Commons Sitting of 23 October 1981

Preamble
The House met at half-past Nine o'clock

Preamble
PRAYERS
[MR. SPEAKER in the Chair]

Orders of the Day

  Betting and Gaming Duties Bill [Lords]
  Order for Second Reading read.
  Motion made, and Question proposed, That the Bill be now read a Second time:—[Mr. Jopling.]
  9.34 am
  Mr. Peter ArcherIt would not be right to permit the Bill or the following five measures to be read a Second time without recognising the massive amount of work that they have entailed for the draftsmen, for the Law Commission and for the Joint Committee on Consolidation. It would be understandable if those three groups were to feel that we bring to nought their labours by refusing to accord them time for debate, that, if we debate their labours, we merely criticise their work, or that we simply ignore them when we allow their work to reach the Floor of the House and finally to come to fruition.

  Having said that, and having expressed the appreciation of the House, I do not propose to take up further time. I am sure that the favour that the three bodies would most desire from me is that I should not impede their progress. I have ventured to give repeated assurances to the Government that the Opposition are anxious to encourage law reform. We shall do nothing that is avoidable to impede it. If I say no more, I hope that the House will understand that that does not signify any disrespect for the work of the Law Commission, the Select Committee and the draftsmen. Indeed, it is the wish of the Opposition to expedite it. In any event, the House may take heart from the reflection that unless anything unexpected transpires what I have said on this Bill is intended to be applicable to the following five measures, and I do not propose to repeat it.
  The Parliamentary Secretary to the Treasury (Mr. Michael Jopling)The Parliamentary Secretary to the Treasury (Mr. Michael Jopling): I am extremely grateful to the right hon. and learned Member for Warley, West (Mr. Archer) for his remarks. We are all extremely grateful for the work of the Law Commission, which comes to the House on frequent occasions. I hope that the House will be able to give the Bill a Second Reading.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Goodlad.]
  Committee upon Monday next.

  Acquisition of Land [Lords]
  Read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Goodlad.]
  Committee upon Monday next.

  Compulsory Purchase (Vesting Declarations) Bill [Lords]
  Read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Goodlad.]
  Bill immediately considered in Committee; reported without amendment.
  Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
  Bill accordingly read the Third time and passed, without amendment.

  New Towns Bill [Lords]
  Order for Second Reading read.
  Motion made, and Question proposed, That the Bill be now read a Second time.—[Mr. Jopling.]
  9.42 am
  Mr. Christopher Murphy (Welwyn and Hatfield)I add my support to this consolidation Bill, as a Member of Parliament having the honour to represent two new towns—Welwyn Garden City and Hatfield. I believe that this New Towns Bill will prove helpful.
  A large number of measures relating to new towns have been enacted between 1959 and 1980. Consolidating such a plethora of legislation is a highly desirable development. All the legislative provisions relating to the Commission for the New Towns and the New Town Development Corporation will now be consolidated into one Act, which will be advantageous to the Government in fulfilling their intention to sell their assets and abolish those bodies.
  I therefore welcome the Bill, which will be of assistance to all those involved with new towns. I urge the Government to make use of this measure in speedily achieving their objectives.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Goodlad.]
  Committee upon Monday next.

  New Towns Bill [Lords]

    TRUSTEE SAVINGS BANKS BILL [Lords]
    Read a Second time.
    Bill committed to a Committee of the whole House.—[Mr. Goodlad.]
    Bill immediately considered in Committee; reported without amendment.
    Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
    Bill accordingly read the Third time, and passed, without amendment.

    BROADCASTING BILL [Lords]
    Read a Second time.
    Bill committed to a Committee of the whole House.—[Mr. Goodlad.]
    Bill immediately considered in Committee; reported without amendment.
    Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
    Bill accordingly read the Third time and passed without amendment.

    Information Technology
    9.43 am
    The Under-Secretary of State for Industry (Mr. John Wakeham)I beg to move,
    That this House takes note of European Community Document No. 9361/80, covering proposals for a Community Strategy on Information Technology, particularly in the fields of microelectronics and telecommunications, and of the supplementary memorandum dated 7th May 1981.
    I suppose that all good things come to an end, even for the House of Commons. Two and a half years of enforced silence have come to an end. Therefore, I have great pleasure, and I welcome the opportunity to do so, in asking the House to take note of European Community document No. 9361/80 on the subject of the information technology industry and the European Community.
    That document covers the Commission's report on a wide range of action which in its view is needed to implement a European Community strategy on information technology. It touches specifically on proposals for support for the Community's microelectronics industry and for harmonisation and creation of a Community-wide market in telecommunications.
    The initiative for an EEC information technology policy was first set out in Commissioner Davignon's paper, approved by the Dublin summit in November 1979, entitled "European Society faced with the challenge of new information technologies—a response"
    Viscount Davignon argued for and outlined a Community strategy aimed at securing a one-third share of a world market in 1990, estimated at $1,300 billion—a share which the Community was not seen as attaining through the pursuit of purely national policies. Those are the guts of the EEC proposal. In the first document, document 9361/80, the Commission sets out projects on information, education and training to which it is giving priority. We fully endorse the Commission's approach in this document and will actively pursue its practical implementation.
    The Government have of course recognised the importance of the rapidly growing information technology industry. This is true in the contexts of both the United Kingdom and Europe. In the United Kingdom the Government have taken initiatives to stimulate and develop the information technology industry. We have put on the statute book the British Telecommunications Act, which will enable a substantial liberalisation of the telecommunications monopoly and so have a determining influence on the provision of the modern telecommunications that are so important to the application of information technology.
    About £80 million of direct support has been earmarked over the next four years to help industrial research, development and manufacture of new products and processes in the IT field. This is in addition to the £110 million provided for the microprocessor applications project and the microelectronic industrial support programme.
    The Government have stated that, whenever it is appropriate, they will also use the power of purchasing by both Government and public bodies to foster indigenous technology such as Viewdata and Prestel and to help pull through innovative products.
    The year 1982 has been designated Information Technology Year, which will entail a major IT awareness

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    campaign, involving exhibitions—including a travelling exhibition of new office technology—seminars and special events, and which will be supported by appropriate studies, trials, demonstration projects and supporting literature. The highlight of the campaign will be a major conference on IT in December 1982.
    In education, my Department has the "Micros in Schools" scheme, which aims to put a microcomputer into every secondary school, including special schools, by the end of 1982. The scheme is being implemented in parallel with the Department of Education's microelectronics in education programme, and it is hoped that it will be extended in due course to primary schools.
    Mr. Torn EllisDoes the Department intend to extend the list of companies recommended to supply computers to schools? I have a company in my constituency that manufactures the machinery, but it, among others, is not on the list and so is at a considerable disadvantage.
    Mr. WakehamI shall consider the point. There is a restricted list, but I do not believe that the Government intend to stick to it for ever and a day. These matters are reviewed from time to time.
    Another important initiative the Department of Industry is involved in is the joint venture with the Manpower Services Commission to set up information technology centers in towns and cities based on the successful Nottingdale scheme in West London. The response to this initiative has been very encouraging. Initially, about 20 centers are due to be set up within the next few months, and we shall be announcing the locations within the next few weeks.
    The centers will offer training in technological skills to young unemployed people, and will also have the remit to develop and produce marketable products with a view to floating off small business enterprises. An example is Digitalent, which makes data loggers. This is a commercial operation, based on the Nottingdale center, which will be contributing 40 per cent. of its profits to the center. This is used to sustain another small business making aids for the disabled.
    In the European context, the Government welcome the Davignon initiative because of the importance of IT and because we consider this to be an area where action at the Community level could be beneficial. We endorse the recent House of Lords Select Committee assessment that the Commission may not have the resources to implement all of the plan. We have, therefore, urged the Commission to press ahead with practical proposals where results are likely to be achieved quickly. We must accept that in many areas, unless funds are allocated to the Commission's plans, these will be limited in effectiveness.
    Ideally, the Commission's recognition of the importance of IT should be reflected in the resources allocated to the initiative. Nevertheless it is unlikely that large scale funds will be available in the short term; the Commission will therefore have to concentrate on areas that do not involve substantial funding and on working through existing organisations for example, competition rules and standards.
    In the areas where the Commission has produced proposals, the Government have taken a positive attitude. We believe that microelectronics is a vital technology and one where European co-operation could be fruitful. The
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    proposals are in the document COM(80)421. In particular, the multi-company—the multinational approach proposed—could not be set up by any national Government acting alone. Although the proposed finance is relatively modest—52 million units of account or £8.5 million—and is unlikely to have a massive impact, nevertheless it is a useful first step and will be encouraging a form of industrial activity that has never before been undertaken in Europe on a significant scale.
    The Government believe that, within our overall policy of restraint of public expenditure and the United Kingdom contribution to the Community budget, the expenditure should be given priority in budget discussions and, subject to small drafting points, fully support the regulation. We have tried hard to obtain agreement among member States in Council discussions, but there are still outstanding difficulties. We shall continue to emphasise that it is now time for the talking to stop and for action to start. We hope that we shall reach agreement before the end of the year.
    To summarise, it is unrealistic to believe at present that it is practical for Europe to be entirely self-sufficient in strategic technologies. Nevertheless, it is a valid objective and the microelectronics regulation is a useful step towards that objective.
    On the telecommunications recommendations the Government intend to continue to endorse the principles of the Commission's proposals. The recommendations are in document COM(80)422. We should like to see the recommendations strengthened and have had some doubts about the practicability of some aspects. Nevertheless, the recommendations would be an important contribution in Europe to the Government's efforts to secure assurances on reciprocal market access following United Kingdom liberalisation. Substantial progress is being made during the present United Kingdom Presidency. Our aim in negotiation is to reach a practical way forward which can be got under way quickly.
    In conjunction with these recommendations, the Government are taking an initiative with British Telecom and United Kingdom suppliers to overcome some of the practical problems currently obstructing genuine European cross-border trade in telecommunications equipment. For example, it is currently extremely difficult for manufacturers in one member State to design equipment for the network of another member State. We are, therefore, encouraging British Telecom and British suppliers jointly to seek European-wide discussions—for example in the European Conference of Post and Telecommunications Administrations and, where appropriate, under Community auspices, to resolve some of the underlying technical and practical problems.
    9.59 am
    Mr. John GarrettWe welcome the end of the silence which the Minister has had to maintain for the past two and a half years. We hope that this does not mean an end to his affability.
    The documents before us are a useful, though to our minds largely irelevant, initiative in a crucial area of microtechnology. Microtechnology lies at the heart of the new industrial revolution. One of the problems for the Government is that it is more than a new industry. It is a new architecture for all industries. The development of information sciences has an all-pervasive effect throughout manufacturing and service industries and, indeed, government itself.

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    The document "First Proposals for Community Actions in the Field of Microelectronics" points out that today's pocket calculator consists of a single chip embodying a power comparable to that of the first computer and that tomorrow's submicron technology will offer up to 1 million bits of information on a single chip and will embody the equivalent of today's large computer or a large telephone exchange. The document points out that the integrated circuit has spread horizontally to an ever-widening range of markets and vertically to take over a great deal of design and production activity of former systems.
    This scale of change and development clearly poses significant problems for Britain and for other European countries. They are problems not only of technical and industrial development—how to obtain and hold a place in the production and use of new systems and devices and to hold a leading place in research and development—but also the social effects, such as the effect on employment, training, education and everyday life.
    The documents propose the basis of what one might call a tentative strategy for technical industrial development and specific programmes of research and development for a few key production processes. In that respect, they are welcome. But they say little that is specific about the social efects and how the EEC proposes to prepare for them. To that extent, the documents are an inadequate response. We need to be able to anticipate the coming revolution in employment, both in quantity and in type. I fear that very little is being done in Europe or by the British Government in that respect. Faced with this challenge, the EEC's response is to spend less than one-tenth of 1 per cent. of its agriculture budget in the area of microtechnology.
    It is clear that Europe lags two to four years behind the United States and Japan in the development and application of microtechnology. The Community depends on imports for 65 per cent. or more of its integrated circuits. Europe's world market share of the production of these devices is less than 10 per cent. and in many ways it may be too late for us to get into that field. European computer companies have only 16 per cent. of the world market, and European peripheral producers have less than 20 per cent. of the world market.
    Japan and the United States have systematic State-supported programmes, funded on a scale which EEC countries collectively and individually have not yet begun to match. The Japanese plan for the information society was begun in 1967 with 400 million units of account spent on computers and 200 mua on integrated circuits. American funding to Federal programmes alone runs to even greater orders of magnitude. Europe has been unable to match the continental scale of the American market or the single-minded planning and Government action of the Japanese.
    Yet Europe provides 20 per cent. to 30 per cent. of the world market for telecommunications equipment, data processing systems and integrated circuits—a home market base in aggregate which could be sufficient to promote manufacturing development on a continental scale and therefore a substantially increased world presence in this sphere.
    One problem which the proposals seek to redress is to find a way of mobilising the European industry on a
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    continental scale by harmonising standards, specifications and practices. A key proposal in this regard is to establish a more open Community market in several key areas of equipment and software and to increase intra-EEC co-operation.
    There is clearly much to be said for this general approach, whether Britain remains a member of the EEC or not. A market for standard equipment and software could promote continental scale markets and manufacturing, so long as all discriminatory practices are ended by mutual agreement.
    The first requirement is closer co-operation between the manufacturing nations in Europe—a difficult objective in itself, given differing national policies, for example, in respect of multinationals, particularly American companies. It seems doubtful to me whether the French, for example, would be willing to subsume their national interest and their clear national strategy to a wider EEC programme.
    Secondly, the specific spending initiative proposed by the EEC on research and development on microelectronic components is on far too small a scale to have any impact on the lead enjoyed by Japan and the United States. The proposed funding of some 50 mua over four years is less than half the annual spend by the United Kingdom alone, and that itself is derisory.
    Thirdly, the risk is that the proposed spending by the EEC will undermine existing sectoral schemes in the United Kingdom at present. The Government will be tempted—we have seen them do this before—to save public expenditure by using EEC funds for purposes to which they were already committed and which are already depleted of funds. Will the Minister give an undertaking that EEC funds will not be used in substitution for programmes already decided upon by his Department?
    The specific EEC proposal is for funding up to 50 per cent. of the cost of five high priority research and development programmes—four on the manufacturing and testing of microelectronic components and one on computer-aided design.
    The first question is, therefore, as to what extent EEC priorities are our priorities. Do the Government see direct optical stepping, electron beam direct writing, plasma etching and testing as high priorities for microelectronic component manufacture in this country? The electronic components EDC did not seem to think so, but pointed to other weaknesses in the components sphere in Britain, such as the lack of optical lithographic equipment and single crystal silicon in bulk. Taking what the EEC regards as important, therefore, there is no indication that our electronic components EDC thinks the same way.
    The fifth area—computer-aided design—is clearly as important to us as it is to our competitors, but is there a common approach to this? Are our priorities in developing computer-aided design the same as those of the EEC? The report of the House of Lords Select Committee on the European Community in May this year dealing with this subject criticised the Commission's proposal as focusing too narrowly on administration and overlooking the large field of application in the manufacturing and process industries. It may be that we should put more effort into computer-aided manufacture rather than attempting to compete with the Japanese and the American on some of these components.

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    If these areas of research and development are appropriate to our needs, how do the Government propose to proceed? Do we have manufacturers or research institutions capable of this work or already doing it? Or do we have to construct or encourage the formation of bodies which can undertake it?
    The Commission was concerned about this funding going to non-European multinational companies. The United Kingdom encourages the activities of multinationals here. Our partners in Europe have a far more suspicious attitude. Is there any way in which European-funded research in Britain can be prevented from still further strengthening American efforts in this sector? Will the funds be restricted to British companies and, if so, how? How can we stop the diffusion of technology promoted by the EEC finding its way into American companies?
    In evidence to the House of Lords Select Committee, the Under-Secretary of State for Industry, information technology division, said:
    "the United Kingdom certainly does not share the Commission's apparent obsession with the problems caused by the multi-nationals, and specifically by the United States multi-national corporations."
    On this issue, the EEC may well be right and the Department of Industry wrong. American multi-nationals set up here not to further British interests but to further American interests and to take advantage of our reputation and our skills in scientific and technical research, which they then deploy worldwide in pursuit of American interests.
    In the course of the Committee hearings in the other place, it was pointed out that the giant IBM, which carries out extensive research and development here, contributed only £8 million to our balance of payments, whereas one of our bigger software houses contributed no less than £4 million on a turnover, as Lord Kearton pointed out, which was peanuts compared with that of IBM.
    The report of the electronic components sector working party last December pointed out some of the disadvantages of inward investment by multinationals. The job creation potential is often low. It could threaten existing companies and could cause a contraction in the United Kingdom output of United Kingdom producers if, for example, foreign component manufacturers diversified into equipment making.
    The documents raise a wider question. Do we have a policy and programme in Britain which would enable us to move in concert with EEC initiatives? Is there a Government strategy for microelectronics? We know of individual ad hoc programmes, which were invented by the Labour Government—MISP and MAP, for example—but do we know where we are going in the long term in this sector? The under-secretary in charge of information technology in the Department of Industry said that his division was a focal point for the development of a "coherent national programme" and that it would be too much to call it a strategy. Later he referred to the way in which these things are done in France and said:
    "The French are doing it initially as their own tight national effort, fully integrated within France, fully working on French national interests. They operate from a position of strength because they know what they want to do and where they want to go. Therefore, they drive very tight and effective bargains, particularly through the Community".
    What an indictment of the British ability to serve our own national interests and drive tight bargains through the
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    Community. Is this proposal another example of a tight and effective bargain driven through the Community by the French? Are its priorities French priorities and not ours? I should have thought that that was very likely.
    Compared with the French, we in Britain simply produce ad hoc expedients in response to problems as they arise. The motive force for technical development in these fields in France is public investment at 10 times our level. In West Germany, the State spends £240 million a year on assistance to its computer and microelectronics industries. A paper by the electronics EDC earlier this year showed that not only did France, Germany, Japan and the United States of America spend a greater proportion of their gross national product on the electronics industry but that their spending had a greater sensitivity to industrial needs, and showed greater selectivity and higher levels of coordination. In other words, it was under better Government direction. Those Governments knew what they were doing. They had long-term national objectives in this field. We do not have them.
    Our electronics strategy is subservient to the crude dictates on monetarism, so that ICL was flogged off to the private sector and then had to be rescued with State funds. British Telecommunications' investment programme, because of the way we keep out our national accounts, is limited by the restriction on public sector borrowing, nothing whatever to do with national needs. It is simply a means of meeting a particular construct applied to our national accounting system. There could hardly be an economic strategy more inimical to systematic planning of high technology developments.
    The Labour Government's microelectronic industrial support programme had its budget cut from £70 million to £55 million in pursuit of the reduction in public expenditure at a time when the seed capital of State assistance was most needed.
    A survey for the Department of Industry last year showed that half of the British companies do not appreciate the importance of microelectronics and are not doing anything to adopt the new technology. The Minister might care to tell the House what is the present take-up rate on the microelectronics applications project, and what has become of the proposal to aim it at specific user industries. Will it be extended?
    One feature of the microelectronics industry that is apparent—unusually for a modern industry—is that small firms, producing or adapting hardware and software, can get into it. In Norwich, the city council recently had a competition that offered premises to new businesses. Several of the contestants were in the field of microcomputers and equipment and software. The limitation on their growth was not commercially viable ideas—there were plenty of those—but the cost of capital. The raising of interest rates has done more to hold back new firms in microtechnology than any other Government policy. Schemes of assistance are of no great value when a new business faces interest rates at their present level. Investment by user industries is held back by the high interest rates which, as we all know, are an integral feature of monetarism. All innovation is stifled by a Government who promote recession to control inflation.
    The absence of a long-term strategy and the use of short-term monetarist economics means that there is very little prospect of our being able to capitalise on the skills that we have to secure a place in microtechnology. We risk

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    becoming an offshore island of American technology, with our manufacturers being forced to rely on foreign suppliers.
    With regard to the telecommunications proposals in the third part of the EEC document, the Commission points out that telecommunications authorities in Europe purchase equipment to a value of 4,500 mua annually, with a growth rate of 5 or 6 per cent. a year, and that this market is now showing explosive growth with the convergence on telecommunications of word processing, new forms of data transmission, and telematic terminals. None of this equipment is compatible across Europe, so that once again we do not have a continental scale in manufacturing, whereas the Americans can operate on that scale.
    The new technology offers a unique opportunity for harmonisation in an area where the Japanese and the Americans do not yet have a stranglehold. The EEC wants to establish a Community-wide market. The first stage in this effort is to open up a general market for equipment.
    It is not unlikely that the United Kingdom will develop a much more open approach to liberalisation than other member countries. The tendency in other countries may well be to insist on a variety of technical barriers so that we open up our market to them while they are not so liberal towards us.
    Mr. John GoldingMy hon. Friend says that it may happen. Is he aware that it has already happened? The proposals in the Commission's report are far less generous, in terms of opening up, than those of British Telecommunications.
    Mr. GarrettYes, I was aware of that and was just about to come to it. My point is that with a free market Government such as we have at the moment, the whole attitude here is one of laissez-faire, as compared with Western Europe, and in a mass of areas public purchasing is much more likely to be opened up here than in the EEC.
    The telecommunications supply industry in Britain is not persuaded of the wisdom of the proposal to open up 10 per cent. of procurement by 1986, and clearly doubts whether it can take advantage of liberalisation on this scale and at this speed. The gains from such an arrangement if it took place too quickly, could go to Japanese and American companies, perhaps assembling their equipment in EEC member countries.
    At present, as my hon. Friend has said, the British Government are opening up markets for terminal apparatus to a far wider extent than is proposed by the European Commission, and that leaves us with no bargaining power. Continental suppliers will be presented with a market in the United Kingdom for types of terminal equipment which have already been liberalised in the United Kingdom but not in the rest of the EEC. United Kingdom suppliers will be able to attack a much more limited area of liberalised purchasing in the EEC.
    If our partners would go for liberalised purchasing on the scale proposed in Britain, British suppliers would then have the same markets as are to be opened up in Britain by the recent Government legislation here. But, of course they will not; they are not that silly. So we have already placed ourselves at a considerable disadvantage.
    British Telecommunications has sunk millions of pounds and years of effort into system X and various forms
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    of digital transmission and would hardly want to open up areas such as these for liberalisation. National purchasing of British equipment is required so that we can proceed with the modernisation of the network. We cannot stand this level of liberalisation until we are sufficiently strong in the new technologies. The timetable for 10 per cent. cross-frontier trading is too ambitious and not in our national interest.
    None of these proposals is of any great value to us in the absence of a national strategy for microtechnology and telematics. The policy of monetarism, plus a suicidal drive to cut public expenditure in areas crucial to national technological development, plus ad hoc responses to isolated developments, is just the formula that we need to make sure that we fail to take advantage of our opportunities and our skills. That is the way in which things are developing at the moment with the Government's refusal to set long-term objectives, supported by public expenditure, for the development of microtechnology and telecommunications.
    10.18 am
    Mr. John GoldingI should like to speak from two points of view. The first is as a constituency Member representing workers at Marconi and ICL. The second is as the sponsored Member and Assistant Secretary of the Post Office Engineering Union.
    I was very disappointed this week to be told by the Minister for Industry and Information Technology that no commitment can be given to my constituency that it is to have an information technology center. That is regrettable, first because of the rapid increase in unemployment in Newcastle-under-Lyme. Our unemployment rate has trebled since the general election of May 1979. There is also a considerable problem of youth unemployment, which did not previously exist in my constituency. There is a potential for young people and others to be employed in factories producing information technology equipment—if they have the skills and if there is sufficient investment. However, I regret that it looks as though Newcastle-under-Lyme will not benefit from the MSC programme.
    Over the last few months I have looked with horror at the position within ICL. I approached these documents against the background of the redundancies that have occurred and recurred in ICL in my constituency and in neighbouring constituencies. Given the growth in world trade and demand for information technology, the run down of employment and a dispersal of skill from ICL is totally unacceptable.
    One of the things that struck me most when I was at the Department of Employment was that we lost so much of our skill to service occupations, not because of pay, but because craftsmen and technicians in our manufacturing industry decided that greater security could be obtained in those services. People tended to leave manufacturing industry when others were being made redundant. I regret that that will also happen in the computer industry. Greater support should be given to ICL at this time.
    From the briefing notes that I received from ICL over the last week—other hon. Members will have received them—I noted that ICL is purchasing chips from Japan. Joint ventures with Japan are not my idea of the best means of developing our microelectronic industry.
    The EEC report is important and significant because its starting point, with which I agree, is that there is a need

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    to develop microtechnology and telecommunications systems. I do not think that any Labour Member would argue against the need for that. It is a prerequisite for our industrial development in the 1980s and beyond, and it is essential, if we are to survive as an industrial nation, that we keep abreast of information technology and ensure that it is applied here. That will require a massive extension and modernisation of telecommunications.
    It is important not only to apply technology but to develop and manufacture it. As my hon. Friend the Member for Norwich, South (Mr. Garrett) pointed out, not only Britain but Europe as a whole has been left behind by the Americans and Japanese. That is a sad reflection on European private enterprise. Europe produces $825 million worth of integrated circuits and uses $4,030 million worth. There is such a large gap between its consumption and its production. The United States and Japan produce much more than they use. Those countries have not developed solely as a result of private enterprise, although firms there have contributed more to their development than have some British and European companies to our development.
    United States defence expenditure has made a significant contribution to the United States industry, and the Japanese Government have made a massive financial contribution that has enabled their industry to leapfrog the Americans in some cases. There is a great need for public funds and for European companies to get together to develop the microelectronic industry in Europe.
    I was disappointed with the original proposal that the funding should come from national Governments, and I congratulate those who have persuaded the Community to set aside that condition. I agree with my hon. Friend the Member for Norwich, South that it is shameful that so little of the Community budget is spent on the development of modern industrial technology compared with the amount spent on the agriculture policy. I am not certain how useful these proposals will be, and I hope that the Minister will reassure me. I agree with my hon. Friend that the amount that the Commission has in mind is inadequate, but that is not my only concern.
    The Select Committee on the European Communities in the other place produced an enlightening report—the 27th report on new information technologies. The Committee examined the requirement that companies involved with the manufacture of infrastructure should persuade two or three users—component manufacturers—to collaborate in technological developments. Given that, and the Commission's agreement, the project would then be given 50 per cent. support from Community funds. I may be wrong, but I assume that that is still the condition for the allocation of funds. If so, I share the Committee's views that it
    "felt some doubt whether the structure of manufacturing industry in Europe would make it easy to establish many projects of this kind."
    Do the Government agree with the conditions laid down? That there should be three users comes to mind. Does that condition reduce the importance of the recommendation? Does the Minister share the doubts of the Select Committee on this point?
    The initiative is, however, to be welcomed. The attention of Governments will be focused on the need to do more in this area. However, I share the concern of my hon. Friend the Member for Norwich, South in one respect. It is important that we increase our development
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    of microtechnology. Without that we shall decline even further as an industrial nation, we shall not have the wealth that we need to make it possible for our people to have decent incomes, and we shall not be able to afford all the services that my hon. Friends and I believe that it is important to provide in education, health, local government and so on.
    The new technology can both create and destroy jobs and I fear that more attention is being paid to the development of the technology than to solving many of the problems that it will bring with it. I hope that when proposals are made to increase the penetration of microtechnology the Government and the Commission will also make proposals to deal with the problems that will arise.
    I welcome the work that has been done to try to ensure an integrated telecommunications system in Europe. Indeed, I should like to see an international integrated system. It does not make sense that it has been impossible to connect equipment from one country to that in another and it makes no sense for the future for us not to have integrated systems.
    However, I fiercely challenge two of the proposals. The first is the intention to open up 10 per cent. of the domestic market to tendering. I do not believe that the British telecommunications manufacturing industry is ready to face such competition. At present, BTel purchases about 99 per cent. of its equipment on the British market and the proposal could be detrimental to our telecommuncations manufacturing industry.
    The Government may argue that in the long run such a move would be beneficial to our industry, but people are not unemployed in the long run; they are unemployed in the short run. In the past 20 years there has been a tremendous rundown of jobs in the British telecommunications manufacturing industry. Plants on Merseyside and in the North-East could be threatened by the EEC proposals and it would be tragic if jobs were lost there.
    The Government must face up to the problem. It was harmful to ICL to lose its preferential public purchasing and it could be harmful to the British telecommunications industry to face competition through tenders.
    There will be occasions when BTel has to go abroad for its equipment. The British manufacturing industry has failed to develop as rapidly as it should over the years and BTel may have to buy equipment from Sweden or elsewhere, but I do not believe that it is desirable to open up our market on the proposed 10 per cent. basis.
    I also fiercely challenge the report's proposal that the market should be opened up through liberalisation. That section of the report jarred after I had read the argument that public support was needed to develop the microelectronics industry.
    Much public money has gone into the development of telecommunications. The report suggests that there should be public support for the development of microelectronics. It accepts that investment will come from public funds and the taxpayers' pocket, without any suggestion of an immediate or anything but an indirect long-term return. The principle is that State funds should be used to develop systems in the interests of the Community.
    Much more needs to be invested in telecommunications, but when we reach that part of the report the arguments change and suggest that private firms should be allowed to take services away from the State monopoly. That would allow private enterprise to come into an area

    527
    where State money has been used to build up services and facilities and cream off the most profitable parts of the business—not the network, but the peripheral terminal equipment.
    The report proposes that where private enterprise has not the wit or the funds to invest in microelectronics the State should assist them. Where, however, that has already happened—and the State has built up telecommunications in one country after another—the Community suggests not that the systems should be built up further, using funds generated by public investment, but that private investors should be allowed to cream off the profits. I find that repulsive. The report is also deficient when it deals with the privatisation principle, including the maintenance of equipment.
    I do not think that this report has faced up to the problems and difficulties of the maintenance of equipment that has been supplied by private companies, both indigenous and foreign. The report deals only with foreign companies. I think that the Commission will find very many more difficulties over maintenance than it has envisaged.
    The Minister will know that it is because of the problems of maintenance, and the abhorrence of creaming off, the realisation that a great deal of money is needed to develop the basic telecommunications system that will not be there if the most profitable services are hived off to private enterprise, that I, on behalf of the Post Office Engineering Union, opposed strongly the British Telecommunications Act. The proposals in the report relating to much of the peripheral equipment have all the defects of that Act. I welcome the general spirit of the report.
    In terms of microelectronics, however, I wonder whether the financial support is big enough. Are the physical arrangements for giving that support correct? In relation to British Telecommunications, I welcome the harmonisation that could take place as a result of the report, but I oppose the opening up of British Telecommunications purchases to foreign companies, and I oppose strongly, the privatisation proposals included in the report.
    10.41 am
    Mr. WakehamBoth the hon. Member for Norwich, South (Mr. Garrett) and the hon. Member for Newcastle-under-Lyme (Mr. Golding) have said that they welcome the report which is before the House today. I am probably not alone in thinking that during their very interesting remarks they could have fooled me on that once or twice. Nevertheless, the burden of many of their complaints was that the report and the proposals did not go far enough.
    Both hon. Gentlemen made important and interesting speeches and raised matters that went rather wider than the particular matters before the house. I make no complaint about that. However, if I do not give them an adequate reply to all the points that they have raised—both of them have had longer experience of dealing with these matters than I have—I shall read their speeches very carefully and cover later any points I have missed.
    I am glad both hon. Gentlemen welcome the report. Both spoke of inadequate funding. The amount proposed is 52 million European units of account, which is £8·5 million per annum, rather than a total of £8·5 million; so
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    it is £32 million over four years. No doubt the burden of the hon. Gentlemen's remarks would be the same whether it was one or the other, but it is rather more, and it may have been my fault in misleading them, in which case I apologise.
    The hon. Member for Norwich, South spoke of the massive problem of dealing with comparative rates of investment and research, as compared with those of the United States and Japan. British and European industries are presented with massive problems in this respect but I deny that we have no policy at all on this matter. The Government have taken initiatives in MAP and MISP to try to deal with these problems in the light of both the need and the conflicting claims on our resources.
    The important point to make in that connection is that in the United States and Japan it is private enterprise and private investment that are involved whose expenditure is many times greater than Government support. The British Government are trying to act as a catalyst in many areas, but in the end we take the view that it is mainly the companies that will have to take the decisive initiatives.
    I was asked whether the funding under the EEC proposal would be a substitute for the present United Kingdom funding. The answer to that is "No." This will be additional funding and will not normally be available for the same projects as the United Kingdom funding. It is possible that European funding and United Kingdom funding may be available for different parts of an overall project, but the intention is that this should be additional funding rather than a substitution.
    We believe that this regulation would not particularly benefit French industry. We think that it is more likely to benefit ours. It has been agreed that all member States regard multinational companies operating in Europe and doing research and development as doing important things for British industry, and they are making in many areas a valuable contribution to employment and the research expertise available in Britain.
    We agree with the priorities in the report, although it does not cover everything. In our judgment, it is not inconsistent with the Electronics Economic Development Council's recent report.
    The United Kingdom telecommunications liberalisation is a much more gradual process than either hon. Gentleman has made out. We are fully conscious of the need to allow industry to adjust, and we have allowed a three-year programme for liberalisation.
    The scope of the recommendations will be narrow in the short term, but in the long term the recommendations will cover a wider range of equipment and all new equipment called "telematic" in the recommendations.
    Matters connected with ICL were raised. Understandably, they are very important. Having given ICL substantial support in terms of guarantees, the Government take a very encouraged view of the way in which the new management has set about dealing with the problems. We welcome the arrangements and agreements which seem to be emerging, particularly in the use of Japanese technology, which will enable ICL to develop a wider range of products. However, we consider that most of the questions concerning the company in this area are primarily for the management.
    A point was raised about the House of Lords Select Committee. We support Community action where we consider that joint participation is appropriate. We have our national programme, but there are areas where we

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    believe that the Community can bring together industry and potential consumers across the member States within the Community. This, we think, will add to the opportunities for our telecommunications industry and our information technology.
    Mr. GoldingWhy should it be a condition? I understand why we should wish to encourage co-operation. Why should it be a condition of getting funds that this should be across borders? It does not apply to farmers, does it?
    Mr. WakehamIt certainly does not apply to farmers. It is clearly unlikely that a scheme could be devised applying to farmers across borders in the same way.
    The point I see in this proposal is that the EEC recognises that if we are to be able to compete successfully with Japan and with the United States, it is necessary for those involved in information technology industries to look at a European market in order to develop across Europe and to be successful in that area. We believe this gives us a better opportunity of getting a major share of this massive world market.
    The EEC proposal is aimed at encouraging that development by cross-border support. The EEC recognises that this is an area where, with limited funding, it can make a contribution. This does not mean that there are not other areas that do not involve cross-border activity which are not extremely important. I think, however, that with a limited fund the EEC would be right to concentrate on particular areas where it identifies particular problems.
    Question put and agreed to.
    Resolved,
    That this House takes note of European Community Document No. 9361/80, covering proposals for a Community Strategy on Information Technology, particularly in the fields of microelectronics and telecommunications, and of the supplementary memorandum dated 7th May 1981.

  Royal Northern Hospital
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Gummer.]
  10.53 am
  Mr. Michael O'HalloranI should like first to congratulate the hon. Member for Hampstead (Mr. Finsberg) on his new appointment. I am glad to have the opportunity to debate the proposal to close the accident and emergency department of the Royal Northern hospital, Islington, and to transfer its facilities to the Whittington hospital. Over 10 years ago, I had a similar Adjournment debate concerning the future of the whole Royal Northern hospital. The then Under-Secretary of State for Health and Social Security, the right hon. Member for Barkston Ash (Mr. Alison), stated in his reply:
  "The Royal Northern hospital has a promising future".—[Official Report, 23 February 1971; Vol. 812, c. 538.]
  That was 10 years ago.
  But times have changed. There are proposals once again concerning the hospital but this time the proposals are to close the accident and emergency department—a step that would, if it took place, lead to the eventual closure of the Royal Northern hospital as a general hospital.
  I must mention briefly that the Royal Northern hospital celebrates its 125th birthday this year. It was founded in 1856 and dealt with 11,718 patients in the first six months. By 1900, it had been extended to such an extent that it was granted a charter of incorporation by the Queen in Council, and the development of the Royal Northern group of hospitals started. This led to the incorporation of the Royal chest hospital in City Road, the Reckitt convalescent home in Clacton, the home of recovery in Earlsmead, Liverpool Road hospital in Islington, now closed, and Hanley Road hospital. In fact, this Royal Northern group formed the basis for the later north-west metropolitan region and pioneered work on self-contained associations, grouping hospitals long before the idea emanated from the Ministry of Health.
  In its first report the north-west metropolitan region health board stated:
  "The committee of management of the Royal Northern hospitals must be congratulated for their wisdom and foresight in anticipating the organisation of the present hospital by many years."
  In the 125 years of its existence, the Royal Northern hospital has served the people of Islington proudly and indeed still does so today. No words of mine can adequately express how indebted we all are to the medical staff, to the nurses and to the ancillary staff for their tremendous work. Islington is particularly proud of its casualty unit. Its war memorial to the dead of both world wars was erected there to mark the special role that the hospital played at that time.
  When plans for the closure of the accident and emergency department were first put forward, there was outrage among the people of Islington. A petition signed by over 60,000 people was collected within a few weeks and was presented to the Minister for Health, the hon. Member for Reading, South (Dr. Vaughan), when he visited the hospital in 1980. There have been numerous meetings since that time but, with the area health authority and the regional health authority both in agreement regarding the closure, I believe that they, in their wisdom, have not considered the full facts.

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  The Minister stated in May 1980 that only some new factors would persuade him to veto the closure. There are new facts that I wish him to consider. With hindsight, it might be regarded as regrettable that the Department of Health and Social Security authorised and funded the building of four new accident and emergency departments in the Camden and Islington area—the Royal Northern, University College, the Royal Free and the Whittington hospitals.
  It might also be regarded as regrettable that the Department had a change of heart regarding the overall development of the Royal Northern hospital site. This ideal site of some eight acres was originally planned to have a 650-bed general hospital including an obstetric unit. Site clearance was undertaken with the compulsory purchase and demolition of many dwellings.
  The loss of the accident emergency department, the casualty department, signals a fundamental change in the nature of a hospital. The Royal Northern medical staff have been very much opposed to the closure of the casualty department. They have been convinced that the best interests of the patients would be served by maintaining the full range of emergency and other services on the Royal Northern hospital's site. Nevertheless, with reluctance and against their deepest feelings they have agreed that the Whittington and Royal Northern hospitals should form a single district general hospital and that the casualty department of the Royal Northern hospital will eventually close.
  Timing is all-important. The Whittington hospital is on three separate sites, the largest being the central site, the St. Mary's wing. The three sites are separated by main roads; and patient communication between them is by ambulance only with all the potential for delays and complexities that this may entail. Within the next year, the 100-bed City of London maternity hospital about half a mile away will be closed and its work transferred to the St. Mary's wing site. In addition, preparations will be put in hand for closing and demolishing a small number of wards in St. Mary's wing in preparation for the building of a 250-bed new surgical ward block.
  It cannot, therefore, be the right time for the casualty department of the Royal Northern hospital to be closed, thus throwing on to St. Mary's wing in this critical year an additional 34,000 casualty attendances—figures for the casualty department attendances, which have varied little during the past five years, show that in 1980 there were 33,875, of which 21,368 were new cases—and requiring a major reorganisation of all the junior medical staff appointments in both hospitals. It would also prejudice the continued viability of the Royal Northern hospital as a coherent and highly efficient unit that has many of the advantages and very few of the disadvantages of the small acute general hospital.
  In the spring of 1982, a new district health authority will be given the task of managing all the complex problems of Islington's health services. Many of those who have advised me are convinced that the closure of the Royal Northern hospital casualty department at this time will result in a clinical load on St. Mary's wing of the Whittington hospital that will be more than it can bear. It might be regarded as unfair to burden the new district health authority with a decision that is likely to result in a complex and potentially dangerous situation.
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  The medical staff of the two hospitals laid down a number of requirements before they would agree to a decision to close the Royal Northern hospital casualty department. Those requirements were that they should be able to examine all the proposals made by the district management team for the reception of the increased casualty load in St. Mary's wing of the Whittington hospital, for the redistribution of emergency admissions to the two hospitals, for the training of junior staff, for the adequate and safe levels of medical and nursing staffing in the reorganised facilities, and for the ability of the ambulance services and other lines of communication to cope with the altered situation.
  Those proposals have not yet been put to the medical staff, so that most important element in the decision-making process has not been completed. The closure of the Royal Northern hospital casualty department will increase the total number of attendances at the Whittington casualty department by approximately 34,000. That will bring the total number of attendances there up to more than 86,000 a year and will, I think, make Whittington attendances the largest in the London area. When it is realised that the flexibility of the site depends on ambulance transport across two main roads and that it is already under pressure from the existing casualty load, it will, I hope, be appreciated that the decision to close the casualty department at the Royal Northern hospital is premature.
  The Islington community health council has uncovered new factors, which have been submitted to the Minister as counter-proposals to the plans approved by the area health authority and the regional health authority. Extensive research was carried out, including the interviewing of patients for seven 24-hour days at each of the hospital's casualty departments—a total of 825 patients. Admissions over a month were analysed and investigations made into whether the Whittington hospital could cope with both its own and the Royal Northern hospital's casualties and admissions from casualty. It was found that not only were there not enough beds near the accident unit at the Whittington hospital and that existing beds were full, but also that admission procedures and information systems were already chaotic. Neither the area health authority nor the regional health authority has explained how it will deal with those problems after the closure of the casualty department at the Royal Northern hospital, although they accept the criticisms of the shortcomings at the Whittington hospital.
  I recognise the anomaly of needing to support counter-proposals to a proposal—that of the area health authority and of the regional health authority—which would, if implemented, subvert the very objectives it sets out to achieve. The area health authority has said that the purpose of its proposal to close the Royal Northern casualty department is to create a better accident or casualty service and to rationalise it. Islington's community health council's investigations and conclusions are that inpatient services would be less efficient and more costly if the area health authority's proposals were implemented and in the counter-proposals it has shown alternatives that could provide a more efficient inpatient service.
  The real challenge to the area health authority's proposals to close the casualty units at the Royal Northern hospital is to produce two complementary hospitals and, in them, the body of one district general hospital. That cannot be tackled through amputation, and it is therefore proposed that the area health authority should implement

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  the recommendations contained in Islington community health council's proposals for immediate improvement in the accident emergency unit and inpatient services at the Whittington hospital. Secondly it is proposed that the district management team and area health authority should review their systems for the collection and transmission of information.
  Thirdly, it is proposed that a full statistical and policy study of how our services—inpatient and accident/emergency—are being used should be carried out, together with an assessment of why patients use the services that they do. Fourthly, it is proposed that, on the basis of such comprehensive and detailed information, a plan for the best organisation of hospital services during the development of the Whittington site should be worked out, consistent with the long-term strategy of avoiding duplication of services and creating a two-site district general hospital.
  In the absence of such remedial measures, information or plan, the area health authority's proposal to close the Royal Northern's casualty department is, at the very least, premature and destructive of very positive aspects of existing services. Indeed, the proposal jeopardises the level and quantity of our future services.
  In conclusion, it will be recalled that the Minister agreed to meet those hon. Members concerned before reaching any decision on the proposals to close the Royal Northern's casualty department. Such a meeting has not taken place, but I hope that I have said enough to convince the Minister that no case whatsoever can be made for the immediate closure of the casualty department and that a case could not be made until the Whittington hospital was in a position to cope with the additional heavy load that the closure would impose on its accident/emergency department and inpatient services.
  The Minister's colleague has said that he will listen carefully to all the proposals; until the new Whittington hospital is built, no part of the Royal Northern hospital should be closed.
  11.6 am
  The Under-Secretary of State for Health and Social SecurityI know that the hon. Member for Islington, North (Mr. O'Halloran) has taken a long and continuing interest in the proposed closure of the accident and emergency department of the Royal Northern hospital and has been a very strong advocate of the health needs of his constituents, as indeed have the other hon. Members with local constituencies, including my hon. Friend the Minister responsible for the disabled, my hon. Friend the Member for Hornsey (Mr. Rossi). This is a complex issue and I want to put this proposal into the context of the local health needs of the district.
  I know the area well, as I live locally. In my time, I have visited both hospitals as a patient. I have read the continuing saga of the proposed changes in our excellent local newpaper, the Hampstead and Highgate Express. Although Ministers may sometimes not have had an opportunity to see the subject under discussion, I have had such an opportunity and know the problems.
  Islington is an inner city district with a high rate of social deprivation, including poor and inadequate housing, often overcrowded and lacking in basic amenities. These environmental factors have an effect on people's susceptibility to illness and the capacity of the community to support those who might otherwise be cared for at home
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  rather than in hospital. In addition Islington, like so many other inner London boroughs, has a declining population, with the elderly forming an ever-increasing proportion of the total.
  It is fair to say that the fundamental problem for the responsible health authority is the maldistribution of resources between the different sectors of health care. For while Islington is well provided in the acute sector, there are serious deficiencies in the primary care services, services for the elderly, the mentally ill and the mentally handicapped. As the hon. Gentleman will be aware, in recent years a number of reports have drawn the attention of Members to these problems. The reports of the London Health Planning Consortium "Acute Hospital Services in London" and the London Advisory Group indicated that the district should achieve a significant reduction in the number of acute beds and from the resources thus released—the hon. Gentleman will accept that this is an important point—aim to improve primary care services and those for the mentally ill, mentally handicapped and elderly. The London Health Planning Consortium calculated that the district had 280 acute beds too many. Both regional and area health authorities are aware of the need to do something to correct this obvious imbalance. One of the region's major strategic objectives, as stated on numerous occasions, is:
  "To continue, either through the use of growth monies or by transfer from the acute sector, the increase of funds available for primary care and the long-stay sectors".
  The area's strategic plan declares its objectives to be
  "the rationalisation of hospital resources to meet deficiencies in services for geriatrics, mental handicap, and other special categories, while at the same time keeping all services at a satisfactory level",
  and
  "to develop health care services throughout the area with emphasis on the further development of primary care services".
  I fully support these objectives. The Government have been making a positive contribution to this development through the additional money that they provide to inner-city partnerships. While I was at the Department of the Environment for two years I chaired the Hackney and Islington partnership committee at, on occasion, somewhat stormy meetings. The hon. Gentleman is now in a different position from when he started as, indeed, are quite a few of the Islington representatives whom I met on that partnership committee. It provided me with an opportunity to gain an insight into some of the stranger activities of the Labour Party in Islington.
  The Health Service problems of the district have been recognised by the Hackney and Islington inner city partnership, of which the Camden and Islington Area Health Authority is a member.
  Although the main priorities of the partnership are the promotion of economic regeneration and employment and the improvement of the physical environment, there has always been a substantial health component in its programme and that is directed towards primary and community care. Apart from partnership money, in the current economic climate, Islington health district cannot expect additional resources. If the so-called Cinderella services are to be improved, the money must be found from savings elsewhere—through greater efficiency and through a rationalisation of acute services. It is the responsibility of the health authorities to bring forward plans on these lines. The area health authority and the

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  health district have made great efforts to attempt to save money and to tackle the fundamental imbalance in the district's health services.
  The proposal to close the Royal Northern hospital accident and emergency department has to be seen against this difficult and complex background. It arises from the fact that nearly all the district's acute services are provided by the Whittington and Royal Northern hospitals, which are about one mile apart, with some duplication of services including, on each site, accident and emergency departments intended to operate a 24-hour, seven days a week service. As I am sure the hon. Gentleman understands from his knowledge of the area, the district finds it difficult to staff and run two major accident and emergency departments so close together. At times the Royal Northern accident and emergency department has been closed because of these difficulties.
  To rationalise the district's acute services, the AHA has been planning to integrate the Whittington and Royal Northern hospitals into a two-site district general hospital, with major redevelopment at the Whittington, to close the accident and emergency department at the Royal Northern hospital and to centralise the district's accident and emergency services at the Whittington hospital.
  As the hon. Member knows and has told us clearly today, this proposal has been the subject of lively local debate for a considerable time. My colleagues and I are fully aware of the considerable local affection for the Royal Northern hospital and the worries about its future. My hon. Friend the Minister of State visited the hospital last year to gain first-hand knowledge of local views and he asked his officials to hold discussions with all interested parties.
  At that time, in the light of the need to reduce the acute beds in the district, the strategy was to concentrate acute services at the Whittington, reduce the number of beds at the Royal Northern and change the use of the hospital to geriatric care. During a second visit to the hospital in May 1980 my hon. Friend announced that he was determined to see that the Royal Northern continued to thrive and have a major role for the future. He said that he would not agree to any plan for developing the Whittington hospital that did not include keeping a viable, worthwhile service at the Royal Northern hospital.
  My hon. Friend thought that the future must lie in treating both the Whittington and the Royal Northern as one district general hospital complex on two different sites and planning the services accordingly so that both hospitals have s sensible, balanced, range of work. My hon. Friend stated that he would expect some acute work to remain at the Royal Northern, particularly so that the good operating theatres could continue to be used.
  However, my hon. Friend made it clear that it could not be right to duplicate all services. He could not see any justification for keeping two accident and emergency departments so near to each other. He said that before the accident and emergency department at the Royal Northern could be permanently closed there would be local consultations. He added that if the proposal were not accepted locally, it would be referred for ministerial decision but that unless the consultation procedures produced some major new factors he would have to agree to the closure of the department. This is still our position, and the matter has been now referred to us for decision.
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  Meanwhile, planning for the redevelopment of the Whittington hospital is proceeding on the basis that, with the Royal Northern, it will form a two-site district general hospital.
  A working group, including the chairmen of the two hospital medical committees and the chairman of the community health council, has been advising on bed allocations between the two sites. However, the first phase of rebuilding is not expected to be completed until the late 1980s.
  The closure or change of use of health buildings is governed by carefully worked-out procedures issued by my Department. These procedures ensure that area health authorities undertake full consultations with a wide range of local interests, including local Members of Parliament and community health councils. If the community health council wishes to object to a closure or change of use, it may submit to the AHA a constructive and detailed counter-proposal. In the event of local disagreement, the AHA must refer the matter to the regional health authority, which, if if supports the AHA, must seek the approval of my right hon. Friend the Secretary of State to the proposal.
  The Camden and Islington area health authority issued a formal consultation document in July 1980. The Islington community health council produced a counterproposal and this, together with other comments, was presented to the AHA in April 1981. We have seen copies of the papers considered by the authority. The objections were set out at great length; many of them were reproduced in full, including those of the Royal Northern hospital medical staff committee and the community health council.
  The AHA deferred its final decision pending discussions with the Islington district general hospital medical committee on certain necessary arrangements of work, accommodation and staff duties. At its meeting in May the AHA reconsidered the outcome of consultation, having before it the views of this medical committee and further comments from the CHC. The authority decided to reaffirm its proposal to close the department and to refer the matter to the regional health authority as required by the closure procedures.
  The AHA claims that the proposed changes would save about £200,000 per annum on the current cost of running the two units and would result in the best possible accident and emergency service for the district. In order to meet some of the objections, the AHA has undertaken that, if my right hon. Friend agrees to the proposal, it will not be implemented until improvements to the Whittington accident and emergency department are completed. These alterations are in progress and should be completed early next year.
  The AHA has also decided that the closure would not be implemented until it is satisfied with changes to the administrative system for patient admissions, bed distributions between the Whittington and Royal Northern hospitals and the consequential staffing changes. The authority has also undertaken to ensure that patients arriving at the Royal Northern hospital are directed to the Whittington accident and emergency department and assisted where necessary by the provision of transport and summoning of interim medical or nursing help. The AHA is also seeking, in conjunction with the family practitioner committee and local GPs, to improve access to primary health care in Islington.

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  The regional health authority considered the AHA's proposal in July, decided to support it and referred the matter to my right hon. Friend the Secretary of State for his decision. We have been studying the papers, including the CHC counter-proposal, very carefully. They are weighty documents indeed, but we expect to make a decision soon.
  It would not be right for me to comment today on the merits of the AHA's case or the arguments against it. My hon. Friend the Minister of State has undertaken to meet again the hon. Member for Islington, North and other hon.
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  Members to discuss the proposal. I have, as I know the hon. Gentleman will appreciate, listened very carefully to him. I hope that he will accept that his views, which I shall convey to my hon. Friend, and those of others who have commented, will be taken fully into account before a final decision is made. That decision will reflect our judgment of what is in the best interests of all the residents of Islington and the others who use its health services.
  Question put and agreed to.
  Adjourned accordingly at twenty-three minutes past Eleven o'clock.