Commons Sitting of 14 May 1981

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS
  BRITISH TRANSPORT DOCKS BILL
  Read the Third time and passed.

  GREATER LONDON COUNCIL (MONEY) BILL (By Order)
  Orders for Second Reading read.
  To be read a Second time upon Thursday 21 May.

Oral Answers to Questions
  NORTHERN IRELAND

    Security
    Mr. Biggs-Davisonasked the Secretary of State for Northern Ireland whether he will make a statement on the state of law and order in the Province.
    Mr. Farrasked the Secretary of State for Northern Ireland if he will make a statement on the current security situation.
    Mr. Trippierasked the Secretary of State for Northern Ireland if he will make a statement on the security situation in Northern Ireland.
    Mr. Molyneauxasked the Secretary of State for Northern Ireland if he will make a statement on the security situation.
    Rev. Ian Paisleyasked the Secretary of State for Northern Ireland if he will make a statement on the security situation in Northern Ireland.
    The Secretary of State for Northern Ireland (Mr. Humphrey Atkins): The police, supported by the Army, remain steadfast in their efforts to put an end to terrorist attacks and in their pursuit of those who have committed them. In recent days they have also had to face the challenge of maintaining public order on the streets. Recent demonstrations and disorder have tested their capacity but they have proved well equal to keeping the situation under control. The methods employed by the security forces are essentially for the judgment of their own commanders. But I am in very regular contact with the Chief Constable and the GOC and both have assured me that they have all the resources they need for the job.
    Recent events have shown the people of Northern Ireland yet again that the terrorists have nothing whatever to offer them. By and large, the community has responded well to appeals from many people in the Province to
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    remain calm and to leave the maintenance of law and order to the security forces. I appeal particularly to parents not to allow their children to participate in rioting or other unlawful activities.
    Mr. Biggs-Davison: Apart from the support given by such as Mr. Ken Livingstone and the naive notions of the right hon. Member for Bristol, South-East (Mr. Benn), has not disorder been encouraged by some media men, mostly foreign, and has anyone been arrested for renting a mob to attack the security forces, to whom my right hon. Friend has justly paid tribute?
    Mr. Atkins: I, too, have heard reports of the activities of some people connected with the media—mostly foreigners. I think that the whole House would deplore the activities of anyone who encouraged or engendered trouble simply for the purpose of getting pictures for his television programme. I hope that that has not happened, but I am told that it has. I hope that it will not happen any more. The Chief Constable, with my full backing, is absolutely determined that if he finds anyone engaging in such activity that person will be arrested.
    Several Hon. Members rose——
    Mr. Speaker: Order. I intend to call first those hon. Members whose questions are being answered together.
    Mr. Farr: Was my right hon. Friend consulted by the Football Association before it took the deplorable decision to cancel the England v. Northern Ireland football match, for which 40,000 tickets or more had already been sold? If my right hon. Friend was consulted, what sort of advice did he give?
    Mr. Atkins: I spoke to the secretary of the FA on the morning before it made its announcement. I was able to assure him, from a conversation which I had had with the Chief Constable only 10 minutes beforehand, that the Chief Constable saw no risk to players or spectators if the match were to take place, and also saw no difficulty in providing the necessary police presence at the match, since that would in no way overstretch his forces. I told this to the secretary of the FA, and I am very sorry, as indeed is everyone in Northern Ireland, that the match is not to take place.
    Mr. Trippier: Is it not true to say that the main aim of the terrorists and those fomenting unrest in the Province is to frustrate the normal political process? Do the Government remain committed to giving the people of Northern Ireland more control over their own affairs?
    Mr. Atkins: I agree with my hon. Friend that this is undoubtedly one of the terrorists' main aims—indeed, one of their stated aims. They aim to destroy the Government of the North and following that the Government of the Republic, and to bring to an end the democratic regime under which we all live. It remains the Government's determination that that aim will be frustrated. There is a better way of working out our future than by killing other people or ourselves and that is the democratic process, which must continue. That is going on next week in the local elections that will take place in Northern Ireland. It remains Her Majesty's Government's view that that is the way forward. We shall be pursuing it as energetically as we can.
    Mr. Molyneaux: Will the Secretary of State undertake to introduce help measures and suitable equipment to

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    prevent Christian savages from burning to death members of the security forces who are engaged in the protection of life and property?
    Mr. Atkins: The Chief Constable and the GOC are content with the size and equipment of the forces which they are using to maintain law and order. I know that the entire House would like to pay tribute to the security forces. These young men, on our behalf, contain disorder in the streets of Belfast, have stones and petrol bombs thrown at them and use the minimum of force to keep order. They have the equipment and strength that they require. I am in close touch with both security commanders, and, so far as I am concerned, whatever they want they can have.
    Mr. Concannon: Our thanks must go out to the security forces for the way in which they are handling a dreadful situation. Does the right hon. Gentleman accept that he should not be deflected from working towards a lasting solution to the Ireland problem, a political solution that takes account of all sections of opinion within the community?
    Mr. Atkins: Yes. I thank the right hon. Gentleman for his reference to the security forces. I agree with him. I was told the moment that I assumed this office about two years ago that a military solution could never be found to the problem. We want a political advance. That is what the Government have been seeking. Unfortunately the Provisionals and others have abandoned any idea of political solutions and they are seeking to impose their will by force—force against the community and, occasionally, force against their own members. They will not succeed.
    Mr. Kilfedder: As violence is the enemy of democracy, does the Secretary of State appreciate that the best news recently heard by the law-abiding Ulster majority was the statement that the evil bunch of murderers and thugs belonging to the Provisional IRA in the H block had decided on a hunger strike to death when presumably in the after-life they will experience the hell that they have created for so many innocent people in Northern Ireland?
    Mr. Atkins: I shall not take up the hon. Gentleman's theological references. We deplore any death, whether it is inflicted by a terrorist on innocent people or inflicted on himself. I hope very much that those who are on hunger strike or who are contemplating going on it will realise that the exercise is totally fruitless. They will achieve nothing save their own destruction.
    Mr. Fitt: I revert to the supplementary question asked by the hon. Member for Epping Forest (Mr. Biggs-Davison). Will the Secretary of State carry out the most thorough investigations into a tragic incident that took place a few hours after the death of Mr. Sands at the top of the New Lodge Road in the Antrim Road not very far from my home, in which an innocent milk delivery man and his young son were brutally and savagely attacked, which subsequently led to the death of both the young boy and his father, the latter having died yesterday afternoon? Is the right hon. Gentleman aware that within seconds of those stones being thrown a television camera crew was on the scene? There are many who are of the belief that that crowd was agitated into throwing stones for the benefit of foreign television cameras. The end result was that two innocent people lost their lives. Will he give an
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    undertaking that the Chief Constable of Northern Ireland will carry out the most far-reaching inquiry into that occurrence to ascertain the identity of the camera crew?
    Mr. Atkins: Yes, Sir, I readily give that undertaking. Nobody is keener to do what the hon. Gentleman suggests than the Chief Constable and myself. In fact, it is being done. That occurrence and others have been reported to us where it is thought that despicable activity of the sort to which the hon. Gentleman has referred has taken place. In default of evidence there cannot be prosecution. Let us see how the Chief Constable gets on. Mr. Guiney and his young son were delivering milk to the people of West Belfast and tragically both are now dead. They were attacked by a gang of rioters with stones and their milk lorry crashed. That event killed them both. Many hon. Members may have seen pictures of the funeral of the young Guiney two days ago. They will have seen the distress, unhappiness and misery that has been caused to him, his family and his friends.
    Several Hon. Members rose——
    Mr. Speaker: Order. This matter arises again later.

    Incident (Londonderry)
    Mr. Stephen Rossasked the Secretary of State for Northern Ireland if he will call for a report from the Chief Constable of the Royal Ulster Constabulary on their progress in investigating the incident in Londonderry during which two teenagers were knocked down by Army Land-Rovers and received injuries from which they have since died; and if he will make a statement.
    The Minister of State, Northern Ireland Office (Mr. Michael Alison): Investigation of this incident by the Royal Ulster Constabulary is well in hand. When it is completed the RUC will forward the papers to the Director of Public Prosecutions for his consideration. It would be inappropriate meanwhile for me to call for a report.
    Mr. Ross: I echo the Secretary of State's words in support of the security forces in Northern Ireland. I imply no criticism whatsoever. However, does the Minister accept that there is some feeling of distress about this incident? The hope is to be expressed that if anybody is found to be at fault the fact will be made public. When is the inquest likely to be held?
    Mr. Alison: I cannot give precise information about the inquest. The report from the RUC will be handed in as soon as it is complete. Adequate time must be allowed for that. The death of two youngsters in these circumstances is appalling. However, the circumstances were those of a riotous assembly, and a vehicle came over the brow of a hill rapidly. A great deal must be considered. I cannot say any more until the investigation is completed.
    Mr. Wm. Ross: Is the hon. Gentleman aware that, although we may accept in normal circumstances that members of the security forces driving vehicles should be subject to the same laws as others, surely any event that takes place in the middle of a riotous occurrence in which the police and the Army have been petrol-bombed by a riotous crowd for a considerable period, in an area which used to be Protestant until the Protestants were driven out by intimidation, must be the subject of careful investigation before any charges are brought? Is he aware that in the same area on Tuesday of this week the police

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    had two acid bombs, 13 nail bombs, 18 blast bombs and 290 petrol bombs thrown at them by a similar-sized riotous mob?
    Mr. Alison: Naturally the investigations will be extremely thorough. It is for the Director of Public Prosecutions to decide whether there should be any prosecution in the circumstances.

    Local Government Elections
    Mr. Wm. Rossasked the Secretary of State for Northern Ireland if he has made any special arrangements to secure the fair conduct of the local government elections in Northern Ireland.
    Mr. Humphrey Atkins: I am assured by the chief electoral officer, who is responsible for the conduct of the election, that he is taking all the necessary steps, in consultation with the police, to ensure its fair conduct, in accordance with the law, and that no additional measures are required at present.
    Mr. Ross: In the light of the figures that the right hon. Gentleman has quoted, is he certain that a fair election is possible in the West Bank area of Londonderry when the schools that are to be used are in the heart of a Republican area? Would not it be far better to put in commissioners to run that electoral district until an election can be held with the IRA firmly under control?
    Mr. Atkins: I am well aware of the difficulties. The chief electoral officer is a man with considerable experience, upon whose judgment I rely. If he needs extra help or protection, he will make that request. I am in touch with him and we shall do everything possible between us to ensure that the elections are fair.
    Mr. Marlow: When my right hon. Friend is considering elections, will he consider perhaps a referendum, so that the people of Northern Ireland could pass judgment on their qualified membership of the United Kingdom whereby they are purported to be members only so long as the majority should wish it? They could become full members of the United Kingdom the same as anybody else, which would reduce the ambivalence that exists at the moment if a suitable majority existed. That ambivalence is a great cause of the present terrorism.
    Mr. Atkins: My hon. Friend is labouring under some misapprehension. Those who live in Northern Ireland are as much members of the United Kingdom as my hon. Friend and I. They are full members of the United Kingdom. My hon. Friend will be aware that the law provides that a border poll may be held at intervals of not less than 10 years, asking whether the people wish the present state of affairs to continue. The last poll was held in 1973. It is a matter for consideration whether a further poll, asking that simple question, should be held in 1983, or subsequently.
    Mr. McCusker: How successful was the census operation in certain areas of Northern Ireland? The right hon. Gentleman's answer will show whether fair elections can be held next week in certain areas of Northern Ireland.
    Mr. Atkins: As the hon. Gentleman knows, there was some difficulty in collecting the census and one collector was murdered. We all regret that and I have already spoken about it in this House. Nevertheless, the census
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    forms are in and are almost 100 per cent. complete. People had the opportunity to return their census forms by post and in other ways. Those whose census forms were lost were invited to complete others. Although I cannot claim a 100 per cent. success, it was nearly that.
    Mr. Skinner: If and when a referendum about the border takes place, will the Secretary of State ensure that, unlike what happened last time, it includes not only those in Northern Ireland, but also those on the mainland? Those in Britain could then judge whether the border should be removed. As they do in their correspondence to many Labour Members, people could show that it was time that the troops were taken out of Northern Ireland.
    Mr. Atkins: The Act provides that the referendum shall be held in Northern Ireland. I do not want to discuss the "troops out" movement now, but I have not heard anyone suggest that troops should be removed from any other part of the United Kingdom. Northern Ireland is part of the United Kingdom and its people are entitled to the same level of protection as those living in the hon. Gentleman's constituency, or anywhere else.

    De Lorean Car Company
    Mr. Bruce-Gardyneasked the Secretary of State for Northern Ireland what royalty payments have been received to date under his Department's agreement with the De Lorean Corporation.
    The Minister of State, Northern Ireland Office (Mr. Adam Butler): The royalties are due to be paid to the Northern Ireland Development Agency quarterly in arrears. The first consignment of 313 cars was shipped on 19 April, so no royalty payments are yet due.
    Mr. Bruce-Gardyne: Does not my hon. Friend recall that, the last time he addressed the House on this matter, he assured us that the royalty payments would be forthcoming as soon as the cars were shipped? Will he bear it in mind that Mr. De Lorean has quite a reputation for running up bills? Will he chase the money up? Furthermore, have any of the cars been sold? What is this great vehicle's current daily production run?
    Mr. Butler: The cars arrived in California either today or yesterday. They will be prepared for sale and I understand that they will go on sale at the end of May or at the beginning of June. The best way of interpreting the production rate is by bearing in mind that the next shipment of cars is due at the end of next week. I ask my hon. Friend to give the company the benefit of the doubt.
    Mr. Bruce-Gardyne: What is the daily production rate?
    Mr. Butler: At the end of the day my hon. Friend may be driving a De Lorean sports car up Downing Street instead of a woman's brown bicycle.
    Mr. Bruce-Gardyne: No way.
    Mr. Cryer: Given the massive public investment in De Lorean and the need to ensure regularity of payments and complete accountability, should not the Government increase the number of directors on its board? After all, in effect, the taxpayer provides the majority of De Lorean's finance. Should that not be reflected in a majority of directors and voting shares?
    Mr. Butler: The hon. Gentleman will be aware of the Government directors on the board. We are entirely satisfied with the monitoring of the company.
    Mr. Concannon: Given the highly unsatisfactory rate of unemployment in Northern Ireland and in the rest of the United Kingdom, may we be told how many people work for De Lorean? Can any estimate be given of the number of jobs that have been saved in Northern Ireland as a result of De Lorean? In addition, can the hon. Gentleman give any estimate of the number of other jobs saved and created not only in Northern Ireland but in the rest of the United Kingdom?
    Mr. Butler: About 1,400 people are employed at De Lorean. There is some spin-off as a result of the supply of parts and other materials to the company.
    Mr. Bruce-Gardyne: On a point of order, Mr. Speaker. In view of my hon. Friend's reply, I give notice that I shall raise the matter again at the earliest opportunity.

    Anorexia Nervosa
    Mr. J. Enoch Powellasked the Secretary of State for Northern Ireland whether he will institute an inquiry into the prevalence and incidence of anorexia nervosa in Northern Ireland and preventive measures which ought to be taken in consequence.
    The Under-Secretary of State for Northern Ireland (Mr. John Patten): No, Sir. The information available on numbers admitted to hospital suffering from this disorder do not suggest that the problem calls for a special inquiry.
    Mr. Powell: In view of the importance—especially at the present time—of firmness, consistency and justice in Northern Ireland's prison administration, do the Government realise the anxiety that has arisen, because no releases have been made in Great Britain as a result of this complaint, that one such release happened to coincide with the critical stage of a recent hunger strike, and that those who have been released have made remarkable recoveries?
    Mr. Patten: I am sure that the right hon. Gentleman appreciates that people have been released only on clear, uneqivocal and independent medical evidence to the effect that they would have suffered imminent death if their condition had continued to deteriorate in prison.
    Mr. Flannery: Does the Minister accept that the vast majority of human beings accepts the answer that he has given? Will not he accept that the question raised by the right hon. Member for Down, South (Mr. Powell) bears a macabre affinity to the sort of things that the right hon. Gentleman believes about those black people who come into Britain? Will not the hon. Gentleman accept that such sentiments, if continued, will lead to a great deal of killing?
    Mr. Patten: I am grateful to the hon. Gentleman for his support. However, the right hon. Member for Down, South (Mr. Powell) voices the fears that are held by some on this side of the water and on the other. It is in our interests to point out that those fears are completely unfounded and baseless.

    Unemployment
    Mr. Cryerasked the Secretary of State for Northern Ireland if he will make a statement on the level of unemployment in Northern Ireland.
    Mr. Adam Butler: The total number of people registered as unemployed in Northern Ireland on 9 April 1981 was 98,943; 17·2 per cent. of the working population.
    I am glad to say that the underlying rate of increase in unemployment over recent months has slackened, but nevertheless I regret that we must still expect some higher figures in the future.
    Substantial and lasting improvements can only come about with the strengthening of the economy which our policies are designed to ensure and with the greater efficiency and competitiveness of industry.
    Mr. Cryer: Will the Minister accept that the viciously high level of unemployment has contributed to the unrest and to the difficulties experienced in Northern Ireland? When will the Government alter their policies and when will they ensure that unemployment is significantly reduced in Northern Ireland and in the rest of the United Kingdom? Does the hon. Gentleman believe that jobs in Northern Ireland can be secured only at the cost per job level of the De Lorean project?
    Mr. Butler: Both in Northern Ireland and in the rest of the United Kingdom lasting improvements in employment can be ensured by reducing inflation and by helping industry to lower its costs.
    Mr. Cryer: No.
    Mr. Butler: Yes. In that way industry can be competitive. The last thing that one should do is to take the advice of the hon. Gentleman and his hon. Friends and to spend public money. That will refuel inflation and make industry even more uncompetitive.
    Mr. Kilfedder: Does the Minister realise that his words will bring no comfort to the unemployed of Northern Ireland? For many people, being out of a job causes great heartbreak. Some of them have been in work all their lives. Does the hon. Gentleman realise that, in addition to the hardship of being jobless, such people must face increased council rents and increased food prices? Should not the Government do something to combat unemployment and the increase in the cost of living?
    Mr. Butler: The hon. Member speaks with feeling on behalf of his constituents. They will take heart from the fact that, for example, this week I have opened two new premises in Northern Ireland. That is important because they are associated with advanced technology, where the future lies. I was in America two weeks ago. A considerable interest in further investment in the Province was expressed, largely from those involved in high technology. That is where the hope for the future must lie.
    Mr. Fitt: Does the Minister agree that the figure of 17·2 per cent., appalling though it is, does not tell the whole story? There are places throughout Northern Ireland where the male unemployment figures are 25 per cent., 30 per cent., 35 per cent., 40 per cent. and up to 50 per cent. That is so in many areas, such as West Belfast, Strabane, Newry and Dungannon. There is now a great deal of frustration among all those people who have no

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    employment, through no fault of their own. Will he further agree that he has always had the maximum co-operation from the responsible trade union movement in Northern Ireland, which has done nothing to bring about the Government's callous attitude towards the unemployed? Will he say today to the thousands of people who have almost lost hope that the Government will try to do what they can to increase the employment figures at the earliest possible opportunity?
    Mr. Butler: It is correct that there are areas of unemployment in Northern Ireland which have percentages which are as high as those which the hon. Gentleman mentioned. It is for that reason that the Government not only offer Northern Ireland the most generous package of incentives for industrial development in the United Kingdom, but make available special rates of capital grant and special incentives to those areas of the highest unemployment. That is one way in which we can help positively.
    Mr. Concannon: Is the Minister aware that, although the official unemployment figure for Northern Ireland is still just below 100,000, it has been said that the real number is probably 30 per cent. higher? We must remember those people who have not bothered to register because of the sheer futility of doing so. Does he not agree that the enormity of the unemployment problem in the Province is evidence of the total failure to improve or maintain normal economic life there?
    Mr. Butler: The House must realise that Northern Ireland was the only region in the whole of the United Kingdom where unemployment fell last month. That is one reason why I was able to refer to the improvement in the underlying trend. Surely that is an advantage. I do not accept for one moment that 30 per cent. of those affected do not register. Over 32,000 people are benefiting from the Government's training and employment schemes, which are not productive jobs, but mainly involve training or work experience. They are of great advantage to those who undertake them and will make those people more able to do a job as they move on.

    Prisons
    Mr. Dubsasked the Secretary of State for Northern Ireland what recent consultations he has had about prison conditions in Northern Ireland.
    Mr. Alison: Prison conditions are kept under regular review. As part of this process there are consultations from time to time with a wide variety of interested agencies both inside and outside Government.
    Mr. Dubs: Is the Minister aware that he has the full support of the European Commission of Human Rights in resisting political status? However, it is in favour of a more flexible approach to the prison system in Northern Ireland. Is the Minister aware that there are still many misunderstandings about prisoners' rights in Northern Ireland? It would be helpful if the Minister could clarify that matter. Will he consider further prison reforms as a way of counteracting adverse propaganda and as a way of encouraging prisoners to conform to the rules?
    Mr. Alison: Prison reform is a continuing process in every part of the prison system in the United Kingdom. The privileges, facilities and rules applicable to the
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    prisoners' lives have been published. They were published in the recent circulars which we issued for public interest. They were placed in the Library of the House. The hon. Gentleman can see in them exactly what the privileges and rules are.
    I am grateful to the hon. Gentleman for reminding us that the European Commission of Human Rights confirmed that there is no such status as political status in the international legal system. It made some recommendations about the need for flexibility. I remind the hon. Gentleman that in the last few months we have introduced no fewer than 12 individually distinguishable improvements and modifications in the detailed administration of the prisoners' lives.
    Mr. Michael McNair-Wilson: Has my hon. Friend given any thought to rescinding those privileges which were first granted in 1972 to certain prisoners, from which the concept of special category status has grown?
    Mr. Alison: The privileges that are accorded to any prisoner are naturally susceptible to withdrawal if the prisoner is in breach of prison rules or if an adjudication awards a penalty against him. Therefore, it is always possible for privileges to be withdrawn.
    Mr. J. Enoch Powell: Do the Government recognise the importance of ensuring that any measures introduced in the prisons in Northern Ireland on humanitarian grounds are seen to be applied as soon as possible in the rest of the United Kingdom?
    Mr. Alison: I am not convinced by the right hon. Gentleman's observation. In his recommendations about the administration of the prison system the late Lord Mountbatten suggested that it was right that prisons containing a large number of long-term prisoners should have a regime and administration which was distinguishable from prisons with a population which was neither so long-serving nor imprisoned for such serious offences. The Northern Ireland prison system has an exceptionally large number of young, long-sentence prisoners. A locally differentiated prison regime is reasonable and applicable in that environment.
    Mr. Stephen Ross: Notwithstanding the efforts by Her Majesty's Government, does the Minister accept that unfortunately, and much as we may resent it, part of the world seems to think that we are running an oppressive regime in the Maze? There is a desperate need to make it clear—as I have seen for myself—that the facts are totally different. Every opportunity should be made to demonstrate to the Americans, the French, the Greeks and the rest that the Maze regime is a fair system of prison administration, probably better than anywhere else in the world.
    Mr. Alison: The hon. Gentleman is a little pessimistic about the extent to which the prison system in Northern Ireland, and conditions in the Maze in particular, are regarded as sinister and unacceptable. We have a liberal regime—if I dare use that word—of admission for the media. Press correspondents and television crews—both sorts of public relations media—have regularly visited the Maze, apart from visits by the hon. Gentleman, other hon. Members and other people. The conditions of life in the prison for those who wish to hear and know the truth are readily accessible and well known.
    Mr. Concannon: Is the Minister aware that in the present circumstances it is important on every occasion to impress upon everyone what the conditions are and what is offered to the prisoners? I suggest to the Government that they take every opportunity to spell that out so that the rest of the world understands.
    Mr. Alison: No one in the House knows more about the conditions of the prison system in Northern Ireland than the right hon. Gentleman, who played a constructive role in establishing it. He will know of the recent publication of two simple popular guides to conditions in the prison. They have had a substantial circulation and show, pictorially as well as descriptively, how up-to-date and modern the prison facilities are there. It is among the most modern and humane prison structures anywhere in the Western world.

    Education (Segregation)
    Mr. Kilfedderasked the Secretary of State for Northern Ireland if he will take steps to end the present segregated system of education in Northern Ireland as soon as possible.
    Mr. John Patten: The present educational system in Northern Ireland, like that elsewhere in the United Kingdom, reflects the wishes of local communities and of parents and there can be no question of the Government attempting to force integrated education on anyone who does not want it. The Government will, however, support integration wherever practical proposals are put forward and there is a local wish for it, and I must stress that there is no legal bar to children of different religions being educated together.
    Mr. Kilfedder: Is the Minister aware that there is no basis for what he has said, as no official assessment has been made of the opinions of Ulster parents? Will the Government take action to tackle the division in the community, which will persist as long as the monstrous religious apartheid in schools is sustained by the Government with taxpayers' money?
    Mr. Patten: I do not accept that there is educational apartheid in Northern Ireland supported by the Government. Parents can choose where they wish to have their children educated, and in Northern Ireland the vast majority wish to have them educated in a school with a particular religious flavour.
    Mr. J. Enoch Powell: How can we seek to deny to our fellow citizens in Northern Ireland the right to have their children educated, if they so wish, within their own confession, a right that we vindicate in the remainder of the United Kingdom?
    Mr. Patten: I entirely agree.
    Mr. Christopher Price: Is the hon. Gentleman aware that the only part of the Northern Ireland education system in which both communities can mix is in higher education? Is he further aware that if an attempt were made to take out the University of Coleraine or to damage public sector higher education it would be a serious setback for the opportunities of the two communities to come together?
    Mr. Patten: I am aware of that and of the public concern about the New University in Coleraine. However,
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    it is not the role of Government to force integration upon parents if they do not wish to have their children educated in integrated schools.

    Constitutional Arrangements
    Mr. Flanneryasked the Secretary of State for Northern Ireland what representations he has received from the Government of the Republic of Ireland about the future constitutional arrangements for Northern Ireland.
    Mr. Humphrey Atkins: I have nothing to add to the reply that my right hon. Friend the Lord Privy Seal gave to my hon. Friend the Member for Brigg and Scunthorpe (Mr. Brown) on 1 April.
    Mr. Flannery: Will the Minister accept that recent events in Northern Ireland have created a new situation and that many people hope that the love-in on Northern Ireland between the two Front Benches will gradually be broken? Is he aware of the massive initiative in the Labour Party for it to be stated that we profoundly believe that a united Ireland is the only ultimate solution? Will he accept that the British people are sick to death because neither party has a proper policy on Northern Ireland? They want to see a new initiative from the Labour Party to solve the terrible and intractable problems.
    Mr. Atkins: That is all fascinating stuff but does not have much to do with the hon. Gentleman's main question. I am interested in his views and no doubt we shall be hearing more of them. We are discussing a variety of matters with the Government of the Republic, but, as has been made clear on many occasions, not the future governmental arrangements of Northern Ireland.
    Mr. Molyneaux: As Mr. Haughey has recently proved to be anything but a good neighbour, will the Secretary of State dissolve the joint study groups and expose the fallacy of the special relationship?
    Mr. Atkins: No, Sir.
    Mr. Michael Brown: While we recognise that Northern Ireland's future constitutional arrangements are not being discussed with the Government of the Republic of Ireland, may I ask what, specifically, is being discussed.
    Mr. Atkins: The Prime Minister has answered questions on the matter on a number of occasions. She has spelt out the range of subjects under discussion between officials, with a view to suggesting to the two Governments what further can be done. That is as far as I am able to go.
    Mr. Ron Brown: As the Minister is interested in the Labour Party and its position on a united Ireland, will he accept that many of us believe not only in a united Ireland but in a united Socialist Ireland—an Ireland that will challenge the green Tories in the South and the orange Tories in the North? Will he further accept that this is not a new concept, but was argued by Jim Larkin and James Connolly many years ago? It is still valid today. Is he aware that Irish workers will still back the concept, given the lead that I hope the Labour Party will give, as my hon. Friend the Member for Sheffield, Hillsborough (Mr. Flannery) said?
    Mr. Atkins: Again, that is fascinating stuff, but the hon. Gentleman's hopes about the future of the Labour Party have nothing to do with me.

  PRIME MINISTER

    Engagements
    Mr. McNallyasked the Prime Minister if she will list her official engagements for 14 May.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in this House I shall be having further meetings later today.
    Mr. McNally: Is the Prime Minister aware that the Chancellor's recent statements have caused grave anxiety among pensioners about the future of their pensions? Will she allay the fears by saying that the State pension will continue to keep pace with inflation?
    The Prime Minister: The Government are bound under our election pledge to keep the retirement pension to its full purchasing power in connection with inflation. The pledge has been more than honoured and will continue to be honoured.
    Mr. John Townend: Is my right hon. Friend aware that in his first statement the new Labour leader of Humberside said that he intended to re-impose the closed shop, which was abolished by the Conservative administration? What aid will my right hon. Friend give to Humberside's poor employees who may be treated like Joanna Harris?
    The Prime Minister: The imposition of a closed shop by an authority runs totally contrary to our belief in individual freedom. If the unions were doing their job, they would be able to get people to join them voluntarily and not have to impose compulsion. The Green Paper on trade union reform has a section on the matter. I hope that we shall have strong representation about future legislation on the closed shop.
    Mr. Foot: We shall be glad to return to the other topics later, but as this is the first occasion that the House has met since the terrible news from Rome, does the right hon. Lady agree that the House will wish to voice the opinion of the country and to express our horror at the event and our desire that the Pope should make the speediest possible recovery? The politics of persuasion and argument are the pre-eminent qualities of the House, and we should express our horror at the event. We deplore not only the brutality but the sheer wanton futility of such action, which is almost as horrifying.
    The Prime Minister: I gladly join the right hon. Gentleman in his comments. I sent a message yesterday. Most of us heard the news with disbelief that such an attempt could be made. All of us in the House, by definition, believe in the politics of persuasion and not in the politics of the gun.
    Mr. Churchill: Is my right hon. friend aware that the entire House wishes to be associated with her remarks and the sympathy and prayers that she sent to the Pope last night? Is my right hon. Friend further aware that her stand against terrorism, supported by the Leader of the Opposition, commands the respect of the entire nation?
    The Prime Minister: It seems to me that people turn to the gun when they have failed to persuade, and they use the gun to try to threaten the civilian population into
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    submission. They must never, never succeed. Those who use terrorism against great public figures must know that there will be still greater public figures coming on who will never, never be afeard by such action.
    Mr. William Hamiltonasked the Prime Minister if she will list her official engagements for 14 May.
    The Prime Minister: I refer the hon. Gentleman to the reply which I gave some moments ago.
    Mr. Hamilton: Now that the Prime Minister has had time to consider the question put to her on Tuesday by my hon. Friend the Member for Lewisham, West (Mr. Price), will she say why the Government in one breath say that they cannot afford to pay the civil servants more than 7 per cent. this year and in the next breath say that they are to award 11 per cent. to the Armed Forces? Why the indefensible contradiction? During the past two or three years the Armed Forces have had more increases than civil servants or almost anybody else.
    The Prime Minister: The decision on the Armed Forces review body will be given shortly. I must point out to the hon. Gentleman that in this week of all weeks most of us know that the Armed Forces undertake far more risks on our behalf than any other section of the community.
    Mr. John Carlisle: Has my right hon. Friend had a chance today to see the early-day motion in the name of my hon. Friend the Member for Nelson and Colne (Mr. Lee) listing the TUC's investment portfolio? Will she take great encouragement from the fact that the TUC has seen fit to invest in British Government stock and British companies?
    The Prime Minister: I am glad that the TUC has such faith in the Government's sound financial policies, and I hope that it will continue in its shrewd investments.
    Mr. David Steel: In view of the Government's failure to negotiate a settlement of the Civil Service dispute, what advice has she for firms that are waiting for tax repayments and are in financial difficulties as a result?
    The Prime Minister: I offer the advice that I gave in response to a similar question on a previous occasion. The Inland Revenue has made arrangements not to press for the payment of PAYE where firms are in difficulties because their value added tax repayments have not been made. Further, banks can be given an undertaking where there are repayments of value added tax outstanding.
    Mr. Douglas: Will the Prime Minister find time today to explain the conversation that she has had with the Secretary of State for Employment on the so-called national employment service for young people? There seems to be a head of steam behind this coming from the more Right-wing parts of the Conservative Party. Does the right hon. Lady acknowledge that there will be extreme opposition in all parts of the country to young people being deployed on some form of square bashing when what they need is proper training and jobs?
    The Prime Minister: There may be opposition to a compulsory service, but the extension of such a service voluntarily would have a very wide welcome across the country. There are already youth opportunities schemes and community enterprise schemes, and those are very welcome. There will be a few places in the Armed Forces. I suspect that those, too, will be over-subscribed. My right

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    hon. Friend and I are anxious to secure more training opportunities and, in particular, to use the many places available in further and higher education for that purpose.
    Mr. Heddleasked the Prime Minister whether she will list her offical engagements for Thursday 14 May.
    The Prime Minister: I refer my hon. Friend to the reply which I gave some moments ago.
    Mr. Heddle: Does my right hon. Friend agree that it is tragic that, just when it is making its way back to recovery, the British motor industry should once again be hit by a wave of strikes leading to lost jobs, more lay-offs and greater competition from abroad? Will she take time today to explain this danger to the management and work force and urge them to settle their differences and get back to work?
    The Prime Minister: Gladly, yes. Strikes give this country a very bad reputation. They raise the cost of vehicles and put back delivery dates. In my tours overseas, when trying to push the cause of more orders for Britain, I have frequently been told two things—"Yes, but your prices are still too high and your delivery dates too bad." Until unit labour costs come down—they are particularly bad in the car industry, as we know—and until delivery dates are on time, we shall not get the car jobs that we need.
    Mr. Soley: Will the Prime Minister give some thought today to the fact that the Provisional IRA is making significant propaganda gains, both nationally and internationally, out of the position in the Maze prison? Will she bear in mind that the Irish Government solved a not dissimilar problem without granting political status—to which I think the vast majority of us would be opposed—and, in so doing, scored a significant propaganda victory against the Provisional IRA?
    The Prime Minister: It is generally acknowledged that the Government are running, in the Maze prison, one of the most liberal and humane prison regimes anywhere. The European Commission of Human Rights went in in 1978 and reported in 1980. It made eight or nine proposals for improvements. Those proposals were fully met by the Government. After that we went even further, agreeing to an issue of civilian clothing by the prison authorities for wear in the Maze. All that was done before the first hunger strike began. What hunger strikers are asking for—the one who died last was in fact a murderer; let us not mince our words—is political status by easy stages. They cannot have it. They are murderers and people who use force and violence to obtain their ends. They have made perfectly clear what they want. They cannot and will not have it.
    Mr. Michael McNair-Wilson: Will my right hon. Friend confirm that of the £2,000 million borrowed from the International Monetary Fund between 1975 and 1977 by the Labour Government, when they were in extremis, only £240 million now remains for repayment? If so, does it not speak volumes for the skill of the Chancellor of the Exchequer and his team and for the excellent economic management of the country by the Government?
    The Prime Minister: I believe that my hon. Friend's figures are broadly right. They show that Labour Governments run the finances of the country in such a way that they have to borrow large amounts overseas and leave Tory Governments to repay them.
    Mr. Altonasked the Prime Minister if she will list her official engagements for 14 May.
    The Prime Minister: I refer the hon. Gentleman to the reply which I gave some moments ago.
    Mr. Alton: Will the Prime Minister find time today to read the debate last Friday on a Bill of Rights? Will she give the House an undertaking that the all-party talks on this important matter, which she promised some months ago, will now take place?
    The Prime Minister: Perhaps the hon. Gentleman will pursue that matter with my right hon. Friend the Chancellor of the Duchy of Lancaster. A Bill of Rights has been mooted for a very long time because people believe that somehow it will enable us to have entrenched provisions. The fact is that in the system that we run, in which there is parliamentary supremacy, there is no possibility of entrenched provisions. That is the difficulty with a Bill of Rights.
    Mr. Stokes: Does my right hon. Friend think that there is any way in which there can be international collaboration to overcome the menace of terrorism worldwide?
    The Prime Minister: There is already a good deal of international collaboration between police forces. I think that all Governments in the Western world are aware of the need to co-operate to overcome this terrible menace that is afflicting our countries.
    Mr. McNamara: Is the right hon. Lady aware that, unlike the hon. Member for Bridlington (Mr. Townend), I was with the leader of Humberside council when he made his first statement on the policy to be adopted there now that Labour has regained control? Is she aware that the first thing that he said was that the council had examined the books and had found that, in order to reduce rates, the Tories had left Humberside virtually bankrupt? That was his first statement. He also said that the council wanted to restore the cuts in social services to the old and to the young, which is the policy of the Labour Party.
    The Prime Minister: It seems that the hon. Gentleman is embarking on a policy of increased expenditure regardless of the cost. In particular, if the rates on Humberside are to go up greatly, I remind the hon. Gentleman that vastly increased rates on industry and commerce cost jobs and create unemployment.
    Mr. Higgins: In the light of earlier questions, will my right hon. Friend review the proposal that Civil Service pay next year should be negotiated without predetermined cash limits? Are there not grave dangers in such a procedure, both in terms of repercussions elsewhere in the public sector and in view of the need to control public expenditure not just this year but next year as well?
    The Prime Minister: The Lord President has said that next year we would be prepared to negotiate without predetermined cash limits. That does not alter the fact that in the end we would have to reconcile any amount given with the public's ability to pay, and with the Chancellor of the Exchequer's requirements as far as public expenditure is concerned. But there is room for a little latitude, as pay is only one factor in the departmental budgets.

Business of the House
Mr. Michael Foot: Does the Leader of the House have a statement to make about the business for next week?
The Chancellor of the Duchy of Lancaster, Paymaster General and Leader of the House of Commons (Mr. Francis Pym): Yes, Sir. The business for next week will be as follows:
MONDAY 18 MAY—Private Members' motions until 7 o'clock.
Afterwards, remaining stages of the Iron and Steel Bill.
Motion on EEC documents on fisheries, relating to social aspects, quotas, total allowable catches, surveillance zones, Swedish and Faroese fishing in the waters of member States.
The relevant Community document numbers will be listed in the Official Report.
Motion on the General Practice Finance Corporation (Increase of Borrowing Powers) Order.
TUESDAY 19 MAY—Debate on the statement on the Defence Estimates, Cmnd. 8212.
Remaining stages of the Armed Forces Bill.
Motion on the Employment (Miscellaneous Provisions) (Northern Ireland) Order.
WEDNESDAY 20 MAY—Conclusion of the debate on the statement on the Defence Estimates.
Remaining stages of the Atomic Energy (Miscellaneous Provisions) Bill.
THURSDAY 21 May—Debate on the BBC licence and agreement, Cmnd. 8233 and on the Royal Charter.
Motion on EEC documents 8479/80 and 8480/80 on shipping standards and prevention of oil pollution.
FRIDAY 22 MAY—It will be proposed that the House should rise for the Spring Adjournment until Monday 1 June.
The relevant documents are as follows:
11626/80 and Corr. 1—Social aspects of the European Community sea fishing sector.
4884/81, 5361/81—Quotas.
5304/81,5360/81, 5362/81, 6021/81—Total allowable catches (TACs) and surveillance zones.
MAFF Unnumbered Memorandum of 9 February 1981—Quotas.
28 April 1981—Swedish-registered vessels fishing in the waters of member States of the European Community.
11 May 1981—Faroese-registered vessels fishing in waters of the member States of the European Community.
Reports of the European Legislation Committee:
Fisheries: 7th Report, HC 32-vii (1980–81), para. 3;
10th Report, HC 32-x (1980–81) para.1;
17th Report, HC 32-xvii (1980–81), paras. 1 to 4;
21st Report, HC 32-xxi (1980–81), paras. 1 and 2;
22nd Report, HC 32-xxii (1980–81). [The 22nd Report is not yet published, but typescript copies of the relevant paragraphs are available in the Vote Office.]
Shipping Standards and Oil Pollution: 11th Report, HC 31-xi (1980–81) paras. 1 and 2.
Mr. Foot: First, can the right hon. Gentleman give an assurance that we will have a debate, in Government time, on unemployment when the House returns from the recess or immediately afterwards? The next unemployment figures will be announced when the House is in recess. I hope that the right hon. Gentleman has been able to consider my request last week for the Government to provide time for a debate on unemployment as soon as we come back.
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Secondly, I asked the right hon. Gentleman last week about the Armitage report. Can he give me the assurance that I asked for then?
Thirdly, I see that a major debate on the defence estimates is scheduled for Wednesday next week. Does riot the right hon. Gentleman understand that Wales is playing England at Wembley that night? What kind of tomfoolery is this?
Mr. Pym: On that matter, the right hon. Gentleman must make his choice.
The right hon. Gentleman asked about a debate on unemployment. The Government are, of course, every bit as concerned as the Opposition about the serious unemployment figures. The House has had a number of opportunities to debate that important subject, and clearly will return to it again. I shall certainly keep the right hon. Gentleman's request in mind, but I cannot give a guarantee, or the specific undertaking that he requested. Of course I appreciate the importance of the subject.
As I said last week, my right hon. Friend the Secretary of State is still considering the representations he has received in connection with the Armitage report. He is not about to take a decision. Indeed, I do not think that a decision is imminent. Therefore, there will be time for the House to return to this matter in due course.
Mr. A. J. Beith: In view of the Prime Minister's reply to my hon. Friend the Member for Liverpool, Edge Hill (Mr. Alton), that it is with the right hon. Gentleman himself that we should pursue the question of all-party talks on a Bill of Rights, and as the Bill of Rights Bill was talked out last Friday, does the right hon. Gentleman believe it best to provide Government time for the Bill, or would he prefer those talks that the Prime Minister promised to be initiated soon?
Mr. Pym: I will consider that, of course, but my right hon. Friend the Prime Minister also pointed out some of the basic difficulties in legislating in such a matter. I am afraid that I would not be prepared to provide Government time for further consideration of the Bill of Rights Bill. I made that point clear before the debate on the Bill was arranged. I am, of course, glad that there was time last Friday to debate it, because I think that a general presentation of the arguments and counter-arguments will have been helpful to the House.
Mr. Michael Latham: The debate next week on the defence White Paper 'will be on a general motion. Will my right hon. Friend consider tabling, either next week or after the recess, a specific Government motion—I hope that it would get all-party support—congratulating the security forces on their work in Northern Ireland, so that the House can express its support for them?
Mr. Pym: I am sure that that will be considered, but my hon. Friend and others might like to table an early-day motion to that effect in any case.
Mr. Jack Straw: In view of the devastating effect of Government policies on employment in Lancashire, as evidenced yesterday by the remarks of a life-long Conservative—county councillor Mrs. Kathleen Sumner-Clough—who complained in public print that people on the doorstep see the Prime Minister
"as nothing less than a Fascist"
and went on to describe the Prime Minister as a disaster and as someone who is trying to take over from the Queen,

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and in view also of the clear disarray amongst Lancashire Conservatives about Government policies, will the right hon. Gentleman arrange an early debate on their effects on Lancashire and the North-West?
Mr. Pym: I do not think that I can arrange that in Government time, but of course the Opposition are quite entitled to choose such a subject on a Supply day at the next opportunity.
Mr. Eldon Griffiths: Whilst appreciating and welcoming the opportunity that my right hon. Friend has made available for a full debate on defence before any decisions are taken in the Cabinet about the defence review, may I ask my right hon. Friend to give an undertaking that that will not pre-empt the opportunity for a full debate on any decisions that the Government may announce later in the Session, and certainly before the Summer Recess?
Mr. Pym: I think that it would be premature to give an undertaking on that score, because the decisions that may have to be taken—and they are taken every year in any case—are not known at this stage. As my hon. Friend is aware, there are in any case other debates on defence after the two-day debate on the White Paper that I have announced for next week.
Mr. Robert Parry: Has the Leader of the House seen early-day motion No. 389, which I tabled and which is supported by many of my hon. Friends from the regions?
[That this House notes with deep concern press speculation that the Chancellor may further increase tobacco duty to recoup the concessions he made on Derv duty following massive increases made in the Budget; reminds the Chancellor of the law of diminishing returns; feels any further increase will put the price of a cigarette of a pipe of tobacco out of the reach of the working man, increase job losses and unemployment particularly in areas of high unemployment; and calls upon the Chancellor not to take this step.]
Will the right hon. Gentleman bring this motion to the notice of the Chancellor of the Exchequer, because if there is any further heavy increase in tobacco duty there could be large job losses in the regions, and further unemployment? I have two tobacco factories in my constituency, and we cannot afford any more job losses or factory closures on Merseyside.
Mr. Pym: I assure the hon. Gentleman that my right hon. and learned Friend the Chancellor of the Exchequer has seen and has in mind that motion, and will take it into account in any decision that he announces.
Mr. Richard Body: Will my right hon. Friend confirm that from now on he is planning our timetable so that we shall be able to debate some of our reports from Select Committees?
Mr. Pym: I hope that there will be time in due course, but there will not be in the immediate future.
Mr. Eric Heffer: Is there to be a statement by the Government about British Leyland and its future, and particularly on the situation that could develop at Speke, with further redundancies on
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Merseyside? Is the right hon. Gentleman aware that the situation would be much more devastating on Wednesday if Liverpool were playing rather than England and Wales?
Mr. Pym: We must all get our priorities right.
We have no plans at the moment to make a statement on British Leyland, but I shall consult my right hon. Friend the Secretary of State for Industry.
Mr. Anthony Beaumont-Dark: I think that it is time for the House to discuss the gathering crisis of British Leyland, which is now forecasting losing £340 million this year—the same amount as last year. I know that it is sacrilege to say so, but some of us think that the time has come when we should discuss this matter as a House——
Mr. Speaker: Order. Will the hon. Gentleman be interrogatory rather than declamatory?
Mr. Beaumont-Dark: Does my right hon. Friend agree that the time has come to discuss the situation at British Leyland, where decisions are being made that will be disastrous to the West Midlands yet again?
Mr. Pym: That is an important subject, but again it is a matter of time and priority. There is no opportunity in the near future, but I hope that the House will be able to consider the subject at some point.
Mr. J. Enoch Powell: On what day does the right hon. Gentleman intend to move the recess motion?
Mr. Pym: On Thursday.
Mr. James Kilfedder: Will the Leader of the House urgently arrange a meeting of the Northern Ireland Committee to debate the excessive rent increases that have been harshly imposed on Housing Executive tenants in Northern Ireland without proper consultation?
Mr. Pym: I shall consult my right hon. Friend the Secretary of State.
Mr. Dick Douglas: Will the Leader of the House give an undertaking that he will bring forward the motions on the Order Paper about the government of Scotland, because if those proposals are not debated soon, certain advantages will be lost to Scottish Members for this Session?
Mr. Pym: I shall of course find an opportunity in due course to debate those motions. It is not our intention that whatever the House decides should apply to this Session—[HON. MEMBERS: "Oh".] I am telling the hon. Gentleman the truth. It is a matter that the House can decide, and clearly it would be appropriate to implement any decision that was taken during the next Session. I cannot bring it forward next week, but I shall do so after the recess, and the House will then have the opportunity that the hon. Gentleman wants.
Mr. Bruce Milian: On that subject, the Leader of the House has no right to say that the Government will not introduce the measures in this Session. It is a matter for the House, and an amendment appears on the Order Paper to enable the House to decide. Is the right hon. Gentleman aware that, due to Government inefficiency, the Scottish Estimates debate that was arranged for next week cannot now take place? Can he assure us that we shall return to the matter immediately after the recess?
Mr. Pym: On the first point, I agree that it is a matter for the House to decide. However, this stage in the Session seems an unusual moment to change our procedure in that way. I want to give the House an opportunity to reach a conclusion and then implement whatever is decided in a sensible way.
In answer to the right hon. Gentleman's question about the Scottish Grand Committee, I understand that there were practical difficulties, but the Government will try to accommodate the Opposition on the matter at the earliest opportunity. We shall try to accommodate the right hon. Gentleman's request.
Mr. Stephen Ross: Does the Leader of the House agree that the House should have a full-day debate after the Whitsun Recess on our attitude to what has been happening in Northern Ireland during the past few weeks?
Mr. Pym: There is much interest in that subject. Again, it is a question of finding the appropriate opportunity.
Mr. James Hamilton: Will the Leader of the House take it from me that there were no practical difficulties at all for the Scottish Grand Committee? It was because of the Government's ineptitude and inefficiency in not putting the matter on the Order Paper that there is no sitting next week of the Scottish Grand Committee to discuss Estimates.
Mr. Pym: I do not presume to suggest that I am blameless in a matter of that kind, but I understand that there were difficulties. We shall try to accomodate the Opposition's request.
Mr. Tom Ellis: In view of the Prime Minister's admission a few minutes ago about the impossibility of securing the entrenchment of British law, does the right hon. Gentleman think that it is now time to begin a study of at least the bones of a written constitution?
Mr. Pym: I think that the hon. Gentleman is asking about the Bill of Rights Bill that was debated last Friday. I have nothing to add to the reply that I gave to the right hon. Gentleman the leader of the Liberal Party.
Mr. Dennis Skinner: Will the right hon. Gentleman or any Minister be making a statement in the near future about the people's march for jobs in Liverpool, Huddersfield and Wales—Mr. Speaker's own territory—during next week on their way to London? Is he aware that hundreds of marchers are touring the unemployment trail and doing exactly what the Prime Minister said when she talked about being more mobile in the search for work? Is he further aware that the marchers have passed through hundreds of towns and cities but have not found work in any of them? Is it not time that the Government realised that their policy is in ruins, and that they should get out and give other people a chance to run the country?
Mr. Pym: Our policy is not in ruins. I have expressed the Government's dismay about the unemployment figures. We have no plans to make a statement on the subject next week.
Several Hon. Members rose——
Mr. Speaker: Order. I propose to call those Members who have been rising.
Mr. Harry Ewing: On the matter of the government of Scotland proposals, why have the Government changed their mind? Is the Leader of the House aware that there has always been an undrstanding that those proposals would be introduced and implemented during this Session? To keep faith, will the Leader of the House ensure that the matter is debated in our first week back after the recess? There are still sufficient Tuesdays and Thursdays left for the Government to honour their word. I offer the Leader of the House this second chance to honour the commitment that was given by the Government.
Mr. Pym: That was not my understanding of the position. I did not understand that there was such a commitment, but I may be wrong. My predecessor may have given such a commitment, but I am not aware of it. I have told the House frankly how I see the matter, and I think that we ought to proceed. I shall provide the time so that the House can come to a conclusion.
Mr. David Winnick: Is it not important that we should debate Northern Ireland at the very first opportunity, and the agony of the events that are taking place there? As there is so much debate taking place outside the House of Commons, both here and abroad, why should not the House of Commons debate this subject? Can the Leader of the House ensure that the subject will be given priority for debate as soon as we return after the recess?
Mr. Pym: The pressures on time are self-evident. Of course, there is no reason why the House should not debate this important subject, and no doubt it will, but there is not an appropriate opportunity next week, and I cannot see one in the immediate future. The Government and I are acutely aware of the problems in Northern Ireland. In due course, no doubt, there will be an opportunity to raise the matter.
Mr. Ioan Evans: In view of the Prime Minister's reiteration of her support for the Government's monetarist policies, will the Leader of the House arrange an early debate on early-day motion 309?
[That this House welcomes the statement by 364 university economists condemning the mad monetarist policies of the Government and demanding an urgent consideration of alternatives; notes their conviction that there is no basis in economic theory or supporting evidence for the Government's belief that by deflating demand they will bring inflation permanently under control and thereby induce an automatic recovery in output and employment; and further recognises that the time has come to consider alternative policies that offer a far better hope of sustained economic recovery.]
Mr. Pym: Perhaps we should have a day for each of the 364 economists and see where that gets us. No, Sir.
Mr. Derek Foster: Will the Leader of the House arrange for a statement to be made next week about the Cabinet's attitude to the so-called national scheme of community service? Is he aware that the stated objective of the Secretary of State for Employment, that he wishes to develop a vocational training scheme for all 16 and 17-year-olds, has widespread support among Opposition Members and, indeed, in the country? Is he further aware that the Prime Minister's flirtation with this so-called national community service scheme will frustrate that objective?
Mr. Pym: The Government are not at the moment considering the specific scheme referred to in the early-day motion, but we are considering thoroughly and carefully what further steps may be taken to aid youth unemployed. As the House knows, we have programmes to ease the problems of young people who cannot find work, and we are exploring every avenue in that respect. However, at the moment we are not considering the specific proposal of my right hon. Friend the Member for Stafford and Stone (Sir H. Fraser), although the general subject of youth unemployment is very much in our minds at present.
Mr. Christopher Price: Can we have a statement next week from the Home Secretary about his future attitude to the holding of inquests in England and Wales? Is the Leader of the House aware that the recent inquest that took place was grossly unsatisfactory from the point of view of everyone concerned—in particular, an inquest of this nature, in which the conduct of the police is in question? The police broadly briefed the coroner, and that, surely, is not a satisfactory way of affording reassurance, particularly to the relatives of the people who died. May we have a statement from the Home Secretary, perhaps suggesting that in future a person more senior than a coroner—perhaps a High Court judge—could preside over an inquiry?
Mr. Pym: I shall certainly consult my right hon. Friend, but the general issue raised by the hon. Gentleman would require very careful consideration. It is not appropriate for me to make any comment on the verdict of that inquiry. I am sure that the whole House feels great sympathy for the families of those who died. I shall consult my right hon. Friend, but I think that a statement next week is most unlikely.
Mr. Frank Allaun: May we have a statement next week on the Civil Service dispute, which is growing daily? I ask because many of us on the Labour Benches strongly agree with the 11 per cent. increase for Service men. Whatever we may think about the fantastic level of arms expenditure, we think that Service men are entitled to a living wage. If that applies to them, why should it not apply to civil servants?
Mr. Pym: That point was dealt with by my right hon. Friend the Prime Minister a few moments ago. I do not know whether it would be appropriate to have a statement next week. I am doubtful. I hope, however, that in due course—and the sooner the better—there will be informal
890
talks, leading, perhaps, to formal talks. I think that the House would like to see the dispute ended at the earliest possible moment.
Mr. Bob Cryer: The Leader of the House will be aware that the current edition of the register of members' interests has been published this week. May we have a debate as soon as possible about it? In that way we can discuss its inadequacies and the fact that the levels of income are nowhere noted in the register. We can debate also those who have failed to register their interests and are subject to a resolution of the House, and, at a time when we have 2·5 million unemployed, condemn those hon. Members who receive full salaries but are moonlighting, with company directorships, parliamentary adviserships and in other capacities? May we have an urgent debate on what is essentially an important parliamentary and public matter?
Mr. Pym: Most of the representations that I receive are in the contrary sense—that the register is not an important document and that it is not something that the House should spend its time debating.
Mr. Cryer: Of course, that is what some would say.
Mr. Pym: The hon. Gentleman is entitled to his view. I did not say that the representations made to me were unanimous; only that most of them took a contrary view to that of the hon. Gentleman. I therefore do not at present see an opportunity of acceding to the hon. Gentleman's request.

Business of the House
  His Holiness the Pope
  Mr. Speaker: I have two brief statements to make. First, I did not want to interrupt the exchanges between the Leader of the Opposition and the Prime Minister. I should have notified the House, however, that, anticipating the feeling of the House, I have sent a message of sympathy concerning the outrage in Rome and saying that our prayers are for the recovery of His Holiness the Pope.
  Whitsun Adjournment
  Mr. Speaker: I remind hon. Members that on the motion for the Adjournment of the House on Friday 22 May up to eight hon. Members may raise with Ministers subjects of their choice. Applications should reach my office by 10 pm on Monday next. A ballot will be held on Tuesday morning and the result made known as soon as possible thereafter.
Orders of the Day
  Social Security Bill
  As amended (in the Standing Committee), further considered.
  Social Security Bill
    Clause 1

      UP-RATING ORDERS
      3.55 pm
      Mr. Norman Buchan: I beg to move amendment No. 1, in page 3, line 1, leave out subsection (3).
      Mr. Speaker: With this we may also consider the following amendments: No. 2, in page 3, line 7, leave out `15.5' and insert '17'.
      No. 3, in page 3, line 10, at end insert—
      (c) Provided that this subsection shall not apply in the case of invalidity benefit'.
      No. 4, in page 3, line 10, at end insert—
      (3A) In calculating the increases to be specified in any draft of an up-rating order prepared and laid before each House of Parliament under section 125 (3) in 1981, the Secretary of State shall increase the value of invalidity benefit so that it has the value which it would have had if section 1 of the Social Security (No. 2) Act 1980 had never been in force.'
      No. 5, in page 3, line 10, at end insert—
      '(3A) Subsection (3) of this section shall not apply to any of the sums mentioned in Part IV of Schedule 4 to the Social Security Act E 975'.
      No. 6, in page 3, line 10, at end insert—
      '(3B) In calculating the increases to be specified in any draft of an up-rating order prepared and laid before each House of Parliament under section 125 (3) in 1981, the Secretary of State shall increase the value of the unemployment benefit so that it has the value which it would have had if section 1 of the Social Security (No. 2) Act 1980 had never been in force.'
      No. 7, in page 3, line 10, at end insert—
      '( ) Provided that this subsection shall not apply in the case of retirement pension'.
      No. 8, in page 3, line 22, leave out from 'benefit' to end of line 24.
      Mr. Buchan: This series of amendments is concerned with the main gaps in the Bill. When to a friend working in social security I described the Bill's appearance as causing one of the blackest days in the history of social legislation in this country, he said that I should strengthen my description because it was even worse than that.
      For the first time since the beginnings of what we have come to call the Welfare State we have seen specific clawbacks and cuts—under the fancy name of abatements—in our social legislation. Our case today is that the cuts are not only morally indefensible. They are certainly socially indefensible and we doubt whether some of them are legally defensible.
      Amendment No. 1 would delete the entire proposition of clawing back pensions by 1 per cent. What a mean concept it is that pensions should be cut by 1 per cent. Amendment No. 2 would raise the baseline on which the year's uprating is to be made and would make good the accumulated shortfall in long-term benefit upratings since the Government came to power. That is of extreme significance because we deny the validity of the Government's argument. We do not accept that there has been an overprovision of pensions.
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      Amendment No. 3 would exempt the invalidity benefit from the cutback. We would expect in the International Year of Disabled People to get some support for that. Amendment No. 4 would require restoration of the cut in the value of invalidity benefits. Amendment No. 5 would exempt from the clawback increases for dependants. Amendment No. 6 would require restoration of the value of unemployment benefit in this year's upratirtg. Amendment No. 7 would exempt the retirement pension from the clawback, and Amendment No. 8 is a safeguard to prevent the Government from repeating the process of clawing back social provision in the future.
      The amendments break down into two sets. One set is concerned with the 1 per cent. clawback, the dreadful proposition by the Government that the pensioners were overprovided for last year by a penny in the pound, and that they must therefore take the money back. The other set—amendments Nos. 4, 6 and 8—deals with the savage attack on those who receive unemployment or invalidity benefits in, of all years, the International Year of Disabled People, by which the benefits will be cut by 5 per cent.
      We deny that even under the Government's etimates there is any proper basis for saying that there was a 1 per cent. overprovision to pensioners. We are horrified by the concept of the 1 per cent. clawback. The Government are unjustified in claiming that the pensioners were overpaid. I shall not rehearse the arguments. they are all on the record. The Opposition deployed them at length in Committee and I shall not repeat them here. It is sufficient to say that, given the shortfall in the years from 1978, the pensioners have been underprovided for.
      In Labour's last year in office we failed to make up the shortfall. We lost the general election and we were unable to make good the underprovision. We were pledged to do so, but the Conservatives came into power and they changed the law that linked pensions to prices or earnings, whichever was the higher. Their change established the link with prices only, but they forgot to honour their obligations under the then law which at that time required pensions to be related to earnings. The Government have sailed very close to the wind in terms of obeying the law.
      The Secretary of State accepted that point when he was asked whether he would make up the shortfall. In a parliamentary question he was asked
      "whether the Government proposed to make good the shortfall in … pensions and other long-term benefits arising from the underestimate of the rise in earnings"—
      which at that time was the law. He replied:
      "No. There is no legal obligation to make up this shortfall which, it is estimated would cost £195 million in a full year. We fully complied with the statutory requirements when uprating retirement pensions and other long-term benefits in November 1979." —[Official Report, 25 January 1980; Vol. 977, c. 418–191
      The Government therefore recognised at that time that there was a shortfall but they assert now that they are not prepared to make it up. In legal terms they are sailing very close to the wind in asserting that. There cannot be a shortfall and overprovision. Either the pensioners were getting too little or they were getting too much. By his answer the Secretary of State said that they were getting too little, but that the Government were not intending to make good the difference. In spite of that answer, the right hon. Gentleman proceeded with this iniquitous Bill in order to cut back by a penny in the pound that to which

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      the pensioners were reasonably entitled. It is the meanest action of any Government since 1931, above all since the beginning of the Welfare State as we understand it.
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      Mr. loan Evans: It is a particularly mean act when the Government have already acted, because it was the Labour Government's intention to increase the pensions in relation to increases in average earnings or prices, whichever was higher. That has already been removed from the pensioners by the Government and now they are meanly taking off a penny in the pound.
      Mr. Buchan: It is meanness upon meanness. As I said on Second Reading, I almost prefer major crime to that petty, mean inequity. The removal of the link with earnings is a major factor, because the pensioners have been told by the Government that they will never be better off. If, by accident, they become better off, even by a penny on the pound, the Government will claw it back. By linking pensions to prices only and by clawing back, the Government are asserting to every pensioner "You will never be better off. If by accident you become better off, we shall take it back." No matter how much better off the rest of society become—whether Ministers, Members of Parliament, Vestey or the other people who will benefit from tax benefits—pensioners will have the same standard of living. We reject the morality, the social necessity, the budgetary necessity and the legal necessity for that. The Government have done it by choice, and it will be a black day for Britain if we allow the Bill to be passed today.
      There is then the abatement aspect, the 5 per cent. cut in invalidity pensions. What a welcome the Government have given to the International Year of Disabled People. Unemployment benefit is to be cut by 5 per cent. in a year when we have 2½ million unemployed. That will go down in history for its infamy. This week the Government have promised to reintroduce abatement of invalidity pension.
      The Financial Secretary to the Treasury was asked on Monday whether the Government would restore the 5 per cent. abatement in unemployment benefit. The excuse for cutting unemployment benefit by 5 per cent. was that it would be brought into taxation. We do not object to benefits being brought into taxation. We recognise that there is a case for all incomes to be taxable. When the Financial Secretary was asked whether he would restore the 5 per cent abatement, he said:
      "There was some concern, … as to whether the 5 per cent. abatement of unemployment benefit will be made good when the taxation comes into play in April 1982. If I could answer that question here and now, I would gladly do so, but I cannot, for the simple reason that no decision has been taken. This is a public expenditure matter and the decision will be taken in the course of the public expenditure review alongside all the other public expenditure decisions." —[Official Report, 11 May 1981; Vol. 4, c. 513.]
      The decision to cut back by 5 per cent., because the Government intended to make a decision to bring it into taxation, has now been rejected, and it becomes a public expenditure factor. Either it is a principle that they should apply or they should be honest and say that they are trying to save money on unemployment benefits so that they can give it to the rich in tax handouts; it cannot be both. That is the gravamen of my charge.
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      Many hon. Members wish to participate in the debate. I cannot say that I have been devoid of friendly comments about the length of time for which I spoke yesterday, so I shall be brief to allow others to speak today.
      The Government are the first I have known who have caused an economic crisis and then attempted to solve it by punishing the poorest and most deprived in our society. That action has outraged the pensioners, and rightly so. They cannot understand why this mean action about the 1 per cent. should be applied to them. The unemployed cannot understand the mean action on the 5 per cent., as they are unemployed through no fault of their own. We back them entirely. It is iniquitous, and the Government have two ways to solve it.
      There is anxiety over the whole of social security at present. I had hoped that the Secretary of State would be present. I want to ask him what he and his Department are doing to force the Treasury Ministers and, above all, the Prime Minister to listen to the requests of the Civil Service unions to negotiate, arbitrate or listen to the Trades Union Congress, which suggests that the International Labour Organisation might be brought in to the crisis. We are facing a difficult problem and if further problems arise in social security and other offices through the troglodyte behaviour of the Government in refusing negotiation, the fault will be entirely on their shoulders. We shall ensure that the community recognises that. What is the right hon. Gentleman doing to persuade the Government to agree to discussions with the Civil Service unions?
      My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker), intelligent and ahead of us all as usual, said on Second Reading that hon. Members would recall that we debated this subject in the year of the announcement of the Royal Wedding, the engagement of Prince Charles and Lady Diana. He said that it would be a good gesture, to which the country would respond, if the Government's wedding present to the Royal couple was the announcement that they would not cut pensions by 1 per cent. this year but would return the 1 per cent. to pensioners. That would be welcomed as a Royal present indeed. I invite the Government to follow that suggestion.
      Mr. Andrew F. Bennett: In supporting the amendment, I want to make a short, simple point. Throughout this Parliament, the Government's reason for the number of social security measures, two last Session and two so far in this Session, is that the country cannot afford, in the present economic climate, to do the decent thing by the disadvantaged—the pensioners, the unemployed and other groups. The excuse was always that in the present economic climate nothing could be done. The message was either that there had to be cuts or the necessary and obvious improvements, that everyone realised needed to be made could not be carried out.
      For the past two months, from the Prime Minister downwards, we have been told that the Government can see the light at the end of the tunnel and that matters are improving. Most people do not believe that, but that is the collective view of the Government. If so, when are the pensioners, the unemployed and those on supplementary benefit likely to see benefit from the improving economic climate?
      The first opportunity for the disadvantaged to see some improvement will be in November. If the Government removed the clawback and the claim about over-provision for pensioners, pensioners would benefit this year from the

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      Government's claim of an improvement in the economy. If that is not done this November, the disadvantaged groups will have to wait until November 1982. If there is an improvement in the economic situation, when will the pensioners benefit?
      Mr. Bob Cryer: My hon. Friend the Member for Renfrewshire, West (Mr. Buchan) reminded me that one of my constituents, a priest, wrote to ask me to ask the Prime Minister whether, in view of the wedding in the Windsor family that is due to take place on 29 July, the Government will consider giving an extra day's pay to the unemployed and those in receipt of supplementary benefit as a gesture of good will and recognition of the event.
      The reply from the Prime Minister was the single word "No". She did not even have the decency to give an explanation. Therefore, in asking for the withdrawal of the Bill and the 1 per cent. clawback which the Government have disgracefully put before the House, my hon. Friend the Member for Renfrewshire, West is asking for the impossible. The Government's heart is too stony and their face is too hard.
      Mr. Andrew F. Bennett: It was probably a little before my hon. Friend's time, but at the time of the Coronation in 1937 the then Government gave the unemployed an extra half-crown to celebrate the occasion.
      Mr. Cryer: My hon. Friend is quite right. Of course, nowadays the sum would be significantly greater than the 1 per cent. clawback proposed in the Bill. There has been a marked move away from generosity and towards a vicious attack on the poor. I hesitate to ask Ministers what a half-crown in 1937 would be worth today, because, as we know, mental arithmetic is not their strong point.
      The Bill represents a continuation of an attack on the poor. Alternative sources of income are available and I shall spell them out. We are talking about a Government who introduced a 54-week year to deny pensions for a fortnight to people who have worked all their lives and who deserve a decent pension. The link between pensions and earnings has been removed as a result of legislation introduced by this rotten Tory Government. Recently tax refunds for the unemployed were deferred, and still earlier there was a £12 disregard in respect of social security benefits for strikers' dependants.
      In every conceivable way, the Government are attacking those who are least able to bear cutbacks of any sort. It is interesting that the Government should be introducing this rotten measure, because earlier today I asked the Leader of the House to initiate a debate on the register of members' interests. He said "No".
      By common consent, widows, pensioners and recipients of supplementary benefit are living on the lowest incomes. We should therefore compare the time allocated for debate on this Bill, and the Government's desire to get this legislation through, with their desire to avoid a debate on the register of members' interests. In the main, the names of Conservative Members appear in that register, although some members of the Social Democratic Party appear as well and, unfortunately, several Labour Members.
      However, they are in the minority. The vast majority of Tory Members are living off the fat of the land. They are receiving public money, and are skiving off and obtaining money from company directorships and
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      parliamentary adviserships. But will Parliament discuss the issue of those who are advantaged as opposed to those who are not? Not on your life.
      This rotten Conservative Government have turned their attention to the well-off and are attacking the not so well-off. That does not apply simply to this elitist little group inside these oak-panelled walls. The Government will avoid any opportunity to discuss the advantages of the elite at large.
      Part of the revenue to pay for the 1 per cent. clawback could come from the tax concessions that the Government have given to their wealthy friends. That would ensure that people who have worked all their lives and have only a State pension as income would get a full and decent pension. It would also enable widows, whom the Goverment are attacking, to get this 1 per cent.
      4.15 pm
      At present, three or four Conservative Members, including two bag carriers, are present to discuss this matter. I bet that if we discussed Members' salaries there would be a larger attendance, and I have no doubt that that would also be true if we discussed tax concessions for the well-off. There was a much better attendance during our discussion on the Lloyds Bill. I remember that a large number of Tory Members could not vote because they were all members of Lloyds. There is a strong affinity between the attendance of Conservative Members and items dealing with significantly large sums of money for their own friends. That is a reflection of their grave and vindictive attacks on people who can least afford a 1 per cent. cutback.
      In the past, Ministers have asked where the money could come from. As I have said, during the two years of this Government we have seen massive tax concessions to the well-off. It is understood and recognised that the wealthy have done best out of the Government. In addition, if the Government want to spend significant sums of money on weapons of mass extermination such as Trident, £6 billion can be obtained from our tottering economy. Without a doubt, if the Government back a priority, they will find the money.
      The Trident programme will be embarked upon because the Conservative Government place means of extermination before reasonable pensions for widows and people in the lowest income bracket. The Government are spending more than £12 billion on defence. The Ministry of Defence is currently overspending by about £250 million. [Interruption.] A Minister asks about Polaris. The Labour Government spent £1 billion on updating Chevaline. I was a member of the Government at the time but, like other members of the Cabinet and the Government, I did not agree with that expenditure. It is an indictment of the Labour Government that a tiny clique, including the leader of the Social Democratic Party, took that decision without the consent of Parliament. It is undemocratic to agree to expenditure of that sort without the consent of Parliament, and I have consistently argued that Parliament should have scrutiny over all Government expenditure. Conservative Members who are chortling cannot fault me on this issue. It is a sign of improvement that the Labour movement is determined to ensure that a future Labour Government do not renege on policy behind its back.
      The Government are spending massive amounts of money on defence. They are spending £6 billion on Trident, a decision which has caused argument among

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      their own Members, let alone among the public at large. I am convinced that if the public were asked to decide between providing for the poorest in society and massive spending on a means of extermination, they would decide that the Government should spend the money on the poorest people who are deserving of support. That was the message spelt out in the county council elections. The Sting Ray torpedo, which has cost £1 billion, is about to go into production and will eventually cost Britain millions more pounds.
      We should reject such priorities and opt for a decently progressive taxation system in which the wealthy make their proper contribution to society rather than being given the soft option by the Government. They must make their contribution so that wealth may be spread more fairly throughout society. There must be a movement of wealth from those who have it to those who do not—to the working men and women and their families. That principle should govern our tax system.
      The Government take the opposite view. This legislation is an example of that. They want to shift wealth towards the wealthy and take from those who are least able to bear any reduction—even 1 per cent. —in their income. This is a shameful, vicious, mean, wretched little Bill which comes from a shameful, vicious, mean, wretched little Government.
      Mr. Andrew Bowden: We have heard a typical contribution from the hon. Member for Keighley (Mr. Cryer). I do not think that the House wants me to spend much time dealing with it, except to say that it is pretty despicable for any hon. Member to make the broad smears against his parliamentary colleagues on both sides of the House in the manner that the hon. Gentleman did this afternoon. We have heard him do so often in the past, and I have no doubt that the vast majority of hon. Members will treat his remarks with absolute contempt.
      Mr. Cryer: What part of my speech is the hon. Gentleman criticising? Does he not think that there should be parliamentary accountability for Government expenditure on defence and other areas? Does he reject that attitude? Does he not support the democratic principles?
      Mr. Bowden: At the risk of being ruled out of order, I ask the hon. Gentleman to recall that in his opening comments he made some smearing and scathing remarks about the outside interests held by many hon. Members. There is nothing morally wrong in having outside interests. It is of value to the House if many Members gain additional experience as paid trade union officials, paid company directors, paid consultants and paid advisers. It makes them better Members of the House.
      If an hon. Member has outside active interests he can occasionally come down to earth by seeing the realities of life. We live in a hothouse—an artificial atmosphere. The vast majority of Members, whether or not they have outside interests, work well in excess of 50 to 60 hours a week. The hon. Gentleman's comments did no credit to him, to Parliament or to the House.
      Mr. Cryer rose——
      Mr. Bowden: I shall not give way to the hon. Gentleman again. He is not worth my giving way. I have done it once and I am not prepared to do it again.
      Mr. Cryer: On a point of order, Mr. Deputy Speaker. When an hon. Member makes a vicious attack on another Member—or, indeed, even mentions another Member—as the hon. Member for Brighton, Kempton (Mr. Bowden) has done, it is usual for that Member to give way so that the other Member can raise a point in reply. The hon. Gentleman raised the issue. I did not make the attack. I am simply trying to respond to it.
      Mr. Deputy Speaker (Mr. Ernest Armstrong): The hon. Member for Brighton, Kempton (Mr. Bowden) is not giving way.
      Mr. Bowden: I am grateful to you for your ruling, Mr. Deputy Speaker. The House will judge who made the attack on the honour, integrity and reputation of the House.
      I am sorry that the hon. Member for Renfrewshire, West (Mr. Buchan) is not in his place, as I wish to refer to his speech. I appreciate that there are considerable pressures upon his time.
      Mr. Cryer: The hon. Gentleman is parliamentary consultant to the Mid-Shires Building Society.
      Mr. Bowden: The hon. Gentleman is good at making sedentary comments.
      Mr. Cryer: I cannot stand up because the hon. Gentleman will not give way.
      Mr. Bowden: The hon. Member for Renfrewshire, West claimed that the Labour Government intended to make up the shortfall in the pension increase which should never have occurred, in November 1978. The facts show that that is not true. It was publicly announced before the 1979 general election that the old age pension would be increased by the Labour Government, if they were returned to office, by 12·8 per cent. in November 1979. Yet earnings for the period rose by 14·5 per cent. It is right that the House should realise that the Labour Government broke both the spirit and the letter of the law in failing to increase pensions at the rate that they had pledged. They broke that pledge in 1976, and again in 1978.
      The House will recall that I made clear my views about the Bill on Second Reading. The Bill compounds the fact that for a number of years pensions have not kept pace with pensioners' true living costs. During an interesting debate in Committee we discussed the pensioner index and the retail price index in some detail. We must consider the early 1960s to determine what happened during the following 10 or 20 years.
      The pensioner index for a two-pensioner family from January 1962 to December 1974—taking 100 as the base in 1962—rose from 100 to 212, while the retail price index rose from 100 to 205. There was a considerable gap between the pensioner index and the retail price index. Pensioners' income began to fall behind their true living costs. The single pensioner household index between 1974 and 1980 fell 1·7 per cent. behind.
      The key reason why I strongly oppose the Bill, why I shall vote in favour of the amendment, and why I voted against the Bill on Second Reading, is that it fails to keep pensions in line with pensioners' true living costs. Parties and Governments on both sides of the House have betrayed the pensioners. For a long time they have not kept pensions in line with pensioners' living costs.
      My hon. Friend the Minister will argue that the pensioner index for the past three or four years shows little

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      difference from the increases in the retail price index. That I concede, but there is a difference between 1974 and 1980, albeit only 1·7 per cent. If that 1·7 per cent. had been made available to pensioners, if the base rate had been higher and not kept lower than it should have been on at least two occasions by the Opposition when they were in office, the very points we are now arguing about would have little validity. The base figure is low and should be higher. I cannot and will not support this Bill.
      4.30 pm
      In that context, I deeply regret that this mean Bill should have been brought forward by my own Government. I am not going to repeat the points I made on Second Reading. I hope we will be given a clear and definite undertaking from the Front Bench that never again will the Government bring forward a Bill which reduces the pension increase by 1 per cent.; that we will do our utmost during the life of this Parliament to make up that amount, to make up the amounts which were not paid when the Labour Party was in office, to make up the amounts which should have been paid to meet pensioners' real living costs based on the pension index in the last 10 or 15 years. If we do that, today's debate and the whole discussion of this Bill will not have been wasted time.
      Mr. Robert Kilroy-Silk: I wish to support my hon. Friends in their opposition to what the hon. Member for Brighton, Kemptown (Mr. Bowden) has described as a miserable Bill. It is rather extraordinary that we should be spending so much time in Committee and in the House debating a Bill which has as its function the taking of nothing more than 1p in the £ off all social security benefits and pensions. It is an extraordinary state of affairs that the Government should have found it sufficiently serious to introduce a Bill aimed at taking vindictive action against what are, by any standards, some of the most vulnerable, highly deprived and disadvantaged of our fellow citizens. As the hon. Member for Kemptown said—he has a very proud and even honourable record on this issue—it is unfortunate and rather strange that the Government should place a Bill before us which takes money away—small amounts, but significant to the recipients—from claimants and beneficiaries and yet at the same time increases fines or terms of imprisonment that can be imposed for any infringement of social security legislation or regulations.
      The Government are asking us to enact a Bill that will take from claimants an amount of money that in terms of the Government's general resources is insignificant, but which, in terms of the amount of money at the disposal of a widow, widower, pensioner, single parent family, unemployed person on supplementary benefit, a person who is sick, disabled or handicapped in some way, is relatively large and significant.
      This is an attack on the most vulnerable of our fellow citizens, but it is by no means the first, and I suspect it will not be the last. It is in line with the Government's attack upon pensioners generally through the reduction in pensions and the breaking of their pledge to maintain the link between pensions and the increases in prices or earnings, whichever is the higher. This link was imposed and met by the last Labour Government so that at the end of their term of office pensions were higher in real terms than they were when we came into office. This
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      Government gave a pledge before the election which they have now dishonoured and the Prime Minister is dishonoured in the process.
      Mr. Bowden: I am grateful to the hon. Gentleman the Member for Ormskirk (Mr. Kilroy-Silk). He has made a strong attack on the Government over this Bill. Would he also be fair and accept that—he used the word "vindictive"—if the Government are making the poorest section of the community suffer—those living on the lowest incomes, particularly those not in receipt of a supplementary pension, when there are 600,000 who could be—it is also true and just as disgraceful that his Government broke the link on two occasions and that his Government, in the statement made early in 1979, said they would not increase the pension in line with the link on earnings, as they were pledged to do?
      Mr. Kilroy-Silk: Unlike many of the lion. Gentleman's Friends, I am not a hypocrite. If my Government did what this Government are doing I would be just as contemptuous and outspoken as I will he on this occasion.
      Mr. J. W. Rooker: Is my hon. Friend aware that under the last Labour Government, if the rule had been that pensions were only raised in line with prices rather than prices or incomes, whichever is the higher, at the time of the General Election in 1979 the pension for a married couple would have been £5 less, under Tory law, than it was under the law introduced by the last Labour Government? The hon. Member for Brighton, Kemptown (Mr. Bowden) knows that.
      Mr. Bowden: The hon. Gentleman broke the law himself.
      Mr. Kilroy-Silk: My hon. Friend is right, as he always is. The hon. Gentleman will remember that many of my hon. Friends, including myself, voted against the actions dictated by the International Monetary Fund, which my Government imposed. The Labour Government imposed cuts, not enthusiastically, not gleefully, but with a great deal of reluctance under the pressure of financial and economic circumstances over which they had no control. This Government do not have the International Monetary Fund breathing over them. Thank goodness for that. This Government are deliberately and premeditatedly acting in a vindictive and disruptive fashion against the interests of the unemployed, the sick and the disabled and all the rest of our disadvantaged citizens. They are doing it because they want to, because they are embarked on a bout of vindictive spite, not because they are required to do so under terms imposed by the International Monetary Fund.
      I wanted to speak for only three minutes——
      The Under-Secretary of State for Social Services (Mrs. Lynda Chalker): If the hon. Member wants to speak for only three minutes, perhaps he might make a more relevant contribution. He seems to have forgotten that in governing the country now this Government are taking economic action which is necessary to put our house in order. They are not waiting for the International Monetary Fund to tell them how to run the economy. They are seeking to bring the whole of the financial dilemma which this country faces under control. They are not being breathed upon by the International Monetary Fund or any other outside Government.
      Mr. Kilroy-Silk: The Minister is well known as one of those Tories who are otherwise described as wets but are known to have bleeding hearts. She is known to be a decent and compassionate person who feels deeply for the disabled and the unemployed. At least that is her media image, one assiduously cultivated and sustained on Merseyside, which area we both represent. I do not deny any of those claims which are made by her and for her. The fact that she felt the need to respond in the tone and the manner in which she did indicates very clearly her embarrassment and great discomfort over being asked to take this action on behalf of this most troglodyte of Governments in their attitude towards the unemployed.
      I do not accept—nor, I believe, does the hon. Lady—that it is right or necessary or proper for a Government to have to manage the economy, to get it right, as she said, by means of 2½ million unemployed. That is not necessary. It is not necessary for the Government's financial targets. It is not necessary for the public sector borrowing requirement. It is not necessary for the maintenance of the economy deliberately to squeeze the most disadvantaged members of our community, to take back a miserable 1p in the £ from already disadvantaged pensioners, from the unemployed living in poverty, from one-parent families.
      Is the Minister saying that neither she nor her colleagues can manage the country's affairs other than by resorting to such despicable tactics? If she is saying that, it is a condemnation of her and her Government. They should get out now and let somebody else deal with the country's affairs more efficiently and effectively.
      The Government have attacked working people and recipients of benefits in other ways. They have reduced pensions. They have broken the link between pensions and increases in prices or earnings. They have attacked the unemployed by refusing to allow tax refunds when people are unemployed. They have attacked strikers by assuming a notional £12 income from trade unions. They have attacked the whole working community by the increase in VAT and through inflation.
      Not content with that, nor with a massive erosion in the living standards of the poorest people, the Government are pretending that they have the compassion that always follows the Under-Secretary of State wherever she goes. The Government, with all the cheek that they can muster, are saying that a further 1p in the pound should be taken from the poorest and most deprived people in our community.
      As my hon. Friend the Member for Stockport, North (Mr. Bennett) said, the Prime Minister pretends that she can see the light at the end of the tunnel and that our economic prospects are improving. Why cannot the Government demonstrate their confidence in their economic policy and prophecies about the improvement in the economy by withdrawing the Bill? As the hon. Member for Kemptown said—and it comes from no better place—the Bill is mean and despicable. Ministers should be ashamed of introducing it and even more ashamed of pretending to defend it.
      Mr. Ioan Evans: It is difficult to find words to describe the Government's mean actions. Yesterday I said that many people believe that the Government want to undermine the Welfare State, because they are withdrawing some welfare benefits. That was a moderate comment. The Under-Secretary of State claimed that I said
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      that the Government were dismantling the Welfare State. I did not say that, but if she wants to put the words into my mouth I shall accept them. The Government are beginning to dismantle the Welfare State. If the amendments are not accepted, or the Bill is not thrown out, as the hon. Member for Brighton, Kemptown (Mr. Bowden) said, the Welfare State will be further dismantled.
      When we were in Government we sought to give the pensioners a guaranteed increase in pensions linked to the retail price index. We wanted pensioners to share the benefits of prosperity. We did not want to tie them to the same pension for ever and a day when other sections of the community improved their living standards. If inflation rises by 15 per cent. and the pensioner is given a 15 per cent. increase he receives nothing. He remains at the same standard. We said that if civil servants, the Armed Forces and other workers had pay rises, the pensioners should have equivalent rises.
      Mr. Robert Taylor: Is the hon. Gentleman arguing that under the Bill the pensioners will do less well than the average worker, who is accepting a wage increase of about 7 per cent.?
      4.45 pm
      Mr. Evans: The pensioners are doing less well than they would do under a Labour Government. The hon. Member for Croydon, North-West (Mr. Taylor) has only just come into the Chamber. If he stays a little longer he will discover that we are discussing taking 1p in the pound off the pensioners. In spite of the Government's lack of incomes policy, incomes are being kept down. It is difficult to explain to civil servants that the Government do not have an incomes policy, because they certainly seem to have such a policy in relation to some sectors. I shall not be drawn into discussing incomes, because the Government are already in enough of a mess about that.
      By withdrawing benefits that people have come to expect the Government are dismantling the Welfare State. The pension reduction is petty. The Government say that instead of the rise being 16·5 per cent. it should be 15·5 per cent. Next week the Defence Estimates will be published. Between £5 billion and £6 billion will be spent on Trident. The Government are pound foolish in relation to the arms race. Government supporters do not object to that.
      Pensioners are to lose 1p in the pound because the Government have discovered that the increase should be 15·5 per cent. not 16·5 per cent. They do not tell the Ministry of Defence that they have had too much and must give it back, but pensioners are told that they must accept 1p in the pound off their pensions.
      The Government's decision is based on the retail price index. They have argued that the RPI is not quite accurate. The Financial Secretary introduced the tax and prices index. That is now higher than the RPI because the Government have imposed enormous taxes. The Government were supposed to reduce income tax, but people are now paying more income tax. They have imposed taxes on spending. VAT and other taxes are paid not only by employed people but by pensioners, the unemployed and recipients of invalidity benefit. The Government's taxation burden has been taken off the shoulders of the people who can best bear it and put on the shoulders of the poorest.

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      Under the Government's first Budget the wealthy had their tax reduced from 83 per cent. to 60 per cent. —a 23 per cent. reduction. The Government have not made a change there. They have not said that they are in financial difficulty and therefore must withdraw that massive concession to the wealthy. Yet they are prepared to take 1p in the pound off pensioners and make a 5 per cent. cut in the income of people who are so disabled that they can claim invalidity benefit.
      The Government have increased the number of unemployed by over 1 million. They are also to bear a 5 per cent. cut in payments. Words fail me. I look forward to the election. In South Wales people still have folk memories of the Tory Government in the 1930s. People still talk about what they were like then. The Tories in the 1930s were like pilgrims compared with the present Tory Government.
      What they are doing is beyond belief. I hope that they will consider these amendments and if they do not throw out the Bill—and I agree with the hon. Member for Kemptown that the Bill should be thrown out—let us at least accept the amendments and give 1p in the pound back to the pensioners.
      Mr. Allen McKay: This is the most despicable Bill that I have seen in this Parliament. I never thought I would see the day when the Government would take power to claw back 1 per cent. from the aged and most vulnerable members of our society. I believe that this is a watered-down version of the Chancellor of the Exchequer's intention, which is entirely to abolish the linking of benefits.
      The Prime Minister has been reminded of her election pledges and the promise that she made during the election. This is a dilution of those pledges. Far from there being an overprovision of benefits since this Government came into power, there is an accumulated shortfall. In 1978, whilst earnings rose by 13·3 per cent., long-term benefit rates increased by only 11·5 per cent. The second Social Security Act of 1980 effectively ended the link with earnings. A single pensioner lost 65p and a couple lost £1·05p. A widowed mother with two children lost £2·65p, and that includes the cut of the children's addition. On invalidity pension, the combined effect of the two Social Security Acts is that a single person lost £1·80p, a couple £2·90p, and a couple with two children £4·90p.
      The real value of unemployment and sickness benefit was cut by 70p for a single person, £1·20p for a couple and £2·40p for a couple with two children, including the cut in the child addition. This 1 per cent. has been clawed back when all, or most, of the benefits have already been subject to cuts, and when the value of the benefits has been falling relative to the average incomes at work. On this basis alone there is no justification for the clawback. If the Government have made a statistical case, they certainly have not got a moral one.
      My hon. Friend the Member for Keighley (Mr. Cryer) talked about the Civil Service and its problems. What is happening to the pensioners at present is unforgivable. People say to me that they depend on the social security benefits to pay their rent, and then they receive a letter from the social security office after an increase of rent of £3·20p saying that they will have to wait but to write no more and to be patient. Patience does not pay the extra £3·20p a week. From where will that person get the money?
      904
      In Committee the hon. Member for Peterborough (Dr. Mawhinney) spoke of pensioners as being of value to the country, people of independence, of responsibility. I endorse every syllable that he said. But what do the Government do as a reward? What do they give as value for independence, for responsibility, for loyalty? These loyal and independent people lived through the 1920s and 1930s. The Government reward their loyalty by docking 1 per cent. from their pay.
      When I was a trade union negotiator the employer always reminded us of the qualities of the workman and rewarded those qualities. We in local authorities reward those qualities through local councils by television licence concessions, free travel and coal concessions.
      I recently met 2,000 pensioners in Westminster Hall. They put to us their problems in rents, rates, travel costs, heating costs and television costs. Although they still have those costs, this Government will dock 1 per cent. from their pay. The Government have stated time and again that it is their intention to improve the pensions in real terms whenever circumstances will allow. I suggest to them that those circumstances exist already. My hon. Friends have talked about the cost of armaments and Trident. The profits from North Sea Oil in about three or four years will be worth about £35 billion. Therefore, the money is already available and there is no reason why the Government should take back the 1 per cent. Why should people believe the Government when they say that they intend to restore these benefits? They can give a fillip to what they are saying by throwing out this Bill and not clawing back the 1 per cent.
      The Minister for Social Security (Mr. Hugh Rossi): This group of amendments represents a series of variations on a theme—the theme being a root-and-branch objection, by the Opposition and one of my hon. Friends, to the Government's proposal to readjust the excess in the November 1980 uprating, in pensions. The first amendment seeks to delete the provision altogether, the subsequent amendments to prevent its application piecemeal to a number of related benefits.
      I have to advise the House that the Government are unable to accept any of these amendments. In doing so I feel that I must explain what the Government are seeking to do in their proposals which are under attack, because it is evident that there has been a great deal of misunderstanding concerning them, both within and outside the House.
      The starting point is that this Government are fully committed to maintaining the level of retirement pensions in line with inflation—namely, increases in prices—and to improve them beyond that when economic circumstances permit, which is clearly not yet. Last year our advance forecasts suggested that prices would rise by 16·5 per cent. Accordingly, the pensions were uprated by that factor for the period November 1980 to November 1981 and the standard rate of the basic retirement pension for a single person became £27·15.
      Mr. Buchan: The pledge was not as the Minister describes it. The pledge, by the Prime Minister and the Secretary of State was "at least" on a level with the rise in prices. What they have done is to assert "at most" on a level with the rise in prices, because the moment it appears to go 1 per cent. over they claw it back. That is the denial; that is the betrayal.
      Mr. Rossi: I am sorry I gave way, because clearly the hon. Gentleman did not listen very carefully to what I said. The pledge to raise pensions at least in line with prices during the lifetime of a Parliament, is exactly what I have said: to maintain pensions in line with prices and to improve them beyond that point when circumstances permit. Those two statements are identical and compatible. I am sorry if the hon. Gentleman does not understand these matters, that I take up valuable time of the House in giving way to him.
      I was saying that, because of the forecast as to anticipated inflation of 16·5 per cent., the retirement pensions between November 1980 and November 1981 were increased by that amount and for a single person this meant a pension this year of £27·15. In the event our counter-inflationary measures were more successful than we had cautiously forecast and the increase in prices proved to be 15·5 per cent. instead of 16·5 per cent.
      On that basis the standard rate of the basic retirement pension for a single person should have been £26·90—in other words, 25p per week less than it is. This is where the first misunderstanding arises. We are not seeking to take back the 25p per week which has been paid, which is continuing to be paid and which will be paid until November 1981. Pensioners are being paid that amount and they are keeping that amount. The same is true of the extra 40p a week on the married couple's retirement pension and of all the related benefits and the extras on related benefits which follow in line with pension increases.
      5 pm
      We made an over-pessimistic forecast. Additional money was paid out. That was our mistake and we cannot conceivably ask for it to be paid back and we are not doing so. However, when we come to the next increase, which will take effect in November 1981, we do not wish to perpetuate our mistake. Thus, having calculated the rate of inflation for the purposes of the next uprating at 10 per cent., we are saying that that 10 per cent. must be calculated on, and added to, what the pension should be, not what it is because of last year's miscalculation.
      Therefore, for the single pensioner the uprating will be 10 per cent. on £26·90, producing a new pension rate of £29·60 a week from November 1981. To calculate the 10 per cent. on £27·15 would be to give 10 per cent. on the extra 25p that the pensioners should not be getting but which he is being allowed to keep this year. The error would be merely perpetuated and compounded.
      Mr. Alfred Morris rose——
      Mr. Rossi: No, I shall not give way. I must make progress. As a result of clause 1(3), which the amendment seeks to remove, the pensioner will find that at the end of 1980–81 his pension will have increased in line with prices, which is exactly what the Government have given their pledge to ensure.
      Mr. Alfred Morris: The hon. Gentleman said that the Bill was about taking back excess provision.
      Mr. Rossi: No.
      Mr. Alfred Morris: He did. He began by saying that the Bill is about taking back excess provision.
      Mr. Rossi: No.
      Mr. Alfred Morris: There was an abatement of 5 per cent. in invalidity benefit last November. What possible justification can there be for taking 1 per cent. from those who suffered the abatement last November? Will he now admit that this is the shabbiest and unkindest cut of all?
      Mr. Rossi: It is clear that Opposition Members are not applying their minds to the argument. The 5 per cent. abatement is another matter to which I shall refer when dealing with a later amendment on the Order Paper. I am dealing with the so-called 1 per cent. clawback.
      Mr. Cryer: It is robbery.
      Mr. Rossi: It is a readjustment in the pension level because of an over-assessment of the rate of inflation for last year. No money is being taken back from pensioners that they have already received. They are merely being put back to the position that they should occupy at the end of the two years on the basis of the correct calculations. That is totally in line with the Government's pledge to keep pensions in line with prices.
      Mr. Andrew F. Bennett: "At least".
      Mr. Rossi: We would be much happier if we could say to pensioners——
      Mr. Buchan rose——
      Mr. Rossi: ——and other beneficiaries, "You will keep the extra this year and we shall carry forward" ——
      Mr. Buchan rose——
      Mr. Rossi: ——"the next increase on top of it." That would have been popular and an easy way out. However, we cannot afford the extra £200 million a year on social security costs that that would involve. We must content ourselves with giving the inflation protection over the two years that we promised and which we are honouring.
      Mr. Andrew F. Bennett: "At least".
      Mr. Rossi: The hon. Members for Ormskirk (Mr. Kilroy-Silk) and Keighley (Mr. Cryer) argue that savings could be made in the defence budget. The hon. Member for Keighley spoke about the £5 billion or £6 billion that will be spent on Trident. He did not tell the House that that sum is currently not being spent. It will not come into the budget, if it does at all, until 1983–84. Before that year there may be an election, when the British people will be able to pronounce their view. It will not come into the budget until 1983–84 and the £5 billion or £6 billion will be expended over 15 years.
      The social security budget is £27 billion a year. My Department spends £5 billion or £6 billion over not 15 years but 19 weeks. Over half that sum is expended on pensions. My hon. Friend the Minister for Health, who is responsible for the Health Service, spends £5 billion or £6 billion every six months. Let us keep these matters in perspective and in context.
      It cannot be said that the Government are not making an extensive public expenditure allocation for social security. As I have said, the budget is £27 billion this year. However, even against such sums, we must have regard to what the country can afford. We are talking about another £200 million that we do not have. That is why we are keeping strictly to our pledge to maintain the level of pensions in line with the increase in prices——
      Mr. Andrew F. Bennett: "At least."
      Mr. Rossi: —until circumstances improve and we can, one hopes, do better. There is no need for the hon. Member for Stockport, North (Mr. Bennett) to keep crying out "at least" from a sedentary position. I know very well the nature of our pledges.
      Mr. Buchan rose——
      Mr. Rossi: I shall give way to the hon. Gentleman, but this will be the last time that I do so in this debate.
      Mr. Buchan: The hon. Gentleman has repeated the pledge many times in different forms. Three times out of four he stuck to the pledge "in line with prices". Once out of the four he said "at least". That was when he got it right. The pledge given by the Government, including the Prime Minister and the Secretary of State for Social Services, was that pensions should be kept in line with prices, at least. The sad feature of the Bill is that pensions will be kept in line with prices, at most. The moment pensions moved 1p over the pound against the rise in prices the Government cut them back. That is where they broke the pledge. If the hon. Gentleman is boasting about the money that the Government are spending on social security, the real reason for that is the 2½ million on the dole.
      Mr. Rossi: The hon. Gentleman is indulging in a semantic exercise about the pledge. Hon. Members know what that pledge is. I have described it accurately—[Interruption]. The words are in parenthesis and mean exactly the same thing. "At least at present" means the same as "we shall do better when things improve". Anyway, our pledge extends over the period of a Parliament. The hon. Gentleman seems to want to play with words and to waste our time. If that is so, I shall not give way to him again.
      For similar financial reasons, the Government cannot accept amendment No. 2, which proposes an uprating of 17 per cent. That would cost £300 million. I understand that the intention is to make good shortfalls in relation to earnings, not only in the long-term benefits but in short-term benefits. It is not our policy that benefits should be kept in line with earnings. I understand that it has never been the Opposition's case that short-term benefits should be uprated with earnings. Indeed, we inherited a situation in which there had been a shortfall of 1·9 per cent. in long-term benefits. The Labour Government's policy on short-term benefits was the same as ours on this point. In November 1979 we made good that shortfall, when longterm benefits increased by 19·5 per cent. We improved the base that we had been left with. This is the best that we can do.
      My hon. Friend the Member for Brighton, Kemptown (Mr. Bowden) referred to the retail price index. In Committee, we discussed the retail price index in great detail. Between June 1970 and February 1974 the single rate pension increased by 55 per cent. but the retail price index increased by only 41· per cent. Indeed, if the retail price index and the increase in single rate pension between 1974 and 1978 are compared, it will be seen that the pensioner has done relatively better. In any event my hon. Friend will also know that the uprating is based not simply on the retail price index, but on a forecast of expected increases. Therefore, the retail price index is not the only factor that is taken into account when the upratings are brought into effect.
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      5.15 pm
      In Committee, I stated that the wording of clause 1(3) makes it clear that the operation is for this year alone. If we had wished to reserve the power to take such action annually, we could have drafted the clause accordingly. However, I hope that my hon. Friend will take this limitation as an earnest of our good intent not to go through the operation again. If we are forced to, further legislation will be necessary. Obviously that would not be undertaken happily. I hope that my hon. Friend will accept that that is the situation.
      Amendments Nos. 3 and 4 deal specifically with invalidity benefit. One amendment seeks to avoid the adjustment in the 1 per cent. over uprating for the past year.
      The second amendment seeks to deal with the 5 per cent. abatement. It is not clear what effect amendment No. 3 would have on the rate of invalidity allowance for next year. As things stand, the rate of allowance is affected by the 1 per cent. adjustment, but only to the extent that the unabated 1981 rate is based on recalculating the 1980 rates as if they had been 15·5 per cent. more than the 1979 rates—instead of 16·5 per cent. —and then adding 10 per cent. for this year. This puts the allowance back on the same basis as the allowance paid with retirement pension.
      If amendment No. 3 were accepted, the rate of invalidity allowance paid with invalidity pension would be higher than the rate of invalidity allowance paid with retirement pension. The proposers of the amendment probably did not intend that outcome. To exempt invalidity pension from the adjustment would entail additional expenditure of £14 million in a full year.
      Amendment No. 4 brings us to consideration of the 5 per cent. abatement. We cannot accept the amendment, because my right hon. Friend has already given an unqualified assurance to the effect that the value of invalidity benefit will be restored to the level that it would have reached without the abatement. In other words, it will be restored to the level of the retirement pension when it is brought into tax. Moreover, we have already found it possible to take a first step in that direction by arranging to restore the value of invalidity allowance this November. Small as it is, the fact that we have been able to make this special increase in the invalidity allowance should be welcome.
      The Government are pleased to have been able to take that first step towards restoring the whole benefit. It is worth recalling that only 15 per cent. of invalidity pensioners do not also get an invalidity allowance. Of the 630,000 receiving pensions at any one time, 30 per cent. receive the highest rate of invalidity allowance; 20 per cent. receive the middle rate and 35 per cent. the lower rate. Restoring the value of the invalidity allowance will cost £5 million in a full year. It would cost a further £50 million gross to restore invalidity pension to the retirement pension level this November. Savings on supplementary benefit would reduce this cost by about £3 million, but it is not possible to spend such an additional amount at present. There can be no question of the Government taking on such a commitment now, although it exists and will come into effect as soon as the benefit is brought into tax.
      It is not generally disputed by hon. Members that in principle income replacement benefits, such as invalidity benefit, should be subject to tax. However, we have given an assurance in respect of invalidity benefit to the effect

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      that it will be put back in line with the retirement pension when it is brought into tax. That cannot be in 1982 as was first hoped, but it seems unlikely that any delay in making the benefit subject to tax will be disadvantageous to the vast majority of invalidity beneficiaries. Very few would be better off with a taxable unabated benefit than with a non-taxable abated benefit.
      The object of amendment No. 5 is to preclude the recovery of the excess for increases for children and adult dependants for a list of benefits that includes unemployment benefit, sickness benefit, invalidity pension and maternity allowance. The amendment would cost about £20 million. However, the effect on beneficiaries would be small. For example, it would mean 10p a week for an adult dependant of a claimant on unemployment benefit and 5p for a child dependant. No case can be made for making a special exemption for those dependency additions.
      Amendment No. 6 involves the 5 per cent. abatement on unemployment benefit. It was discussed in debate yesterday and also, at length, during Monday's debate on the Finance Bill.
      The reasons given by my right hon. Friend the Financial Secretary why the Chancellor of the Exchequer is unable at this time to give any undertaking on that matter have already been quoted. Therefore, there is nothing which I can usefully add to what has already been reported to the House.
      Amendment No. 7 requires that the subsection
      "shall not apply in the case of retirement pension".
      In that I call in aid all the general remarks which I made at the beginning of my speech about this group of amendments. Those remarks were directed principally to the position of the retirement pensioner.
      The intention of amendment No. 8 is not perfectly clear. I am not sure that it would have the desired effect, even if one could discern clearly which of the two possible constructions it bears is the real intention of the Labour Party.
      The amendment relates to the 5 per cent. abatement in the November 1980 increase of short-term benefits. That abatement was made because of the need to restrain public expenditure and because, unlike pensions, the benefits in question are not taxable and should be. The measure was approved by the House, and what the House approved last year is what we are carrying through this year in relation to invalidity pension and short-term benefits—no more and no less.
      As we are being consistent with what the House decided on a previous occasion about that amendment, I ask the House to reject it also, together with all the other amendments, for the reasons which I have given.
      Mr. David Ennals: I shall deal only with the question of pensions. During the five years when the Labour Government were in power the real value of the pension rose by a total of 20 per cent. —an average of 4 per cent. a year. In part that was due to the 1975 Act, which obliged the Government to take earnings as well as prices into consideration, and it was partly because, in any case, there was a general increase in standards of living. We now make a comparison between what the Labour Government did and what this Government are doing.
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      The Government's decision to remove the obligation to base uprating on earnings, which cuts 1 per cent. from pensions below price protection, is a totally different approach from that of the Labour Government. It is mean, penny-pinching and despicable.
      When the Secretary of State made his announcement about that matter on 11 March, I asked:
      "does he not accept that the Government's decision not to protect against inflation the elderly, the sick, those on supplementary benefits and the unemployed will be seen as a cynical attack on the people least able to care for themselves?"
      The Secretary of State replied:
      "The vast majority of elderly people understand the economic difficulties that we face and are perfectly prepared to pay their share." —[Official Report, 11 March 1981; Vol. 1000, c. 897.]
      That is sheer nonsense. I do not believe that elderly people are prepared to accept that a Government who reduced their entitlement understand their position at all. That was well demonstrated in the local elections and the results which we saw just a week ago.
      The Government seem to have no qualms about stealing 1 per cent. of even the expected rise of the inflation rate as from November 1981. What does the Minister think pensioners do with their weekly pension? Do they feel that they are being over-compensated and that too much money is being put into their pockets by either a generous Government or a Government who got their arithmetic wrong? Do they feel that they are receiving too much money as a result of their long years of contribution to national insurance?
      Does the Minister think that every week elderly people are putting aside 20p or 30p into a little collecting box because they are overpaid in order to save themselves the extra money for the year when they will be underpaid? Of course that is all nonsense. Does not the Minister accept that he is forcing elderly people to lower their standards of living and not to improve them, as we did—unless the Chancellor's guesstimate is once again optimistic? Not many of us on the Opposition Benches think that it is likely to be optimistic.
      So far all the other guesstimates of the Chancellor have proved to be hopelessly wrong. All his guesstimates on the PSBR, money supply targets, the level of unemployment, growth—or lack of growth—in the economy have proved to be wrong. The signs are that the downward trend in the retail price index, on an annual basis, is slowing down. In April it went up from 12·5 per cent., which it was in the previous month, to 12·6 per cent. In the three months of February, March and April, it was 12·8 per cent.
      The petrol price increases and other Budget measures have not fully worked their way into the system. Therefore, I am surprised that the Government are confident about what will happen to the retail price index, especially with the news, published earlier this week, that wholesale prices are now moving upwards again. We know that eventually wholesale prices are reflected in retail prices and in the retail price index.
      It is not impossible that single-figure inflation will be down to 10 per cent. by the end of the year. However, even if they accept that possibility, many forecasters believe that the inflation rate will start to rise early next year. If it is then rising above 10 per cent. the pensioners will be suffering even more than the Government have planned and intend for them to suffer now.
      This is a mean and petty measure, which every member of the Cabinet and every member of the Government should be ashamed to introduce. Pensioners should not be

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      expected to pay their share of the tax reliefs for those on incomes many times higher than the pension that the pensioners receive. The Secretary of State said that they would understand. They will understand one thing. They will understand where Tory priorities lie, compared to the priorities of the Labour Government and of the next Labour Government, in relation to the responsibilities that we have for the elderly people in our society.
      Mr. Rooker: The Minister has gone through the amendments almost one by one. I felt that he threw out some of them because they would cost too much and that he threw out others because it would not benefit people very much to pass them. The Minister cannot have it both ways.
      I shall confine my remarks to amendment No. 1, which is the most expensive. We shall seek to divide on that amendment. If subsection (3) were taken out, the whole 1 per cent. would be demolished. We want to put the £229 million back into people's pockets.
      Mr. Rossi: Amendment No. 2 would uprate by 17 per cent. so that is more expensive.
      Mr. Rooker: I accept what the Minister has said about the figures.
      However, I shall not continue to bandy the statistics that we have already given. Basically, we wish to knock out the subsection that gives the Government power to take back the 1 per cent. The Minister has had a new phrase drummed up by someone in his office—"adjustment of excess". Last November the Chancellor of the Exchequer said that pensioners were over-provided for. Now it is simply an excess.
      5.30 pm
      Mr. Kilroy-Silk: By an "adjustment of excess" the Minister means a cut. The Government will no doubt call an increase an increase, so why do they not now talk about a decrease?
      Mr. Rooker: They already have the terminology organised. A citizen in Kingswood, in Bristol presumably, wrote to ask the Treasury why it was taking the 1 per cent. back. In its reply dated 5 January the Treasury stated:
      "It therefore decided that when the pension is next increased, in November 1981, the increase will be reduced by the bonus of 1 per cent. paid this year."
      It is worth putting that on record as a warning for the future. Someone in the Treasury is getting lined up so that when pensions rise above prices and the Government keep them there it becomes a bonus. To give the civil servants their credit I also put on record that the letter was signed by a Mr. P. S. Jenkins, private secretary to the Chancellor of the Exchequer.
      The amounts involved are small. The Minister said that one amendment would benefit people by only 10p a week, which is £5 a year. The basic salary of Members of Parliament is £13,000 a year, which is just over £200 a week, so £5 a year does not seem substantial. However, the point is that we are not dealing with people earning over £13,000 a year. We are dealing with people in receipt of social security benefits, such as old age pensioners, people receiving industrial injury benefit, widows and people on attendance allowance. Those are the benefits that are being cut. For a single person it could be 25p a week and for a couple with a pension 40p a week, which
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      is £20 a year. The amount would probably not pay for a quarter's energy bill these days, but it would substantially help to pay for the summer gas or electricity bill.
      In Opposition the Conservatives made a big song and dance about persuading us to do more for widows, although they could not quote a single case where we had cut their benefits. The cut of 1p in the pound is £17.50 over the year for widows.
      By and large, the Bill has been treated outside the House in much the same way as the Social Security (No. 2) Act 1980. Organisations that have a good track record in championing the cause of the underdog have been conspicuous by their silence in opposing the measure, although they have privately made representations to the Government. They are worried about their charitable status or about being seen to be political.
      The argument applies only under a Conservative Government. If it was Labour legislation, registered charities would be up and down Whitehall and in and out of the BBC. The BBC would have peak hour broadcasts and Fleet Street would have front page announcements. We should hear from Mr. Bryan Redhead and the "Today" team every day of the week. There would be no distortion from such sources, as there was on the Social Security (No. 2) Act last year, referring only to strikers' benefits and not to the cuts in invalidity and other benefits. There would be interviews with Mr. or Mrs. so-and-so from this or that pressure group, who had written to the Chancellor or the Secretary of State for Social Services about the deplorable, mean and despicable Bill, cutting 1p in the pound. The media would have a field day—but not under a Conservative Government.
      Mr. Bowden: The hon. Gentleman is being less than fair to organisations deeply concerned about the elderly and in particular Age Concern England. I have a large batch of press releases issued by the organisation, which made its views clear about the Social Security Act and the present Social Security Bill David Hobman, the director, has been on the radio and television to make plain his opposition to both pieces of legislation. I shall not deal with the media, but the organisations that devote energy and time to such causes, backed up by a great number of voluntary workers, have clearly and widely made their views known to the Government, hon. Members and the nation.
      Mr. Rooker: I deliberately refrained from going through the organisations. They have made representations privately and not strongly enough. It is not their fault that the media have not responded, but they would respond under a Labour Government. The director of Age Concern advised me and others at a breakfast meeting in 1979 that it had to be careful about its charitable status. Three organisations dealing with the elderly, children and the disabled said the same that year. No organisation told me or my hon. Friends of concern about its charitable status under the Labour Government. It happens only when the Conservatives come to power.
      I do not criticise individual organisations. I criticise them collectively. Some have written to tell me that they learnt the details only when they heard about the Bill on "Today in Parliament". I do not include that programme in my complaints about the media. I have singled out "Today" on its track record.

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      The total effect of the 1p in the pound is not insignificant. It is £229 million. Pensions to former members of the Armed Forces and local authority workers are included.
      Mr. John Townend: Quite right.
      Mr. Rooker: I hope that the hon. Gentleman will remember that remark when widows of members of the Armed Forces make representations to him about their pensions being cut by the Government. I accept that it is a small amount, but it is not insignificant, when one considers the £4 million a year off war pensions, irrespective of the £121 million off retirement pensions, £6 million off widow's benefits and £1 million off maternity allowances. To the recipients it is not an insignificant sum.
      I shall say a brief word about the pledge. My hon. Friend the Member for Renfrewshire, West (Mr. Buchan) and others mentioned the alleged pledge by the Prime Minister—of which we know that she was reminded during the Cabinet's discussions about the cuts last November—that she gave in her interview with Brian Walden in 1979. In Committee, the Under-Secretary amplified the Prime Minister's pledge, and for that we are grateful. It is on record in the form of a letter to me, which I can arrange to put on the record in Hansard. The Prime Minister's pledge on pensions means pensions and longterm benefits. The Under-Secretary has listed all the benefits that are involved in the pledge. The pledge means that there will be full compensation for price increases over the lifetime of the Parliament. They include widows' pensions, industrial death benefits, war disablement pensions, industrial disablement pensions, supplementary pensions to the retirement pensions and attendance allowances.
      The pledge is on the record. It is in at least three Parliamentary written answers to questions—in other words, the answers were considered answers. It has been mentioned, too, at the Dispatch Box. So why is there a lingering doubt about the pledge? It was given, initially at least in line with prices. One assumes that if the over-provision were of a minor nature—and I consider 1 per cent. minor—the Government could let it ride and, in fact, they could get enormous kudos from it. They could say "When we said 'At least in line with prices', we meant what we said. This accident has occurred, but it was not intended. It is only 1 per cent. and we shall leave the money in the pockets of pensioners and others." In reality the money will be taken from the pockets of pensioners and others this November.
      There is one reason why the pledge may not be as firm as we were led to believe. The Treasury is about to commence another round of public expenditure discussions. I want to refer to the reports of a speech made a week ago by the Chancellor of the Exchequer. Most of the reports were buried away in the financial pages of the press, and not on the ordinary news pages. On the financial pages of the Financial Times of 8 May the headline was:
      "Pension costs becoming intolerable, Howe warns."
      The Times report was:
      "Warning by Howe on pensions rebellion"
      It was not talking about a rebellion by Tory Members over pensions. We know from yesterday and today that the only speech made by a Conservative Back-Bench Member
      914
      either today or yesterday was made by the one hon. Member who voted against the Bill on Second Reading. I suspect, too, that he will vote with us in the Lobby for this amendment, and against the Third Reading. He deserves the praise of his own pensioner constituents for that action, although I do not intend to heap praise on him. So the Chancellor was not talking about a pensions rebellion.
      5.45 pm
      The headline in The Daily Telegraph of the same day was:
      "Howe warns on rising burden of pensions".
      The Daily Mail was an exception because its report was on page 2. Its headline was:
      "Can we afford these high pensions?".
      The Guardian did not even report it. It was buried away in the economic notebook without a headline. However, on the same day Hamish McRae gave a report of the Chancellor's speech to the National Association of Pension Funds. The Birmingham Post—I think the speech was made at the National Exhibition Centre—gave the report in the financial columns with the heading:
      "Howe's warning on pension schemes."
      So what is the problem? The Chancellor's speech said:
      "Quite apart from the question of equity between one group of pensioners and another, there is the question of the affordability of the present day pensions structure as a whole".
      He went on:
      "There is a real risk that the working population may come to question the justice of further increases in this burden".
      He is talking about paying for the pensions of their mothers and fathers and grandparents. I have not met one person who objects to the part of their national insurance contributions that pays for the pensions of their parents and grandparents and other members of the family. The Chancellor went on:
      "This is why we cannot afford to increase the real value of pensions at such a time. This is why we are recovering the 1 per cent. excess over the rate of inflation which occurred in the November 1980 uprating. Other countries have gone further. They have argued, for instance, that changes in indirect taxes or the rising price of energy are not changes for which wage-earners should seek compensation."
      He then quoted the Scott Committee, and it is worth mentioning that quotation:
      "In some circumstances, as has happened before, the standard of living of the whole community might have to be reduced…It would be inequitable if this were prevented from happening to pensions also."
      That is the advice that the Chancellor read out that day. He then said:
      "We must ask also if private employers are not offering too generous pensions".
      That was what the Chancellor of the Exchequer said on Thursday 7 May, and his words were not to be released before 16.30—by which time, of course, most of the anti-Tory votes were in the ballot box. That would not be such a worry if it were an isolated case. The Chancellor spelt out to the pension fund managers of Britain his disquiet, as shown in those press headlines, about the cost of the pension scheme. Much of his speech referred to the State pension scheme, which was enacted by the Labour Government with the full co-operation of the Conservative Party when it was in Opposition. It was a bipartisan approach—if that is not a dirty word word to use these days—after about three or four attempts to get occupational pension structures correct and bring to an end the ping-pong of putting through pension proposals that never came into operation and were thrown out at the next

      915
      general election. The late Brian O'Malley made a significant contribution, but we have not yet benefited from that new pension scheme. Yet now the Chancellor is starting to chip away at the foundations of that pension scheme.
      As I said, we should not be so worried if this were an isolated case. In another Treasury press release of Wednesday 13 May, there is a report of the Chief Secretary's speech to the international executive seminar at the Ritz Hotel. Not many of my pensioners were there. What he said at the end of the press release must be a warning to everyone in the House.
      "What had previously been thought sacrosanct has been challenged. What was regarded as an entitlement has been downgraded to an aspiration. To quote just one example, the Swedish Government has excluded rises in energy prices and indirect taxes from the index used to calculate increases in pensions and some other social security payments. We have been reluctant to adopt such a radical approach."
      I am not sure whether that sentence should be read as being in the past tense. We must have from Ministers—they may be unable to do it now—a copper-bottomed assurance that there will be no mucking around with the composition of the retail price index as it affects pensions. They must confirm that there will be no attempt to remove from it any aspect of the cost of living, certainly not energy costs which form a high proportion of pensioners' living costs.
      We want to be assured that there will be no attempt to take these charges out of the retail price index as the Government clearly intend to do for wage earners. That may spill over to social security recipients, and that includes pensioners. It is clear that speeches from the Chancellor and the number two at the Treasury, the Chief Secretary, making the same point, are designed to soften us up. They are helped in that by the story on the front page of today's Financial Times which carried the headline:
      "Treasury asks for big new options on spending cuts."
      The last paragraph of the story reads:
      "Some Ministers apparently said that it was nonsense for all departments to have to produce options, on the grounds that this would just lead to 'needless' press speculation about the kind of horrors the Government was planning. But Mrs. Thatcher is believed to have backed the Treasury request for a complete review."
      In the complete review that the DHSS will have to make will it give us an assurance that pensions are protected in terms of the RPI? We cannot ask for an assurance that if there is under-provision on the basis of the forecast rate of inflation the Government will make that good this year. We know from our debates in Committee that they will not do that. They are prepared to take back the penny of over-provision. But pensioners know that nothing in the Bill carries the assurance that if there is under-provision in the RPI estimate the Government will put that right.
      Ministers may claim that they will do it over the lifetime of a Parliament, but they will not write the alternative to what they are doing into the Bill. It is a waste of time asking for it. We are entitled, however, in the light of those two speeches, to ask for an assurance that the RPI will not be messed about with by the Government in the way that pensions are uprated this November.
      Question put, That the amendment be made:—
      The House divided: Ayes 213, Noes 270.

      Division No. 186]

      [5.53 pm

      AYES

      Abse, Leo

      George, Bruce

      Adams, Allen

      Gilbert, Rt Hon Dr John

      Alton, David

      Ginsburg, David

      Anderson, Donald

      Graham, Ted

      Archer, Rt Hon Peter

      Grant, John (Islington C)

      Ashton, Joe

      Grimond, Rt Hon J.

      Atkinson, N.(H'gey,)

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

      Bagier, Gordon A.T.

      Harrison, Rt Hon Walter

      Barnett, Rt Hon Joel (H'wd)

      Hattersley, Rt Hon Roy

      Beith, A. J.

      Heffer, Eric S.

      Bennett, Andrew(St'kp't N)

      Hogg, N, (E Dunb't'nshire)

      Bidwell, Sydney

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

      Booth, Rt Hon Albert

      Homewood, William

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

      Hooley, Frank

      Bowden, Andrew

      Horam, John

      Bray, Dr Jeremy

      Howell, Rt Hon D.

      Brown, Hugh D. (Provan)

      Hughes, Robert (Aberdeen N)

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

      Hughes, Roy (Newport)

      Brown, Ron (E'burgh, Leith)

      Janner, Hon Greville

      Buchan, Norman

      Jay, Rt Hon Douglas

      Callaghan, Rt Hon J.

      John, Brynmor

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

      Johnson, James (Hull West)

      Campbell, Ian

      Johnston, Russell (Inverness)

      Campbell-Savours, Dale

      Jones, Rt Hon Alec (Rh'dda)

      Cant, R. B.

      Jones, Barry (East Flint)

      Carmichael, Neil

      Jones, Dan (Burnley)

      Carter-Jones, Lewis

      Kaufman, Rt Hon Gerald

      Cartwright, John

      Kilfedder, James A.

      Clark, Dr David (S Shields)

      Kilroy-Silk, Robert

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

      Lambie, David

      Coleman, Donald

      Lamborn, Harry

      Concannon, Rt Hon J. D.

      Lamond, James

      Conlan, Bernard

      Leadbitter, Ted

      Cook, Robin F.

      Leighton, Ronald

      Craigen, J. M.

      Litherland, Robert

      Crowther, J. S.

      Lofthouse, Geoffrey

      Cryer, Bob

      Lyon, Alexander (York)

      Cunliffe, Lawrence

      Lyons, Edward (Bradf'd W)

      Cunningham, G. (Islington S)

      McCartney, Hugh

      Cunningham, Dr J. (W'h'n)

      McElhone, Frank

      Dalyell, Tam

      McKay, Allen (Penistone)

      Davies, Rt Hon Denzil (L'lli)

      McKelvey, William

      Davies, lfor (Gower)

      MacKenzie, Rt Hon Gregor

      Davis, Clinton (Hackney C)

      Maclennan, Robert

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

      McNally, Thomas

      Deakins, Eric

      McTaggart, Robert

      Dean, Joseph (Leeds West)

      McWilliam, John

      Dempsey, James

      Magee, Bryan

      Dewar, Donald

      Marks, Kenneth

      Dormand, Jack

      Marshall, D(G'gow S'ton)

      Douglas, Dick

      Marshall, Dr Edmund (Goole)

      Douglas-Mann, Bruce

      Marshall, Jim (Leicester S)

      Dubs, Alfred

      Maxton, John

      Duffy, A. E. P.

      Maynard, Miss Joan

      Dunn, James A.

      Meacher, Michael

      Dunnett, Jack

      Mellish, Rt Hon Robert

      Dunwoody, Hon Mrs G.

      Mikardo, Ian

      Eadie, Alex

      Millan, Rt Hon Bruce

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

      Mitchell, Austin (Grimsby)

      Ellis, Tom (Wrexham)

      Mitchell, R. C. (Soton Itchen)

      English, Michael

      Morris, Rt Hon A. (W'shawe)

      Ennals, Rt Hon David

      Morris, Rt Hon C. (O'shaw)

      Evans, loan (Aberdare)

      Morris, Rt Hon J. (Aberavon)

      Evans, John (Newton)

      Morton, George

      Ewing, Harry

      Moyle, Rt Hon Roland

      Field, Frank

      Newens, Stanley

      Fitch, Alan

      O'Halloran, Michael

      Flannery, Martin

      O'Neill, Martin

      Fletcher, Ted (Darlington)

      Orme, Rt Hon Stanley

      Foot, Rt Hon Michael

      Owen, Rt Hon Dr David

      Ford, Ben

      Palmer, Arthur

      Forrester, John

      Parry, Robert

      Foster, Derek

      Penhaligon, David

      Foulkes, George

      Prescott, John

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

      Price, C. (Lewisham W)

      Freud, Clement

      Race, Reg

      Garrett, John (Norwich S)

      Radice, Giles

      917

      Rees, Rt Hon M (Leeds S)

      Thomas, Dafydd (Merioneth)

      Richardson, Jo

      Thomas, Jeffrey (Abertillery)

      Roberts, Allan (Bootle)

      Thomas, Mike (Newcastle E)

      Roberts, Ernest (Hackney N)

      Thomas, Dr R. (Carmarthen)

      Roberts, Gwilym (Cannock)

      Thorne, Stan (Preston South)

      Rooker, J. W.

      Tilley, John

      Roper, John

      Tinn, James

      Ross, Ernest (Dundee West)

      Torney, Tom

      Ross, Stephen (Isle of Wight)

      Wainwright, E. (Dearne V)

      Rowlands, Ted

      Wainwright, R.(Colne V)

      Ryman, John

      Walker, Rt Hon H.(D'caster)

      Sandelson, Neville

      Watkins, David

      Sever, John

      Weetch, Ken

      Sheerman, Barry

      Wellbeloved, James

      Sheldon, Rt Hon R.

      Welsh, Michael

      Shore, Rt Hon Peter

      White, J. (G'gow Pollok)

      Silkin, Rt Hon J. (Deptford)

      Whitehead, Phillip

      Silkin, Rt Hon S. C. (Dulwich)

      Whitlock, William

      Silverman, Julius

      Wigley, Dafydd

      Skinner, Dennis

      Willey, Rt Hon Frederick

      Smith, Rt Hon J. (N Lanark)

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

      Snape, Peter

      Wilson, Gordon (Dundee E)

      Soley, Clive

      Wilson, William (C'try SE)

      Spriggs, Leslie

      Winnick, David

      Stallard, A. W.

      Woodall, Alec

      Steel, Rt Hon David

      Woolmer, Kenneth

      Stewart, Rt Hon D. (W Isles)

      Young, David (Bolton E)

      Stoddart, David

      Stott, Roger

      Tellers for the Ayes:

      Strang, Gavin

      Mr. Frank Haynes and Mr. James Hamilton.

      Straw, Jack

      Summerskill, Hon Dr Shirley

      NOES

      Adley, Robert

      Chapman, Sydney

      Aitken, Jonathan

      Churchill, W. S.

      Alexander, Richard

      Clark, Sir W. (Croydon S)

      Alison, Michael

      Clarke, Kenneth (Rushcliffe)

      Amery, Rt Hon Julian

      Clegg, Sir Walter

      Ancram, Michael

      Cockeram, Eric

      Arnold, Tom

      Colvin, Michael

      Aspinwall, Jack

      Cope, John

      Atkins, Rt Hon H.(S'thorne)

      Cormack, Patrick

      Atkins, Robertf(Preston N)

      Corrie, John

      Baker, Kenneth(St.M'bone)

      Cranborne, Viscount

      Baker, Nicholas (N Dorset)

      Critchley, Julian

      Banks, Robert

      Crouch, David

      Beaumont-Dark, Anthony

      Dean, Paul (North Somerset)

      Bell, Sir Ronald

      Dickens, Geoffrey

      Bendall, Vivian

      Dorrell, Stephen

      Benyon, W. (Buckingham)

      Dover, Denshore

      Berry, Hon Anthony

      du Cann, Rt Hon Edward

      Best, Keith

      Dunn, Robert (Dartford)

      Bevan, David Gilroy

      Dykes, Hugh

      Biggs-Davison, John

      Eden, Rt Hon Sir John

      Blackburn, John

      Edwards, Rt Hon N. (P'broke)

      Blaker, Peter

      Eggar, Tim

      Body, Richard

      Elliott, Sir William

      Bottomley, Peter (W'wich W)

      Emery, Peter

      Braine, Sir Bernard

      Fairbairn, Nicholas

      Bright, Graham

      Fairgrieve, Russell

      Brinton, Tim

      Farr, John

      Brittan, Leon

      Fell, Anthony

      Brooke, Hon Peter

      Fenner, Mrs Peggy

      Brotherton, Michael

      Fisher, Sir Nigel

      Brown, Michael (Brigg & Sc'n)

      Fletcher-Cooke, Sir Charles

      Browne, John (Winchester)

      Fookes, Miss Janet

      Bruce-Gardyne, John

      Fowler, Rt Hon Norman

      Bryan, Sir Paul

      Fox, Marcus

      Buchanan-Smith, Alick

      Fraser, Rt Hon Sir Hugh

      Buck, Antony

      Fraser, Peter (South Angus)

      Budgen, Nick

      Fry, Peter

      Bulmer, Esmond

      Galbraith, Hon T. G. D.

      Burden, Sir Frederick

      Gardiner, George (Reigate)

      Butcher, John

      Garel-Jones, Tristan

      Butler, Hon Adam

      Gilmour, Rt Hon Sir Ian

      Cadbury, Jocelyn

      Glyn, Dr Alan

      Carlisle, John (Luton West)

      Goodhew, Victor

      Carlisle, Kenneth (Lincoln)

      Goodlad, Alastair

      Chalker, Mrs. Lynda

      Gow, Ian

      918

      Gower, Sir Raymond

      Mudd, David

      Gray, Hamish

      Murphy, Christopher

      Greenway, Harry

      Myles, David

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

      Neale, Gerrard

      Griffiths, Peter Portsm'th N)

      Nelson, Anthony

      Grist, Ian

      Neubert, Michael

      Grylls, Michael

      Newton, Tony

      Gummer, John Selwyn

      Onslow, Cranley

      Hamilton, Hon A.

      Page, Rt Hon Sir G. (Crosby)

      Hamilton, Michael (Salisbury)

      Page, Richard (SW Herts)

      Hampson, Dr Keith

      Parkinson, Cecil

      Hannam,John

      Parris, Matthew

      Haselhurst, Alan

      Patten, Christopher (Bath)

      Havers, Rt Hon Sir Michael

      Patten, John (Oxford)

      Hawksley, Warren

      Pattie, Geoffrey

      Heddle, John

      Pawsey, James

      Henderson, Barry

      Percival, Sir Ian

      Heseltine, Rt Hon Michael

      Peyton, Rt Hon John

      Hicks, Robert

      Pink, R. Bonner

      Higgins, Rt Hon Terence L.

      Prentice, Rt Hon Reg

      Holland, Philip (Carlton)

      Price, Sir David (Eastleigh)

      Hooson, Tom

      Prior, Rt Hon James

      Horam, John

      Proctor, K. Harvey

      Hordern, Peter

      Pym, Rt Hon Francis

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

      Raison, Timothy

      Hunt, David (Wirral)

      Rathbone, Tim

      Hunt, John (Ravensbourne)

      Rees, Peter (Dover and Deal)

      Jenkin, Rt Hon Patrick

      Rhodes James, Robert

      Johnson Smith, Geoffrey

      Ridley, Hon Nicholas

      Jopling, Rt Hon Michael

      Ridsdale, Sir Julian

      Kaberry, Sir Donald

      Rifkind, Malcolm

      Kimball, Marcus

      Roberts, M. (Cardiff NW)

      King, Rt Hon Tom

      Roberts, Wyn (Conway)

      Knox, David

      Rossi, Hugh

      Lamont, Norman

      Rost, Peter

      Lang, Ian

      Royle, Sir Anthony

      Langford-Holt, Sir John

      Sainsbury, Hon Timothy

      Latham, Michael

      St. John-Stevas, Rt Hon N.

      Lawrence, Ivan

      Scott, Nicholas

      Lawson, Rt Hon Nigel

      Shaw, Giles (Pudsey)

      Lee, John

      Shaw, Michael (Scarborough)

      Le Marchant, Spencer

      Shelton, William (Streatham)

      Lennox-Boyd, Hon Mark

      Shepherd, Colin (Hereford)

      Lewis, Kenneth (Rutland)

      Shepherd, Richard

      Lloyd, Ian (Havant & W'loo)

      Shersby, Michael

      Lloyd, Peter (Fareham)

      Silvester, Fred

      Loveridge, John

      Sims, Roger

      Luce, Richard

      Speed, Keith

      Lyell, Nicholas

      Speller, Tony

      McCrindle, Robert

      Spence, John

      Macfarlane, Neil

      Spicer, Jim (West Dorset)

      MacKay, John (Argyll)

      Spicer, Michael (S Worcs)

      Macmillan, Rt Hon M.

      Sproat, Iain

      McNair-Wilson, M. (N'bury)

      Squire, Robin

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

      Stanbrook, Ivor

      Madel, David

      Stanley, John

      Major, John

      Steen, Anthony

      Marland, Paul

      Stevens, Martin

      Marlow, Tony

      Stewart, Ian (Hitchin)

      Marshall, Michael (Arundel)

      Stewart, A.(E Renfrewshire)

      Mates, Michael

      Stokes, John

      Maude, Rt Hon Sir Angus

      Stradling Thomas, J.

      Mawby, Ray

      Tapsell, Peter

      Mawhinney, Dr Brian

      Taylor, Robert (Croydon NW)

      Maxwell-Hyslop, Robin

      Tebbit, Norman

      Mayhew, Patrick

      Temple-Morris, Peter

      Mellor, David

      Thomas, Rt Hon Peter

      Meyer, Sir Anthony

      Thompson, Donald

      Miller, Hal (B'grove)

      Thorne, Neil (llford South)

      Mills, Iain (Meriden)

      Thornton, Malcolm

      Mills, Peter (West Devon)

      Townend, John (Bridlington)

      Miscampbell, Norman

      Townsend, Cyril D, (B'heath)

      Mitchell, David (Basingstoke)

      Trippier, David

      Moate, Roger

      Trotter, Neville

      Molyneaux, James

      van Straubenzee, W. R.

      Monro, Hector

      Vaughan, Dr Gerard

      Montgomery, Fergus

      Viggers, Peter

      Morgan, Geraint

      Waddington, David

      Morrison, Hon C. (Devizes)

      Wakeham, John

      Morrison, Hon P. (Chester)

      Waldegrave, Hon William

      919

      Walker-Smith, Rt Hon Sir D.

      Wickenden, Keith

      Wall, Patrick

      Williams, D.(Montgomery)

      Waller, Gary

      Wolfson, Mark

      Ward, John

      Young, Sir George (Acton)

      Warren, Kenneth

      Younger, Rt Hon George

      Watson, John

      Wells, John (Maidstone)

      Tellers for the Noes:

      Wells, Bowen

      Lord James Douglas-Hamilton and Mr. Robert Boscawen.

      Wheeler, John

      Whitelaw, Rt Hon William

      Whitney, Raymond

      Question accordingly negatived.

    Clause 2

      MATERNITY PAY
      Mr. Buchan: I beg to move amendment No. 13, in page 3, line 32, leave out from 'there' to end of line 37 and insert 'the fraction of ten-tenths'.
      Mr. Deputy Speaker: With this we may take Government amendments Nos. 14, 15 and 16.
      Mr. Buchan: The amendment arose from a technical matter that was discussed in Committee. We want to ensure that the Government's intentions are clear and that with the phasing out of the earnings-related supplement they intend to increase the amount and not decrease it. Our amendment gives the Government the opportunity of replying.
      6 pm
      Mrs. Chalker: I am glad to have this opportunity of speaking, not to amendment No. 13 but to Government amendments Nos. 14, 15 and 16. I hope that I shall move them formally later. Right hon. and hon. Members will remember that when we were debating the possibility of replacing that which was taken from the maternity pay by the abandonment of the earnings-related supplement we were considering introducing into the Bill, as originally worded, maternity pay to compensate for that phasing out of the earnings-related supplement.
      In Committee, the Opposition were keen to point out that the phrasing of the Bill might mean not just that we could improve the amount of maternity pay but could reduce it. In Committee I was clear in my comments, which can be found in Hansard for 5 March in columns 63–66. We intended to improve the amount of maternity pay in compensation for the phasing out of the earnings-related supplement. I commend the three amendments to the House because they give my right hon. Friend the Secretary of State for Employment power to alter rates of maternity pay, under the Employment Protection (Consolidation) Act 1978, but only by increasing and not by reducing them. That was the original intention, and the amendments make that clear beyond peradventure.
      I repeat that the original wording of the clause would have enabled the Government to adjust maternity pay as part of an overall improvement in maternity pay provisions, especially if it were decided to pay benefit for a longer time. I accept that the wording has aroused genuine fears—and some not quite so genuine fears—but hon. Gentlemen are concerned that the wider powers should be used for positive help to working women. Nothing that I said in Committee or say now detracts from that. The powers should not be used to the detriment of working women.
      920
      The immediate need is to give the Secretary of State for Employment the power to vary the rates of maternity pay positively as soon as public expenditure constraints permit.
      To achieve the end that was intended and to remove any remaining misgivings about our intentions, we are introducing the amendments. I apologise if the wording seems cumbersome, but the construction is deliberately designed to allow a phased increase in the rate of allowance, should that be necessary.
      The timing of the change is a matter for my right hon. Friend the Secretary of State for Employment. That, again, depends on resources. I cannot give a firm timetable at present, but with the amendments I give a firm promise to the House that the intention is to improve maternity pay when the earnings-related supplement is no longer paid with the maternity allowance after April 1982, and for new cases after January 1982. That is an important consideration, but it is not the only one. These are modest improvements. I hope that the House will accept them in the spirit in which they are meant to meet the criticisms and concerns expressed in Committee.
      Mr. Buchan: I thank the hon. Lady for those remarks. With the rider that we would not welcome the process to be carried out in a piecemeal fashion, or by stages, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Amendments made: No. 14, in page 3, line 32, leave out 'or reinserted'.
      No. 15, in page 3, line 34, leave out 'other' and insert `greater'.
      No. 16, in page 3, line 36, leave out 'or, as the case may be, reinserting'.—[Mrs. Chalker.]

    Clause 3

      INCREASES IN CERTAIN PENALTIES
      Mr. Rossi: I beg to move amendment No. 17. in page 3, line 43, leave out
      `Part I increasing maximum fines'.
      Those hon. Members who served in the Committee will recall that we decided to drop the proposal to increase the period of imprisonment from three months to six months. The reason was quite simple, namely, that while there is a case for the inflation-proofing of financial penalties, the same arguments do not apply to custodial penalties, because a term of imprisonment remains constant year in year out.
      The amendment in Committee removed part II of schedule 1, and consequently clause 3 needs only to refer to schedule 1. The amendment removes the unnecessary words from the clause.
      Mr. Rooker: I am grateful to the Minister for what he said, but his remarks need slight embellishment. The Government withdrew the proposal to increase maximum prison sentences promoted by the DHSS because of the actions of my hon. Friend the Member for Ormskirk (Mr. Kilroy-Silk), who pointed out that the Home Secretary had gone round the country pleading for shorter prison sentences.
      Mr. Rossi: That point was made by the hon. Member for Ormskirk (Mr. Kilroy-Silk), but it was also made by a number of my hon. Friends. I accept at once that overcrowding in prisons persuaded me to ask leave to

      921
      withdraw the amendment in Committee. However, I was equally—perhaps even more—impressed by the argument that an increase in fines because of the drop in the value of money does not necessarily mean that we must also increase prison sentences.
      Mr. Kilroy-Silk: The Minister is as pathetic now—[HON. MEMBERS: "Oh."] Oh yes. I had not intended to intervene, but I do so simply because of the false impression that he has given about what happened in Committee. The Minister reduced the period of imprisonment because he accepted amendments that I had tabled. He accepted them because it was patently clear—this is obvious to anyone who reads the Committee debates—that he had absolutely no defence for what the Bill proposed. In view of the argument deployed in Committee, as well as what the Home Secretary said about the need to avoid imprisonment for non-violent offenders, there was no case at all for increasing the length of imprisonment.
      6.15 pm
      Mr. Rossi: The hon. Gentleman has often made the point that there should be no custodial sentences for nonviolent offences. We know that that is a matter about which he is concerned, but that was not the argument that persuaded me to make this amendment.
      The hon. Gentleman will remember that we had a long discussion about maintaining consistency between penalties for different types of offences. Although he may well be right—I do not judge his thoughts on this matter—it is a question for discussion in the wider context of criminal law as a whole. He must discuss that matter elsewhere. If he is able to persuade those who are concerned with questions of criminal law and the type of penalties that should be imposed for non-violent offences that there should be a substantive change for every type of non-violent offence it will follow that offences in the DHSS sector will follow suit. Therefore, it is unfair of the hon. Gentleman to make the point that he has.
      I invite the House to reject the amendments, because they follow the principle—[HoN. MEMBERS: "They are not being moved".] Very well, I need say nothing more about them.
      Amendment agreed to.
      Mr. Kilroy-Silk: I beg to move amendment No. 37, in page 4, line 2 at end add—
      `(3) The Secretary of State shall make regulations which shall make provision whereby any person charged with an offence under any enactment amended by subsection (1) above and Schedule 1 to this Act shall be furnished with a form requesting details of his income and financial commitments.
      (4) The power to make regulations under subsection (3) above shall be exercisable by statutory instrument, and regulations so made shall be subject to annulment in pursuance of a resolution of either House of Parliament.
      (5) Before imposing a fine under any enactment amended by subsection (1) above and Schedule 1 to this Act, a court shall, when considering the offender's means, have regard to any completed form furnished to the court by the offender under regulations made under subsection (3) above'.
      The Government are proposing a substantial increase in the fines that can be imposed by the courts on those found guilty of certain social security frauds. I shall not argue now whether or not the level of fines is appropriate. the amendment provides that a defendant in such a case shall be given a form requesting details of his income and
      922
      financial commitments. If the defendant chooses to complete the form—it is completely voluntary—the court must consider the information provided when imposing a fine for any of the offences covered in this enactment.
      I accept that the fines currently imposed by the courts for these and other offences are rarely, if ever, imposed to the maximum. However, taken in conjunction with the Government's media-inspired campaign against alleged fraud by social security claimants, I am concerned that the courts may view the increase in financial penalties as a signal to impose harsher penalties.
      My main concern is that, having increased the penalties, the courts will choose, at least on some occasions, to use those additional penalties. If they do so, and if more people are fined larger sums of money, it may be that more of them will default on payment and, as a consequence, find themselves imprisoned. If people choose deliberately and openly not to pay the fine, that is all right. That is their decision, and they must face the consequences that flow from it.
      I am concerned about the situation that faces some of the poorest and most disadvantaged people in society, such as those on social security benefit. They may not have the means to pay. I am concerned, as I am sure the Minister is, that no one should end up in prison for default of payment of a fine imposed for an offence against social security legislation simply because that person is unable rather than unwilling to pay. That would go against my predilections and principles. It would fly in the face of the policy and exhortations currently emanating from the Home Secretary. He has my wholehearted and enthusiastic support in enjoining magistrates and judges not to impose longer than necessary sentences and not to impose prison sentences when a non-custodial sentence would suffice.
      As the Home Secretary has repeatedly made clear, not least in his major speech to Leicestershire magistrates, he wishes to avoid imprisonment of all except the dangerous and violent offenders. If it is at all possible, he does not wish to see fine defaulters imprisoned. They tend to be concentrated in the urban areas, and they put considerable pressure on police and court time. They inevitably find themselves imprisoned in local prisons, which are often overcrowded. We all wish to avoid that.
      I accept that the percentage of fine defaulters who are imprisoned is relatively small—and could be considered insignificant—but the absolute figures are quite large. About 17,044 were imprisoned in 1979, as opposed to 10,426 in 1973. The figure is increasing dramatically. I am trying to ensure that the figure is not increased as a result of this legislation. Although defaulters form only a small percentage, there are many of them in absolute terms. They form one quarter of the sentenced population at any one time.
      The May committee, among others, said that wherever possible we should avoid imprisonment for fine defaulters. I want to quote from the Home Office research unit study No. 46 "Fines in Magistrates Courts", published in 1978. It analysed questionnaires completed by 368 offenders fined for various offences. It said:
      "Defaulters were more likely than others to have reduced expenditure on food and housekeeping … Twelve per cent. of defaulters compared with only 2 per cent. of other respondents said that they deferred payment of rent, rates, hire purchase commitments or other debts. This finding is disturbing as it suggests that, in a small proportion of cases, pressure to pay fines caused serious financial difficulties."

      923
      The survey found that 78 per cent. of defaulters had delayed paying the court because they needed the money for other things, such as—in order of frequency—shoes, clothing, food, housekeeping, rent, rates, unspecified bills, hire-purchase commitments, light, heating and public transport. Those are not frivolous, trivial or extravagant items, by any stretch of the imagination; they are important items in a normal household budget.
      I do not think that the Minister would want, and I would not accept, a person who had been fined by the court—perhaps a head of household—being put in the intolerable position of having to decide at the end of a week whether to pay the fine, buy the necessary pair of shoes for his child, or provide an extra meal. That is an intolerable and indefensible position for any individual. Either he must go to prison in default of his fine or he must forgo necessary expenditure on items that are important to his family. I am sure that the Minister will agree with those sentiments.
      The point at issue is, by what means should we try to avoid a defaulter being imprisoned because he is unable, rather then unwilling, to pay the fine? When the courts consider imposing a fine it is important that they should take a great deal of care when investigating an individual's financial circumstances. The amount of the fine must be related to what he can be reasonable expected to pay. A small fine may be far more significant to a man of low income than a large fine to a relatively affluent man.
      Other countries go to great lengths to ensure that there is a close relationship between the fines imposed and the incomes of the offenders. The Swedish day-fine system has been discussed in the House. There is also the German system. They both attempt to ensure that the financial circumstances of individuals are ascertained before fines are imposed. A familar system was approved in principle by the Advisory Council on the Penal System in 1970. It was approved in principle by the Expenditure Committee and was endorsed by the parliamentary all-party penal affairs group. The Government's 1980 White Paper offered to explore the principle of introducing a day-fine system.
      I asked in Committee—and I reiterate it now to a Minister who knows what we are talking about, and has the ability to put it into effect—whether it would be possible, while we are awaiting the review promised by the White Paper, to issue a practice direction to the courts to ensure that they follow the practice already applied by some courts, of making a substantial investigation into the financial circumstances of an offender before imposing a fine. I hope that the Minister will not retort that the Magistrates' Courts Act 1952 already imposes a duty upon magistrates to take account of an offender's means. We all know of that obligation. We also know—those in the House tonight who are lawyers, unlike myself, will have direct experience of it and can testify to it—that the examination is perfunctory. It is often hurried. Only a few peremptory non-investigatory questions are asked of the offender when the fine is imposed.
      Mr. Andrew F. Bennett: Some of my constituents have said that if they go into the court wearing their best clothes—which they feel they should do out of respect to the court—they are penalised because they give the impression that they have more resources than if they had gone there in their worst clothes.
      Mr. Kilroy-Silk: I am sure that my hon. Friend's remarks are true. We can only draw the logical conclusion from that. I accept that the courts have a duty to take account of an offender's means. I am sure that the Minister will agree that they do not do that job thoroughly or effectively. Such treatment should be applicable to all offenders who have fines imposed on them, not only social security offenders. However, in the nature of things, this is the only way in which I can make my case and find a peg on which to hang it.
      The amendment's proposal is already applied in Scotland. It is not a pilot scheme, as the Minister insisted in Committee. On the evidence at my disposal it appears to work fairly effectively. It has contributed towards reducing the number of those unnecessarily and unfairly imprisoned. The amendment proposes a form analogous to the green-form legal aid scheme. The proposal has widespread support, not only from the Advisory Council on the Penal System, the Expenditure Committee and the parliamentary all-party penal affairs group, but from the Cheshire cat sitting smiling on the Conservative Back Benches, namely, the hon. Member for Paddington (Mr. Wheeler)—dare I call him my hon. Friend—who is an expert in this area. He has written a thoughtful and well researched pamphlet advocating such a measure
      6.30 pm
      We all want to ensure that fines are paid—that there is a greater likelihood of their being paid than of the individual ending up in prison. In conjunction with the use of the form, the courts should be advised of the maximum amounts that people with low incomes can afford. That is crucial in this context. In places like West Germany, where a day-fine system operates, certain low rates of weekly payment are specified for those who are unemployed.
      It should also be brought to the attention of the courts that at present the supplementary benefit system will directly deduct from benefit such things as repayments of fuel debts and rent arrears, but will make deductions only up to a certain maximum total amount each week. If it is officially considered that people on supplementary benefit cannot be expected to suffer more than a certain level of deductions each week, it would be quite wrong for a court to require weekly fine instalments that exceeded this amount. In some cases, the application of a form as I have described will reveal those circumstances. In the light of the income and the commitments of the offender, if he cannot possibly afford even the minimal amount that the courts would wish to impose the courts clearly should impose a non-custodial sentence, and make a community service order, an attendance centre order, or a probation order, or give a conditional discharge, instead.
      The best outcome of this debate would be for the Minister—as I know in his own heart he would wish to do on this occasion, having tussled with him when we were in Government and he was proposing not dissimilar things when he was in Opposition—to say that he accepts the amendment. We should not need to force it to a vote, given what the Minister of State said in Standing Committee:
      "I cannot accept the amendment at this stage. I shall draw to the attention of my right hon. and hon. Friends in the Home Office the pleas that have been made in this Committee dealing with this particular matter. I shall ask them to consider whether, within the general review of their legislation relating to magistrates, they will consider bringing forward something to deal with this aspect of the matter."—[Official Report, Standing Committee G; 10 March 1981, c. 107–8.]

      925
      He was clearly in sympathy with the principle and general objectives of what was proposed then and I hope that he is in sympathy with what is now proposed in slightly more sophisticated form.
      The Home Office has had several months to present a proposal. What I asked for then was nothing more than I am asking for now. If the Minister finds himself unable to accept my amendment, let him at least announce the establishment of a pilot scheme in one or more areas to assess the feasibility of the consequences of using such forms, either for social security offences or for offences generally. I hope that he will be able to respond to this positively and will bring the general points that I have made to the attention of the courts, either by means of a circular direction or by consulting senior members of the judiciary on the possibility of a practice direction in this area.
      I hope that the Minister will feel able to do some if not all of those things. I hope that he will take this issue as seriously as I do and will ensure that we do not clog up our overcrowded local prisons unnecessarily, at the expense of £160 per week per person, with those who are already highly disadvantaged and deprived, who are not committed violent criminals, and who face imprisonment as a result of this legislation simply because they lack the means, not because they deliberately wish to flout the intentions of the courts.
      The Minister of State, Home Office (Mr. Patrick Mayhew): This amendment gives shape to an idea that is both helpful and attractive. It is an idea that originated, I think, with my hon. Friend the Member for Paddington (Mr. Wheeler), whom I am glad to see in his place and to whom the hon. Gentleman the Member for Ormskirk (Mr. Kilroy-Silk) paid a very well deserved tribute. I have noted the support it received from both sides in Committee. Although, for reasons which I shall explain, I cannot advise my hon. and right hon. Friends to support this amendment, I undertake to do two important things.
      First, my right hon. Friend will consult the Magistrates' Association and the Justices' Clerks' Society and other appropriate bodies to see whether it would be practicable and desirable, not on a narrow but on a wider and more general scale than that proposed in the amendment, to employ a form for the purpose which we are discussing in this debate. Secondly, he will consult similarly to see whether we can usefully promote a pilot study to see whether, on a limited scale, in the first instance, perhaps, there is value in the use of such a form.
      We share the intent that lies behind this proposal. We recognise that a very small proportion of fine defaulters will be sent to prison. I noted the hon. Gentleman's realistic assertion that, if somebody deliberately decides not to pay a fine imposed upon him and ends up in prison, well and good. That is his choice. That was a fair and realistic observation. I, for my part, think it essential that we should keep the ultimate sanction of prison, because without it I think that we would find much more deliberate defaulting on fines.
      Only a very small proportion of defaulters go to prison, but it is important—and here I agree with the hon. Gentleman—that courts should, when fixing fines, be accurately informed as to the defendant's means. Similarly it is important that a fine should not, by its severity,
      926
      impose unintended sacrifices upon the defendant and perhaps his family. I agree with what the hon. Gentleman has said about that. That is not to say that fines should not impose a measure of sacrifice. If there is no difficulty in paying a fine it loses the greater part of its purpose. The hon. Gentleman's intent is to improve the accuracy of the information generally available to courts, and that is very proper and laudable. Full information about a defendant is essential to all aspects of sentencing, not just fines. Naturally enough, the practice of the courts already is to look to a defendant's means when fixing a fine. Section 31 of the Magistrates Court Act 1952 provides that when fixing the amount of a fine a court must take into consideration, among other things,
      "the means of the person on whom the fine is imposed so far as they appear or are known to the court."
      Similarly, in cases where a defendant pleads guilty by post, as happens with certain minor offences, the Home Office recommends to the courts that he be given an opportunity on the plea notification form to mention any mitigating information about his financial circumstances. This is not a dead letter. Courts pay attention, and rightly so. I do not think that I can say to the hon. Gentleman, as he has asked me to do, that we will invite the authorities to issue a practice direction. The courts take this matter seriously. We are concerned to see whether they can be helped.
      Nor is anybody sent to prison for defaulting on a fine as the automatic consequences of not having paid. The hon. Gentleman will know that when default occurs the court cannot issue a warrant of commitment unless it has conducted a means inquiry at which the offender has a full opportunity to explain his circumstances. It may do so only if it is satisfied that the offender either has the means to pay or that the default is due to his wilful refusal or culpable neglect and, furthermore, that all other methods of enforcement have been considered or tried. That is an important point that people outside might miss. If somebody has defaulted, he cannot automatically be sent to prison. A means inquiry must be conducted by the court. That is very important. Accordingly, I think that we can be confident that only very rarely does a prison sentence result from inadequate information as to the defendant's means.
      The hon. Member for Ormskirk uncharacteristically made a serious mistake. He rightly said that about 17,000 people were sent to prison for defaulting on fines last year. He also said that at any one time a quarter of the prison population comprised fine-defaulters. At any one time last year, the average number of such prisoners was 1,000. The majority of fine defaulters do not serve more than four days.
      The need for full information first arises when the fine is fixed. I am interested in the recently introduced Scottish practice. A survey of 2,000 cases in Scotland shows that only about 34 per cent. of recipients of the forms completed them. The majority were pleading guilty by post to motoring offences. It was a small survey and it might not be reliable. However, it is relevant to the question that must always be asked about a new procedure—will its results be worth the administrative candle?
      The practice of issuing a form to defendants when criminal proceedings are commenced extends in Scotland to nearly all criminal offences, in contrast to the proposal in the amendment.

      927
      It would be wrong to introduce such a practice by means of main legislation applying only to offences under one statute. If we can prove that the idea is good, we should want to apply it generally and not narrowly. That is why we want to consult, and I undertake to do that. I do not say that to stave off unwelcome innovation. A Home Office working party is already examining what help can be given to courts in improving fine enforcement procedures. This will fit aptly into that work. The NACRO working party, of which the hon. Member for Ormskirk is a member, is due to report in the summer and we shall be most interested in it. I shall be surprised if it does not offer advice on this proposal.
      I hope that I have said enough to show that we have a genuine interest in and sympathy for the proposal. If it proves practical, and if resources permit, it should have a wide rather than a narrow application. It is plain why we cannot support the amendment. I hope that the hon. Member will withdraw it.
      Mr. Kilroy-Silk: I am grateful to the Minister for his constructive and helpful approach. I accept that it is not right to legislate for offenders on such a narrow front, but that was the only way open to me. I accept that the proposals should apply to offenders generally. Having heard what the Minister said about consultation, which I hope will be speedy and successful, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Schedule 1

      INCREASES IN PENALTIES
      Mr. Rossi: I beg to move amendment No. 18, in page 6, line 13, leave out '£100' and insert '£200'.
      I move the amendment under the "slip" rule. There was an accident in Committee, which was a pleasant surprise to the Opposition. I give them credit for their persistence and good fortune. The Government must put it right. I shall not argue the case once more.
      Amendment agreed to.

    Title
    Amendments made: No. 19 in line 1, after 'security', insert 'and'.
    No. 20 in line 2, leave out
    'and reports in relation to war pensions'.—[Mr. Rossi.]
    Bill, as amended, reported.
    Motion made and Question put, That the Bill be now read the Third time:
    The House divided: Ayes 277, Noes 212.

    Division No. 187]

    [6.44 pm

    AYES

    Aitken, Jonathan

    Benyon, W. (Buckingham)

    Alexander, Richard

    Berry, Hon Anthony

    Alison, Michael

    Best, Keith

    Amery, Rt Hon Julian

    Bevan, David Gilroy

    Ancram, Michael

    Biffen, Rt Hon John

    Aspinwall, Jack

    Biggs-Davison, John

    Atkins, Rt Hon H.(S'thorne)

    Blackburn, John

    Atkins, Robert (Preston N)

    Blaker, Peter

    Baker, Kenneth(St.M'bone)

    Body, Richard

    Baker, Nicholas (N Dorset)

    Boscawen, Hon Robert

    Banks, Robert

    Bottomley, Peter (W'wich W)

    Beaumont-Dark, Anthony

    Braine, Sir Bernard

    Bell, Sir Ronald

    Bright, Graham

    Bendall, Vivian

    Brinton, Tim

    928

    Brittan, Leon

    Henderson, Barry

    Brooke, Hon Peter

    Heseltine, Rt Hon Michael

    Brotherton, Michael

    Hicks, Robert

    Brown, Michael(Brigg & Sc'n)

    Higgins, Rt Hon Terence L

    Browne, John (Winchester)

    Holland, Philip (Carlton)

    Bruce-Gardyne, John

    Hooley, Frank

    Bryan, Sir Paul

    Hordern, Peter

    Buchanan-Smith, Alick

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

    Budgen, Nick

    Hunt, David (Wirral)

    Bulmer, Esmond

    Hunt, John (Ravensbourne)

    Burden, Sir Frederick

    Jenkin, Rt Hon Patrick

    Butcher, John

    Johnson Smith, Geoffrey

    Butler, Hon Adam

    Jopling, Rt Hon Michael

    Cadbury, Jocelyn

    Kaberry, Sir Donald

    Carlisle, John (Luton West)

    Kimball, Marcus

    Carlisle, Kenneth (Lincoln)

    King, Rt Hon Tom

    Chalker, Mrs. Lynda

    Knox, David

    Chapman, Sydney

    Lamont, Norman

    Churchill, W. S.

    Lang, Ian

    Clark, Sir W. (Croydon S)

    Langford-Holt, Sir John

    Clarke, Kenneth (Rushcliffe)

    Latham, Michael

    Clegg, Sir Walter

    Lawrence, Ivan

    Cockeram, Eric

    Lawson, Rt Hon Nigel

    Cope, John

    Lee, John

    Cormack, Patrick

    Le Marchant, Spencer

    Corrie, John

    Lennox-Boyd, Hon Mark

    Cranborne, Viscount

    Lewis, Kenneth (Rutland)

    Critchley, Julian

    Lloyd, Ian (Havant & W'loo)

    Crouch, David

    Lloyd, Peter (Fareham)

    Dean, Paul (North Somerset)

    Loveridge, John

    Dickens, Geoffrey

    Luce, Richard

    Dorrell, Stephen

    Lyell, Nicholas

    Douglas-Hamilton, Lord J.

    McCrindle, Robert

    Dover, Denshore

    Macfarlane, Neil

    du Cann, Rt Hon Edward

    MacKay, John (Argyll)

    Dunn, Robert (Dartford)

    Macmillan, Rt Hon M.

    Dykes, Hugh

    McNair-Wilson, M. (N'bury)

    Eden, Rt Hon Sir John

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

    Edwards, Rt Hon N. (P'broke)

    McQuarrie, Albert

    Eggar, Tim

    Madel, David

    Elliott, Sir William

    Major, John

    Emery, Peter

    Marland, Paul

    Eyre, Reginald

    Marlow, Tony

    Fairbairn, Nicholas

    Marshall, Michael (Arundel)

    Fairgrieve, Russell

    Mates, Michael

    Farr, John

    Maude, Rt Hon Sir Angus

    Fell, Anthony

    Mawby, Ray

    Fenner, Mrs Peggy

    Mawhinney, Dr Brian

    Fisher, Sir Nigel

    Maxwell-Hyslop, Robin

    Fletcher-Cooke, Sir Charles

    Mayhew, Patrick

    Fookes, Miss Janet

    Mellor, David

    Forman, Nigel

    Meyer, Sir Anthony

    Fowler, Rt Hon Norman

    Miller, Hal (B'grove)

    Fox, Marcus

    Mills, Iain (Meriden)

    Fraser, Rt Hon Sir Hugh

    Mills, Peter (West Devon)

    Fraser, Peter (South Angus)

    Miscampbell, Norman

    Fry, Peter

    Mitchell, David (Basingstoke)

    Galbraith, Hon T. G. D.

    Moate, Roger

    Gardiner, George (Reigate)

    Molyneaux, James

    Garel-Jones, Tristan

    Monro, Hector

    Gilmour, Rt Hon Sir Ian

    Montgomery, Fergus

    Glyn, Dr Alan

    Morgan, Geraint

    Goodhew, Victor

    Morrison, Hon C. (Devizes)

    Gorst, John

    Morrison, Hon P. (Chester)

    Gower, Sir Raymond

    Mudd, David

    Gray, Hamish

    Murphy, Christopher

    Greenway, Harry

    Myles, David

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

    Neale, Gerrard

    Griffiths, Peter Portsm'th N)

    Nelson, Anthony

    Grist, Ian

    Neubert, Michael

    Grylls, Michael

    Newton, Tony

    Gummer, John Selwyn

    Onslow, Cranley

    Hamilton, Hon A.

    Page, Rt Hon Sir G. (Crosby)

    Hamilton, Michael (Salisbury)

    Page, Richard (SW Herts)

    Hampson, Dr Keith

    Parkinson, Cecil

    Hannam,John

    Parris, Matthew

    Haselhurst, Alan

    Patten, Christopher (Bath)

    Havers, Rt Hon Sir Michael

    Patten, John (Oxford)

    Hawksley, Warren

    Pattie, Geoffrey

    Hayhoe, Barney

    Pawsey, James

    929

    Percival, Sir Ian

    Stevens, Martin

    Pink, R. Bonner

    Stewart, Ian (Hitchin)

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

    Stewart, A.(E Renfrewshire)

    Prentice, Rt Hon Reg

    Stokes, John

    Price, Sir David (Eastleigh)

    Stradling Thomas, J.

    Prior, Rt Hon James

    Tapsell, Peter

    Proctor, K. Harvey

    Taylor, Robert (Croydon NW)

    Pym, Rt Hon Francis

    Tebbit, Norman

    Raison, Timothy

    Temple-Morris, Peter

    Rathbone, Tim

    Thomas, Rt Hon Peter

    Rees, Peter (Dover and Deal)

    Thorne, Neil (llford South)

    Renton, Tim

    Thornton, Malcolm

    Rhodes James, Robert

    Townend, John (Bridlington)

    Ridley, Hon Nicholas

    Townsend, Cyril D, (B'heath)

    Ridsdale, Sir Julian

    Trippier, David

    Rifkind, Malcolm

    Trotter, Neville

    Roberts, M. (Cardiff NW)

    van Straubenzee, W. R.

    Roberts, Wyn (Conway)

    Vaughan, Dr Gerard

    Rossi, Hugh

    Viggers, Peter

    Rost, Peter

    Waddington, David

    Royle, Sir Anthony

    Wakeham, John

    St. John-Stevas, Rt Hon N.

    Waldegrave, Hon William

    Scott, Nicholas

    Walker, B. (Perth)

    Shaw, Giles (Pudsey)

    Walker-Smith, Rt Hon Sir D.

    Shaw, Michael (Scarborough)

    Wall, Patrick

    Shelton, William (Streatham)

    Waller, Gary

    Shepherd, Colin (Hereford)

    Ward, John

    Shepherd, Richard

    Warren, Kenneth

    Shersby, Michael

    Watson, John

    Silvester, Fred

    Wells, John (Maidstone)

    Sims, Roger

    Wells, Bowen

    Speed, Keith

    Wheeler, John

    Speller, Tony

    Whitney, Raymond

    Spence, John

    Wickenden, Keith

    Spicer, Jim (West Dorset)

    Williams, D.(Montgomery)

    Spicer, Michael (S Worcs)

    Wolfson, Mark

    Sproat, Iain

    Young, Sir George (Acton)

    Squire, Robin

    Stanbrook, Ivor

    Tellers for the Ayes:

    Stanley, John

    Mr. Alastair Goodlad and Mr. Donald Thompson.

    Steen, Anthony

    NOES

    Abse, Leo

    Cryer, Bob

    Adams, Allen

    Cunliffe, Lawrence

    Alton, David

    Cunningham, G. (Islington S)

    Anderson, Donald

    Cunningham, Dr J. (W'h'n)

    Archer, Rt Hon Peter

    Dalyell, Tam

    Ashton, Joe

    Davies, Rt Hon Denzil (L'lli)

    Atkinson, N.(H'gey,)

    Davies, Ifor (Gower)

    Bagier, Gordon AT.

    Davis, Clinton (Hackney C)

    Barnett, Rt Hon Joel (H'wd)

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

    Beith, A. J.

    Deakins, Eric

    Bennett, Andrew(St'kp't N)

    Dempsey, James

    Bidwell, Sydney

    Dewar, Donald

    Bottomley, Rt Hon k.(M'b'ro)

    Dormand, Jack

    Bowden, Andrew

    Douglas, Dick

    Bray, Dr Jeremy

    Douglas-Mann, Bruce

    Brown, Hugh D. (Provan)

    Dubs, Alfred

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

    Duffy, A. E. P.

    Brown, Ron (E'burgh, Leith)

    Dunn, James A.

    Buchan, Norman

    Dunnett, Jack

    Callaghan, Rt Hon J.

    Dunwoody, Hon Mrs G.

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

    Eadie, Alex

    Campbell, Ian

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

    Campbell-Savours, Dale

    Ellis, Tom (Wrexham)

    Cant, R. B.

    English, Michael

    Carmichael, Neil

    Ennals, Rt Hon David

    Carter-Jones, Lewis

    Evans, loan (Aberdare)

    Cartwright, John

    Evans, John (Newton)

    Clark, Dr David (S Shields)

    Ewing, Harry

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

    Faulds, Andrew

    Concannon, Rt Hon J. D.

    Field, Frank

    Conlan, Bernard

    Fitch, Alan

    Cook, Robin F.

    Flannery, Martin

    Craigen, J. M.

    Fletcher, Ted (Darlington)

    Crowther, J. S.

    Foot, Rt Hon Michael

    930

    Ford, Ben

    Moyle, Rt Hon Roland

    Forrester, John

    Newens, Stanley

    Foster, Derek

    O'Halloran, Michael

    Foulkes, George

    O'Neill, Martin

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

    Orme, Rt Hon Stanley

    Freeson, Rt Hon Reginald

    Owen, Rt Hon Dr David

    Freud, Clement

    Palmer, Arthur

    Garrett, John (Norwich S)

    Parry, Robert

    George, Bruce

    Penhaligon, David

    Gilbert, Rt Hon Dr John

    Prescott, John

    Ginsburg, David

    Price, C. (Lewisham W)

    Graham, Ted

    Race, Reg

    Grant, John (Islington C)

    Radice, Giles

    Grimond, Rt Hon J.

    Rees, Rt Hon M (Leeds S)

    Hamilton, James (Bothwell)

    Richardson, Jo

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

    Roberts, Allan (Bootle)

    Harrison, Rt Hon Walter

    Roberts, Ernest (Hackney N)

    Hattersley, Rt Hon Roy

    Roberts, Gwilym (Cannock)

    Haynes, Frank

    Rooker, J. W.

    Heffer, Eric S.

    Ross, Ernest (Dundee West)

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

    Ross, Stephen (Isle of Wight)

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

    Rowlands, Ted

    Homewood, William

    Ryman, John

    Howell, Rt Hon D.

    Sandelson, Neville

    Hudson Davies, Gwilym E.

    Sever, John

    Hughes, Robert (Aberdeen N)

    Sheerman, Barry

    Hughes, Roy (Newport)

    Sheldon, Rt Hon R.

    Janner, Hon Greville

    Shore, Rt Hon Peter

    Jay, Rt Hon Douglas

    Silkin, Rt Hon J. (Deptford)

    John, Brynmor

    Silkin, Rt Hon S. C. (Dulwich)

    Johnson, James (Hull West)

    Skinner, Dennis

    Johnston, Russell (Inverness)

    Smith, Rt Hon J. (N Lanark)

    Jones, Rt Hon Alec (Rh'dda)

    Snape, Peter

    Jones, Barry (East Flint)

    Soley, Clive

    Jones, Dan (Burnley)

    Spearing, Nigel

    Kaufman, Rt Hon Gerald

    Spriggs, Leslie

    Kerr, Russell

    Stallard, A. W.

    Kilfedder, James A.

    Stewart, Rt Hon D. (W Isles)

    Kilroy-Silk, Robert

    Stoddart, David

    Lambie, David

    Stott, Roger

    Lamborn, Harry

    Strang, Gavin

    Lamond, James

    Straw, Jack

    Leadbitter, Ted

    Summerskill, Hon Dr Shirley

    Leighton, Ronald

    Thomas, Dafydd (Merioneth)

    Lestor, Miss Joan

    Thomas, Jeffrey (Abertillery)

    Litherland, Robert

    Thomas, Mike (Newcastle E)

    Lofthouse, Geoffrey

    Thomas, Dr R.(Carmarthen)

    Lyon, Alexander (York)

    Thorne, Stan (Preston South)

    Lyons, Edward (Bradf'd W)

    Tilley, John

    McCartney, Hugh

    Tinn, James

    McElhone, Frank

    Torney, Tom

    McKay, Allen (Penistone)

    Varley, Rt Hon Eric G.

    McKelvey, William

    Wainwright, E.(Dearne V)

    MacKenzie, Rt Hon Gregor

    Wainwright, H.(Colne V)

    McNally, Thomas

    Walker, Rt Hon H.(D'caster)

    McNamara, Kevin

    Weetch, Ken

    McTaggart, Robert

    Wellbeloved, James

    McWilliam, John

    Welsh, Michael

    Magee, Bryan

    White, J. (G'gow Pollok)

    Marks, Kenneth

    Whitehead, Phillip

    Marshall, D(G'gow S'ton)

    Whitlock, William

    Marshall, Dr Edmund (Goole)

    Wigley, Dafydd

    Marshall, Jim (Leicester S)

    Willey, Rt Hon Frederick

    Maxton, John

    Wilson, Gordon (Dundee E)

    Maynard, Miss Joan

    Wilson, William (C'trySE)

    Meacher, Michael

    Winnick, David

    Mellish, Rt Hon Robert

    Woodall, Alec

    Millan, Rt Hon Bruce

    Woolmer, Kenneth

    Mitchell, Austin (Grimsby)

    Young, David (Bolton E)

    Mitchell, R. C. (Soton Itchen)

    Morris, Rt Hon A. (W'shawe)

    Tellers for the Noes:

    Morris, Rt Hon C. (O'shaw)

    Mr. Donald Coleman and Mr. Joseph Dean.

    Morris, Rt Hon J. (Aberavon)

    Morton, George

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

Iron and Steel Bill
As amended(in the Standing Committee), considered.
Iron and Steel Bill
  New Clause 1

    THE ORGANISATION OF THE CORPORATION'S ACTIVITIES
    `(1) In the 1975 Act, after section 4, there shall be inserted the following section—
    4A.—(1) It shall be the duty of the Corporation so to exercise their powers as to secure that the carrying on of the activities that have fallen to be carried on under their ultimate control is organised, so far as regards the direction thereof, in the most efficient manner.
    (2) The Corporation shall not make, or permit to be made, any substantial change in the manner in which the carrying on of the activities that have fallen to be carried on under their ultimate control is organised, so far as regards the direction thereof, except with the consent of the Secretary of State.
    (3) In carrying out any measure of reorganisation or any work of development which involves substantial outlay on capital account, and in securing the carrying out by any publicly-owned companies of any such measure or work, the Corporation shall act in accordance with a general programme settled from time to time with the approval of the Secretary of State.
    (4) Without prejudice to subsection (1) of section 4 of this Act or subsection (3) above but subject as provided in subsection (5) below, the Secretary of State may by order give the following directions to the Corporation or any publicly-owned company after consultation with the Corporation or that company, as the case may be, that is to say—

    (a) a direction to the Corporation to discontinue or restrict any of their activities or to dispose of any of their property, rights, liabilities and obligations; or

    (b) a direction to the Corporation to secure the discontinuance or restriction of any of the activities of a publicly-owned company or the disposal of all or any of its property, rights, liabilities and obligations, or the winding up of any such company; or

    (c) a direction to a publicly-owned company to dispose of all or any of its property, rights, liabilities and obligations;

    and the Corporation or the publicly-owned company shall give effect to any directions given to the Corporation or the company.
    (5) The Secretary of State shall not give any direction under subsection (4) above unless he is satisfied that the giving of it will further the public interest.
    (6) As soon as practicable after giving a direction under subsection (4)(c) above, the Secretary of State shall give notice of the direction to the Corporation.
    (7) Subject to subsection (8) below, any direction under subsection (4) above to dispose of property, rights, liabilities or obligations may in particular include a direction—

    (a) to form a company for the purpose of acquiring the property or rights and assuming the liabilities or obligations to be transferred in pursuance of the direction;

    (b) prohibiting, except with the consent of the Secretary of State, the disposal to, or acquistion from any person by, any company which will acquire property or rights in pursuance of the direction of assets used or capable of use in the production of products of a description, or of products other than products of a description, specified in the direction.

    (8) The powers to direct the formation of a company and to restrict the disposal or acquisition of assets are exercisable subject to the following further limitations, that is to say—

    (a) no company shall be directed to be formed otherwise than as a publicly-owned company; and

    (b) no such restriction shall be imposed except on a company which is or, when formed will be, in public ownership or be binding after it ceases to be in public ownership;

    and the Secretary of State shall, as soon as it is practicable to do so, give notice of the imposition of the restriction to any company that is to be bound by it if that company is not the one to which the direction is given.
    (9) So long as a restriction on the disposal or acquisition of assets is binding on the Corporation or a publicly-owned
    932
    company the provisions of this Act relating to the capacity of the Corporation or the publicly-owned company shall have effect subject to the restriction."
    (2) In section 4 of the 1975 Act (general powers of the Secretary of State in relation to the Corporation) the following provisions shall be omitted, that is to say—

    (a) subsection (power to give directions about organisation);

    (b) subsections(3) and (4) (which are re-enacted as subsections (2) and (3) of the section 4A inserted by subsection (1) above);

    (c) subsection (5) (which is re-enacted with modifications in subsection (4) of that section); and

    (d) subsection (6) (no direction to prejudice discharge to Corporation's duties).

    (3) In section 5 of the 1975 Act (which imposes on the Corporation duties to review their affairs and report to the Secretary of State)—

    (a) subsections (1) and (2) (Corporation to review and, after consultations, report on their organisation) shall be omitted;

    (b) in subsection (5) (annual report to set out directions given by Secretary of State during year) after the words "to the Corporation", where those words occur first, there shall be inserted the words "or to a publicly-owned company"; and

    (c) after subsection (5) there shall be inserted the following subsections—

    "(5A) Except as provided in subsection (5B) below, the report made under subsection (4) above for any year shall set out any consent given by the Secretary of State to the Corporation during that year under section 4A(2) of this Act and shall include a general account of the organisational changes effected during that year by virtue of any consent of his given in that or in any earlier year under that subsection.

    (5B) Paragraphs (a) and (b) of subsection (5) above shall apply in relation to any consent given during the year by the Secretary of State as they apply in relation to any direction given by him and in relation to organisational changes effected during the year, shall so apply except to such extent as the Secretary of State agrees."

    (4) Section 13 of the 1975 Act shall have effect with the substitution, in subsection (2) (exemption of Corporation from stamp duty where chargeable transaction is due to directions etc.), for paragraph (a), of the following paragraph—
    "(a) for the purpose of giving effect to a direction given by the Secretary of State by virtue of section 4A(7) of this Act; or".
    (5) In section 36 of the 1975 Act (supplementary provisions about orders and regulations), in subsections (2) and (5), for the figures "4(5)" there shall be substituted the figures "4A(4)". '.—[Mr. Tebbit.]
    Brought up, and read the First time.
    6.55 pm
    The Minister of State, Department of Industry (Mr. Norman Tebbit): I beg to move, That the clause be read a Second time.
    Mr. Deputy Speaker (Mr. Bernard Weatherill): With this it will be convenient to discuss also Government amendments Nos. 2 to 5.
    Mr. Tebbit: This new clause and the attendant amendments are put forward in response to the arguments, put most notably by my hon. Friends the Members for Aldridge-Brownhills (Mr. Shepherd) and for Birmingham., Selly Oak (Mr. Beaumont-Dark), and many others, that competition between the State and the private sector in the steel industry should not only be fair but be seen to be fair. In Standing Committee, my hon. Friend withdrew his amendment to that effect and his further amendment concerning the present requirements for the corporation to report to the Secretary of State certain reviews of its

    933
    affairs. He did so on my undertaking that I would introduce amendments on Report to meet the comments in Committee. I apologise to the House for the length and complexity of the new clause and the short time that it has been on the Order Paper.
    Mr. D. N. Campbell-Savours: Does the hon. Gentleman accept that the Opposition and others outside the House will think that this is a new Bill? This is not just a new clause that has come before the House today. We are having no chance to discuss this matter in Committee. This has been brought before the House, swept through its parliamentary procedures and will be put on the statute book in a completely unacceptable way. Will the Minister address himself to that? Many of us are disgusted by what has happened.
    Mr. Tebbit: The hon. Gentleman will perhaps concede that I am addressing myself to this point. If he will be kind enough to wait, I shall make the point again. The new clause does no more and no less than what I undertook would be done after the debate on the amendments that were tabled by my hon. Friends in Committee. I have no apologies to make for that; what I say to the House is that I very much regret that this has proved to be such a complex new clause and that we could not put it down earlier. We sought to find a shorter and simpler route to the objective, but that did not prove to be attainable, and eventually the form now before the House was devised and was tabled as soon as I had seen and approved it.
    7 pm
    Because I was painfully aware of the complexity of the new clause, I provided copies of an explanatory memorandum to those hon. Members who were members of the Standing Committee and to some others who I thought would be particularly interested. In the time that I had to do that, I could do very little more, and I hope that any hon. Members whom I have forgotten will not feel aggrieved. [Interruption.] I hear a sort of noise from my right and I suspect that I have forgotten somebody. However, my hon. Friend the Member for Honiton (Mr. Emery) is welcome to my copy of the explanatory memorandum as soon as I have sat down.
    I come now to the new clause itself. Since it was clear that it was bound to be complex, I took the opportunity to bring together a number of provisions about the organisation of the corporation's activities. The new clause begins by imposing a specific duty on the corporation to organise its affairs efficiently and it has three additional main purposes arising out of discussions in Committee.
    First, it will enable the Secretary of State to direct the corporation, by order subject to annulment, to form separate companies to carry on those of the corporation's businesses which are in competition with the private sector of the industry; secondly, it will remove the Secretary of State's existing power to give directions how the corporation should organise itself internally; thirdly, it will remove the Secretary of State's power to require the corporation to carry out a review of the way in which it is organised and to report to him the conclusions of such a review. None of those purposes will come as a surprise to hon. Members who were on the Standing Committee.
    Mr. Campbell-Savours: They are disgusting.
    Mr. Tebbit: They may be disgusting, as the hon. Member says—that is a matter of opinion; but I hope that it will be a matter of agreement that they are not surprising.
    The first additional purpose, that of empowering the Secretary of State to direct the corporation to form separate companies where there is competition with the private sector, is achieved by subsections (4) to (8) of a new section, 4A, which this new clause inserts into the Iron and Steel Act 1975. Section 4(5) of that Act empowered the Secretary of State to direct the corporation to discontinue or restrict its activities, or to dispose of its assets, in areas of its business other than iron and steel making.
    The House will recall that clause 1(4) of the Bill, as presented, extended that power to cover iron and steel making activities and assets as well. Subsection (4) of the new clause now consolidates these changes, and in addition extends the Secretary of State's powers of direction to cover the disposal of assets by any of the publicly owned companies.
    In addition to the power to direct the discontinuation of activities and disposal of assets, a new power will be available to the Secretary of State to direct that the assets which are specified in the order under subsection (4) should be transferred to a separate company which shall be formed for that purpose. This is in subsection (7)(a). In order to ensure that the company so formed into a separate and identifiable accounting unit actually carries on the type of business which is intended, subsection (7) (b) prohibits the company, except with the consent of the Secretary of State, from taking on assets which can be used for the manufacture of products other than those specified in the direction. This restriction will remain in force for as long as the company remains in public ownership.
    Mr. John Bruce-Gardyne: My hon. Friend has reached subsection (7). I was hoping that he would tell us something about subsection (5), which I find riveting. I wonder why it has been inserted into the Bill.
    Mr. Tebbit: Subsection (5) is the subsection which requires that the Secretary of State
    "shall not give any direction under subsection (4) above unless he is satisfied that the giving of it will further the public interest."
    I do not think that my hon. Friend really finds that surprising.
    Mr. Bruce-Gardyne: I find its insertion very surprising indeed.
    Mr. Tebbit: If my hon. Friend would go carefully through the 1975 Act and the Bill and the new clause, I think that he would see that it fits in perfectly clearly. I am not sure whether he objects to the position of this provision or to what it says.
    Mr. Bruce-Gardyne: I do not understand the purpose of inserting it. Presumably, anything that the Secretary of State decides to do he will decide to do because it is in the public interest. He will not do it because he thinks that it is not in the public interest. What on earth is achieved by inserting this subsection?
    Mr. Tebbit: My hon. Friend will know that there is a long history, and a good history, of requiring that such directions as these are given in the public interest. It would be possible for a direction to be given which was in the interests of a section of the public, and that might seem to a Secretary of State a reasonable thing to do, but I think that it would have to be established—and would have to

    935
    be capable of being contested—whether it was in the public interest as a whole that he should do it. I think that that is a fair point to make.
    Mr. Tom Ellis: My difficulty is not that of the hon. Member for Knutsford (Mr. Bruce-Gardyne). I understood that the thrust of the Government's policy was to put the emphasis on the commercial viability of the steel industry, whether publicly or privately owned. To the extent that the public interest might not coincide with the commercial viability of a particular company, surely the Secretary of State is defeating his own object.
    Mr. Tebbit: The two matters have to be balanced. At any time, it has to be the public interest which prevails. I do not think that that is particularly extraordinary.
    As I was saying, subsection (7)(b) prohibits the company, except with the consent of the Secretary of State, from taking on assets which can be used for the manufacture of products other than those specified in the direction.
    That direction will remain in force for as long as the company remains in public ownership. It is envisaged that, initially, all companies formed in this way will remain publicly owned, but it will of course be possible for private capital to be introduced into such companies on either a part or a whole share basis.
    Mr. Stan Crowther: Can the Minister explain how this can possibly work, bearing in mind the fact that innumerable items of machinery can be used in the production of many different products? This apparently would preclude the BSC, except with the Secretary of State's permission, from buying any of this machinery, although it desperately needed it to produce decent steel products, because it could be used for some other purpose—for example, the manufacture of aluminium products. Will the BSC have to ask the Secretary of State for permission every time that it wants to buy a new lathe or something of that sort?
    Mr. Tebbit: That is not the purpose at all. The purpose is that the BSC should not take on assets which would not be recognised—typewriters, for example, which could be used to type letters which were not conceivably about the business of the company. Thus the corporation would require the Secretary of State's permission to buy processing machinery which was clearly not directed towards the purpose for which the company was set up.
    That seems reasonable. Otherwise, those companies would be free to act in a way in which the corporation itself was not free to act, in going beyond the obligations or the responsibilities which were laid upon it in the normal course of the legislation which affects all nationalised industries. Otherwise, as the hon. Gentleman will understand, a company would have no restriction upon the activities into which it entered.
    The powers that are incorporated in the new clause have been necessitated by the serious situation that has developed in the areas in which the British Steel Corporation competes with the private sector. My hon. Friends have often expressed their concern about that, but equal concern has been expressed by Labour Members, and understandably so. Many Labour Members have private sector steel companies in their constituencies and they have been made painfully aware of the problems
    936
    which have been caused to those companies, which in many instances the companies and the employees contend have been caused by the corporation's trading practices.
    The seriousness of the situation has been recognised by the corporation and it has given assurances about its pricing policies. It is already transferring two of its businesses into separate companies—namely, the pipe makers Stanton and Staveley, and the steel stock holders, British Steel Service Centres. To that extent the powers that we are now taking should be seen as reserve powers only. However, they are necessary even if it transpires that their only function is to serve as guidelines for the way in which we believe that the corporation should manage businesses that are in competition with the private sector. They are a mark of the Government's determination to improve matters in the overlap area.
    It is important that the private sector should be able to see that the corporation is competing on as near equal terms as possible. The provision in the new clause should go a long way towards reassuring it of that.
    Mr. Roger Moate: My hon. Friend is right to say that the private sector wants reassurance and wants to know of the resources that are available to its competitors in the overlap areas. My hon. Friend has said that the new clause is difficult to absorb rapidly. Does it provide, especially for Allied Steel and Wire, that from the beginning of its operations it will make clear to the world the resources, especially financial resources, that it has at its disposal and how much taxpayers' money has gone into it, so that its rivals will know of the size and substance of the State competition?
    Mr. Tebbit: It is more likely that Allied Steel and Wire will take advantage of the law that applies to all Companies Act companies and will publish its accounts and balance sheet at the end of its first year of operation. That is a perfectly normal and commercial practice to adopt. The company will behave commercially arid I believe that, in its view, that would be the commercial way in which to behave.
    Mr. Bruce-Gardyne: I am not clear in what way the establishment of the new separate companies—those that are being set up or will be set up under the new clause—will assist those in the private sector in competition with British Steel or former parts of British Steel to assess the transfer pricing between British Steel and the new companies.
    Mr. Tebbitt: The difficulty that my hon. Friend postulates is a real one. I said in Committee that these arrangements would not be perfect because of that There still remains an obligation upon the Government and British Steel to ensure that there is not unfair practice. I say "unfair" because there are many commercial practices among private sector companies and between the State sector and fully private companies where transfer prices—prices of the raw material being bought and sold—are not immediately apparent and may vary from time to time and from customer to customer.
    If we reach a stage where some companies are formed where the steel maker and some of the downstream organisations are included, these matters will be rather clearer. I do not pretend that these arrangements will solve all the problems. I am sure that my hon. Friend would not believe me if I told him that they would do so.

    937
    7.15 pm
    The second purpose of the new clause is to remove the power of the Secretary of State to give general or specific directions on the way in which the corporation organises itself internally. It is the Government's view that the detailed provisions in the Iron and Steel Act 1975 enabling the Secretary of State to intervene in the internal organisation of the corporation are no longer appropriate in the context of a business which we are determined should be run on normal commercial lines.
    The new clause achieves the objective of making the corporation less subject to the Secretary of State's control in matters of organisation by virtue of subsection (1) of the new section 4A which the new clause inserts into the provisions of the 1975 Act. The subsection is designed to retain the evident intention of the 1975 Act that the corporation should organise its activities in the most efficient manner. What has been omitted, however, is the power of the Secretary of State to give directions to the corporation, either of a general or of a specific nature, on the way in which this goal should be achieved, or to require the corporation to carry out a review of its organisation. In other words, the initiative in securing the efficiency of the corporation's organisation will be left where it should be—in the corporation's own hands.
    We have, however, considered it appropriate to retain the provision in section 4(3) of the 1975 Act that the corporation shall not make any substantial change in the way it is organised without first obtaining the consent of the Secretary of State. To remove that provision would go too far. As I said in Committee, there is at present no difference of opinion between the corporation and the Government over the manner of the organisation, but the removal of the spirit of section 4(3) of the 1975 Act would permit the corporation in future to develop in ways which might be unacceptable to the Government of the day. That is why subsection (2) of the new section 4A repeats the provisions of section 4(3) of the 1975 Act. Similarly, the Government would wish, for obvious reasons, to retain their power of approval over the corporation's investment programme. The provisions of section 4(4) of the 1975 Act are therefore repeated in subsection (3) of the new section 4A.
    The third purpose of the new clause—to remove the power of the Secretary of State under section 5(1) to require the corporation to carry out a review of the way the corporation is organised and to report its conclusions to the Secretary of State—raises similar issues. Such a power is no longer appropriate and is removed by subsection (3)(a) of the new clause. Section 5(2) of the 1975 Act—the requirement to consult employee representatives in any review of organisation ordered by the Secretary of State—falls with the removal of section 5(1). As I was at pains to point out in Committee, that does not mean that the Government or the corporation consider that consultation of employees should be reduced or abandoned; merely that it is primarily for the corporation's management to decide how such consultation is conducted.
    The remaining subsections of the new clause are consequential. The most important concerns the consents given by the Secretary of State to substantial changes in organisation. Under section 5(5) of the 1975 Act the corporation is required to set out in its annual report details
    938
    of any directions given to it by the Secretary of State. Subsection (3)(c) extends this to include details of consents given by the Secretary of State.
    Subsection (4) amends section 13(2) of the 1975 Act so as to continue the exemption from stamp duty where the corporation is setting up a company in the course of giving effect to a direction under new section 4A(7).
    I am glad to say that amendments Nos. 2, 3, 4, and 5 are consequential and require no further explanation. I hope that the House will find that my explanation has been helpful, even if it has been a complex explanation of a complex clause. I would not be surprised if any hon. Member said that at first he had had difficulty following the measure. It is particularly difficult to follow unless one has the explanatory memorandum, or, better still, a 1975 Act to amend as one goes along.
    I am sure that the House will recognise the deep concern that has been expressed in all quarters about the need to ensure, as far as possible, that competition between the two sectors is seen to be fair. No one could object to that part of the new clause. I accept that Opposition Members may argue that the new clause makes it too easy to privatise subsequently. That is a difference of opinion. With the exception of the powers that we are taking to ensure that there is fair competition, it is right that the corporation should be left to take the initiative in changes and reviews of its organisation in order that it may achieve the greatest efficiency possible. The new clause is designed with those ends in view. With that in mind, I commend it to the House.
    Dr. John Cunningham: The Minister has narrowly escaped the charge of having abused the procedures of the House. I have allowed him to escape because he has just about earned it by providing the notes on the new clause. I very much agree with the criticism that my hon. Friend the Member for Workington (Mr. Campbell-Savours) made during an intervention. This is not so much a new clause as a new Bill. When that point was made there was some exclamation of dissent. It came not from the Minister but, I believe, from the hon. Member for Honiton (Mr. Emery). I should point out to the hon. Gentleman that the new clause contains 95 lines of legislation. The hon. Gentleman has a copy of the new clause in front of him, but he has not got the Bill in front of him. If he were to compare the new clause with the Bill, he would see that the whole Bill contains only 134 lines. Therefore, the charge is easy to substantiate.
    Mr. Tebbit: I am sure that the hon. Gentleman understands that it would have been possible to make the amendments with fewer lines. However, the measure would have been even more difficult to understand. I decided that it was better, in effect, to put a new clause into the 1975 Act. It is easier to understand.
    Dr. Cunningham: My second criticism can also be substantiated easily. Several of my hon. Friends who were members of the Committee feel strongly about it. A lot of time was spent debating clause 1. We did not seek to delay the Bill's passage unduly. To table a clause of such magnitude 48 hours before the debate is to trespass on the prcedures of the House. I cannot say that too firmly. In essence, the major political part of the Bill has been rewritten. The clause makes a great difference to the

    939
    management, running and prospects of the British Steel Corporation. Therefore, this is by no means a small measure.
    The one thing that I welcome is that the new clause removes part of clause L As amendment No. 1 seeks to remove the whole of clause 1, we should be a little happy. However, the Government's productivity in leaving out 13 lines and replacing them by 95 lines leaves something to be desired, particularly as this Administration pride themselves on the claim that they do not over-legislate. Almost every line of the new clause allows for intervention in the management of the corporation. The Minister says that it is lengthy because the provisions need to be spelt out. Given that, many of us find it surprising that Mr. MacGregor and members of the board are happy to accept what is being proposed.
    Clause 1 and new clause 1 are riddled with controls and powers for the Secretary of State for Industry. It is a compendium of restrictions and controls, which are to be assumed by—as we are told again and again—the arch-apostle of management freedom and the market economy. On 1 April the Secretary of State gave evidence to the Select Committee on Industry and Trade. The Chairman said:
    "It has been suggested to us by previous witnesses that if there were on your staff brilliant administrators in the steel industry, they would probably be wasting their time on your staff, they ought to be in the steel industry itself and employed by the Steel Corporation. Is that not the case?"
    The Secretary of State replied:
    "Yes, I agree entirely."
    The Chairman then asked:
    "You do not put up your staff as being superior experts to those who now man the British Steel Corporation, is that the case?"
    The Secretary of State replied:
    "That is correct."
    The Secretary of State apparently confirmed his desire not to intervene. However, within a few weeks he tabled a large clause that gives him powers that no other Secretary of State for Industry has enjoyed over any industry. That is the reality of the new clause.
    The Minister fairly conceded that clause 1 and the new clause also involve the rundown of the corporation, its privatisation and the removal of virtually all its statutory duties. I am surprised that Conservative Members should accept that. Almost alone among public corporations, the BSC will have virtually no statutory duties. That is unprecedented. Of course, there are inherent dangers for the corporation's members. The corporation's statutory duties lay obligations on its members and also provide safeguards against ministerial intervention. That has always been the intention. The Government have almost completely removed those duties.
    This is a denationalisation measure which in many ways creates a dangerous precedent. It will restrict and curtail the freedom and commercial judgment of board members. The Secretary of State will have new powers to direct the corporation and its subsidiaries to dispose of assets, whether or not they agree or judge it to be in the corporation's commercial interests. Under the new clause the Secretary of State will also have power to prevent the corporation from expanding its activities or acquiring assets to meet new market opportunities.
    In effect, the Secretary of State has fitted up the board and has put it into a sort of tailor-made straitjacket. He has denied the board's members freedom of action and has
    940
    removed or at least stifled, managerial initiative. He has wiped out the statutory safeguards for consultations, even with the trade unions.
    7.30 pm
    The Minister has taken up one point that we have pressed upon him again and again, namely, the statutory requirement in section 5 (2) of the 1975 Act to consult the trade unions. When we have asked why that part of the Act was not being implemented, he has come up with all sorts of lame excuses. However, the clause is altogether removing that safeguard for the trade unions.
    The Minister says that it is a matter for management prerogative to decide the amount of consultation. The long history of the struggle by trade unionists to be involved in the management of their industries leads us to conclude that it is only by having statutory safeguards that major advances in consultation have ever been made. That is the lesson of history. Although he tries to disguise it, the Minister of State, in his proposals in the new clause, is taking a major step backwards in terms of that involvement and, in terms of trying to achieve the commitment that we need from trade unions to the industries that employ their members.
    So much for non-intervention. Those are draconian powers that are taking the Secretary of State into a much higher level of ministerial control than has ever existed before. Those powers are specifically designed to ensure not only control in terms of the use of public resources but political control, for reasons of political dogma. Those powers are not just in the commercial interests of the steel industry. The measure is aimed at keeping down the public sector and putting it—no doubt to the delight of many Conservative Members—firmly in its place for the future of steel.
    The Minister referred to the intentions of the new clause. He said that there was an intention to remove the power of the Secretary of State to give general and specific directions about the internal organisation of the corporation. I stress the word "internal" because elsewhere in the clause the Minister is doing exactly the opposite.
    Another purpose of the clause is to enable the Secretary of State to direct the corporation to form separate Companies Act companies in respect of those businesses that are uncompetitive with the private sector, and to give various other directions. Therefore, the claim—if it was intended to be a claim—that somehow that is withdrawing the Secretary of State from involvement in the corporation can be substantiated only in so far as it refers to the day-to-day running. We know that, whether or not that was laid down in the statute, most Ministers and most Governments have taken the line that they would not in any event interfere in the day-to-day running of the corporation.
    Mr. Bruce-Gardyne: They then proceed to do so.
    Dr. Cunningham: There is no doubt that this Secretary of State has every intention of doing so on a wider and wider scale, if we read the new clause aright. However, he then says, publicly, exactly the opposite.
    It says a great deal about Mr. MacGregor and his board that they have accepted all of that, apparently with equanimity. It belies Mr. MacGregor's reputation that he would acquiesce in the Government's taking such a power, but perhaps it is being taken to ensure that the Secretary of State can keep not only the public corporation in its place, but the chairman whom he has appointed. Some

    941
    arguments have been advanced by Conservative Members that Mr. MacGregor was being too successful in his management of the corporation and that he should be restricted.
    I shall make a number of detailed comments about the provisions. I shall begin by quoting again from the notes provided by the Minister of State:
    "The new provision also enables the Secretary of State to direct the publicly-owned company to dispose of all or any of its property rights, liabilities and obligations. This is to facilitate the imposition of the restrictions set out in subsection (7)(b)."
    One needs no clearer statement than that. The provision enables the Secretary of State to direct the corporation. Those are the words in the Government's own explanatory notes about the proposals.
    In subsections (2) and (3) there are powers that will control the corporation so that it can be prevented from expanding to meet new market opportunities. In subsection (4) and its various paragraphs there are new powers of direction. In subsection (4) (c) there is the direction to a publicly owned company to dispose of all or any of its property.
    We see that in subsection (6) the Secretary of State,
    "As soon as practicable after giving a direction under subsection(4) (c) … shall give notice of the direction to the Corporation."
    It is incredible that the chairman of the corporation might suddenly receive a message one day to say that, by the way, last week or the week before the Secretary of State to directed one of its subsidiary companies to dispose of its assets. That is an astonishing provision.
    It is an intolerable proposal. We are opposed to a Minister having such a power. As well as being grossly insulting to the board, it is ridiculous that such commercial intervention should be contemplated, apparently without any consultation being required. That point, perhaps more than any other, underlines the need for statutory duties for public corporations to safeguard the members who are responsible for running them.
    In other circumstances we might have welcomed section 4A(5), which apparently covers the point that we raised in Committee, that the Secretary of State could not be allowed to act in a manner prejudicial to the proper discharge of the duties of the corporation. That appears to be covered by that provision. I hope that that is so.
    Almost all the proposals in some way or another strengthen the ultimate control of the Secretary of State over what is left of the British Steel Corporation after privatisation. They effectively prevent major changes in activities without his explicit agreement. Subsection (4) outlines the wide-ranging power that the Secretary of State is to be given. It will allow him to order the BSC to discontinue production of certain or all steel products. It is astonishing that the Government can tell the corporation that they have decided that it will, in effect, stop competing in a certain area of steel products. That power is contained in the clause.
    The hon. Member for Faversham (Mr. Moate) is looking rather puzzled. I advise him to read the clause. He is probably delighted by the provision. It probably goes a long way to meet some of his objections to public enterprise. However, we regard that as highly objectionable, too.
    Mr. Campbell-Savours: I wonder what attitude Conservative Members would take if private enterprise were subject to the controls and restrictions imposed by the Secretary of State in this appalling Bill.
    Dr. Cunningham: No private company, merchant bank or investment organisation would act in that way. No holding company in the private sector would act in that way to a company under its control without the sacking or resignation of the people running it. It would not get away with it without serious objection and disagreement.
    Mr. Moate: My reaction was partly because I have not been privileged to have the explanatory notes, presumably because I am not supposed to be interested in these affairs; hence my puzzlement. I have now glanced at the point, and wonder whether it is not possible that the power may lead to the Government's having market sharing arrangements, which we have been told would be an impossible power for them.
    Dr. Cunningham: The interpretation that I put on the matter will not be found in the explanatory notes. The Government carefully omitted to draw our attention to it, so I hope that I have done the House a favour. The EEC arrangements about capacity utilisation and market share seem to be working reasonably well without the envisaged statutory provisions.
    Subsection (3) makes provision for the corporation to provide the Secretary of State from time to time with regularly constituted arrangements for consultation in a longer-term framework than that laid down by him. That seems to be a change of heart by the Secretary of State, but, although he is ensuring that he will be consulted prior to any change, the corporation has no such right; nor have the workers. I re-emphasise that their right to statutory consultation is being repealed.
    Subsection (6) is interesting. The corporation is to be informed of directions only after the event. It is to be informed as soon as is practicable, but other people have no such guarantees. Will the Secretary of State explain that? In this 95-line clause nowhere can we find safeguards for the members of the corporation from what may be an intolerable level of interference. Their only apparent redress is to resign. They have no right of appeal and no safety of the sort that has been widely enjoyed over the decades in public corporations and is still enjoyed in the British Gas Corporation, British Rail and the electricity industry.
    Dozens more questions could be asked about the lengthy new clause. We have many major reasons to vote against it. To say the least, it is inadequate to bring forward the proposal in this way, even taking into account the Minister's generosity in providing the background notes, although we received them only this morning. Even after the briefest consideration we see that there is more than enough in the new clause to ensure that we shall vote against it.
    7.45 pm
    Mr. Moate: I am totally disappointed with the Minister's reply. When a new company is set up, as has been done under the Phoenix I arrangement, we are entitled to know at the inception the resources available to it. On two previous occasions at private meetings and again today I put that point to my hon. Friend. Today he said that it was unnecessary and that Allied Steel and Wire

    943
    would, like any other company, give the figures at the end of the accounting period, probably about 18 months from the time that it starts to operate. That is totally unsatisfactory. My hon. Friend is wrong not to tell the House that the figures will be published. Eighteen months in the steel industry today can be a matter of life and death. Companies can go under in that short period. The effect on competitors can be disastrous. There is no question of principle between public and private ownership. The House is entitled to know where assets are being directed.
    Let me explain why that is important. In my constituency we have the highly successful Sheerness Steel company, which has survived the trials and tribulations without a major impact on the work force until a few weeks ago. Now, like other companies, it has succumbed to the problems and declared redundancies and short-time working. It wants fair competition and not subsidies. With fair competition it can and will give a good livelihood and high pay to a large, highly efficient and superb work force and survive the storm.
    The new rival organisation, Allied Steel and Wire, will massively dominate the market. Sheerness Steel wants to know what public resources will be made available to Allied. Not much information has been published but I believe that Allied is to be a £100 million company. The 50 per cent. from GKN will be largely in the form of assets, so a large amount of cash will probably be put in by the BSC to make up its 50 per cent. interest. If so, Allied will start with an enormous amount of cash that could be used to undercut market prices and undermine its competitors.
    My hon. Friend will argue that the company will act commercially, but in this strange market what is "commercial"? Is it not commercial to try to secure the lion's share of the market and undercut competitors? In a year or 18 months we shall know whether it has acted commercially badly or well, but by then it may be too late for its competitors.
    When we have, in effect, 50 per cent. public ownership in a company, it is not unreasonable to be told what its capital structure will be. My hon. Friend says that it will act like a company in the private sector, but I do not believe that a £100 million company comes fresh to the private sector without divulging its capital structure in a prospectus or at least to the shareholders. It is not unreasonable to ask for the figures to be published now or when the company starts up. If I am being unreasonable, I hope that my hon. Friends will tell me. I cannot believe that that information will not be available.
    Is my hon. Friend really saying that if the Select Committee asked him to reveal those figures he would say "I am sorry, it is private to Allied and you cannot know it for a year to 18 months"? Or if a shareholder of GKN asks GKN "How much of our assets have gone into the company? May I please be told the details of this subsidiary?", will that shareholder be told "No"? Shall we have to spend months ferreting out this information through the back door when my hon. Friend should say that he will give us the information? So far he has said that he does not think that Allied need give the information unless it feels commercially inclined to do so.
    Mr. Crowther: I am following the hon. Gentleman's words with great care, but is he not overlooking the fact that the new company is entirely out of the control of the British Steel Corporation? One of the conditions which the
    944
    Secretary of State insisted upon and will insist upon in all the Phoenix arrangements is that, although British Steel owns 50 per cent., it has no share of the control. The company is entirely a private sector company, albeit with some capital that belongs to a public body. It is in no way responsible to the Secretary of State for Industry, because it is not in any way a public industry.
    Mr. Moate: I accept what the hon. Gentleman says, but I am speaking not as representing the State that owns the corporation, but on behalf of the shareholders who have a 50 per cent. stake in that corporation. Are we not, as shareholders, whether public or private shareholders, entitled to know those facts? My hon. Friend cannot say "If we give too much information it might imply that we are still retaining control over the company and therefore taking away the independent nature that we are trying to create". That does not arise at all. However, competitors are entitled to know what sort of new rivals are being created by the State. That, after all, is what we are doing. When this Phoenix rises from the ashes with public support, I believe that we as a nation are entitled to know how much national fuel is being put in to propel the Phoenix out of the ashes.
    I hope that my hon. Friend will give me the information. What does he want me to do? I am not being unreasonable. I have asked him privately and I have asked him on the Floor of the House. He rather led me to understand that I would be told, but now he says "No". Does he want me to vote against the new clause? All that Ministers seem to understand is votes. Am Ito vote against the Third Reading? I shall be happy to do so, if that is the way my hon. Friend thinks I should proceed.
    However, I would prefer my hon. Friend to understand what I am saying, and to regard it as reasonably commercial. It is not designed to undermine Allied; it is designed to achieve what he says that he is trying to achieve, namely, proper transparency of these corporation activities. That is in the notes that he has now kindly passed to me. If there is to be fair competition and transparency of accounting, this large £100 million pound corporation should divulge its capital structure at the moment when it comes to life and competes with other private companies.
    In my opinion, that is not an unreasonable request, and until I have a satisfactory answer from my hon. Friend I shall remain in a difficult position.
    Mr. Tebbit: My hon. Friend must understand the dilemma in which I find myself. Allied Steel and Wire will be a company in the private sector. Therefore, it would not be appropriate for me to give it any directions, which would make it something of my creature, as opposed to a. private sector company. My hon. Friend must view the matter in that light. I have carefully considered what he has said, but I cannot help him. I am sorry about that because it is my intention to make these matters as transparent as I can without going so far as to damage the proposition that Allied is not a public sector company.
    Mr. Moate: I do not want to rehearse what I have already said. My hon. Friend is known for speaking frankly, so I must speak to him frankly. He is talking nonsense. It is absolute rubbish to say that the simple revelation of the amount of public capital that is going into

    945
    this corporation in some way implies Government control over it. In no way does that information jeopardise the status of that new company.
    Mr. Tebbit: My hon. Friend misunderstands me, which is most uncharacteristic of him. It is not that the revelation of the information would prejudice the status of the company; it is that if I were to require it to reveal that information when it does not think that it is in its commercial interests so to do it would prejudice the status of the company.
    Mr. Moate: No private sector company of that size could come to the market and come to life without its being generally known what its cash resources were and the nature and the size of its capital structure. I do not believe that my hon. Friend has thought the matter through. I understand his general concern about maintaining the philosophy of independence from ministerial intervention for these new companies. However, in this instance, when all we want to know is how much public support is available for these new supposedly independent companies, he should give us the information. I do not think that it will make much difference. The competitors and the work force who see their livelihoods put in jeopardy as a result of this development are entitled to have that information—as is the House—and at some stage during our proceedings we shall have to extract that information. My hon. Friend should give it to us now, or say that he will tell us when the new company is established.
    Mr. Roy Hughes: To me the essence of new clause 1 smells of sharp practice. Its introduction at this late stage is diabolical. It could be argued, too, that the length of its content constitutes a new Bill. It is necessary, therefore, to ask ourselves what is behind the new clause. It pretends to lessen the powers of the Secretary of State. In fact, it strengthens them. In that sense, the Minister of State, on behalf of his master the Secretary of State, is speaking with a forked tongue.
    The new clause appears to be an attempt, as my hon. Friend the Member for Whitehaven (Dr. Cunningham) said, to throttle the activities of the publicly owned British Steel Corporation and to curb the powers of the celebrated and relatively new chairman, Mr. MacGregor. It would appear from all the reports that, now that he has been assigned to this position, Mr. MacGregor wishes to make a success of it. As my hon. Friend the Member for Whitehaven pointed out, the provision allowing the Secretary of State to sell different parts of the corporation almost at random is an insult to the new chairman. Of course, there may have been pressure from Government Back Benchers on this issue, and they in turn may have received pressure from the private sector, which is anxious to ensure that the corporation closes certain plants and sells those that are potentially lucrative.
    8 pm
    It is said that charity begins at home. I can only recite what has happened recently to the Whiteheads works in my constituency. It seems that there has been private sector pressure to close the works. Last Saturday morning Mr. MacGregor made what amounted to a private visit to the works. He went unheralded and unsung. He found an efficient works, and I understand that he gave it a vote of
    946
    confidence. That was good news for the town of Newport, but the whole episode shows the pressure that is being applied to the corporation.
    Subsection (2) of the clause means that there will be no substantial change in the corporation's affairs without the permission of the Secretary of State. Likewise, subsection (3) says that any substantial reorganisation and development must be
    "in accordance with a general programme settled from time to time with the approval of the Secretary of State."
    But all this is a complete contradiction of anything that the Secretary of State has ever said about public corporations—even during the steel strike. He has always used the stock reply that control of the negotiations in and management of the industry is a matter for the corporation and is not something with which he will interfere. We did not believe him then, and we have no confidence in him now. He is essentially the Ripper of British industry and his schizophrenic approach has already cost British industry over 1 million jobs, a figure that is for ever escalating.
    Subsection (1) of the clause provides that the duty of the corporation is to create an efficient enterprise. For most of us that goes without saying. But efficiency is a relative term, and we ask ourselves what constitutes efficiency. It seems that some believe that a universal panacea for creating efficiency lies in the introduction of outside contractors. Having witnessed the steel scene, I can see that the wheel has turned full circle. Over the years it has been suggested that Japanese and certain Western European steel industries have achieved better production figures than our industry because, it was suggested, so much of the servicing was carried out by private contractors.
    With the castles by the sea, it seems that our strategy is 25 years behind the times. Some of us have long memories of the steel industry. When I became a Member of the House 15 years ago there were many accusations and allegations about corruption in the steel industry in South Wales. The allegations concerned the Llanwern works. They related to the outside contractors who were widely employed in the works at that time. Certain cases came to light and were brought before the courts. My impression, however, was that some of the big boys seemed to get away with it.
    Stemming from developments at that time there was pressure to get rid of outside contractors in the industry and let the BSC employees do the work. In that way the wheel has now turned full circle. Efficiency is a relative term. Last weekend I was speaking to a man who, having completed 15 years at Llanwern, has been made redundant. The following day he was being taken on by a firm of contractors to do roughly the same work. But in addition he was receiving generous redundancy terms from the corporation. That sort of thing—it happens in other industries, too—seems to be an abuse of the whole redundancy procedure.
    The whole purpose of the clause is to tighten the Secretary of State's control over the BSC. That would enable him to nibble away at the corporation and, at an appropriate time, sell the lucrative parts to the private sector. The whole exercise is underhanded, and the clause should be thrown out.
    Mr. Bruce-Gardyne: I am not a tremendous enthusiast for delegated legislation, and I think that the Department

    947
    of Industry is becoming a little delegation mad. The scope of the discretionary powers that have been sought by the Department in successive Bills has been extremely wide. This Bill is no exception. Perhaps we should not take that too tragically because I have a nasty suspicion that perhaps the clause is more cosmetic than real. I hope that I am wrong, but I doubt it.
    The hon. Member for Whitehaven (Dr. Cunningham) referred to the reaction of the chairman of the British Steel Corporation to the clause—the dog that did not bark in the night. Certainly from all that we know of Mr. MacGregor it is hard to see him taking kindly to a massive extension of the powers of intervention by the Secretary of the Department. I guess that Mr. MacGregor has concluded that the clause contains little of substance by way of additional intervention, and I suspect that he may be right.
    I appreciate the reasons that have led my hon. Friend the Minister of State to table the clause. He referred to the considerable anxieties that are felt about the BSC's competitive practices and their impact on the private sector steel makers with which the corporation competes directly. The clause is obviously designed to deal with some of those anxieties. I wish that I could believe that the simple act of establishing Companies Act companies would greatly reassure the private sector, or what is left of it by that stage.
    In my intervention I referred to transfer pricing. My hon. Friend the Member for Faversham (Mr. Moate) has drawn attention to the problems that arise over the establishment of Allied Steel and Wire. The problem is that we have established the British Steel Corporation with enormous resources from the taxpayer, resources to which we are continuing to add, even in the Bill.
    We have bought the services of an eminent entrepreneur on terms which I suspect mean that he owns us rather more than we own him. He is determined—and no doubt laudably determined—to win back for the British Steel Corporation a market share that it has been consistently losing. He is seeking to do that in the depths of a recession when there is a world-wide massive contraction in demand for steel. We are frequently told that it is no use suggesting that the British Steel Corporation should not be allowed to match the prices at which foreign suppliers are prepared to supply to the United Kingdom market, because the only consequence would be not to help what is left of the private sector but to hand over a larger slice of our market to imports.
    We return again and again to the problem that the British Steel Corporation can offer prices which it may not be obliged to offer by the pressures of external competition but which will make it irresistibly appealing to suppliers who might otherwise turn to the private sector.
    It is difficult to be sure when that is happening and the extent to which it is happening. My hon. Friend has volunteered to investigate any complaints and I am sure that they will be carefully investigated. However, a private sector business in competition with the British Steel Corporation or a part of it will almost certainly be a customer of BSC, and, to some extent, a fairly dependent customer. That private sector business would be ill advised to complain about the behaviour of a business on which it was a dependent if it had any regard to its future prospects. I am afraid that the reassurance that all complaints of abusive competition by the British Steel Corporation will be investigated is not much consolation
    948
    to the private sector. I feat also that the undertakings offered in the new clause will not be much consolation either.
    Obviously the establishment of Companies Act companies will enable us arid those who remain in the private sector to examine the accounts of companies as they appear. But, as my hon. Friend the Member for Faversham pointed out, that may lead to considerable delays. I doubt whether the mere establishment of Companies Act companies will offer much reassurance o the private sector.
    In that context, when my hon. Friend replies I should be grateful if he would deal with a problem for which there may be a good explanation, but I do not think he gave it in his opening remarks. It refers to subsection 8(a) of the new clause, which says:
    "no company shall be directed to be formed otherwise than as a publicly-owned company".
    I am sure that there is an obvious explanation for that, but we have not had it and it would be helpful to have it.
    I do not want to prolong my remarks, but we have heard much about privatisation, as one would expect, from the hon. Member for Whitehaven. The appalling spectacle of my right hon. Friend flogging off bits of the British Steel Corporation and 10 days or a fortnight later telephoning Mr. MacGregor to tell him what he has done is sheer fantasy. I am sure that the hon. Member knows that well. I do not see any prospect in the foreseeable future of that sort of privatisation. I suspect that that is one of the reasons why Mr. MacGregor is capable of viewing the new clause with the equanimity that he has displayed.
    In short, if I really believed that the new clause would lead to substantial changes of substance, I confess that I would have reservations about it on the ground of the extent of delegated powers that it gives my right hon. Friend. I do not think that the House should view that with great enthusiasm. I am less 'worried about the extent of delegated powers because I am worried about the extent to which the clause will, in practice, operate.
    Mr. Tebbit: My hon. Friend shows great understanding of these problems and an ability to have it both ways in his understanding. How would he prefer that I should ameliorate those problems? I say "ameliorate" because I do not think there is a practical way to end them.
    Mr. Bruce-Gardyne: The Department of Trade must take a much tougher line with Mr. MacGregor and insist that he does not, by aggressive marketing behaviour based on taxpayers' subvention, continue to destroy what remains of the private sector. As I have said to my hon. Friend the Minister of State, if he succeeds in destroying the rest of the private sector, the British Steel Corporation will not retain the market share resulting because the customers are not prepared to become dependent on single sourcing. They will insist on a second source, and that second source will be overseas and imports. We shall not benefit in the long run. Import penetration will continue but we shall have destroyed the elements of competition that are left in the steel industry.
    Therefore, my answer to the Minister of State is that I believe that the Department must take the initiative.
    The hon. Member for Whitehaven referred to putting Mr. MacGregor in a straitjacket. He has not shown many signs of suffering from that condition, and in some respects I think that he needs to be placed in a straitjacket. I do not believe that the new clause will make the remotest

    949
    bit of difference either to his freedom of action or to his freedom of initiative. Sadly, I can hardly believe that it is worth the trouble.
    Mr. Campbell-Savours: The House will not be convinced by the words of the hon. Member for Knutsford (Mr. Bruce-Gardyne). He put them well, but those of us who have looked at the new clause in detail are horrified and deeply disturbed by the implications for what remains of the BSC after the Minister has laid his hands upon it.
    We were equally disturbed by the way in which the new clause was produced. This is a new Bill. The Minister knows that, and he also knows that the House has been cheated out of a Committee stage on an important area of legislation. It is important that every steel worker in Britain understands what is happening in the Chamber tonight.
    I should like to know what Mr. MacGregor's response was. What happened during the conversations that took place, when Mr. MacGregor was confronted by a Secretary of State laying down the law and saying that he intended to introduce a new Bill of this nature and to insert it in an existing Bill which had completed its Committee stage? He would have been negligent had he not objected most strongly to this curtailment of his activities. It is important that Mr. MacGregor understands that he has a duty to every steel worker in Britain to ensure a secure future for the BSC, but as far as I can see, there will be no security or future in any area of the BSC under the proposals embodied in the new clause.
    Why was it introduced? Hon. Members on both sides of the House will be well aware of the late-night activity of Conservative Members to press the Government to give way on the reorganisation of the BSC in such a way that the private sector of the BSC's interests would be fully protected. That is at the root of the new clause—pressure exerted by Conservative Members during Committee. Indeed, Conservative Members did not chirp up too often in Committee. It seems that they did most of their lobbying in the Corridors. Had they come out publicly, at least there would have been a free and open debate about the implications of the pressure that they were exerting.
    According to the explanatory notes provided by the Minister, the new provisions limit the Secretary of State's powers under section 4(2) of the 1975 Act to give directions about the Corporation's organisation. That now means that the next Government—a Labour Administration—will not be able to influence the managerial organisation inside the BSC or introduce the kind of industrial democracy within existing legislation and in the new clause that I tabled, which will be lost as a result of the introduction of the Government's new clause.
    Many of us believe that the lack of industrial democracy lies at the heart of the BSC's problems. We have now lost an opportunity to introduce the vital change that is necessary to secure that industrial democracy.
    The same section of the explanatory notes says later on:
    "The Corporation will retain their responsibility to ensure the efficiency of their organisation but the Secretary of State will no longer have the power to tell them how this should be done or when they should review their organisation".
    It is not for the Minister to presume that the cash flow has ended, because many of us believe that over the coming years the BSC will be funded increasingly by the
    950
    State. On the basis of the policy pursued by the Government, based on voluntary agreement in Europe and the lack of success in that area, it is quite clear that the level of imports will only escalate in future. Irrespective of the cash allocated to the BSC, the Secretary of State will not have the power to intervene in its management so as to secure the best use of that money.
    The effect of section 4A(2), we are told,
    "is to ensure that the Secretary of State's consent is sought before the Corporation makes any substantial change in the way it is organised."
    That is even more innocuous. Having removed the power to direct on organisational matters, the Government can block the reorganisational changes. It is the whirling of the big stick and the big threat. The Secretary of State can block whatever changes the BSC may wish to introduce in its best interests.
    Section 4A(3), according to the notes, gives the Secretary of State
    "a general control over the corporation's capital investment programme."
    That gives the Secretary of State power to stop, halt, cease and, prevent investment if the private sector complains. It is obvious that the private sector will determine the level of public sector investment, and its determination will be dependent on the private sector's partisan interests.
    The effect of section 4A(4)
    "is to give the Secretary of State power to give direction to the Corporation by order subject to annulment for the discontinuance or restriction of any of their activities".
    That means that the Secretary of State can instruct the BSC to stop competing with the private sector. How is it possible to impose on a public corporation, a company or a wealth-producing unit, the restrictions that prevent it from competing with a competitor because in competing it may damage its competitor's interests? I thought that that was what competition was all about—survival of the fittest. I do not wish to see the demise of the private sector, but that clause provides for a far more aggressive form of commercial activity than is in the interests of either the BSC or the private sector.
    The effect of section 4A(5) is to allow the Secretary of State to put party dogma before the proper discharge of the Corporation's duties. The section is built in such a way that its political considerations, which will determine investment and the reorganisation of the BSC, are not a proper discharge of the corporation's activities.
    Section 4A(7)
    "gives the Secretary of State specific powers to acquire the formation of Companies Act companies to carry on the Corporation's business in areas where this overlaps with that of the private sector."
    When private companies complain about BSC activities they can threaten the public sector companies by complaints to the Secretary of State. They could demand privatisation of those companies which, dependent on those companies' internal organisation—for example, raw materials, supplies, marketing or distribution arrangements—could lead to the phasing out of operations and the bankruptcy of those companies.
    The Secretary of State is emasculating many of the essential powers that the BSC traditionally holds. The Bill restricts the BSC in such a way that it cannot fairly compete with the private sector.
    8.30 pm
    This is all in response to a very heavy lobby that has been put up by private sector interests on the opposite side

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    of the House and private sector interests in the country who worried about the trading tactics of the British Steel Corporation; unable to understand that those are the criteria which govern the way they operate, they are the people who demand these silly changes.
    Instead of spending three or four weeks sitting in Committee and gallivanting around Europe, the hon. Gentleman would have done much better to sit down with the British Steel Corporation and work out a marketing strategy in conjunction with the private sector based on market share, so that at the end of the day the British Steel Corporation could say, "This is the proportion of the market we are required to retain." It could look at its assets and use them in the best interests of securing the market share on the least cost arrangements. If that had been done, a number of plants in my constituency would not have been closed down as a result of the policies pursued by this Government.
    Mr. Anthony Beaumont-Dark: I cannot help feeling that a tremendous amount of false hysteria is being built up by this clause. The hon. Member for Workington (Mr. Campbell-Savours), as ever, likes to use wonderful flowery phrases—which may look good in his local papers—to the effect that he has shed the last drop of their blood to protect his constituents. He has said that every steel worker should be horrified at this clause and that it was some wicked Conservatives—of whom I am glad to say I am one—who said that the new clause should be inserted in the Bill.
    There are two interests to be protected here. As I said in Committee, private steel workers and private employers bleed just as much as the State or the State worker. When a private company gets into difficulty, if it has not sufficient finance behind it, it goes to the wall. Such companies were and are going to the wall. With the State there is a lot of tut-tutting, a lot of sorrow, a lot of anguish, with many people saying how awful times are, and the Minister has to ask the House, quite modestly and without any blushing, for another £3,000 million for this and another £500 million for that. State enterprises go marching on while private enterprises are faced with that awful claw, a pincer movement. They cannot get support from their banks because they will not be profitable enterprises.
    The State can go on because it gets support out of its own pocket via this House. The idea of this clause which my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) and I were pleased to have had a hand in—I am sure he will speak for himself—was not, as the hon. Member for Workington said, to protect private industry. One should ask firms such as Duport, Round Oaks, Guest Keen and Hadfields about compensation. If one wishes to be cynical, one may well say that it is better to lay off one British Steel worker than it is to lay off one private steel worker. The British Steel worker will get up to 10 times the compensation awarded to his private colleague who is still working just as hard as the British Steel worker. The difference is that the BSC worker's compensation will come out of the pockets of the taxpayer whereas the compensation of the private workers can come only out of what funds are left when the private companies try to compete with the British Steel worker.
    Mr. Bill Homewood: During the massive BSC closures, including Corby in my constituency, we did
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    not hear such plaintive speeches from the Government Benches. It is amazing how their interests have been animated by the steel workers' cause since the private sector ran into trouble. The hon. Gentleman ignored the public sector.
    Mr. Beaumont-Dark: That is not true. The British taxpayer is being asked to write off thousands of millions of pounds. Because we needed an Iron and Steel Bill we are given the chance to put right the inequities which led to some of the private steel industry's problems.
    It has been said that the clause is cosmetic. I do not believe that it is. It is a genuine attempt to ensure that the problems are better understood. We hope to prevent a repetition of a firm such as Stanton and Staveley quoting a price for black iron which made it impossible to break even. That cannot be allowed to continue. The intention of the clause is not to keep down the British Steel Corporation. There is a need for the BSC. We cannot go on nationalising and denationalising industries.
    However, we need a powerful private steel industry as well. Private industry has greater flexibility. Some people do not wish to deal with State companies. We must move away from the amorphous balance sheet of the BSC. Nobody knows whether it competes with private steel companies as fairly as possible. Private, quasi-public companies are to be set up. We shall not know whether the competition is entirely fair, but it will be fairer. It will be only partly fair because, as I understand the public debt structure of the BSC, it is not based on a notional rate of interest on its money. If any money is left over, that is called a profit. If a private steel company could regard all its borrowings as an equity debt, some gross profits would suddenly appear, instead of its having to pay between 15 per cent. and 17 per cent. interest.
    I understand that Allied Steel and Wire will be 50 per cent. owned by Guest Keen and Nettlefolds. It will have an absolute duty to its shareholders to tell them precisely how much of their assets are in the company. It will not be a secret, hole-in-the-corner £100 million company. All the facts will have to come out. They will have to be published in the balance sheet of a company which is owned by about 54,000 shareholders, including trade union pension funds. It will not be a secret affair.
    My hon. Friend the Member for Faversham (Mr. Moate) is confused with the idea that Allied Steel and Wire can draw up a balance sheet until it knows what assets are to go into it and what value will be put on the assets by the British Steel Corporation in collaboration with the new company.
    Mr. Moate: I accept that, but I am not asking the Minister now, before the company exists, to tell us what cash and resources it has. However, when that company exists we should be told how much taxpayers' or BSC cash has gone into it. That is reasonable.
    Mr. Beaumont-Dark: The point is quite reasonable. I think that the Minister was quite right to say clearly that this will be a matter for Allied Steel. It will then be run as a separate entity. That board will be answerable to its shareholders, of whom the Slate will be one. Then all the figures will come out. Members cannot press the point now as though it was a matter of enormous principle because something has been hidden. In my view, the Minister is right. It cannot be hidden because there will be other shareholders.

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    Some hon. Members say that this clause is sinister. In my view, the only sinister part is that, having heard all the explanations, I now understand why lawyers make so much money, because I found the Bill difficult to understand but I found the explanations even more difficult to understand. But if the new clause does what I believe it is meant to do—enable people outside to see, not that the BSC is driven into the ground, but that the private steel industry will have a fair chance to compete—it and the Bill will have my support as well as my respect for the Minister at the Department.
    Dr. Jeremy Bray: I understand the wishes of the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) in commending the new clause to the House. I understand the way in which the Minister of State set about producing it. I doubt whether the Minister himself wrote it. I cannot recall a similar process, in a late stage of a Bill similar to this, since the Industry Act 1975. That was a Bill introduced by my right hon. Friend the Member for Bristol, South-East (Mr. Benn) when he was Minister for Industry. When the Bill was half-way through Committee he was moved into the Department of Energy. His successor saw the Bill through the remaining stages in the House, introducing a fantastically baroque new clause, comparable to this one, which was drafted by no less a person than my right hon. Friend the Member for Huyton (Sir H. Wilson) to screw up the mandatory requirements for disclosure at the behest of trade union representatives to such an extent that they could never be exercised and never were exercised. In this case, instead of my right hon. Friend the Member for Bristol, South-East being knocked out by my right hon. Friend the Member for Huyton, the Secretary of State for Industry is himself knocked out in one of those extraordinary contortions of which only he is capable.
    If I remember aright, in so far as I have been able to delve into this matter, in the original Industry Act there were no powers for the Secretary of State to give directions either of a general or of a specific character. Perhaps the Minister of State can confirm that. Those powers to give general or specific directions were written into the Iron and Steel Act 1975 by my right hon. Friend the Member for Bristol, South-East only to bring the iron and steel industry into line with the original nationalisation statutes of other industries. With this new clause the Minister of State is preserving all the Bennery, sharpening it up a little to serve the purposes of the Secretary for Industry, and getting himself into a bit of a muddle.
    As I understand it, the powers to give a general direction have been left totally unchanged. It is still possible for the Secretary of State to give a general direction which the original Secretary of State was not able to do in the 1975 Act. In the new clause the powers to give a special direction have been greatly sharpened up, but not in terms of the general organisation of the corporation, as we used to understand it—the question whether the private sector company should continue, and whether it should be rationalised on to a product basis, or a geographical or market basis, and the major trauma that the industry went through in those successive wages reorganisation as it was gradually shaken down into an organisationally practicable form.
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    The original intention was to give a special direction, but the Secretary of State has departed entirely from that policy. I understand and agree with the hon. Member for Selly Oak in wishing to see proper accountability and comparability in the corporation—with a view to carving out bits of the corporation that may be put into a shape that will enable them to be sold off to the private sector, or put into joint ventures with the private sector and, if they are successful, subsequently sold off completely.
    8.45 pm
    I suspect that no one in the Department of Industry thinks that these powers will be used for the principal steel making and steel finishing facilities of the BSC in such works as Ravenscraig, in my constituency, Port Talbot, Llanwern, Scunthorpe and Thrybergh, namely, the corporation's main central steel making and finishing mills. These powers will be used in the engineering steel and special steels sectors where the private sector is in direct competition with the BSC. These are the areas in which we shall see attempts made to use these powers.
    I ask the Minister of State whether there have been underlying problems that led him to introduce the clause. I have in mind problems in dealing with the corporation. Has the Department been trying to push the pace of hiving off in the special steels and engineering steel areas that the corporation has not been willing to accept? In other words, has it not been prepared to move as fast as the Department wishes? I am not sure that we shall receive an answer from the hon. Gentleman or from the Under-Secretary of State—the hon. Member for Arundel (Mr. Marshall). The broad smile of the Minister of State confirms that there have been difficulties of that sort.
    Mr. Tebbit: The broad smile on the face of the Minister of State appeared when he considered the idea that a Minister would discuss in the House such intimate details of the relationship between himself and the chairman of a nationalised industry. It would be unusual.
    Dr. Bray: It would be unusual, but that does not mean that discussions have not been somewhat difficult.
    If the real purpose of the clause is to assist the hiving off process and not merely the accountability process, and if it is being used as a weapon to enable the Secretary of State to strengthen his argument with the corporation's chairman, I think that we can understand what is happening. If that is so, I think that we need not be too worried about the major impact in wrecking the corporation that undoubtedly some of my hon. Friends fear.
    Instead, we have a pathetic revelation of the sheer confusion with which the Secretary of State conducts his industrial policy. He has the basic doctrinal position that all problems in industry should be solved by competition. Therefore, he says to the corporation "We shall put you on to a fully competitive basis. This requires your becoming competitive in your principal activities, revealing what your minor activities are and hiving those off if you can." If that is his strategy, the main thrust of where he is putting his money and what is being done with his money is to make his competitive strategy completely nonsensical.
    The right hon. Gentleman has rightly enabled the corporation to pursue an aggressive commercial policy against overseas competition. It is regrettable that some of that policy has rubbed off on the private sector, which

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    should have been looked after by giving it comparable support by comparable measures to ensure that the private sector could survive in a way in which it would be able to meet the country's needs when the upturn comes. To do that would have gone against the Secretary of State's dogmatic preconceptions. He was not prepared to do that. He has found a reasonable solution for the public sector. However, because of his schizophrenia about what he is prepared to do for the private sector, he is wrecking it.
    I understand the frustration experienced by Conservative Members. However, I cannot understand their readiness to go into the Lobby with this mad Secretary of State for Industry while he slaughters the private sector. Have they no guts, or convictions on behalf of their constituents? Will they just wait to be mown down by their constituency party chairmen during the process of reselection? Should Conservative Members survive that process of reselection, a stickier end awaits them. At the next general election they will find that their principal basis of support has disappeared. They have pursued an economic strategy that they do not understand. In so far as they understand it, they disagree with it. They like the slogans, but they do not like their effects.
    The industrial consequences of the Government's policy are inescapable. Bankruptcies and closures have taken place throughout industry and there has been a tragic rundown of the private sector of the steel industry. There have also been grievous consequences for the public sector. Such things will prove to be the real measure of the Department of Industry's disastrous policies, which Conservative Members have not had the guts to oppose in the Lobby.
    Mr. Tom Ellis: On Second Reading, I said that it was clear that if we did not have a corpse on our hands, we had at least a patient on a life-support system. The clause is an attempt—albeit wrong-headed—to deal with that patient. The Minister intervened in a speech made by the hon. Member for Knutsford (Mr. Bruce-Gardyne). He spoke about having to ameliorate the position. The Minister served only to confirm my feelings. I am disappointed that the hon. Gentleman should have felt it necessary to argue that the measure was being introduced for some purpose to do with the need for transparency of competition. He seemed to say that that was its justification. However, the hon. Member for Faversham (Mr. Moate) shot down that argument. Competition policy in the Community is knocking on the door and the problem of transparency may solve itself shortly.
    There is something in the argument that several people put forward when Mr. MacGregor announced his plan. It was said that the proposals were not drastic enough. This set of proposals is a wrong-headed attempt to prepare the ground for introducing even more drastic measures, should they prove necessary. I do not have any strong ideological conviction about whether the industry should be publicly or privately owned. Most of those who work in the industry are not bothered whether it is publicly or privately owned. They are bothered about keeping their jobs. To the extent that all hon. Members would sink their prejudices if that would ensure jobs, I support the Minister.
    As the hon. Member for Motherwell and Wishaw (Dr. Bray) said, this measure is nothing but a reflection of the Secretary of State's ideological commitment. I cannot help feeling disappointed that the Minister is disproving the old
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    adage that necessity is the mother of invention. There is a serious problem in the steel industry. It has been getting worse and we are not half-way towards curing it.
    With this reconstruction we have an opportunity to try to do something and to get the best out of the precise arrangement in a publicly owned body and the precise and ideal relationship between the board of the corporation and the Minister. One of the problems which has faced the steel industry, like many other nationalised industries, is the perverse and capricious relationship between the Minister and the industry. We have an opportunity to solve that problem, given what appears to be good management in the British Steel Corporation; I do not object to the great expense at which its chairman was obtained. We have the opportunity to let the manager manage. Are we letting it slip? We are imposing a specific narrow halter. The Minister shakes his head, but I feel that that is what will happen.
    By hiving off the more competitive parts of the British Steel Corporation, the rump or main stream will be even less competitive and in due course we shall end up with the corpse. That point was made by the hon. Member for Motherwell and Wishaw. It is sad and tragic that the Minister has failed to take advantage of the situation and has failed to try to achieve the ideal relationship between himself and the chairman.
    Once the Bill goes through and once quasi-public / private companies are established, the only direction which will remain to the Minister will be to give a directive to dispose of the corporation's assets and to close it down. For that reason more than any other I shall vote against the new clause and support the hon. Member for Whitehaven (Dr. Cunningham).
    Mr. Homewood: I have given much thought to the new clause, although it has not been with us for long. I wondered why, in such a short space of time, the Government could substantially change their minds about a clause in a Bill which was introduced only a few weeks ago.
    I sought to discover why the Goverment changed their minds. My hon. Friend the Member for Motherwell and Wishaw (Dr. Bray) and the hon. Member for Wrexham (Mr. Ellis) probably came fairly close to the truth. When we receive lectures about competition from the Government Benches almost every day, usually their attitude has been that private enterprise is so successful that it is in no need of any protection from public enterprise. That is relevant to the new clause.
    I have said before in the Chamber and in Committee that the Government and some Conservative Members have found that the new management of the British Steel Corporation has been far too successful for their comfort, with regard to public enterprise. It is only in the steel industry that we have a publicly owned industry which was nationalised as a doctrinaire concept. I am not afraid to use that term. I do not know why people back away from it. The Government have doctrinaire ideas and so do we. The BSC is the only doctrinaire company in this country. The remainder of publicly owned industries were nationalised to keep them afloat. It is the only such company in direct competition with private enterprise. All the other deliberately nationalised industries are complete monopolies.

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    9 pm.
    With BSC a constant failure, the Conservatives had a marvellous setting for denigrating public ownership. Recently, the scene has changed. The BSC is no longer such a failure. The Government are, therefore, introducing this clause, but not to interfere internally. Why should they? The corporation is successful internally. The concept in the clause is that, having become successful, the corporation will be sold to private enterprise. The Government's record of interference in industry means that they would probably have turned it into a failure. The BSC management is successful, so the Government plan to let it continue without internal interference, become more and more successful and then sell it off.
    In business, the ultimate criterion for success is expansion, so the Secretary of State is taking control of expansion, perhaps by venturing into different processes or taking over private enterprise. It is stopped there. The Secretary of State will have complete jurisdiction over expansion; otherwise the corporation could devour the entire private sector.
    As the Government know, even in these depressed times, the steel-making side of the industry is where the losses are made. If the BSC could continue its steel making and make its peripheral activities profitable, the private sector could not prevent itself from being commercially taken over by the corporation. Therefore, the marvellous idea of the Phoenix came about. There will be no rising from ashes. The Phoenixes will be in two sections. I believe that the one that will be created in engineering steels will be the most successful and in a short time will be sold to the private sector. By selling off that sector, the Government will ensure that they can again say that the publicly owned steel industry is a failure and a loss-making industry, having taken away from it every chance of being profitable.
    In all the arguments about doctrinaire activities, this squalid little clause is the most doctrinaire measure that has been introduced in my two years' experience in the House. Its purpose is simple. The Government, having decried and denigrated public enterprise and having been proved wrong in one industry, then deliberately re-assert the situation in this squalid clause.
    The Under-Secretary wrote to me about a possible Phoenix operation between Corby tube works and TI. He denied that possibility, and I am sure he is right, because at present Corby tube works is not very profitable. Its condition is such that neither the Government nor TI would wish to turn it into a Phoenix. However, I am sure that the Minister knows that developments are now taking place in Corby that would make such an arrangement very attractive, not only to the Government but to TI. The clause makes it possible, without consulting either the work force or BSC's management, for the Secretary of State to bring such an arrangement into being.
    I believe that Mr. MacGregor, having discovered how critical Labour Members are of his appointment, set out to make sure that BSC became a successful enterprise. I do not agree with his methods. I believe that he is a complete autocrat and that no industry can function very long on the system of consulting no one. That is Mr. MacGregor's way of doing business. But at the moment he has succeeded to a degree that has frightened the people there to death. Give us two or three more chairmen like that, even if we have to pay them £2 million or £3 million, and the old denigration of public enterprise will be
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    destroyed. That, I believe, is the sole purpose of the clause. That is why it appeared so late on the Order Paper. It was not realised until a few weeks ago that the whole intention is to make sure that public enterprise, put in a competitive situation, will never be able to escape from criticism.
    Mr. Martin Flannery: The hon. Member for Faversham (Mr. Moate) complained at some length that he and the steelworks in his constituency had no knowledge of its fate. He complained that Ministers were treating him and his hon. Friends in a cavalier fashion. If that is so it must be obvious to all that their treatment of the steel workers—including the managers—is disgraceful.
    Our debate is a farce. It is hardly a debate at all. My hon. Friends and I are taking part to show that we are still fighting a Bill whose aim is nothing less than the denationalisation of the corporation, an organisation that has received massive amounts of public cash. The private sector is always complaining about taxpayers' money being spent on public ventures, but while saying that it is a crime to use taxpayers' money in this way, they are preparing to take the thousands of millions of pounds that the taxpayer has put into the BSC.
    The Report stage of a Bill is the occasion when those who served on the Standing Committee come to the House to report on their stewardship of that Committee. The farce is that we are apparently reporting to fewer than 20 hon. Members because the Conservatives are not interested. So long as they can filch this great industry they are satisfied. It is a farce also because the Bill that we discussed in Committee is different from that now before us. What is the good of our reporting on the Bill we had in Committee—and we had insufficient time for that—when on Report we have to contend with a different Bill, one that I saw for the first time at 4 o'clock this afternoon—[Interruption.] The hon. Member for Bromsgrove and Redditch (Mr. Miller) is not in the House because he is on the wrong side of the Bar. I suggest that he either keeps quiet or comes into the debate.
    It is a task simply to read the 95 lines of the new clause, or the new Bill, which introduces a new set-up. This is not a Report stage. It is the Committee stage of a new Bill. By adopting this approach the Government are guilty of sharp practice and improper behaviour. My hon. Friend the Member for Whitehaven (Dr. Cunningham) quoted from subsection (6). Subsection (5) is enough to make a cat laugh. It states:
    "The Secretary of State shall not give any direction under subsection (4) above"—
    and it continues with this deathless prose—
    "unless he is satisfied that the giving of it will further the public interest."
    Who do the Government think they are talking to? They are to take from taxpayers thousands of millions of pounds and are to put it into the pockets of the robber barons. And they say that is in the public interest.
    9.15 pm
    I hope that what I say will be heard widely by those working in the industry. Some workers from the private industry, from Hadfields, visited the House today to try to save their jobs. Hadfields is part of the so-called corporate plan. The Committee on the lion and Steel Bill has not seen that so-called plan. I am not sure that Mr. MacGregor has seen it. I do not know whether anyone has seen it. The

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    intention of the plan is to take the public steel industry and this vast amount of money away from us. The new Bill, miscalled a new clause, is one that we have never seen before. We are having a Committee stage on a new clause.
    On Second Reading the Secretary of State said:
    "This Bill will allow the corporation's activities to be reduced virtually to nil but we have stopped short of introducing a measure to provide for complete liquidation of the corporation. We do not think it appropriate at this stage to take such powers but we do not rule out the possibility of introducing further legislation to wind up the corporation if it becomes necessary."
    The Secretary of State went on:
    "I am simply emphasising that if the residual British Steel Corporation seemed no longer to have justification we should be ready to seek further legislation to wind up the corporation."—[Official Report, 19 March 1981; Vol. 1, c. 445–446.]
    We are expected to have a nice leisurely debate on a massive new clause, in what is miscalled the Report stage, in a Bill carrying out massive robbery, as was said by the Secretary of State for Industry.
    The original Clause 1 entitled "Modification of Corporation's functions" means destruction of the corporation's function. My right hon. Friend the Member for Salford, West (Mr. Orme), the Shadow Minister, said earlier in that debate that the Bill was produced by doctrinal prejudice against nationalised industries.
    That is true of the interests of the workers in the private sector who came here today. They came from the Phoenix II factory, Hadfields. They have been put out of work already in the great private steelworks as a result of the Government's action. In those factories hundreds, if not thousands, will be sacked from the private sector which the Bill is supposed to help by its effects in the public sector.
    A few days ago I took part in a march for jobs, the biggest demonstration that the city of Sheffield has ever seen. The whole city was involved and the police attempted to keep the demonstration away from the centre of the city. The Minister understands, as he once worked in that area. All over the city are great factories bearing signs "To Let". The city looks like a desert as a result of the Bill and what is called the slump—as though a slump is an act of God. The reality is that the Government have failed to help the industry to survive.
    The Bill loots and robs working people and at the same time puts them out of work and lays waste the factories that were built with public money.
    We are against this so-called new clause, which we have never had time to discuss. It has been imposed on us without a chance. The explanation was that it was only issued this morning. I received a copy on the board earlier this afternoon. It is impossible in the midst of all our other work to read the new clause and be expected to debate it, when we should be reporting the Bill that we discussed in Committee.
    A new word has appeared in our vocabulary—"privatisation". The old word was "redundancy". Both mean people out of work. We want these people and the trade union movement to know that this seemingly small Bill is one of the most powerful and reactionary that we have ever had to discuss, and that a great industry has been taken away from those who have patiently built it up. That is exactly what happened before.
    I am fundamentally opposed to what is being done. We should tell working people that vast amounts of money will be taken from them to help private industry. We are defending all working people. We shall not allow anyone to set workers in private industry against workers in public
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    industry, because to the extent that public industry suffers, private industry—which to a great extent is its customer—also suffers.
    When the Bill is passed, as it will be, I hope that it will be made clear to everyone that a proper debate did not take place and that things we had never seen before were foisted upon us at the last moment before we even had time to glance over them.
    Mr. Crowther: The Minister moved the new clause in the moderate tone for which he is rightly famous. One could have been lulled into thinking that this was a modest extension of the Secretary of State's powers. However, my hon. Friends have clearly shown that it is far from that. In fact, it will give the Secretary of State powers that are absolutely unprecedented in any nationalised industry.
    If the powers are used—and we can only assume that they will be, or there is no point in inserting them into the Bill—the BSC will be placed in the middle of a web of bureaucratic and political interference which no industry can be expected to survive. Indeed, from the new clause, it seems that Mr. MacGregor will almost have to get the Secretary of State's permission to blow his nose. I do not know how any chairman could tolerate that sort of interference, and in due course I look forward to hearing from Mr. MacGregor's own lips what exactly he thinks of it.
    My hon. Friend the Member for Whitehaven (Dr. Cunningham) properly pointed out that the Secretary of State, throughout his evidence to the Select Committee on 1 April, protested that he had no responsibility, and did not want it, for the management of the industry. My hon. Friend quoted one part of the Secretary of State's evidence, and I shall quote another. In answer to me the right hon. Gentleman said:
    "I do not expect to have officials who are expert at steel management, or steel managers—that is the job of the Steel Corporation."
    That is clear enough. The right hon. Gentleman is telling us that he does not have people in his Department who are experts on the industry. He said later:
    "I think, with respect, Chairman, we would be deceiving the public if we promised to have in position people with the same level of experience and depth of knowledge in each of the nationalised industries for which we are responsible."
    Whose advice will the Secretary of State seek when deciding whether to make directions under the power that he is taking in the new clause? He has told us clearly that there are no people in his Department qualified to advise him. His answer makes it clear that they do not know as much about the industry as the people in charge. We are therefore forced to the conclusion that his decisions will be made on purely political grounds. That is the only conclusion that we can reach.
    When the right hon. Gentleman makes a decision on whether to order the BSC to dispose of its assets, the rather naive condition is imposed that he must be satisfied that it will "further the public interest". We are entitled to ask what criterion he will use to decide what is in the public interest. Whose advice will he seek? Clearly he will riot seek the advice of Mr. MacGregor or the people running the corporation, because the only time when he will need to give such orders is when Mr. MacGregor refuses to sell an asset.
    If Mr. MacGregor or is in favour of selling, there is no need for the Secretary of State to make an order. That much is clear. Under the new clause, the Secretary of

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    State's political decision will override the commercial judgment of those who have been placed in charge of that publicly owned industry. The people appointed by the Secretary of State will be overruled by his political decision. I do not understand how that can be in the public interest.
    We have to see the new clause as we see clause 1, namely, in the context of the Bill as a whole. Later clauses, which we shall not oppose, provide for major financial restructuring of the corporation at considerable public expense. Yet the Bill, as the Secretary of State and the Minister of State have pointed out many times, is a denationalisation measure. There has been no attempt to hide that fact. The reason for pouring in vast sums of taxpayers' money is not to boost a publicly owned industry but to prepare it for slaughter. An industry that is submerged under a mountain of debt will not be an attractive proposition for prospective purchasers.
    We must consider the new clause against that background. It has been introduced at this stage for a clear reason. I appreciate the Minister's point that he cannot discuss the intimate relationship between Ministers and chairmen. He does not need to do so because anyone wno has his eyes open can see why the clause, which provides massive powers, has been introduced.
    In recent weeks it has become clear that Mr. MacGregor will not joyfully preside over the dismantlement of the industry for which he is responsible, even if he was appointed for that purpose. He has shown himself to be tough, shrewd and quick on his feet. He is the Muhammad Ali of the nationalised industry chairmen. He has taken on some powerful private companies in recent weeks—people who were lining up to grab themselves a share of BSC's special steels division. He knocked them out of the ring halfway through round two. That has upset the Government and they now have to use powers to force Mr. MacGregor to do certain things.
    Everyone deplores the tragic loss of jobs in the private sector at Llanelli and the Hadfields works in Sheffield, to which my hon. Friend the Member for Sheffield, Hillsborough (Mr. Flannery) has referred. But it is true to say that the jobs at Hadfield were doomed anyway. It was well known in South Yorkshire, long before Christmas, before the Bill appeared and before the Phoenix talks were under way, that a large part of Hadfields could not be expected to survive beyond halfway through this year. The owners, Lonhro, were hoping to get a stake in the modern BSC plant in South Yorkshire before closing Hadfields. That is where Mr. MacGregor has beaten them. That is why the Secretary of State needs to take such extreme powers. He needs to force Mr. MacGregor to become the instrument of the Government's will. When the Bill was drafted the Government were no doubt hoping that Mr. MacGregor would prove a more pliable or malleable sort than has been the case.
    9.30 pm
    It is unfortunate that the Government have not taken this opportunity to write into the Bill, as part of the new clause, a safeguard of the interests of the taxpayers and owners of the BSC. I have raised this point with the Minister on a number of occasions. I asked him how valuation will be determined when the BSC is ordered by
    962
    the Secretary of State to dispose of its assets. Under the new clause the assets are not necessarily plants, mills or melting shops. They may be research projects.
    We are talking about BSC's property, rights, liabilities and obligations—in other words, all it has. A very expensive research project at BSC Stainless in Sheffield has been suspended.
    Presumably the corporation could be ordered to dispose of that project to a private company. If that happens, who will decide the price so that we, the taxpayers, the owners of this property, are not robbed? Who will ensure that it is sold at a proper price? In the case of a willing vendor and a willing purchaser the matter is simple. Agreement is reached on the price and the sale is completed. If agreement is not reached, no sale takes place. If the vendor is forced to sell, there is no free market and the purchaser or purchasers are in a very strong position to take advantage of it. When I raised this matter in Standing Committee the Minister of State said:
    "If an order were made, it would place the corporation in the position of wishing to sell an asset".—[Official Report, Standing Committee B, 28 April 1981, c. 116.]
    That is patent nonsense. An order would need to be made only if the corporation did not wish to sell. Quite clearly, if an order is made the corporation is not a willing vendor. There is no provision in this Bill for independent arbitration to determine the proper value of assets which are to be disposed of.
    I am very concerned about this matter. Taxpayers must also be very concerned, because there is a great danger that the most valuable pieces of the publicly owned steel corporation will be sold at bargain basement prices. In all other cases, where a compulsory sale takes place—for example, there is a compulsory purchase order for highway or planning purposes—provision is made that, in the absence of agreement, the price will be determined by an independent arbitrator, in this case the Lands Tribunal. There is no similar provision in the Bill.
    I agree with my hon. Friends who have expressed serious worries about the new clause. It contains provisions by which the public, the taxpayers, are likely to be robbed of some extremely valuable assets and not paid a proper price for them. It is a thoroughly bad clause.
    The Under-Secretary of State for Industry (Mr. Michael Marshall): This has been an interesting debate, if perhaps at times a strange one. The hon. Member for Wrexham (Mr. Ellis) referred to our Second Reading debate. I have to tell him that we have had it all over again. Much of the argument put forward by the Opposition reveals a state of synthetic indignation which is remarkable.
    I never cease to be amazed at the ability of some hon. Members who make bricks without straw and then hurl them at us. In Committee my hon. Friend gave an undertaking to bring forward a new clause that would give power to the Secretary of State to give general or specific directions as to the internal organisation of the corporation; to remove the power of the Secretary of State to require the corporation to carry out a review of the way in which the corporation is organised; to report its conclusions to the Secretary of State and to enable the Secretary of State to direct the corporation to form separate Companies Act companies in respect of those businesses that are in competition with the private sector of the industry. Those undertakings were given very plainly, and

    963
    for hon. Gentlemen to say that they received some amazing document today, when this is what the new clause provides for, is totally unreal.
    It would not be sensible to rehearse many of the general arguments. On Third Reading it may be possible to pick up some of the points. I want to concentrate on some points of substance and try to answer them. I blame myself—I cannot seek to blame my hon. Friend—that the Government, in trying to be helpful, have seemingly run into crossfire.
    The new clause produces a somewhat longer Bill. The hon. Member for Whitehaven (Dr. Cunningham), who opened for the Opposition, sought to make much of this. When one tries to clarify and be helpful there is a knock-on effect, and legislation becomes longer. It is frightening to think that if we took the view that the best way to pass legislation was not to expand or explain we should not have to face the type of agonising that we have had to face tonight. My hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) put the matter into perspective.
    The hon. Member for Whitehaven talked about intervention. He said nothing about fair competition. Few hon. Members mentioned it, except the hon. Member for Motherwell and Wishaw (Dr. Bray) and, in a different context, the hon. Member for Sheffield, Hillsborough (Mr. Flannery). The question of competition motivated my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) to move amendments in Committee. His amendments are replaced by the new clause.
    The hon. Member for Whitehaven was carried away. The provisions in the new clause cover precisely what is already happening. The establishment of Companies Act companies is envisaged in the new clause. Many arguments expressed by hon. Members have become redundant in the light of experience.
    The hon. Member for Whitehaven perhaps misheard what we said about consultation. He said that under the new clause we would decide how much consultation would take place, but my hon. Friend the Minister of State explained how such consultation would take place. There is an important distinction. That is a reasonable decision for BSC in consultation with trade unions.
    The hon. Member made sport of subsection (6). Procedure is provided under that subsection to ensure that a direction is given and made known formally to the corporation. That is an integral part of making plain the formal position. It is part of the mechanism under which that direction will appear in the annual report. That is how the issue is made public. On reflection, the hon. Gentleman might appreciate the significance of that.
    My hon. Friend the Member for Faversham (Mr. Moate) expressed concern. I respect the way in which he has taken an interest in Sheerness, in his constituency. We are talking about a private company in which GKN has a 50 per cent. holding. The company is being established as a result of commercially confidential negotiations between GKN and the BSC. We are not in a position to comment on the negotiations.
    My hon. Friend urges that we should require the publishing of information that we would not require of other private sector companies. There is a legal restriction
    964
    on the Secretary of State disclosing such information obtained from the BSC or the private sector under section 33(1)(a) of the Iron and Steel Act 1975, which prevents the disclosure of information without the consent of the person who supplied the information.
    My hon. Friend would be worried if Sheerness were involved in negotiations with the BSC and it was felt that there was discrimination in a company being asked to provide information that would not be required of other Companies Act companies. Reports have to be made by companies under other legislation. In those circumstances I hope that my hon. Friend will appreciate that we have tried to steer the fair course here and that there is no attempt simply to be difficult in regard to what he put to us.
    Mr. Moate: I am grateful for my hon. Friend's explanation. I think that he has misunderstood my request. I am not asking for confidential information at this stage. That would unreasonable. It seems to be reasonable, when we have a publicly owned company—which is what this will be—that from the moment that the company is formed it is public knowledge. Certainly it should be known to the shareholders of that company, of which indirectly the public are shareholders, that we should know the capital structure—the balance sheet—of the company at the time of its inception. I do not believe that to be unreasonable. I do not think that the points that my hon. Friend has advanced really undermine the point that I make. I cannot believe that he can disagree with the proposition that I put forward.
    Mr. Marshall: I understand the spirit in which my hon. Friend puts his point, but I think that my hon. Friend the Member for Selly Oak put the matter in proper perspective when he said that in the normal course of events one would see the reports that would make plain the matters to which my hon. Friend referred, and specifically to seek to intervene in the reporting process—which is what is implied here—would go, in a rather discriminatory way, down a track that I frankly cannot accept.
    Dr. Bray: If it is a Companies Act company the balance sheet will be filed in Companies House and will meet the requirements of the hon. Member.
    Mr. Marshall: The hon. Gentleman is correct. That will follow.
    The hon. Member for Newport (Mr. Hughes) raised a point that I should like to clarify for him. He talked about subsection (3). He seemed to find something very worrying, and got somewhat worked up about that. That was incorporated in the 1967 Iron and Steel Act passed by the Government of which he was a supporter, and he will appreciate that there is no new or sinister connotation about that unless he wants to look back to the roots of that piece of party legislation and complain about that.
    My hon. Friend the Member for Knutsford (Mr. BruceGardyne) has raised a problem that is accepted by Ministers. The difficulty of establishing and seeing fair competition is evident. It has been brought out in the debate that this is a step in the right direction. That is

    965
    important. I believe that some hon. Gentlemen may be selling themselves short. I should be surprised if, armed with the information available in the Companies Act company published report, they cannot see for themselves the degree to which fair competition applies. This move towards transparency is certainly important.
    The hon. Member for Workington (Mr. Campbell-Savours)—who is not with us now; I appreciate that he has other commitments—argued somewhat against himself tonight. He objected to the curtailment, as he put it, of the activities of the British Steel Corporation. He argued that we should curtail activities by some direct role in seeing how the organisation of the corporation was set up and maintained. This is a somewhat typical piece of the hon. Gentleman's confused thinking. We know that his instincts tend to make him want to run the British Steel Corporation from this place, but the burden of his arguments tonight was to object to what he described as the curtailment of the corporation's activities.
    The hon. Member for Motherwell and Wishaw could not be with us at the opening of the debate. I took the opportunity in Committee to express my appreciation of his interest in these matters. I say this in no partisan sense; I mention it because he will find that one or two of the questions that he raised were covered by my hon. Friend in opening. In particular, when the hon. Member spoke about proper accountability and comparability with the private sector I agreed with him. That is part of what is intended here. I was glad that he saw the significance of what we were trying to do.
    The hon. Gentleman asked why we decided to introduce the new clause. As my hon. Friend and I have made clear, it meets the spirit of the amendment that was moved in Committee by my hon. Friend the Member for Aldridge-Brownhills. The hon. Gentleman moved on to the slightly dangerous concept of reselection, and I shall pass over that quickly.
    9.45 pm
    Dr. Bray: In the original 1967 Act there were no powers of a general or specific direction. In this clause the Government are sharpening the Secretary of State's powers specifically to direct the corporation. Therefore, the Secretary of State is increasing ministerial interference in the affairs of the corporation.
    Mr. Marshall: The hon. Gentleman is making a fair point. It is one that he made in his speech. He argued that under the terms of the 1975 Act, as with the amendment, the power of general direction would remain. He described the powers in the clause as rather more refined. We are seeking competition that is as fair as may be possible between the public and private sectors. That is the basic objective. Where we are providing these powers, we are seeking to do so in the sense that they will be used as reserve powers. We are reflecting what is already happening. Companies Act companies are being established and directions are not being issued. In future and in other circumstances it may be necessary to consider those factors. At this stage I do not regard it as relevant
    966
    to take on board the hypothetical situations that were embodied in the questioning of the hon. Member for Rotherham (Mr. Crowther).
    We are seeing a progression of the sort that I have described. The powers in the clause are being sought to underwrite the progression. They are fall-back powers in the event of the progression not taking place of its own volition.
    Mr. Crowther: When compulsory purchase powers are given to local authorities for various purposes, there is provision for a system of appeal in the event of the person whose property is being forcibly sold not agreeing with the price that is offered. Why are the Government not incorporating a similar system in the clause which makes arrangements for our property—the BSC's assets—to be forcibly sold? Surely there should be some arrangement for arbitration in the event of a disagreement over price. It is a simple question.
    Mr. Marshall: The hon. Gentleman is extremely skilful in putting forward the most far-fetched construction and then shooting it down in flames. In the real world, as he knows, there is a progression towards the Phoenix development about which he spoke.
    I regard the hon. Member for Wrexham as one of the more moderate voices in these debates. I am sorry that he is not prepared to consider the real implications of these 50–50 public-private companies and to recognise that they are important.
    We are seeking to reduce the powers of direction. In two of the three instances we are seeking to provide a reserve power. We are doing so on the basis of a 2:1 reduction— I have not heard what the score is anywhere else—and it seems an entirely reasonable new clause. Once more I commend it to the House.
    Mr. Stanley Orme: The Opposition find the Minister's explanation completely unsatisfactory. We are opposed to the new clause, as we are opposed to clause 1, and I ask my right hon. and hon. Friends to vote against it.
    Question put, That the clause be read a Second time:—
    The House divided: Ayes 248, Noes 194.

    Division No. 188]

    [9.49 pm

    AYES

    Aitken, Jonathan

    Body, Richard

    Alexander, Richard

    Bottomley, Peter (W'wich W)

    Amery, Rt Hon Julian

    Braine, Sir Bernard

    Ancram, Michael

    Bright, Graham

    Aspinwall, Jack

    Brinton, Tim

    Atkins, Rt Hon H.(S'thorne)

    Brittan, Leon

    Atkins, Roben(Preston N)

    Brotherton, Michael

    Baker, Nicholas (N Dorset)

    Brown, Michael(Brigg & Sc'n)

    Banks, Robert

    Browne, John (Winchester)

    Beaumont-Dark, Anthony

    Bruce-Gardyne, John

    Bell, Sir Ronald

    Bryan, Sir Paul

    Bendall, Vivian

    Buchanan-Smith, Alick

    Benyon, W. (Buckingham)

    Budgen, Nick

    Berry, Hon Anthony

    Bulmer, Esmond

    Best, Keith

    Burden, Sir Frederick

    Bevan, David Gilroy

    Butcher, John

    Biffen, Rt Hon John

    Butler, Hon Adam

    Blackburn, John

    Cadbury, Jocelyn

    Blaker, Peter

    Carlisle, John (Luton West)

    967

    Carlisle, Kenneth (Lincoln)

    Langford-Holt, Sir John

    Chalker, Mrs. Lynda

    Latham, Michael

    Chapman, Sydney

    Lawrence, Ivan

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

    Lawson, Rt Hon Nigel

    Clark, Sir W. (Croydon S)

    Lee, John

    Clarke, Kenneth (Rushcliffe)

    Le Marchant, Spencer

    Clegg, Sir Walter

    Lennox-Boyd, Hon Mark

    Colvin, Michael

    Lloyd, Ian (Havant & W'loo)

    Cope, John

    Lloyd, Peter (Fareham)

    Cormack, Patrick

    Loveridge, John

    Corrie, John

    Luce, Richard

    Cranborne, Viscount

    Lyell, Nicholas

    Critchley, Julian

    McCrindle, Robert

    Crouch, David

    MacKay, John (Argyll)

    Dean, Paul (North Somerset)

    Macmillan, Rt Hon M.

    Dickens, Geoffrey

    McNair-Wilson, M. (N'bury)

    Dorrell, Stephen

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

    Dover, Denshore

    McQuarrie, Albert

    Dunn, Robert (Dartford)

    Madel, David

    Dykes, Hugh

    Major, John

    Eden, Rt Hon Sir John

    Marland, Paul

    Edwards, Rt Hon N. (P'broke)

    Marlow, Tony

    Eggar, Tim

    Marshall, Michael (Arundel)

    Elliott, Sir William

    Mates, Michael

    Eyre, Reginald

    Mather, Carol

    Fairbairn, Nicholas

    Mawby, Ray

    Fairgrieve, Russell

    Mawhinney, Dr Brian

    Farr, John

    Maxwell-Hyslop, Robin

    Fell, Anthony

    Mayhew, Patrick

    Fenner, Mrs Peggy

    Mellor, David

    Fisher, Sir Nigel

    Meyer, Sir Anthony

    Fletcher-Cooke, Sir Charles

    Miller, Hal (B'grove)

    Fookes, Miss Janet

    Mills, Iain (Meriden)

    Forman, Nigel

    Mills, Peter (West Devon)

    Fowler, Rt Hon Norman

    Miscampbell, Norman

    Fox, Marcus

    Mitchell, David (Basingstoke)

    Fraser, Rt Hon Sir Hugh

    Moate, Roger

    Fraser, Peter (South Angus)

    Monro, Hector

    Fry, Peter

    Montgomery, Fergus

    Garel-Jones, Tristan

    Morgan, Geraint

    Gilmour, Rt Hon Sir Ian

    Morrison, Hon C. (Devizes)

    Glyn, Dr Alan

    Morrison, Hon P. (Chester)

    Goodhew, Victor

    Mudd, David

    Goodlad, Alastair

    Murphy, Christopher

    Gow, Ian

    Myles, David

    Gower, Sir Raymond

    Neale, Gerrard

    Greenway, Harry

    Nelson, Anthony

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

    Neubert, Michael

    Griffiths, Peter Portsm'th N)

    Newton, Tony

    Grist, Ian

    Onslow, Cranley

    Gummer, John Selwyn

    Page, Rt Hon Sir G. (Crosby)

    Hamilton, Hon A.

    Page, Richard (SW Herts)

    Hamilton, Michael (Salisbury)

    Parris, Matthew

    Hampson, Dr Keith

    Patten, Christopher (Bath)

    Hannam, John

    Patten, John (Oxford)

    Haselhurst, Alan

    Pattie, Geoffrey

    Havers, Rt Hon Sir Michael

    Pawsey, James

    Hawksley, Warren

    Percival, Sir Ian

    Hayhoe, Barney

    Pink, R. Bonner

    Heddle, John

    Prentice, Rt Hon Reg

    Henderson, Barry

    Price, Sir David (Eastleigh)

    Heseltine, Rt Hon Michael

    Proctor, K. Harvey

    Hicks, Robert

    Raison, Timothy

    Higgins, Rt Hon Terence L.

    Rathbone, Tim

    Hogg, Hon Douglas (Gr'th'm)

    Rees, Peter (Dover and Deal)

    Holland, Philip (Carlton)

    Renton, Tim

    Hooson, Tom

    Rhodes James, Robert

    Hordern, Peter

    Ridley, Hon Nicholas

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

    Ridsdale, Sir Julian

    Hunt, David (Wirral)

    Rifkind, Malcolm

    Hunt, John (Ravensbourne)

    Roberts, M. (Cardiff NW)

    Jenkin, Rt Hon Patrick

    Roberts, Wyn (Conway)

    Johnson Smith, Geoffrey

    Rossi, Hugh

    Jopling, Rt Hon Michael

    Rost, Peter

    Kaberry, Sir Donald

    Royle, Sir Anthony

    Kimball, Marcus

    Sainsbury, Hon Timothy

    King, Rt Hon Tom

    Shaw, Giles (Pudsey)

    Knox, David

    Shelton, William (Streatham)

    Lamont, Norman

    Shepherd, Colin (Hereford)

    Lang, Ian

    Shersby, Michael

    968

    Silvester, Fred

    Waddington, David

    Sims, Roger

    Wakeham, John

    Skeet, T. H. H.

    Waldegrave, Hon William

    Speed, Keith

    Walker, Rt Hon P.(W'cester)

    Speller, Tony

    Walker, B. (Perth)

    Spence, John

    Walker-Smith, Rt Hon Sir D.

    Spicer, Jim (West Dorset)

    Wall, Patrick

    Spicer, Michael (S Worcs)

    Waller, Gary

    Sproat, Iain

    Walters, Dennis

    Squire, Robin

    Ward, John

    Stanbrook, Ivor

    Warren, Kenneth

    Steen, Anthony

    Watson, John

    Stewart, Ian (Hitchin)

    Wells, John (Maidstone)

    Stewart, A.(E Renfrewshire)

    Wells, Bowen

    Stradling Thomas, J.

    Wheeler, John

    Taylor, Robert (Croydon NW)

    Whitney, Raymond

    Tebbit, Norman

    Wickenden, Keith

    Temple-Morris, Peter

    Wiggin, Jerry

    Thomas, Rt Hon Peter

    Williams, D.(Montgomery)

    Thompson, Donald

    Wolfson, Mark

    Thorne, Neil (Ilford South)

    Young, Sir George (Acton)

    Thornton, Malcolm

    Younger, Rt Hon George

    Townend, John (Bridlington)

    Trippier, David

    Tellers for the Ayes:

    van Straubenzee, W. R.

    Lord James Douglas-Hamilton and Mr. Robert Boscawen.

    Vaughan, Dr Gerard

    Viggers, Peter

    NOES

    Abse, Leo

    Duffy, A. E. P.

    Adams, Allen

    Dunn, James A.

    Alton, David

    Dunnett, Jack

    Anderson, Donald

    Dun woody, Hon Mrs G.

    Archer, Rt Hon Peter

    Eadie, Alex

    Ashton, Joe

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

    Atkinson, N.(H'gey,)

    Ellis, Tom (Wrexham)

    Bagier, Gordon A.T.

    English, Michael

    Barnett, Guy (Greenwich)

    Ennals, Rt Hon David

    Barnett, Rt Hon Joel (H'wd)

    Evans, loan (Aberdare)

    Beith, A. J.

    Evans, John (Newton)

    Bennett, Andrew(St'kp't N)

    Ewing, Harry

    Bidwell, Sydney

    Faulds, Andrew

    Booth, Rt Hon Albert

    Field, Frank

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

    Flannery, Martin

    Bray, Dr Jeremy

    Fletcher, Ted (Darlington)

    Brown, Hugh D. (Provan)

    Ford, Ben

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

    Forrester, John

    Brown, Ron (E'burgh, Leith)

    Foster, Derek

    Buchan, Norman

    Foulkes, George

    Callaghan, Rt Hon J.

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

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

    Freeson, Rt Hon Reginald

    Campbell, Ian

    Garrett, John (Norwich S)

    Campbell-Savours, Dale

    George, Bruce

    Cant, R. B.

    Gilbert, Rt Hon Dr John

    Carmichael, Neil

    Ginsburg, David

    Carter-Jones, Lewis

    Graham, Ted

    Clark, Dr David (S Shields)

    Grant, John (Islington C)

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

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

    Coleman, Donald

    Harrison, Rt Hon Walter

    Concannon, Rt Hon J. D.

    Hattersley, Rt Hon Roy

    Conlan, Bernard

    Haynes, Frank

    Cook, Robin F.

    Heffer, Eric S.

    Craigen, J. M.

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

    Crowther, J. S.

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

    Cryer, Bob

    Homewood, William

    Cunliffe, Lawrence

    Hooley, Frank

    Cunningham, G. (Islington S)

    Huckfield, Les

    Cunningham, Dr J. (W'h'n)

    Hudson Davies, Gwilym E.

    Dalyell, Tam

    Hughes, Robert (Aberdeen N)

    Davies, Ifor (Gower)

    Hughes, Roy (Newport)

    Davis, Clinton (Hackney C)

    Janner, Hon Greville

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

    Jay, Rt Hon Douglas

    Deakins, Eric

    John, Brynmor

    Dean, Joseph (Leeds West)

    Johnson, James (Hull West)

    Dempsey, James

    Johnston, Russell (Inverness)

    Dewar, Donald

    Jones, Rt Hon Alec (Rh'dda)

    Dormand, Jack

    Jones, Barry (East Flint)

    Douglas, Dick

    Jones, Dan (Burnley)

    Douglas-Mann, Bruce

    Kaufman, Rt Hon Gerald

    Dubs, Alfred

    Kerr, Russell

    969

    Kilroy-Silk, Robert

    Roberts, Gwilym (Cannock)

    Kinnock, Neil

    Rooker, J. W.

    Lambie, David

    Ross, Ernest (Dundee West)

    Lamborn, Harry

    Rowlands, Ted

    Lamond, James

    Ryman, John

    Leighton, Ronald

    Sever, John

    Lestor, Miss Joan

    Sheldon, Rt Hon R.

    Litherland, Robert

    Shore, Rt Hon Peter

    Lofthouse, Geoffrey

    Silkin, Rt Hon J. (Deptford)

    Lyon, Alexander (York)

    Skinner, Dennis

    McCartney, Hugh

    Smith, Rt Hon J. (N Lanark)

    McElhone, Frank

    Snape, Peter

    McKay, Allen (Penistone)

    Soley, Clive

    McKelvey, William

    Spearing, Nigel

    MacKenzie, Rt Hon Gregor

    Spriggs, Leslie

    McNally, Thomas

    Stallard, A. W.

    McNamara, Kevin

    Stoddart, David

    McTaggart, Robert

    Stott, Roger

    McWilliam, John

    Strang, Gavin

    Magee, Bryan

    Summerskill, Hon Dr Shirley

    Marks, Kenneth

    Thomas, Jeffrey (Abertillery)

    Marshall, D(G'gow S'ton)

    Thomas, Dr R.(Carmarthen)

    Marshall, Dr Edmund (Goole)

    Thorne, Stan (Preston South)

    Marshall, Jim (Leicester S)

    Tilley, John

    Maxton, John

    Tinn, James

    Maynard, Miss Joan

    Torney, Tom

    Meacher, Michael

    Varley, Rt Hon Eric G.

    Mikardo, Ian

    Wainwright, E.(Dearne V)

    Millan, Rt Hon Bruce

    Walker, Rt Hon H.(D'caster)

    Mitchell, Austin (Grimsby)

    Watkins, David

    Mitchell, R. C. (Soton Itchen)

    Weetch, Ken

    Morris, Rt Hon A. (W'shawe)

    Wellbeloved, James

    Morris, Rt Hon J. (Aberavon)

    Welsh, Michael

    Moyle, Rt Hon Roland

    White, J. (G'gow Pollok)

    Newens, Stanley

    Whitehead, Phillip

    O'Halloran, Michael

    Whitlock, William

    O'Neill, Martin

    Willey, Rt Hon Frederick

    Orme, Rt Hon Stanley

    Wilson, Gordon (Dundee E)

    Palmer, Arthur

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

    Parry, Robert

    Wilson, William (C'try SE)

    Penhaligon, David

    Winnick, David

    Prescott, John

    Woodall, Alec

    Price, C. (Lewisham W)

    Woolmer, Kenneth

    Race, Reg

    Young, David (Bolton E)

    Radice, Giles

    Rees, Rt Hon M (Leeds S)

    Tellers for the Noes:

    Roberts, Allan (Bootle)

    Mr. James Hamilton and Mr. George Morton.

    Roberts, Ernest (Hackney N)

    Question accordingly agreed to.
    Clause read a Second time.
    It being after Ten o'clock, further consideration of the Bill stood adjourned.

    THE ORGANISATION OF THE CORPORATION'S ACTIVITIES

      BUSINESS OF THE HOUSE
      Ordered,
      That, at thisday's sitting, the Iron and Steel Bill and the Ports (Financial Assistance) Bill may be proceeded with, though opposed, until any hour.—[Mr. Thompson.]

  Iron and Steel Bill
  Bill, as amended (in the Standing Committee), again considered.
  Question, That the clause be added to the Bill, put and agreed to.

  Iron and Steel Bill
    Clause 1

      MODIFICATION OF CORPORATION'S FUNCTIONS
      Amendment proposed: No. 1, in page 1, line 6, leave out clause 1.—[Dr. John Cunningham.]
      Question put, That the amendment be made:—
      The House divided: Ayes 198, Noes 250.

      Division No. 189]

      [10.4 pm

      AYES

      Abse, Leo

      Ginsburg, David

      Adams, Allen

      Graham, Ted

      Alton, David

      Grant, John (Islington C)

      Anderson, Donald

      Hamilton, James (Bothwell)

      Archer, Rt Hon Peter

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

      Ashton, Joe

      Harrison, Rt Hon Walter

      Atkinson, U.(H'gey,)

      Hattersley, Rt Hon Roy

      Bagier, Gordon A.T.

      Haynes, Frank

      Barnett, Guy (Greenwich)

      Heffer, Eric S.

      Barnett, Rt Hon Joel (H'wd)

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

      Beith, A. J.

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

      Bennett, Andrew(St'kp't N)

      Homewood, William

      Bidwell, Sydney

      Hooley, Frank

      Booth, Rt Hon Albert

      Huckfield, Les

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

      Hudson Davies, Gwilym E.

      Bray, Dr Jeremy

      Hughes, Robert (Aberdeen N)

      Brittan, Leon

      Hughes, Roy (Newport)

      Brown, Hugh D. (Provan)

      Janner, Hon Greville

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

      Jay, Rt Hon Douglas

      Brown, Ron (E'burgh, Leith)

      John, Brynmor

      Buchan, Norman

      Johnson, James (Hull West)

      Callaghan, Rt Hon J.

      Johnston, Russell (Inverness)

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

      Jones, Rt Hon Alec (Rh'dda)

      Campbell, Ian

      Jones, Barry (East Flint)

      Campbell-Savours, Dale

      Jones, Dan (Burnley)

      Cant, R. B.

      Kaufman, Rt Hon Gerald

      Carmichael, Neil

      Kerr, Russell

      Carter-Jones, Lewis

      Kilroy-Silk, Robert

      Clark, Dr David (S Shields)

      Kinnock, Neil

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

      Lambie, David

      Coleman, Donald

      Lamborn, Harry

      Concannon, Rt Hon J. D.

      Lamond, James

      Conlan, Bernard

      Leighton, Ronald

      Cook, Robin F.

      Lestor, Miss Joan

      Craigen, J. M.

      Litherland, Robert

      Crowther, J. S.

      Lofthouse, Geoffrey

      Cryer, Bob

      Lyon, Alexander (York)

      Cunliffe, Lawrence

      Lyons, Edward (Bradf'd W)

      Cunningham, G. (Islington S)

      McElhone, Frank

      Cunningham, Dr J. (W'h'n)

      McKelvey, William

      Dalyell, Tam

      MacKenzie, Rt Hon Gregor

      Davies, Rt Hon Denzil (L'lli)

      McNally, Thomas

      Davies, Ifor (Gower)

      McNamara, Kevin

      Davis, Clinton (Hackney C)

      McTaggart, Robert

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

      McWilliam, John

      Deakins, Eric

      Magee, Bryan

      Dean, Joseph (Leeds West)

      Marks, Kenneth

      Dempsey, James

      Marshall, D(G'gow S'ton)

      Dewar, Donald

      Marshall, Dr Edmund (Goole)

      Dormand, Jack

      Marshall, Jim (Leicester S)

      Douglas, Dick

      Maxton, John

      Douglas-Mann, Bruce

      Maynard, Miss Joan

      Dubs, Alfred

      Meacher, Michael

      Duffy, A. E. P.

      Mikardo, Ian

      Dunn, James A.

      Millan, Rt Hon Bruce

      Dunnett, Jack

      Mitchell, Austin (Grimsby)

      Dunwoody, Hon Mrs G.

      Mitchell, R. C. (Soton Itchen)

      Eadie, Alex

      Morris, Rt Hon A. (W'shawe)

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

      Morris, Rt Hon J. (Aberavon)

      Ellis, Tom (Wrexham)

      Morton, George

      English, Michael

      Moyle, Rt Hon Roland

      Ennals, Rt Hon David

      Newens, Stanley

      Evans, loan (Aberdare)

      O'Halloran, Michael

      Evans, John (Newton)

      O'Neill, Martin

      Ewing, Harry

      Orme, Rt Hon Stanley

      Faulds, Andrew

      Palmer, Arthur

      Field, Frank

      Parry, Robert

      Flannery, Martin

      Penhaligon, David

      Fletcher, Ted (Darlington)

      Prescott, John

      Ford, Ben

      Price, C. (Lewisham W)

      Forrester, John

      Race, Reg

      Foster, Derek

      Radice, Giles

      Foulkes, George

      Rees, Rt Hon M (Leeds S)

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

      Roberts, Allan (Bootle)

      Freeson, Rt Hon Reginald

      Roberts, Ernest (Hackney N)

      Garrett, John (Norwich S)

      Roberts, Gwilym (Cannock)

      George, Bruce

      Rooker, J. W.

      Gilbert, Rt Hon Dr John

      Ross, Ernest (Dundee West)

      971

      Rowlands, Ted

      Varley, Rt Hon Eric G.

      Ryman, John

      Wainwright, E.(Dearne V)

      Sever, John

      Walker, Rt Hon H.(D'caster)

      Sheldon, Rt Hon R.

      Watkins, David

      Shore, Rt Hon Peter

      Weetch, Ken

      Silkin, Rt Hon J. (Deptford)

      Wellbeloved, James

      Skinner, Dennis

      Welsh, Michael

      Smith, Rt Hon J. (N Lanark)

      White, J. (G'gow Pollok)

      Snape, Peter

      Whitehead, Phillip

      Soley, Clive

      Whitlock, William

      Spearing, Nigel

      Willey, Rt Hon Frederick

      Spriggs, Leslie

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

      Stallard, A. W.

      Wilson, Gordon (Dundee E)

      Stoddart, David

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

      Stott, Roger

      Wilson, William (C'try SE)

      Strang, Gavin

      Winnick, David

      Summerskill, Hon Dr Shirley

      Woodall, Alec

      Thomas, Jeffrey (Abertillery)

      Woolmer, Kenneth

      Thomas, Dr R. (Carmarthen)

      Young, David (Bolton E)

      Thome, Stan (Preston South)

      Tilley, John

      Tellers for the Ayes:

      Tinn, James

      Mr. Hugh McCartney and Mr. Allen McKay.

      Torney, Tom

      NOES

      Aitken, Jonathan

      Dickens, Geoffrey

      Alexander, Richard

      Dorrell, Stephen

      Amery, Rt Hon Julian

      Douglas-Hamilton, Lord J.

      Ancram, Michael

      Dover, Denshore

      Aspinwall, Jack

      Dunn, Robert (Dartford)

      Atkins, Rt Hon H.(S'thorne)

      Dykes, Hugh

      Atkins, Robert (Preston N)

      Eden, Rt Hon Sir John

      Baker, Nicholas (N Dorset)

      Edwards, Rt Hon N. (P'broke)

      Banks, Robert

      Eggar, Tim

      Beaumont-Dark, Anthony

      Elliott, Sir William

      Bendall, Vivian

      Emery, Peter

      Benyon, W. (Buckingham)

      Eyre, Reginald

      Berry, Hon Anthony

      Fairbairn, Nicholas

      Best, Keith

      Fairgrieve, Russell

      Bevan, David Gilroy

      Farr, John

      Biffen, Rt Hon John

      Fell, Anthony

      Biggs-Davison, John

      Fenner, Mrs Peggy

      Blackburn, John

      Fisher, Sir Nigel

      Blaker, Peter

      Fletcher-Cooke, Sir Charles

      Body, Richard

      Fookes, Miss Janet

      Boscawen, Hon Robert

      Forman, Nigel

      Bottomley, Peter (W'wich W)

      Fowler, Rt Hon Norman

      Braine, Sir Bernard

      Fox, Marcus

      Bright, Graham

      Fraser, Rt Hon Sir Hugh

      Brinton, Tim

      Fraser, Peter (South Angus)

      Brittan, Leon

      Fry, Peter

      Brotherton, Michael

      Garel-Jones, Tristan

      Brown, Michael(Brigg & Sc'n)

      Gilmour, Rt Hon Sir Ian

      Browne, John (Winchester)

      Glyn, Dr Alan

      Bruce-Gardyne, John

      Goodhew, Victor

      Bryan, Sir Paul

      Goodlad, Alastair

      Buchanan-Smith, Alick

      Gow, Ian

      Budgen, Nick

      Gray, Hamish

      Bulmer, Esmond

      Greenway, Harry

      Burden, Sir Frederick

      Griffiths, Peter Portsm'th N)

      Butcher, John

      Grist, Ian

      Butler, Hon Adam

      Hamilton, Hon A.

      Cadbury, Jocelyn

      Hamilton, Michael (Salisbury)

      Carlisle, John (Luton West)

      Hampson, Dr Keith

      Carlisle, Kenneth (Lincoln)

      Hannam, John

      Chalker, Mrs. Lynda

      Haselhurst, Alan

      Chapman, Sydney

      Havers, Rt Hon Sir Michael

      Churchill, W. S.

      Hawksley, Warren

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

      Hayhoe, Barney

      Clark, Sir W. (Croydon S)

      Heddle, John

      Clarke, Kenneth (Rushcliffe)

      Henderson, Barry

      Clegg, Sir Walter

      Heseltine, Rt Hon Michael

      Colvin, Michael

      Hicks, Robert

      Cope, John

      Higgins, Rt Hon Terence L.

      Cormack, Patrick

      Hogg, Hon Douglas (Gr'th'm)

      Corrie, John

      Holland, Philip (Carlton)

      Cranborne, Viscount

      Hooson, Tom

      Critchley, Julian

      Hordern, Peter

      Crouch, David

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

      Dean, Paul (North Somerset)

      Hunt, David (Wirral)

      972

      Hunt, John (Ravensbourne)

      Raison, Timothy

      Jenkin, Rt Hon Patrick

      Rathbone, Tim

      Johnson Smith, Geoffrey

      Rees, Peter (Dover and Deal)

      Jopling, Rt Hon Michael

      Renton, Tim

      Kaberry, Sir Donald

      Rhodes James, Robert

      Kimball, Marcus

      Ridley, Hon Nicholas

      King, Rt Hon Tom

      Ridsdale, Sir Julian

      Knox, David

      Rifkind, Malcolm

      Lamont, Norman

      Roberts, M. (Cardiff NW)

      Lang, Ian

      Roberts, Wyn (Conway)

      Langford-Holt, Sir John

      Rossi, Hugh

      Latham, Michael

      Rost, Peter

      Lawrence, Ivan

      Royle, Sir Anthony

      Lawson, Rt Hon Nigel

      Sainsbury, Hon Timothy

      Lee, John

      Shaw, Giles (Pudsey)

      Le Marchant, Spencer

      Shelton, William (Streatham)

      Lennox-Boyd, Hon Mark

      Shepherd, Colin (Hereford)

      Lloyd, Ian (Havant & W'loo)

      Shersby, Michael

      Lloyd, Peter (Fareham)

      Silvester, Fred

      Loveridge, John

      Sims, Roger

      Luce, Richard

      Skeet, T. H. H.

      Lyell, Nicholas

      Speed, Keith

      McCrindle, Robert

      Speller, Tony

      MacKay, John (Argyll)

      Spence, John

      Macmillan, Rt Hon M.

      Spicer, Jim (West Dorset)

      McNair-Wilson, M. (N'bury)

      Spicer, Michael (S Worcs)

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

      Sproat, Iain

      McQuarrie, Albert

      Squire, Robin

      Madel, David

      Stanbrook, Ivor

      Major, John

      Steen, Anthony

      Marland, Paul

      Stevens, Martin

      Marlow, Tony

      Stewart, Ian (Hitchin)

      Marshall, Michael (Arundel)

      Stewart, A.(E Renfrewshire)

      Mates, Michael

      Stradling Thomas, J.

      Mawby, Ray

      Taylor, Robert (Croydon NW)

      Mawhinney, Dr Brian

      Tebbit, Norman

      Maxwell-Hyslop, Robin

      Temple-Morris, Peter

      Mayhew, Patrick

      Thomas, Rt Hon Peter

      Mellor, David

      Thompson, Donald

      Meyer, Sir Anthony

      Thorne, Neil (Ilford South)

      Miller, Hal (B'grove)

      Thornton, Malcolm

      Mills, Iain (Meriden)

      Townend, John (Bridlington)

      Mills, Peter (West Devon)

      Trippier, David

      Miscampbell, Norman

      van Straubenzee, W. R.

      Mitchell, David (Basingstoke)

      Vaughan, Dr Gerard

      Moate, Roger

      Viggers, Peter

      Molyneaux, James

      Waddington, David

      Monro, Hector

      Wakeham, John

      Montgomery, Fergus

      Waldegrave, Hon William

      Morgan, Geraint

      Walker, Rt Hon P.(W'cester)

      Morrison, Hon C. (Devizes)

      Walker, B. (Perth)

      Morrison, Hon P. (Chester)

      Walker-Smith, Rt Hon Sir D.

      Mudd, David

      Wall, Patrick

      Murphy, Christopher

      Waller, Gary

      Myles, David

      Walters, Dennis

      Neale, Gerrard

      Ward, John

      Nelson, Anthony

      Warren, Kenneth

      Neubert, Michael

      Watson, John

      Newton, Tony

      Wells, John (Maidstone)

      Onslow, Cranley

      Wells, Bowen

      Page, Rt Hon Sir G. (Crosby)

      Wheeler, John

      Page, Richard (SW Herts)

      Whitney, Raymond

      Parkinson, Cecil

      Wickenden, Keith

      Parris, Matthew

      Wiggin, Jerry

      Patten, Christopher (Bath)

      Williams, D.(Montgomery)

      Pattie, Geoffrey

      Wolfson, Mark

      Pawsey, James

      Young, Sir George (Acton)

      Percival, Sir Ian

      Younger, Rt Hon George

      Pink, R. Bonner

      Prentice, Rt Hon Reg

      Tellers for the Noes:

      Price, Sir David (Eastleigh)

      Mr. Selwyn Gummer and Mr. Carol Mather.

      Proctor, K. Harvey

      Question accordingly negatived.
      Amendment made: No. 2, in page 2, leave out lines 30 to 43.—[Mr. Tebbit.]

    Schedule 1

      RELATED AND CONSEQUENTIAL AMENDMENTS
      Amendments made: No. 3, in page 5, line 9, leave out `(2),'.
      No. 4, in page 5, leave out lines 11 to 14 and insert—
      '(2) In section 7(1) and (2), immediately before the words "publicly-owned companies", wherever those words occur, there shall be inserted the word "any".'—[Mr. Tebbit.]

    Schedule 2

      ENACTMENTS REPEALED
      Amendment made: No. 5, in page 7, line 9, column 3, leave out lines 9 to 12 and insert—
      'In section 4, in subsection (1) the words "and performance" and subsections (2) to (6).
      In section 5,subsections (1) and (2) and, in subsection (7), the words "(1) or ".'—[Mr. Tebbit.]
      Bill to be read the Third time tomorrow.

  Ports (Financial Assistance) Bill
  Not amended (in the Standing Committee), considered.
  Ports (Financial Assistance) Bill
    Clause 1

      FINANCIAL ASSISTANCE TO PLA AND MDHC
      10.15 pm
      Mr. Albert Booth: I beg to move amendment No. 1, in page 1, line 13, at end insert—
      'Before giving financial assistance for any measure to reduce the number of persons employed in a port specified in this subsection in a way which would involve the National Dock Labour Board in additional expenditure, the Secretary of State shall consult the Board.'.
      The purpose of the amendment is to require the Secretary of State to consult the National Dock Labour Board before he uses the provisions in the Bill that enable him to reduce the number of persons employed in the two ports, Liverpool and London.
      My great difficulty is that I have a grievous sense of engaging in an attempt to lock the door after the horse has bolted. The principal effects of clause 1 have probably already taken effect, but I make no apology for moving the amendment because it raises an important issue about the work of the board. It also raises a serious point about how the board can carry on its duty, given the action that has already taken place to reduce the registered dock labour force in London and Liverpool in anticipation of the Bill's becoming an Act.
      For reasons that we understand but which I do not intend to debate tonight, the Secretary of State has enabled those two port authorities to bring about a substantial reduction in their registered dock labour forces by offering a direct payment of £5,500 per registered dock worker over and above the payment of £10,500 from the National Dock Labour Board. As a result, a considerable voluntary severance has been secured in each of the two ports—about 1,000 men in each. However, the way in which that has been done is causing, and will cause, major problems for the board and the industry. If for no other reason, I believe that the board should be consulted because of the special severance provisions in London and Liverpool greatly increasing the number of severances that will have to be met from the total scheme.
      A major part of the Government's case for introducing the Bill is that the number of people who could obtain severance in London and Liverpool are such that they are justified in making this special provision for those two ports. On Second Reading, the Secretary of State made it clear that he considered that the number who could obtain severance justified the introduction of this special severance arrangement. It was therefore inevitable that if this special offer was made the number who would quickly go out of the industry—and, therefore, the amount of severance pay that the board would have to give—would increase substantially. That will have a major effect on the board's finances for this year, and I believe for a number of years to come.
      In financing the severance scheme, the board can stand a small increase in severance, and a small drop in the number of registered dock workers who are used to calculate levy, if that takes place during a period in which
      976
      the wages of dock workers rise to such an extent that the amount of levy compensates the increased severance and the drop in numbers.
      When there is a major and sudden increase in the numbers to be severed, for whom the National Dock Labour Board will have to pay £10,500 per man, its finances cannot meet that if it coincides with a period when there is a large increase in the amount of severance that it must pay. From August 1980 it has had to meet an increase in its contribution from £9,000 to £10,500. Within a period of less than 12 months there has been a double increase in the demand on the NDLB's finances—first, the increase in the severance rate from £9,000 to £10,500, and, secondly, a massive increase in the numbers going out of the scheme as a result of the special supplement to severance brought about by the Bill.
      The problem cannot be solved, or even diminished, by the loans provision in the Bill. The NDLB has already resorted to loans to cover severance pay. The Under-Secretary of State for Employment probably has exact figures. To have to resort to additional loans to cover additional severance pay will mean that during coming years it will have additional capital to repay and additional interest payments to meet. It will have to do so on a basis of a smaller number of workers in the industry and therefore a smaller levy income.
      The second reason why it is essential that there should be a statutory right for the NDLB to be consulted before rundowns of this order are brought about in any port—we are currently discussing two ports with the greatest number affected—is that the time scale of the demand for severance pay is fundamentally changed by such a massive increase. It may reasonably have been expected that without such additional severance pay, or with a uniform increase in severance pay for ports, other ports would have achieved a considerable degree of severance. Certainly Bristol would have been seeking to achieve considerable severance pay to meet its problems, as would Manchester and a number of other ports.
      Mr. Michael Colvin: Does the right hon. Gentleman agree that for Bristol, which has about 250 severance dockers, the passage of the measure—which I fully support—will nevertheless virtually pull the carpet from under the feet of those at the NDLB trying to negotiate severance payments? It raises the question where the money will come from—if it is not to come from the NDLB—to pay the additional money that dockers in Bristol and other ports rightly expect to be paid before severance terms can be properly negotiated.
      Mr. Booth: The hon. Gentleman has described one of the problems that arise from this measure for the port of Bristol and a number of other ports. I do not understand why he said that he supports the measure. His special interest would be a good reason for him to oppose it.
      Mr. Arthur Palmer: It is acknowledged in Bristol that the Bill greatly aggravates the financial difficulties of Bristol. As my right hon. Friend has said, there is a contradiction in the hon. Member for Bristol, North-West (Mr. Colvin) agreeing with the Opposition about the issue but still supporting the Bill.
      Mr. Booth: I certainly agree with my hon. Friend that there is a strange difference in attitude about how the Bill

      977
      should be dealt with from two hon. Members who are agreed in their complaint against it in relation to a port that they know better than I do.
      Mr. Colvin: If additional money is available for severance payments, and to make severance payments acceptable to dockers, I should prefer to see such payments extended to the port of Bristol. That does not mean that I shall be dog-in-the-manger and will deny the ports of Liverpool and London, which are facing a crisis, the money which is essential for profitable operation.
      Mr. Booth: That is a strange form of reasoning, given the purpose of the amendment. The purpose of the amendment is simple. It is to give the National Dock Labour Board a right to be consulted. Had the National Dock Labour Board been consulted, it would have told the Minister that if he went ahead and carried out his intentions there would be financial consequences and problems for other ports in the National Dock Labour Board's voluntary severance scheme. I hope that it will persuade the Minister of the consequences which are now complained of in other ports.
      The time scale for repayment for the National Dock Labour Board will undoubtedly be made more difficult, partly because ports such as Bristol will find it difficult, if not impossible, to increase their levy payment at a time when, as a result of the measure, they are unlikely to achieve severances unless—this is a possibility that we must contemplate and the historical precedents suggest that—there is a general increase in National Dock Labour Board severance.
      The last occasion on which there was an attempt to increase severance pay in the port of London without increasing it in any other port was rapidly followed by a drying up of willingness to take severance in any other port, and an agreement had to be reached about the general rate of severance. However, I am trying to make the point that the time scale for the severance scheme and the payments has been affected and will continue to be affected by the Bill.
      There will be a delay in take-up of severance in all other ports, while a campaign is waged for equity of treatment between registered dock workers in the various ports. The case will be strong.
      I doubt whether any Minister will be able to rest on the defence that has been advanced up to now about the total numbers in Liverpool and London being high. Undoubtedly they were high, but not in relation to the total numbers employed in the port. They were lower in relation to the number of registered dock workers than in many ports which are also facing serious industrial trouble.
      Mr. Ted Leadbitter: The Secretary of State might consider telling the House what kind of representation he has had from other ports on this matter and the extent to which he is able to satisfy them. I understand the immediacy of the Bill; the whole House does. Swift action to solve a critical problem carries with it a number of consequences that are genuintly worrying to the industry. Perhaps in addition to the consultation——
      Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. The hon. Gentleman may have omitted to notice that the Bill deals with London and Merseyside.
      10.30 pm
      Mr. Leadbitter: With great respect, I have not omitted to notice that. I am emphasising, with great respect to you, Mr. Deputy Speaker, that the immediacy of this Bill to meet the problems carries with it consequences. Has the Secretary of State had representations made to him from the employers' association and what responses has he given to them? They have problems.
      Mr. Booth: I agree that the issues mentioned by my hon. Friend the Member for Hartlepool (Mr. Leadbitter) are of considerable importance to the argument which I was deploying, namely, the effect on the National Dock Labour Board of having the right of consultation, because undoubtedly it is in close touch with the employers' representatives, as it is with the union representatives, whose members are affected by the scheme. Sooner or later the issue of whether or not the there will be any means of achieving equity of treatment as between those taking severance in one port and another must be resolved.
      As soon as the Secretary of State for Transport announced that the special severance scheme was to be available in Liverpool and Merseyside, applications for severances in other ports dried up. They came to a dead stop. Some were withdrawn. It was clearly anticipated that better severance terms could be obtained in other ports. Until the question whether this applies only to London and Liverpool is resolved, other ports will have to attempt to trade, to attempt to pay levy and to carry a higher proportion of surplus registered dock workers on their labour force than London and Liverpool. They had a higher surplus to begin with, but now it will be even higher in percentage terms than that of London and Liverpool.
      The geographical distribution of severance has been affected considerably by the levy supplement, and it must have been affected in a way which could not have been foreseen by the National Dock Labour Board. There will be pressures to raise the cost of severance, because this has been done with no consultation with either the port employers or the unions. This is the first time that this has happened, and the consequences are most regrettable. Previously, when changes have taken place in the severance terms under the National Dock Labour Board voluntary severance scheme, there has been consultation with port employers and at least two of the unions which organise registered dock labour workers.
      The last argument I wish to deploy for contending that there must be consultation between the Secretary of State and the National Dock Labour Board before any further changes of this kind can take place is that this Bill was introduced at a time when we were awaiting the new dock labour scheme to replace the 1967 scheme. While it is awaited, it is of the utmost importance that any Government action which alters the size or composition of the dock labour force, or that part of the dock labour force for which the National Dock Labour Board is directly responsible, should follow only after consultation with the board.
      Section 4 of the Dock Work Regulation Act 1976 lays a clear statutory requirement upon the Secretary of State for Employment. It provides:
      "The Secretary of State shall as soon as maybe—(a) prepare in draft, with a view to its being brought into force area by area, a new Dock Labour Scheme to replace the 1967 Scheme".
      The duty is there; the scheme is awaited. The object of the scheme is set out clearly in section 5, which states:

      979
      "The Secretary of State shall frame the Scheme with a view—(a) to securing stability of employment for dock workers and the creation and maintenance of a permanent labour force of a size and composition appropriate for the efficient performance of dock work".
      There is no doubt about that. The words are clear.
      The Bill impinges on the clear duty of the Secretary of State to lay before the House a new scheme. It will have to be done in consultation with the National Dock Labour Board. The scheme is needed. The amendment is, therefore, reasonable and sensible. It is a way of testing the Government's willingness to co-operate with the NDLB in the serious problem which it faces.
      The Under-Secretary of State for Employment (Mr. David Waddington): The argument by the right hon. Member for Barrow-in-Furness (Mr. Booth) is fair. He says that consultation should take place because the industry, through its obligation to pay levies, will have to bear substantial extra costs as a result of extra severances in London and Liverpool.
      One must go back in history and acknowledge that the port employers took on an obligation when they entered the agreement that gave birth to the national voluntary severance scheme. By agreement they assumed a general obligation to pay severance to surplus labour. The extra payments in London and Liverpool have accelerated the process of severance in London and Liverpool. Those severances would have had to take place sooner or later, the ports would collapse. The industry would sooner or later have had to pay for that surplus labour.
      It is wrong to say that the arrangement for London and Liverpool has added to an existing obligation. In the long term, what has happened in London and Liverpool will assist the industry. In January this year the National Dock Labour Board made estimates of the number of redundancies required in the coming year. Those estimates will be fairly accurate, in spite of the scheme for increased payments in London and Liverpool. In January the board was budgeting for a substantial number of severances.
      The argument is that, as a result of the extra payments, severance in other ports has dried up and has added to the difficulties. I can understand hon. Members' anxieties. However, as the right hon. Gentleman acknowledged, the slowing down of applications for redundancy is the result of the hope that the Government will finance high severance payments at other ports. People who imagine that should remember what has been said time and time again by the Secretary of State—that simply will not happen. Anyone who thinks that severance payments such as have been financed by the Government in London and Liverpool are to be extended to other ports has, to use the vernacular, got another think coming to him. It will not happen.
      Mr. Booth: Will the hon. and learned Gentleman accept that that statement would have sounded more convincing if the Secretary of State had stood by his statement last year, that the port of London would be the only port to be assisted? Some of my hon. Friends and I told him that he would have another think coming and that he would be back this year with support for another port, and that is what has happened. It is hard for us, let alone dockers throughout the country who recognise an equity case, to accept the hon. and learned Gentleman's statement.
      Mr. Waddington: I am sure that the right hon. Gentleman is not asking the House to accept that London and Liverpool were not faced with a crisis. I am sure that he is not saying that emergency action did not have to be taken. I am sure that he is not seriously opposed to the Bill. He has had to bear heavy responsibilities in Government, and it is ridiculous to assume that the Government money that is involved in the extension of the scheme to London and Liverpool to deal with a crisis is available for the use of all the other ports, almost regardless of their financial situations.
      Mr. Palmer: Does the hon. and learned Gentleman appreciate that his remarks are extremely cynical? He is saying to Bristol ratepayers "We do not care what happens to you. You must find the money as a consequence of our actions at other ports."
      Mr. Waddington: I know of Bristol's problems. I know how grave they are. However, there are no other ports that have faced recently the crisis that has been faced at London and Liverpool. The Bill was introduced because of the crisis and the need to take emergency measures. The hon. Gentleman accuses me of cynicism. It is rather cynical for anyone to encourage dockers to believe that extra money will be available as a result of Government grants if they wait. That message is being put about by some, but it is not being heeded. Only last week there was evidence that severance is not drying up in other ports. There were no fewer than 52 severances in the port of Manchester last week. I do not accept that the special supplements in London and Liverpool have set a precedent that common justice demands that the Government should follow.
      The purpose of the amendment is consultation. The right hon. Gentleman was frank when he said that, in effect, he was trying to close the stable door after the horse had bolted. He freely acknowledged that the passing of the amendment would have no practical effect. He is asking for consultation in advance of an arrangement being arrived at between the Government and separate ports to make extra payments available. That arrangement has not only been entered into; it has been executed in full, with remarkable success.
      10.45 pm
      Sometimes the wrong impression is given when one talks about the National Dock Labour Board as though it dispenses its own money. It plays a most important role. Nobody would deny that. However, we are discussing severance payments, not administration. In that context, the board is merely acting as the agent of the industry. It collects the levy and doles out the industry's money again by way of severance payments. Only in the most artificial sense can one talk of the board's being involved in additional expenditure. Nevertheless, the amendment is worded as though the board were involved in additional expenditure.
      If the Bill interfered with the dock labour scheme and with dockers' rights, the most detailed consultations with the board would have been essential. Anyone would acknowledge that. However, we are not doing anything of the sort. Perhaps I should take this opportunity to comment on an inaccurate report that appeared in Lloyd's List on 11 May.
      In Committee, the hon. Member for Kingston upon Hull, East (Mr. Prescott) said:

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      "The dock workers' stewards in Liverpool are extremely concerned that the Bill is a forerunner of an intervention in the scheme itself … The stewards think that this might be the first step towards breaking up a scheme".—[Official Report, Standing Committee G, 30 April 1981; c. 40.]
      That refers to the 1967 scheme.
      Mr. John Prescott indicated assent.
      Mr. Waddington: I am grateful to the hon. Gentleman for acknowledging that that is the case. I am sure that he remembers the exchange clearly. I replied that there were no plans to break up the 1967 scheme. I did not say, as was reported in Lloyd's List, that the Government had no intention of introducing a new scheme. I deliberately put it that way because the Government have not yet come to a firm conclusion. It was right that the right hon. Member for Barrow-in-Furness (Mr. Booth) should mention this matter in the context of this debate. I am fairly new to this subject, but I know the great trouble that my predecessor went to. He went round the docks and spoke to all the interested parties to discover what common ground there was, and to see whether it would be possible to introduce a new scheme that would be acceptable to all interests.
      I need not tell the right hon. Gentleman how varied the interests are and how difficult it sometimes is to find the hoped-for common ground. The employers hoped for more flexibility in the recruiting of temporary labour. There were differences of opinion about the handling of disciplinary matters. I freely acknowledge that the Transport and General Workers Union made formal representations to the effect that the 1976 Act should be fully implemented there and then. It claimed that a new scheme would assist in protecting registered dock workers against the loss of work that they regarded as rightfully theirs.
      We have gone round the ports, but have detected no feeling among registered dock workers that a new scheme would have that effect. Many people feared that a new scheme might simply extend the scheme to marginal firms that would shortly transfer or discontinue their operations or, in one way or another, leave their labour force to swell the existing dock labour surplus. I shall merely leave it at that, because I must not go on for long in the context of this debate. I am sure that we will not be accused of not having tried to find a solution to the problem. However, we are not yet able to say that we have reached a firm conclusion on the matter.
      I know that there have been suggestions that some registered dock workers see the special payments as an attack on the dock labour scheme. I have no idea how that impression has come about. The special payments in those two ports do absolutely nothing to affect the position of a registered dock worker or to restrict his rights in any way. I understand that similar special payments outside the national voluntary severance scheme were made not so long ago, when Preston docks closed. So far as I know there was no suggestion that any attack was being launched on the scheme because special severance payments were being made.
      Mr. Prescott: It is a most sensitive area. About 600 dockers in my area of Hull would feel that they would like the same payments for being made redundant, although the docks there are not bankrupt, as are London and
      982
      Liverpool. The Minister should bear in mind that when the Tory Administration in 1972 brought forward a scheme based on the Jones-Aldington scheme, they made money available to every docker under the scheme, at their choice, and everyone received the same rate of pay. Here, we differentiate between two ports. That is what causes the dock workers' fears.
      Mr. Waddington: The hon. Gentleman raises two important points. Back in the time of Jones-Aldington, one was deliberately trying to restructure the situation by getting rid of the unattached register. There is not a great similarity between that situation and today's situation. The hon. Gentleman rightly mentions that some dock workers are fearful about the scheme. When I came new to the subject I found it strange that so many aspects of the matter were assumed to be related to the scheme when they formed no part of it at all.
      It was obvious from the exchange that the hon. Gentleman and I had in Committee that he was saying that, wrongly, some dockers' representatives assumed that anything that had a connection with the national voluntary severance scheme was an attack on the dock labour scheme. The two things are separate in any event. Sometimes that is the cause of the confusion.
      I can do no more than repeat what I said in Committee—that when they introduced the Bill the Government had not the slightest intention of impinging on dockers' rights in any way. I hope that the House will believe that the amendment has given us the opportunity of discussing some important matters. I am thankful that it has given me the opportunity of clearing up some misunderstandings.
      However, at the end of the day the Government had to act as they did. They had to act swiftly because it was an emergency. My right hon. Friend the Secretary of State touched on that matter. One would always desire as wide a process of consultation as possible, but sometimes events do not work out precisely as one would wish.
      Mr. Prescott: I hope that the Minister realises that when one is dealing with this scheme about London and Liverpool, although the extra amount may come from the Government and make up the difference, for example, between £10,000 and £15,000, the levies that the employers will pay for the extra amount of demand on the fund at £10,000 become particularly heavy. All ports have to pay the levy at a time of considerable difficulty. The Minister said that the Government always consult fully on matters that affect the scheme, but the employers were informed only an hour before the announcement was made. We were told only within a minute of the announcement. That is not full discussion on matters affecting the schemes and the levies.
      Mr. Waddington: I do not believe that I said that the employers were always consulted fully. I conceded that it was an emergency. In situations of less emergency there would have been greater consultation.
      The effect of the extra payments is an acceleration of severance, but at the end of the day it is not increasing the obligations of the other ports. As a result of the national voluntary severance scheme, into which the ports freely entered, the obligation to pay for surplus dockers in London and Liverpool was there already. One can argue

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      that it makes life more difficult if the other ports have to face the obligation more quickly, but that is precisely where the Government come in with the loans.
      Mr. Prescott: I well understand that the incremental amount between £10,000 and £15,000 is met by the Government, but the £10,000 payments come from the port employers via the levies. If an extra number of dockers has to be paid for as a result of the Government's policy for London and Liverpool, the levy for other ports is significant ly increased, and that is not helped by the Government's paying the £5,000. The Government loan money to the scheme and the employers have to pay the interest, which is reflected in the levy and at 10 per cent. it is far more than they can afford.
      Mr. Waddington: The hon. Gentleman again misunderstood what I said. The purpose of the clause is to give the Government power to lend more money to the National Dock Labour Board. One reason why we are taking the power is that we acknowledge that there will be a strain on the ports' finances immediately, because of the accelaration of redundancy in London and Liverpool. That is why we are making the money available.
      Amendment negatived.
      Mr. Nigel Spearing: I beg to move amendment. No. 2, in page 1, line 16, after 'Secretary of State', insert
      'shall require the Port of London Authority or Mersey Docks and Harbour Company to comply with the requirements in subsection (8) below and he'.
      Mr. Deputy Speaker (Mr. Ernest Armstrong): With this it will be convenient to take the following amendments:
      No. 3, in page 1, line 17, after 'such', insert 'other'.
      No. 4, in page 2, line 28, at end add—
      `(8) When any grant loan or guarantee is made by the Secretary of State to the Port of London Authority, or the Mersey Docks and Harbour Company, they shall make to him and shall publish a statement setting out—

      (a) the measures taken by them consequent on such grant loans or guarantees;

      (b) the uses made of those resources in carrying on their undertaking;

      (c) a description of the current activities, plans and present and future financial basis of each of their principal operations and duties;

      (d) the effects of, or place of, such plans in the economic development and commercial future of the whole of the Ports of London or Liverpool respectively.'.

      Mr. Spearing: Amendment No. 2 is a paving amendment relating to the powers of the Secretary of State or the conditions that he requires from either of the port authorities when making a loan, grant or guarantee. The heart of this group of amendments is amendment No. 4 which states:
      "(8) When any grant loan or guarantee is made by the Secretary of State to the Port of London Authority, or the Mersey Docks and Harbour Company, they shall make to him and shall publish a statement setting out—

      (a) the measures taken by them consequent on such grant loans or guarantees;

      (b) the uses made of those resources in carrying on their undertaking;

      (c) a description of the current activities, plans and present and future financial basis of each of their principal operations and duties;

      (d) the effects of, or place of, suich plans in the economic development and commercial future of the whole of the Ports of London or Liverpool respectively.".

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      In view of the fact that public money is being voted, I submit that that is a reasonable condition that the Secretary of State should place on either of those public bodies.
      11 pm
      In these or other circumstances, one might have expected an amendment of this nature to have been tabled by Conservative Members. I wonder whether the Under-Secretary will claim that these conditions are too stringent, I shall be interested to hear what he says. We are told that the Government are to intervene again in the autumn. Last year, we had a Port of London financial measure. Now we have this temporary measure. In Committee the Minister said that he would bring forward more legislation in the autumn for London and Liverpool. We are not surprised. If my amendment is not accepted, I hope that the Minister will work some such conditions into his consideration of the next measure.
      The underlying assumption of the Bill is that both these ports authorities can be made "profitable". I shall not dwell on the matter, because I put a number of points, perhaps repetitively and in different ways, during discussions on the PLA Bill on 16 April 1980, the Second Reading of this Bill on 25 March 1981, and in our debates upstairs in Standing Committee G on 30 April 1981. I now expect some answers. The Minister of State cannot claim that much of what I shall say is entirely unexpected. No doubt he will have received advice about what I have said. If he does not give us a proper reply, we shall draw our own conclusions.
      The Government expect that in future the Port of London will be almost entirely self-financing and run on the lines of any commercial enterprise. The Under-Secretary put it very clearly on 30 April, when he said:
      "With regard to London and Liverpool, it is the Government's minimum aim that they should produce a report in the autumn showing the policies that they intend to pursue to get them back to a position where they can continue trading without the need for such assistance from the taxpayer which this Bill facilitates. The essential condition for the survival of those ports is that they shall no longer need public subsidy or assistance but can continue trading in a free-standing way and service their debts in the usual commercial manner".—[Official Report, Standing Committee G, 30 April 1981; c. 36–7.]
      I do not say that that might not be a happy state of affairs. However, in making that statement, the Minister equates that with survival, and survival is usually associated with first aid and the sort of things that are being done to the Pope at the moment. He is certainly not standing on his own feet.
      That is the basic flaw in the Government's argument on the Bill and on ports in general. They expect not only that our ports should compete with one another, but that London should compete with ports on the Continent. I shall come to that and the Touche Ross report later. The Minister took the Touche Ross argument one stage further in Committee, and I want to come back to that.
      The conditions for which I am asking are an attempt to discern and get on record some of the principal operations of the port authorities. The Minister will know that the port authorities are not the same as the port. They are business concerns which are only part of each port. The Thames is the father of London. It may surprise the House to know that in my constituency at the Royal Docks, which, according to the popular view, are too far up the river, the Thames is wider and deeper at high tide than is the Panama Canal. It is a channel 47 ft. deep and 600 ft. wide. In the

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      City of London, at the upper pool, it is 34 ft. deep and 300 ft wide, which compares with the Suez Canal at 42 ft. and 197 ft.
      Visitors from the Continent see what is happening to the Thames and say that we must be mad. Think what the Dutch would be doing with such channels. The Thames is a natural asset. It is used not just by the PLA but by riverside manufacturers and a good many riverside installations. Of course many of them are going downstream. I do not question that.
      The Minister says that the Bill provides public money for "survival". He used that word in Committee. But the danger is that this might well be public money to encourage extinction. We do not know exactly how the money will be used. The Bill is drawn extraordinarily wide. Clause 1(1)(b) refers to assistance
      "for the carrying out of their undertakings while such measures are being taken."
      It is an open-ended subsidy, the sort of thing that Conservative Members and Ministers do not like. There is no provision in the Bill calling the PLA to account for what it is doing. Privately the Minister will impose all sorts of requirements. He may require it to surrender land to an urban development corporation, if that comes. But that will mean that he cuts down on the grant. He has made that clear. But that is not in public. The accountability will be to him privately from the PLA and its board. We shall not know what he is asking them to do as a condition of the grants. Unless my amendment, or something like it, is written in—I have used the words
      "they shall make to him and shall publish a statement"—
      the public who are providing the money will not know how it is being used.
      This is not a British Leyland. The port of London is a national asset, different from British Leyland. It is the biggest port in the country and the basis of a good deal of London's economic activity. The Minister says that the Bill is not a slipway to extinction, that it is first aid to enable the port to come out fighting under its own resources. If that is so, he should not be afraid of the amendment which in paragraph (a) requires publication of the details of the measures taken, and in paragraph (c) refers to a
      "description of current activities, plans and present and future financial basis of each of their principal operations and duties".
      That leads to the duties of the PLA, and they are widespread. One would not necessarily expect roads to make a profit. In many respects the PLA is a highway authority—a water highway authority.
      The Port of London Act 1968 lays down these duties and responsibilities in section 5. It states that the general duties and powers of the port authority are
      "to provide, maintain, operate and improve such port and harbour services and facilities in, or in the vicinity of, the Thames … as they consider necessary or desirable."
      There is the improvement and conservancy of the Thames. It is charged with the duties of the proper development and operation of the undertaking. It has wide functions. It is not a commercial operation, any more than the Secretary of State for Transport runs a commercial operation. The Port of London Authority runs the Thames and the Thames estuary, which is a major waterway. Indeed it is the major water highway of the country. From first principles that cannot be a commercial operation. It can be run as a
      986
      turnpike, as it is, because it has harbour dues. I am not saying that there are not commercial elements in it, but it is not and cannot be run as a commercial undertaking.
      The Minister has granted that the powers and responsibilities of the PLA are anomalous because, while it is the highway authority, it also operates service stations, docks, warehouses—or did—as a commercial operation in competition with those along the highway. The Minister has acknowledged that. He has acknowledged that in 1908 Parliament placed upon the Port of London Authority a number of what are now anomalous functions which have not been designed from scratch but have grown up through history. That is understandable. The Bill acknowledges that the money for a good many of the surplus registered dock workers is being funded through the PLA, although in many cases they have only recently been Port of London Authority employees.
      The Minister has acknowledged that the port can be looked at as a whole for severance pay, but he has not yet acknowledged that it should be looked at as a whole in terms of the needs of the country. When I asked him in Committee whether the corporate plan that he was tasking the PLA to produce would bear the totality of the port in mind, he virtually said "No". I asked him whether he would bear in mind that in asking the PLA to draw up a corporate plan it had anomalous functions. He said:
      "The Government have regard to the port's general economic condition"—
      of the port as a whole—
      "but we do not intend to collar the corporate plan by making other generalised assumptions about the port's economy. We believe that if the Port of London Authority could be restored to a sound financial condition it would ensure not only job security for its own employees, and some stability at last in the Port of London, but be the best contribution that the authority could make to the general economic wellbeing of the port of London." —[Official Report, Standing Committee G, 30 April 1981; c. 19.]
      That is a non sequitur, because, as the Minister knows, some of the port's commercial operations are incomplete and what he would regard as desirable competition with those on the river. A very small proportion of the traffic of the port of London goes into the docks. Some 20,000 ships a year come into the port of London up the river, but a tiny fraction of them go into the docks. A tiny fraction of their cargoes is handled by the PLA. The Minister knows that very well. Yet the PLA is in competition with people outside. The PLA is losing on some of those operations.
      The Port of London Authority publishes reports and accounts, and it published them for 1979. Unless we know where some of these grants and guarantees are to go, as we would under subsection (d) of my amendment, we cannot tell whether the Port of London Authority, in its strenous efforts to get into the black, will kill off, or take action that will be generally deleterious to the port as a whole. There is no guarantee about that. As he is anxious to get the PLA into the black, the Minister will chase it into that position through the accountants in any way he can, whether or not it has a beneficial effect on the economy of the port as a whole.
      11.15 pm
      I shall give some examples of where the matter is anomalous. In 1979, the operating revenue of the PLA on cargo handling was £47 million and its costs in respect of cargo handling were £46 million—more or less in balance. Where is the loss? That arises in respect of administrative overheads and the cost of restructuring—in other words,

      987
      severance—and totals £7 million. Interest charges amount to £9½ million. But in speech after speech Conservative Members tell us that cargo handling is unprofitable. That is not strictly correct.
      Another great source of revenue for the PLA is its commercial operations as a handler of cargo. That is an historic anomaly of the PLA. As a highway authority, its function is dock and conservancy charges on ships, for which there was an income of £12½ million. The annual accounts do not say how much of that resulted from the conservancy charge, which is a river due, and how much from the dock charge. But the conservancy charge went to the PLA as a harbour authority and the dock charge went to it as a dock company.
      The PLA has at least four different functions. It is a harbour authority, a dock company, a cargo handling company and a company engaged in warehousing and other auxiliary facilities. Each of those businesses is separate, although they operate in respect of the same ships.
      In addition, there are port rates on goods, because the value of the goods unloaded is subject to port dues. That amounts to £11 million. If added together, we get about £23 million consisting of dock and conservancy charges on ships and port rates on goods. That is a substantial sum.
      By no means does the PLA run only on cargo handling, and this is where the whole question of Continental competition comes into play. In Committee, the Minister replied to what we have come to know as the Touche Ross question. In 1974, the National Ports Council asked the firm of accountants Touche Ross to look into the whole question of Continental competition. It was said that if only British ports, and London and Liverpool in particular, were funded in a way that was comparable with the municipal-style undertakings of the Continent, a lot of our problems would be over. I am not necessarily saying that that is so, but that was the Touche Ross point.
      In Committee, the Minister said:
      "That report did not deal with cargo handling charges, which is the principal problem of the ports, but only with port and harbour dues. It points out that Continental ports subsidise port and harbour dues whereas we do not" —[Official Report, Standing Committee G; 30 April 1981; c. 36.]
      However, we would be subsidising the £23 million, which is not inconsiderable. That is a considerable proportion of the PLA's income. As the Minister knows, if Hamburg conditions operated here, those dues would be cut by 84 per cent. I am not suggesting that that is what London or the Government could do. They might be modest and go for Dunkirk conditions, which would mean a 30 per cent. cut, or about £7million. I bet that the PLA would love to cut its charges by £7 million and watch the result—especially for ships in the river.
      Hon. Members may ask how Continental ports can reduce their charges to that extent. Touche Ross makes it clear that, at 1974 prices, if Hamburg conditions were operated in London dredging costs would be reduced by £125,000, rates by £2·7 million—much increased now, due to the activities of the Secretary of State for the Environment—police costs by £6·2 million, and so on. There would be a reduction of all financial charges in the transfer to revenue of port modernisation grants of £29 million. Hamburg received that money, and Dunkirk has recently received a similar amount from the French Government. The French understand the national economy and the importance of ports.
      988
      The Minister's point that the Touche Ross report applies only to harbour dues and not to cargo handling is only partly correct. The PLA depends for a great deal of its revenue on those charges. It has to pay capital for that charge. The Hamburg condition allows that port to get around many of the modernisation charges that have to be paid.
      Dunkirk is a huge port. I do not know whether the Minister has seen it. Perhaps he should visit it one day. I see that he is nodding his head. I am glad that he has seen it. Dunkirk has expanded recently. The Minister may say that traffic does not come to Britain from Dunkirk because the figures from our censuses show that. That may be true now, but what if there is a Channel tunnel——
      Mr. Deputy Speaker: Order. Will the hon. Gentleman please relate his remarks on Dunkirk to the amendment?
      Mr. Spearing: I shall do so immediately, Mr. Deputy Speaker. I want to know that the money will enable the PLA to compete effectively with Dunkirk. If it does not, Dunkirk will become the port for Britain. If there is a railway to Dunkirk it might as well be a railway to Birmingham.
      In giving this money to the PLA, not only now but in the future, the Minister must account not only to his views of port economics but to the House and the British public for the way in which they are spent. He must take into account the effect that the plans and the money spent will have on the port as a whole. Unless he does that he will be open to the charge—he can try to rebut it if he wishes—that much of the money will not help the PLA to gain profitability but will simply assist adjustment when jobs are lost, when ships do not come. It will encourage and assist in the PLA's demise, reduction and, relative to its past, extinction.
      The Under-Secretary of State for Transport (Mr. Kenneth Clarke): I realise that the motive of the hon. Member for Newham, South (Mr. Spearing) in tabling this amendment was to pave the way for the general case that he has expounded before about the Port of London, to which I always listen with interest. I hope that he will forgive me if I begin by dealing with the amendment in a rather narrow and technical way. Taken literally at its face value, it would be impracticable. It requires the reports in the given form to be submitted when payments of grant, loan or guarantee are made by the Secretary of State. In day-to-day practice payments of grant are made only as and when they are required. That gives rise to fairly frequent payments.
      For example, the Mersey Docks and Harbour Company has received six grant payments since the Second Reading of the Bill and the Port of London Authority has received five. Further instalments will be made periodically. The effect of the amendment would be to make both authorities produce these rather copious statements on a large number of occasions as the year went on. It would be impracticable to produce them so rapidly. It would be a rather unwelcome diversion of management effort and time at what is a very critical period for the affairs of the two ports.
      I know that the hon. Gentleman has a cogent case to put—although I often do not agree with the details of it—about the present condition of the Port of London. Many of the matters raised have been debated in this year's Bill and in last year's Port of London Authority Bill. I am

      989
      grateful to the hon. Gentleman for quoting my reply to his points. He asked about the definition of profitability, and accurately quoted my reply to him in the Standing Committee. The Government are giving this aid only on the basis that both these businesses are to return to profitability. By "profitability" we mean that they should be able to provide for their own capital, to survive, and to trade competitively in the market without recourse to the kind of assistance from public funds that this Bill provides to both of them for the interim but emergency period.
      The hon. Gentleman also talked about the Touche Ross report, in Manchester, many years ago and the difference between harbour dues charged by British ports and Continental ports that were to some extent in competition with them. The point that I made in Committee was valid—that the comparison related only to harbour dues. what makes London and Liverpool to some extent uncompetitive is the problem of cargo handling charges. These particularly reflect their excessive manpower and the working practices that have held them back for so long. that is where the problem arises.
      The hon. Gentleman did not quote the second part of the answer that I always give him on what he calls the Touche Ross question. The figures that I quoted in the Standing Committee illustrate the very limited extent to which British ports compete with Continental ports. London and Liverpool are, by and large, in competition with other ports in this country and it is there that their problem arises. The hon. Gentleman would like a great deal more information about the progress of events in London, in particular, and Liverpool. He thought the Government were entitled to much more information about where the grants and loans were going before authorising this sort of money.
      The Government have emphasised all along that they are not prepared to hand over the sums provided for in the Bill or any substantial part of them without satisfying ourselves that worthwhile progress is being made towards our eventual objective. We will satisfy ourselves that the necessary manpower reductions and other changes are being carried out.
      It follows that a good deal of information about the port authorities' operations is being made to my Department. Procedures for regularly monitoring the position have been set up between the authorities, our officals and the consultants who are advising us. Much of the information that we are now obtaining as a matter of set procedure and routine from both authorities would fall within the categories of the amendment. It would be quite impracticable for this information to be published on the statutory basis proposed by the hon. Member. Quite a lot of it would be commercially confidential, and it would be in nobody's interests for the Government to publish, even to Parliament, financial information and policy decisions that would be of advantage to the competitors of the two ports.
      As I said in Committee, the Government will remain answerable to the House. We shall try to give the fullest information possible, consistent with the need to respect commercial confidentiality and consistent with the practicalities of the moment and the need not to divert management from its immediate efforts too much into the business of producing reports and taking part in public debate.
      990
      The hon. Member for Newham, South (Mr. Spearing) asked for statements on the effect of the port authority's plans on the economic development and commercial future of the other ports. The hon. Gentleman often draws the valid distinction between the operation of the Port of London Authority as a harbour authority with conservancy functions and as one of many cargo handling businesses within the geographical boundaries of the Thames.
      In relation to its harbour and conservancy functions the PLA is under strict statutory duties and has a continuing obligation to the range of port users. Generally, the harbour and conservancy functions are the profitable parts of the PLA's business. The 1979 and 1980 figures show that a surplus was produced by those activities.
      The cargo handling activities cause the difficulties. They are the source of the overmanning that led to the supplementary severance scheme. They are the real problem, which resulted in the Bill. We are bound to have some regard to the effect of the PLA's activities on other users and upon the economies of the ports. It is inevitable, when asking the PLA to produce a corporate plan and analysing its progress between now and producing the plan, that we concentrate primarily on the financial position of the PLA, particularly in relation to its cargo handling. The PLA itself has limited knowledge of the commercial and trading position of private operators on the river. There is also a limit to the Government's knowledge. We shall keep in mind the broad responsibilities of the PLA. For the purposes of giving aid we shall concentrate largely on the trading activities, and particularly on cargo handling.
      The hon. Gentleman said that there was a risk in giving grants and loans to the PLA for its cargo handling—that that might have an effect on its private competitors on the river. We must have regard to that. It reinforces the Government's aim that the PLA must return to profitability and viability. It cannot look forward to a permanent subsidised future for its cargo handling, which could only adversely affect other port businesses.
      The hon. Gentleman is not always consistent. He says that there is a danger of damaging private sector employers. On Second Reading he urged upon us the need to approve the PLA's taking over the business of Mercantile Lighterage, which seemed in danger of closing. If the PLA took over an unsuccessful lighterage business it would adversely affect other lighterage business. Fortunately it was a false alarm, and the company did not close. The awful consequences predicted by the hon. Gentleman did not come to pass.
      We are mindful of the interests of private business. For that reason it is right that the PLA should concentrate on a return to viability and profitability. The purpose of the Bill is to provide the essential aid for the remainder of the year, until we can get the two authorities to the state that by the autumn they produce their long-term plans. We shall judge whether there is a case for continued financial assistance and decide whether there is a prospect of bringing back one or both of the ports to viability.
      Amendment negatived.
      Bill reported, without amendment.
      Motion made, and Question proposed, That the Bill be now read the Third time. —[Mr. Kenneth Clarke.]
      11.35 pm
      Mr. Palmer: I represent a part of Bristol, and I cannot let the Bill have a Third Reading without saying a word of protest about its effect on the port of Bristol, which is in great financial difficulties.
      I am glad that my right hon. and hon. Friends divided the House against the Bill on Second Reading. It is a bad Bill in its overall effect, and, as the Under-Secretary of State for Employment, the hon. and learned Member for Clitheroe (Mr. Waddington), demonstrated, it is a cynical measure. It makes light of others' troubles. It helps London and Liverpool by aggravating the financial difficulties of other ports, especially the port of Bristol, because of its financial structure.
      I am not alone in expressing that view. The same view was expressed by the hon. Member for Bristol, West (Mr. Waldegrave) on Second Reading. He said that
      "experience shows that it is impossible to create a port differential for voluntary severance payments."
      The hon. Gentleman was referring to the opinion of the manager of the Port of Bristol Authority. He continued:
      "It is hardly surprising, as it is a national scheme, that the negotiations rapidly become national and that has happened."
      He later said:
      "There is no doubt that voluntary redundancies have completely dried up in Bristol, as in other docks around the country. I sympathise with the Secretary of State and the other Ministers who are facing the terrible problems in the docks nationally. However, the Bristol dock is caught."—[Official Report, 25 March 1981; Vol. 1, c. 1010.]
      Bristol never expected to have to meet severance payments on the scale that it will now have to meet them. The Bill, in effect, makes fish of one and fowl of another. In fairness to the ballot's representation of Bristol, although the hon. Member for Bristol, West spoke in the terms that I have quoted he cast his vote for the Bill on Second Reading. I checked the Division list and I found that he supported the Bill. Of course, time changes all things. However, I have had considerably longer experience of these matters in the House. That experience goes back about 16 or 17 years.
      In 1970 Conservative leaders came to Bristol and encouraged Bristol to go ahead with the Portbury scheme, in spite of the lukewarm attitude of Labour Ministers. The Conservatives tried to make it an issue in the 1970 general election. I do not think that the memory of such events has entirely faded in Bristol. It may be that that was demonstrated to some extent by the excellent results that were achieved by Labour candidates in the county council elections in Bristol when perhaps alone, apart from London and the South of England, we secured a great victory over the party badly represented in Bristol matters by the hon. Member for Bristol, West.
      11.39 pm
      Mr. Kevin McNamara: I apologise for intervening in the debate at this late stage, but a point that was made on Second Reading should be made most strongly. I regret that I was unable to attend the Committee as I was elsewhere on the business of the House.
      Under the Bill, members of my union will be given compensation for losing their jobs. It will be hard for members of my union to accept redundancy proposals in ports that are not as bankrupt as London and Liverpool. Those ports have been struggling harder than the British Transport Docks Board to try to ensure some profitability.
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      Members of my union who are made redundant will find it hard to receive less compensation under the limited terms of the Bill than has been offered to members of my union in Liverpool and London.
      The Bill deals with two special ports, but the same problems arise in other areas, and it is ridiculous that there should be a differential. It will be forced on port employers. As a union we cannot accept that fish should be made of the docker in Bristol, and fowl of the docker in Hull, London or Liverpool. It is wrong to expect us to do that. Equally, it is wrong to tell reasonably successful ports that they should expect people to accept unemployment and a lower level of compensation.
      It is time that the Government considered putting their proposals to other docks and to others employed under the dock labour scheme. If a reduction is wanted in lie numbers of those employed in the industry, compensation should be offered across the board. If that is not agreed to, one is entitled to ask whether a dock or the BTDB must become bankrupt before it can go to the Government for compensation for those who lose their jobs. If that is the Government's criterion, it is one of mayhem and foolishness.
      If the Government wish Ito tell members of my union that they will treat people with justice, they must offer the same compensation overall within the terms of the clock labour scheme. If they fail to do that, Liverpool and London will continue to be in a favourable position, and the other ports will not be prepared to accept that. In addition, Bristol or some other port may find itself in increasing difficulty and may say that what is sauce for the goose is sauce for the gander. They may say that if the Government wish to treat people that way everyone should be treated like that.
      It would be wrong to end the debate without expressing the indignation felt by dockers. They ask why dockers in port X should get one amount of compensation while dockers in port Y get another. They must all be treated in exactly the same way or the Government can expect nothing but hostility on this issue from people who work in the docks.
      11.45 pm
      Mr. Roger Moate: It would be wrong for the debate to conclude without putting on record one's congratulations to the Government for having had the courage to introduce such a scheme. I say courage because it is not an easy decision, nor is it a desirable principle to have introduced such a crisis measure.
      It is easy to do things that are self-evidently right. It is sometimes harder to take such steps, which are not immediately palatable either to Opposition Members or to Conservative Members. It is not a desirable principle to introduce such a discriminatory measure, but I believe that it was right to do so. The results that the scheme has produced entirely justify the difficult decisions taken by my right hon. and hon. Friends.
      If London and Liverpool were in a severe crisis, something would have to be done. My right hon. and hon. Friends were right to take such steps, which did not immediately bring forth a large amount of taxpayers' money to help all ports, whether or not they were in a crisis. Therefore, I believe that the action has been justified, although I readily concede that it is not an easy,

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      desirable or acceptable principle. Any of us who have been involved in ports elsewhere know that it has not been welcomed by others who are handling port operations.
      I wish to make one point in response to the points made by the hon. Member for Kingston upon Hull, Central (Mr. McNamara). He says that it must be a national scheme and that the same terms must be offered to all registered dock workers throughout the country. I understand that that is the general basis on which we have operated up to now. However, the fact remains that we now have only the original figure—£10,500—available to all registered dock workers. The temporary scheme has now come to an end.
      It is surely open to other managers of ports throughout the country to negotiate whatever terms can be negotiated in that port with their employees. If a port at the moment is operating profitably or has some resources, but has a heavy surplus of dock workers and is potentially running a heavy loss, it would be sheer common sense for the managers to sit round the table with the local unions to see whether they could come to terms.
      The sort of figures that we are talking about are perhaps an extra £2,000 or £3,000—perhaps not the £5,000 available. It makes sense for the port to pay out such a figure to the registered dock workers as a local top-up on the national scheme. It is a much better bargain for the port to do that now rather than to incur major losses ad infinitum.
      Mr. McNamara: If one accepts the hon. Gentleman's argument, where is the money coming from? Will there be extra charges on the port and the port dues, or will something come from the Government, or will there be a once-for-all payment, or what?
      Mr. Moate: I did not make myself clear. Essentially it is a local top-up made by the local port employer. If that port employer is paying up for hundreds of surplus dock workers in that port—paying out many thousands of pounds every year in wages—it is ordinary commercial sense that a deal should be made locally. The employers would make that top-up themselves. They are entitled to do so out of their resources and income locally. That is ordinary commercial common sense. They do not have to look to the Government to the national dock labour scheme, or to the taxpayer. They ought, as ordinary commercial managers, to sit round the table with the unions and work out a local deal. The hon. Gentleman may say that it should not or cannot be done, but I am saying that it is being done, and it is in the interests of everyone that it should continue.
      Mr. McNamara: Why, then, do Liverpool and London have to come to the Government for the money?
      Mr. Moate: We have come full circle. The hon. Gentleman has made the case for the Bill. The sheer scale of the crisis in Liverpool and London necessitates the steps that the Government have courageously taken, although they are in many ways unpalatable and unwelcome.
      Elsewhere, let us approach the matter a little more commercially and not always look to the taxpayer and the Government to come forward with a national solution to bail everyone out and to hand out money to many ports that do not need it.
      11.52 pm
      Mr. William Waldegrave: I shall make one point only, as I made my basic points on Second Reading.
      I shall not follow the uncharacteristically intemperate language of the hon. Member for Bristol, North-East (Mr. Palmer). He and I usually work together on these matters. I can only assume that he had a bad dinner and is less than comfortable. Bristol will not be greatly helped by a vote against desperately needed aid for Liverpool and London. We still have a case to make to the Government. The fact that we are having difficulty in persuading those whom we need to persuade should not make us squabble among ourselves.
      I have one request for the Minister. The criterion cannot be the level of crisis in the port. The crisis in Bristol is as severe as it can be. If the port were a separate trading operation it would be bankrupt. I understand the pressure of the sheer scale of the problems of London and Liverpool, and I respect the Government's difficulty in dealing with them.
      Faced with a bankrupt dock, we in Bristol may produce a package of measures that will inevitably involve considerable sacrifice by the citizens of Bristol. As part of it, we may run up against a final block. It will be only a relatively small part, because the sums are very large in Bristol. We may have to pay off part of the debt and perhaps sell part of the land. I pay tribute to the Labour leaders of the city council, who are ruling out no option. They are trying with the best advice that they can find from the city and elsewhere to consider all possible steps. If, finally, we cannot get the scale of redundancies that we need—and perhaps elsewhere, such as in the Medway ports, people are persuaded to behave in different ways—may we at least have a hearing from the Government? Otherwise we shall set out on the road to reconstruction with a serious handicap that may end in a disaster that will surprise Ministers by its scale. The cost of helping us will not be large to the Government, and it will be preferable to avoid the collapse if possible.
      11.54 pm
      Mr. Kenneth Clarke: Like my hon. Friend the Member for Bristol, West (Mr. Waldegrave), I was surprised by the language used by the hon. Member for Bristol, North-East (Mr. Palmer) in making representations about his port. I had understood that the representations from Bristol were unanimous, so I was amazed to hear an exercise in party political debate, trying to relate Bristol's problems to the council election results. The hon. Gentleman seems to arrive at the conclusion because of a difference over the votes on Second Reading. I fail to understand how the problems of Bristol would have been solved had we refused emergency aid to Liverpool and London, with the inevitable consequences for the ports and the economies of those regions. The vote that he cast seems pointless.
      Mr. Palmer: People speak strongly because they feel strongly.
      Mr. Clarke: Everyone in Bristol feels strongly because there is considerable difficulty with the port, but it is not a partisan matter. There is no doubt that the principal responsibility for Bristol remains with the local authority.
      I draw one distinction between Bristol on the one hand, and London and Liverpool, on the other. The main

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      problem in Bristol is not the need for severance or excess manpower, although I realise that it wishes to sever some of its redundant dock workers. The main problems in Bristol result from a major capital investment decision made in the early 1970s. At the time it was made plain, and accepted by both sides, that the implications of that investment were primarily those for the local authority and for the city of Bristol. I do not recall any strong Labour discouragement at the time for the investment, and I do not believe that the hon. Member for Bristol, North-East was in the forefront of those attacking the Conservative Party for making the investment in Bristol.
      All I am saying is that the basis on which investment was made, as was spelt out at the time, was that this was a local authority responsibility, and it remains so. That in itself is a distinction between Bristol and the other ports. There are clear and fundamental distinctions between London and Liverpool, on the one hand, and Bristol on the other, London and Liverpool on the one hand, and Hull on the other, and all the other ports in the country about which representations have been made at various stages of our debates. None of the other ports has problems of surplus manpower and a need for redundancy on anything like the scale of London and Liverpool. On Second Reading, we talked about two ports on the edge of closure. They would have ceased trading as cargo-handling businesses within a few days if we had not been empowered to give them aid. They needed to sever over 1,000 men in each case—about 25 per cent. of their work force—and they had no resources whatever to meet the severance payments that the men expected before they could dispose of the numbers that they desired.
      Many other ports have their difficulties, but there is a clear distinction in scale and nature between London and Liverpool, our biggest traditional ports, and the problems that are faced by other ports. As my hon. and learned Friend the Under-Secretary of State for Employment said, there can be no question of the special supplementary severance scheme being extended to other ports in the way that is being urged. The supplementary severance scheme is now over. There is a national rate of severance, and no doubt that will be adjusted over the years in accordance with usual practice.
      Mr. McNamara: How, then, can the hon. and learned Gentleman explain to a docker in Bristol or in Hull that if he gives way and accepts a redundancy payment it should be less than that which has been accepted by a docker in Liverpool or London?
      Mr. Clarke: The national voluntary severance scheme has not been affected by the Bill. Over a period of two months in the two biggest ports, at a time of acute crisis, a special supplement was made available for those who applied then, and it was financed by the Government. Now we have reverted to the national scheme. There is no imminent possibility of any equivalent situation arising in Hull. If the hon. Gentleman uses this opportunity to try to discourage people in Hull from taking voluntary severance which they might otherwise take, because he holds out some fanciful notion that if they argue long enough about it the Government will give a supplement to Hull, I can only say that he would be misleading his constituents and would do no good to the long-term future of Hull or the general state of affairs in the British Transport Docks Board.
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      The background to the situation was the special supplementary severance scheme. On Second Reading, we talked about a scheme which had just begun. We said that it was an essential precondition for progress that that scheme was a success and that we achieved the level of severance that we were aiming for, and that the Government, with the help of the Mersey Docks and Harbour Company and the Port of London Authority, had made a judgment about the amounts of money that should be necessary to achieve such large numbers of severances as rapidly as were required.
      I can give hon. Members the final figures for applications for severance under the special scheme, which has now run its full two months up to the end of April.
      In London 1,057 registered dock workers applied, including 837 employed by the PLA. In Liverpool the total was 1,313, including 841 employed by the Mersey Docks and Harbour Company. In both ports the total number of applications received exceeded the target set at the beginning of the scheme. Already about half of those who have applied have left the ports—572 in London and 610 in Liverpool—and more will go shortly. It may take a little time before the final instalment of volunteers can be released, because more volunteers in some particular skills have come forward than can be released straight away. The retraining of men who will take their jobs is needed. Some of the releases also depend on changes in working practices.
      Both port authorities are pursuing these points actively with a view to ensuring that all those who want to leave can do so at the earliest possible date. It is clear, therefore, that the supplementary severance scheme has been virtually a complete success and the first objective of the Bill has already been achieved. Throughout, the Government have emphasised that manpower reductions form only a part of the process of rationalisation and recovery. We always said that without those manpower reductions there was no prospect of going further, and that the ports were doomed. What we are therefore now awaiting is to have a look at the position of both ports in the light of the manpower reductions that have been achieved before we make available further instalments of financial aid under the Bill.
      The Government will therefore now be considering whether to continue providing assistance pending receipt of the full plans from the PLA and the Mersey Docks and Harbour Company in the summer. We hope in the summer to be able to make decisions on the longer term future of the two authorities and to be able to chart a clear and early return to profitability. Meanwhile, this Bill provides the means for the ports to continue in business until those long-term decisions can be taken. I therefore ask the House to give it a Third Reading.
      12.2 am
      Mr. Booth: When this Bill becomes an Act it will give a cloak of statutory respectability to what I believe is a last-minute, ad hoc, belated, unco-ordinated reaction on the part of the Government to crises in two of our great ports. It bears little relation to the long-term needs for financial restructuring of the ports, and no relationship to the need to deal with the ports' problems within an overall ports strategy.
      We, nevertheless, support the Bill at this stage because it is the best that the Government are prepared to give and

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      because we are convinced that they will have to come back to the House to face in a more realistic way the problems of British ports. They will do so shortly, and we hope that we shall then be able to debate this issue in a more realistic framework.
      Question put and agreed to.
      Bill read the Third time and passed.

  Petition

    British Nationality Bill
    12.3 am
    Mr. Ivor Stanbrook: With your permission, Mr. Deputy Speaker, and that of the House, I beg to ask leave to present a petition signed by 91 Britons resident in Belgium concerning their position under the British Nationality Bill. This is the third such petition that I have had the honour of presenting to the House. The others were from Britons resident in Venezuela and Sierra Leone.
    This petition draws the attention of the House to the provisions of the British Nationality Bill which completed its Committee stage this evening—to the great relief of most of us who were members of the Committee. It will deprive Britons born abroad of the right to transmit their nationality to their children born outside the United Kingdom. In some cases it will render the children stateless. The petition was organised by Mrs. Hilary Naqvi on behalf of the Association for the Rights of Britons Abroad. The petition reads:
    Wherefore your Petitioners pray that your Honourable House amend the British Nationality Bill so as to ensure that: at commencement, all citizens of the United Kingdom and Colonies with the right of abode in the United Kingdom, wherever born, shall be entitled to transmit their nationality to their children;
    Britons by descent shall be entitled to transmit their nationality to their children, which children shall in turn be permitted to transmit their nationality to their children if they have a continuing close connection with the United Kingdom, such connection being defined in accordance with certain specified criteria which shall not include employment;
    And your Petitioners, as in duty bound, will ever pray.
    I beg leave to present the petition.
    To lie upon the Table.

  Old Vic Theatre
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Berry.]
  12.5 am
  Mr. John Ryman: I want to raise the subject of the threatened closure of the Old Vic. At this late hour the Adjournment provides the first opportunity that has occurred under the rules of procedure for me to raise this important subject. As the House will have learnt with regret, this distinguished company is due to perform its last production at the end of this week. I know that all hon. Members will deeply regret that this company, which embodies the grandeur of classical Shakespearean drama, and has been the Mecca of the most distinguished Shakespearean actors in this country, is due to close so shortly.
  I shall not go into the facts of the case in great detail because they have been written about at considerable length in newspapers and in correspondence in The Times between the chairman of the Arts Council and Mr. West, of the Old Vic company. However, the Government have a responsibility in this matter. Even at this late stage, I ask the Government to intervene.
  The constitutional position is that the Minister for the Arts has no direct responsibility for the day-to-day decisions of the Arts Council, just as the Secretary of State for Energy has no direct responsibility for the day-to-day management decisions of the National Coal Board or the Secretary of State for Industry for the decisions of the British Steel Corporation. But as the Minister for the Arts he represents the public interest. If he is satisfied, as I apprehend he is, that the closure of this distinguished company is a great tragedy, and it requires only the sum of £400,000 to keep going, in the public interest it is his duty to intervene, even at this late stage.
  I shall not go into the merits of the reasons for its closure. Suffice it to say that the company has turned a substantial loss into a modest trading profit in the past financial year. The company maintains that the reason for its enforced liquidation is that the Arts Council has let it down badly, with inadequate notice in the payment of a grant of £300,000 in the latter half of last year.
  That is disputed by the Arts Council. No doubt there are arguments on each side. I am concerned not with those arguments but with the problem that has arisen as a result of the company's threatened closure. This distinguished theatre—which symbolises the grandeur of Shakespearean tradition in this country—will close because someone cannot produce the sum of £300,000. Because of that lack many distinguished actors will be out of work, the theatre will close, and the theatrical tradition and the British theatre public will suffer the loss of its most distinguished amenity, not only in London—as that sum was earmarked for touring purposes—but in the regions.
  It is scandalous that for the sum of £300,000—there has been no suggestion that the Government will intervene—this magnificent theatre is to close. The Government have so far shown not the slightest interest in saving the theatre, although there has been voluminous correspondence in The Times and voluminous publicity of the liquidation proceedings and the meetings of its creditors.
  I am indebted to the Minister for being present to reply to the debate. I want to give him the opportunity of
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  replying at length so that he can tell the House whether the Government recognise the crisis in the theatre and whether they are willing to intervene. So far, in the two years that they have been in office the Government have shown scant regard for the arts.
  I have never heard the Prime Minister, who speaks frequently on a vast variety of subjects, make a speech on theatre, music, paintings, old houses, furniture, books, or anything of that nature. I have never heard the right hon. Lady or any other Minister take an active interest in Shakespearean drama, classical music, or the like. The only Cabinet Minister with the slightest interest in culture—the right hon. Member for Chelmsford (Mr. St. John-Stevas)—was dismissed from the Government in the reshuffle earlier this year.
  The Government have been repeatedly asked to take steps to mitigate the harsher effects of VAT on theatre tickets. The Chancellor has received many representations on this issue in the last two years, which he knows is driving the live theatre into bankruptcy, yet the Government have not lifted a finger to help the theatre in any way whatever.
  I suspect that the truth—although the Government will not say so frankly and publicly—is that they are not very interested in the arts and are not prepared to exercise their patronage in the way that it should be exercised. I snail be interested to hear the Minister's comments on whether the Government will intervene in respect of the Old Vic company.
  I have received many letters from people who have visited the Old Vic for years, and many actors who have played there—most distinguished people—to the effect that the loss of this company and theatre is a national tragedy. The argument that there are other Shakespearean companies, that the National Theatre exists, and that the small profit does not justify the sums being put into the company by the Arts Council, is neither here nor there. The point is that the Minister can exercise enormous pressure on the council, not by telling it, day-to-day, what to do, but by influencing its funding, appointments, and the artistic standards that it should maintain.
  I suggest that the Arts Council wastes millions of pounds throughout the country year in, year out, on footling projects, yet in December 1980 it was unwilling to give the premier Shakespearean company in the world £300,000, which would save the company and the theatre.
  I want to give the Minister ample opportunity to reply to my points, because this is the first occasion on which this matter has been raised. I should like to ask him a number of direct questions.
  First, are the Government concerned about art at all? Are they prepared to intervene in the public interest—which means the interest of the theatre-going public—on behalf of the Old Vic theatre? Are they concerned about maintaining the tradition of classical Shakespearean drama in Britain? Are they interested in intervening, for the measly sum of £300,000, to save this theatre? That is the immediate question. The broader question is whether the Government, in the long term, are prepared to encourage the theatre and the arts by mitigating some of the harsh financial measures that have been introduced by the Chancellor of the Exchequer in successive Budgets.
  The Minister knows full well that the 15 per cent. VAT on theatre tickets is ruining the live theatre. He knows perfectly well that the theatre simply cannot survive if that level of taxation is maintained. He knows perfectly

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  well—at least, I hope that he does—that theatres cannot raise their commercial prices for tickets without killing the desire for them. Are the Government prepared to do something about the 15 per cent. VAT on tickets? They have had representations after representations from all the parties concerned—both management and players—in the live theatre.
  Is the Minister prepared to act urgently? Has he read the letter in The Times recently from Mr. Timothy West, the artistic director of the Old Vic company, giving the company's version of the events that lead to the threatened closure? Has he also read the letter from Mr. Kenneth Robinson, the chairman of the Arts Council? No doubt he has read the leaders in The Times, the Financial Times and The Daily Telegraph about the universal condemnation of the closure of the theatre and the disbandment of the company.
  The finest Shakesperean actors in Britain have played in that theatre. The finest Shakesperean acting company is about to be dispersed, unless the Government say that they are prepared to intervene. My plea to the Minister, at this late hour, in the middle of the night, when most people appear to have gone home, is to ask the Government to act. Otherwise, the suspicion may well arise that the Government do not care. For the reasons that I have already outlined I strongly suspect that the Government are not interested in promoting art in Britain, and are not interested in helping the live theatre. I hope that I am wrong. The only way in which the Minister can prove that I am wrong is to say that the Government will intervene and save that fine theatre and that excellent company.
  12.17 pm
  The Minister for the Arts (Mr. Paul Channon): I shall deal in a moment with the points raised by the hon. Member for Blyth (Mr. Ryman), especially those relating to the closure of the Old Vic, which everyone regrets. I deeply resent his remarks about the Government's so-called lack of interest in the arts. To hear him speak one would not have thought that there has been the most generous Arts Council grant ever this year—an increase from £70 million to £80 million. One would not have thought that VAT on theatre tickets existed under the Labour Government. I have never heard such arrant nonsense as when the hon. Member said that not a single member of the Government was interested in classical music or Shakesperean drama. He ruins and overstates his case by such ludicrous exaggeration, which I for one deeply resent, I suspect that others will also. I have not heard such utter rubbish in the House for a long time. It rather spoilt what I believe to be a serious issue, namely, the future of the Old Vic.
  Everyone, both inside and outside the House, is sad at the news of the closure of the Old Vic at the end of this week. I have spent many happy evenings there and I know full well the deep feeling that exists about its closure. I must make a distinction between the disbandment of the company and the closure of the theatre. The hon. Gentleman did not make that distinction. The two issues are linked, but they are not the same. I must make it absolutely clear that whatever the rights or wrongs of the
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  position, whoever might be responsible for it, and whether or not it was avoidable, the loss of such a major arts enterprise is bound to sadden any Minister for the Arts.
  The possible loss of one holding such a special place in the hearts of the British public as the Old Vic saddens me very much. It is also bound to lead me to reflect most seriously on what might be done to save it. I am sure that this is what hon. Members expect.
  I agree with the hon. Member. A great deal of most commendable work has been done by the Prospect Company over the years since it was formed in 1961, especially by Toby Robertson, who directed its fortunes for so long, and by Timothy West, who succeeded him. To its chairman, David Russell, and to the new administrative director, Mr. Andrew Leigh, must go credit—although many others are also involved—for the quite remarkable success of their subscription—selling scheme over the past two years, which, whatever happens, will be an example and a model from which many others will derive benefit and confidence. Equally impressive has been the sponsorship and fund-raising work of the Old Vic trust's appeal committee, under the chairmanship of my noble Friend Lord Jellicoe. The experience and record of all these will not be lost to us and to the British theatre, and I happily acknowledge our debt to them.
  But if the Prospect Company is to close, I hope, as do many others, that the Old Vic theatre, on which so much sentiment has centred in the past week or so, will not close for long. The Temperance Coffee Hall of Emma Cons and Lilian Baylis, the cradle of such great actors as Gielgud, Olivier, Richardson and Ashcroft, under the directorship of Tyrone Guthrie, and the birthplace of the National Theatre has a place in the history of the British theatre.
  The facts about this sad situation, in varying degrees of accuracy, have been recounted many times in the past few days. As the hon. Member has asked me I must say that, of course, I have read the letters to which he referred. In brief, the salient points are that the Prospect Theatre Company, trading under the name of the Old Vic Theatre Company, now has accumulated debts of nearly £400,000 and has no cash assets to pay its creditors, among them public utilities, a considerable number of small traders and the Inland Revenue. These debts had accumulated in the past three years, since the company had been working from its London base at the Old Vic theatre. Last year this accelerating trend was reversed and the company made a small profit, which enabled it to reduce the debt by £20,000.
  From the figures that I have seen, produced for Prospect's governing board, there can be little doubt that the deficit dates from the quite dramatic escalation of costs in 1977–78, the beginning of the London operation, quadrupling those of the previous year. Of course audiences also increased considerably but income did not. The reason for the financial reversal last year, bringing the account into balance, is attributable largely to the enormous success of the subscription ticket-selling scheme and of the sponsorship and fund-raising. But to have made any significant reduction in the debt would of course have required a much-multiplied yield from these schemes in future years and a continuation of the quite exceptional box-office appeal of presentations such as "Macbeth". I draw no conclusions, but the House will have to consider that.
  The London presentations were not—I emphasise "not", directly, at least—subsidised by the Arts Council.

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  That was not made clear by the hon. Member. The Arts Council, from the outset, not suddenly, made it abundantly clear that it could not support a third national company presenting classical drama in London. This was a question not just of the financial viability of such a venture but of the council's obligation and declared policy of increasing support for the arts outside London. I think that it is generally agreed in all quarters of the House that the trend for greater support outside London is welcomed. I am pressed on this by hon. Members in all quarters of the House all the time. I would have thought that the hon. Member, coming from the North-East, would understand that argument.
  Mr. Ryman: Will the Minister give way?
  Mr. Channon: I cannot give way. I have only a few minutes.
  Prospect understood and accepted this and persuaded the Arts Council that the company should be given the chance to show that it could make its London presentations pay without public subsidy.
  The Arts Council's relations with Prospect continued solely in respect of the touring activities, and these were funded generously by comparison with other touring companies. The proportion allowed to Prospect was larger than that of any other touring company.
  In so far as the same plays were often also in the London repertoire at Waterloo Road, the touring grant was, in practice, defraying some of the London costs. This is no doubt why the withdrawal of the touring grant has been quoted as responsible for the disbanding of the acting company and closure of the theatre. This, of course, is a decision for the Arts Council and not for me. I do not take decisions for it, nor have my predecessors attempted to do so. Recent events have shown how wise it is, when there is political involvement in the arts, to have a body such as the Arts Council to take decisions.
  I am full of admiration for the theatre's record, as I have already said, but the two operations are in this case quite separate. The touring grant purchased a particular product—classical plays in regional theatres. That was what the Arts Council was funding.
  I read in the press and have been told that there is a conflict between the company's claim that the Arts Council assured it in early December that it could expect at least £300,000 for touring in 1981–82, and the Arts Council's version that it told the company that £300,000 was the most that it could expect. I clearly cannot resolve this, but there is little doubt that the letter sent by the council in October warned the company not to bank on any grant at all until the Government's grant to the council had been announced. Furthermore, informal discussions had referred to the spiralling touring costs, and the 1979–80 touring programme grant was cut from £400,000 to £320,000 and from 16 weeks to 12 because the council was not satisfied with the artistic quality and the venues. In all fairness, the company would not claim that it had no inkling of Arts Council doubts about standards and value.
  This spring, the most that the company realistically expected—and this is in writing between it and the council—was to be enabled to pay off the more pressing of its creditors and wind itself up, so that the theatre would be left in good order for a successor company or companies to use. Otherwise a liquidator could have
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  distrained on the movables and equipment in the theatre and stripped it to satisfy creditors. But this would have required something approaching £200,000 in immediate cash and, indeed, the company asked the council to make a special grant for the purpose of paying these immediate debts. Let me stress that the money would not have avoided the company ceasing to trade—that was a certainty—and it would have left the larger loans outstanding. These would have taken many more years to write off.
  In the event, the council decided that it had no mandate to enter into a new contractual relationship with a defunct company for the sole purpose of discharging its debts. This would have been an improper use of the public funds that this House votes to the council. This is the reason—the true reason—why the company had to call in the liquidator. I want hon. Members to be quite clear about this. The Arts Council could not save the company, either with a touring grant or with a special debt-clearing grant. It is not the Arts Council's job to provide public money to save something that it has never supported in the first place. That surely must be common sense.
  Whether it was right or wrong in deciding not to support Prospect in London, it never supported it and always argued against it. It cannot be consistent with the Arts Council's charter to provide public money for something that it never supported. Such action cannot be the promotion of the arts as required by the Arts Council charter.
  What we must try to save is the theatre—the real Old Vic. It is early days to see quite clearly what the future holds, but the Arts Council is prepared to consider a grant from its housing the arts fund to preserve the fabric, to secure the building and its equipment. The situation will revert to that of 1976 when the National Theatre had moved out and before Prospect moved in. Then a new start can be made.
  North of the river, Lilian Baylis's other theatre, Sadler's Wells, operates as a management without a resident company. Perhaps in that way also lies the future of the Old Vic. We must put recriminations behind us and find a new solution. I find that people outside the House who are interested in the theatre, who are in the theatre or who are interested in Shakespearean drama or theatre history are interested in doing so. The recriminations have to be put behind us and the rights and wrongs of this decision. We must find a new solution. If the amount of public and private dedication and effort and experience that have been devoted to this much-loved theatre in the past few years can continue for the next few, I believe that the past glories can return. I fear that in the present situation there is little or nothing that can be done about that.
  I share with the hon. Gentleman the hope and belief that the Old Vic theatre must be saved. I shall willingly do what I can towards that cause. In spite of any harsh words that the hon. Gentleman and I may have exchanged this evening on other topics, we are at least united in that cause. If he can play his part towards that, he will have done the theatre a good service.
  Question put and agreed to.
  Adjourned accordingly at twenty-nine minutes to One o' clock.