were proposed by Labour Members in Committee. It seems eminently sensible that something as controversial as a decision to postpone partially a revaluation should be subject to the affirmative procedure. I am grateful to the Minister for his concession.
      Amendment agreed to.
      Amendments made: No. 6, in page 3, line 25, leave out from 'shall to 'have' in line 28.
      No. 7, in page 3, line 30, after 'Parliament' insert;
      (b) subsection (6A) above shall be subject to annulment in pursuance of a resolution of either House of Parliament'.—[Mr. Rifkind.]

    Clause 4

      POWER OF SECRETARY OF STATE TO AMEND TABLE OF DEDUCTIONS FROM GROSS ANNUAL VALUE
      Mr. Rifkind: I beg to move amendment No. 8, in page 4, line 6, leave out 'in' and insert 'for'.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 9.
      Mr. Rifkind: These amendments are, in a sense, the reverse of the previous group of amendments. The amendments give effect to an undertaking that I gave in Committee. Labour Members may recall that in responding to an Opposition amendment I agreed in principle that it would be more appropriate for an order under section 6 of the Valuation and Rating (Scotland) Act 1956 amending the table of deductions in schedule 1 to be subject to the negative rather than the affirmative resolution procedure of both Houses of Parliament. This seems to be a much more sensible way of dealing with a matter which, though important, is considerably less important than some of the other issues under consideration.
      Amendment agreed to.
      Amendment made: No. 9, in page 4, line 7, leave out from 'section' to end of line 12 and insert—
      `there shall be substituted the following subsection—
      "(7) Any order under subsection (6) above shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament". '.—[Mr. Rifkind.]

    Clause 10

      NEW CONSTITUTION OF SCOTTISH VALUATION ADVISORY COUNCIL
      Mr. Rifkind: I beg to move amendment No. 10, in page 5, line 41, leave out from "Council)" to "for" in line 44.
      The amendment removes from the Bill the paragraph in clause 10 that seeks to increase the membership of the Scottish Valuation Advisory Council from 15 to 16. I agreed in Committee to reconsider whether such an increase was necessary. I am able to say that on further reflection I feel able to maintain the present overall size of the council without making any pro rata reduction in the number of members nominated by COSLA. I am grateful to my hon. Friend the Member for Edinburgh, South (Mr. Ancram) for his suggestion that we should consider the matter again. I am glad to have been able to meet his argument.
      Mr. Dewar: This is a minor matter, but it is an interesting case of quango-bashing. The Scottish Valuation Advisory Council is undoubtedly a body of some use. In Committee we considered the rating system for hostels, and one of the reasons for inaction that was ingeniously produced by the Minister was that it would be necessary to take the advice of the council. There is no doubt that it has a useful life in front of it. I am curious to know why it has been decided to cut off the extra member before he gets to the starting gate.
      We were told in Committee, in column 164 of the Official Report of 27 January, that the cost of the council varied between £146 and £332 per year, depending upon its activity. I do not imagine that the Government have reached this decision on the ground of economy. We have seen a desirable expansion in its numbers cut back. We know that the hon. Member for Edinburgh, South (Mr. Ancram) complained bitterly about any increase in numbers as a general matter of principle. In a letter to me of 18 March the Minister claimed that he had responded positively to his hon. Friend's representations. I do not know whether one responds positively by retreating. In any event, the Minister gave no reason for his decision, and he has given no reason today.
      The Minister said in Committee that
      "a large majority—not an overriding majority"—[Official Report, First Scottish Standing Committee; 27 January 1981, c. 166.]
      should be local authority members. That is an interesting use of language. It seems that we shall now have six local authority members in a council of 15 members. If that can be described as
      "a large majority—not an overriding majority",
      it is an interesting use of the English language by the Minister that I find novel and somewhat puzzling.
      It is a pity that the hon. Member for Edinburgh, South is not in the Chamber to enjoy his triumph. However, I cannot think that he wants to go down in history as the

      947
      author of this major legislative change. When autobiographical fragments are written later in life, I do not think that he will want the reduction in the size of the council from 16 to 15 members to be recorded as his proudest moment. If it is merely to please the hon. Member for Edinburgh, South and give him the erroneous impression that his activities are useful, I shall be sorry. I hope that there is something a little more substantial behind this retreat, and the Minister owes us an explanation.
      Mr. Rifkind: I am happy to respond to the hon. Gentleman's kind invitation. He will recall that the main purpose of the clause which was considered and approved in Committee was to reduce the representation of the local authorities on the council from eight to six. The background was that until now local authorities have had a majority of the representation on the Valuation Advisory Council of eight members out of a total of 15.
      When the council was first created there was an argument for that because there were several different local authority organisations and there was no particular significance in the fact that they added up to an overall majority. Since local government reorganisation, however, the Convention of Scottish Local Authorities represents all local authorities and it seems undesirable that any one organisation should have, by itself, a controlling power, even on an advisory council. Therefore, it seemed more sensible to have a figure of approximately six out of 15, which still allows COSLA the largest single representation, but does not leave it with a majority.
      It was the Government's original intention to increase the size of the council from 15 to 16 to allow as wide a spread as possible amongst the other interests that could be represented on the council. My hon. Friend the Member for Edinburgh, South (Mr. Ancram)) and other hon. Members pointed out that that might not be necessary, both because of the reduction in COSLA's representation and because the responsibilities of the council had been reduced rather than increased.
      We gave consideration to the representations, and they seemed to be valid. As I have occasionally been accepting amendments from the Opposition, there is no fundamental reason why I should not occasionally accept an amendment from one of my hon. Friends.
      Mr. Dewar: I remain totally unconvinced by that explanation. It is an interesting variation of the theory of fair shares for all, but I suppose we shall have to be satisfied with this rather thin argument. I think that the only reason why the amendment has been accepted is that when, in years to come, the grandchildren of the hon. Member for Edinburgh, South (Mr. Ancram) ask him what he did in the great economic depression he will be able to point to the amendment as his life's work. It is an extraordinary gesture, but as it is not a matter of enormous importance I do not intend to divide the House.
      Amendment agreed to.
      Mr. Deputy Speaker: Order. I should make it plain to the House that we are on Report and that hon. Members who wish to speak twice should seek the permission of the House, apart from the Minister and hon. Members who are moving amendments.

    Clause 12

      EFFECTS OF SECTIONS 4 TO 9
      Amendment made: No. 11, in page 6, line 7, after "9", insert
      "and (Valuation of underground railways)".—[Mr. Rifkind.]

    Clause 13

      REDUCTION OF RATE SUPPORT GRANT WHERE LOCAL AUTHORITY'S ESTIMATED EXPENDITURE EXCESSIVE AND UNREASONABLE
      Mr. Rifkind: I beg to move amendment No. 13, in page 6, line 27, leave out `—(i)'.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 15 and 16.
      Mr. Rifkind: The amendment proposed is a result of the consideration given to this part of the clause in Committee.
      The clause as drafted requires the Secretary of Stale, before being satisfied that planned expenses are excessive and unreasonable, to have regard to the financial and other relevant circumstances of the area of the authority and to the entire area of a joint board, inasmuch as the expenses relate to the functions of a joint board.
      In considering the contributions that were made in Committee the Government have concluded that there is a strong case for deleting the reference to joint boards. As drafted, the clause would require the Secretary of State to look at the entire area of the board, for example, the area of each constituent authority of the board, even if action were contemplated against only one. This could be burdensome and unnecessary, as joint board expenditure is unlikely to contribute materially to any estimated expenditure excess. Deletion of the reference to joint boards would not, however, preclude action under the provisions in respect of joint board expenditure if it were prima facie excessive and unreasonable. In that event the Secretary of State could subject joint board expenditure to examination as part of an examination of expenditure planned by the constituent authorities or as part of the Secretary of State's consideration of the financial circumstances.
      Amendment No. 15 is consequential upon amendment No. 13.
      I come now to amendment No. 16. When this part of the clause was examined in Committee I advised hon. Members that it would be the Secretary of State's intention in the first instance to look at total planned expenditure, but that if that seemed prima facie excessive and unreasonable he would need to consider planned expenditure on particular services. It is important in these circumstances that the Secretary of State should be able to compare expenditure on individual services as between authorities. That is a necessary step in making a comprehensive assessment. Accordingly, the removal of the definite article before the reference to "expenditure" or "estimated expenses" of other closely comparable authorities is to avoid restricting the Secretary of State to making comparisons on the basis of total expenditure.
      I commend the amendments to the House.
      Amendment agreed to.
      4.45 pm
      Mr. Dewar: I beg to move amendment No. 14, in page 6, line 28, leave out 'the area of'.
      Mr. Deputy Speaker: With this it will be convenient to take amendment No. 26, in clause 14, page 7, line 36 leave out sub-paragraph (ii).
      Mr. Dewar: The amendments deal with the phraseology of the clause. We have little time for it. We find it a thoroughly unpleasant and unnecessary piece of tyranny. It is important that it should be put in the most respectable order possible, and the amendments are an attempt to do that.
      Amendment No. 14 refers to the phrase "the area of the authority. The House will remember that in considering whether expenditure is excessive or unreasonable the Secretary of State will have regard to the financial and other relevant circumstances of the area of the authority. We have long considered that it would be clearer and more flexible if the inhibiting phrase "the area of" were removed and merely the financial and other relevant circumstances of the authority had to be taken into account.
      The point was argued at length in Committee and has reappeared on Report because in Committee the Minister made fairly symphathetic noises and it seemed worth while to give him a chance to reconsider his position. He made it quite clear that he thought that there was an arguable case for the exclusion of the words. He said:
      "one could stretch a case to say that they are matters affecting an authority, which are more correctly problems affecting the area of the authority".
      The factors that he was thinking of were the sparsity of the population and the possibility of oil developments and other demographic factors of relevance. Those can easily be taken into account if the phrase is merely "the authority" and not
      "the area of the authority".
      Later, the Minister said:
      "I agree that that is by no means an evident proposition, because it could be argued that the phrase 'financial or other relevant circumstances' already covers these matters".—[Official Report, First Scottish, Standing Committee; 3 February 1981, c. 306.] Put shortly, we prefer that second view and it would be better if the words were removed.
      In his letter of 18 March, for which I thank him, the Minister said that he rejected the proposition on consideration because it would be unwise, as the criteria more accurately can be ascribed to the area. That is a statement of view and does not tell us why he came to that conclusion. Given the friendly noises that he made in Committee he owes us more of an explanation, or perhaps he will continue his recently established habit of retreat and concede the amendment.
      Amendment No. 26 refers not to the mandatory conditions which the Secretary of State must take into account but to the discretionary conditions in the clause. One factor of the new sub-paragraph (ii) of subsection (1A)(a) is the "general economic conditions". There are statutory precedents for certain phrases. No doubt the Minister will draw them to my attention again. My view is that the phrase "general economic conditions" means that the Minister will be able to call something excessive and unreasonable if it does not suit his policy.
      There will be many occasions when, in the view of the local authority and the people living in the area of that
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      local authority, there is a strong case for expenditure in terms of reflating the local economy and creating jobs. Given the present difficulties, it is an almost unanswerable case. I am suspicious of sub-paragraph (ii) because I fear the phrase will allow the Minister, as a loyal acolyte of the Chancellor of the Exchequer, to fly in the face of local reality, of the judgment of local representatives, and merely say that something is excessive or unreasonable because he does not like it. I believe that all these—the mandatory criteria, the discretionary criteria, the whole thicket of words that has been gathered around what at the end of the day is a pretty naked power—
      Mr. Rifkind: There may be some confusion. The hon. Gentleman is speaking to amendment No. 26. He appears to be suggesting that it deals with the deletion of the words "the general economic conditions" in clause 13. But the amendment suggests that the hon. Gentleman wishes to leave out sub-paragraph (ii) in clause 14, which deals with the resources element.
      Mr. Dewar: I apologise. I do not mean to criticise anyone, but the confusion has arisen because of the rather strange grouping. The second amendment dips into a different clause for reasons that I do not understand. I had assumed—I accept that it was a mistaken assumption—that we were dealing with a group of amendments to clause 13 and not to clauses 13 and 14.
      The Minister is correct. However, my remarks were valid, and I shall hold to them without a blush. I retreat, even though my arguments are evidently sound. The phrase "the area of" is one to which the Minister should address his mind. Perhaps if he is feeling generous he will give me a crumb of comfort by conceding that.
      Amendment No. 26 dips into a different clause but it raises questions about which the Minister appreciates we feel strongly. Clause 14 deals with a local authority's estimated expenditure relevant factor in calculating the amount of resources element. Sub-paragraph (i) is merely a restatement of words already in the existing statute. Subparagraph (ii) imports, we believe unnecessarily, all the paraphernalia and arbitrary machinery involved in clause 13 where it is not needed.
      Our amendment asks simply that that should not be done, but that we should leave it as it is. We do not object to the original words, which were
      "of the opinion that the local authority have fixed an unnecessarily high rate".
      We do not object to that concept being restated, because it is not a new infringement of local authority independence. We are prepared to live with that. But to import the imperfections and the unsatisfactory paraphernalia from clause 13 into the subsequent paragraph in part II of schedule 1 of the 1966 Act is unnecessary. I hope that at this late stage the Minister will be prepared to reconsider.
      Mr. Rifkind: I shall deal first with amendment No. 14, which is concerned with the words
      "the area of the authority."
      That is essentially a drafting matter. In a sense, I am surprised that the hon. Gentleman is continuing his opposition to the wording in its present form. I should have thought that from the point of view of the local authorities the inclusion of the word "area" was an added protection to ensure that the relevant circumstances would be taken into account in a way that might be proper with the words

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      proposed by the hon. Gentleman but which would not necessarily be seen to be proper. By the use of the word "area" we are anxious to ensure that if there are factors such as sparsity of population there should be no confusion in anyone's mind that that is a relevant consideration for the Secretary of State to take into account when considering whether expenditure is excessive and unreasonable. That might be the conclusion if the wording were limited to references to the local authority itself, but there is doubt on the matter.
      There is a second factor that the hon. Gentleman might wish to bear in mind. The wording in the clause is consistent with the wording used in the 1966 Act from which those powers stem. Under the 1966 Act the Secretary of State had power to withdraw expenditure from a local authority whose spending was excessive and unreasonable. The reference in that Act is to the area of the authority. It seems reasonable that there should be consistency.
      The hon. Gentleman also spoke to amendment No. 26, which deals with the power of the Secretary of State to reduce the resources element going to an individual authority by substituting a notional rate poundage for the rate poundage fixed.
      The hon. Gentleman suggested that he believed that to be unfair and unnecessary. In the context of the general provisions of the Bill, I believe that clause 14 is eminently sensible and reasonable. At present, if a local authority fixes a high rate to fund its excessive spending, not only does it squeeze substantial sums out of the ratepayers but it automatically entitles itself to a greater amount of resources element in the rate support grant calculation. The more one local authority receives in resources element the less is available to others. Therefore, other local authorities suffer directly and inevitably as a consequence of a high rate poundage fixed by one authority to fund excessive spending.
      If the Secretary of State uses the powers available to him under clause 14 and substitutes a notional rate poundage for the rate poundage fixed by the local authority—although that local authority will receive less resources element than it otherwise would receive—that sum will not be a loss to local authorities. It will automatically be redistributed among other local authorities in Scotland. That is a fair and sensible provision. I hope that with that explanation the hon. Gentleman will accept that the provisions are sensible. We are seeking to ensure that anything that might be considered relevant to the expenditure of the authority is taken into account. While the hon. Gentleman may be correct to say that it is unnecessary to refer to the area of the authority, I assure him that by including that word we are giving at least the possibility of added protection to the local authority. There is no way in which a local authority can be better off by the deletion of that word. While the inclusion of it may have little practical effect, it may give greater certainty that all relevant considerations will be borne in mind by the Secretary of State.
      Amendment negatived.
      Amendments made:No. 15 in page 6, line 28, leave out from `authority'; to end of line 33.
      No. 16 in page 7, line 7, leave out `the'.—[Mr. Rifkind.]
      Mr. Rifkind: I beg to move amendment No. 17, in page 7, line 9, leave out
      952
      "are, in the opinion of''.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 18, 24, 25, and 27.
      Mr. Rifkind: The amendments are intended to change the wording of clauses 13 and 14 as suggested in Committee. As drafted, the clauses use the terms "satisfied that" and "in the opinion of', relative to various decisions by the Secretary of State. Both phrases are used at different stages.
      In Committee hon. Gentlemen argued for consistency, and I can see no compelling arguments for not meeting their point. I therefore propose to substitute the test of satisfaction for the test of opinion relative to selection of comparable authorities and in that way to use the same terminology in various parts of clauses 13 and 14. I am sure that the amendment will be acceptable to the House.
      Mr. Dewar: We are grateful to the Minister for agreeing to the point that came up in Committee and was argued by the Opposition. He was a little grudging when he suggested that he could not think of any reason for not being consistent, so he supposed that he had better be. I should have thought that he would be anxious to be consistent, for consistency can be a virtue. I have not gone through this in great detail, but the words "of the opinion" survive in brackets in clause 14, next to the word "multiplicand" and various other terms that we did not like in Committee.
      Before the Bill concludes its passage through Parliament I hope that the Minister will consider whether that outbreak of "opinion" can be curbed, in the interests of consistency. It is not a matter of great importance, but we thought that consistency would improve the Bill and we are grateful for the amendment.
      Amendment agreed to.
      Amendment made: No. 18, in page 7, line 10 after `State', insert 'is satisfied are'.—[Mr. Rifkind.]
      5 pm
      Mr. Martin J. O'Neill: I beg to move amendment No. 19, in page 7, line 16 leave out sub-paragraph (iii).
      Mr. Deputy Speaker: With this we may take Government amendment No. 20 and amendment No. 21, in page 7, line 19, at end add—
      '(c) shall exclude estimated expenditure on public transport subsidies where such subsidies can be shown to promote energy conservation and to support an efficient public transport system.'.
      Mr. O'Neill: The amendments are concerned with the criteria on which unreasonable and excessive expenditure will be determined. We objected in Committee to subparagraph (iii) because we considered it to be too ague. The amendment seeks to delete the sub-paragraph, though we concede that in amendment No. 20 the Government have gone some way to meet our criticisms by introducing various adjectives in relation to the criteria. We do not wish to be churlish, but there are references to economic criteria in sub-paragraphs (ii) and (iii). Perhaps the Under-Secretary will arrange to have one "economic" deleted in another place in order to avoid repetition.
      On amendment No. 21, we accept that expenditure resulting in an efficient and energy-conscious public transport system should be excluded from consideration of excessive and unreasonable expenditure. An efficient public transport system that is conscious of the

      953
      requirements of energy conservation will be of general benefit to the economy and, in many respects, of greater assistance than attempts to limit the public sector borrowing requirement in the simplistic way that the Government's monetarist philosophies entail.
      We shall not press amendment No. 19, but I should point out that if Government amendment No. 20 is accepted the word "economic" will appear in the criteria in sub-paragraphs (ii) and (iii). That repetition is unnecessary, and we ask the Minister to suggest to his noble Friends in another place that they should delete one "economic". We are not fussy which one they choose.
      Mr. Gavin Strang: I wish to speak to amendment No. 21, which would require the Secretary of State to exclude public expenditure on providing an efficient public transport system from consideration when he is deciding whether a local authority is spending excessively. Such expenditure is desirable if it is supporting an efficient service. There will be a redistributive aspect to such spending. Those who benefit most from reduced fares are those on low incomes, though others, including visitors to a city such as Edinburgh, may also benefit.
      In addition, if bus fares are held down many workers will accept low-paid jobs, which they would otherwise not accept but would continue to live on benefit. That is an important consideration, which applies not only to some of my constituents but to some of those of the Under-Secretary in Westerhailes.
      There are other pragmatic reasons for supporting such a policy. It reduces traffic congestion in a major city such as Edinburgh and it can promote energy conservation.
      We in the Lothian region are proud of the Edinburgh bus service, which was shown in a recent national survey to be the most efficient in Britain. We believe that the benefit of subsidisation is that it increases the use of the service and the revenue from passengers. It is cost-effective expenditure.
      I do not expect the Government to produce a circular encouraging local authorities to pursue such a policy, but I hope that they will give the benefit of the doubt to authorities that are attempting that approach, so that we can make a proper analysis of the cost benefits of such an approach to transport policy.
      The constructive meeting that took place between the Scottish Transport Group and representatives of Lothian region yesterday about the proposal to cut fares on Eastern Scottish buses in the region will mean, I hope, that there will be an opportunity for that policy to be implemented and for equity to prevail in bus fares throughout the Lothian region.
      Mr. John Home Robertson: I agree with my hon. Friend the Member for Edinburgh, East (Mr. Strang) that Government intervention to cut off local authority subsidies of bus services is likely to be damaging to our public transport network and to energy conservation measures. Nowhere is that more relevant than in the rural areas of Scotland, such as my constituency.
      The Borders regional council transport policy and programme for 1981–82 states:
      "The Government's proposals to end New Bus Grant and to impose financial targets on Scottish Bus Group predicate against
      954
      any further reductions in public transport support over the next few years except by depriving many villages of their bus services."
      That view has been overtaken by events, because the Scottish Bus Group has already increased its demands on local authorities, including the Borders region, and the regional council has refused to pay the additional subsidy. A report in The Scotsman on 17 March revealed that Eastern Scottish would be compelled to reduce the bus fleet in the Borders from 98 vehicles to 76 and that 20 bus drivers were to be made redundant. It continued:
      "The bus company is also taking steps to recover the £140,000 which Borders Regional Council have refused to pay towards the company's profitability target."
      The report stated that the company had threatened further increases in fares and cuts in services in the region.
      The problem is that high fares and a low level of services bring about resistance among passengers. There is clear evidence that the number of passengers falls and public transport services come up against the law of diminishing returns when fares are increased. The areas that prove that the converse is true are South Yorkshire and the Lothian region. Reasonable fares attract passengers and lead to more efficient public transport.
      The only problem in the Lothian region is that since local government reorganisation fares in the city of Edinburgh and those in other parts of the region have not been in line. Bus fares are about 20 per cent. higher outside the city, and it could be argued that my constituents in East Lothian have been subsidising passengers in the city.
      To its credit, the regional council brought forward a policy to increase the subsidy to Eastern Scottish bus services outside the city in order to ensure that fares would be at a similar level. That would have required a subsidy of £3 million.
      At that stage, the Secretary of State intervened and prevented the Scottish Bus Group from accepting the additional subsidy. That is our worry, and explains why we are discussing this matter. The right hon. Gentleman's action ensures that an inequitable situation is preserved and that my constituents continue to have to pay unreasonably high fares compared with people in other parts of the region.
      This demonstrates that the Secretary of State's influence in the matter is not helpful. I support the move made by my hon. Friend the Member for Edinburgh, East, which would prevent the Secretary of State from taking this kind of consideration into account when reducing rate support grant.
      Mr. Rifkind: The amendment moved by the hon. Member for Clackmannan and East Stirlingshire (Mr. O'Neill) from the Opposition Front Bench deals with a different matter from the transport consideration. It proposes the deletion of the final part of clause 13, which relates to the discretion that the Secretary of State can use in considering whether proposed spending is excessive and unreasonable.
      The hon. Gentleman and his hon. Friends put forward in Committee the understandable proposition that the words
      "to such other criteria as he considers appropriate"
      were too wide and too dangerous and would not even guarantee that the factors taken into account were legitimate considerations from the point of view of local

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      government expenditure. The Government undertook to consider whether the wording was too wide and whether some amendment was desirable.
      Government amendment No. 200, which is being discussed with the amendment that has been moved, is our response. By referring specifically to
      "financial, economic, demographic, geographical and like criteria,"
      it will be impossible for the Secretary of State to take into account considerations that are patently irrelevant to a proper consideration of the aggregate of local government spending.
      The hon. Gentleman asked whether it was desirable to include the word "economic" in the amendment, because if it were there it would lead to its appearing in two different parts of the clause. I do not think that it does any harm. Indeed, I consider that it is positively desirable. The first mention of "economic" refers to general economic conditions. That means considering the totality of public spending by local authorities as a whole and the economic circumstances that the country faces at the time. The wording points to national economic considerations and to general economic conditions, and not necessarily to criteria which, although economic, are limited to the economic situation of the local authority in question. The use of the word "economic" in the amendment includes matters specifically local to the authority in question.
      The more substantive point to which the hon. Members for Edinburgh, East (Mr. Strang) and for Berwick and East Lothian (Mr. Home Robertson) have drawn attention is that of the assistance that a local authority might wish to give to its transport undertakings. The amendment seeks to exclude any expenditure of that kind from any determination by the Secretary of State whether the proposed spending of an authority is to be considered excessive and unreasonable.
      The Government will not be terribly interested in the proposed spending of a local authority on any particular service if the aggregate of its spending does not appear to be prima facie excessive and unreasonable. The procedure that my right hon. Friend will carry out in relation to the powers is that he will first look at the budget of a local authority and then at the grand total of its proposed spending. If the grand total—the aggregate of proposed spending by the authority—does not appear to be prima facie excessive and unreasonable, he will not wish to look further at the budget.
      Mr. Robert Hughes: Will the Minister say what guidelines will be used to determine what is prima facie unreasonable expenditure?
      Mr. Rifkind: This matter was discussed at length in Committee. A whole series of considerations is spelt out in clause 13. It enables the Secretary of State to look at a whole series of factors, including the guidelines that have been laid down, any question of growth that the local authority may be building into its proposed spending, comparability of spending by that authority and other similar authorities, and questions of per capita expenditure of the authority compared with that of authorities in other parts of Scotland. A whole series of considerations can be looked at.
      If, and only if, the Secretary of State takes the view that on a prima facie basis the proposed spending of the authority is excessive and unreasonable will he wish to look further into what has brought about that situation. As
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      the Secretary of State is required, if he wishes to use his powers, to indicate both to the local authority and to Parliament his reasons for believing that the proposed spending is excessive and unreasonable, it would be impossible for him to fulfil that requirement unless he were able to look at specific items in a budget which he believed added up to aggregate spending that was clearly excessive and unreasonable.
      5.15 pm
      Even if, at the end of the day, the Secretary of State believes that a local authority's spending meets those criteria and rate support grant is withdrawn from it, there will be no question of my right hon. Friend's giving directions to a local authority about how it should make reductions in order to achieve a total level of spending acceptable both to the Secretary of State and to Parliament. That will be a matter for the local authority to decide. Equally, if a local authority wishes to spend far more on any one area of spending and can do so by making economies elsewhere, that is not a matter on which my right hon. Friend will wish to intervene. It is a matter properly within the discretion of the local authority.
      If the Lothian region or any other authority wished to spend more on transport than is the case in the rest of Scotland, but proposed to do so by making corresponding economies elsewhere so that its aggregate of spending was not excessive or unreasonable, that matter would not interest my right hon. Friend in any sense that is relevant to the powers in clause 13.
      The hon. Member for Berwick and East Lothian implied that if the amendment moved by his hon. Friend were to be approved by the House and become part of statute the Secretary of State would be unable to do in future what he did in respect of Lothian region's proposal to give an extra £3 million, I think, to the Scottish Transport Group. The hon. Gentleman misunderstands the situation. He misunderstands the basis on which the Scottish Transport Group was unable to accept the sum which the local authority in question wished to provide for it. It has nothing to do with clause 13 or the Bill as a whole. It is concerned with the question of the external finance limit of the Scottish Transport Group itself.
      A letter sent by my right hon. Friend to the chairman of the Scottish Transport Group illustrates the position. My right hon. Friend wrote:
      "An increase of the kind which was being proposed would have major implications for the Scottish Transport Group's external finance limit, which the Secretary of State announced in Parliament on 24 November last year was to be fixed at £17 million for the year 1981–82. Local authority bus support payments are one of the elements in the calculation of the EFL which, in turn, reflects, in relation to the Government's judgment of resource availability, the volume of external financial resources (in addition to direct income from customers of the service) which it is considered that the country can at any one time devote to the industry in question."
      In considering the total external finance limit of the Scottish Transport Group or any other public body of that kind account has to be taken of the sums received from outside sources. That includes the bus support grant received from a local authority. In the case of the Scottish Transport Group, the sum had been fixed at £17 million in respect of all its services throughout Scotland. This allowed for a substantial degree of bus support grant from various local authorities in Scotland. There was no way in which the Scottish Transport Group could have accepted the extra subsidy of about £3 million from Lothian region

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      within the EFL that had been laid down. That EFL was not laid down in order to prevent its accepting sums of this kind. The EFL had been fixed some time previously. It was the Scottish Transport Group's own judgment that there was no way in which it could accept this extra sum from Lothian region without breaching its external finance limit. It was on that basis that the Scottish Transport Group reached its decision.
      Mr. Home Robertson: We realise the limitations of the amendment. We are seeking to make it less easy for the Minister to be as obstructive as in the past.
      Mr. Rifkind: It is kind of the hon. Gentleman to express himself in that way. He should appreciate that whatever the desirability or undesirability of spending large sums of money on subsidising public transport, what the Secretary of State and the Government are concerned about is not how much a local authority spends on transport, social work, education or other individual items, but total spending of that local authority. The best way for local authority to ensure that my right hon. Friend takes no interest in how much it spends on any one item is to ensure that the totality of its spending is not excessive and unreasonable.
      Mr. Strang: A few years ago the external finance limit for the Scottish Transport Group was calculated in a manner that excluded any subsidy from a local authority. Will the Minister confirm that had it been a private bus service the Secretary of State would not have been in a position to intervene?
      Mr. Rifkind: I am not sure about the hon. Gentleman's latter point. A private bus service does not have an external finance limit. We are dealing with public bodies that have external finance limits. No one can seriously question that the Scottish Transport Group must operate within its EFL.
      I cannot comment on the question whether such a sum would not have been included within the EFL some years ago. However, the change in the system was made some time ago. I know that the hon. Gentleman acknowledges the fact that that change was made by the Labour Government. We are operating a system that was introduced by the Labour Government. On that basis, there is no way in which the Scottish Transport Group can absorb an increase in subsidy of £3 million, which is a considerable sum, when its EFL for the whole of Scotland is £17 million. In those circumstances we took a necessary decision.
      On the general question of a transport subsidy, I repeat that if a local authority wishes to make that a priority for its expenditure and is able to do so within total expenditure that is not excessive and unreasonable, we shall not intervene by using the powers contained in the Bill. It will be free to make its judgment about priorities. That is a full response to the points that have been raised.
      Amendment negatived.
      Amendment made: No. 20, in page 7, line 16, after `other', insert
      'financial, economic, demographic, geographical and like'.—[Mr. Rifkind.]

    Clause 14

      LOCAL AUTHORITY'S ESTIMATED EXPENDITURE RELEVANT FACTOR IN CALCULATING AMOUNT OF RESOURCES ELEMENT PAYABLE TO THEM
      Amendments made: No. 24, in page 7, line 30, after `authority', insert 'satisfied'.
      No. 25, in page 7, line 31, leave out 'of the opinion'.
      No. 27, in page 7, line 36, leave out `satisfied'.—[Mr. Rifkind.]

    Clause 15

      EFFECT OF SECTIONS 13 AND 14
      Amendment made: No. 29, in page 7, line 40, after `13', insert
      ', (Redetermination and lowering of regional, district or general rate)'.—[Mr. Rifkind.]
      Mr. Dewar: I beg to move amendment No. 30, in page 7, line 42, leave out '1981–82' and insert '1982–83'.
      Mr. Deputy Speaker: With this it will be convenient to take amendment No. 42, in clause 37, page 14, line 1, leave out `section 25' and insert `sections 15 and 25'.
      Mr. Dewar: Clause 15 makes it clear that clause 13 and the penal machinery contained in it should apply in the financial year 1981–82. We object to that. It is a mistake to bring the machinery into operation so quickly. Amendment No. 30 proposes that clause 13 should not take effect until 1982–83. It is a charitable attempt to save the proposed system from chaos, and to save the Minister from a degree of ridicule.
      It is common ground that clause 13 envisages a lengthy time scale and a complicated machinery. The theory is that the estimates will be examined in the February preceding the start of a financial year. There will be discussions between the Government and local authorities, and Ministers will decide whether estimates are excessive and unreasonable. No doubt there will be dickering backwards and forwards. For the purpose of the exercise we assume that no agreement will be reached. At that stage a report will be issued and subsequently there will be a debate in the House about an order. Only at that stage will it be possible for the Minister to claw back from that year's rate support grant the money that he intends to take out of the local authority's budget.
      In Committee the Minister said:
      "We hope that in the normal year the question of whether an order has to be presented to Parliament for the approval of Parliament can be put forward in about June or July of the year in question.'
      The Minister has an inbuilt tendency towards optimism when considering his stratagems and legislation. The estimate is for a normal year. It is not for the year 1981–82, but for subsequent years when the machinery is established and working to a normal routine and pattern.
      If in a normal year we look at estimates in February, and do not reach the point of clawback until June or July, that point will be reached at a much later stage for the year 1981–82. The process cannot begin until the Bill reaches the statute book. It not only has to conclude its passage—perhaps today—through the House, but it has to go to another place where it will no doubt be subjected to the rigorous and sceptical examination that it deserves. It

      959
      will be some time before we reach the process of judgment, negotiation, condemnation and an order in the House.
      The Minister has shown a tendency to disagree with that view. He may do so again. He said in Committee:
      "In any event, at this point we have no reason to believe that it should not be possible this year to submit an order to Parliament, if one is required, at approximately the same time as will apply in subsequent years."—[Official Report, First Scottish Standing Committee; 10 February 1981, c. 402–443.]
      The Minister may have thought that when he made his statement, but with somewhat maturer consideration he should realise that it was a preposterous claim. It is misconceived to assume that he can make an order and lay it in the House in June or July this year while recognising that he cannot begin the processes of consultation until the Bill has reached the statute book.
      In Committee on 10 February the Minister talked about October or November and said, rather weakly, that that was better than waiting until April, as was done under the 1966 Act machinery. Anyone reading his speech will realise that there is an implicit admission that it may be October or November before any clawback can be organised and before deductions are made from the weekly rate support grant payment.
      Our simple proposition is that if it is as late as October or November we shall be faced with the prospect of crushing into the fag end of the financial year substantial cuts that will be hard and painful enough to accommodate when phased over 12 months, but when phased over four or five months will become an insupportable burden. Whatever the disagreement about what may happen in a normal year when there is a whole financial year in which to operate, we shall run into the complications that my hon. Friends and I described when discussing the possibility of using the escape clause machinery that was added to the Bill in a new clause on Monday.
      The assessor of one major region said that if the escape clause came into operation as late as August it would be impossible to operate. I know that the Minister disagrees with that. However, he may accept that if we begin the machinery after the Bill has been passed we shall face considerable problems. Although he knows that we object root and branch to the whole concept of the Bill, that is not the point now. It would be more sensible to give the financial year 1981–82 a miss. The time scale is wrong because most of that year will be eaten up getting the Bill through the House.
      If the Government think that this is a valuable legislative initiative—which we do not—let it be for future years, when it will have a chance of operating in a civilized and orderly manner, starting the timetable in the preceding February, as envisaged.
      5.30 pm
      None of us has a duty to approve the proposals in clause 13, but every hon. Member has a vested interest in ensuring that machinery that reaches the statute book should be in good order and demonstrably workable. To proceed with clause 13 powers at a time that is likely to be halfway through the financial year before the process can be started is a recipe for disaster, and will reflect no credit upon the House. Moreover, it will place an insupportable burden on the local authorities, which will have to bear the consequences of the heat of the battle.
      I hope that the Minister will accept the reality of what I am saying. I know that he is anxious to have a few
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      sacrificial offerings in the coming financial year, but I hope that he will put that personal vendetta on one side and accept that in the interests of neat, tidy and workable government it is better to leave clause 13 for subsequent years, when it will be workable, if not desirable.
      Mr. Rifkind: I listened with interest, and perhaps a little amusement, to the speech of the hon. Member for Glasgow, Garscadden (Mr. Dewar). He would have us believe that his only interest in tabling the amendment is the serious, solemn and sober desire that the provisions should work in a straightforward and simple administrative way, and that he had not contemplated for one moment that the amendment, if accepted, would mean that local authorities, whose spending for 1981–82 was excessive and unreasonable, would lose their rate support grant.
      The hon. Gentleman knows that the Government made it clear some time ago that the provisions, if approved, would take effect for 1981–82. Local authorities., too, knew that when they fixed their budgets, and no doubt took it into account.
      In any event, I disagree with what the hon. Gentleman said about the time scale factors, He assumed that the process cannot begin until the Bill receives Royal Assent. My right hon. Friend, as happens most years, received the budgets from local authorities some time ago. Those budgets are being scrutinised at present, as happens in any event. By the time the Bill receives Royal Assent, my right hon. Friend will already be in a position to tell those local authorities whose proposed spending he considers excessive and unreasonable his conclusions in that respect. He will then be able to tell them the extent by which their spending is excessive and give his reasons for doing so.
      Mr. Peter Fraser: I am interested to know that the examination of local authority spending is already under way. When shall we be told the Secretary of State's decision? People in parts of my constituency in Dundee district will be anxious to know whether they are to be singled out for the treatment that they rightly deserve.
      Mr. Ernie Ross: Rubbish.
      Mr. Rifkind: The hon. Member for Dundee West (Mr. Ross) says "Rubbish." He will agree, whether or not he likes what the Government are doing, that the people of Dundee will be waiting with great interest to see how they will be affected by the proposals.
      My right hon. Friend is empowered under existing statute to obtain and consider the budgets. Clearly he cannot say what conclusions he will reach. Nor can he carry out any of the specific powers given to him in the Bill until after Royal Assent. Then, after Royal Assent, he will be able to excercise those powers.
      Mr. Dewar: I accept that we shall be given no specific information about who is to be on the hit list at this stage, but the Minister seems to be saying that the matter is already being considered. He must therefore know what the objectives are. How will the system work? If it is decided that expenditure is excessive and unreasonable, and if it is decided that a specific sum is excessive, will that entire sum be clawed back in the rate support grant? Will there be a punitive penalty over and above, pour encourager les autres, as one might say, or will it be a token deduction? If it is to be pound for pound, how will the deduction be made?
      Mr. Rifkind: The hon. Gentleman will have to await my right hon. Friend's decision. He knows perfectly well that my right hon. Friend's powers will be to ask Parliament to approve the withdrawal of rate support grant in respect of expenditure that is excessive and unreasonable.
      On the matter of procedure, my right hon. Friend, shortly after Royal Assent, will expect to be able to inform the affected authorities of his proposals. We do not expect to have weeks and months of consultation with an individual local authority. If there were weeks and months of consultation at the discretion of a local authority, not only this year but every year, a large part of the year would elapse before the consultations were concluded. My right hon. Friend will carry out his statutory obligations regarding consultation and will then put his proposals to the House.
      The hon. Gentleman is under another misapprehension. He says that if he is correct and we are wrong, and it were necessary to have weeks and months of consultation before the House approved an order, the local authority would know only in November or December what it would lose in rate support grant. Any local authority that acted in that way would be acting in a most irresponsible fashion. If it knew relatively early in the year the amount that the Secretary of State proposed to withdraw in rate support grant, it should take into account—if it were a responsible local authority—the fact that my right hon. Friend will not change his mind.
      Any sensible and responsible authority will take into account the sum that the Secretary of State proposes to withdraw when it decides on its spending pattern during the subsequent period. I fully accept that local authorities are not obliged to do that. I am simply expressing my opinion about what a responsible local authority would be likely to conclude at that stage. In any case, that all stems from the hon. Gentleman's assumption, which I do not accept, that a considerable period will elapse between the original intimation to a local authority and any decision by the Secretary of State to report to the House of Commons.
      Mr. Dewar: The Minister's answer is thoroughly unsatisfactory. He is being uncharacteristically coy about his right hon. Friend's intentions. He must know whether there is to be a pound-for-pound deduction and what the machinery will be. He owes it to the House to give us that information. In an attempt to disguise what is happening, he paid lip service to parliamentary scrutiny and the importance of Parliament's having to approve. He then had the cheek to say that Parliament will rubber stamp the prejudices of the Secretary of State. That will not do. Will the Minister give us a definition of the word "consultation", if it is as meaningless, as this form of words suggests?
      Mr. Rifkind: I thank the hon. Gentleman for saying that I was being uncharacteristically coy. From him that is a supreme compliment, and I am grateful for it. There will, of course, be an opportunity, as statute will require—there is no question of discretion—for the Secretary of State to tell a local authority what he has in mind and why he considers its expenditure to be excessive and unreasonable, and the local authority will have an opportunity to comment. It is not a question of the local authority's being presented with a brand new set of statistics of which it is totally unaware and which comes upon it like a thunderbolt from the sky.
      962
      We are talking about information which the Secretary of State will have gleaned from the local authority's budget, and the authority should be familiar with that. It will know why particular items are included or why allowance has been made for particular forms of expenditure. Therefore, if a local authority wishes to make any response to the Secretary of State it should do so in a very short time. Assuming that it knows its original reasons for including items in its budget it will not need lengthy investigation before being able to indicate those reasons to my right hon. Friend.
      Mr. Robert Maclennan: The procedure that the Under-Secretary is describing is utterly draconian. He confirms not only that it is but that it is intended to be, removing as it does considerable discretion from local authorities. If the local authority is to know whether the sanctions operating under clause 13 are to be introduced, presumably it will at least be advised in advance not only that its expenditure is regarded as unreasonable and excessive, but against what criteria the Secretary of State may have it in mind to act.
      Is the Under-Secretary saying that this whole operation is to be wrapped up in one communication to the local authority and that, ex post facto, it will have the whole draconian procedure visited upon it without opportunity to comment upon the criteria, and even before it can say whether the Secretary of State's requests can be met? Does the Secretary of State intend to publish the criteria separately and then apply them to particular cases?
      Mr. Rifkind: The hon. Gentleman says that the procedure is draconian, but it is the procedure set out in the Labour Government's 1966 Act. There is no reference in the Bill to procedure. The 1966 Act dealt with the Secretary of State imposing a similar penalty on a local authority. The only difference here is that the local authority will already have spent excessively rather than be proposing to do so.
      The hon. Gentleman asked whether the local authority would have the right to know, and whether the information would be published. He can rest assured that it will be. Under the 1966 Act procedure the report which the Government have to lay before the House in asking it to approve any intention to reduce rate support grant must include the reasons why the Secretary of State has reached that view, along with any comments that the local authority in question may have made in response. That may not be a satisfactory procedure to the hon. Gentleman, but it was used in the 1966 Act and we are happy to rest on that.
      Mr. Maclennan: Clause 13 introduces the words
      "the Secretary of State…may…have regard…to such other criteria as he considers appropriate".
      That is an innovation. Unless the right hon. Gentleman intends to publish the criteria in advance of seeking to visit the draconian clause 13 sanctions upon the luckless authority, he will not give it a proper opportunity to consider whether its expenditure is excessive and unreasonable, decided against the new and, so far, undisclosed criteria.
      Mr. Rifkind: The hon. Gentleman is introducing a new factor. His previous intervention was about procedure. All of us understand that "procedure" means the steps that the Secretary of State or the local authority must take. The procedure is specified in the 1966 Act, and is in no way

      963
      altered by the Bill. However, the hon. Gentleman is now referring to the criteria that my right hon. Friend must take into account in determining whether to initiate that procedure. If he applies those criteria he is obliged to inform the local authority and the House of his reasons for doing so.
      5.45 pm
      Mr. Hugh D. Brown: Will the Minister confirm what he said earlier? We are dealing here with a question of confrontation. He knows—we warned him—that he is about to take on authorities over unreasonable and excessive expenditure. That is the whole purpose of the exercise. Does he think that such authorities will work within the law or will not wait until Parliament has approved the order that he is to put before the House? He has indicated that he expects them to jump the gun. What is the purpose of all these orders and resolutions? He might just get another "Aberdeenshire, East rebel", because other Conservative Members will have to win their spurs as well. The hon. Gentleman should not take Parliament for granted.
      Mr. Rifkind: I am not taking Parliament for granted. I am not saying that an authority would be required to reduce its spending instantly. Only on Monday, however, the Opposition agreed with a Government new clause which allowed a local authority, from the moment the Secretary of State informed it that he was proposing to reduce its rate support grant, the right to reduce its rates as an alternative. If it is acceptable for the local authority to reduce its rates in that way, it is not unreasonable for me to say that even if it does not wish to use that facility it may nevertheless wish to reduce its spending from that date. It is not compulsory, but a responsible authority, knowing that it might be about to lose rate support grant, would wish to make a precautionary move. Nothing that I have said indicates that it would be compelled to do so. However, the position that I have outlined is no worse than that applying under the new clause that the Opposition accepted on Monday.
      There has never been any doubt that the Government intend that the provisions should apply in the current year. We believe that in any event it will be possible, well before the time scale to which the hon. Member for Garscadden referred, for the proposals to be implemented and for the House to consider them. It is on that basis that I believe that the clause and its date of commencement are acceptable.
      Mr. Maclennan rose—
      Mr. Deputy Speaker: Amendment proposed, page 7 line 42—
      Mr. Maclennan: Did you overlook me, Mr. Deputy Speaker?
      Mr. Deputy Speaker: Is this a point of order?
      Mr. Maclennan: I thought that you might have overlooked me when I rose to speak, Mr. Deputy Speaker.
      Mr. Deputy Speaker: This is the Report stage and the hon. Gentleman has exhausted his right to speak.
      Mr. Maclennan: I have not made a speech, Mr. Deputy Speaker. I merely intervened in the speech of the Under-Secretary. I therefore did not think that it was necessary to seek the leave of the House to speak again.
      Mr. Deputy Speaker: I apologise to the hon. Gentleman. I thought that his intervention was a speech. Does he wish to speak now?
      Mr. Maclennan: I am most grateful, Mr. Deputy Speaker.
      I need not detain the House at great length, but it is important that I should deal with the point that the Minister was seeking to make in answer to me. I was raising a substantive, not a procedural, point. I submit that this is a matter of procedure. If the Secretary of State is simply proposing to announce to the local authority in one move that its expenditure is excessive and unreasonable, that is one procedural step. If he proposes, however, to publish the general criteria against which he proposes to test local authority expenditure as being unreasonable or excessive, and then to apply those criteria to the local authority, that will constitute two procedural steps. It will make a considerable difference to the amount of time taken in giving effect to the Secretary of State's determination. That is highly germane to the amendment. If this is to be done properly, with due process and with proper regard to rules of natural justice, widely conceived, it will take much longer than the Minister says.
      If, however, the Minister is saying that the whole process is to be wrapped up in one confrontation and that the criteria will be disclosed to an authority only when it is deemed by the Secretary of State to have transgressed, that is different.
      Mr. Rifkind: The hon. Gentleman may have been absent from the Chamber when the Government amendment was accepted by the House. The part of the Bill to which he referred contains the phrase
      "such other criteria as he considers appropriate."
      The Government amendment that was accepted by the House a few minutes ago specifically replaces that by referring to economic, demographic and other named criteria.
      The procedure with which my right hon. Friend will comply is the procedure under statute, as laid down in the 1966 Act. That requires him to intimate his proposals; to a local authority and to give it an opportunity to make comments and representations to him on those proposals, Only after he has given it an opportunity to do so—whether it uses that opportunity is up to it—is he enabled to lay a report before the House. That procedure is laid down in the 1966 Act and is adopted for the purposes of the Bill.
      Amendment negatived

    Clause 31

      PLANNING APPLICATIONS AND CONSIDERATION OF THE NEEDS OF THE DISABLED
      Amendments made:No. 37, in page 12, line 28 leave out first 'subsection' and insert 'subsections'.
      No. 38, in Page 12, line 36, after 'duty', insert
      'and of the provisions of the Code of Practice for Access for the Disabled to Buildings.
      (4B) In subsection (4A) above "the Code of Practice for Access for the Disabled to Buildings' means the British Standards Institution code of practice referred to as BS 5810: 1979; but the Secretary of State may by order amend that definition'

    Clause 37

      SHORT TITLE, COMMENCMENT AND EXTENT
      Amendment made: No. 41, in page 13, line 36, after '9', insert
      'and (Valuation of underground railways)'.—[Mr. Rifkind.]

    Schedule 1

      POWERS OF COMMISSIONER FOR LOCAL ADMINISTRATION IN SCOTLAND
      Mr. Gordon Wilson: I beg to move amendment No. 43, in page 15, line 10, at end add—
      'In section 25, leave out subsection (2) and insert—
      "(2) A complaint shall be entertained under this Part of this Act if it is made in writing to the Commissioner by the person aggrieved or with the consent of the person aggrieved by a person acting on his behalf with a request to investigate the complaint".'.
      The amendment's objective is simple. It relates to the system of local authority commissioners, which is dealt with in the Bill. The purpose of the amendment is to allow members of the public to go direct to the local government commissioner if as aggrieved persons, they have an objection to or complaint against the actions of a local authority.
      When the local government commissioners were first introduced it was probably a fairly revolutionary step for United Kingdom administration. For the first time there was to be reference of a dispute with an elected or administrative body to an administrative official whose job it would be to investigate those complaints thoroughly and impartially, and to make a report which would be published thereafter. At the time, Members of Parliament were greatly worried. I was not a Member of Parliament at that time, so I cannot be too forceful about that matter. Councillors were also worried that their rights would be invaded by the change. In Scandinavia it is possible for citizens to take such complaints direct to the ombudsman, as the commissioner is known there. Here the complaints must be referred only through the Member of Parliament or a councillor in the authority concerned.
      The change was applied to local government in 1975. Many of the worries of Members of Parliament and councillors about that new system have long since disappeared. It is interesting that in one of his most recent reports the Parliamentary Commissioner has recommended that access to him should be direct, without going through a Member of Parliament. That recommendation has not been put before us in the form of legislation for implementation. Perhaps it is stacked up on the shelves of a Government Department.
      However, we now have before us a local government Bill which is not only couched as a Local Government (Miscellaneous Provisions) (Scotland) Bill but deals with the powers of the Commissioner for Local Administration in Scotland, contained in clause 21. Schedule 1 also deals with that.
      This change is fairly innocuous. It would fit in well with the Bill, which is a miscellaneous provisions Bill. We should take advantage of the experience which has been gained with the local authority commissioner system and the Parliamentary Commissioner. A change should be introduced to that system, which would allow aggrieved persons to go direct to the local authority ombudsman. I invite the House to accept my amendment.
      Mr. Bill Walker: I am at a loss to understand why the hon. Member's amendment has been tabled.
      I am a member of the Parliamentary Commissioner for Administration Select Committee, together with the hon. Member for Central Ayrshire (Mr. Lambie), who will confirm that the local government commissioner for Scotland comes to Parliament and reports to the Select Committee. He has on occasions drawn our attention to the fact that members of the public can, at his discretion, write and complain direct to him on matters of maladministration. that facility exists now, is used by members of the public and has been used by them.
      Mr. Gordon Wilson: It is true that the local government commissioner is prepared to entertain a complaint from an aggrieved person if a councillor has refused to take up a case or if he said that he would take up the case, but has not done so. I am suggesting that the citizen should have the power to go direct to the ombudsman, who would then have the opportunity to make the necessary inquiries into the case without going through the elongated procedure at which the hon. Gentleman has hinted.
      Mr. Walker: I am interested in that intervention, because I do not believe that the hon. Gentleman has studied in detail the reports of the local government commissioner or the Parliamentary Commissioner. If he had done so he would realise that the local government commissioner for Scotland had said that he was satisfied with the system. The Select Committee felt that the area concerning the Parliamemtary Commissioner could be looked at and added to. The amendment is unnecessary. My reading of the words on the Notice Paper is not in accordance with what the hon. Member has said.
      Mr. Maclennan: I was the first hon. Member to introduce a Bill to set up a Commissioner for Local Administration in Scotland. I withdrew that Bill on an undertaking given by the then Labour Government that they would seek to bring forward such legislation. Therefore, I have retained ever since a parental interest in the development of the powers of the Commissioner for Local Administration.
      There is substance in the amendment proposed by the hon. Member for Dundee, East (Mr. Wilson). The position of the commissioner is different from that of the parliamentary ombudsman. It is correct that the parliamentary ombudsman should be approached by the Member of Parliament, the Member of Parliament having no part in the administration that is being investigated. The case in respect of local government is different. The councillor who is approached may have had some part in the direction of the administration, or in decision making, which led to the grievance that gave rise to the complaint. It is in part to protect the interests of the members of the local government that the proposed amendment commends itself to me. All too often such complaints are subject to delay—the circuitous route is blocked after some embarrassment. I shall support the hon. Member for Dundee, East if he presses his amendment to a vote.
      6 pm
      Mr. Russell Johnston: I have four points to make. First, I compliment the Government on approving the ombudsman procedure in general in the Bill. Secondly,

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      there is not much evidence that sifting matters through councillors improves efficiency. Thirdly, the citizen may be reluctant to go to a councillor and may not know that he can write to the ombudsman direct. We must never underestimate public ignorance. It must be made known that access can be direct. Access is generally thought to be only through a councillor. If the citizen is reluctant to go to a councillor he is unlikely to take advantage of the procedure mentioned by the hon. Member for Perth and East Perthshire (Mr. Walker).
      Finally, if the complaint is frivolous or not well-founded, electoral pressures often cause the councillor to pass it on. That also applies to the Parliamentary Commissioner and Members of Parliament.
      The proposal is simple and would help individuals with genuine problems. I see no reason for the Government to reject it.
      Mr. Bruce Milan: I found the amendment difficult to understand. In addition, the hon. Member for Dundee, East (Mr. Wilson) related it to the wrong section of the 1975 Act. It is directed to section 25 when it should relate to section 24, and would remove a necessary part of section 25, which covers a complaint when a potential complainant has died.
      I am interested in the Minister's views. At present, a complaint normally goes through a councillor, as an elected representative, which is a useful procedure and ensures that the officials and the authority can examine it. The procedure prevents complaints that can be dealt with effectively by the authority going to the commissioner. The authority should first have the opportunity to remedy the problem. A system that prevents that happening would not produce a better result; it would cause confusion and give more work to the authority and the commissioner, to no good purpose.
      Under the 1975 Act, if a councillor is not willing to take up a complaint and it can be demonstrated to the commissioner that he has been asked and has refused, the complaint can be made direct, so that a safeguard exists. If it is felt that the safeguard is not adequate, or is not working satisfactorily, I should be willing to improve the procedure in the interests of the complainant. I do not wish to diminish the necessity for an effective route for complaints to the commissioner, but I am not aware that the system is unsatisfactory. If it is unsatisfactory, I do not believe that the amendment provides the remedy.
      Mr. Rifkind: I compliment the hon. Member for Dundee, East (Mr. Wilson) on raising a legitimate issue, but one on which there can be a difference of opinion. We all wish to ensure that the public's interests are properly protected and grievances are investigated and remedied where necessary. As the right hon. Member for Glasgow, Craigton (Mr. Millan) said, the hon. Gentleman has inadvertently addressed his amendment to the wrong part of the Act, but that should not stop us considering the idea.
      Should members of the public be able to ignore councillors when a problem arises out of a believed or alleged maladministration by the local authority? Dogma should not come into it, but it is, prima facie, undesirable to ignore elected members whose primary functions are to represent the interests of their constituents and to deal with problems that they may have as a result of local authority action. As the right hon. Member for Craigton said, we have to take into account not only the constitutional
      968
      principle of the role of the councillor in dealing with alleged problems of maladministration but the question whether the problems could be dealt with easily and simply by the councillor taking them up with the local authority and expeditiously producing a satisfactory response.
      When the local ombudsman, like the parliamentary ombudsman, was established, it was considered that recourse to him should be a last resort. One way to ensure that is by channelling grievances through the elected member and having the matter dealt with by the ombudsman only if the elected member feels it appropriate. The only reason for changing the arrangement arises if the councillor fails or refuses to pass on the complaint, so that he is not involved in considering the alleged maladministration. If that were a bar to the processing of the complaint there would be risk of injustice to members of the public, either because of malice or, more likely, incompetence by the councillor in failing to deal with the request. However, as my hon. Friend the Member for Perth and East Perthshire (Mr. Walker) pointed out, the 1975 Act covers that possibility and allows discretion to the ombudsman where he is satisfied that the councillor has refused to pass the complaint to him, or has failed to do so. The position seems satisfactory.
      Like the right hon. Member for Craigton, I am not aware of dissatisfaction with the arrangements or evidence to show that they have led to injustice. The Government do not have a closed mind. If there were evidence that the system was unsatisfactory we should wish to discuss it with the Secretary of State for Environment and the Secretary of State for Wales in relation to other parts of the United Kingdom to see whether changes were appropriate.
      Mr. Gordon Wilson: I shall be brief in my final remarks on the amendment. First, my intention was not to detract from the valuable role of councillors. Nevertheless, there are occasions when citizens may be dissatisfied with the actions of councillors in relation to complaints, or, indeed, when they feel that the councillors are part of a group of people who would not be willing to take action. They are therefore disinclined to raise the matter with a councillor for submission to the ombudsman. As I pointed out to the hon. Member for Perth and East Perthshire (Mr. Walker), the citizen has the right to take a complaint direct to the ombudsman if the councillor refuses to deal with it or procrastinates in his handling of it.
      I confess that it would have been helpful if I had addressed the amendment to the appropriate section of the Act. That is usually an advantage if one wishes to press an amendment. I had not intended, however, to press the matter to a Division, as I know that time is limited. I intended to test the temperature of the water to see whether the Government accepted my worries about the lack of openness in the system. Having raised the matter, I have gained the fairly mild assurance from the Minister that, should any evidence emerge, he is prepared at least to consult his right hon. Friends in other Departments throughout the United Kingdom. He spoke as though he had it in mind that some great constitutional change was involved, which I certainly did not have in mind myself.
      With those remarks, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Schedule 3

      MINOR AND CONSEQUENTIAL AMENDMENTS
      Amendment made: No. 44, in page 25, line 14, at end insert—
      'The Local Government (Scotland) Act 1947 (c. 43)
      O. In section 238(1) (fixing of dates for lodging and hearing appeals against rates), at the end there shall be added the following proviso—
      ": Provided that, if and in so far as required by virtue of a determination under section 108A(1) of the Local Government (Scotland) Act 1973, new such dates shall be so fixed.".'.—[Mr. Rifkind.]
      Mr. Rifkind: I beg to move amendment No. 45, in page 27, line 43 at end insert—
      'The Post Office Act 1969 (c. 48)
      11A. In paragraph 93(1) (xxxiv) of Schedule 4 (Post Office deemed to be statutory undertakers and its undertaking a statutory undertaking for the purposes of certain provisions of the Town and Country Planning (Scotland) Act 1972), after the words "205,", there shall be inserted the words "205A,",'.
      This is a technical amendment, consequential upon paragraph 14 of the schedule, which introduces a new section 205A to the Town and Country Planning (Scotland) Act 1972. The amendment provides that the Post Office is a statutory undertaker for the purposes of that section, thus ensuring that permission for Post Office development requiring the authorisation of a Government Department can be sought concurrently with setting in motion the procedure for making stopping-up or diversion orders for highways in connection with the proposed development.
      I commend the amendment to the House.
      Amendment agreed to.
      Mr. Norman Hogg: I beg to move amendment No. 46, in page 27, line 43, at end insert:
      "New Towns (Scotland) Act 1968 (c.I6)
      11A. In Schedule 2 (Constitution and proceedings of development corporations), at end of paragraph 9 insert—
      '9A. For the purpose of securing the admission, so far as is practicable, of the public including the press, to all meetings of Development Corporations themselves, the Public Bodies (Admission to Meetings) Act 1960 shall have effect.'.".
      I refer to the speech of the Under-Secretary of State, the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), in Committee on 24 February, when I moved a similar amendment. At that time the Government appeared to be enthusiastic in their support for the idea. Indeed, the Under-Secretary of State said:
      "We see the force of what the hon. Gentleman has said and the desirability of seeking some change in this direction."
      He continued:
      "I can tell the hon. Gentleman that my right hon. Friend will indicate to the chairmen of the new town development corporations the strength of feeling of this Committee and that the Government see no objection in principle to opening up these matters of obvious public interest that in the case of a local authority would clearly lead to access to the public and to the press. We can at this stage see no objection in principle to a similar right being provided for similar types of issue if they are being discussed by a new town development corporation."
      He concluded:
      "If the hon. Gentleman will seek to withdraw his amendment at this stage, my right hon. Friend is meeting the chairmen of the
      970
      new towns on 13 March, and it will be his intention to discuss this issue at that meeting."—[Official Report, First Scottish Standing Committee, 24 February 1981; c. 634–35.]
      6.15 pm
      In the light of what was clearly an assurance, I did not press the matter on that occasion, although it is a matter of immense importance to those who live in new towns and to my constituents in Cumbernauld in particular.
      I put down a parliamentary question to ask what progress had been made at that meeting with the chairmen of the new town corporations. I was told that the right hon. Gentleman had had a useful meeting with the chairmen on 13 March, that he was considering the matter further in the light of the views expressed, and that I would receive a letter in due course.
      I sincerely hope that the Government will take the opportunity today to accept the amendment, in view of the assurances that were given. There is no doubt that the citizens of a new town should have the opportunity to hear at first hand what is said at meetings of the development corporations. The corporations spend money. They make decisions about rents. They also make very important decisions about the environment and the attraction and location of industry within the town. For all those important reasons, the press and the public should have the opportunity to hear what is said and what is determined.
      I hope, therefore, that the Minister will tell the House that he has been able to secure the agreement of the chairmen of the new towns to make this perfectly reasonable arrangement. The amendment would do no more than bring the development corporation into line with Scottish local authorities, which, of course, admit the press and the public to their meetings. I look forward to hearing the Minister's reply.
      Mr. Lambie: I intervene very briefly to support what has been said by my hon. Friend. I represent Irvine new town, which is unique among new towns in Scotland in that it was developed on existing communities. The Royal burgh of Irvine had a charter going back more than 600 years, while in the burgh of Kilwinning there is the long religious tradition of Kilwinning Abbey, and the centre for masonic lodges throughout the world, with masonic lodge No. 0. We therefore have two towns of great historical interest.
      Superimposed on them is an undemocratic body, the Irvine development corporation. Under local government reorganisation, local councils were abolished. Cunninghame district council and Strathclyde regional council are now the two local authorities involved, so that all local council meetings, including all sub-committee meetings both at district and regional level, are open to the public. Yet the new town corporation, which has overall control over people in the new town, and complete control in the areas in which the new town has developed outside the existing communities, holds its meetings in private. We do not know what goes on at those meetings. The unemployment rate is 21 per cent., yet we do not know what the corporation is doing about it, or whether it even discusses the matter. I have come to the conclusion that the board does not want its meetings to be open to the public because it does nothing.
      I point this out to the Minister responsible for the new towns. The board meets once a month. I believe that its members spend half an hour on pleasantries and then have a good drink and a good lunch. That disposes of the

      971
      business for the month. If minutes were taken of those meetings—I know that this would appeal to you, Mr. Speaker, with your traditions against drinking, and so on—and if the meetings were open to the public, it would be seen that the board members have no say at all in what happens. It is the managing director and the officials of Irvine development corporation who run the corporation.
      When I read the Under-Secretary's assurance in Committee that the Government agreed in principle that meetings should be open to the public, I thought that that was a breakthrough, but according to today's Irvine Times the managing director of Irvine development corporation has put out a statement of the meeting held between himself, the chairman and the Secretary of State on 13 March, saying that the Secretary of State listened to their point of view and to the arguments put forward and intends to reconsider the whole matter.
      The Minister should stick to the principle of opening these meetings to the public. He should make the new town development corporations democratic. He should not listen to the undemocratic arguments that have been put forward by both the chairman and the managing director of Irvine development corporation.
      Mr. Gregor MacKenzie: I support the amendment of my hon. Friend the Member for Dunbartonshire, East (Mr. Hogg). However, I do not agree in every particular with the comments of my hon. Friend the Member for Central Ayrshire (Mr. Lambie). Along with my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan), I was responsible for many of the appointments to these boards. I have seen them in operation. I do not believe that the meetings last for half an hour or that the members have a nice lunch. These boards do a substantial job, for which we should be grateful.
      Mr. Norman Hogg: Does my right hon. Friend not accept that if we were to open the meetings and lunches to the press we should be able to confirm, or otherwise, the comments of my hon. Friend the Member for Central Ayrshire (Mr. Lambie)?
      Mr. MacKenzie: I should not go that far. However, I believe that the meetings should be open to the public. For a long time there has been great fear about the number of people who have been appointed to these bodies. We appoint people to the boards of commercial organisations—such as the electricity boards—but they have watch dog committees, such as the electricity consultative committee and the gas consultative committee. That does not apply to the new town development corporations, and what my hon. Friend has suggested would be helpful.
      There are times when it may not be appropriate for such a board to admit the public—for example, discussions might take place with a group of companies—but my hon. Friend's amendment takes care of such matters. It says that
      "so far as is practicable"
      this right should apply. It would be good for both the towns people and the boards if there were better communication, and there is no better means of communicating than by the means suggested in my hon. Friend's amendment.
      The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): I appreciate the points that have been made, as well as the strong feelings of hon. Members about the proceedings of new town development
      972
      corporation. In particular, I appreciate the feelings of the hon. Members for Central Ayrshire (Mr. Lambie) and of Dunbartonshire, East (Mr. Hogg) who have new towns in their constituencies. Nevertheless, I am sure that they will be the first to accept that there is a difference between an elected authority—such as a district or regional council—and a new town development corporation. The former consists of elected representatives who attend under a direct mandate from the electors, whereas members of the latter are nominated by the Secretary of State for Scotland. That is the major difference between the two types of organisation.
      As my hon. Friend the Under-Secretary of State promised in Committee, my right hon. Friend and I have held discussions with the chairmen of the five new towns in Scotland about the admission of press and public to new town development corporation meetings. The new town chairmen are well aware of the principle of openness in government that underlies the amendment.
      Equally, it was clear from our discussions that there would be difficulties in making a change of the sort proposed. We have undertaken carefully to study the Government's response to the various conflicting considerations. As I indicated in my reply earlier this week to the hon. Member for Dunbartonshire, East, my right hon. Friend will make his views known as soon as he has reached a decision. We shall not be tardy. My right hon. Friend will do that before the Bill is considered in another place, but I am unable to accept the amendment this
      evening.
      Amendment negatived.
      Amendments made: No. 47, in Page 30, line 34, at end insert—
      '19A. In section 273—

      (a) in subsection (4) (power to make orders under certain sections to be exercisable by statutory instrument), after the words "21,", there shall be inserted the words "26 (4B),"; and

      (b) in subsection (5) (statutory instruments containing orders made under certain sections to be subject to annulment in pursuance of a resolution of either House of Parliament)—

      (i) after the words "1 (3),", there shall be inserted the words "26 (4B),"; and

      (ii) for the words "18 (4) (a)" there shall be substituted the words "181 (4) (a)",'.

      No. 48, in page 31, line 3 at end insert—
      '21A. In section 108(1) (determination and levy of regional district and general rates), after the words "district rate; and" there shall be inserted the words ", subject to subsection 108A of this Act,".
      21B. In section 109(2) (intimation of district rate to rating authority), for the words "the district rate" there shall be substituted the words "such district rate as is".
      21C. In section 111(1) (regulations with respect to rates), at the end there shall be added the following paragraph—
      "; (f) providing, as regards a rate determined under section 108A(1) of this Act by a local authority—

      (i) for the repayment of sums paid in respect of a rate determined by them under section 108 thereof; and

      (ii) for the cost of levying and collecting to be borne by them.".'.

      No. 49, in page 31, line 26 at end insert—
      '26A. In section 8(3) (times at which instalments of rates are payable), for the word "the" where it occurs for the second time there shall be substituted the word "a".'.
      No. 50, in page 31, line 33, at end insert—
      '27A. In section 16 (which gives effect to a schedule relating to borrowing and lending by local authorities etc.), after the word "shall" there shall be inserted the words ", subject to section

      973
      (Prohibition of using sums from loans fund to offset reduction of rate support grant or diminution in amount of resources element) of the Local Government (Miscellaneous Provisions) (Scotland) Act 1981,".
      27B. In Schedule 3 (the schedule mentioned in paragraph 27A, above)—

      (a) in paragraph 15(1), after the word "below" there shall be inserted the words "and to sub-paragraph (2) of paragraph 1 above"; and

      (b) in paragraph 31, in the definition of "fixed period" after the words "case or" there shall be inserted the words ", from time to time, for any class of cases or".'.'—[Mr. Rifkindi]

      Mr. Rifkind: I beg to move amendment No. 51, in page 32, line 34, leave out 'out'.
      Mr. Speaker: With this we may take Government amendment No. 52.
      Mr. Rifkind: These are technical, drafting amendments to section 2(10) of the Tenants' Rights, Etc. (Scotland) Act, which provides that where a tenant chooses not to exercise his right to purchase he shall be deprived of the right to re-apply for 12 months starting from the last date on which he would have been entitled to serve a notice of acceptance.
      Some local authorities have expressed difficulty in understanding the provision as it is drafted, especially in identifying the starting date of the 12-month period. Any ambiguity in the original provision may have been exacerbated in the new proviso to be added to section 2(8) of the Act by paragraph 31(b) of schedule 3.
      In the circumstances, an amendment to clarify the meaning of the subsection is essential. The opportunity has been taken to recast subsection (10) more generally in the interests of the ease of interpretation. That substantive change is made in amendment No. 52. Amendment No. 51 is purely consequential. I commend both amendments to the House.
      Amendment agreed to.
      Amendments made: No. 52, in page 32, line 46 at end insert
      '; and
      (c) for subsection (10) (restriction on tenant's reapplication to purchase dwellinghouse) there shall be substituted the following subsection—
      "(10) Where an offer to sell has been served on the tenant, he shall not be intitled to make an application to purchase under this this Part of the Act again until 12 months after the last date on which he has, under either of subsections (6) and (8) above, any entitlement to serve a relative notice of acceptance,".
      No. 53, in page 33, line 33 at beginning insert '—(a).
      No. 54, in page 33, line 33 leave out 'forthwith —(a)', and insert—(i)'.
      No. 55, in page 33, line 35 leave out `(b)' and insert'(ii)'.
      No. 56, in page 33, line 37 leave out from `tenancies' to second `any' in line 38 and insert
      ; and

      (b) to publish in accordance with subsections (2) and (2A) below,

      within 6 months of the coming into force of paragraph 36 of Schedule 3 to the Local Government (Miscellaneous Provisions) (Scotland)
      Act 1981 and within 6 months of any alteration of the rules'.
      No. 57, in page 33, line 40 leave out from 'above' to end of line 43.
      No. 58, in page 33, line 45 at end insert ';
      974
      '(c) in subsection (2)—

      (i) after the word "times" there shall be inserted the words "—

      (i) in a case where the body is an islands or district council or a Development Corporation,"; and

      (ii) at the end there shall be added the words"; and

      (ii) in any other case, at its principal and other offices."; and

      (d) after subsection (2) there shall be added the following subsection—
      "(2A) Rules sent to a council in accordance with subsection (1A)(a)(ii) above shall be available for perusal at all reasonable times at its principal offices.".
      37. The following Schedule shall be inserted before Schedule 1—
      "SCHEDULE AI
      VESTING ORDER UNDER SECTION IA: MODIFICATION OF ENACTMENTS
      The Town and Country Planning (Scotland) Act 1972 (c. 52)
      1. Paragraphs 1(2), 6 to 13 and 16 to 39 of Schedule 24 only shall apply and in them any reference to a general vesting declaration shall be treated as a referecnce to an order under section 1A of this Act.
      2. The references, in paragraphs 6, 7 and 37 of that Schedule, to the end of the period specified in a general vesting declaration shall be treated as references to the date on which such an order comes into force and the reference in paragraph 9 thereof to the acquiring authority having made a general vesting declaration shall be treated as a reference to such order having come into force.
      3. In paragraph 6 of that Schedule—

      (a) the reference to every person on whom, under section 17 of the Lands Clauses Consolidation (Scotland) Act 1845, the acquiring authority could have served a notice to treat, shall be treated as a reference to every person whose interest in the land to which such order relates is vested by the order in the landlord; and

      (b) sub-paragraph (a) shall be omitted.

      4. The reference in paragraph 20(2) of that Schedule to the date on which the notice requred by paragraph 4 thereof is served on any person shall be treated as a reference to the date on which such order comes into force.
      5. In paragraph 29 of that Schedule—

      (a) sub-paragraph (1)(a) shall be omitted; and

      (b) the reference in sub-paragraph (1)(b) to the date on which a person first had knowledge of the execution of the general vesting declaration shall be treated as a reference to the date on which such order came into force

      The Land Compensation (Scotland) Act 1963 (c. 51)
      6. Any reference to the date of service of a notice to treat shall be treated as a reference to the date on which an order under section 1A of this Act comes into force.
      7. Section 25(2) shall be treated as if for the words 'the authority proposing to acquire it have served a notice to treat in respect thereof, or an agreement has been made for the sake thereof to that authority' there were substituted the words 'an order under section 1A of the Tenants' Rights, Etc. (Scotland) Act 1980 vesting the land in which the interest subsists in the landlord has come into force, or an agreement has been made for the sale of the interest to the landlord'.
      8. In section 30—

      (a) subsection (2) shall be treated as if at the end of paragraph (c) there were added the words; or

      (d) where an order has been made under section 1A of the Tenants' Rights, Etc. (Scotland) Act 1980 vesting the land in which the interest subsists in the landlord.'; and

      (b) subsection (3) shall be treated as if in paragraph (a) the words 'or (d)' were inserted after the words 'subsection (2)(b)'.

      9. Any reference to a notice to treat in section 45(2) shall be treated as a reference to an order under the said section 1A.
      10. In Schedule 2, paragraph 1(2)(a) shall be treated as if the words 'or the coming into force of an order under section 1A of the Tenants' Rights, Etc. (Scotland) Act 1980 for the vesting of the land in the landlord' were inserted after the word 'land'.".'.—[Mr. Rifkind.]
      Mr. Speaker: Mr. Bruce Millan.
      Mr. Millan rose—
      Mr. Rifkind rose—
      Mr. Speaker: Mr. Malcolm Rifkind.
      6.26 pm
      Mr. Rifkind: I beg to move, that the Bill be now read the Third time.
      I would have been happy to give way to the right hon. Member for Glasgow, Craigton (Mr. Millan) had I been satisfied that he would have moved a similar motion. I suspect that that might have been an unrealistic expectation.
      This is a Bill which covers a substantial number of policy matters. However, the House has rightly been interested in the provisions relating to local government expenditure and to the powers available to the Secretary of State to withdraw rate support grant if a local authority proposes unreasonable and excessive expenditure in its budget.
      From the beginning my right hon. Friend has made it clear that he hopes to use these powers either never or, at the very most, rarely. It is our belief that in practice only one or two authorities at most will have to be proceeded against under the powers in the Bill. It has been suggested that the procedure which will be applied contains no safeguard for the local authorities. However, the procedure which was approved by Parliament in 1966 is similar to the procedure contained in the Bill.
      The new clause which was accepted on Monday is of considerable importance. It means that a local authority, faced with a prospective loss in rate support grant will, at its own initiative, be able to avoid such a loss if, as an alternative, it agrees to reduce its proposed spending and makes a reduction in its rate poundage, with a consequent benefit to the local community and ratepayers. Faced with that choice, it is likely that most local authorities will find that to be a preferable alternative because, if the House were to approve a reduction in rate support grant, a local authority would, in any event, be required to reduce its expenditure. If it finds that necessary, it is more sensible and appropriate from everyone's point of view that the local community should benefit as a consequence rather than the Treasury. In effect, that will be the alternative available to a local authority if the House approves an order under clause 13.
      I am sure that all hon. Members will accept that this is a major improvement in our law. For the first time in history, Scottish local authorities, having fixed their rates, will have an opportunity to reconsider their decisions in order to reduce the rate burden and benefit the local community as a consequence. I accept that if a local authority is required to reduce its spending it will have to reduce certain services. That is an inescapable consequence. But I am equally clear that given the circumstances in which these powers will be used, it will not affect any of that local authority's vital services. We are dealing only with expenditure that the Secretary of State believes and the House of Commons accepts to have been excessive and unreasonable.
      These powers represent a sensible and desirable improvement to our legislative framework. It is in everyone's interests that they are not used on other than infrequent occasions. However, I make it clear that my
      976
      right hon. Friend has every intention of using them if he judges that an authority's expenditure is excessive and unreasonable, and if the House accepts his judgment. Both in respect of these powers and the other clauses, I have no hesitation in commending the Bill to the House.
      6.30 pm
      Mr. Millan: I shall ask my right hon. and hon. Friends to vote against the Bill. We are utterly opposed to it. Unfortunately, there is time for only a short Third Reading debate, because yesterday I promised that we would try to finish Third Reading by 7 o'clock. I wish to keep that promise. I shall speak for only a few minutes, although the Bill deserves much more than that.
      I pay tribute to my hon. Friends the Members for Glasgow, Garscadden (Mr. Dewar) and for Clackmannan and East Stirlingshire (Mr. O'Neill) and to those of my hon. Friends who served in Committee. They put in a considerable amount of work. I also pay tribute to the work that my hon. Friends did on Report. If the Bill has not been improved it is not because of lack of effort by my hon. Friends, but because of the Government's doctrinaire obsession for cutting local authority expenditure in Scotland. The Government have made no attempt to meet the reasonable objections that have been made.
      In the past few years the Government have been on a collision course with Scottish local authorities. It has inevitably produced confrontation, which is bad for both local government and ratepayers. I note that the Secretary of State is not in the Chamber. However, the Minister has had to bear the burden of the work. Despite all the efforts and despite the right hon. Gentleman's blustering, in the current year 1980–81 local rates in Scotland have been increased, on average, by 32 per cent. In 1981–82 there will be an average increase of no less than 34 per cent. If rates continue to increase in that way and if the Government do not come to their senses about the level of rate support grant and housing support grant the rating system in Scotland may collapse. The system cannot sustain such increases.
      If a Conservative Member were to believe that the Bill allowed for more than a very marginal reduction in overall rate increases in Scotland he would be mistaken. There may be no reduction. Indeed, even in the areas that the Government will try to tackle under the powers contained in clause 13 there will probably not be a reduction.
      It is typical of the Government's disingenuousness in dealing with clause 13 that, although they know which local authorities will be affected and have some idea about how the clause will be used, they have resolutely refused to give us any information. Indeed, less than an hour ago the Minister was given an opportunity to tell us. The provisions are not workable for 1981–82, and the position will be little altered, if at all.
      In principle, we are opposed to the Government's intentions. The Government have had to introduce more and more new clauses. Apart from clause 13 there is a provision that is meant to give local authorities a second chance, and a new clause that will prevent borrowing from the loans fund. Where the Government can use clause 13, they will determine local expenditure. But central Government are not competent to do the job. Once they begin to determine the expenditure of any local authority it will be the end of local government and of local

      977
      democracy. Despite all the warnings that the Government have received from Opposition Members and local authorities, the Government chose to set out on that road.
      I am apprehensive about my next suggestion, because the Government may take me up on it. However, we might just as well have a clause that states that every local authority should do everything that the Secretary of State says without question. That is what the Secretary of State wants. In some respects that is the effect of many of the Bill's provisions.
      If the Bill had contained amendments to the Tenants' Rights, Etc. (Scotland) Act—as we attempted to secure yesterday—there might have been something to be said for it. Nevertheless, we violently object to such disagreeable and wicked clauses as clause 13. Nothing in the Bill can be commended. That is why I ask my right hon. and hon. Friends to vote against it in the Lobby. It is a wretched Bill. The sooner we see an end to the attempt by Government and the Secretary of State in particular to dictate to Scottish local authorities, the better.
      6.37 pm
      Mr. Alex Pollock: Before we vote on Third Reading I wish to raise two points that concern schedule 2. The first concerns paragaph 22 and tree preservation orders. It is proposed to withdraw the need for the Secretary of State to confirm any such order. Instead, the planning authority is to take the final decision and there will be no appeal. Private forestry interests, particularly in the Highland region, are worried because even the whiff of suspicion that such a tree preservation order might be applied by the local authority could have an adverse effect on contracts with timber merchants. In turn, that could have a major effect on timber sales programmes and could involve loss of revenue.
      I ask the Government to ensure that that is given consideration in the other place. I ask them to consider that it would be better to retain the Secretary of State's right. If that is not acceptable, perhaps firm guidelines could be issued to local authorities in order to minimise the risks.
      The other matter concerns the amendments to the Local Government (Scotland) Act 1973, which is covered in paragraphs 31 and 32 of the schedule. They involve the structure of community councils. If the Bill is accepted without amendment those councils will, in effect, come under the direct control of district councils. Of course, there are certain safeguards. There is a right to make representations. Nevertheless, the final decision lies in the hands of district councils, whom, on occasion, community councils are charged to criticise. What consultation took place before that part of the Bill was drafted? The Convention of Scottish Local Authorities was consulted. It has an obvious interest in providing the best that it can for district councils. However, the Scottish Council of Social Service—
      Mr. Hugh D. Brown: On a point of order, Mr. Deputy Speaker. Is it not an abuse of the House to raise detailed Committee points on Third Reading? The hon. Gentleman has had every opportunity to raise such points.
      Mr. Deputy Speaker (Mr. Ernest Armstrong): I have been listening very carefully. If the hon. Gentleman is addressing his remarks to provisions in the Bill, he may continue.
      Mr. Pollock: The provisions are contained in the Bill. My attention was drawn to these matters only at the weekend. I am concerned about the lack of consultation between the Government and the community councils. Again I would ask for a rethink by the Government before consideration of the Bill in another place is finished.
      6.40 pm
      Mr. Robert Hughes: This is a thoroughly bad Bill. Indeed, the Government have not even got the title right. The Bill is called the Local Government (Miscellaneous Provisions) (Scotland) Bill. It should be called the Local Government (Prevention of) (Scotland) Bill, because that is precisely what the Government are doing—preventing local government from carrying out its responsibilities. The Bill introduces for the first time into legislation the language of George Orwell's 1984—the Newspeak language. The title of section 22 is
      "Relaxation of controls over local authorities".
      What absolute nonsense. The whole purpose of the Bill is to tighten the control by central Government over local authorities and to maintain a stranglehold on everything that they do. It is a wholly negative Bill. There is nothing in it that gives any encouragement to local authorities to use their initiative or good sense, or to have consultations with the people who live in the area on the provision of local government services.
      I confess that the impression is sometimes given that local government is about providing work for local government employees. I accept that that criticism is sometimes justified. The whole purpose of having local government is to provide local services that are locally determined. Local councillors, duly elected, should be able to decide for themselves, first, what priority they wish to give to different services and, secondly, how far they themselves are willing to top up over and above the Government grant.
      Because of the shortage of time I shall say nothing more except that the Government will rue the day that they centralised local government in this form. I think that they will find that even their own supporters in local government will rebel against it. They are building up resentment among local authorities and among local authority staff. Sometimes we do not give sufficient credit to the staff for the work that they do. I know that many people in local authorities do tremendous work because they are dedicated to the service. They are not in it just for the money. The Bill destroys the initiative of councillors and of local authority staff. At the end of the day it will lead to the destruction of local government. I shall go into the Lobby with my right hon. and hon. Friends to vote against the Bill and express my disapproval.
      6.43 pm
      Mr. John Mackay: I should like to make two points. I am sure that the hon. Member for Central Ayrshire (Mr. Lambie) would make one of them if he were called, namely, that having taken the power to delay the 1983 revaluation my right hon. Friend will exercise that power and delay indefinitely and perhaps for ever that revaluation.
      My right hon. Friend might also look at the tactics that assessors are employing even at the moment, in that, without the legislation, revaluation is going on. A certain class of subjects, namely, self-catering subjects, are being quietly reclassified by the assessor. They are receiving

      979
      thumping great assessments, which place their whole economic position in doubt. The assessor is attempting to relate their gross annual value to a percentage of their turnover. This is very serious. The assessor started off at 30–40 per cent., and that figure has been reduced on appeal to something like 20–25 per cent. The Highlands and Islands Development Board and the Scottish Tourist Board, having encouraged self-catering, are now going to have to watch the whole thing being destroyed by the actions of the assessor.
      The second power that I welcome is that given to the Secretary of State to do something about local authorities who take no account of the economic damage that they do not only to their domestic ratepayers but to their commercial and industrial ratepayers. A lot has been said and written about the damage that they do to their domestic ratepayers. My hon. Friend the Member for Edinburgh, South (Mr. Ancram) has spoken much on this, but I should like to draw the attention of the House to the damage that they do to the commercial ratepayers.
      I have here a letter that has been sent to all local authorities in Scotland which have in their area a quarry or a plant run by Tilcon, the quarrying group. Every local authority should give a copy of this letter to all their members and they should look at it every time they decide to spend another penny of public money. The letter encapsulates the problem that has been caused in industry and therefore in employment by local authorities increasing their rates beyond anything that is fair and just. The letter states:
      "In the present economic climate, with the private sector under enormous pressure, it is totally unacceptable that local authorities should seek to levy rates which are not only in excess of the current level of wage awards, but in many cases grossly in excess of the Retail Price Index itself. In industry we have to live within our income. When our income decreases, then we have to cut our expenditure. Public bodies, including all the nationalised industries, react in a completely different way. They raise their income to meet whatever increase in expenditure they deem appropriate. Their accountability, in the case of local authorities, to the providers of a massive proportion of their income—namely industry, is precisely nil. During 1980, Tilcon has paid in total, rates amounting to over £1 million which is an increase of over 20 per cent. on the 1979 figure.
      The present parlous state of the economy is related in no small measure to the profligate spending of ratepayers' money without the salutary discipline of having to earn that money or to justify the amount of expense. We see no evidence whatever of any serious attempt to really cut expenditure in the town halls as we have to in private industry. Tilcon were not able to increase their income in 1980 to the tune of 20 per cent. by which our rates increased. Against a background of ever increasing costs, of which by far the largest increase was in relation to rates and charges by nationalised industries, coupled with a sharp decline in demand for our products, Tilcon had to take the very regrettable decision during 1980 alone to make over 10 per cent. of our total workforce redundant. We would like some demonstration of the positive steps you have taken to reduce your expenditure on labour by cutting the numbers."
      The next sentence is very serious. It says:
      "We give you notice that during 1981, Tilcon will give serious consideration to its position in each community in which we operate. Those areas which show little or no restraint in their demand for rate increases will find that as a first step there will be plant closures or withdrawals and inevitably a total and permanent loss of rate income adding a further spiral of increase to the rate poundage."
      I have read that letter because it illustrates why it is essential for commerce and for employment that my right hon. Friend should take these powers to stop local authorities ignoring absolutely the economic damage that they do to their own areas and the way that they ride
      980
      roughshod over all those problems. They pay scant regard—nay, no regard at all—to the position of commerce and industry.
      I hope that my right hon. Friend will not have to use the powers. I hope that some sense will prevail in those local authorities that seem to think that money grows on trees and that basically the trees all grow on the properties of the commercial and industrial sector.
      6.48 pm
      Mr. Gordon Wilson: I wish to make it clear that I regard this as an objectionable measure. When the hon. Member for Argyll (Mr. MacKay) was attacking local authorities for overspending he may have had a point in terms of authorities like the Dundee authority, on which the loony Left seems to have gone out of control. Even set against that, what the Bill strives to do is to cut the throat of local government itself. The essential feature of local government is that democraatic decisions are taken at local level. It is the electors who have elected the councillors to serve and take those decisions. The electors will have the chance, every four years or so, to record a different choice.
      What is important when we pass measures like this in order to cut down the Chancellor's public service borrowing requirement in any one year is that we have required him to hack the feel from under the whole system of democratic control at local level. I am shocked particularly by the hypocrisy of the Government, who strive to pretend that they have no part to play in the high rate increases that are taking place. Of course, one can criticise a specific decision taken by a local authority. Every hon. Member knows that the Government are acting in pursuit of overall economic objectives which I regard as misjudged and harmful, but these objectives have caused savage reductions in the level of housing support grant and in the level of rate support grant.
      It is appalling that the Secretary of State for Scotland has not been able to point out to the Treasury that Scotland should have been exempted from the increased cuts in public expenditure for the simple reason that this year Scotland is producing £4,000 million by way of oil revenue. The Shetland Isles this year are proposing to pay to their old folk something like £100, whereas in Strathclyde the charges for meals on wheels service will go up by 50 per cent. It is disgraceful that the Secretary of State for Scotland has not been willing to tell the Chancellor of the Exchequer that Scotland deserves a better deal and a fairer share. He must take the blame not only for the cuts that are taking place but for the savage assault on the inherent democracy of our local government system.
      6.50 pm
      Mr. Russell Johnston: The Liberal position is that the Bill is an unacceptable piece of legislation. It extends still further the powers of the Secretary of State, and in ways that prevent his decisions being challenged. This is the wrong direction in which to proceed. It is the first time that Parliament has proceeded in this direction for at least a decade. It breaches the spirit that underlay the reform of local government, which was to strengthen the power of local authorities as against the Government and to enable local authorities to have greater discretion in determining its expenditure priorities within the parameters of national legislation. The Bill has been introduced and supported by

      981
      a Conservative Government and Conservative Members who in their own areas stress continually the importance of local independence and repeatedly condemn centralisation. We now know how much weight to give such declarations in future.
      The hon. Member for Edinburgh, South (Mr. Ancram) is the Conservative Party's chairman in Scotland. I tell him that the god Janus, who had two faces, would seem a much more appropriate symbol for the Conservative Party than the wee arrow that it pinched from British European Airways.
      The Bill is two-faced in a real way. It claims to remove restrictions on local authorities when in reality it removes minor restrictions while imposing substantial new central control. The tone of the Bill suggests a profound lack of confidence in local government. It has aroused great hostility among local authorities and deserves the opposition of the House.
      6.52 pm
      Mr. Dewar: I say briefly to the hon. Member for Argyll (Mr. McKay)—
      Mr. James Dempsey: On a point of order Mr. Deputy Speaker. Am I to take it that we are now terminating the debate? I have been in my place for hours and I have been trying to catch your eye so that I might speak for about five minutes on clause 11, but I have failed to do so. Will I be in order in trying to catch your eye, Mr. Deputy Speaker, after my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) has made his speech?
      Mr. Deputy Speaker: I did not see the hon. Member for Coatbridge and Airdrie (Mr. Dempsey) rising in his place. If he wants to participate, he can do so now.
      Mr. Dempsey: Clause 11 removes the right of creditors to confiscate goods that might be on hire to a debtor to whom a warrant for sales and possession is being applied. I welcome the action that the clause will take. It prevents television sets or any other goods, on hire from being acquired by the creditor. In the past that could apply even to someone who was looking after his grandfather's clock.
      I welcome the clause, but it is rather half-hearted. Surely we can dispense with warrant sales in general. It is an iniquitous method of recovering debt. There should be some control over the prices that the sheriff's officer sets. The officer can poind, seize, secure and sell at bargain basement prices. That is an unfair way of treating the debtor.
      I know of a small business that was supposed to owe £300 worth of rates. The value of all the goods in this little shop was totalled. Figures were put on different items that were disgracefully low. That seemed not to matter as long as the total came to £300. The same items were valued by an auctioneer, a man of experience, and the total real value was over £3,000. Will the Secretary of State consider adding a few words to clause 11 in another place to provide that when goods are being sold they should be sold at market value? I urge him to consider that suggestion sympathetically.
      6.54 pm
      Mr. Dewar: The 1979 Conservative Party manifesto laid great emphasis on local government and its freedoms.
      982
      It was claimed that they were means of bringing government closer to the people. The Conservative councillors who canvassed for the return of the Secretary of State for Scotland—the right hon. Member for Ayr (Mr. Younger)—and his hon. Friends must be aghast at the consequences of that action. We have seen an assault on the essential freedoms of local government on a scale that is almost unprecedented.
      As a result of the Bill—this is only one feature of a wide-ranging series of infringements and encroachments on local government initiative—the powers of local government to determine the level of services and the level of rates will now be exercised only by the grace and favour of the Secretary of State for Scotland. Borrowing consent in the revenue account will now have to be obtained from the Secretary of State. If consent under section 94 of the 1973 Act is given, that cannot be relied upon. It can now be varied and withdrawn at the whim of the Secretary of State.
      The right hon. Gentleman has become a dictator in local government activity. Local authorities may propose a course, but the right hon. Gentleman will do the disposing. I fear that that strikes at the essence of a healthy local government structure. We have created an unnecessary and unpleasant dilemma for local authorities in Scotland. They will be told on the arbitrary opinion of the Secretary of State that they are excessive and unreasonable in their expectations and expenditure. The right hon. Gentleman has threatened a slashing reduction in the rate support grant this year.
      Late in the day, on Report, the Government produced a hurriedly cobbled-together series of clauses to allow at least some relief for hard-pressed ratepayers. The Government will try to represent those provisions as a triumph for the ratepayer, but they are not. The ratepayers will see school closures, nursery school closures, reduced facilities for the disabled and the physically handicapped and an incomplete programme of maintenance of the housing stock. The gamut of local authority services will be under attack in a higgledy-piggledy fashion by the force majeure of the Secretary of State's policies. We shall pay the price in deteriorating circumstances and higher unemployment as the knock-on and knock-off effects are seen throughout the economy.
      Outside the Chamber the Bill is totally friendless. The right hon. Gentleman has succeeded in uniting the entire Scottish local government world. That includes Conservative councillors throughout the length and breadth of Scotland. It is clear that COSLA is unanimous. The Bill is friendless because it is wrong-headed, misconceived and misguided.
      Ministers are creating conditions that will lead to confrontation. They are causing a serious crisis in local government, of a sort that we have never seen before. It is a bad day for the system when good responsible councillors on both sides of the political divide are saying after years of service "We are prepared no longer to be ciphers. We shall not be captives of policies that we deeply abhor and that we have no chance of influencing." It is a tragedy that that is being said, and said increasingly.
      I put on record our deep distress at the measures that are being introduced by means of the Bill and our deep opposition to the unfair and restrictive straitjacket to which local authorities and local democracy are being confined by the Government. The Bill is essentially undemocratic and, to add insult to injury, it is in many parts unworkable.

      983
      I know that it is difficult for the right hon. Gentleman to retreat and to admit that he is wrong. I can only recommend, if he has the interests of local government at heart, that he should think again and retreat from the brink before it is too late.
      7 pm
      The Secretary of State for Scotland (Mr. George Younger): In finally commending the Bill to the House I compliment and thank my hon. Friend the Under-Secretary of Sate for Scotland, the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), for the magnificent job he has done in piloting through this long measure. I think the whole House will appreciate that.
      I suppose it is inevitable that the speeches should have been dominated by the default powers contained in the Bill. I do not regret that, but I must confess that the farrago of nonsense put forward by the hon. Member for Glasgow, Garscadden (Mr. Dewar) made me wonder whether he was referring to the Bill that is before us. As for his claim to speak for Conservative councillors, I can say that the Bill is warmly commended by all Conservative councillors, particularly those who are responsible for looking after the ratepayers' money.
      To suggest that the Bill represents an attack on local authority independence is to ignore that the only people affected by the default powers are local authorities who have been declared by the House to have been guilty of excessive and unreasonable expenditure. No other local authority, council or part of a council has anything to fear from the default powers.
      To talk about an attack on local authority independence is absurd and leads me to doubt what the hon. Member for Garscadden said about other aspects. That is not surprising, because Labour Members have not faced the fact that there is a large body of people who warmly applaud the Bill and expect it to be passed by the House tonight—the Scottish ratepayers.
      People living in some areas are feeling more beleaguered than they have felt for many years. If we ask by whom they are feeling beleaguered we can perhaps get a clue why the hon. Member for Garscadden spoke as he did. The facts are clear. The rate increases announced by Labour-controlled councils in Scotland average 38 per cent., whereas those announced by non-Labour-controlled authorities average only 23 per cent. The Labour-controlled districts are averaging increases of 40 per cent.—a truly terrifying figure—whereas non-Labour-controlled districts are averaging increases of 11 per cent.
      It is against that background that we must regard the hon. Member for Garscadden and his hon. Friends who are bemoaning the fate of the poor ratepayers. The only people the Scottish ratepayers have to fear are the over spenders on Labour-controlled authorities in Scotland—not even all the Labour-controlled authorities. The majority are being perfectly responsible and trying to keep expenditure under control in the national good. Only a small proportion of authorities have decided to overspend and they are threatening the peace of mind of ratepayers and threatening the national strategy. The right hon. Member for Glasgow, Craigton (Mr. Millan) is extremely lucky that the Conservative-controlled authorities in 1976, 1977 and 1978 did not take that view when he was asking them to make economies in their expenditure. I am sure that he will not deny that they loyally helped him to do that although they did not agree with his political philosophy.
      984
      The default powers in the Bill are essential if the ratepayers living in the areas of a small number of Scottish authorities are to be protected from the depredations of Labour-controlled councils that have no regard to the ability of their ratepayers to pay. The ratepayers of Scotland will warmly welcome the Bill, and I hope the House will pass it.
      Question put, that the Bill be now read the Third time:—
      The House divided: Ayes 292, Noes 229.

      Division No. 123]

      [7.03 pm

      AYES

      Adley, Robert

      Dickens, Geoffrey

      Aitken, Jonathan

      Dorrell, Stephen

      Alexander, Richard

      Douglas-Hamilton, Lord J.

      Amery, Rt Hon Julian

      Dover, Denshore

      Ancram, Michael

      du Cann, Rt Hon Edward

      Arnold, Tom

      Dunn, Robert (Dartford)

      Aspinwall, Jack

      Durant, Tony

      Atkins, Rt Hon H. (S'thorne)

      Dykes, Hugh

      Atkins, Robert (PrestonN,)

      Eden, Rt Hon Sir John

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

      Eggar, Tim

      Baker, Nicholas (N Dorset)

      Elliott, SirWilliam

      Banks, Robert

      Emery, Peter

      Beaumont-Dark, Anthon y

      Eyre, Reginald

      Bell, Sir Ronald

      Fairbairn, Nicholas

      Bendall, Vivian

      Fairgrieve, Russell

      Benyon, Thomas(A'don)

      Farr, John

      Benyon, W. (Buckingham)

      Fell, Anthon y

      Best, Keith

      Fenner, Mrs Peggy

      Bevan, David Gilroy

      Finsberg, Geoffrey

      Biggs-Davison, John

      Fisher, Sir Nigel

      Blackburn, John

      Fletcher, A. (Ed'nb'gh N)

      Blaker, Peter

      Fletcher-Cooke, Sir Charles

      Body, Richard

      Fookes, Miss Janet

      Bonsor, Sir Nicholas

      Forman, Nigel

      Boscawen, Hon Robert

      Fowler, Rt Hon Norman

      Bottomley, Peter (W'wich W)

      Fox, Marcus

      Bowden, Andrew

      Fraser, Rt Hon Sir Hugh

      Boyson, Dr Rhodes

      Fraser, Peter (South Angus)

      Braine, Sir Bernard

      Fry, Peter

      Bright, Graham

      Gardiner, George (Reigate)

      Brinton, Tim

      Gardner, Edward (S Fylde)

      Brittan, Leon

      Garel-Jones, Tristan

      Brooke, Hon Peter

      Gilmour, Rt Hon Sir Ian

      Brotherton, Michael

      Glyn, Dr Alan

      Brown, Michael (Brigg&Sc'n)

      Goodhart, Philip

      Browne, John (Winchester)

      Goodlad, Alastair

      Bruce-Gardyne, John

      Gorst, John

      Buchanan-Smith, Alick

      Gow, Ian

      Buck, Antony

      Gower, Sir Raymond

      Budgen, Nick

      Gray, Hamish

      Bulmer, Esmond

      Greenway, Harry

      Burden, Sir Frederick

      Grieve, Percy

      Butcher, John

      Griffiths, E, (B'ySt. Edm'ds)

      Cadbury, Jocelyn

      Griffiths, Peter Portsm'thN)

      Carlisle, John (Luton West)

      Grist, Ian

      Carlisle, Kenneth (Lincoln)

      Grylls, Michael

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

      Gummer, John Selwyn

      Chalker, Mrs. Lynda

      Hamilton, Hon A.

      Channon, Rt. Hon. Paul

      Hamilton, Michael (Salisbury)

      Chapman, Sydney

      Hampson, Dr Keith

      Churchill, W, S.

      Hannam, John

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

      Haselhurst, Alan

      Clark, Sir W. (Croydon S)

      Hastings, Stephen

      Clarke, Kenneth (Rushcliffe)

      Hawksley, Warren

      Clegg, Sir Walter

      Hayhoe, Barney

      Cockeram, Eric

      Heddle, John

      Colvin, Michael

      Henderson, Barry

      Cope, John

      Hicks, Robert

      Cormack, Patrick

      Hill, James

      Corrie, John

      Hogg, Hon Douglas(Gr'th'm)

      Costain, Sir Albert

      Holland, Philip (Carlton)

      Cranborne, Viscount

      Hooson, Tom

      Critchley, Julian

      Hordern, Peter

      Crouch, David

      Howe, Rt Hon Sir Geoffrey

      Dean, Paul (North Somerset)

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

      985

      Howell, Ralph (N Norfolk)

      Prior, Rt Hon James

      Hunt, David (Wirral)

      Proctor, K, Harvey

      Hunt, John (Ravensbourne)

      Raison, Timothy

      Hurd, Hon Douglas

      Rathbone, Tim

      Irving, Charles (Cheltenham)

      Rees, Peter (Dover and Deal)

      Jenkin, Rt Hon Patrick

      Rees-Davies, W. R.

      Johnson Smith, Geoffrey

      Renton, Tim

      Jopling, Rt Hon Michael

      Rhodes James, Robert

      Joseph, Rt Hon Sir Keith

      Rhys Williams, Sir Brandon

      Kaberry, SirDonald

      Ridley, Hon Nicholas

      Kimball, Marcus

      Ridsdale, Sir Julian

      King, Rt Hon Tom

      Rifkind, Malcolm

      Knight, Mrs Jill

      Robert s, M. (Cardiff NW)

      Knox, David

      Robert s, Wyn (Conway)

      Lamont, Norman

      Rossi, Hugh

      Lang, Ian

      Rost, Peter

      Latham, Michael

      Royle, Sir Anthony

      Lawson, Rt Hon Nigel

      Sainsbury, Hon Timothy

      Lee, John

      St. John-Stevas, Rt Hon N.

      Lennox-Boyd, Hon Mark

      Scott, Nicholas

      Lester, Jim (Beeston)

      Shaw, Giles (Pudsey)

      Lewis, Kenneth (Rutland)

      Shelton, William(Streatham)

      Lloyd, Ian (Havant & W'loo)

      Shepherd, Colin(Hereford)

      Lloyd, Peter (Fareham)

      Shepherd, Richard

      Loveridge, John

      Silvester, Fred

      Luce, Richard

      Sims, Roger

      Lyell, Nicholas

      Skeet, T. H. H.

      McCrindle, Robert

      Smith, Dudley

      Macfarlane, Neil

      Speed, Keith

      MacKay, John (Argyll)

      Speller, Tony

      Macmillan, Rt Hon M.

      Spence, John

      McNair-Wilson, M. (N'bury)

      Spicer, Jim (West Dorset)

      McNair-Wilson, P. (New F'st)

      Spicer, Michael (S Worcs)

      McQuarrie, Albert

      Sproat, Iain

      Madel, David

      Squire, Robin

      Major, John

      Stainton, Keith

      Marland, Paul

      Stanbrook, Ivor

      Marlow, Tony

      Stanley, John

      Marshall, Michael(Arundel)

      Steen, Anthony

      Marten, Neil (Banbury)

      Stevens, Martin

      Mather, Carol

      Stewart, Ian (Hitchin)

      Mawby, Ray

      Stewart, A. (E Renfrewshire)

      Mawhinney, Dr Brian

      Stokes, John

      Maxwell-Hyslop, Robin

      Stradling Thomas, J.

      Mayhew, Patrick

      Tapsell, Peter

      Meyer, Sir Anthony

      Taylor, Robert (Croydon NW)

      Miller, Hal (B'grove)

      Taylor, Teddy (S'end E)

      Mills, Iain (Meriden)

      Tebbit, Norman

      Mills, Peter (West Devon)

      Temple-Morris, Peter

      Miscampbell, Norman

      Thomas, Rt Hon Peter

      Moate, Roger

      Thompson, Donald

      Monro, Hector

      Thorne, Neil (IlfordSouth)

      Montgomery, Fergus

      Thornton, Malcolm

      Moore, John

      Townend, John (Bridlington)

      Morgan, Geraint

      Townsend, Cyril D, (B'heath)

      Morris, M. (N'hampton S)

      Trippier, David

      Morrison, Hon C. (Devizes)

      Trotter, Neville

      Morrison, Hon P. (Chester)

      van Straubenzee, W. R.

      Mudd, David

      Vaughan, Dr Gerard

      Murphy, Christopher

      Viggers, Peter

      Myles, David

      Waddington, David

      Neale, Gerrard

      Wakeham, John

      Needham, Richard

      Waldegrave, Hon William

      Nelson, Anthony

      Walker, Rt Hon P. (W' cester)

      Neubert, Michael

      Walker, B. (Perth)

      Newton, Tony

      Walker-Smith, Rt Hon Sir D.

      Oppenheim, Rt Hon Mrs S.

      Waller, Gary

      Page, John (Harrow, West)

      Walters, Dennis

      Page, Rt Hon Sir G. (Crosby)

      Ward, John

      Page, Richard (SW Herts)

      Warren, Kenneth

      Patten, Christopher(Bath)

      Watson, John

      Pattie, Geoffrey

      Wells, John (Maidstone)

      Pawsey, James

      Wells, Bowen

      Percival, Sir Ian

      Wheeler, John

      Peyton, Rt Hon John

      Whitney, Raymond

      Pink, R, Bonner

      Wickenden, Keith

      Pollock, Alexander

      Wiggin, Jerry

      Porter, Barry

      Williams, D. (Montgomery)

      Prentice, Rt Hon Reg

      Winterton, Nicholas

      Price, Sir David(Eastleigh)

      Wolfson, Mark

      986

      Young, Sir George (Acton)

      Tellers for the Ayes:

      Younger, Rt Hon George

      Mr. Spencer Le Marchant and Mr. Anthon y Berry.

      NOES

      Abse, Leo

      Fraser, J. (Lamb'th, N'w'd)

      Adams, Allen

      Freeson, Rt Hon Reginald

      Allaun, Frank

      Garrett, John (Norwich S)

      Alton, David Anderson, Donald

      Garrett, W. E. (Wallsend)

      Archer, Rt Hon Peter

      Ginsburg, David

      Ashley, Rt Hon Jack

      Golding, John

      Ashton, Joe

      Graham, Ted

      Atkinson, N, (H'gey,)

      Grant, George(Morpeth)

      Bagier, Gordon A.T.

      Grant, John (IslingtonC)

      Barnett, Guy (Greenwich)

      Grimond, Rt Hon J.

      Barnett, Rt Hon Joel (H'wd)

      Hamilton, James (Bothwell)

      Beith, A, J.

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

      Bennett, Andrew (St' kp'tN)

      Hardy, Peter

      Bidwell, Sydney

      Harrison, Rt Hon Walter

      Booth, Rt Hon Albert

      Hart, Rt Hon Dame Judith

      Boothroyd, Miss Betty

      Hattersley, Rt Hon Roy

      Bottomley, Rt Hon A (M'b'ro)

      Haynes, Frank

      Bray, Dr Jeremy

      Healey, Rt Hon Denis

      Brown, Hugh D. (Provan)

      Heffer, Eric S.

      Brown, R. C. (N'castle W)

      Hogg, U. (E Dunb't' nshire)

      B rown, Ro n (E'burgh, Leith)

      Holland, S, (L'b'th Vauxh'll)

      Brown, Ronald W. (H'ckn'y S)

      Home Robert son, John

      Callaghan, Jim (Midd't'n & P)

      Homewood, William

      Campbell, Ian

      Hooley, Frank

      Campbell-Savours, Dale

      Horam, John

      Canavan, Dennis

      Huckfield, Les

      Cant, R. B.

      Hudson Davies, Gwilym E.

      Carmichael, Neil

      Hughes, Mark(Durham)

      Carter-Jones, Lewis

      Hughes, Robert (Aberdeen N)

      Clark, Dr David (S Shields)

      Hughes, Roy (Newport)

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

      Janner, Hon Greville

      Cohen, Stanley

      Jay, Rt Hon Douglas

      Coleman, Donald

      John, Brynmor

      Concannon, Rt Hon J, D.

      Johnson, James (Hull West)

      Cook, Robin F.

      Johnson, Walter (Derby S)

      Cowans, Harry

      Johnston, Russell(Inverness)

      Craigen, J. M.

      Jones, Barry (East Flint)

      Crawshaw, Richard

      Jones, Dan (Burnley)

      Crowther, J, S.

      Kaufman, Rt Hon Gerald

      Cryer, Bob

      Kerr, Russell

      Cunliffe, Lawrence

      Kilfedder, James A.

      Cunningham, G. (Islington S)

      Lambie, David

      Dalyell, Tam

      Lamond, James

      Davidson, Arthur

      Lead bitter, Ted

      Davies, Ifor (Gower)

      Leighton, Ronald

      Davis, Clinton (Hackney C)

      Lestor, Miss Joan

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

      Lewis, Hon (Carlisle)

      Deakins, Eric

      Litherland, Robert

      Dean, Joseph (Leeds West)

      Lofthouse, Geoffrey

      Dempsey, James

      Lyons, Edward (Bradf' d W)

      Dewar, Donald

      Mabon, Rt Hon Dr J. Dickson

      Dixon, Donald

      McCartney, Hugh

      Dormand, Jack

      McDonald, DrOonagh

      Douglas, Dick

      McGuire, Michael (Ince)

      Douglas-Mann, Bruce

      McKelvey, William

      Dubs, Alfred

      MacKenzie, Rt Hon Gregor

      Duffy, A. E. P.

      Maclennan, Robert

      Dunn, James A.

      McMahon, Andrew

      Dunnett, Jack

      McNamara, Kevin

      Dunwoody, Hon Mrs G.

      McTaggart, Robert

      Eadie, Alex

      McWilliam, John

      Eastham, Ken

      Magee, Bryan

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

      Marshall, D (G'gowS'ton)

      Ellis, Tom (Wrexham)

      Marshall, DrEdmund (Goole)

      English, Michael

      Marshall, Jim (Leicester S)

      Ennals, Rt Hon David

      Mart 'M (G'gowS'burn)

      Evans, Ioan (Aberdare)

      Mason, Rt Hon Roy

      Field, Frank

      Maxton, John

      Fitch, Alan

      Maynard, Miss Joan

      Flannery, Martin

      Meacher, Michael

      Fletcher, Ted (Dartlington,)

      Mellish, Rt Hon Robert

      Ford, Ben

      Mikardo, Ian

      Forrester, John

      Millan, Rt Hon Bruce

      Foster, Derek

      Mitchell, R, C. (Soton Itchen)

      Foulkes, George

      Morris, Rt Hon A. (W'shawe)

      987

      Morris, Rt Hon C. (O'shaw)

      Spearing, Nigel

      Morris, Rt Hon J. (Aberavon)

      Spriggs, Leslie

      Mort on, George

      Stallard, A, W.

      Moyle, Rt Hon Roland

      Steel, Rt Hon David

      Newens, Stanley

      Stewart, Rt Hon D. (W Isles)

      Oakes, Rt Hon Gordon

      Stoddart, David

      Ogden, Eric

      Stott, Roger

      O'Halloran, Michael

      Strang, Gavin

      O'Neill, Martin

      Straw, Jack

      Orme, Rt Hon Stanley

      Summerskill, Hon Dr Shirley

      Owen, Rt Hon Dr David

      Taylor, Mrs Ann (Bolton W)

      Palmer, Arthur

      Thomas, Dafydd (Merioneth)

      Parker, John

      Thomas, Jeffrey (Abertillery)

      Pendry, Tom

      Thomas, Dr R. (Carmarthen)

      Powell, Raymond (Ogmore)

      Thorne, Stan (Preston South)

      Prescott, John

      Tilley, John

      Price, C. (Lewisham W)

      Torney, Tom

      Race, Reg

      Varley, Rt Hon Eric G.

      Radice, Giles

      Wainwright, E. (Dearne V)

      Richardson, Jo

      Wainwright, R. (Colne V)

      Roberts, Albert (Normanton)

      Walker, Rt Hon H. (D'caster)

      Robert s, Ernest (Hackney N)

      Watkins, David

      Robert s, Gwilym (Cannock,)

      Weetch, Ken

      Robert son, George

      Wellbeloved, James

      Rooker, J. W.

      Welsh, Michael

      Roper, John

      White, J. (G' gow Pollok)

      Ross, Ernest (Dundee West)

      Whitehead, Phillip

      Ross, Stephen (Isle of Wight)

      Whitlock, William

      Rowlands, Ted

      Willey, Rt Hon Frederick

      Ryman, John

      Williams, Rt Hon A, (S'sea W)

      Sandelson, Neville

      Wilson, Gordon (Dundee E)

      Sever, John

      Wilson, Rt Hon Sir H, (H'ton)

      Sheerman, Barry

      Winnick, David

      Sheldon, Rt Hon R.

      Woodall, Alec

      Shore, Rt Hon Peter

      Woolmer, Kenneth

      Short, Mrs Renée

      Wrigglesworth, Ian

      Silkin, Rt Hon J. (Deptford)

      Young, David (Bolton E)

      Silverman, Julius

      Skinner, Dennis

      Tellers for the Noes:

      Smith, Rt Hon J. (N Lanark)

      Mr. Allen McKay and Mr. James Tinn.

      Snape, Peter

      Soley, Clive

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

  Ports (Financial Assistance) Bill
  Order for Second Reading read.
  Mr. Deputy Speaker (Mr. Ernest Armstrong): I must inform the House that Mr. Speaker has selected the reasoned amendment.
  7.10 pm
  The Secretary of State for Transport (Mr. Norman Fowler): I beg to move, That the Bill be now read a Second time.
  The Bill deals with our two biggest traditional general cargo ports, both of them of considerable national as well as regional importance. Both have been affected by containerisation and other changes in cargo handling. Both have particularly large labour surpluses. Each has a surplus of about 1,500 workers—1,000 registered dock workers and 500 others. This means a total of 3,000 or more surplus workers in the two ports and amounts to 25 per cent. of the work force of each port authority. That is the essential problem they face.
  By the end of last year severance applications from registered men had virtually dried up. The Government therefore decided that the best way of tackling the problem was by means of a special severance supplement for a limited period. Neither port authority had the money to pay for that themselves. If the Government had refused to help, both ports would have had to cease trading next week. That is the measure of the crisis both ports face and explains why we have to act urgently.
  This Bill is to provide the funds to pay for the special severance payments and to keep the two ports going while they are carrying through the rationalisation of facilities, rundown of manpower and improvement of working practices which they both need in order to survive.
  The history is that both ports suffered sudden and unexpected losses as a result of the drastic reduction in traffic which has hit all ports, but these two in particular. Last year both ports lost between 35 and 40 per cent., of their general cargo traffic with very little prospect of it ever coming back. The effect was dramatic in the second half of the year. That meant that although they had both been very successful up to then in reducing manpower—the PLA severed 2,000 workers last year, well above target, and Mersey severed almost 600—they both ended the year with substantial surpluses of men for whom there is no work now and will not be any work in the future. No one can gain from nursing the illusion that those ports can survive as employers while paying a work force which is much too large for the traffic.
  Just under a year ago when I introduced the Port of London (Financial Assistance) Bill which was later enacted to authorise assistance totalling £70 million for the Port of London Authority, I made clear the Government's general position on the ports industry. I pointed out that we had inherited an obligation from the Labour Government to help the PLA and we were honouring that and no more than that. I said that I believed that the Port of London could once again return to profitable operation, given the vigorous action that the PLA chairman, Victor Paige, and the management had shown their intention of taking, and given the co-operation that the work force had recently demonstrated so convincingly.
  Despite even bigger achievements in cutting costs and reducing manpower that were envisaged, the port is still

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  in crisis. That is the measure of the decline in the PLA's traffic since that time and of the seriousness of the problems that it faces.
  Mr. Tony Marlow: Do not the points that my right hon. Friend has made about the PLA apply to many other parts of British industry? Do they not also face problems, find that they have too many workers and need to reduce their work force? Will my right hon. Friend explain why he suggests that those who work in the docks should get massive handouts of taxpayers' money while those who work in other industries in my constituencies get a much lower level of reward?
  Mr. Fowler: I have sought previously to explain the position to my hon. Friend. We had a long conversation, and I thought that I had explained the matter. We are dealing with an industry in which the dock work scheme applies, and it serves no one to pretend that it does not apply.
  Mr. Alfred Morris: The right hon. Gentleman has had a letter from the chairman of the Manchester Ship Canal Company, and the managing director of the company has been in touch with hon. Members. There are important problems affecting that company. Will the Secretary of State say a brief word about the effect of what he is proposing on that company and its employees?
  Mr. Fowler: If the right hon. Gentleman will allow me to continue I shall come to that point. Not only have I had a letter from the chairman of the Manchester company; I met a delegation from the port employers.
  Mr. Marlow: I am grateful to my right hon. Friend for giving way again. My constituents and many others would be more satisfied if the money involved were being used to wind up the dock labour scheme, which gives to dockers privileges that others do not have. It will provide Government money to people in a privileged position in a privileged industry. Perhaps, with the other hand, my right hon. Friend could do something to make it fairer for the rest of the country.
  Mr. Fowler: I understand the point that my hon. Friend is making. The future of the dock work labour scheme is a question for my right hon. Friend the Secretary of State for Employment, but whatever divisions there may be and whatever our views on this scheme—clearly not everyone supports it or believes that it is the best way to go on—we have to consider the crisis facing the ports of Liverpool and London. It serves no interest to pretend that the crisis can magically be turned aside. Clearly, my hon. Friend will make a speech about the dock work scheme and what sould be done with it, and I shall listen to what he says.
  When we last discussed the ports industry, many hon. Members, including the hon. Member for Liverpool, West Derby (Mr. Ogden), urged me to provide similar assistance for the Mersey Docks and Harbour Company. At that stage the company was carrying out studies of its business in all its aspects and the financial improvements open to it, and was drawing up its new profitability plan. That plan was completed towards the end of last year and copies were deposited in the Library. It set out a decisive programme of action for a sizeable manpower rundown, improvements in working practices and many other steps
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  which are now being implemented by the company. The assistance provided for in the Bill is designed to help it carry on with this work and in particular with the rundown of 1,500 in manpower which is its initial target.
  The position that the Government faced at the end of last year was that these two major ports of national importance had suffered a dramatic loss of traffic and were substantially overmanned. Volunteers for severance were not coming forward and a substantial increase in severance payments was needed to make any impact on the problem. Neither of them—this is crucial—had the funds to foot the unavoidable bill for severances. There was no way in which they could carry on trading much beyond the first three months of this year without Government help, both to meet their severance payments and to enable them to continue operating while the manpower rundown and other measures were in progress.
  Both chairmen advised me that a substantial improvement in severance terms would be needed to enable both port authorities to make a sufficient impact on their surpluses of registered dock workers. I therefore decided, and announced on 17 February, that I should make funds available for special supplementary payments of up to £5,500 per man, which, when added to the payments available under the port industry's own national voluntary severance scheme, gives a maximum total payment of £16,000 per man for a man of—I emphasise this—20 years' service. To encourage the quickest possible response from men in the two ports and to minimise any repercussions on other ports, I also decided that the special offer should be limited to men who apply for severance between 1 March and the end of April.
  The appeal and success of the special severance scheme is essential to the future of the two port authorities. The House may be interested to know that—so far as our information goes at present—1,100 dock workers have accepted the offer—474 men in London and 623 men in Liverpool. This represents more than 8 per cent. of the registered work force in London, and nearly 14 per cent. in Liverpool.
  While it is obviously too early to judge whether the scheme will achieve its purpose of eliminating surplus labour in the interests of the survival of the ports, a good start has clearly been made. I very much hope that volunteers will continue to come forward at the current rate. I must emphasise that the very generous terms being offered now are available only for a two-month period. It is not our intention to repeat it or extend it to other ports.
  Mr. R. C. Mitchell: Does the right hon. Gentleman really know what he is doing? Does he not realise that the national dock labour scheme was worked out after years of negotiations between the employers, the Government and trade unions and after a number of industrial disputes? One of the bases of the scheme was that all dockers in all ports should be treated alike. Does the right hon. Gentleman realise that he will be storing up a great deal of trouble for himself if he takes action for two ports and not for the others?
  Mr. Fowler: The hon. Gentleman says that I am storing up a great deal of trouble, but I ask him to address himself to the problem. There is no doubt about the financial crisis that the two ports face. The hon. Gentleman may generalise, but the particular problem is that unless we get a Second Reading for the Bill and

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  provide the aid, the two ports will run out of money next week. That is why we are making a particular case of them.
  I am sure that hon. Members will want to make the case for an extension to other ports. We shall listen to that case, but I hope that they will bear in mind the immediate crisis facing the ports of London and Liverpool.
  The supplementary severence scheme is an exceptional measure for a limited period. Naturally, there has been concern in some other ports about the implications of these payments for their own operations. I recognise that the recession is having its effect on other British ports, and that in many of them a surplus of registered dock workers is one of their problems. But in no other port is the size of the surplus manpower problem as serious as in London or Liverpool. Nowhere else is it clear that massive severences are immediately needed for the port's survival. In no other ports is it the case that the only way of obtaining these severances is by means of additional payments funded by Government.
  I am glad to be able to tell the House that when the National Association of Port Employers wrote to me recently following my meeting with its representatives about the special scheme, it expressed the reservations that have been mentioned but it also recognised the nature of the problems in London and Liverpool and hoped that the manpower reductions needed would be achieved.
  The Bill involves the expenditure of £87 million of new money. The other £70 million is the money from last year's Bill and a £3 million overdraft guarantee for Mersey authorised in December. A major purpose of the new money is to pay for severances, in the first place, to pay for the special supplementary payments for registered dock workers, and secondly, to pay for about 1,000 severances of other employees in the two ports. The total provision for severances of all kinds within the £87 million is over £40 million, about half of the total of new money.
  A further £13 million or so of the new money will be for necessary capital investment, much of which would have been financed in the normal way by loans under the Harbours Act 1964 but which, in the present financial circumstances of both ports, I would need for the time being to finance by repayable grants rather than by loans. The remaining sum is largely for contingencies, although a relatively small part—in the region of 10 per cent. of the total new money—is to enable the two ports to keep operating while the manpower rundown and other measures are going on.
  Mr. Roy Hughes: Does the Secretary of State appreciate the negative effect of his proposals on other ports? There is surplus labour, with redundancies anticipated, in certain other ports. When the dockers in these ports heard about the terms offered in Liverpool and London they said "No dice". They said that they would not be made redundant if there were any chance of their receiving the same treatment as that afforded to those in these two large ports.
  Mr. Fowler: I understand the point that the hon. Gentleman makes. There is, however, this particular, special and immediate crisis faced by these two ports at the moment. That is the problem.
  Dr. J. Dickson Mabon: We know it.
  Mr. Fowler: The right hon. Gentleman may know it. I am glad that he knows it. He has to face it as well as know it. The Government recognise the problems but the special supplementary scheme we are setting out is for a limited period and comes to an end at the end of next month. That is one way in which we can limit the effect.
  Mr. John Prescott: Is the £13 million for capital investment an outright grant or is it to be given in loans? Why is it done in this manner rather than through the Harbours Act?
  Mr. Fowler: This cannot be done through loans because of the financial position of the two ports. Their financial position does not make it possible for the ports honestly to say that they could have loans of that kind. We have arranged to make a repayable grant rather than a loan. I shall ask my hon. and learned Friend the Under-Secretary of State to go further into that matter if it concerns the hon. Gentleman.
  The Bill does not attempt a detailed breakdown of this money into these purposes or between the two ports. This is because I want to retain maximum flexibility and I certainly do not want to create the impression that either port can expect by right to draw the whole, or even part of these funds unless I see definite evidence of results. Such additional funds as are provided will be found from within the unallocated contingency reserve, and will not add to overall public expenditure totals or the PSBR.
  The initial cash ceilings that I shall be giving to each port will only be sufficient to meet their minimum requirements, on the basis of their own forecasts, over the next two or three months. If the Government then decide, on the basis of the results achieved, to continue with assistance, each further cash ceiling will be for limited amounts and for limited periods and related to specific categories of forecast expenditure.
  I have now received interim proposals from the port authorities, for both ports, and reports from the accountants that I have appointed—from Price Waterhouse in the case of PLA and Peat Marwick in the case of the Mersey board. These set out the steps that need to be taken to improve the financial position of the PLA and Mersey. The figures in the present Bill for new money are based on the authorities' and the accountants' estimates of the maximum possible requirements that could arise over the next year or so, including substantial provision for contingencies.
  As I have already indicated, I am not committed to making anything like these sums available and I do not intend to provide any assistance except in limited amounts for proven needs for specific periods and against definite evidence of achievement.
  The position is this. Without substantial and rapid progress the two ports have no future. I have, therefore, made it quite clear to both chairmen that the Government's future attitude to their ports is entirely dependent on the progress that the authorities make over the next few months. While I accept that some immediate further financial assistance is necessary in each case, the Government are not committed to supporting the authorities beyond May, when the results of the special severance scheme are known, and we can then consider whether we would be justified in continuing to provide aid until the autumn, by which time I expect to have received firm plans for returning both ports to profitability. To this

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  end I am continuing to retain the services of Price Waterhouse and Peat Marwick, which will assist with the monitoring of the ports' financial position and comment on the steps needed to return to profitability.
  Mr. John Carlisle: In what has been a depressing sort of speech, my right hon. Friend mentioned £13 million capital investment. Will he assure the House that this investment will hold jobs and create employment? The impression of many hon. Members, particularly of the PLA, is that some of its facilities are being reduced. I speak particularly of the withdrawal of the rail services at the grain terminal. Will the money to be invested create, or at least hold, some jobs, or are we literally, as some hon. Members feel, putting good money after bad?
  Mr. Fowler: We are not putting good money after bad. It is to ensure that this does not happen that Price Waterhouse and Peat Marwick are reviewing the position. There is no question but that this is a difficult situation. I ask my hon. Friend to believe, however, that although it may be reassuring and nice to believe and to hope that we are not in the position that now exists, we are actually in this position. We must somehow, in my view, get out of it. I am seeking to try to put forward a progress plan which is checked at every stage along the way. The last thing that we want, and the last thing that anyone in the PLA or in Liverpool wants, is to put, using my hon. Friend's term, good money after bad. That is not our intention.
  At any successive stage I shall be prepared to provide assistance under the Bill only if the authorities can demonstrate substantial progress towards reducing manpower and eliminating restrictive working practices, and if I am convinced that all concerned are committed to making the changes that are needed.
  For the period during which the two ports are dependent on assistance under the Bill I intend to introduce suitable arrangements, agreed with the two boards, for regulating and safeguarding the outflow of public funds. Details of those arrangements are being discussed with both authorities and will, of course, need to be agreed before any payments under the Bill are made. In the case of the PLA, I shall require it to use the proceeds of disposals of assets—especially the compensation it is likely to receive in return for the substantial area of surplus land in the Isle of Dogs which may be transferred to the Docklands development corporation—to offset the assistance. A similar requirement will not be possible with Mersey, as the proceeds of land sales pass direct to the company's stockholders and it has no other disposable assets of any significant value.
  I turn to the specific provisions of the Bill. Clause 1(1) provides for financial assistance for measures taken by the authorities to reduce the number of persons employed in their ports, or adjacent ports, and for the carrying on of the undertaking while those measures are being taken.Those provisions parallel the ones in the Port of London (Financial Assistance) Act 1980, in particular, extending the special supplementary severance scheme to apply to the registered dock workers or private companies in London and Liverpool.
  Clause 1(2) enables financial assistance to be given in the form of grant, loan or guarantee, and also provides for the attachment of conditions, including conditions
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  requiring repayment when the authorities' financial position permits. Clause 1(3) sets a new limit, and clauses 1(4) and 1(5) provide for the inclusion within that limit of payments made under the Port of London (Financial Assistance) Act 1980, which is repealed under clause 1(7).
  Clause 2 concerns the limit on borrowing by the National Dock Labour Board. There are two points here. First, if the PLA and Mersey secure the numbers of severances of registered dock workers that they want, that will not only lead to the expenditure that I shall meet under clause 1 for the £5,500 topping-up payments, but will require payments for the basic amounts under the industry's national voluntary severance scheme.
  Secondly, the scheme also has to meet the cost of severances in other ports. My right hon. Friend the Secretary of State for Employment will need to provide further loans to the National Dock Labour Board to finance national voluntary severance scheme payments to registered dock workers—not only in London and Liverpool but in other scheme ports that have surplus labour problems. Those loans will be repayable from levies on all registered port employers.
  The present limit on borrowing by the National Dock Labour Board, under section 3 of the Dock Work Regulation Act 1976, is £30 million. Clause 2 proposes that that limit should be increased to £50 million, or such greater amount, not exceeding £90 million, as may be specified by order of the House. My right hon. Friend the Secretary of State for Employment calculates that on the basis of present national voluntary severance scheme terms, the lower figure should accomodate both loans already made to the NDLB and those estimated to be needed during at least the next couple of years. As in the past, he considered it desirable to make provision for increasing that figure if in the longer term that proves necessary. He does not envisage that the higher figure will be needed in the foreseeable future but believes some flexibility is needed to respond to changing circumstances, if necessary without further main legislation. He will, of course, expect the industry to continue to make the maximum contribution possible towards meeting its needs through severance levies.
  I wish to say a word here about the Opposition amendment. If it were to be passed its only effect would be to deny Government assistance to the ports of London and Liverpool. It would not help any other port. A new Bill would be needed for such a wider purpose. The effect of the amendment would be that the ports of London and Liverpool would be in danger of ceasing to trade on or shortly after Wednesday of next week. I hope that the Opposition will think again about pressing the amendment.
  I understand that there are differences between us. As I understand the Opposition's policy they favour a general subsidy. Their amendment would have that effect. I do not believe that that would be a proper use of the taxpayers' money. I also believe that it would be a recipe for waste and would merely enable the ports concerned to avoid facing the real problems confronting them and to avoid the real merits of greater efficiency.
  One option that we must rule out for any port is a permanently subsidised future. That would be a soft option for everybody but the taxpayer. That option was specifically rejected by the Labour Government. Our approach is that the ports should operate in full competition with one another and meet the normal tests of

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  commercial success. That is the clear aim for London and Liverpool. The only object of the Bill is to help them get as quickly as possible into a position where, having tackled their overmanning and structural problems, they can look forward to a soundly based future.
  That will be possible only if the management and work force continue building on the recent encouraging steps towards making the necessary changes. I emphasise that it remains for the ports and those who work in them to convince me that they can continue to justify such assistance.
  7.56 pm
  Mr. Albert Booth: I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
  'this House declines to give a Second Reading to a Bill which in making provisions for financial assistance to restore the profitability of port undertakings includes the Port of London Authority and the Mersey Docks and Harbour Company but provides no assistance for this purpose for Tyne and Wear, Middlesbrough and Hartlepool, Hull and Goole, Grimsby and Immingham, Wash Ports, East Anglia, Medway and Swale, South Coast, Plymouth, Cornwall, Bristol and Severn, South Wales, Manchester, Fleetwood, Cumbria, Ayrshire, Clyde, Aberdeen, or East Scotland.'
  The House has listened in vain for some sign from the Secretary of State that he understands that the problems of London and Liverpool are not peculiar to two ports but are two examples of a most serious docks industry crisis. It is an industry-wide crisis, with certain highly specialised charateristics that are readily identifiable by those who know the industry. The first is the inability of so many ports to balance their financial accounts, which results in many of them being threatened with collapse.
  Another characteristic is the manpower surplus. If the Secretary of State has attempted to provide any justification for isolating London and Liverpool from the remainder of the ports industry, it has been on the basis of the manpower surplus, but the surpluses are by no means peculiar to the two ports. They exist to a greater degree in a number of other ports.
  I have taken the trouble to acquire the surplus figures for the fourth quarter of 1980, during which there was a 15 per cent. surplus in the PLA and a 17·5 per cent. surplus in Liverpool. In Bristol and Severn—no one can say that Bristol is without problems—there was a 19 per cent. surplus. In Hull and Goole, it was 22 per cent.; in the Clyde, including Greenock and Glasgow, it was 25 per cent., and in Manchester it was 36 per cent. If we were to pick the ports that should be supported by a Bill that isolates two or more of them on the bases of their labour surplus and the degree of problems that they face pro rata to the surplus, London and Liverpool would come a long way down the list.
  Yet another characteristic is the increasing burden of funding the severance scheme of the National Dock Labour Board.
  Mr. Fowler: The right hon. Gentleman has stated only half the position. The other half is that London and Liverpool are on the verge of bankruptcy; so much so that bankruptcy comes next week. That is something that he should also bear in mind.
  Mr. Booth: It is hard for me to take that advice from the Secretary of State. Nearly a year ago, when he brought forward the Port of London (Financial Assistance Bill), we
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  told him that other ports would be facing bankruptcy. I am well aware of what he says, and I shall deal with some of the financial difficulties that face the industry. When a port is facing bankruptcy and the right hon. Gentleman brings forward a Bill to put it right a fortnight before the receivers move in, he should be prepared to give the same assurance to other ports. I suspect that a number of them will be queuing up within the next 18 months for similar treatment.
  Mr. Fowler: There is no other port in the country that faces all these conditions and that does not have either the reserves or a place to which to go for further funds. That is the difference in this case.
  Mr. Booth: I do not accept that, and on looking around these Benches I see ports' representatives who could speak on the matter with greater knowledge than I can. However, I can give the Secretary of State examples of the financial crisis that is facing other ports and the extent of the increasing burden of funding financial severance and meeting the loans as they become due. It does not happen only in London and Liverpool. As the employers take on higher contributions under the present arrangements for severance payments, so their ability to charge at rates that will enable them to recover or even sustain trade is diminishing in a number of ports, including London and Liverpool.
  The most terrifying characteristic of the docks crisis is the lack of any strategic Government policy to enable British ports to take advantage of the technological revolution that has taken place in the industry and to deal with the challenge of some of the major changes that have taken place in the trade.
  Dr. Oonagh McDonald: I wish to support what my right hon. Friend is saying. What is happening in this country is quite unlike what is happening in France. I shall quote from the latest edition of The Port newspaper. An article on the ports of Dunkirk and Rouen is headed:
  "United Kingdom docks groan under the depression—but the French turn an exuberant face",
  and it says:
  "Dunkirk: State aid lets the expansion go on—and on".
  In the midst of the recession traffic in Dunkirk increased by 1 per cent. in 1980 compared with 1979, and in Rouen the increase was about 7 per cent. That shows the importance of State aid, and the lack of a proper Government policy of State intervention is the reason for the present serious financial difficulties of all our ports.
  Mr. Booth: I thank my hon. Friend for what she said. If the Secretary of State does the same for our ports as the French Government do for French ports, I shall not accuse him of a retreat to Dunkirk, and I shall welcome him with open arms.
  Two major factors are involved in the present crisis. The first, clearly, is the dramatic fall in trade through our key ports. The other is the decline in jobs that has occurred as a result of the container revolution. Here I am talking not just about the decline in absolute terms but about the movement of jobs away from the traditional points of the jetty and the quay. The container revolution has moved inland a number of jobs involved in handling cargo from factory to ship. Unless we change our dock scheme to take regard of that fact we shall face problems of increasing severance and of increasing severity.
  The measure of the rundown of registered dock workers is quite dramatic. In 1947 there were 80,000 registered

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  dock workers in this country. By 1967 the number was down to 59,000. By 1977 it had reached 29,000, and today there are fewer than 23,000 registered dock workers in the industry. It is forecast that the total labour force of the industry will decline to 55,000 by 1985.
  Such a rundown of registered dock workers would have been inconceivable, given the history of bad industrial relations in the past, had we not had a dock work severance scheme and a National Dock Labour Board that could maintain a continuing dialogue between the employers and unions in the industry to deal with the rundown on a civilised basis. When I was in office I was convinced that we should carry that approach a stage further and have a modern type of dock labour scheme, but that was rejected by the Government when they took office. I believe that the national dock labour scheme that we now have, the severance scheme and the promise of a new dock labour scheme have enabled the country to accomplish such a massive rundown of labour in an industry which, traditionally has feared the loss of job security, without virtually a day's loss of work in our docks.
  A major response is required from the Government. We need the new scheme now under the 1979 Act in order to restructure registered dock work. That Act, for which I had some responsibility, obliges the Secretary of State for Employment to lay a new scheme before the House. When will the right hon. Gentleman discharge his statutory duty, and when will we get a chance to look at the scheme that the Government feel should come into being for registered dock workers in British ports?
  We also need loan funds on a basis that will provide for worthwhile developments and sustain some of our ports through the present conditions, because they are unquestionably not viable. We should also consider some central regulation of investment and pricing policies for our ports. The Government have failed to come to terms with the scale and nature of the crisis in our ports. They are indulging in an ad hoc, piecemeal approach to a problem that can be solved only by a national plan. I do not believe that there is any other way to deal with our ports crisis.
  It is interesting to hear the Secretary of State insist tonight that there is an immediate crisis in two ports. A year ago he denied that fact. Even some of his hon. Friends tried to change his mind. I remember the right hon. Member for Crosby (Sir G. Page) telling him that he would deal with Liverpool, but the Secretary of State disagreed. I suppose that we could have some sort of arithmetical progression. Next year the Secretary of State could say that the problem is affecting only four ports, and the year after it could be eight ports, but by that time our ports industry could have gone down the drain. We cannot deal with the problem only when ports are on the brink of bankruptcy.
  Let me give an example of another port that is in immediate and serious financial trouble. What does the Secretary of State think of the ability of the port of Bristol to survive for a further 12 months under the financial regime of the Government? In addition to the Secretary of State refusing to aid the port as he is aiding London and Liverpool, the Secretary of State for the Environment is refusing to allow the local authority to sustain it at this difficult time.
  Mr. Arthur Palmer: Is my right hon. Friend aware that if nothing is done for Bristol soon half the rates in the city will go to support that port?
  Mr. Booth: I have the gravest of reservations in responding to my hon. Friend's suggestion. He certainly knows the rates position in Bristol much better than I do, but, as I understand the policy of the Secretary of State for the Environment, it is imposing stringent limits on the ability of local authorities to adopt policies that would mean a massive increase in their expenditure, even where they believe that it is essential to sustain such expenditure.
  Mr. Donald Anderson: Do not the Government have a special responsibility in respect of Bristol, since all those who are familiar with the ports industry in the Bristol Channel warned them in the 1960s that by allowing the Portbury scheme to proceed they would be creating a white elephant because of the surplus capacity that would be provided?
  Mr. Booth: That is why the Government should have been more keenly aware of the problem. However, they have made it more difficult to be warned of uch factors by their refusal to countenance having any body to look at the relative merits of port investment proposals.
  Mr. Marlow: Will the right hon. Gentleman remind the House who made the decision to go ahead with the West dock at Bristol?
  Mr. Prescott: It was the Tory Government in 1972.
  Mr. Booth: I believe that the decision was made in 1972, but to be fair in terms of the full implications of the question I should explain that the proposal had been put to the National Ports Council before that, and it was initially rejected. It went back to the NPC again, and the council agreed to a limited and later development. However, it is part of the contention of the people of the port of Bristol and the local authority there that had they been allowed to devolop the facilities sooner they would have made a lot of money on them. The straight answer to the hon. Gentleman's question is that the decision was made by the Government in 1972.
  The Secretary of State is now destroying the only remaining national body capable of giving him an assessment of the wider needs of ports or of the merits of investing in one port as opposed to another. I refer to this proposal in the Transport Bill to abolish the National Ports Council. He has created the position in which he turns to Price Waterhouse and Peat Marwick Mitchell to advise him on the problems of two ports in crisis. But he will have no body to look at the whole industry. The right hon. Gentleman may well go down in history as the man who engineered a boom for accountants at the cost of running down a major part of this country's port industry.
  The Bill shows the Government's complete inability to grasp what is happening in Britain's ports. It is inadequate as a response both to the national ports position and to the problems facing London and Liverpool. When he receives the full reports from the accountants, I believe that he will be able to conclude only that some substantial measure of financial reconstruction is needed for the Port of London. That conclusion could have been reached a year ago if the Secretary of State had been prepared to view what was happening in a wider context.
  The Bill creates an artificial distinction between London and Liverpool and the rest of the ports industry.

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  It poses problems for the operation of the severance scheme, and that can only be detrimental to a number of other ports. Although the Bill will provide for an additional £5,500 severance for every registered dock worker to leave London and Liverpool, for every such £5,500 the National Dock Labour Board severance scheme will have to find £10,500. The board will have to pay £2 for every £1 that it gets under the Bill. That will create a financial problem for the severance scheme. I predict that the board will be forced to borrow more money in order to meet the additional burden. If it is to receive loans under the Bill, how is it to pay the interest on them?
  Mr. Harry Cowans: Does my right hon. Friend agree that the Bill is designed to rob Peter to pay Paul, but will end up doing neither? The only way in which the board will raise money will be to increase the levy, and that will step up the pressure on the provincial ports. Within the next two or three months there will probably be another Bill to save other ports that, because of the increased levy, will be put in the same position as London and Liverpool.
  Mr. Booth: My hon. Friend raises a very serious problem that will be created by the Bill in respect of the operation of the National Dock Labour Board severance scheme. If the board is to borrow money to pay nearly twice as much in severance payments as the Bill will provide, it will face the problem of paying the interest. I understand that the levy currently brings in about £13 million a year. The figure is based on a percentage of the wages bill of the registered dock labour force. When severance takes place the number of registered workers falls. But a greater amount of money will have to be raised to meet the interest charges, and that will have to be based on a smaller number of employees. One can conclude only that it will not be long before the level of interest payments is such that that will swallow up the entire levy, leaving nothing to meet future redundancies under the scheme.
  Mr. Kevin McNamara: Is not my right hon. Friend understating the case? The port of Hull, for example, carries a surplus of over 300 dockers. It will have to pay an additional levy, which means that the dues and fees for the port will have to go up in order to meet it. Employers in the port could be forced out of business and that would mean dockers standing around doing nothing. The employers would be unable to pay them severance, and that would lead the dockers to ask, quite rightly, why a Hull docker is not as good as a Liverpool docker.
  Mr. Booth: My hon. Friend raises another dimension of the problem. However, the contribution of levy is based on a flat rate of 3½ per cent. across all ports, plus an amount that varies between ports so that they bear the cost of severance in some relation to the extent to which they call upon the scheme as a means of running down their labour forces. Therefore, some of the ports that have already faced the biggest severance payments are paying the heaviest levy. I do not believe that they could meet the burden of having to pay additional severance.
  I am told by port employers that they regard a combined levy of about 10 per cent. as the maximum that they can meet in current conditions. If they are called upon to pay more their costs will be such that they will be unable to sustain their trade. If their trade runs down that will create
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  further problems of severance. These major problems are created directly by the Bill for ports other than London and Liverpool. By introducing the Bill to help London and Liverpool the Secretary of State has effectively brought the severance plans of other ports to a halt. In other ports the port authorities cannot carry through their severance plans because their dockers ask why they should go out for less than a man receives if he goes out in London or Liverpool. Therefore, the problems of other ports are being compounded.
  I put it to the Secretary of State, with no pleasure, that he has created an inevitable pressure to raise the general level of severance pay in the industry at a time when it will be hard to fund it. It will also add to the problems of competition between the scheme and the non-scheme ports.
  The Bill is an attempt to sidestep a problem that cannot be dodged for much longer. The Government are being dragged reluctantly into an area where they should play a leading, major, strategic role. They have attempted to inject into the port industry a greater dose of public ownership and a greater measure of market economic force arrangements. They have done so by seeking to sell off the public interest in the British Transport Docks Board, and by assembling the ports owned by Sealink and Associated British Ports to put them into the hands of a private company.
  Mr. David Hunt: Is the right hon. Gentleman aware that his words will be read carefully on Merseyside? There will be a great deal of concern. I do not know whether the right hon. Gentleman will refer to the problems of Merseyside. Will he let us know whether he is in favour of the provisions as they apply to Merseyside, against the background of the serious financial crisis that our port faces?
  Mr. Booth: That will the be the last point to which I shall refer.
  The Government, instead of addressing themselves to the problems of Merseyside, have addressed themselves to how they can sell the public interest in the British Transport Docks Board and how they can assemble the ports owned by Sea link so that they can be put in the hands of a Companies Act company. That is the priority of the Government.
  An attempt at this time to inject a greater dose of private ownership and market discipline into our port industry when there is excess capacity and when there is cut-throat competition is doomed to fail and will do nothing but damage. The ports industry is essential, not only as a part of our transport system, but as a means of sustaining a great deal of our industry, which is based upon access to ports. The time has come for the Government to face the need for a realistic ports policy to deal with basic issues on which the future of the industry depends.
  Finally, I shall give the answer to the hon. Gentleman's problem. I cannot advise any of my hon. Friends or Conservative Members to vote against the Second Reading of the Bill. Left with the desperate plight in Liverpool and Merseyside, we must allow the Bill to have its Second Reading. However, we should also call for maximum support for the reasoned amendment, which we have tabled as a protest against the Government's failure to deal with the true, wider and much deeper problem that faces the ports industry.
  8.14 pm
  Mr. Teddy Taylor: The debate has been depressing so far. Although the Minister put forward his case with his usual ability and was able to answer all the questions, I have a sneaking feeling that, bearing in mind the inevitability of the problem, he might have been a little happier if he had been on the Opposition Benches, picking holes in the Bill and in the strategy behind it.
  The Minister faces an impossible problem, because the Port of London Authority is in a desperate financial situation. The inevitable problem that worries us when that arises, such as in the case of British Leyland and British Steel, is that there is an awful fear that we are putting in more money not to make the problem better but to pave the way for what happens next year or the year after.
  I agree that an acute problem is faced by the Minister. He suggested that there was no question of an open cheque or a blank cheque. He said that he would have periodic reviews to see what progress was being made, and that he would not provide further finance if the plan were not maintained. It would be helpful if the Minister could tell us what will happen if he is not satisfied and if the money has to be cut off. If the fears must be considered and if we must have a plan ahead of us, the Minister should spell out what happens if progress is not made. He said that the money was conditional on progress.
  The industry has many horrendous problems. There appears to be a certain injustice because London, which traditionally has had more problems and probably less co-operation than other ports, receives the extra prize of the high severance payment to buy itself out of those problems.
  I wish to point out to the Minister the problems of one group that could be a casualty in this crisis. The House knows from the register that I am the adviser to the Port of London Police Federation, and have been for many years. The Minister will know that the Port of London police force had no less than 400 members in 1971. At that time the force could offer a good career structure. The basis of payment was strictly related to the salaries paid to the Metropolitan force. Since then there has been a dramatic change, because of the repeated crisis that have occured in the Port of London.
  Last year, for the first time, the relationship with Metropolitan Police payments was broken, because of the serious crisis facing the docks and because of the implementation of the Wright report. A link of 37 years was broken. The police were given the same increased payment as other staff. That may seem reasonable and fair in normal circumstances. However, the police are now in a unique and unfavourable situation. Because they are a disciplined force they do not have the normal negotiation rights that all other groups have in that docks community. They are not registered dockers or staff men who can represent themselves in labour relations and in negotiations in wages. They must accept what is given to them by the management. That is unfair and unreasonable.
  Those who joined the police force did so on the expectation that there would be a reasonable career structure, but whereas there were 400 police officers in 1971 and 250 in 1978, there are now only 138.
  Hon. Members have rightly mentioned the substantial reduction in the number of registered dockers, but the position of the police force is unique, comprising only 138 members. I do not blame the Minister or his predecessor
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  for the problem, which has arisen naturally from the contraction of the docks. However, as he will be virtually in control of PLA policies because of the periodic review linked to the increase in finance, will he look carefully at two issues?
  First, is it possible to have negotiating procedure to determine the wages of the PLA Police? The force has lost its link with the Metropolitan Police and would like to re-establish the relationship. If that is not possible, it would like a fair and reasonable negotiating procedure.
  Secondly, is the Minister willing to discuss with the PLA the question of establishing a career structure for the police through a relationship with the British Transport Police or a more direct relationship with the Metropolitan Police? It would be a good idea if the British Transport Police took over responsibility for policing the docks, and it might also save cash. It could be done on a contract basis and could add to the efficiency of the British Transport Police by giving it experienced and capable officers and by establishing a contract that could be remunerative. Will the Minister consider whether the proposal would save cash and provide a career structure for that small force?
  The PLA force has a superb record in providing security and in arresting and detaining criminals. Crime at ports is substantially increasing. It is more remunerative, because cargoes are more valuable. The job of the PLA force is important and has been well carried out for many years. I hope that the Minister will give consideration tonight and later, to this small group, which might suffer special casualties.
  8.21 pm>
  Mr. Eric Ogden: May I start by quietly asking the Under-Secretary of State some practical questions? Why is the title of the Bill "Ports (Financial Assistance) Bill", when a more accurate title would be "Port of London and Ports of the Mersey (Financial Assistance) Bill"? The explanatory memorandum states:
  "This Bill enables the Secretary of State…to give financial assistance to the Port of London Authority".
  Then, almost as an afterthought adds:
  "It also enables the Secretary of State…to give financial assistance to the Mersey Docks and Harbour Company".
  The phrasing could have been more equitable. It is not even a two-part Bill. It is a Port of London and perhaps Merseyside Bill.
  The explanatory memorandum also states that the financial assistance will be:
  "for measures to reduce manpower"—
  not investment, not maintenance, not new equipment, not dredging, not conservancy, not security, not promotion of port facilities or sales abroad. The financial assistance is for redundancy payments. Had that been more clearly explained, the Bill would have been easier to understand, although we would not have avoided all the differences across the Floor of the House.
  The provisions in the Bill have a limited life. How does the Minister propose to extend them? There is a six-week life until May for the first limits on allowances, and then the possibility of extension for a further six months.
  Port severance payments are of special help for special employees in special areas. The principle of redundancy payments is fundamentally sound, but difficulties arise not because a man has lost his job but because he is employed by a particular employer or in a particular sector. Ports will

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  be treated differently. A private sector steel worker will be treated differently from a public sector steel worker. People in the mines will he treated differently. It is the old problem, not of the disability or the redundancy payment, but of the employer. Dock workers are in a unique position with the guarantee—although limited—of employment. Overmanning in any port will be continued and they will have a job for the remainder of their working life. Very few other workers can claim that. In the main they have accepted their responsibilities.
  I ask the Minister to recognise, however, that it is a limited guarantee. The need will not exist in 10 years' time. I doubt whether the need will exist in five years' time. This is a limited guarantee, justified in the present circumstances. To put it bluntly, this is perhaps the price of industrial peace in the docks. This is not an open-ended commitment which will go on for ever.
  I ask the Minister to recognise that even the maximum payment of £16,000 tax-tree at the present time is not an overwhelming incentive for anyone below the age of 62, or possibly even 63, and certainly not for anyone aged 61 or 60 employed in the docks, to go for the redundancy scheme. I suggest that the Minister discusses this with his colleagues in the Departments of Employment and Social Services.
  If a person takes the £16,000, followed by six or 12 months' unemployment benefit, and then applies for supplementary benefit, he will be disadvantaged if he has saved some of the money. The practical advice to workers who take redundancy payments must, therefore, be to get rid of the money as quickly as possible, to buy a house, to go on holiday, or at any rate to spend it. They should not invest it, perhaps salt it away—give it to their sons, their daughters or their neighbours—because that is the only practical solution given in the conditions being imposed by the Government. If they keep the money in the bank for a rainy day, when their unemployment benefit runs out they will be denied the advantages which would come from social security be for which they would be eligible if they had spent the money. That is not what I want. I do not think that it is what the Minister wants. Buts it is a fact.
  Mr. Roger Moate: What is the hon. Gentleman's argument? Is he against redundancy schemes? The situation that he describes has always applied. The scheme has been carried out by successive Governments. Is he against capital payments for redundancy?
  Mr. Ogden: No, I am all in favour. But it is a two-edged weapon. It has advantages and disadvantages. It is a necessary evil. We are making it more complicated than need be. It is being used to buy out jobs, which was not the purpose of redundancy payments under the Labour Government. I am pointing out the practical objections in Merseyside and London to anyone jumping at the opportunities provided by the Bill. This is not as attractive to those for whom it is intended as it would be if the Minister considered some of my ideas.
  The main question facing me and other hon. Members tonight is whether to give or to deny a Second Reading to a Bill which provides at least the possibility of urgent financial help for the ports of London and Merseyside. My right hon. Friend the Member for Barrow-in-Furness (Mr. Booth) has explained, and others of my hon. Friends will
  1004
  explain, the opposition to the way in which this measure has been introduced. The Opposition amendment, which proposes
  "That this House declines to give a Second Reading to a Bill which…provides no assistance"
  for any other British port, expresses sentiments which I entirely support. Every port in the United Kingdom needs help in one way or another and should have that help.
  The question is whether we should tonight deny a Second Reading to the Bill because it does not provide more. I agree with most of my right hon. Friend's comments. I certainly support action to provide financial help for other ports. But given the situation on Merseyside, with which I am most familiar, must I tonight accept the possibility that if the amendment is carried, that help will be denied, simply because help is not provided for other ports?
  I appreciate that my right hon. Friend gave me the opportunity to explain my objections at a meeting of interested Members at 11 o'clock this morning. I did not arrive back from Liverpool until 5 o'clock this morning, and even I need some sleep at some time. That is why I was not at the meeting. But the amendment was already on the Order Paper. There was nothing that I could have done about that at 11 o'clock this morning. I must therefore put it on record that the tactics being employed officially by the Opposition tonight are different from those that we employed on the Port of London (Financial Assistance) Bill some 12 months ago.
  Mr. Booth: I appreciate the reason why my hon. Friend could not be present at this morning's meeting. However, he should appreciate that the debating rules of the House require a reasoned amendment to be prefaced by the words
  "declines to give a Second Reading".
  That does not preclude an hon. Member from supporting a Second Reading subsequently.
  Mr. Ogden: With respect, I think that I have been in the House as long as my right hon. Friend, and I think that I know some of the rules, procedures and tactics which must be employed. I was making the point that the tactics that we adopted on the Port of London legislation were different from the tactics adopted now. Merseyside Members practically took over that debate. We did not say that we would oppose financial help for London simply because help was not given to Merseyside. We stated that we wanted equivalent help for Merseyside, but we did not oppose that legislation.
  Merseyside Members have asked successive Governments for help for at least 17 years. If robes are ever provided for Members of Parliament, Merseyside Members should be given saffron robes and begging bowls. That has been our prime occupation. We have constantly asked the Government for aid.
  All that I am saying is that if the amendment is a tactic, a better form of words might have been used. As it stands, my right hon. Friend is asking us to support his amendment knowing full well that it will be defeated.. Another approach could have been used.
  Mr. PrescottWill my hon. Friend give way?
  Mr. Ogden: Not at the moment. A bitterness is creeping into Merseyside. I believe in Opposition solidarity, workers' solidarity and port solidarity, and no

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  one can complain about lack of support from the members or ports of the Mersey. However, that kind of reciprocity has sometimes been missing in other industries.
  It was particularly noticeable that when Liverpool Roadline was closed down the work went to Manchester. It was also noticeable that when Standard Triumph at Speke closed the work went to Birmingham. In the last few weeks it has been bitterly noticed that when Tate and Lyle closes down Greenock and London will not say "There is no way in which we shall take the work from Merseyside."
  That is the background to the current feeling that Merseysiders will have to look after their own. My choice tonight is simple. I can go into the Opposition Lobby hoping that we shall be defeated. But let us suppose that the amendment is not defeated. We would then have to wait another 10 days before it could again be brought forward, if another Bill were brought forward. That is not a risk that I can take.
  Alternatively, I can abstain. However, the Bill provides the help for which we have been asking, although it is not as much as we would like. The help is desperately needed. Do not deny this to Merseyside simply because at present help is not available to others. Let us take what we can and continue to call for help for the other ports.
  8.33 pm
  Mr. Barry Porter (Bebington and Elleswere Port): I am pleased to follow the sensible speech of the hon. Member for Liverpool, West Derby (Mr. Ogden). It is the sort of speech that one expects from the hon. Gentleman.
  I do not understand what the hon. Member for Kingston upon Hull, East (Mr. Prescott) and the right hon. Member for Barrow-in-Furness (Mr. Booth) meant by "a reasoned amendment". There is nothing reasoned or, indeed, reasonable about it. The hon. Member for West Derby made that point, and it is not for me to intervene in the Opposition's internal rows. No doubt they can sort them out in some other place at some other time.
  Any Labour Member who has any thought of saving these two ports from imminent bankruptcy should not support the amendment, because it is always possible that hon. Members will be taken ill and that the place will fall down. One cannot guarantee that there will be enough Government supporters around to see the Bill through. I note with interest that the Social Democrats do not seem to show much interest in these two major ports.
  Mr. Ogden: Nor do the Liberals.
  Mr. Porter: Given the launch of the Social Democrats' great new party—as they like to think of it—they may have seen fit to think about the difficulties that real politicians face every day.
  I am probably the only hon. Member to make my living and to have been born, bred and educated in the port of Merseyside. When I first became aware of the port in the mid- to late 1940s, it was bustling. The great Cunard liners were there. I was there when the Queen Mother launched the "Ark Royal" in 1950. The whole of the South docks was thronged with men. The overhead railway took men throughout the port of Merseyside. Birkenhead had all the North American trade—the corn and flour. All that has changed. In this House and outside it the question why and how has often been debated. The port of Liverpool is still overmanned by 1,500 men.
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  I listened with interest when the right hon. Member for Barrow-in-Furness spoke about the percentages in other ports. However, those percentages are not relevant to Liverpool. The 3 per cent. that the right hon. Gentleman mentioned in one port might be 20 per cent. in Liverpool. The 19 per cent. that he mentioned in another might be 40 per cent. in Liverpool. In Liverpool, 1,500 men are surplus to requirements. Many of us on Merseyside are bitter about the way in which we are treated by other parts of the country. To some extent we deserve it. There are many jokes about Merseysiders. For instance, there was the man who saw the Liverpool docker stamping on a tortoise. When he was asked why he was doing that, he said that it had been following him around all day. It is relevant that such jokes are made.
  Workers in the Liverpool docks, or their sons, know what it was like in the 1930s. We cannot altogether blame men when they indulge in restrictive practices if they fear a return to the 1930s. No one would want that. During the past decade the labour force has to some extent behaved better than before. The fear is going.
  It saddens me to think that the great port of the 1940s and 1950s has had to bring out the begging bowl once more. Over the years the port of Liverpool has received more assistance, in real terms, than has the port of London. The Opposition criticised the Secretary of State for saying that there would be nothing for Liverpool. My right hon. Friend pointed out how much Liverpool had received in the past decade. In those circumstances, how can anyone suggest that there should be opposition to giving the Bill a Second Reading. [Interruption.] The Opposition motion declines to give the Bill a Second Reading. [Interruption.]It may well be a hallowed formula. I do not think that hallowed formulae are going to go down too well with the lads on the docks in Liverpool. They do not go in much for hallowed formulae, except for working the welt. I am not going to explain that.
  The dockers of Liverpool and Merseyside generally want to see a serious attempt by the Mersey Docks and Harbour Company, by the Government and, they would hope, by the Opposition to make the port of Merseyside a viable and sensible employer of labour. The only way in which we are going to do that is by making it possible for the company to survive and for the dockers who remain in that port to have permanent, sensible and genuine jobs, so that the jokes about Merseyside dockers need never be repeated. Why should they be? Many of these men work hard. The ones who remain in a viable enterprise will need to have no fear and no requirement to indulge in restrictive practices.
  That is why I welcome the Bill. Rightly, a Government do not push out public money merely because somebody asks for it. It is given after careful, searching examination. This is the only way in which that major port can survive.
  8.42 pm
  Dr. J. Dickson Mabon: I respond to the hon. Member for Bebington and Ellesmere Port (Mr. Porter) by saying that the parliamentary mechanism of a reasoned amendment is the only procedure that is open to us other than voting against the Second Reading. My right hon. Friend the Member for Barrow-in-Furness (Mr. Booth) said that the Opposition would not vote against the Second Reading. If the reasoned amendment were carried, the Minister would be obliged

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  to bring in tomorrow a Bill that, if he were responsive to the House after having been defeated, would include provisions in addition to those now in the Bill.
  I have been in the House of Commons for 25 years and I have seen the Conservative Party nationalise Rolls-Royce in one day following our parliamentary procedures. Let us have no nonsense to the effect that if the Minister lost the Bill tonight it would be lost for ever. It would be the volition of the Minister in defiance of the House if that were to happen. What we are trying to argue tonight—the reasoned amendment is a symbol of this—is that so far as the Bill goes it is acceptable, but it does not go far enough. It is a Bill of inequity. It is inequitable between man and man and between port and port. It is downright unfair to the British nation, because it suggests no comprehensible way to deal with the problems of our ports.
  I represent a good port—Clydeport-which has made profits for the last 14 years but which is about to declare a loss. It is seriously embarrassed by the Bill, inasmuch as part of the way in which it can avoid a continuing loss is to persuade some of its men, with great reluctance, to leave the industry. They will join a massive unemployed force on Clydeside. In my constituency we are inviting 27 dockers to leave to join an unemployment register for males of 16 per cent. Many of these are highly skilled men. That is asking a lot.
  I sympathise very much with my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) in his dilemma and with his story of what happens to these men once they accept redundancy. The Minister has been told what happens on Clydeside. He must be close to Ethelred the Unready in terms of being a Minister if this is the way in which he is going to deal with the situation. Today it is London and Liverpool, but tomorrow it will be Clydeport, or somewhere else. That is what we are extremely worried about.
  We do not want these emergency, crisis Bills. A crisis Bill is brought in by a had Government, who treat their Ministers badly, by a bad Minister, who cannot comprehend what is happening, or by a bad Department, which does not inform its Ministers. It is one of these three things that is wrong with a crisis Bill, or perhaps it is all of them. I do not want any more crisis Bills; I want a comprehensive Bill, which will deal successfully with the situation.
  Before the Minister made his announcement Clydeport, in Glasgow, had managed to persuade 53 men to take severance pay; that was 53 out of the 60 that it wanted to leave. However, the moment this measure was announced the others would not agree. The next 60 men who were being asked to leave said "No. In no circumstances are we leaving when there is the enormous diffential of 50 per cent. between our proposed severance payments and the payments that will be made to those who work in the same jobs in London and Liverpool. If we work elsewhere we will not get this increase of £5,500".
  Men have a deep sense of injustice. That applies to dockers especially. They will not take this lying down. It is requested by Clydeport that 27 of the men in my constituency should accept redundancy payments. They will not accept those payments. They refuse to do so, on grounds or principle, pride, conviction and a sense of injustice. They say that the scheme is unfair and nonsensical. The Secretary of State has made a great mistake. If he had said that he would introduce such a scheme for any port that wanted to shed its labour and to
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  make itself economic, that would be understood. Indeed, I would vote for such a scheme, without making the gesture that we feel it necessary to make tonight to persuade the Minister to change his mind.
  When the debate is over the crisis will not be over. The ports that are heading for trouble will not necessarily get out of trouble if the Bill is given a Second Reading. We are putting up a signal that will be important to the right hon. Gentleman's political career and to his reputation as a Minister. Is he to be the Minister who brings in all the crisis Bills one by one?
  Those of us who do not represent London or Liverpool constituencies feel that the Department does not give a damn for any of the other ports. That may be unjust, but that is the feeling. The Forth Port Authority is lucky in that it has a great carriage of oil traffic. It is in surplus, and I hope that it will continue to be in surplus for a long time. However, it has its internal problems. The Forth ports would be in trouble if the oil business were taken from them. That is mentioned in the last phrase of the reasoned amendment.
  There are many reasons why the ports are in difficulty. I accept that the Minister has no control over many of them. Let us suppose that the Minister or the Under-Secretary of State said "We shall consider this. We want you to let the Bill pass through the House because of the crisis next week. We shall seriously consider the impact on the other ports of increasing the redundancy payments to the figures set out in the Bill. We shall seriously consider the consequences for other ports that are in difficulty." If that were said, could the hon. Member for Bebington and Ellesmere Port deny the justice of the case? I hope that he would not try to do so. If that were his argument, he would be as selfish as the Minister is in claiming my hon. Friends and I are in appearing to oppose the Bill.
  In essence we are not opposing the Bill. We are opposing the piecemeal and patchwork way in which the Minister has proceeded. We are condemning him for not regarding the industry through the eyes of the entire industry. We are condemning him for not considering the industry from a British point of view. It is clear that the French Government—a Conservative Government—are concerned about their ports. They are trying to maintain the structure of their ports system. Why cannot we follow suit?
  Mr. Porter: If the port that the right hon. Gentleman represents were in the same situation as Merseyside and if he advanced the same arguments as those advanced by my right hon. Friend, it would be totally inconsistent for me or any one else to deny the justice of his case. It seems not to be apparent to some Labour Members that Liverpool and London are on the verge of bankruptcy, within weeks.
  Dr. Mabon: I said that, and the Minister was rather annoyed. We know that there is a crisis. We have known that for a long time. We are distressed that the Minister has taken so long to recognise it. We are all worried that we shall be next. That is the essence of our argument. We can ask leave to withdraw the reasoned amendment only if there is an assurance from the Minister that London and Liverpool are not the end of the story. The effect of the amendment is that we are expressing dissatisfaction with the Minister for ignoring all the other ports.
  The Minister seriously contradicted himself. At one stage he said that the Government would not apply this

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  provision to others. Later he said that he would listen carefully to the speeches made by hon. Members and then think what he might do. I hope that he will repudiate his remark that he will not apply the provision to others. He may have to in a mustle-bustle-Ethelred-the-Unready way.
  This measure makes the position on Clydeside worse. It hastens the day when we shall come cap-in-hand seeking a Bill to assist us to get back on our feet in Clydeside. We want the Minister to learn his lesson and to realise that the ports must be run in a comprehensive, understanding way, which does justice to each port, each docker and the country.
  8.50 pm
  Mr. William Waldegrave: Hon. Members who represent Bristol constituencies are grateful for the unusual interest which the affairs of Bristol have attracted. I only hope that it is not a transitory interest and that other aspects of our great city will also receive attention. I sometimes feel that we are being used as a pawn in a wider game.
  My right hon. Friend the Secretary of State has done many things for Bristol during his term of office, one of which has been to halve the cost of bus fares between Bristol and London. That is one cost that has gone down.
  Mr. Prescott: Will the hon. Gentleman accept that because of a strike in that area Bristol has the highest bus fares in the country? This leads to disputes and to people not travelling on the buses.
  Mr. Waldegrave: The hon. Gentleman would be well advised to restrict himself to interventions about his own bus company, because he might get out of his depth in talking about others.
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. We must all keep off buses.
  Mr. Waldegrave: I shall be delighted to keep off buses, Mr. Deputy Speaker. The problems facing the Port of Bristol Authority are fairly well known. On several occasions the hon. Member for Bristol, North-East (Mr. Palmer) and I have urged the Government to help us. Of course, Bristol must take the ultimate responsibility for its own development. It is no good going back over ancient history. It might have been better if the Labour Government in 1968 had given permission to start the development. We know from Crossman's diaries why they did not. In 1977 the Conservative Government gave us permission to go ahead with the West dock, but it is Bristol's money and Bristol must ultimately take responsibility.
  I pay tribute to the Labour council in Bristol, which is showing courage in looking for ways of putting the dock back into the private sector, where perhaps it should be. That is being done with no help from elements in Bristol further to the Left, who are being marshalled by the right hon. Member for Bristol, South-East (Mr. Benn).
  Mr. Palmer: The hon. Member was not in the House at the time, but it was a Private Bill.
  Mr. Waldegrave: I hope that the hon. Gentleman will agree that Bristol must ultimately take responsibility for its own development.
  The situation has been worsened for us, as for many other ports, by the action which, understandably, the
  1010
  Secretary of State feels he has to take for Liverpool and London. Bristol's problems are very severe. In February, for example, we had 600 dockers over requirement, which is a large number. I have been in close touch with the Secretary of State and the Port of Bristol Authority on this matter.
  An additional problem is that one of the last private stevedore companies in the port, which has to take its share of dock labour, has announced that it is forced to go out of business, giving as one of the reasons its inability to reduce its labour force sufficiently to meet the lower level of trade.
  The manager of the Port of Bristol Authority, Mr. Turner, has put it to me in the strongest terms that previous experience shows that it is impossible to create a port differential for voluntary severance payments. It is hardly surprising, as it is a national scheme, that the negotiations rapidly become national and that that has happened. I cannot resist quoting from a letter, one of several that Mr. Turner wrote to me. He expressed his fears that the dockers in Bristol would at once ask for the severance payments at the same level as those for dockers in Liverpool and London. In brackets added at the end of one paragraph he states:
  "In the course of dictating this letter I have just been informed that this has, in fact, happened today."
  That letter was dated 19 February. Thus, there has been a quick response on this matter.
  There is no doubt that voluntary redundancies have completely dried up in Bristol, as in other docks around the country. I sympathise with the Secreary of State and the other Ministers who are facing the terrible problems in th docks nationally. However, the Bristol dock is caught. I accept that ultimately Bristol must take the responsibility and find ways of lifting the burden off the rates. It is sensible of the council to introduce schemes to bring private money and private developments into the docks.
  Mr. Anderson: Will the hon. Gentleman confirm that the Bristol city council has asked the British Transport Docks Board to take over responsibility for the port?
  Mr. Waldegrave: The Bristol city council has been talking to a much wider group than that. It would be willing to sell the dock to the hon. Member if he wished.
  It is not that the Port of Bristol Authority is facing bankruptcy. If the dock were a separate trading entity it would be bankrupt, I am sorry to say. I do not want to cause alarm and despondency, but I think that everyone in Bristol—certainly every ratepayer and every dock worker—knows the facts. Redundancies are urgently needed, but not only among registered dock workers. Part of the problem is that other workers in the docks, not registered dock workers, will ask for higher redundancy payments as well. That goes through the system.
  It is hard to imagine a dock facing a greater crisis than is the PBA. Bristol must ultimately take the responsibility for its own problems. It is a rich city, in a rich region, and it can do so. We took the risk. Perhaps it was a wrong risk ultimately. It is a fearsome prospect, but one day we may have to face the closure of the port. Goodness knows, we cannot go on for ever increasing the rates at the speed that we are doing at present.
  The situation has been made dramatically worse by a change in the rules. The change in the rules is the new subsidy. We knew that we would have to face the fact that we were not a development area. We know all the other

  1011
  problems that Bristol faces as a dock authority because it does not have special status, which most other docks do. This supplementary scheme—the special offer, as the Secretary of State calls it—is an additional hazard that we could not have predicted.
  The Secretary of State, with his usual courtesy, has written to me today outlining the arguments that he has made in his speech. He rests his argument on a sentence in his letter, which says:
  "Both ports"—
  meaning Liverpool and London—
  "are in fact on the verge of bankruptcy."
  I suggest that we are beyond the verge of bankruptcy. We are caught in the dilemma that while we are trying to find ways out, by new forms of ownership, new equity participation, and so on—we are ruling nothing out—the situation has been made dramatically worse for us by the supplementary scheme.
  The other side of the problem is that under the new block grant system the extra redundancy payments, which we shall undoubtedly be forced to pay, will not be eligible
  1012
  for grant from the Department of the Environment and we shall be caught on both sides by the Secretary of State for the Environment's new legislation. Thus, we are in a vicious circle. Those who run the port are not their own masters on redundancy payments and as a result of the new block grant system we shall suffer because of that.
  We are asking not that the Secretary of State should take responsibility for our risk, which may have failed, but that he should recognise that he has added an extra burden at a most critical time when we are trying to see ways out of our difficulties. He has dried up the source of voluntary redundancies in Bristol, and the problem has become acute.
  No one wishes to argue against the necessity of providing urgent help for Liverpool and London, but I am sure that all Bristol Members and ratepayers will back my request that the Secretary of State should return to the matter, perhaps at the end of the initial temporary period, and that if evidence shows that redundancies in Bristol and elsewhere have stopped he will think again about providing further help for the rest of us.
  9.1 pm
  Mr. Nigel Spearing: I have great sympathy for the hon. Member for Bristol, West (Mr. Waldegrave) in the difficulties that he is having with the Secretary of State for the Environment. That shows how illogical and unfair the Local Government, Planning and Land (No. 2) Act has proved to be.
  I shall not oppose the motion for a Second Reading, but I cannot pretend that it is welcome. No one pretends that. I understand the feelings of my hon. Friends who regret that it is not a national scheme. I shall support the procedural gesture, though, particularly for a reason that the Secretary of State will understand. I will not oppose the Bill, but I do not believe that it will achieve its end.
  Clause 1 refers to
  "measures taken with a view to restoring the profitability of their undertakings".
  The financial memorandum mentions measures
  "with a view to restoring the profitability of their undertaking and for the carrying on of their undertaking while such measures are being taken."
  The Long Title of the Port of London (Financial Assistance) Act 1980 contained the phrase:
  "to provide financial assistance for and in connection with, the measures taken by the Port of London Authority to restore the profitability of their undertaking by reducing the number of persons employed by them."
  I told the House, the Secretary of State and his advisers that that measure could not do the trick. I said that we would be back again—and here we are. London is being offered a big breakfast, much as the condemned man is given a big breakfast on the day of his execution. No one will refuse a breakfast, but the Secretary of State can ensure that the reprieve arrives between the breakfast and the gallows.
  The right hon. Gentleman may appear to be doing London a favour, but his formula for long-term success could bring failure even closer, because he misunderstands the nature and future prosperity of the port of London. I do not believe that the port can be restored by the restoration of profitability that the Secretary of State seeks. I take that view partly for reasons of which the right hon. Gentleman is aware and partly for reasons that he does not want to know about.
  On Second Reading of the Port of London (Financial Assistance) Bill a year ago I said that we needed a Select Committee to deal with the Bill. The Secretary of State refused an investigation of some of the charges that I made. I said that we must consider the legislation from the point of view of the long-term health of the port of London as a whole, which deals with four times as much tonnage as the PLA. In Committee I asked for a public inquiry and consultation with local authorities.
  All these were turned down. It is with great regret that we come to yet another Bill for the so-called reconstruction of the profitability of the PLA. I should like to mention some of the reasons why I do not think that this is possible, contrary to what the Secretary of State thinks. The first is Continental competition.
  Time after time, the Government have been challenged on the question of the Touche Ross report. The Government are keen on the Common Market and the concept of harmonisation, even to the extent of standardised water supplies for food manufacturers. This is the sort of harmonisation that the EEC pursues. Yet it
  1014
  does not examine the amount of public money available to ports. The Government appear oblivious to that situation. It would be easy for the Port of London Authority to attain financial viability. No doubt the accountants will so advise the Minister before long. He will be advised: "Sack all the men. Turn away all the ships. Turn it into an estate authority". The right hon. Gentleman can do so now that he has repealed the Community Land Act. There are assets and other operations involved that might just about pay their way.
  If the criterion is profitability, this means the end of the Port of London as it is known today, because the Port of London Authority was not set up to make a profit. It was set up in 1908 by the House to rescue the dock authorities, which had, through competing, put themselves into bankruptcy. That shows how much monetarism and private enterprise work. The private enterprise dock companies of the Port of London were bankrupt in 1908 and the House had to intervene. The structure then created was based on assumptions that are no longer true. One big assumption was the payment of interest on port stock where a profit was made on the operation.
  Frequently, the PLA makes a profit on its operation. The losses which the Department often trumpet to the world are those related to the paying of interest on capital. It cannot therefore be "profitable" in the sense of the account book. It is, however, fundamental to the economy of London. That is, perhaps, the reason why the Secretary of State brings forward the Bill. It is not simply the PLA and the people whom it employs who are being supported by the Bill. Those involved are the private firms along the river, private operations and manufacturers and other wharfingers. The curious aspect is that many of those who will perhaps accept redundancy are not employed by the PLA at all. It was never a large employer of labour in the old days. The PLA has become the residual legatee of those who are made redundant or those firms, many of them private, that have closed.
  Since the last Bill there has occurred an even more ominous development. The PLA took on labour from the firms that went bankrupt. One firm in my constituency went bankrupt overnight. Men arrived for work one day to find that the firm had closed. Those men did not have any recourse to the normal redundancy Acts. To this day, some of them have not been paid for the work that they did that week. That shows the lack of security for some people in the dock industry.
  Some installations along the river, which takes four-fifths of the tonnage in the real, large port of London, went bankrupt. Such was their importance for the economy of London and the economy of the port as a whole that the PLA has seen that these operations continue. It is right that they should continue. The health of the port of London as a whole is important. For that, no one except the Secretary of State has statutory responsibility.
  The Port of London Authority is an anachronism in function. It provides facilities for people who compete with its own dock operations. There are many anomalies in organisation and operation which have assisted and accelerated the authority's decline.
  I wish to turn to another trend which is perhaps even more disturbing. No single body apart from the Secretary of State, who does not know a great deal about it, or his advisers, is concerned with the health of the port of London at large. No one is specifically concerned with the co-ordination of the different parts of that complex

  1015
  organism. One of the most important parts has been lighterage traffic. The port is linked from the Medway to Tilbury to the Royal Docks and as far as Brentford by a flexible system of floating containers called lighters. They are now carrying new types of containers.
  The port of London is not concentrated, as is Liverpool or Bristol. It extends over 60 or 70 miles of river. It was built on lighterage at the time when ships were lightened in the river because they were too deep to pass over the shallows. That was the function of a lighter. But the PLA has been suspect in that regard. I have good reason to distrust its attitude towards lighterage. The lighterage traffic has been reducing.
  Not long ago the PLA rescued the installation at Dagenham. There are now reports—I put it no higher—that one major lighterage concern is approaching bankruptcy. I am not sure whether that report has been confirmed, but it is well founded. It is not a fly-by-night organisation, but one of the best equipped, forward looking and best organised firms. If that firm goes down there may be further work for other firms, but one of the best components in the flexible port of London will disappear. Capital assets will be distributed, up to 200, 300 or 400 lighters will be sold for scrap, and tugs will be distributed around the world. Tug engineers do not receive severance money under the ports labour scheme, only ordinary severance pay. Some thinning down may be necessary, but why should it involve the best component? Port lighterage is rather like the bloodstream of the body because it marries the remainder of the port functions.
  I heard that approaches were made to the Minister asking that the PLA should intervene as an operational body, as it did for the Dagenham dock and the fixed installation. I heard also that the Minister rejected that suggestion. I make that point based on some degree of speculation. It would be wrong to assert that those are facts. But faced with the current position in the port of London and the Bill before us tonight, it would be wrong not to mention the facts as I understand them. I hope that the Minister will say something about that point when he replies.
  The British Waterways Board has depots up the canals at Brentford and Enfield. The firm to which I refer runs the canal barges. Not many other firms run such barges because that firm took over other firms when they went down one by one. Will water transport—which the Government want to assist—and the depots up the canals cease to operate? Will more traffic be diverted to the roads? That could happen if the Minister does not permit the PLA to take the necessary co-ordinating and succouring action.
  I enter one caveat, which I should have made at the beginning of my speech. A number of tugs on the river bear my name. I have no financial relationship with them. As far as I am aware, other than many generations ago, I have no relationship with the firm that runs the tugs. I wish to make that clear because of my plea on behalf of the lighterage industry.
  I forecast that we would be back here again and that the Port of London (Financial Assistance) Act 1980 would not deal with the problem in London. I am not sure whether this Bill will deal with the problem in Liverpool either. I appeal to the Minister to ensure that all the matters that I raised during Second Reading and Report stage of the 1980
  1016
  Act are now considered. I do not believe that they were considered. He says that time is important, and that we must deal with the matter quickly. Very well.
  We now have a new procedure in the House, known as the Special Standing Committee. We can go into Committee upstairs and spend two days taking evidence on the Bill. If the Bill receives a Second Reading, it cannot deal with matters that are not in the Bill. The principle will have been achieved, and we shall concentrate on matters other than those which understandably affected and influenced the speeches that have been made by my hon. Friends this evening. Otherwise, the Minister is clearly not determined to get to the bottom of the problem, and we may find ourselves back here again. By then, the port of London may be absolutely beyond recall. That happened in the case of the River Thames shipbuilders, on which I had an Adjournment debate. In half an hour I sketched out the vicious circle that operates when redundancy money is paid to grease the slopes to oblivion. That is what happened to that firm.
  One cannot revive firms by doling out redundancy money. What happens is that one buys off trouble. so that jobs disappear for good. That is what happens with Bills of this kind. This country, London and, indeed, the British mercantile marine cannot afford to see the port of London disappear. I sincerely believe that, in their ignorance, the Government may permit that terrible and horrible prospect.
  9.17 pm
  Mr. David Hunt: I welcome the Bill. Indeed, it would be surprising if I did not, having fought so long and hard for it. I pay tribute to the work done by my hon. Friends the Members for Wallasey (Mrs. Chalker) and Bebington and Ellesmere Port (Mr. Porter) and the hon. Member for Birkenhead (Mr. Field), who, with me, tried to put the case of our side of the Mersey for ensuring the future viability of Birkenhead docks and, in doing so, the future viability of the port of Liverpool as a whole.
  I join the hon. Member for Liverpool, West Derby (Mr. Ogden) and my hon. Friend the Member for Bebington and Ellesmere Port in finding it difficult to understand how the right hon. Member for Barrow-in-Furness (Mr. Booth) could say to me, in response to an intervention that I made, that he did not intend to advise hon. Members to vote against the Second Reading, but that he intended to ask them to vote for an amendment that declines to give a Second Reading to the Bill.
  We were given various explanations for that. First, the hon. Member for Swansea, East (Mr. Anderson) said that it was a hallowed formula. Then the hon. Member for Newham, South (Mr. Spearing) said that it was a procedural gesture. The people of Merseyside are fed up with the use of tautological or quixotically chivalrous language or procedure to try to get round saying "Yes" to a Bill as vital as this.
  Mr. Anderson: If the hon. Gentleman's dockers do not understand the words "hallowed formula", would they accept "custom and practice"?
  Mr. Hunt: With due respect to the hon. Gentleman, I should not find it easy to argue the case of the right hon. Member for Barrow-in-Furness in saying that he would not vote against Second Reading but would vote for an amendment that declines to give the Bill a Second

  1017
  Reading. Whatever the custom and practice, I find that a remarkably difficult matter to understand, particularly when one sees that the amendment is a wrecking amendment. It asks for financial assistance for more than 40 other ports, some of which are not asking for financial assistance and several of which are not trying to sever men at present. In my opinion, it is an irresponsible amendment.
  I cannot see why the Opposition cannot say that they believe that the Bill is a good one and wish it a speedy progress through the House, and then enter as many caveats as they wish about the need for a ports policy.
  I pay tribute to my right hon. Friend the Secretary of State and to my hon. and learned Friend the Under-Secretary, who form the best team that we have had at the Ministry of Transport. They inherited a most difficult position with considerable over-capacity in the ports at a time when there had been no ports policy under the previous Administration.
  Mr. Palmer: Further to the procedural points that the hon. Gentleman was making, does he agree that it would have been possible for the Government to introduce a Bill that sought to help Liverpool and London but was not confined to those two ports?
  Mr. Hunt: I acknowledge that the hon. Gentleman has the interests of Bristol at heart and asks that question in the context of Bristol, but the immediacy of the financial crisis in Merseyside does not allow us to have a general ports Bill.
  One of the difficulties about the inheritance by my right hon. Friend and my hon. and learned Friend at the Ministry was that there had been no ports policy for years. I do not know whether anybody is leaping to defend the right hon. Member for Stockton (Mr. Rodgers)—the hon. Member for Kingston upon Hull, East (Mr. Prescott) seems to be mouthing imprecations at me—
  Mr. Prescott: The hon. Gentleman should read the 1979 report of the National Ports Council.
  Mr. Hunt: I have read that document, and I am still looking for a ports policy.
  It is salutary to see the hon. Gentleman defending the right hon. Member for Stockton, who is now forming another party and who preceded my right hon. Friend the Secretary of State at the Ministry of Transport. I never heard the right hon. Gentleman enunciate a ports policy when he was in office.
  Our Ministers inherited a difficult position and now, after a long and careful appraisal, having listened to the problems that we have described for Liverpool and Birkenhead, thay have given us the Bill. I warmly welcome it. On Merseyside we have considerable and long-standing problems. I would have been pleased if the right hon. Member for Barrow-in-Furness had said something about them. I sat throughout his speech but I heard no analysis of the problems of Merseyside, although this Bill is all about them. I will not rehearse the details of the serious unemployment there, or the problems that could be caused by the potential closure of such firms as Tate and Lyle. I will not accept that closure until the final opportunity to save it has been lost, and I do not believe
  1018
  that it has. The Bill must surely be seen in the context of those unemployment problems, as well as of the other problems that have been described.
  In welcoming the Bill I do not wish to sound as depressed as did the hon. Member for Newham, South in speaking about the port of London. The Bill will enable Liverpool and Birkenhead to be restored to profitability.
  We do not see it as a permanent prop. For us it is a means of surmounting the considerable overmanning problems that are an integral and long-standing part of the Merseyside scene. The profitability study that was published last October showed that our port could achieve viability only if it were to shed about 1,500 men, improve working practices and concentrate activity in about three areas of the port. So the Bill will give us an opportunity of achieving just that.
  I see the Bill in the context of the future. Liverpool and Birkenhead have some of the finest facilities in the world. They cater for almost every type of trade—bulk, grain, containers, heavy lift, or whatever. They have some of the finest dockers in the world. We therefore have every opportunity, within the context of the Bill—having been given the financial security that it will bring to the port—of looking forward to a better future. I see a great future particularly for Birkenhead.
  Before I finish welcoming the Bill I want to praise the constructive attitude of the men in Birkenhead, because it is with those men rather than the men in Liverpool that I have been engaging in a dialogue. They have always adopted a constructive attitude. They have a number of ideas on the ways in which trade can be increased. I hope that the port will respond to those ideas.
  A little while ago the future of Birkenhead was said to be in jeopardy. It would be if the Bill were not to proceed quickly. That era is past. Provided that we can achieve the financial stability given by the Bill there will be an upturn of trade in Birkenhead. The men have shown not only a constructive attitude but a considerable understanding of the serious problems faced by our area and by the port.
  I welcome the Bill as a necessary lifeline. The hon. Member for Newham, South talked about a special Standing Committee, which would take evidence. I would not like to see that. We know the problems of London and of Merseyside. Perhaps one of the difficulties is that the problems have been aired too frequently and in too much detail. This quick solution, as long as the Bill speeds through the House, will give us the lifeline that we need and will enable us to look forward to longer-term prosperity, given the attitude of the men and of management in their determination to bring more trade to the port of Liverpool.
  9.27 pm
  Mr. Kevin McNamara: First, I declare an interest, as I am a sponsored member of the Transport and General Workers Union. In the first part of my speech I shall try to state to the House the union's attitude to the Bill.
  The union's attitude is contained in the amendment. That applies also to the General and Municipal Workers Union, but I do not speak for that union. As a union, we welcome the assistance given to the ports of Liverpool and London. We welcome the additional severance pay that is being given, but why is it not being given to the other ports and docks? That is why the reasoned amendment has been tabled.
  The Under-Secretary of State for Transport (Mr. Kenneth Clarke): Is the hon. Member sure that that reflects the policy of the union? I am sure that it would like to see the Bill extended to other ports. The reasoned amendment declines to give a Second Reading to the Bill. As my right hon. Friend said, the effect of the amendment being carried would be to decline the emergency assistance to the two ports and give rise to the risk that both would close and cease trading, probably during next week. I do not believe that that is the policy of the TGWU. The Opposition are in a frightful muddle having put down their reasoned amendment, which does not reflect that policy.
  Mr. McNamara: That is not so. If the Secretary of State and the Under-Secretary were beaten tonight, would they allow the two ports to become bankrupt, as they are threatening, or would they follow the direction of the House and introduce other help for other ports and dockers? The matter is not as simple as the hon. and learned Gentleman makes out.
  Mr. Kenneth Clarke rose—
  Mr. McNamara: I have already given way to the Under-Secretary, who has made his point. I have made my reply. His hon. Friends have tried to get at my right hon. Friend about that matter too. We could spend much time debating the semantics of the situation, but other hon. Members wish to speak. Therefore, I shall not pursue that matter, but will consider other matters pertaining to what the Secretary of State has done.
  The Secretary of State has taken arbitrary action to cut across the relationship between the port employer and the port employee, as contained in the national voluntary severance scheme of the National Joint Council for the Port Transport Industry. He has taken that arbitrary action without going through the normal procedure and without reference to the unions concerned or the employers. Having taken his decision, he puts before them a fait accompli. That can only result in poor industrial relations. The concept of a differential between those two ports and the remainder of the scheme ports will create two levels of docker. The value of a docker's job will be less in Hull than in Liverpool or London. No union can accept that.
  In addition, by pursuing that policy the right hon. Gentleman is making it more difficult for ports that may wish to shed labour to do so. Following the last severance scheme in Hull, we still have vacancies. The latest agreement from the National Dock Labour Board is that we can shed a further 320 dockers. If dockers want to go, will they accept that they are worth only £10,000, when a Liverpool docker is worth £16,000? Of course they will not. They will hang on. First, they will not accept the equity of the Secretary of State's decision in setting one port against the other. Secondly, they will hang on because of unemployment. Once their jobs and security are gone, they will have a capital sum that will disappear in a few years, and no prospect of employment.
  The scheme will not be successful in Liverpool, and not necessarily so in London, either. The employees' side advises its members not to accept until there is equity between the ports. Even then, I doubt whether a dock worker will leave his job with no chance of other employment. When national severance pay was introduced and we got rid of the casual system, workers could give up their job in the docks and obtain other
  1020
  employment. We now see dockers in our surgeries, with active years ahead of them, wanting to get back in the docks because there is no employment elsewhere.
  There is an even greater problem. What will ports such as Hull do with a bill of £1·5 million a year to carry surplus dockers who will not leave—and I do not blame them? The port's high overheads continue, forcing up the cost of port dues and port facilities. The Minister talks of fair competition among the ports, but he is giving an unfair advantage to London and Liverpool. This is a serious matter. We need not piecemeal legislation but a national ports policy that recognises that ports are a national asset and uniformly treats them as such. That is the only basis on which the union believes that a proper scheme can be operated.
  One thing is certain. The axeing and buying out of dockers' jobs-100 last year, 300 this year and perhaps 200 on the next occasion—will not solve the problem of our docks. That is not the way to deal with the problem. The docks must be looked at as a unified whole. It is no use staggering from one crisis to the next. This must be the third, fourth or fifth time that we have had special legislation to help the port of London, and the second or third time that we have had special legislation to deal with the Mersey Docks and Harbour Company.
  Mr. Ogden: No.
  Mr. McNamara: With great respect, when the Mersey Docks and Harbour Company became bankrupt, special Government help was provided to keep it going.
  Mr. Ogden: Bankrupting the port of Liverpool at that time was scarcely helping it. It is 11 years since there was a Bill concerned with the port of Mersey. That does not mean that it is the third time that we have had special legislation to help Merseyside.
  Mr. McNamara: If I have offended my hon. Friend. I willingly withdraw what I said. I have to do that, as I hope to have him with me in the Lobby later, when we can perhaps pursue the point. I think that I was born closer to a dock in Liverpool than was any other hon. Member. I therefore have much sympathy with the case that has been put for that port.
  My point is none the less valid. It is no good staggering from crisis to crisis in the industry. There must be a valid national ports policy. The problem was illustrated by my hon. Friend the Member for Newham, South (Mr. Spearing), who spoke of the problem of the Port of London Authority's role as residual employer and the future of mercantile lighterage. I hope that the Minister will give us an answer on this. Is it true that the Port of London Authority was prevented from being the residual employer for mercantile lighterage because of objections by other private lighterage firms that wanted to take only the cream of the traffic but were not prepared to maintain the rest of the traffic between Brentford and the port, particularly with regard to British Waterways docks and British Waterways dock services?
  If the Minister has intervened and said that those private firms can take the cream of the work, he is compounding the heavy loss that the Port of London Authority is making on lighterage, when taking on that work would have reduced it considerably. My hon. Friend spoke of the contradiction of the port of London surrendering work to private concerns, subsidising them and providing facilities for them and then suffering the losses that accrue.
  Mr. Spearing: Does my hon. Friend agree that if, as the reports that are circulating suggest, the Minister has refused permission for the Port of London Authority to undertake this role without an undertaking that the existing lighterage organisations will fulfil all the services at present undertaken by the firm concerned, the Minister will be responsible for further reducing waterside services and the lighterage trade in the port of London and will be a party to cutting off some of its limbs with regard to the lighterage trade? Does my hon. Friend agree that the Minister has a responsibility to tell the House whether he has given that permission and whether he has intervened in the way that has been widely reported?
  Mr. McNamara: My hon. Friend has made the point even more succinctly than I intended.
  I make one further point on this matter. I believe that it would be right for the Minister to meet representatives of the men employed and officials of their union to discuss this matter. It is a matter of considerable concern in that area of the Port of London Authority's work.
  Finally, in reply to a letter from Mr. Cronin, the national docks officer of the TGWU—the substance of which I have more or less covered in my speech—about the effect of the new scheme on severance pay and the suggestion that the Minister should do the same for other ports, the Minister said:
  "Although I appreciate your concern about the possible implications of these local payments in London and Liverpool for the operation of the National Voluntary Severance Scheme, this is primarily a matter for port employers and trade unions in the National Joint Council for the Port Transport Industry."
  If a joint approach is made by the port employers and the workers within the national joint council, will the Minister ensure that funds are made available to provide an equivalent severance scheme for all the other docks? By so doing, he can end the iniquity that now exists.
  Mr. Cronin warned that different treatment between dock and dock could lead to friction in the industry. If the Minister does not consider this matter more carefully, it could well lead to a serious docks stoppage—official or unofficial—that would be even more disastrous than what he is proposing.
  9.40 pm
  Mr. Tony Marlow: I enter the debate with a certain amount of temerity and timidity—[HoN. MEMBERS: "Hear, hear."]—as is usually the case, surrounded as I am by so many experts on ports and recognising the fact that there are no ports in Northampton. However, Northampton does have an interest, in that the people there must pick up the tab for this measure, as do others in non-port constituencies.
  Every Government do not entirely succeed in what they are trying to do. If this Government have not succeeded it is because their main fault has been an inability to cut public expenditure. That has caused taxes to be higher than we would otherwise need, and interest rates to be above those that we would otherwise need. It has placed a great burden on industry and has been the cause of the unemployment from which we are currently suffering.
  My right hon. Friend is asking us to provide another £87 million, which I believe amounts to £5 for every family in the country. On other occasions, we have been asked for £5, £10, £20 or £30. To what end is every family being asked to contribute £5 tonight? It is to bail out the most notorious industry that this country has ever known. It has
  1022
  a record of restrictive practices and overmanning. Eight men are doing a job which could be done by two. It has a record of nepotism that is second to none. It is an industry with a history of extortionate practices which would make the Mafia green with envy.
  If my right hon. Friend is asking the House for this tranche of Danegeld tonight he should have the most compelling reasons for so doing. He has told us that without this money the ports of London and Liverpool would have no future. He owes the House a fuller explanation. Let us suppose that the money was not forthcoming. Would the sea disappear? Would the Mersey and the Thames dry up? Would the wharves fall into the docks? Would the cranes march down the quayside and disappear? Would the workers and their skills evaporate into the mists of the night?
  As my right hon. Friend knows, other industries have suffered financial crises. They have gone into receivership or liquidation. But people have bought the assets, got hold of the work force and have come back leaner, more efficient and more effective. As a result, those firms have been better places in which to work. My right hon. Friend should explain why that is not an option that we can pursue in this case.
  My right hon. Friend also said that the ports were suffering from a financial crisis. Why? I accept that part of the reason may arise from the recession. Although I do not have the same experience of the port industry as other hon. Members, I have in past jobs been involved with that industry. On one occasion I tried to negotiate the establishment of a grain-handling facility in one of our major ports. We wanted to employ our own men, but were told that it was not possible. When we eventually made the calculation we discovered that employing dock labour would cost eight times more than employing our own men.
  I accept that there is a recession. However, I believe that a far greater reason for the crisis in the dock industry is overmanning, greed and restrictive practices. My right hon. Friend is asking my constituents to pick up the tab for those bad habits and the practices of the past.
  Other businesses and industries face financial crises. Other businesses have records of high productivity, of moderation, of good labour relations and of co-operation. Other industries are suffering from a high pound—based on the value of our North Sea oil—and have to compete, without any tariffs or controls, with other European countries that do not have such high currencies. Other businesses have these temporary problems. If they were provided with some of this money they could survive and become much stronger.
  Opposition Members have spoken about injustice. The overriding injustice of this measure is that if someone happens to have his hand in the Government's back pocket he will get what he wants. If someone works for a nationalised industry or for a port, the Government will cough up. If someone works for private industry he will get hardly a penny.
  As my hon. Friend the Member for Southend, East (Mr. Taylor) said, the worse one's behaviour the better the prize to be picked up. That is one hell of a moral to give to the nation.
  I sincerely appreciate the problems that my right hon. Friend and my hon. and learned Friend have with the national dock labour scheme. I appreciate that they inherited a situation that had been in being for some time. They have a difficult job to do. But why do they propose

  1023
  to give financial aid without attaching any strings? Perhaps I am being naive again, but why do we not get rid of an archaic system—unique save for the Civil Service—in which a registered docker has a job for life? Instead, why do we not try to give dockers a stake in their ports and in their industry so that they will wish to compete—port with port—and so that they will receive increasing benefits from their increased efficiency? That would be better than the situation that has existed for generations, whereby there has been a powerful effort to maintain the maximum number of jobs, no matter what the cost to the community.
  The measure is entirely negative and against the interests of my constituents who will have to pay for it. If there is a vote on the measure I shall have to oppose it.
  9.46 pm
  Mr. Ken Eastham: I was amazed by the speech made by the hon. Member for Northampton, North (Mr. Marlow). He seemed to suggest that the ports could close. He may hate the ports and port workers, but if there are no ports, industries—including those in his town—will not be able to export their goods. That is a sobering thought.
  I do not wish to appear prejudiced against the docks in London and Liverpool. The Opposition recognise that the Minister is faced with a dilemma. He has spoken about labour surpluses. One hon. Member after another has said that all the ports suffer from a surplus of labour. Our protest is that the proposals are unfair because they refer to only two docks. This is a piecemeal Bill, which pays piecemeal attention to the problems. It does not deal with them comprehensively. As has been illustrated, other ports have difficulties.
  I shall refer to a port that has not received much mention, namely, that of Manchester. There have been great difficulties. If there should be a complete collapse resulting in closure, it could have a detrimental effect on the city. Its trade and commerce are dependent on the Manchester port, which over many years has helped the prosperity of the city. We all recognise, as has been conceded this evening, that there have been dramatic changes in transport methods. No one is blaming anyone for the changes in containerisation or the new handling methods, but we can put some blame on the Government for the devastating trade recession and its effect on the ports. When ports are no longer exporting there is a serious rundown.
  When the Minister is winding up I should like him to amplify on the aspects of consultation. There has been a lot of criticism of the Government because of the lack of consultation. I wish to quote an extract from a letter which was written by the chairman of the Manchester Ship Canal Company, Mr. Redford, to the Secretary of State for Transport:
  "I am indeed surprised to read of the action you are taking to assist the Port of London Authority, the Mersey Docks and Harbour Company and presumably private employers in the ports of London and Liverpool with special severance payments to dock workers who wish to take advantage of them. I understand that only one hour's notice of your action was given to the management committee of the National Association of Port Employers.
  What you propose can only result in continuing and worsening unfair competition for other ports who have attempted to run their own affairs, with varying degrees of success. Operating losses which my company incurred in 1980 were due in no small measure in having to find almost £1 million in attendance payments to dock workers for whom there was no
  1024
  work and who are not likely to have work in the future. The action which you have in mind to take will merely exacerbate this situation.
  I shall be grateful if you will be good enough to let me know why, so far as I am aware, there was no prior discussion with the industry and why the financial assistance cannot be offered generally to port employers, many of whom are in serious plight. You will appreciate that the chances of persuading dock workers to leave the industry on terms less than those to be offered to London and Liverpool men are slender indeed."
  Those are fair comments. The Minister owes it to the House to give some explanation as to why there has been a lack of consultation and respect for the other ports and organisations. I understand that a brief reply was given indicating that the Minister was willing to help only London and Liverpool and stating that such places as Manchester were not considered to be big enough or yet broke. Perhaps we have to wait until the patient bleeds to death. Then when we come along cap in hand to ask what the Government are going to do for Manchester, Hull, Glasgow or wherever, I wonder if the Minister will exercise expediency and determination to introduce a Bill to deal with the problems.
  The Minister may be interested to know that at one stage Manchester had more dock workers without work than Liverpool. It ran to 40 per cent. which is astronomical. That is the burden that was being carried by the port. Of course, Manchester is suffering its share of mass unemployment. I draw the Minister's attention to the figures published only yesterday for the North-West, and I remind him that that includes Manchester as well as Liverpool. The figures are horrific. They are higher in the North-West than in Scotland and only 1 per cent. less than in Wales.
  It is ridiculous to offer enhanced redundancy payments to Liverpool alone, apart from London, when the Manchester docks are only 30 miles along the ship canal and the Manchester dockers are being offered less favourable conditions for the same work. There will be resistance from the other dock workers. It is not likely that they will accept less favourable conditions than those that the Minister is proposing in the Bill.
  If the Bill is enacted, Liverpool and London will improve their position. It may be that they will become slightly more competitive, as they will carry less in overheads. The other docks will suffer from greater competition, which will take away their rightful share of the work and proportion of the trade. That is not fair and just. We ask the Minister to think again.
  Manchester dock workers are entitled to no less favourable conditions. Bearing in mind unemployment levels in the North-West, it is probable that those who leave the docks will never get a job again. For the reasons that I have advanced, they are entitled to the same consideration. The Bill should be rethought. We prophesy that it will not succeed as it stands. I ask the Minister urgently to reconsider it.
  9.57 pm
  Mr. Roger Moate: It would be foolish not to acknowledge the validity of the argument of the hon. Member for Manchester, Blackley (Mr. Eastham). When two ports are close alongside each other, the differential redundancy factor will cause an even greater sense of unfairness than already exists. Some right hon. and hon. Members have failed to recognise the acute sense of grievance and unfairness that already exists about various

  1025
  redundancy schemes. There are many employed in the ports who are not registered dock workers. The redundancy benefits that they receive are quite diffeent from those paid to registered dockers. Many who are not engaged in the docks do not receive such favourable payments. They have the same sense of grievance and unfairness.
  We know the historic reasons that have led to the dock industry workers receiving substantial redundancy payments whereas workers in other industries receive payments that are considerably less. It would not eliminate the sense of grievance and unfairness if we were to extend the scheme to other ports in the United Kingdom. To do so would merely accentuate that feeling in the minds of workers in other industries.
  The hon. Member for Blackley did not explain why he and his right hon. and hon. Friends will decline to vote for the Second Reading of the Bill. The hon. Gentleman acknowledged that the Government are in a dilemma. The Opposition's response is to decline to vote for the Second Reading.
  The right hon. Member for Greenock and Port Glasgow (Dr. Mabon) used all his considerable eloquence and decibel level to try to justify the Opposition's position. His sole justification was that if the Opposition were to carry the matter on a Division, although he is relying upon Conservative Members not to allow that to happen, within the next day or two the Government would spirit up a new measure and the Treasury would produce hundreds of millions of pounds for a new scheme.
  The right hon. Member for Greenock and Port Glasgow, who said that he had been in the House for 25 years, should know better than that. It is totally illogical. The right hon. Gentleman has had a distinguished medical career. He should recognise that we are proposing to give an urgently needed blood transfusion to ports in crisis. His proposal is that we should give a blood transfusion to all ports in the United Kingdom, whether or not they have problems. It is an extraordinary way to treat patients, if he goes round giving blood transfusions to everyone, be they healthy or sick.
  It being Ten o'clock, the debate stood adjourned.
  Ordered,
  That, at this day's sitting, the Ports (Financial Assistance) Bill may be prodeeded with, though opposed, until Eleven o'clock. —[Mr. Cope.]
  Question again proposed, That the amendment be made.
  Mr. Moate: Perhaps the right hon. Gentleman, who has, I am sure, plastered many a broken leg, puts plasters on people without broken legs in case they break them later. Perhaps it is the Socialist belief in comprehensive treatment and the comprehensive handout of benefits on an unselective basis that has led to the whole country being on crutches today.
  As has been explained by my right hon. Friend the Secretary of State, if this money is not granted to the PLA and the port of Liverpool, those ports will be bankrupt. The measure is necessary to keep them alive, yet the Opposition are voting against it tonight. I hope that that message gets clearly across in the ports. I do not for a moment believe that the Opposition want to see port operations close; it is just ineptitude. The justification is that it is the only way the case can be argued for the wider
  1026
  treatment of all ports. Reference was made to last year's debate on the Port of London (Financial Assistance) Bill. There was no reasoned amendment then, but that did not prevent hon. Members from talking about Liverpool in a debate on a London Bill.
  The right hon. Member for Barrow-in-Furness (Mr. Booth) knows that he could have had an extensive debate tonight on the implications of the Bill for all the other ports without having to take a step which could result in the defeat of the Bill. That is a serious tactical error. The Opposition think that they will not win on their reasoned amendment, but many of my hon. Friends have been saying that presumably there will be no vote because the Opposition can hardly vote against this measure. They might have gone home. Perhaps the right hon. Gentleman will carry his amendment and endanger the financial position of London and Merseyside. The most courageous and honourable speech came from the hon. Member for Liverpool, West Derby (Mr. Ogden), who understands the position clearly.
  Of course there is a problem for other ports. Even in the port of Medway, in my area, which is a highly successful, highly competitive and profitable port, there is surplus labour that it is felt should be dealt with on redundancy terms. The implication is that those dock workers will not now opt for redundancy, because they expect that there will be more Government support. I hope that my right hon. Friend made it clear that that will not be available.
  I am sure that my right hon. Friend does not enjoy promoting the Bill, but one of its few merits is that it has a two-month limitation as a first step. It is for a limited period, for a limited purpose. It is not to bail out the ports. It is specifically to deal with surplus manpower.
  The defence of the Bill is that it is deemed to deal with the crisis for a short period and, specifically, to deal with surplus manpower.
  I have to deal with my final point so I cannot do justice to it. It is the question of the possible extension of the activities of the Port of London Authority into lighterage, which was extensively dealt with by the hon. Member for Newham, South (Mr. Spearing). I do not know whether a decision has been made. Some of those services are operated jointly with the Medway, so I have an interest in the matter. At a time when the Port of London Authority is asking for more public assistance it is quite wrong for it to extend its activities into private enterprise and ake over the lighterage firms in the river. At the same time that would act as a disincentive to many workers who otherwise would apply for voluntary redundancy. I understand the difficulties of this extremely complex matter. I do not feel that it is right for the taxpayer to pay for the Port of London Authority to extend its activities at a time whem it should be reducing the scale of its activities. Above all, such a step would undermine the purpose of the Bill, which is to deal with the crisis in London and Liverpool and especially with surplus dock labour.
  10.7 pm
  Mr. Donald Anderson: That is surely the essence of our opposition to the Bill; it is an ad hoc response to a general problem. If the Secretary of State or the Minister is now prepared to give an undertaking in the terms suggested by my right hon. Friend the Member for Greenock and Port Glasgow (Dr. Mabon), that he will give

  1027
  parity of treatment to the other ports that are similarly affected, I shall resume my place and there will be no further problem.
  Mr. Kenneth Clarke indicated dissent.
  Mr. Anderson: What is clear is that the Minister has not thought through the effects on the other ports of the ad hoc response to a particular crisis in two ports. Hence, he has apparently not discussed the matter with the major trade unions or with the port employers, who would have informed him of the consequences. They would have told him that it would create injustice between one port and another. It is likely to lead to disruption in labour relations and to go against the existing practices that have been built up in the industry, by discriminating in favour of two ports against other ports that are similarly affected. It needs a strong justification to break from precedent, and the Minister has not given that justification.
  Mr. Fowler: The hon. Gentleman asserted that I had not consulted the port employers. That is incorrect. I had a special meeting with the National Association of Port Employers. It wrote to me on 13 March and said that it none the less recognised the nature of the problems and hoped that
  "the special supplement will succeed in bringing about the required reductions in these ports".
  Mr. Anderson: In response to that I quote from a document dated March 1981 from the National Association of Port Employers:
  "the Association regrets that it was not brought into consultation at an appropriate point in the discussions which led to the Secretary of State's announcement".
  So much for that point.
  The voluntary severance scheme was operated hitherto as a national scheme, with its terms uniformly applied. That precedent is bad for the industry and, after a period of relative industrial harmony in our ports, is likely to lead to disruption. The Minister will be responsible for that as a result of his individual response to particular problems in Merseyside and the port of London. He must know that there will be strong trade union opposition. I understand that a special dock workers' conference has already said that it would not accept the scheme unless it were extended to other affected ports. Over 100 of the 650 severances that have been authorised have been withdrawn. Hence, that will undermine the working of the current scheme, increase the costs on the ports and reduce the competitiveness of those ports, because they will be forced to retain men, surplus to their requirements, who would have been willing to leave the port industry. The Secretary of State will know that many ports are competing for comparatively little trade and, therefore, costs are critical.
  I wish to raise a point on the South Wales dimension. The recession has led to heavy under-employment in the South Wales ports, currently averaging two days a week. My hon. Friend the Member for Newport (Mr. Hughes) knows that the severance of 30 registered dock workers has been authorised at Newport, but there has been only limited success for the scheme because of the heavy local unemployment. No registered dock worker in South Wales will accept severance when he knows of the injustice of the present scheme compared with the proposed system for London and Liverpool and anticipates that there will be a further temporary ad hoc Bill from the Government to extend the provisions of the Bill before us. Ports such as Swansea will also face cost increases because of the levy.
  1028
  There has been age-old rivalry in the Bristol Channel. The hon. Member for Bristol, West (Mr. Waldegrave) mentioned the financial problems of Bristol. In response to the South Wales Docks Board, the managing director of the British Transport Docks Board said:
  "Obviously we could not contemplate taking responsibility for Bristol's heavy financial losses, nor the future liabilities associated with Portbury and Avonmouth Docks. Nor would we contemplate any policy which could sustain traffic in the Bristol Docks at the expense of South Wales."
  The BTDB agreed to meet the Bristol city council, and the outcome of that was discussed at a recent meeting of the South Wales board.
  All the fears that those of us on the South Wales side of the Bristol Channel expressed in the late 1960s about the over-capacity in the channel—the over-capacity that would be created as a result of the Portbury decision—appear to be coming to fruition. The Western Mail stated that the BTDB will be under
  "Government pressure to shut down a couple of the older Welsh ports in the face of falling trade and profits"
  if it yields to the overtures of the Bristol city council to incorporate Bristol within the board. I hope that the Minister will be able to give me an assurance on that point.
  The extension of the advantages in the Bill to other ports will lead to a smooth development of severance in the national interest, but the current scheme will be seen to be unfair, will embitter relationships within our ports and, hence, will be disruptive. I urge the Government to think again about their ad hoc scheme.
  10.13 pm
  Mr. John Prescott: The debate has clearly shown that many hon. Members are concerned about the consequences of the policy enshrined in the Bill. There has been some controversy about the Opposition's amendment. I am advised by "Erskine May", and it appears to be so, that the reasoned amendment is a parliamentary procedure which has been well used by Oppositions of both parties to express a point of view.
  Our view is that the policy is likely to discriminate, for the first time ever, between groups of dockers on the question of redundancy payments. That is the point which the hon. Member for Faversham (Mr. Moate) did not understand. Most of his speech was, therefore, devoted to matters that he had not got clear in his mind.
  The Bill is essentially different from the Port of London (Financial Assistance) Act 1980, which the hon. Member for Faversham supported. He said then that it was not a precedent. This is the first time that we have had first-class and second-class redundancy payment systems for the docks. This Bill is essentially different from any Bill previously brought before the House. I have consulted "Erskine May" on the reasoned amendment. The old practice apparently was to table a reasoned amendment, but even if it were carried the Government could continue with the Bill. The modern practice apparently is that, if one is defeated, one is defeated on the day and one can come again before the House. I do not have time to become involved in arguments over "Erskine May". I commend it to the Secretary of State if he cares to read it himself. We support the Bill as far as it goes.
  I was surprised to hear the remarks of my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden). As hon. Members will see, many names are attached to the amendment. My right hon. Friend and I went to a lot of trouble to collect them during the last two days. It is

  1029
  unfortunate that my hon. Friend the Member for West Derby was unable to attend in the last two days. I could not discuss the matter with him as I did with other hon. Members. I am more surprised by his approach when I see that he himself voted for a reasoned amendment to the Coal Industry Bill on 17 June which sought to do the same thing. My hon. Friend did not wish, as a member of the National Union of Mineworkers, to deny subsidies for the mining industry. He was prepared to vote for a reasoned amendment but did not vote against the Second Reading. Perhaps his arguments are peculiar to a Liverpool Bill. It is not a practice that he has avoided in the past. A few months ago, he followed it himself.
  Mr. Ogden: I do not interfere in my hon. Friend's relations with his union. He should not try to interfere in my relations with my union. The Coal Industry Bill is not the Ports (Financial Assistance) Bill. We, the Opposition, are treating this Bill differently from the way in which we approached the Port of London (Financial Assistance) Bill less than 12 months ago. That is the difference.
  Mr. Prescott: My hon. Friend does not understand the Bill. This is a separate Bill. For the first time it differentiates between ports. The Port of London (Financial Assistance) Bill did not do that. We supported my hon. Friend in his demands for Liverpool. The same argument applies now. As a sponsored Member myself, I understand the appeal to the National Union of Mineworkers. It is an act of solidarity. This amendment, too, is an act of solidarity with other ports—a solidarity that we showed last year in supporting Liverpool's case on the London Bill.
  Mr. Ogden rose—
  Mr. Prescott: No. I shall not give way.
  Mr. Ogden: On a point of order, Mr. Deputy Speaker. My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) is making heavy weather of where I was. I was in Liverpool, being urged by Liverpool dockers to vote for the Bill.
  Mr. Deputy Speaker: That is not a point of order.
  Mr. Prescott: I was not questioning where my hon. Friend was. Each hon. Member has his own pressures of business. I did not reflect on where my hon. Friend was or what he was doing. I think that that will be shown by the record. [HON. MEMBERS: "Get on with it."] Hon. Members should not tell me to get on with my speech. If hon. Members feel that I have made heavy weather of the issue, I would only say that I felt that it was important to put it before the House to justify the amendment. The essential factor is that the Bill is different from any past Bill. It seeks to differentiate between port workers in different ports. We know the reason. The Secretary of State says that the companies are bordering on bankruptcy. The Bill, however, interferes with the national dock labour scheme and differentiates between workers in different ports and employers who were not consulted but only informed what was happening. That is another broken procedure. It is an extremely controversial matter in the ports.
  Our criticisms are connected with the fact that the Bill fails to reflect any ports strategy. It relies on the market philosophy that ports should be profitable and that this
  1030
  should be the only reason for their survival. It reflects the policy of the Government's 1971 White Paper, "Financial Policy for Ports". Unfortunately, we seem to be about to see history repeating itself. The White Paper said:
  "The Government expects the ports to put themselves in a position where they can provide the services essential to the country's economic prosperity efficiently and profitably. They are expected, like other businesses, to be self-supporting and competitive".
  The White Paper said that the National Ports Council had a major part to play. The Government are abolishing it. A different policy is now being pursued on the central agency role.
  We are critical of the Bill because it is selective in its approach to certain ports. We made the same criticism of the Port of London (Financial Assistance) Bill. It is now being extended to the Mersey docks. We accept that that docks must receive aid, but other ports face similar problems. We are critical of the lack of a proper ports strategy. The selective approach will create more problems than it will solve.
  It has been common ground in past debates that many of the problems faced by the ports industry are brought about by excess capacity. Our ports have a capacity for about 1,000 million tonnes, but only 320 million tonnes are passing through them. We cannot simply close down the ports and public utilities. Traffic is not solely determined by price. There are technological changes relating to containerisation in Bristol, Liverpool, London and other ports. That has brought about changes in our ports. There has been a tremendous switch in our trading relationships from the West to the East, which has also affected the ports. We have seen the growth of the small to medium-sized ports at the expense of the large, deep-sea ports. One consequence of the imbalance in our trade is that it affects ports depending on where they are and what they trade in.
  Excess capacity has led to such a fall in prices that the ports have not been able to carry through a proper investment programme. The market philosophy followed to its logical conclusion was to get rid of excess capacity by allowing bankruptcies. If it were decided to eliminate excess capacity, as happened in the steel industry, that at least might be called a policy. It is a problem in the ports, and we shall not obtain enough traffic within the next 10 or 20 years to feed the surplus capacity. That leaves us with a major problem of planning for the ports industry. Whatever policy is pursued, there will always be ports that will never achieve a sufficient throughput to justify a number of their activities.
  Labour Party and Labour Government policy has been reasonably consistent. We believe that there should be a national ports authority. I do not have time to go into the arguments for that, but I developed them at some length in Committee. The Tory Party has been consistent only in the sense that it began with an ideological purpose—it was wedded to a marked philosophy—and has ended up with collapse and bankruptcies and has had to rush in with taxpayers' money.
  Let us consider what has happened. We are not witnessing a unique formula. What the Secretary of State is doing was done by a previous Tory Secretary of State in 1971, when the Mersey Docks and Harbour Board was in considerable difficulty and wanted to borrow £6 million. That is a small sum compared with the sort of money that is now floating around. It was decided that the board

  1031
  should stand on its feet because the market philosophy was to reign supreme and that if it was not commercially profitable it should go to the wall. That company went bankrupt. The capital was written down by 60 per cent., which caused many people to suffer. Problems were created by small wharfs, there were the national strikes of 1972, and the Jones-Aldington solution was implemented by a Conservative Government supported by a Labour Opposition. The Jones-Aldington solution was that money should be made available for excess labour. But that additional money was to be made available to all ports and their dockers. The solution did not pick out only one or two ports. If anyone doubts that it is not only in London and Liverpool that excess labour exists, I refer them to the National Docks Labour Board report which details surpluses in every port. The national average is about 12 per cent. Even allowing for the current depression in trade, excess capacity is a problem in many more ports than only London and Liverpool. We must address ourselves to that problem.
  In 1972 the Government introduced further legislation and loans, and there was a strengthening of the National Ports Council to monitor the position financially. To that extent there was a reversal to intervention. We told the Secretary of State in a previous debate on the Port of London (Financial Assistance) Bill 1980—indeed, every Opposition Member warned him—that the problems did not affect only London. I give credit to Liverpool Members who exerted powerful pressure on behalf of the Liverpool docks. My hon. Friend the Member for West Derby said that it was more of a Liverpool debate than a London debate.
  The point was eventually driven home, though it took time. The Secretary of State was still flush with his free market philosophy. He came to office in May 1979, but it has been said tonight that there are still not many plans for port development. In 1978 the then Secretary of State asked for a plan for the National Ports Council for the development of the future of the ports, and that plan was ready when the present Secretary of State took office. However, he decided to call for his own report. That is understandable, but the new report came up with the same conclusions as those that were contained in the 1978 report about the future problems of the ports.
  Hon. Members should consider those reports. They predicted what would happen to the ports of London, Liverpool and other towns. The information is all contained in the policy reports of 1978 and in the report given specifically to the Minister in October 1979. But what did the Minister do? He brought forward a Bill to abolish the National Ports Council and sell off the British Transport Docks Board.
  If any hon. Member wishes to know about the problems of our ports he should study those reports. Unfortunately, the Secretary of State rejected the advice that he was given there. Indeed, he went further, and abolished the body that gave him the advice, because he did not like the advice. He then gave us a series of statements about port policy. In The Port of Wednesday 2 April 1980 we read:
  "Fowler's message—`Do it yourself"—
  that was the new policy of the Conservative Party —
  "The Government will intervene less in the ports industry".
  We told him that that was nonsense. He said that the 1980 London Bill was not to be seen as a precedent, but we know very well that it was a precedent. Exactly the same circumstances were used in the Labour policy of 1978 for
  1032
  the Port of London Authority, namely, to lend money, put in accountants, and monitor the progress. That is exactly the policy to apply to the Mersey Docks and Harbour Company. The tragedy is that it was relevant 12 months ago and that we have had to wait all this time.
  The Minister says that the Bill is being brought forward now because the companies are bankrupt. He says "If we do not get the measure by a certain date, and because the companies are bankrupt, we have to provide money, I have a pistol at my head". That is no solution. Had he given the matter more thought he might have seen ahead and taken action. Unfortunately, he did not do that. He said that he was bringing forward the Port of London Bill because it was an obligation of the Labour Administration.
  There is another quote of 6 August 1980—"No aid for ports". That was the heading on an exclusive report given to the Journal of Commerce about the Secretary of State's attitude to the ports. It was that they must stand on their own feet.
  Tonight, however, we see that the Secretary of State's attitude has changed. Thai is to be welcomed, but it is tragic that we have had to wait 12 months. I do not imagine that the right hon. Gentleman is likely to change his attitude to a central agency, such as the National Ports Council or, as we would prefer, a national ports authority, but he is coming round. Like other Ministers, he is doing a U-turn.
  There is one matter that worries me. In the press statement about the Bill, dated 13 March, the Secretary of State said:
  "I should make it clear that the Bill does not commit the Government to supporting the two port authorities beyond May".
  I recall the "no precedent" claim of last year. In fact, I think that we shall have reason to quote it again, because surely no one believes that the problems of the ports of London and Liverpool will be solved by May, or even in a year.
  Perhaps I am being a little unfair to the Secretary of State. However, if he believes that he will not have to intervene again he is mistaken. His own accountants are advising him that a financial reconstruction is needed, certainly in London and possibly in Liverpool, and that something will have to be done about the problems. Having abolished the National Ports Council he is now putting accountants into the companies that have been set up. The accountants are costing a lot more than the National Ports Council. It was paid by a levy on industry, whereas the taxpayers are paying for all the accountants. I do not know who comes best out of deal.
  These are political points that it is natural for us to want to make. The great tragedy is that the Minister does not seem to have learnt. The various accountants' reports on London and Liverpool make it clear that traffic flow, upon which their future depends, is determined not only by price but by a variety of other factors—the geographical location, the type of investment, and so on. One of the most important factors revolves around the concentration of container facilities. Investment in excessive container capacity at Felixstowe will undoubtedly lead to Dart Line leaving Southampton, CPR leaving London, and Manchester Liners going from Liverpool. That will happen because they are part of a consortium that is investing in Felixstowe. It will add to the financial difficulties of the ports.
  The Minister will then be faced with deciding whether to close ports down. The ports will tell him that they

  1033
  cannot survive in conditions of declining trade and rising manpower surpluses, which impose such a liability on their earning capacity. Will he then say that the ports must go bankrupt? No Government have been prepared to say that yet.
  When he first came to office the Secretary of State bravely closed down Preston docks. But that was an easy one to deal with. Liverpool and London are different altogether. The consequences of closure for the communities and commerce in those areas would be considerable. In addition, the vast investment by society in roads and railways would be lost. The roads strategy is based upon serving the ports. But the future of the ports lies in the hands of the shipowners, playing one port off against another at a time of excess capacity.
  I presume that by bringing this Bill forward the Secretary of State is saying that he will not declare ports bankrupt. If so, he will have to find another criterion upon which to base his policy. The Financial Times of 24 March said of the Bill—
  "the question needs to be considered as to whether totally free competition between ports is in the country's best interests, or whether there should be some sort of national framework within which ports are allowed to develop. Ports are an integral part of the United Kingdom transport system and behave in many respects like public utilities. Even though inter-port competition is desirable they cannot be viewed as purely commercial concerns … A coherent ports policy, taking these factors into account, is overdue."
  The Secretary of State's contribution tonight reflected his failure to understand the difficulties of the ports industry, and it did not take us far towards a national ports policy.
  Last year we predicted that Liverpool would need help. We argued strongly for it. I now give the right hon. Gentleman another prediction. Within 12 months something will have to be done about the port of Bristol, whether that is the responsibility of the Department of Transport, the Department of the Environment or the Department of Employment. Manchester, too, it is clear, is not far from needing the same treatment.
  The Government cannot turn their backs on these problems. These ports are public utilities, and their failure would have consequences for the community that we simply cannot ignore. The Secretary of State would do well to consider how much less expensive it would have been to help Liverpool with £6 million in loans over the few years leading up to 1972. That was not done, and now the House is debating a Bill that involves grants and loans totalling about £250 million. What an approach to ports policy. It is the most expensive and the least efficient course to follow.
  Against this background, and against demands for a ports policy and some central agency to oversee it, the right hon. Gentleman is abolishing the National Ports Council. Instead, he turns to the accountants for advice. We appeal to him to rethink his approach to the ports, to reassess the possibility of making this enhanced scheme of redundancy available across the country. That would not cost a great deal more. We can argue about that in Committee, and suggest what the cost would be.
  The Secretary of State will have to consider limiting the further development of ports capacity. It is crazy for the community to spend more on developing port facilities when there is an excess of capacity already. The Government's piecemeal approach will create more
  1034
  problems. If cheap loans had been available to Liverpool in 1972 it would have been better off. Now, as a result of what happened then, the company cannot even sell its land, because it belongs to the shareholders. So, yet again, because of that Tory deal the taxpayers will have to foot the Bill.
  Liverpool may reach break-even point if it gets the 1,200 registered dockers. However, even in private stevedoring there are problems for the major employer. Vestey's is blackmailing the port of Liverpool by demanding an interest in the container sector. The company that refused to pay tax is threatening to shift the burden of its unemployment on to the port of Liverpool unless agreement is reached. London has a similar problem, as has been shown with Price Waterhouse and the capital reconstruction. I could give further details if the time was available.
  The competitive philosophy will eventually cost more money, and it does nothing to alleviate the problem. It also weakens the financial position of competitive ports. It puts a further burden on ports through extra levies for the National Dock Labour Board scheme. Moreover, there are surpluses not only in London and Liverpool but in Hull and Bristol, and so on.
  The National Dock Labour Board scheme has been agreed by both Governments, and redundancy schemes have been implemented. Between 1965 and 1980, manpower was run down by 60 per cent. The scheme has played a considerable part in the readjustment of the industry, although there have been tremendous problems. When the Government introduced extra money in 1972, it was for every port. This is the first time that the House has been asked to differentiate between ports in redundancy proposals. The NDLB will require more money than the Bill allows for. How will the money be raised? It will be by levies or loans, but loan levies greater than 10 per cent. cannot be supported at present. Is the Minister prepared to allow a moratorium on interest payments?
  The Bill deals only with a limited problem. It does not deal with port strategy. The problems were ignored in 1972. If we ignore them again in 1981 we shall have greater problems and even perhaps a national strike, because of the Bill. The Bill puts forward a bankrupt policy for bankrupt ports, for which we will continue to pay in the future.
  10.36 pm
  The Under-Secretary of State for Transport (Mr. Kenneth Clarke): The contributions of the hon. Member for Kingston upon Hull, East (Mr. Prescott) are always forceful and are usually clear. He came as near as anyone to clarifying the attractive but vague call for a national strategy for ports, which is used by some of his right hon. and hon. Friends as a slogan. It sounds appealing, but it is merely a substitute for a policy of tackling the real problems. We got an inkling of precisely what he means by a national plan for ports. We have listened to his speeches upstairs about a national dock authority. I have some idea of where at least he wants to go.
  However, I remain convinced that the policy that the hon. Gentleman is advocating could be carried out only at huge costs to the taxpayer. It would be likely to reduce the service to exporters and importers. It would lessen competition between ports and frustrate investment in small and medium-sized ports. The hon. Gentleman makes

  1035
  no secret of his hostility to investment in those ports which have been a success over the past 10 years. Had he had his way, the port of Felixstowe would scarcely have existed, let alone expanded to its present size. I also fear that his policy would tend to give rise to unreal hopes in the ports industry and among sections of the work force that they would be relieved from the pressures that changes in cargo handling and traffic are bound to bring to our traditional ports industry. I see what the hon. Gentleman means about a national strategy. No doubt it is also what the right hon. Member for Barrow-in-Furness (Mr. Booth) means, but it is not a realistic solution.
  Our policy remains the same as it was when we came to the House with the Port of London (Financial Assistance) Bill last year. The industry should serve the trading community by ports competing with each other in services, commercial pricing policy, and so on. Each port can cope with the difficulties by reducing and rationalising facilities, by rationalising manpower to fit the traffic which there is a realistic hope of gaining, by providing quality of service and by raising productivity to a level that can give secure jobs to the manpower in each port. To the extent that each port succeeds, its customers will benefit and the trading performance of this country will benefit.
  Some ports face very big transitional problems in adapting that policy, based on competition and choice for the trader, in view of the history of change that had taken place in their dock areas. The Port of London Authority and the Mersey Docks and Harbour Company are our two biggest traditional ports authorities. The House should therefore not have the difficulty that the Opposition seem to have in distinguishing between the situation facing the Port of London Authority and the Mersey Docks and Harbour Company and that of the huge list of ports, docks and quays contained in their reasoned amendment, which they say should have part of the same largesse because that is what they call a national ports policy.
  I do not believe that some Opposition Members, including some who have an interest in the ports, have entirely taken on board the depth of the crisis to which the Port of London Authority and the Mersey Docks and Harbour Company have been reduced, principally by changes of trade, during the past year. There is no point in going too far back into history. We all know that the dramatic change in cargo-handling methods has hit the traditional ports particularly hard. The growth of container and roll-on/roll-off traffic has left installations such as the Royal docks in London and the deep water installations on the Mersey having to cope with very great changes. There are also difficulties because London is some way up an estuary in terms of the old closed docks, and Liverpool is on the West Coast whereas the growth of trade has been with European ports on the other side of the country, and so on.
  I concede, however, to those with interests in the two ports, that both have made dramatic attempts to adjust to the changed conditions over the past 10 years. Those efforts continued even after last year's legislation when the Government were adopting a policy towards London similar to that being adopted now. In 1980, for instance, the Port of London Authority, helped by the legislation, succeeded in shedding more than 1,900 men—more than 800 registered dock workers and more than 1,000 staff. The Mersey Docks and Harbour Company last year shed 570 men-360 registered dock workers and 210 staff. But the loss of traffic that those ports suffered last year as a
  1036
  result of the level of trade and industrial activity in this country, as well as the disadvantages in which their own working practices still placed them compared with the more succesful and competitive ports, meant that over the last year their position deteriorated very seriously.
  Let us consider the situation which has led the Government to seek a Second Reading of the Bill as a matter of urgency. The Port of London Authority lost £11·1 million in 1979, and it is estimated to have lost £15 million in 1980. It has about 3,700 registered dock workers and 2,800 staff. But there is no work from day to day for about 1,500 of those men. The Mersey Docks and Harbour Company lost £7.4 million in 1979 and probably lost £6.5 million in 1980. It has about 3,000 registered dock workers and 2,800 staff. Again, there is no work—and no likelihood of work—for 1,000 of its registered dock workers and 500 staff.
  Both ports therefore have about one-quarter of their manpower surplus to requirements and no work to offer those men. That is a continuing financial drain, which has led to enormous annual losses. These ports no longer even have the money to finance the severances that are a necessary to persuade that one-quarter of the work force to leave, which is putting them in a ruinous position at present. That is the situation. Those ports are bankrupt. If the House carries the Opposition's reasoned amendment, with which I shall deal in a moment, and denies a Second Reading to the Bill, those ports will cease trading within a matter of days.
  I appreciate that this causes concern to hon. Members such as my hon. Friend the Member for Northampton, North (Mr. Marlow). I have considerable sympathy with the points that he made. Other British industries are in a critical condition. Industries such as textiles and footwear are facing desperate situations with surplus manpower and trying to sever their staff. We appreciate that. But I think that my hon. Friend accepts that the Port of London Authority and the Mersey Docks and Harbour Company, much though many hon. Members would like to think of them as analogous with companies in their own constituencies, are not analogous with ordinary private sector companies. They are great port authorities which carry out conservancy and other statutory duties in the estuaries. Both authorities, particularly the PLA, service other private sector industries.
  Receivership is a difficult course to follow in respect of these great public bodies in which the Government already appoint the board or have a substantial hand. They are vital installations for a large number of other private industries both in London and Liverpool. Given that they are facing a crisis, and given that in the near future we shall not move away from the registered dock workers scheme or the basis of the severance pay, it calls for emergency help of this kind.
  The form of help is a one-off crash programme, with severance as its central feature, to help those who apply for severance only in March and April this year, The Bill will enable the Government to supplement the severance pay of registered dock workers by an additional £5,500 over and above the national voluntary severance scheme level of £10,500.
  This is not a permanent move to two classes of severance. It is an emergency offer for two months only to two ports which will close unless something is done to help them through the present crisis.

  1037
  It is not a long-term guarantee. Here I must correct my hon. Friend the Member for Wirral (Mr. Hunt), who seemed to think that this was guaranteed stability. If that severence is successful, and if, thereafter, plans can be produced which give the ports the opportunity to return to a profitable and competitive position, the Bill will enable my right hon. Friend to take further steps and to support them in some trading losses and essential investment while they continue to sever.
  Two other points were raised about what the PLA ought to be doing. My hon. Friend the Member for Southend, East (Mr. Taylor) asked about the Port of London police. I have great sympathy with what he said about their reduced pay—compared with other police forces—as well as their career prospects. My right hon. Friend is not stepping in to the day-to-day management of the PLA. The authority will remain responsible for the police force. Obviously, I shall make sure that my hon. Friend's remarks are drawn to the attention of the PLA. No doubt it will supply him with its up-to-date reaction to the problems of the police and how it proposes to deal with them.
  I understand that there have been some discussions about the possibility of an amalgamation of the Port of London police and the British Transport police. Unfortunately, practical objections have so far prevented that amalgamation from taking place. However, it will remain the responsibility of the PLA to deal with the future of the Port of London police.
  Mercantile Lighterage was mentioned. I understand that there is a prospect of that company ceasing to trade. My right hon. Friend has been sounded out about the Government's position. I can assure my hon. Friend the Member for Faversham (Mr. Moate), and confirm to the hon. Member for Newham, South (Mr. Spearing), that my right hon. Friend and the Government do not approve of the prospect of the PLA taking over a loss-making lighterage business, given its present situation.
  We are particularly concerned about the knock-on effect that the PLA's taking over a loss-making lighterage company will have on the other lighterage firms up and down the river, which will inevitably suffer from loss of trade and prospects as a result. It will merely jeopardise other businesses if the PLA steps in and tries to rescue that company.
  We are therefore suggesting an emergency measure for two ports where the scale of activity and crisis is far greater than in other ports. We are suggesting that the Government should put some money behind them to help them transform to perhaps much reduced but competitive and successful ports, which can thrive in the competitive atmosphere that is essential for the ports industry.
  Mr. Spearing: Does not the hon. and learned Gentleman realise that the refusal of permission could—unless he makes conditions—sever lighterage traffic on rivers and canals which feed and maintain traffic in the port of London? Surely, the hon. Gentleman wishes to assist the port of London. Has he not got some responsibility?
  Mr. Clarke: There are other healthy lighterage companies on the river. If one goes out of business, the others will probable take over the traffic. The Port of London Authority has no experience of lighterage and has
  1038
  never been involved in it. It it were to take over a loss-making company, harm could result. In part reply to my hon. Friend the Member for Northampton, North, I should point out that should there be a closure those who work for private sector companies that get into difficulties in the immediate period will also be able to take advantage of the enhanced voluntary severance arrangements provided by the Bill. If a crisis must be faced, the Bill may come at a fortunate time, because registered dock workers will be able to take advantage of the Bill.
  Mr. Teddy Taylor rose—
  Mr. Clarke: Having given way to the hon. Member for Newham, South, I am sorry that I cannot give way to my hon. Friend. However, there are many points that remain unanswered.
  I have sketched what we are doing for London and Liverpool. We are entitled to ask the Opposition what their alternative is in the long term. I have described what their long-term alternative and national plan would lead to. I do not know what alternative they think they are giving the House. Despite the strictures of the hon. Member for Liverpool, West Derby (Mr. Ogden), the Opposition are determined to refuse the Bill a Second Reading. [Interruption.] Opposition Members are clutching copies of "Erskine May." We have all read it. We can all see the terms of the Opposition's amendment. It means exactly what it says:
  "this House declines to give a Second Reading to a Bill".
  The Opposition's policy seems to be that they decline to give the Bill a Second Reading tonight, but they might give it one next week.
  Mr. Booth rose—
  Mr. Clarke: I may give way in a moment, but I wish to ensure that the right hon. Gentleman knows where he is. When I mentioned this point to the hon. Member for Kingston upon Hull, Central (Mr. McNamara) he cheerily assumed that we could ignore everything and that my right hon. Friend could carry on paying out the money. My right hon. Friend and I cannot raise the few million pounds that the docks will need in the next few days out of our own resources.
  Despite the weaknesses of our parliamentary procedure we need the authority of a Second Reading before we can commit public expenditure on this scale, or anything like it. If the Bill is declined a Second Reading, both ports are likely to cease trading next Wednesday. The Opposition are being frivolous when they suggest that they might give the Bill a Second Reading later. Presumably it will be the same Bill. Perhaps they want to take it away and redraft it.
  I shall not dwell further on the Opposition's position, because the first five minutes of the speech made by the hon. Member for Kingston upon Hull, East were taken up by an animated debate between the hon. Gentleman and another hon. Member. The Opposition have internal problems as regards deciding what to do. I do not understand it and neither do my hon. Friends.
  Mr. Booth: The hon. and learned Gentleman has just demonstrated, as he said, that he does not understand. Chapter 21, page 500 of "Erskine May" deals with the effect of carrying a reasoned amendment. If he were to study that page he would notice that it is for the Government to decide whether to amend a Bill if a

  1039
  reasoned amendment is carried. "Erskine May" makes it clear that the effect of a reasoned amendment being carried is that the Second Reading is delayed. The Government could present the same Bill tomorrow, when—as they know—we shall not oppose its Second Reading.
  Mr. Clarke: The streets of the Isle of Dogs and of Liverpool will be crowded with people reading "Erskine May." They will be reassured by the thought that a precedent was set in 1861 that suggests that it might be possible for the Government to go away, to redraft another Bill in three days, and to try to gain a Second Reading. I believe that not for the first time the Opposition transport team have got their tactics a little confused.
  We wish the Bill to obtain its Second Reading tonight. There will still be safeguards. A considerable sum of money is involved—£87 million potentially of new money. But it is not going to be issued just like that and there is no guarantee that it will ever be expended to the full. Initially my right hon. Friend will set ceilings which will carry these undertakings over the next two to three months. At the end of that time we will look at the success of the severance programme to decide what steps to take then. No doubt further funds would be released to enable them to continue to the autumn if the severance scheme had been reasonably successful. In the autumn, with the assessments of accountants, the two companies will come forward with their long-term strategies. Then we will have to decide to what extent the two ports have a future, how that is to be achieved, and whether further assistance under the Bill is justified by their performance and progress. That is the way in which we wish to deal with these two companies.
  A great deal of the debate has been taken up by other hon. Members who are not opposed to the assistance that the Government are giving to the port of London and the port of Liverpool but are fearful about the effects on other ports. I have left myself time only to draw the distinction between the scale of problems that I have just described in London and in Merseyside and that in some of the other ports that have been referred to. I understand constituency speeches—hon. Members saying "Why can my port not have some money as well?" With respect to some hon. Members, their ports are in a totally different position.
  The hon. Member for Greenock and Port Glasgow (Dr. Mahon) mentioned the Clyde. Of course, it has some problems of surplus manpower, but it has over £11 million worth of reserves. It is trying to sever only 60 people and it made £3 million profit in 1979. Clyde is not in the same critical situation. Neither is Manchester, which has £13·4 million worth of reserve. Even Bristol, which I will come on to in a moment because it is a little more complex, although it is making losses, has reserves of £2½ million.
  My right hon. Friend actually met the manager for Bristol, who explained that it is seeking to sever 50 registered dock workers; presumably it would like to have assistance with that. Liverpool and London are trying to sever one-quarter of their work force—3,000 people. It is ridiculous to suggest that somehow we are compromising ourselves by not offering the same assistance to the smaller ports. I do not want to dismiss the problems of these other ports, least of all Bristol. It has serious problems, which are falling on the local authority, but again I must underline, as my hon. Friend the Member for Bristol, West (Mr. Waldegrave) underlined, that in the end the responsibility lies with Bristol city council. When the then
  1040
  Minister for Transport gave permission for it to invest in Portbury, which is where the problems arise, he made it clear in his letter that responsibility, financial and otherwise, for the project lay solely with the Port of Bristol Authority. The authorisation letter did not commit the Government of the time in any way.
  I have no doubt that the city of Bristol is doing the same studies of the long-term future that had to be done in London and Liverpool to see how it can rationalise the port, how far the work force can be reduced, and what may remain open, to try to get it back on a sound footing. There is no way in which the Government will put pressure on the British Transport Docks Board or anybody else to step in in Bristol in such a way as to jeopardise the future of the South Wales ports, of which the right hon. Member for Swansea, West (Mr. Williams) was fearful. The British Transport Docks Board is meeting the city of Bristol. Let me make it clear that the Docks Board is free to make its own commercial decision about its involvement, if any, in the port of Bristol. There will be no Government pressure to make it step in in that port.
  There is no way in which the assistance under this Bill can be extended to Bristol or other ports. Distinctions can be drawn. We shall be ignoring the crisis of the moment and what can be achieved in London and Liverpool if we fritter the time this evening by voting on a rather strange reasoned amendment, which tries to draw in the quite different problems of a whole range of ports all round the coasts of this country.
  Question put, That the amendment be made:
  The House divided:Ayes 81, Noes 137.

  Division No. 124]

  [11.00 pm

  AYES

  Anderson, Donald

  Jay, Rt Hon Douglas

  Atkinson, N. (H'gey,)

  Johnson, James (Hull West)

  Bennett, Andrew(St'kp'tN)

  Jones, Dan (Burnley)

  Booth, Rt Hon Albert

  Lamond, James

  Boothroyd, Miss Betty

  Leighton, Ronald

  Brown, Hugh D. (Provan)

  Lestor, Miss Joan

  Campbell-Savours, Dale

  Lewis, Ron (Carlisle)

  Clark, Dr David (S Shields)

  Lofthouse, Geoffrey

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

  Mabon, Rt Hon Dr J. Dickson

  Concannon, Rt Hon J. D.

  McCartney, Hugh

  Cowans, Harry

  McDonald, Dr Oonagh

  Cryer, Bob

  McKay, Allen (Penistone)

  Dalyell, Tam

  McNamara, Kevin

  Dixon, Donald

  Marshall, D(G'gowS'ton)

  Dormand, Jack

  Marshall, Dr Edmund (Goole)

  Douglas-Mann, Bruce

  Millan, Rt Hon Bruce

  Dubs, Alfred

  Mitchell, R. C. (Soton Itchen)

  Duffy, A. E. P.

  Newens, Stanley

  Dunwoody, Hon Mrs G.

  Oakes, Rt Hon Gordon

  Eadie, Alex

  Palmer, Arthur

  Eastham, Ken

  Parker, John

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

  Powell, Raymond (Ogmore)

  Fletcher, Ted (Darlington)

  Prescott, John

  Forrester, John

  Roberts, Ernest (Hackney N)

  Foster, Derek

  Rooker, J.W.

  Graham, Ted

  Ross, Ernest (Dundee West)

  Grant, George(Morpeth)

  Rowlands, Ted

  Grant, John (IslingtonC)

  Sever, John

  Hamilton, James(Bothwell)

  Shore, Rt Hon Peter

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

  Silverman, Julius

  Harrison, Rt Hon Walter

  Skinner, Dennis

  Haynes, Frank

  Snape, Peter

  Hogg, N. (EDunb't'nshire)

  Soley, Clive

  HomeRobertson, John

  Spearing, Nigel

  Homewood, William

  Stott, Roger

  Hooley, Frank

  Tinn, James

  Hughes, Mark(Durham)

  Wainwright, E. (Dearne V)

  Hughes, Robert (AberdeenN)

  Welsh, Michael

  Hughes, Roy (Newport)

  Whitehead, Phillip

  1041

  Wilson, Gordon (DundeeE)

  Tellers for the Ayes:

  Winnick, David

  Mr. Joseph Dean and Mr. George Morton.

  Woolmer, Kenneth

  NOES

  Alexander, Richard

  Dykes, Hugh

  Alton, David

  Fenner, Mrs Peggy

  Arnold, Tom

  Fisher, Sir Nigel

  Aspinwall, Jack

  Fletcher-Cooke, Sir Charles

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

  Fowler, Rt Hon Norman

  Baker, Nicholas (N Dorset)

  Gardiner, George(Reigate)

  Beith, A.J.

  Garel-Jones, Tristan

  Benyon, Thomas(A'don)

  Gow, Ian

  Berry, Hon Anthony

  Gray, Hamish

  Best, Keith

  Griffiths, E. (B'ySt. Edm'ds)

  Bevan, David Gilroy

  Griffiths, Peter Portsm'th N)

  Biggs-Davison, John

  Gummer, John Selwyn

  Blackburn, John

  Hawksley, Warren

  Boothroyd, Miss Betty

  Hicks, Robert

  Bright, Graham

  Hogg, Hon Douglas (Gr'th'm,)

  Brinton, Tim

  Hunt, David (Wirral)

  Brittan, Leon

  Hunt, John(Ravensbourne)

  Brooke, Hon Peter

  Hurd, Hon Douglas

  Brotherton, Michael

  Jopling, Rt Hon Michael

  Brown, Michael (Brigg & Sc'n)

  Kilfedder, James A.

  Buck, Antony

  Lang, Ian

  Carlisle, John (LutonWest)

  LeMarchant, Spencer

  Carlisle, Kenneth (Lincoln)

  Lester, Jim (Beeston)

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

  Lloyd, Peter (Fareham)

  Chalker, Mrs. Lynda

  Luce, Richard

  Chapman, Sydney

  Macfarlane, Neil

  Churchill, W.S.

  MacKay, John (Argyll)

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

  McNair-Wilson, M. (N'bury)

  Clarke, Kenneth (Rushcliffe)

  Madel, David

  Colvin, Michael

  Marlow, Tony

  Cope, John

  Marshall, Michael(Arundel)

  Crawshaw, Richard

  Marten, Neil (Banbury)

  Crouch, David

  Mawhinney, DrBrian

  Dorrell, Stephen

  Maxwell-Hyslop, Robin

  Douglas-Hamilton, Lord J.

  Meyer, Sir Anthony

  Dover, Denshore

  Miller, Hal(B'grove)

  Dunn, Robert(Dartford)

  Mills, Iain(Meriden)

  1042

  Miscampbell, Norman

  Speller, Tony

  Moate, Roger

  Spicer, Michael (S Worcs)

  Morris, M. (N'hampton S)

  Sproat, Iain

  Murphy, Christopher

  Stanbrook, Ivor

  Myles, David

  Steel, Rt Hon David

  Neale, Gerrard

  Steen, Anthony

  Needham, Richard

  Stevens, Martin

  Neubert, Michael

  Stewart, A. (E Renfrewshire)

  Newton, Tony

  Stradling Thomas, J.

  Ogden, Eric

  Taylor, Teddy (S'end E)

  Page, John (Harrow, West)

  Tebbit, Norman

  Page, Rt Hon Sir G. (Crosby)

  Temple-Morris, Peter

  Page, Richard (SW Herts)

  Thomas, Rt Hon Peter

  Patten, Christopher(Bath)

  Thompson, Donald

  Pattie, Geoffrey

  Thorne, Neil(IlfordSouth)

  Penhaligon, David

  Townend, John(Bridlington)

  Pollock, Alexander

  Townsend, Cyril D, (B 'heath)

  Proctor, K. Harvey

  Trotter, Neville

  Renton, Tim

  Waddington, David

  Rhodes James, Robert

  Wakeham, John

  Ridley, Hon Nicholas

  Waldegrave, Hon William

  Roberts, M. (Cardiff NW)

  Waller, Gary

  Roberts,, Wyn (Conway)

  Ward, John

  Ross, Stephen (Isle of Wight)

  Watson, John

  Sainsbury, Hon Timothy

  Wells, Bowen

  Sandelson, Neville

  Wheeler, John

  Scott, Nicholas

  Wickenden, Keith

  Shaw, Giles (Pudsey)

  Williams, D. (Montgomery)

  Shelton, William(Streatham)

  Winterton, Nicholas

  Shepherd, Colin(Hereford)

  Silvester, Fred

  Tellers for the Noes:

  Skeet, T. H. H.

  Mr, Alastair Goodlad and Mr. Robert Boscawen.

  Smith, Dudley

  Speed, Keith

  Question accordingly negatived.
  Main Question put forthwith, pursuant to Standing Order No. 39 (Amendment on Second or Third Reading) and agreed to.
  Bill accordingly read a Second Time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  Ports (Financial Assistance) [Money]
  Queen's Recommendation having been signified—
  Motion made, and Question proposed,
  That, for the purposes of any Act of this Session to provide financial assistance to the Port of London Authority and the Mersey Docks and Harbour Company and to increase the limit on sums borrowed by the National Dock Labour Board (`the Act'), it is expedient to authorize—

  (a) the payment out of money provided by Parliament of any sums required by the Secretary of State for giving financial assistance to the Authority and the Company for measures taken by them to restore the profitability of their undertakings and for the carrying on of their undertakings while such measures are being taken;

  (b) the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable out of money so provided tinder any other other Act;

  (c) to the payment of any sums into the Consolidated Fund.—[Mr. Fowler.]

  11. 11 pm
  Mr. Arthur Palmer: I was unable to catch the eye of the Chair on the Second Reading of the Bill but I believe that I shall be in order if I make a number of financial points affecting the port of Bristol that are relevant to the money resolution. The financial structure of the port of Bristol is different from that of many of the other ports that we have been discussing. In the long run, the Bristol port is funded on the rates.
  About 10 or 12 years ago, Bristol did what Conservative Members often advise ports and many other enterprises to do; it modernised and rationalised. Part of that process was the building of a new deep-water dock, which is one of the finest in this country and probably one of the best in Western Europe. Bristol showed great courage, even allowing for the favourable conditions that existed at that time.
  The Royal Portbury project—it was originally called the West dock—was controversial, and its history should be of interest to the Conservative Party. The project was proposed in a Private Bill—a fact which seemed to be overlooked by the hon. Member for Bristol, West (Mr. Waldegrave); it came before the House in various forms at different times.
  Labour Ministers, including Barbara Castle and Richard Marsh, when each was Minister of Transport, advised against the project going ahead. Conservative Members, if anything, encouraged it, even though the Under-Secretary of State for Transport said earlier that it was made clear to Bristol that it was going ahead on its own responsibility. I voted for the Bill, as did all Bristol Members. he felt that we had an obligation to our own city. There were still opponents on the Labour Benches, especially the Welsh Members. They felt that it increased unfairly against them the total ports capacity of the Severn estuary.
  On that occasion, 10 or 12 years ago, there was a vote. It is interesting now to look at the Division list. I find that voting for Bristol going ahead with its new dock were the present Secretary of State for Transport, the present Minister of Agriculture, Fisheries and Food, the present Secretary of State for the Environment, the present Minister of State, Department of the Environment and the present Prime Minister. It was stated austerely tonight that Bristol took this responsibility on its own shoulders following a disclaimer by the Government. That was not
  1044
  the general attitude of the Conservative Party at the time, or the attitude of Conservative spokesmen in Bristol during the 1970 election.
  I suggest to Conservative Members that they have a moral responsibility for the troubles that Bristol now finds by its enterprise in tune with the market economy 10 or 12 years ago. The port of Bristol has all the difficulties of other ports over redundancies, but its finances are founded on the security of the rates. Three years ago, the Bristol ratepayers were finding about £1·7 million towards the maintenance of the port, though it was always understood that that might be the case for a few years. The rate support grant at the same time amounted to £460,000.
  In 1980–81, the ratepayers are finding £6 million to support the port while the rate support grant has grown to £1·5 million. The rate poundage for Bristol has climbed from 3p three years ago to lop now, to support the port.
  Another menace approaches. The rate support grant system is to be replaced by a new block grant formula under new local government legislation. If the new system works out like the old, in money terms, the situation may not be too bad. It means that Bristol, under the formula of rate support grant that applied last year, would need to receive no less than £3 million.
  If the Government choose, as they have the opportunity to do under the new formula, to give Bristol considerably less than £3 million—I understand that the amount could be cut to almost nothing—the rate poundage to support the port could rise by another 6p. That would mean that the total contribution from the rates in Bristol for the support of the port would be no less than 16p in the pound. Indeed, half the money raised from the Bristol ratepayers would go towards compensating for the docks deficit. That is an intolerable burden on any city. I hear one or two Conservative Members saying that we should not have done it. We did it in the name of enterprise, and to modernise the port. We were encouraged by the Conservative Party.
  I understand that there will be a meeting next week between the Secretary of State and the leaders of both sides—the majority Labour and the minority Conservative—of the Bristol city council. It will not be the first such meeting. The hon. Member for Bristol, West knows that last year we met the Secretary of State for the Environment and the Minister for Local Government and Environmental Services. It was a hot afternoon in August. We talked for about two hours, and much hope for Bristol was expressed in that conversation. I recently received a note from the Minister that after all this delay nothing more could be done for Bristol.
  Bristol has suggested that the area around the new dock should be designated an enterprise zone. We do not like enterprise zones if they are a substitute for something better, but it is part of the Government's policy to create them. It would be possible to make an enterprise zone around the new Royal Portbury dock. We could then obtain assistance from the EEC, because it would be a special area, which I assume would rank for European grants.
  Money will flow out to two other ports which, no doubt, need it. Bristol has tried everything, and is continuing to do so, but whichever way it turns it is frustrated. I add my plea to that of the hon. Member for Bristol, West. The Minister was a little brief earlier on in his reference to Bristol. He did not deal with it until the last two minutes of his speech. The hon. Member for

  1045
  Bristol, West gave a number of facts and figures about the way in which the Bill would aggravate the problems of Bristol. It was negotiating a severance pay agreement which might involve considerably less than the £16,000 that will be paid to Liverpool and London dockers. We cannot blame Bristol dockers for thinking that if the Goverment can afford that much for other places they will have to afford it for Bristol. They do not want their severance pay—which is important to a man's future and to his family—to be less than that for London and Liverpool dockers.
  The Bill aggravates the problems at Bristol. I urge upon Ministers that when the leaders of both sides of the Bristol city council meet them once again they should do something to help this time. Bristol has never directly asked for money. All that we have asked for is that conditions should be created so that the intolerable burden now being placed upon the Bristol ratepayers will be lightened.
  This matter cannot be dismissed or brushed aside. I therefore again urge the Government to take seriously the points that have been made tonight and that will be made to them by the city council next week. Ministers must take the matter seriously and do something positive to assist Bristol.
  11.25 pm
  Mr. Don Dixon: It is getting a bit late now, and although I am sure that hon. Members who have sat here all evening, as I have, during the Second Reading debate, will have heard enough about ports, finance and severence pay, I wish to say a few words on the money resolution as it affects severance pay. There will be problems, and I am glad that my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) pointed out that it could cause industrial disputes.
  First, I declare an interest in that I am a Member sponsored by the General and Municipal Workers Union, which organises the dockers on the river Tyne—one of the few ports, incidentally, where that union organises dockers. In company with my right hon. and hon. Friends, I believe that there is a case for financial assistance for the Port of London Authority and for the Mersey docks, but there is a case also for financial assistance for the other ports which face the same problems. They are not as urgent for us, perhaps, but we have the same problems of surplus labour and having to shed labour.
  As my hon. Friend the Member for Newport (Mr. Hughes) said, negotiations are going on now between the trade unions and port authorities on voluntary redundancies, and the outcome will have an enormous effect. When the national voluntary severence scheme was introduced—and when the sum was revised in August last year from £8,500 to £10,500—it was a national scheme. It applied to everyone. There was no differentiation. This is where the problem arises.
  It is not only nonsense but it is grossly unfair that a docker in London or Merseyside who volunteers for redundancy should get £16,000 while a docker on the river Tyne or in any other port will have only £10,500.
  My right hon. Friend the Member for Barrow-in-Furness (Mr. Booth), when referring to the various percentages of surplus labour in the other ports, omitted to mention the River Tyne. I know that it was not a
  1046
  deliberate omission on his part, because he has a great affinity with and good experience of the River Tyne. But the House should know that on the River Tyne at present our union is negotiating a reduction of almost 23 per cent. of the labour force by September of this year. For example, Newcastle quay is to close for general cargo handling. In future, it will be used only for grain shipments for the flour mills of Spillers and Rank. At present, 84 men are employed there.
  At Tyne dock there are 68 men working, and at Albert Edward docks we have 58 men. The union is trying to persuade the older dockers to take redundancy so that the younger dockers from Newcastle quay can be deployed at either Tyne dock or Albert Edward docks.
  How on earth shall we encourage or help a union official who is trying to get people to accept voluntary redundancy when he knows, and they know, that in Liverpool and London dockers who volunteer for redundancy can get £5,500 more than their counterparts can get on the river Tyne? It is just not on.
  The dockers on the River Tyne are as important as those in Liverpool or London, or any other port. The Secretary of State intervened in my right hon. Friend's speech to say that one of the problems in London, and especially in Liverpool, was unemployment. One has only to go to the Tyne and see some of the unemployment on both sides of the river to understand the problems there. Some areas have more than 20 per cent. male unemployment. Those on the River Tyne who volunteer for redundancy have virtually no chance of obtaining another job. Indeed, the northern region has the highest percentage of unemployment in Great Britain, and the second lowest number of vacancies.
  It is nonsense to say that we do not have the problems that Liverpool and London have. Most of the trouble is created by the present Government's industrial policy. We forced our amendment to a Division, and I am speaking in this short debate, because those on the River Tyne who volunteer for redundancy will not sell their livelihood for £5,500 less than the dockers in Liverpool and London will receive.
  11.31 pm
  Mr. R. C. Mitchell: The Minister said that we must approve the money resolution, because, if we do not, the Port of London Authority and the Mersey Docks and Harbour Company will go broke. He said earlier that for the same reason the Bill must have its Second Reading. If that is so, why did the Minister wait until now to introduce the Bill? Why did he not introduce it a month ago? Surely he has not just found out the serious situation that those two organisations are in.
  The Secretary of State is trying to bulldoze the Bill through. He has also tried blackmail, saying that if we do not vote for it the authority and the company will go bankrupt next week. Why on earth did he not introduce it earlier?
  When answering criticisms from his hon. Friend the Member for Northampton, North (Mr. Marlow), the Under-Secretary kept giving him reassurance. He said "This is only a temporary measure. The redundancy is only for two months; it is not permanent." The hon. and learned Gentleman did not say what would happen is the severance scheme on which we are voting tonight did not work. He told his hon. Friend "We cannot let the company and the authority go into receivership, because that would mean

  1047
  all sorts of other things for other organisations." I entirely agree with the Under-Secretary, but if the severance proposals do not work what will he do? Will he introduce another money resolution in a month's time to give more money, or will he let the organisations go into receivership, which he told his hon. Friend was unthinkable and could not happen?
  The danger of the Bill and the money resolution is that by picking out two particular areas they will sour industrial relations in the whole ports industry. The employers in Southampton have told the National Dock Labour Board "We want to negotiate 200 redundancies with you." I know what the board will reply. It will say "Give us the same redundancy pay as Liverpool and London are getting, and we may talk to you. Otherwise, we shall not even talk to you about it."
  We spent years getting a national dock labour scheme built up. After years of bad industrial relations in the ports, we built it up, and it was agreed between employers, the Government and unions as a result of the Jones-Aldington report, but now the proposal before us will endanger the whole thing. I suspect that before long, if the Government are not careful, there will be other Bills relating to other ports, with other money resolutions. This could be only the beginning. It could do great harm to the industry as a whole.
  When I listened to the Secretary of State and his hon. and learned Friend I had the impression that they knew very little about the docks industry. They certainly did not know anything about the make-up and temperament of dockers. I did not recognise the people that they were referring to. Having had many years' experience, and having had some dockers in my own family, I know how they think.
  The dockers fought for years for a national scheme and now the Government are in danger of spoiling that scheme. We have no alternative but to vote for the money resolution. I object to this form of pressure being placed upon hon. Members.
  The Government have brought this Bill forward at the last minute, in such a way that it represents a threat of blackmail. They have said that if we do not vote in favour of the Bill these ports will go bust. I ask the Minister to go away and think seriously about a new redundancy scheme covering the entire port industry.
  11.35 pm
  The Under-Secretary of State for Transport (Mr. Kenneth Clarke): I am glad that the money resolution has given us an opportunity to clear up the points relating to the ports of Bristol, Tyne and Southampton, particularly because the hon. Members in whose constituencies these ports lie were present throughout the last debate and were unable to speak. I apologise for not doing justice to Bristol in my winding-up speech earlier, mainly due to the limited amount of time available. I spent a high proportion of the time on London and Liverpool and on the general principles, and rather rushed my response to my hon. Friend the Member for Bristol, West (Mr. Waldergrave).
  The hon. Member for Bristol, North-East (Mr. Palmer) has had the opportunity of putting the case for Bristol more fully. I must clarify the distinction which exists between London and Liverpool, on the one hand, and Bristol on the other. London and Liverpool have got into their difficulties because they are our biggest and oldest
  1048
  traditional ports and because they have had considerable difficulty in coping with the change in trading conditions which has taken place over the last 10 years.
  Bristol's current problems are entirely the result of investment decisions fought for by the council against successive Governments. A major investment was embarked upon only comparatively recently. The investment was embarked upon against the background of Government approval under the powers of the Harbours Act and on very clear terms. The then Minister of Transport, my right hon. Friend the Member for Yeovil (Mr. Peyton), set out the Government's position very clearly in a letter of 17 November 1970 to the city of Bristol confirming that authorisation under the Harbours Act had been given. I shall quote again, more fully, from that letter:
  "I must also make it clear that the responsibility, financially and otherwise, for this project ties solely with the Port of Bristol Authority and that this letter does not commit the Government in any way."
  Successive Governments, as far as I am aware, have not moved from that position vis-à-vis Bristol. This was a major piece of capital investment by a local authority, sponsored by a Private Bill. It turned out to be speculative and, I am afraid, unsuccessful. It is now posing considerable difficulties for the city of Bristol and its ratepayers. Nevertheless, it is a responsibility of the local authority and certainly not of the Government. It is for the port authority and the city to deal with. There are not very good industrial relations at the port. The authorities must look to the future. No doubt they are getting the necessary reports on the likely financial prospects, considering 'what rationalisation may be needed and deciding what kind of labour force can permanently be sustained. They will be considering what kind of traffic is available to be won. It is for the local authority to do that since it is local authority capital spending.
  We have a lot of local authority wishful thinking, when authorities seek to go in for major capital investment. We cannot operate on the basis that speculative investment will be bailed out by the national taxpayer a few years later.
  Mr. Palmer: The hon. and learned Gentleman appears to be saying something new—that the troubles are of Bristol's recent making. Fie seems to hint at poor management. Trade has gone and Bristol's ratepayers cannot escape the obligations upon them. They cannot close down the port. Even if they did, they would have to pay the interest on the loans.
  Mr. Clarke: I do not minimise the problem. The problem is that capital investment has been incurred and the loans still have to be serviced. Thus far, the investment has proved unsuccessful. The Port of Bristol Authority will presumably be engaging in the necessary studies to decide what can be done, at least to reduce trading losses and to see in what ways the three different docks in Bristol can be rationalised. That is for it, and not for the Government. It seems to me that in no way are Bristol's problems comparable to those of the Port of London Authority and the Mersey Docks and Harbour Company. I have no doubt that the matter will be explored in greater depth when representatives of the city of Bristol meet my right hon. Friend on 1 April.
  The hon. Member for Jarrow (Mr. Dixon) complained about the impact on the port of Tyne and the redundancies

  1049
  that are necessary there, given the rationalisation that is happening of the arrangements that we have made for two months' topping up of severence payments for registered dock workers at London and Liverpool. The hon. Member for Southampton, lichen (Mr. Mitchell) made the same point in respect of Southampton. There has been a predictable and swift reaction in various ports that dock workers there will not accept less for severence than the emergency sums that are on offer in London and Liverpool.
  However, that enhanced severance is available for a two-months period only. Only a few weeks are left in which the men can volunteer for severance and get the addition of up to £5,500. Thereafter, payments in London and Liverpool will revert to the level of the national voluntary severance scheme, which is currently £10,500. That two months, once-and-for-all offer is being made because of the drastic conditions in both those places where, including registered men and staff redundancies, a cut of 3,000 jobs is being sought because there is no longer work for the men.
  After the end of April, Liverpool and London will be back on the same footing as the other ports. I hope that the impact on the other ports will have been fairly minimal and will pass over. The other ports—Southampton, Tyne, Clyde, Manchester, Hull and the rest—do not have problems on anything like the scale of those afflicting London and Liverpool, and they have the resources to deal with their severence pay arrangements. I have no doubt that, in line with inflation, employers will in due course examine the levels of payments under the national voluntary severance scheme, but I think that the ordinary levels will suffice for redundancies in most parts of the country.
  Mr. Dixon: What does the hon. and learned gentleman intend to do if he does not secure the necessary number of volunteers during the two-months period? Is he seriously suggesting that those concerned will accept a scheme under which if a man goes on 29 April he will receive £16,000, whereas a man who goes on 2 May will get only £10,500? If he is, he has no idea of industrial relations.
  Mr. Clarke: That was the exactly the point raised by the hon. Member for Itchen. As the dockers in London and Liverpool know from the documents that they have, the offer is available only if they volunteer for severance in March and April. Severances in those ports after the end of April will revert to the national level and will be subject to the usual negotiations that go with the national voluntary severance scheme. That is why, although the Bill authorises new expenditure to a considerable extent—£87 million—my right hon. Friend will not make that money, or anything like it, readily available to the ports in the forseeable future. The first step will be to set cash limits which are in line with the minimum necessary for London and Liverpool to continue to trade during the period of the emergency severance programme.
  The cash limits will take both ports, on their own estimates, into May. In May, my right hon. Friend will review what has been achieved by the severance scheme and look again at the ports. He will probably then set cash limits to take them through to the autumn, by which time
  1050
  we shall have had reports from the companies and their accountants about whether they will return to profitability, and, if so, how.
  I shall not go in detail into the hypothesis of what happens if voluntary severance does not work. My right hon. Friend gave the figures. In both ports there has been a healthy response. Liverpool already has over 600 applications and I believe that London has over 400. There is a tendency to hang back with applications until the end, just in case more is offered, but that will not happen. We are expecting both ports to be near their targets, and then to move on to the severance of non-registered staff men as well.
  However, if the ports fail to get the severance that they require, as I am sure that everyone in London and Liverpool realises, they will be in a serious position. If by May each has over 1,000 men—25 per cent. of its work force, being paid every week, yet with nothing to do—we should look to the authority and to the company and seek their proposals to meet the situation. The Government would re-examine the policy in the light of the failure of the scheme. However, we are advised by the chairmen and by those who know both ports that the extra £5,500 should be sufficient at present to achieve the emergency severance of men. We believe that the scheme is going well and in May we will consider the prospects to take us to the autumn, when detailed studies will be made. Assuming that severance has worked and that the policy has gone through to that stage, in the autumn it will be possible to take a realistic view on the question whether the ports can return to profitability, and, if so, what rationalisation is required.
  I believe that I have dealt with the points raised. I apologise to he hon. Member for Itchen for the rush. As we have said, it is an emergency. Had the Opposition's vote been successful, the results would have been calamitous for both ports. It is likely that the PLA and the Mersey Docks and Harbour Company would have had to cease trading next Wednesday. The timing has not helped the preparation of the Bill and the Government's parliamentary timetable.
  The problem was brought to a head by a catastrophic loss of trade in London and Mersey last year, the full impact of which was first reported to us towards the end of last year by the boards of the two bodies. Although it was clear that they were getting into difficulties, we had to make an extremely full appraisal. We needed information about the full extent of the difficulties to put together the policy. We had to have an idea of the figures for the rescue. The preparation of the Bill has not been in a leisurely manner, ending with the House being given only one night to make up its mind, with three days to go. The highest priority has been given to its preparation, against a background of late information and quick in-depth studies to see exactly what was needed. The Bill was brought forward at the first possible moment. Fortunately, it has had a Second Reading before the companies were forced to cease trading.
  Mr. R. C. Mitchell: How much, if any, money will be paid out under the provisions of the Bill before it becomes law?
  Mr. Clarke: I will give the hon. Gentleman a rough figure in writing. The PLA will need help on 1 April and I believe that both bodies will need more help next week.

  1051
  The convention is that now that the Bill has had a Second Reading, Ministers are authorised to expend moneys, although we shall continue to seek parliamentary approval in the later stages of the Bill. It would not have been possible to anticipate the legislation by spending moneys on the scale required without the Bill having had a Second Reading. That is the background. It reinforces the need for the money resolution, because the whole thing could be frustrated at this stage. I hope that the House will agree to the money resolution.
  Question put and agreed to.
  Resolved,
  That, for the purposes of any Act of this Session to provide financial assistance to the Port of London Authority and the Mersey Docks and Harbour Company and to increase the limit on sums borrowed by the National Dock Labour Board ('the Act'), it is expedient to authorize—

  (a) the payment out of money provided by Parliament of any sums required by the Secretary of State for givingfinancial assistance to the Authority and the Company for measures taken by them to resore the profitability of their undertakings and for the carrying on of their undertakings while such measures are being taken;

  (b) the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable out of money so provided under any other Act;

  (c) the payment of any sums into the Consolidated Fund.

  British Railways Board (Payments)
  11.50 pm
  The Under-Secretary of State for the Environment (Mr. Giles Shaw): I beg to move,
  That the draft Transport Boards (Adjustment of Payments) Order 1981, which was laid before this House on 3 March, be approved.
  The order establishes, for the rating year 1981–82 and subsequent years, the "standard amount", which determines the contribution in lieu of rates to be paid by the British Railways Board. The proposal would result in a decrease in British Rail's "standard amount" of £ 1 million as compared with 1979–80. It represents a small increase over 1980–81, but that was a transitional year, for reasons that I shall explain shortly. There is a need for permanent revision of British Rail's contribution in lieu of rates as a result of the recent change of status of the National Freight Corporation. The order introduces that.
  Instead of paying rates as such, on its operational property, British Rail pays an amount in lieu of rates, calculated in accordance with statutory provisions. The Secretary of State then distributes the money between rating authorities. BR's liability for any year depends on a prescribed "standard amount"—which this order would amend—and also on the average rate poundage set by local authorities in the previous year. This covers the railway network. In addition, British Rail pays rates, in the normal way, on non-operational property such as hotels, refreshment rooms and some offices.
  Prior to 1980–81 the National Freight Corporation was required to make British Rail a "fair" contribution in relation to premises that it occupied for the purposes of handling rail-related traffic. The amount of the NFL's contribution was a matter for agreement between the two boards. This obligation was devised when almost all of the corporation's traffic was carried by rail at some point on its journey. In recent years, however, as hon. Members will appreciate, an increasing proportion of the corporation's traffic has been carried by road. Since premises used for road traffic have been assessed for rating purposes by normal methods, an additional burden—a sort of "double rating"—ensued for the NFC. The unfairness of this burden was recognised in 1980–81, when British Rail's "standard amount" was reduced for that year by £573,000 as compensation for the element of double rating that had taken place since 1 April 1978.
  In addition, the 1980–81 reduction also took account of the intention to change the status of the NFC to a Companies Act company from an "appointed day. From that date, all NFC premises were to be rated by normal methods and the corporation, or its successor, would no longer be required to contribute towards British Rail's payment in lieu of rates. A reduction of £500,000 was agreed, in anticipation of the "appointed day" falling midway through the rating year, that is to say, on 1 October 1980. Taking account of these two elements, of £573,000 and £500,000, the Transport Boards (Adjustment of Payments) Order 1980, which the House agreed to last year, reduced British Rail's "standard amount" by £1,073,000.
  During consultation with interested parties and in debates both in this House and in another place on the 1980 order, the Government made it clear that a further order would be necessary in 1981 to make a once-and-for-all adjustment to British Rail's liability.

  1053
  This would reduce the "standard amount" for British Rail by £1 million permanently from the 1979–80 level and, if necessary, would compensate for any discrepancy between the date of the NFC's becoming a Companies Act company and 1 October 1980.
  The order before the House tonight is that order. It sets British Rail's "standard amount" for 1981–82 and subsequent years at £17,963,000, which is £1 million less than in 1979–80. Hon. Members will see that this figure is entirely in accordance with the proposals outlined last year, on which consultation took place prior to the making of the 1980 order. Both British Rail and the local authority associations were consulted about the proposals then, and recently they have been advised that this order was about to be introduced to complete the change.
  Hon. Members will also note that no further adjustment has been necessary to take account of the actual date of the change of status of the NFC. This is because, as envisaged, the "appointed day" fell on 1 October 1980.
  I commend the order to the House.
  11.54 pm
  Mr. Ted Graham: This should not take long, as there is no animus in the matter. Both the method and the changes have been agreed by the Opposition in both Houses whenever the matter has come forward.
  Perhaps the Minister would confirm what I surmise. It is really a question of whose side one is on—that of the transport board, British Rail, or the local authority. The net outcome will be that the standard amount, which is more or less the rateable value, will be multiplied by the average rate levied by local authorities.
  Last year the standard amount was £17,890,000, which was multiplied by the average rate. Let us assume that the average rate was 100p in the pound. This year there is a marginal increase in the standard amount, to £17,963,000. However, it is widely suggested that the average rate this year is likely to be not less than 10 per cent. higher, and could well be 20 per cent. higher. If that is the case, does it mean an increase of about £3,555,000 on top of the increased £17,963,000?
  In other words, does it mean that the sum that British Rail will have to pay to the Government, which is then distributed to local authorities, will be greater because of increased inflation and rates for which the Government must take a large part of the blame? Although the formula is accepted and understood, the net effect in cash terms will be that British Rail will have to pay about £3½ million more this year than last year.
  11.56 pm
  Mr. Giles Shaw: The hon. Gentleman is quite right. The British Rail formula is affected by the average of the rate poundage in any year. The position for the coming year is affected by what occurred last year. It is certainly true that because of the mechanics of the system, British Rail's contribution goes up each year in line with the rate of increase in the previous year's rate poundage. The current increases will have their impact on British Rail next year.
  Question put and agreed to.
  Resolved.
  That the draft Transport Boards (Adjustment of payments) Order 1981, which was laid before this House on 3rd March, be approved.

  BRD Factory (Newtown)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Cope.]
  11.57 pm
  Mr. Delwyn Williams: It is my sad duty to draw the attention of the House to the proposed closure of the BRD factory in Newtown, which is a subsidiary of the giant GKN group. We have become used to hearing of factory closures involving job losses of hundreds and even thousands. In Newtown, the staff involved at BRD numbers a mere 430—small by United Kingdom standards but large in the context of Newtown, which has a total work force of 5,000.
  BRD came to Newtown 18 years ago. At one time it had nearly 1,000 employees and in the main manufactured rear axle transmission units. According to BRD, it is now proposed to close that factory because of:

  "(a) The increasing proportion of smaller and lower powered cars using front wheel drive applications, incorporating C.V. Joints, for which we have no manufacturing capability.

  (b) The significant growth of imported cars into the U.K. market.

  (c) The fall in exports due to the strength of the pound.

  (d) The recession, which in the Automotive and Tractor Industries, is almost worldwide."

  I am proud to say that the factory at Newtown has a loyal work force, which has accepted 60p to 70p an hour less than the comparative rate for the job in Aldridge, in Staffordshire. Part of the problem arose during the period of the Socialist Government, when the work force was reduced from 750 to 430. Most of those lost were voluntary redundancies, but that reduced the viability of this outpost of the GKN group.
  The work force has been loyal and strike-free. There have been only three weeks on strike in 15 years. There are 100 skilled men there. I know that the company lost £750,000 in operations last year. Taken in isolation that is a lot of money, but it is chicken-feed compared with GKN's world-wide group profits. I accept that it has recently announced lower profits for the last commercial year than it would have liked.
  My work force has been discriminated against. Hardy Spicer—part of the group—has taken over much of its work. In the Midlands, Aldridge, which has a greater work force and which does the same sort of work, has been kept going. Justly, my constituents feel that they are being discriminated against by the management of GKN. The Government should use their influence at least to persuade GKN to lease the factory in Newtown to the Development Board for Rural Wales. There is great uncertainty about the future of this vast amount of factory space. GKN should give some indication of its plans.
  Other multinationals have seconded executive staff to development boards to help find alternative sources of employment. The GKN group, with all its multinational involvement, has treated my constituents very badly. The management should consider making finance available for a venture capital investment scheme in my constituency. That is the very least that I expect it to do.
  I call upon the Government to bring forward the review to development status. We are a special case, because when the Development Board for Rural Wales was set up, its aim was not only to create employment but to stem

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  depopulation. That sets us apart from the rest of the United Kingdom. A special case can therefore be made for bringing that review forward without further ado.
  Our development board lost development area status about 18 months ago. Although it has done a tremendous job for the area it must now compete with areas that have kept their status. Soon, we shall have to compete with nearby special enterprise zones, particularly in South Wales. The Government have pumped in £48 million to help the steel and coal industries of South Wales. If the Government, in all conscience, cannot renew our development status prematurely, they should give more money to the development board so that it can set up alternative employment for those skilled and semi-skilled men.
  After all, the Government poured money into British Leyland, which hardly has a hard-working, strike-free or successful work force. A fraction of the money given to British Leyland would help my constituents through a very bad patch. The work force is loyal and skilful. With more money, alternative industries could be attracted to Mid-Wales. We have something to offer industrialists and working people. We can offer them fantastic scenery and an education for their children that is second to none. Even in these hard times Powys spends more on education per capita than any other part of the United Kingdom. That should give industrialists an incentive to come to my area. We have the sporting facilities of golf and fishing. There are good communications and housing costs are reasonable.
  We in Mid-Wales are not gloomy about the prospects. The Budget affects Wales as much as any other part of the United Kingdom. Let us look on the bright side. Everyone spells out the bad news, but there is also a lot of good news. Year on year inflation is down to 13 per cent. Over the past six months inflation has fallen to 7 per cent. Our trade surplus is on the right side. The savings ratio is very high, at 17 per cent. Pay settlements are realistic; 50 per cent. of the work force settled for pay settlements of under 10 per cent. Of the national work force, 33 per cent. settled for pay settlements of between 11 and 15 per cent. In the United Kingdom, employment offices placed 122,000 people in jobs in the last quarter of 1980. The value of retail sales in the United Kingdom is constant, despite rumours to the contrary.
  My constituents in BRD might blame the Government, but as soon as consideration is given to the company's excuse it becomes clear that it is not the Government who are to blame for the closure but the management of GKN. Any decent management would have foreseen that front-wheel drive was taking over and that rear-axle drive would be a thing of the past. Nevertheless, it did nothing to diversify or meet this eventuality.
  My area has been dealt a severe blow. One-tenth of the work force in a development area town has been destroyed. Despite that, Mid-Wales could, with help, have a great future. As at April 1980, £11·5 million spent by the Development Board for Rural Wales produced 141 factories and created 4,500 jobs. Reducing its budget and doing away with the development area status has been a severe blow. We cover 40 per cent. of the full land area of Wales. The total regional aid for Wales was £190 million. Yet between 1977 and 1980 only £1½ million of regional aid came to Mid-Wales, but we delivered the goods, we produced the jobs and we are going ahead.
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  We need incentives. Dr. Ian Skewis, who does a magnificent job as the chief executive of our development board, analysed 111 cases of applicants for factory space. He found that 93 of those applicants were influenced by regional aid. So it is that I look to the Minister to give me some assurance that Mid-Wales will not be allowed to go back to the depopulated state that it was in some 10 to 15 years ago, before the Development Board was brought into being.
  We have the capacity, the will power, the men, the loyalty and the traditional skills. We must not allow the impetus that has been created over the last 10 years to disappear suddenly. It is in that sense of achievement, mitigated by some sense of grievance, that I look to the Minister to give me some assurance and, indeed, to give some hope to the work force of BRD in Newtown that although they may lose their jobs in the next six months in the near future they will have alternative employment to look forward to. This is not because we feel that we should be treated any differently from the rest of Europe; in fact, we do not feel that we should be treated differently in a general employment sense.
  The Government have already said that we are a special case because of rural depopulation. That trend of depopulation has not been helped by the recent Budget annoucement of an increase in the petrol tax. I accept that there might be a conservation element in the rise in the price of petrol, but it is stilt inflationary and a blight on rural people. Many of my constituents who are farm workers and factory workers have to travel up to 20 miles to work. To them the recent increase represents an extra cost of £100 a year. They are already earning less than the average wage. Some of them would be better off on the dole, but they are honourable men with dignity, who would prefer to work rather than skive and live off the State. This is why my appeal is all the more pertinent.
  I should have thought—I hope that the Minister will convey this to the Chancellor—that there were alternative ways of raising the money besides putting an increased petrol tax on rural areas. He could increase each dog licence by £5. He could increase the revenue from one-armed bandits and gaming machines. He could increase the duty on off-course betting by 1 per cent. He could tax towing caravans and non-residential static caravans. He could have a jewellery tax. All we look to the Chancellor for is more flair and imagination.
  I mention this tonight because some people must be dissuaded from coming to Mid-Wales by the fact that there is no public transport. That came about because of the bureaucratic approach of the last Government, who eliminated small bus companies and the small independent transport operators. That is why public transport is almost non-existent in Mid-Wales and why all of us there have to rely on private cars.
  Overall I have managed to get in a little attack on the Budget during this debate. I make no apology for that, because it is pertinent to the Mid-Wales situation. In that spirit I look to the Minister and to the Government to help the people of Mid-Wales and the men of BRD in particular and give them smile hope after all the loyalty and devotion, that they have shown to their work in the last 18 years in Newtown and Powys.
  12.9 am
  The Under-Secretary of State for Wales (Mr. Wyn Roberts): I fully appreciate the reason why my hon.

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  Friend should want to raise this issue at the end of this fairly long day for Welsh Members. As you may know, Mr. Deputy Speaker, the Welsh Grand Committee met at 10.30 am and some of us were involved in it.
  The closure of the BRD factory is a matter of great concern to many of my hon. Friend's constituents in the Newtown area and, indeed, one of concern to all of us who understand and appreciate the problems posed by the closure of this factory for all those living in this predominantly rural area. This is all the more true because Newtown is an area that so far has experienced a rate of unemployment much lower than that in some of the more industrialised areas of Wales. The town has been the focus of the activities of the Development Board for Rural Wales and its predecessor in the area, the Mid-Wales Development Corporation.
  I have no intention of seeking to understate the seriousness of the blow for Newtown when about 430 employees are to lose their jobs in the next six months and when Mid-Wales is losing what has been one of its largest employers. It will be a major blow for employment in the area. Over many years the company has provided substantial and high-quality job opportunities, and these will be very difficult to replace. At the same time, when considering the future we must not forget what the board and its predecessor have achieved in Newtown.
  First, I should mention that my right hon. Friend has received a request from the chief executive of the Montgomery district council to meet a deputation—including my hon. Friend—to discuss the proposed closure and associated matters. Although the closure is not a matter in which the Government can intervene—it could not seek to impose a different solution on the company—my right hon. Friend considers that in view of the scale of the closure for the area there should be a meeting to hear at first hand the views of the local authority and others involved. We shall be taking into account what my hon. Friend said this evening.
  My hon. Friend placed great stress on the assisted area status of Mid-Wales in general and the Newtown travel-to-work area in particular. The decisions on assisted area status for Mid-Wales, which are due to be made next year, will take account of all the relevant factors set out in the Industry Act and all the representations that have been made. The effect of the job losses at BRD will be taken on board in the review. An important factor in the review will be an assessment of the relative positions of various areas. Consequently, it would not be appropriate to consider individual areas in isolation. Changes in assisted area status that have already taken place and those proposed have not been a factor in BRD's decision to cease production at Newtown. My hon. Friend should not, therefore, overestimate the role of regional policy in overcoming the problems of the area.
  My hon. Friend said something about the company's history in Newtown. It is part of the GKN group and is not one of the many firms that occupy a factory belonging to the Development Board for Rural Wales. It has, nevertheless, had a long association with Newtown and came there before the board and the Mid-Wales Development Corporation came into being. It was formed in 1940 and set up its subsidiary factory in Newtown as long ago as 1963, in what was an old war-time shadow
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  factory. The premises comprise about 200,000 sq ft of floor space, which only a few years ago catered for about 700 employees. The property is owned by the company.
  There is no dispute of which I am aware about the circumstances that led to the company's decision to cease production. The company made this clear in the press statement which it issued on 27 February, which stated:
  "The severe effects of the current recession and a continuing reduction in demand for British-built cars, have caused a tremendous reduction in business activity at BRD Company Ltd.
  This has led to financial losses which totalled £750,000 in 1980 and which, under present conditions, would result in an even greater loss in 1981."
  The company went on to state that it foresaw no prospect of recovery in demand in the foreseeable future and therefore had decided to rationalise production on to one site at its headquarters in Aldridge, in the West Midlands. Employees at the subsidiary factory in Pool Road, Newtown were therefore advised that it would be impossible to continue production on that site after the end of August 1981. The closure will result in the loss of 430 jobs.
  The company's statement went on to say that
  "A close analysis of current order levels and forecast demand indicates that there is insufficient business to maintain two production centres. Therefore, without this urgent action to reduce costs and improve productivity, the future of the whole company would be put in jeopardy.
  The announcement has been made at the earliest possible time, to allow full discussions to take place with employees and their representatives on the phasing out of operations at Newtown and all other matters arising out of today's announcement.
  Every effort will be made by the company to assist employees in obtaining alternative employment."
  That was the end of the statement.
  There is in that statement no suggestion that labour relations in the factory or the rate of output of employees were factors influencing the company in reaching its decision, and I understand that the company has discussed its closure plans with the unions affected. I am sure that my hon. Friend would join me in paying tribute to the contribution that the company has made to the economy of Mid-Wales for nearly 20 years. It has made the reasons for its reluctant decision to close its Newtown operation entirely clear. It has not been arrived at lightly, but because it has no practicable alternative.
  My hon. Friend recognises that the decision to cease production at Newtown by the end of August 1981 was one for the company to take, on the basis of its commercial judgment of the future market position. Given the company's assessment, this is not a situation in which the Government can actively intervene. It is a matter for management, and management alone. The problems that the company have faced are shared by others whose business is to supply the needs of the United Kingdom vehicle industry.
  I need hardly remind the House that the car industry in Britain, France, the United States and elsewhere in the Western world is in recession and is struggling to survive severe financial losses. Consequently, component manufacturers are experiencing grave difficulties everywhere. Many are having to reduce their labour forces and to rationalise their operations to adjust to the situation and to improve their efficiency and productivity to compete and prosper when the car market revives.
  We have reason for deep regret when those painful realities result in closure of a plant that has served a

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  company well and is of such vital importance to jobs in an area that has very few other large industrial employers. But we can hardly feel that it is altogether unexpected.
  Neither Mid-Wales nor any other area can be entirely isolated from the effects of the recession or exempted from the vulnerability of car component manufacturers and their imperatives of improving competitiveness and productivity by rationalisation.
  To attempt to persuade responsible industrialists to set aside their commercial judgment in favour of such a proposition would be no favour to anybody—and certainly not, in the long run, to Newtown, which has been successful not least because over the years it has faced economic change realistically and adaptably.
  The suggestion has been made in some quarters of indifference by the Government—a dogmatic rejection of intervention. That is a curious proposition in the context of the car component industry. But for the massive support being provided to British Leyland, car component companies throughout the country—including many providing major employment in Wales—would be facing a much bleaker future. The Government are backing BL—and thus the car component industry—to improve its efficiency. We are certainly not saying to BL "Improve your efficiency but do it without reducing your work force or rationalising your plants."
  Of course, we are concerned about the special problems of Mid-Wales and the serious effects of BRD's closure. As long ago as May 1980 the Welsh Office Industry Department discussed with the local management of the company the possibility of assistance under Section 7 of the Industry Act 1972 for any investment to safeguard employment, but the company was understandly not able to follow up that line.
  The Development Board for Rural Wales, as the agency responsible for the planned development of Newtown, reacted quickly to the firm's announcement of its closure plans. The chairman-designate of the board, together with his senior officers, met directors of the company on 3 March to hear in detail the reasons for the closure and to determine what scope there was for postponing or mitigating it. The company made it clear to the board that its decision would stand, but said that it was prepared to discuss the future of its premises in Newtown.
  If the company goes ahead with its closure plans, the board, with the other agencies, will take all the action open to it to meet the difficulties that are bound to be caused locally.
  At present the future use of the factory is a matter for BRD Ltd., since it owns the factory. If it decides to seek to sell or let it, the board will offer every assistance in helping to find suitable new industry to take it on.
  Meanwhile, the development board will continue to assist BRD Ltd. in finding alternative industrial uses for its factory. The board has also its normal programme of factory developments in Newtown. At present it has six factories, totalling 54,000 sq ft, completed and available
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  for new industry, in addition to 78—of over 605,000 sq ft—already occupied and employing about 1,450 people. Five others, 15,000 sq ft in total, are under construction, and the possibility of another 12 units totalling 49,000 sq ft is under discussion.
  The board has maintained in Newtown a considerable programme of factory building and has succeeded in attracting a good range of industrial developments to set up there. Newtown has become a focus for the integrated development of employment, housing and social amenities in an area that has traditionally experienced depopulation from its rural communities. It has been, and continues to be, a growth point that is attractive to industry.
  As well as its other activities the board is in a position to offer advice to those seeking to set up business on their own account in the area. No doubt some of those unfortunately being made redundant will take advantage of that facility. The board, in addition, supports the training facilities of the area in a variety of ways.
  The facilities of the Welsh Office industry department are available in full measure to assist in the introduction of new employment into the area. I stress the determination of the department to do everything possible to help find an alternative occupier of the BRD factory if the premises become available for letting. My right hon. Friend will also make full use of section 7 assistance if that is deemed appropriate.
  The Manpower Services Commission has already made plans for a team of specialist advisers to be on hand during the period of rundown. They will be able to offer advice on prospects for employment and guidance on opportunities for retraining.
  Despite any special help and advice that the Government may be able to offer, I end by saying that the most important factor will be the state of the overall economy of Britain. We are determined that our policies to reduce inflation will be successful and provide the right climate for industrialists to invest in the future. It is essential to Mid-Wales, as it is to the rest of the United Kingdom, that these policies should succeed.
  In Committee earlier today we discussed the effects of the Budget and the measures that my right hon. and learned Friend the Chancellor of the Exchequer has introduced to help small businesses, and I will not go over the ground again now. My hon. Friend referred to the increase in petrol duty. We dealt with that matter in Committee, and it has also been dealt with by my right hon. and learned Friend the Chancellor of the Exchequer. We believe that we are creating the right conditions as a framework for industrial recovery and we all hope that Mid-Wales—as indeed the rest of Wales and the United Kingdom—will soon be able to move towards a period of more success and prosperity.
  Question put and agreed to.
  Adjourned accordingly at twenty-six minutes past Twelve o'clock.