Commons Sitting of 5 February 1982

Preamble
The House met at half-past Nine o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS

  The Vote
  9.35 am
  Mr. Clement Freud: On a point of order, Mr. Speaker. I am privileged to live within the area in which the Vote is delivered early in the morning. There is a problem, I believe, with the printing of the Vote, but I feel that the delivery of yesterday's Vote today, with the attendant delivery expenditure, should be considered.
  Mr. Douglas Hogg: Further to that point of order, Mr. Speaker. I simply wish to add that that has been happening, fairly frequently, for a long time. I am in the same position as the hon. Member for Isle of Ely (Mr. Freud).
  Mr. Speaker: I am also in the district. I will, of course, look into the matter that the hon. Gentlemen have raised. We are facing some difficulties at the moment. I do not wish to go into all the details now, but I will obviously bear in mind the remarks made by the hon. Gentleman and the hon.—and learned?—Member.
  Mr. Hogg: No.
  Mr. Speaker: Not yet.

Orders of the Day

  Planning Inquiries (Attendance of Public) Bill
  Order for Second Reading read.
  9.36 am
  Mr. Michael Hamilton: I beg to move, that the Bill be now read a Second time.
  Such are the whims of the ballot box that the majority of hon. Members cease to be Members of the House never having had an opportunity to introduce a Private Member's Bill. I am grateful this morning, for the first time in 22 years, to have that chance.
  I have chosen a topic which springs from personal experience but which is of universal application. What happened at Salisbury could equally happen tomorrow in London, Birmingham, Newcastle or Dorset. If the House approves this small measure, those places will be spared the rather disagreeable events which have left their mark in Wiltshire. If that is achieved, Parliament will riot have wasted its time this morning. I am pleased to bring forward a Bill which is so simple and short. Evidence at planning inquiries shall be heard in public: that is the sum total of the Bill. Many people may think that that message does no more than underline the obvious. All hon. Members here this morning regard a planning inquiry and a public inquiry as being the same thing. Indeed, 15 years ago, we would have been correct, but, sadly, that is not the case today.
  Events in Salisbury have shown that what we used to call a "public inquiry" can occur behind closed doors. A citizen may decide to attend a planning inquiry which affects his house, village or community. He may wish to listen or give evidence, but when he reaches the town hall he may find that the doors are closed against him.
  It is a disturbing development that a citizen's freedom is curtailed, and it is right that the House should be made aware of it. I do no more today than ask the House to restore to the citizen the freedom which obtained in practice, without exception, up to 15 years ago.
  I stress that there is nothing party political about the Bill. If the House considers that some criticism is due of past events, at least that criticism can be levelled equally at both Labour and Conservative Administrations. A Labour Government made the original mistake—some would describe it as an honest mistake—and a Conservative Government compounded that mistake by seeking to defend it. The same civil servants served both Administrations.
  If I had been lucky in the ballot 15 years ago, I should have introduced my Bill then. Such is our system that it is not given to private Members to decide timing. I have been happy to wait 15 years, although it has meant negotiating not merely the ballot box here but the ballot box at the four general elections which intervened in those years.
  First, I shall outline the events in Wiltshire. If there is a single inaccuracy in the narrative, I ask the Minister to correct me. In 1967 a company from another part of England sought permission to carry out large-scale mineral

  645
  workings in a particularly beautiful part of Wiltshire. It is a well-known company of high standing and today it earns profits of about £40 million a year.
  The issue went to appeal and the Minister ordered a local inquiry to be held in Salisbury, opening on 21 June of that year. However, 28 days earlier a quiet meeting took place here in London. It was on Wednesday 24 May 1967. It was a meeting with disastrous consequences. Representatives of the company called by appointment on a civil servant at the Department. The Minister knows the name of that civil servant and I shall not use it this morning. The representatives of the company claimed to have commercial secrets which they did not wish to reveal to competitors. They therefore asked whether the central part of the inquiry might be held in camera. It was that part which explained why it was necessary to choose the Wiltshire site out of more than 200 alternative sites which had been explored elsewhere.
  At that time no part of a planning inquiry had ever been held in private. About one-third of a million applications for planning permission are made each year. Planning procedures have operated since the beginning of the century, but evidence had never been heard in secret.
  To turn aside from a well-trodden path is liable to lead to unforeseen pitfalls. Faced with that request and asked to agree to that precedent, the civil servant would have done well to ponder very deeply. He might have done well to consult the permanent secretary, Sir Matthew Stephenson. Sir Matthew, a distinguished civil servant, was to be cross-examined on the issue later by a Select Committee. Hon. Members who choose to read the printed evidence will see that he had no knowledge of the matter.
  "I am not really terribly well equipped to answer."
  Those were Sir Matthew's words.
  The civil servant might have done well to consult the Secretary of State or one of the two junior Ministers. Mr. Anthony Greenwood, now Lord Greenwood of Rossendale, was a greatly respected Member of this House. He was well capable of assessing the implications of the company's request. Lord Greenwood will confirm that the issue never so much as crossed his desk. Again, the civil servant that morning might have done well to recall the words of Lord Kilmuir six years previously. Lord Kilmuir, who was known to some senior hon. Members present this morning, was Lord Chancellor at the time.
  Sir Ronald Bell: Will my hon. Friend give way?
  Mr. Hamilton: I shall in a moment.
  Lord Kilmuir spoke in another place about ironstone workings. He said:
  "it must be for the applicants to weigh the risk of disclosing information to their competitors against the advantage to be obtained from its disclosure."—[Official Report, House of Lords, 13 April 1961; Vol. 230, c. 426.]
  There was no thought in the Lord Chancellor's mind of in camera proceedings being countenanced.
  Sir Ronald Bell: I wished to ask my hon. Friend whether he would mind giving way if any Member of the Labour Party wished to intervene on the conduct of Mr. Greenwood at the time, but the occasion has passed.
  Mr. Hamilton: I take my hon. and learned Friend's point. I am always happy to give way to any intervention, from whatever quarter it comes.
  The civil servant that morning did none of those things. Instead he gave the principle his blessing. He told the company's representatives that an inspector at a planning inquiry had the discretion and the right to hold proceedings in camera. He told them, therefore, that they should apply to the inspector for such proceedings when the inquiry opened. I wish to be generous this morning, and that is the more generous version of the meeting at the Department. But I must add that the Prime Minister of the day, with whom I raised matters, indicated that the whole deal was sewn up at that meeting, never mind about the niceties of the inspector's discretion. The Prime Minister wrote:
  "Because of the secret nature of the process they"—
  the company—
  "sought the Minister's agreement for holding part of the inquiry in camera and it was decided that in all the circumstances it would be right to deal with their inquiry in this way."
  The Prime Minister then referred to
  "the undertaking about the in camera proceedings which was given to the company before the inquiry."
  Even if we accept that the Prime Minister was wrong and that discretion was left to the inspector, it proved to be a grievous mistake. I am sure that the Minister will agree that Government is a majestic institution, but Governments never find it easy to admit a mistake. Indeed, it took me five long years and 10 debates in this Chamber before a Government were prepared so much as to admit it. On 4 May 1972 the Secretary of State announced from the safety of a written answer:
  "It is Government policy that inspectors should in future not accede to requests that they should hear evidence in private at planning inquiries."—[Official Report, 4 May 1972; Vol. 836, c. 199.]
  So much for that civil servant.
  Mr. Douglas Hogg: Does my hon. Friend know whether that statement was ever incorporated into a circular issued by the Department of the Environment to inspectors dealing with planning inquiries?
  Mr. Hamilton: I can only confirm that no fressh safeguards exist today to prevent recurrence of what happened at Salisbury. By the time that that written answer appeared in Hansard, it was too late. The damage had been done. Policy can change from week to week, but by then, the company had gained access to Wiltshire behind the screen of secrecy. By then the company had paid the highest price ever for Wiltshire farm land and owned a stretch of countryside twice the size of Hyde Park. It was too late to help Wiltshire.
  I shall return briefly to the subject of that quiet meeting at the Department. At the end of the interview the company's representatives took leave of the civil servant. Having obtained the assurance that what they were seeking was acceptable in principle, they returned to their headquarters. They had 28 days in which to prepare their case, which was to be heard in camera. The Department had alerted the inspector to expect an application for secret proceedings. Meanwhile, neither I nor my constituents knew that that meeting had taken place. I did not learn of it until years later. No one in the Department thought to warn us of what had been agreed. Therefore, on 21 June when the scene moved to Salisbury, we did not know that the dice were already loaded.
  The inspector had travelled down from London. Fearful for their countryside, my constituents had come into

  647
  Salisbury to follow the proceedings, and there assembled were the company's representatives. There were present a leading Queen's Counsel, a group estate surveyor, a consultant landscape architect, a chartered architect and a research manager. It was an impressive concourse. Nothing was left to chance.
  At the appropriate moment, and in accordance with the advice given by the Department, counsel for the company rose in his place and applied to the inspector for a private hearing. The inspector, well briefed before leaving London, was waiting for his cue. He heard the plea and he granted it. It would be difficult to stage a less attractive piece of pre-arranged official play acting.
  Had my constituents had the resources to employ counsel, and had they had warning of what was afoot, some defence might have been prepared; but they had neither. A local farmer wrote:
  "The first we knew about it was when the appellants asked to go into camera and the inspector agreed. We were flabbergasted."
  Thus was launched the first hearing in Britain of planning proceedings behind closed doors.
  My flat in London overlooks a house that has a commemorative plaque on the front. I saw it this morning.
  It says:
  "Mozart composed his first symphony here."
  We in Salisbury are equally keen to preserve little pieces of our history and I have in mind putting a commemorative plaque on the front of the building where the planning proceedings took place. Perhaps the House would like to suggest a suitable inscription. I thought of "In-camera planning, conceived in a London office, was born here."
  Once that threshold was crossed it was hardly surprising that what could go wrong did go wrong. These were uncharted waters. There were no rules and no safeguards. Those who had come into the city to follow the proceedings returned home and elected representatives of the parish on the rural district council and the county council were shown the door. Only two of my constituents, neither of whom had any technical qualifications, were admitted and a declaration of lifelong secrecy was produced for signature.
  For a time there remained a ray of hope for my constituents. The critical question to be considered was whether the chalk on the site had peculiar qualities not to be found in chalk elsewhere. It is surprising that there are few in this country who understand chalk. The main centres of study are the geological departments of Oxford, Cambridge and London universities.
  No library on chalk would be complete without a work by Dr. Michael Hancock of London university. Dr. Hancock had travelled to Salisbury that day to give help to the threatened parish as an expert witness. He was not admitted. The company objected to his presence and he had no choice but to take the train back to London. I asked the Government whether the cost of his second-class return rail fare could be refunded, but they refused.
  Months later the Minister decided to grant the planning application. My constituents were not told why, out of more than 200 alternative sites, their piece of countryside had been chosen. It remained a mystery. They saw the machines arrive, they knew that excavation was permitted to a depth of 160 ft and they were left to watch the excavations proceed.
  648
  That is how the industrial complex arrived in Wiltshire. To this day, there has been no redress, no apology and no amends made.
  I invited the Minister to correct even the smallest point in my narrative which might be inaccurate. From his silence, I must deduce that he agrees that my account is true.
  The Under-Secretary of State for the Environment (Mr. Giles Shaw): I intervene in the speech of my hon. Friend since he is pressing me to make an observation. Without prejudicing what ultimately I might be able to say, I am fearful of interrupting my hon. Friend's speech on two grounds. First, the quality of his speech is such that any intervention of mine would be a gross discourtesy, and, secondly, although he is outlining his case with considerable accuracy, I assume that he will be referring to the Ombudsman's inquiry into this matter.
  Mr. Hamilton: The Minister is very courteous. He is correct in assuming that I shall be referring to the Ombudsman's inquiry.
  I shall not weary the House with the detail of what followed. Mistakes can happen anywhere, and I have no hard feelings towards the civil servant, the company or the inspector. But it is difficult to forgive the calculated refusal to put matters right by those in this House who hold the responsibility. For a time I believed that the facts would speak for themselves, that the injustice was such that Ministers would have no alternative but to rescind the permission. But it was a difficult journey. When events happen in one's back yard that have no precedent, one cannot merely go down the corridor to the Library and turn up what happened last time. I tabled questions and raised the matter on the Adjournment. On one occasion the Adjournment was at 3.45 am and on another at 5.25 am. Progress was slow.
  I assumed that the local planning authority, the Wiltshire county council, would be anxious to protect this stretch of countryside. Initially, and rightly, the council objected to the project on the ground that the country lanes were inadequate to take the additional lorry traffic. But the county surveyor was offered £30,000 by the company towards the cost of road improvements in the event of the appeal succeeding. The highway objection was therefore withdrawn.
  Later, when I suggested to the local planning authority that it should exercise its express right to apply to the High Court within six weeks to quash the Minister's decision on the ground that the inquiry had been irregular, it decided not to avail itself of that opportunity. So much for the Wiltshire county council.
  Similarly, the Parliamentary Commissioner for Administration, to whom the Minister referred just now, proved disappointing. To be fair to him, his function is to study whether rules have been broken and whether statutory regulations have been overlooked. In this case he was operating in a situation without precedent, with no rules or regulations that could be observed or disregarded. These were uncharted waters. Long after, when the commissioner was interviewed by a Select Committee of this House, he admitted:
  "This is not to say that the complainants in this case do not suffer, because they do."
  I turn to the Council on Tribunals, which is a little known body set up in the aftermath of the Crichel Down affair. It is responsible to the Lord Chancellor and has

  649
  offices just off Trafalgar Square. Its purpose was well summarised by the then Mr. R. A. Butler, who said in this Chamber, referring to tribunals and inquiries:
  "some continuous supervision is essential if the confidence of the public is to be inspired and the citizen assured that they carry out their duties in accordance with the principles of fairness, openness and impartiality."—[Official Report, 3 July 1958; Vol. 590, c. 1606.]
  Openness and fairness were the two cardinal principles which the Franks Committee sought to inject into our inquiry proceedings.
  I laid matters before the Council on Tribunals. After an interval the secretary replied
  "The Council recognise that a procedural point of considerable general importance has been raised. They feel that this ought to be covered by a provision in the statutory rules of procedure."
  At last I felt that a little progress was beginning to be made. It seemed that the council really was a national watchdog, there to sound the alarm when things went wrong and to speak out fearlessly until matters were put right.
  Talks between the council, the Lord Chancellor and the Department began. A year passed, and a second year passed. Excavation in Wiltshire was proceeding, but justice cannot be hurried. In the course of the third year new rules for planning inquiries were ready to be laid before Parliament. They occupied 23 pages. They were circulated for comment to other public bodies such as the Country Landowners' Association. The rules insisted that notice of in camera hearings was to be published in local newspapers, in contrast to events at Salisbury, where no hint or warning had been given by the Department. They insisted that an expert witness was not to be excluded, in contrast to events at Salisbury where that distinguished geologist had been shown the door. If nothing else, I believed that the rules would demonstrate that what had happened at Salisbury without such safeguards should never have taken place. I therefore still hoped that the permission would be rescinded and here at last I believed that there was progress. But those rules were never laid before Parliament.
  After three years' work the Lord Chancellor stopped dead in his tracks. Overnight the Government held such rules to be "inappropriate". That was his word. No sooner had I heard from the Lord Chancellor than I turned to the Council on Tribunals. Here was the council firmly committed and on printed record year in and year out stating that new rules were essential. However, within hours of the Government deciding that rules were inappropriate, the council came to the same view.
  I am entirely content to leave it to the judgment of the House this morning whether the Council on Tribunals is a courageous watchdog, jealous to protect
  "the principles of fairness, openness and impartiality"
  or whether it is no more and no less than the Lord Chancellor's poodle. Today, there are no new safeguards. There is nothing to prevent a repetition of what happened—hence my Bill.
  However, it must be said that I found some staunch friends who did not see fit to quit the field. Lord Brooke of Cumnor was one of them. The House will know that few men alive today have a greater knowledge of planning laws than he. In another place, he asked whether there was any opportunity at Salisbury for the objectors to produce
  650
  geological evidence to rebut the evidence given in secret on behalf of the company. He said that if there was not something must be wrong with the procedure.
  The late Sir Roger Stevens, former ambassador and chairman of the committee on mineral planning, was another ally. His report stated:
  "We did not feel it would be right for us to avoid the difficult issue put before us."
  His recommendation was that any party to a planning inquiry wishing to give evidence in camera should first apply to the High Court. That, at least, was constructive. It was the Government who avoided the difficult issue.
  Another ally was Sir Frederick Corfield, a lawyer of great distinction in planning matters, and a friend to many of us who served in the House with him. Finally, among allies I list The Times. It stood fairly and firmly alongside the Lord Chancellor, Lord Kilmuir. Not only was it generous enough to grant space for my countless letters; it was constructive. A leading article summed up the position more ably than I can today. I shall quote only four sentences:
  "So it would seem unrealistic to hope for a compromise solution whereby evidence could be heard in camera at planning inquiries under conditions that would be a satisfactory safeguard again injustice or abuse. A choice has to be made between the guarantee of openness and the assurance that an appellant would not be inhibited from giving evidence because its publication would damage him. The choice must be for openness. That is essential for public confidence in planning inquiries and it is unlikely to impose too great a burden on commercial interests; otherwise the 1967 case would surely not have been the first of its kind."
  That is what my Bill is all about. A planning inquiry is not a court of law. Its function is essentially different. If justice is not seen to be done, it is better that the inquiry is not held at all. The wider public interest demands that proposals can be challenged by those affected. The citizen must be free to summon the aid of such experts as he may choose to muster. Commerce managed perfectly well until 1967, and it can continue to do so.
  Indeed, what happened in 1967 would never have happened but for that quiet meeting of which I have spoken. My Bill restores to the citizen the right of access to planning inquiries—a right which obtained in practice without exception until 15 years ago. If the House is good enough to grant this measure a Second Reading today, I intend to table a small amendment in Committee. I wish to add the phrase "except in the interests of defence and national security". An exception must be made for defence, but not for commercial interests.
  If hon. Members look at Hansard for 29 November 1974, they will see that on that distant Friday I moved a motion in the Chamber which was identical in purpose to my Bill this morning. It said:
  "That this House disapproves of the holding of planning inquiries in secret, except in the interests of defence and national security."—[0fficial Report, 29 November 1974; Vol. 882, c. 985.]
  A Division was called at 12.32 pm, but no hon. Member voted against the motion. Among those who supported it was my right hon. Friend the Secretary of State for the Environment. I was grateful to him then, and I remain grateful to him today. His support means a great deal to me. I hope that now that it has come to the crunch, and we are reaching the stage of legislation, he will stand by that judgment and not join the ranks of those of whom I have spoken this morning who chose to quit the field.
  Government have no cause for pride in this unhappy story. Governments have flatly refused a judicial inquiry

  651
  into these events. It is still not too late. Not only have Government declined to offer a hint of apology for all that happened; they have not taken a single step in these 15 years to prevent a recurrence. My Bill is a modest enough measure, but, in nine words, it resolves the whole matter. The recommendations of Sir Roger Stevens and his committee have been disregarded. The 23 pages of rules, the result of work by the Council on Tribunals, the Department, and the Lord Chancellor, have also been thrown in the waste basket. They were inappropriate. Besides, would they not have demonstrated that what happened in Salisbury without such safeguards should never have been allowed?
  We have yet to hear what the Minister has to tell us this morning. I confess that I remain fearful lest the Government, after 15 years of inaction, with not a single fresh safeguard, still suggest that the unique precedent of Salisbury should remain an acceptable part of our planning system. Why should the Government want a repetition of Salisbury? Of course, the Government recognise that a major blunder took place with lasting consequences. My fear is that the Government may still decide to defend the indefensible and, as part of that defence, feel bound to allow the practice to continue. We shall see. A simpler solution would be to muster courage, to admit the mistake, to close the door on the past and to put an end to the whole business by welcoming my Bill with open arms.
  There is one other small matter which has arisen in the last 24 hours to which I must refer. Planning is a complex business. Not many of us here—an exception is my right hon. and learned Friend the Member for Hertforshire, East (Sir Derek Walker-Smith)—are experts in planning. A note has been made available—as is the case with all Private Member's Bills—to assist hon. Members to understand the background. Thanks to a colleague, this paper concerning my Bill is available to me. At the head it says:
  "Mr. Giles Shaw, Parliamentary Under-Secretary of State at the Department of the Environment, thought that it would be helpful".
  The Minister was kind enough, as he entered the Chamber this morning, to apologise to me personally because no copy was sent to me in advance. The paper contains a great deal about myself—I have not had time to read it all—and I have no objection whatever to that. It goes on to say:
  "He has had interviews with members of previous Governments, including the present and previous Prime Ministers."
  I must make it plain that it would never occur to me so much as to mention this topic to the present Prime Minister, still less to seek an interview with her. My right hon. Friend carries far too heavy a burden already without having to unscramble the shameful conduct of the Department of the Environment.
  The Prime Minister made her maiden speech in this Chamber 22 years ago this morning, on 5 February 1960. On that occasion she presented the Public Bodies (Admission of Press) Bill. The Prime Minister believes profoundly in the liberty of the citizen to attend meetings which affect his life.
  Does the paper to which I have referred give the relevant information? Does it mention the meeting at the Minister's Department on 24 May 1967? Does it set out what was agreed at that meeting? Does it confirm that no warning was issued by the Department of in camera
  652
  proceedings? Does it confirm that the expert witness was excluded? Does it describe the pre-arranged official play acting at Salisbury? Does it quote from The Times leader?
  Mr. Douglas Hogg: What my hon. Friend is saying has a degree of force. It is also possible that those who prepared the paper thought that hon. Members would have the opportunity of reading the 45-minute speech made by my hon. Friend in November 1974 when all these matters were fully deployed.
  Mr. Hamilton: I am grateful to my hon. Friend. The paper does none of these things. It says that
  "Mr. Giles Shaw, Parliamentary Under-Secretary of State … thought that it would be helpful".
  Mr. Hogg: It was.
  Mr. Hamilton: Are those things true? Did they happen? Are they so long ago that it does not matter, or is excavation proceeding this morning? If they are true, I invite the Minister to say so. If they are not true, I invite the Minister to say so. I grow weary of Ministers who neither confirm nor deny these things, of Ministers who speak of everything except the kernel of the issue. Planning is a tedious subject, but justice is not, and my hope is that the Minister will welcome the Bill with no ifs and no buts.
  I have spoken long enough and I may seek the leave of the House, Mr. Deputy Speaker, to intervene briefly later in reply to the debate. You will need no reminding that it was Edmund Burke, no less—the Member for Bristol when Bristol was the second city of the kingdom—who left us the phrase
  "where mystery begins, justice ends."
  I have great confidence that the House will give this small measure its overwhelming support.
  10.26 am
  Sir Derek Walker-Smith: It is a pleasure and privilege to participate in the debate. An ancillary reason is that I have rarely, if ever, seen the Labour Benches wear so agreeable an aspect as they do today.
  I convey cordial congratulations to my hon. Friend the Member for Salisbury (Mr. Hamilton) on his success in the ballot and also on the persuasive advocacy with which he has commended his Bill to the House. My hon. Friend's success has enabled him to pursue a grievance long felt in a matter affecting the constituency that he has served so zealously, so conscientiously and so effectively during his 17 years of distinguished representation in this House.
  My hon. Friend says that this is the first time that he has been able to promote a Private Member's Bill. It so happens that the only Private Member's Bill that I have had an opportunity of promoting also dealt with town planning matters.
  When I went to the Board of Trade as Parliamentary Secretary a great many years ago—I shall not say how many in case any hon. Member is moved to inquire why I am still alive—Leslie Hore-Belisha, with characteristic kindness—
  Mr. Douglas Hogg: When was it?
  Sir Derek Walker-Smith: My hon. Friend, who is so diligent in his researches, in his capacity as a Member and as a practising barrister, can easily find the information for himself, if he goes to the sources. I am sorry to lose his attentive ear for this exhortation. Leslie Hore-Belisha, in

  653
  conveying his kind congratulations, said "As a matter of interest, I too started my ministerial career in that office. I only hope that you do not find this too discouraging." I hope that my hon. Friend the Member for Salisbury does not find the precedent of my Private Member's Bill too discouraging.
  Mr. Douglas Hogg: It was 25 years ago.
  Sir Derek Walker-Smith: Yes, a quarter of a century. Since my hon. Friend the Member for Grantham (Mr. Hogg) seems to wish to delve into the past, may I parenthetically observe that when I was a Treasury Minister we ran the Treasury on three Ministers. I have lost count of how many there are now. [Interruption.] Too many, of course. It would be a bold man who would say that the economy of the country is any better now than it was then.
  Mr. Douglas Hogg: I note that my right hon. and learned Friend was there for a year.
  Sir Derek Walker-Smith: At the Treasury, yes. I went to the overseas chair of the Board of Trade—if we must continue on this biographic note—and was congratulated by the then Director-General of the Federation of British Industries on going to constructive work.
  If it would not be out of order, I shall return to the theme of my hon. Friend's Bill. He is concerned with the long saga of the Wiltshire case. However, it is not, in the words of the poem
  "far off things,
  And battles long ago,"
  because although far off, it has clearly not been forgotten by my hon. Friend, and rightly not. The Bill seeks to guard against any repetition and to use the experience of the past, sad though it was, for the benefit of the future. I welcome the Bill and hope that the Government will do so too.
  I shall take up a moment or two to describe some of the existing procedural framework for inquiries and hearings under the law of town and country planning. I ask the House to believe that, on the whole—we must not have a distorted perspective—it works well.
  The Bill refers to planning inquiries. This, perhaps rather surprisingly, is not a term of art in planning law and is not defined as such therein. There is a statutory power relating to local inquiries in section 282 of the Town and Country Planning Act 1971. The primary term used in town planning legislation is "hearing", which can be equated with inquiries under the inquiries procedure rules 1974. That being so, and having regard to the terminology of my hon. Friend's Bill, it is possible that questions of definition may thereby arise when the Bill becomes law, but no doubt these can be canvassed in Committee and are soluble in practice.
  Inquiries or hearings under planning law arise in three main aspects. The first is what, in the jargon of these matters, is called "the called-in application," that is to say, those applications that the Secretary of State directs be referred to him for decision without the normal preliminary of decision by the local planning authority. That is the procedure under section 35 of the 1971 Act. The second aspect is the ordinary appeal which is decided in the first instance by the planning authority. That is the second procedure under section 36. The third is appeals against enforcement notices, which are governed by section 88.
  The three sections, 35, 36 and 88, governing these categories of case contain provisions for hearings in substantially similar terms. Section 35(5) provides that before determining the application referred to him
  "the Secretary of State shall, if either the applicant or the local planning authority so desire, afford to each of them an opportunity of appearing before, and being heard by, a person appointed by the Secretary of State for the purpose."
  Similar words appear in section 36(4) for normal appeals and in section 88(7) for appeals against enforcement notices.
  654
  All those provisions are mandatory, subject only—and this is an important qualification—to either the applicant or the local planning authority desiring a hearing and giving expression to that desire. In addition to these mandatory provisions, the Secretary of State has a power at large under section 282(7) to
  "cause a local inquiry to be held for the purposes of the exercise of any of his functions under…the Act."
  The procedure of all these hearings and inquiries is governed by the Town and Country Planning (Inquiries Procedure) Rules 1974, Statutory Instrument 419 of 1974. Rule 15 makes it clear that the rules apply equally to inquiries sub nomine and hearings as so described in the Act. Under rule 10(1) the procedure at the inquiry is at the discretion of the appointed person, as he is known in legal phraseology, but popularly, or it may be unpopularly, described as the inspector.
  I shall go on to deal with the right to appear at the inquiry.
  Mr. Douglas Hogg: I thought that my right hon. and learned Friend was going to develop his subject a little further. I wonder if he could help the House on two aspects. First, are the directions of the Secretary of State as to the way in which the procedure is conducted binding on the inspector, or does the inspector have a fairly unfettered discretion? Secondly, is there any appeal from the way in which the inspector exercises his discretion save to the High Court on the grounds that the inspector acted ultra vires?
  Sir Derek Walker-Smith: Those are interesting questions. The answer to the first is that the inspector is bound by the inquiries procedure rules of 1974, which set out in some detail the preliminaries, the documentation and the procedure at the inquiry, and then the post-inquiry procedure. That is binding on the inspector and on anybody else, because a statutory instrument is, as the House and my hon. Friend will know, secondary, subordinate legislation and has the force of law.
  Mr. Michael Hamilton: We are intensely lucky to have with us this morning my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) with his specialised knowledge in this field. There are no Scottish Members present. It has been put to me that, whereas in England the conduct of the planning inquiry rests on the discretion of the inspector, in Scotland it is specifically stated in law that planning inquiries shall be heard in public. I wonder if my right hon. and learned Friend has anything to say on that score. I appreciate that he is not expert in Scottish law.
  Sir Derek Walker-Smith: I am obliged to my hon. Friend for his opening remarks. When he says that I am not expert on Scottish law, that is a masterpiece of understatement. Like most English counsel, I walk, like Agag, delicately. I have only once appeared in a case in Scotland. My hon. Friend will appreciate that we have no right of audience in Scottish courts and Scottish advocates have no right of audience in ours. We come together only in the last stages of matters that go to the appellate committee at the other end of the corridor here. Therefore I am unable to answer his question, although perhaps some subsequent hon. Member, who has the good fortune to catch your eye, Mr. Deputy Speaker, can deal with the Scottish point.

  655
  I return to the second question of my hon. Friend the Member for Grantham, as I would not wish to be discourteous to him. He asked what sanctions there were and he is right to say that it is only a breach of the rules, which is corrected in the High Court.
  I had been about to deal with the right to appear at an inquiry. The discretion is modified by rule 7, which expressly gives the right to appear to the applicant, the local planning authority and to what are known as the section 29 parties—principally the owner of a site if he is not himself the applicant. Further, under rule 5(2)(b) the Secretary of State has a wide reserve power to serve notice of the inquiry on such persons or classes of person as he may specify. When he has served such notice, those involved naturally have a right to appear in response. It is true—were it otherwise, the Bill would be unnecessary—that there is no absolute requirement in law to hold all inquiries or hearings in public. However, the statutory entitlements to appear prevent them, on the whole, from degenerating into hole in the corner affairs.
  Mr. Sydney Chapman: My right hon. and learned Friend is obviously an expert in this area. Would he care to comment not only on the fact that many people think that it is fair for inquiries to be held in public at all times, but on the apparently outstanding issue, where the inspector—using his powers of discretion—accepted representations from the applicant development company to deny access to someone who wished to give evidence on behalf of the objectors, the public? Presumably, the reason was that the man was an expert geologist and might have argued against the expert professional advice given by witnesses called by the applicant company. Is that not a most disquieting factor in the case?
  Sir Derek Walker-Smith: On those facts, there would appear to have been—apart from anything else—a breach of the principles of natural justice. In addition, there is a need to consider better procedure for directions before trial, on the analogy of ordinary High Court procedure. The Department is probably considering that and if it is not, I hope that it will do so after today.
  Normally, inquiries—whether classed as public local inquiries, or simply local inquiries—are open to the public. The same usually applies to a hearing, which is procedurally equated with an inquiry. The wide-ranging inquiries that the Secretary of State convenes under section 282 are, of course, open to the public. The Bill gives effect and statutory authority to procedures that are normally in operation now, although not enforceable in law.
  Two difficult questions arise. I turn to the problem of security and defence issues. The inquiries procedure rules properly exclude evidence whose effect would be contrary to the public interest. However, that is not necessarily inconsistent with giving the public the maximum possible information and the maximum opportunity to check it. In, I think, 1970—my hon. Friend the Member for Grantham will notice that the reminiscences are gradually approaching the present day—the Roskill commission inquiry into the third London airport was held. I appeared at the inquiry, on behalf of some very respectable clients, in my professional capacity as a Queen's Counsel. Lord Roskill—Mr. Justice Roskill as he then was—said that some of the evidence from the Ministry of Defence was classified and would have to be heard in camera. Under his distinguished chairmanship, the commission was
  656
  properly anxious that as much of the defence evidence as possible should be made publicly available and open to public examination. It therefore arranged for counsel for the commission—Mr. Arthur Bagnall, QC—to cross-examine Ministry witnesses in the in camera sessions, but in the presence of one leading counsel, appearing for the parties. The other Queen's Counsel engaged were kind enough to nominate me for that task and to attend while Mr. Bagnall cross-examined defence witnesses in the in camera session.
  In addition, the then Mr. Justice Roskill directed that the transcript of the proceedings should be published in so far as security considerations permitted. In that way, most of the evidence was made public and all the points that the parties wanted explored were put by Mr. Bagnall. All the counsel present—there was a fairly wide representative cross-section and many of them now grace the High. Court bench—agreed that that was satisfactory.
  Mr. Michael Hamilton: My right hon. and learned Friend is right in discussing the inquiry on the third London airport, in which he took part. However, I should like one point to be placed clearly on the record. Will my right hon. and learned Friend confirm that the inquiry was not a planning inquiry?
  Sir Derek Walker-Smith: I thought that it was a planning inquiry. There is something called a planning commission inquiry, which is hardly ever used. I am not sure whether the Roskill inquiry—after all, it was a long time ago—technically came under that. I do not wish to digress, but there is a difficulty.
  Mr. Giles Shaw: In that case, Lord Roskill presided over a commission.
  Sir Derek Walker-Smith: It was a high-powered commission. Indeed, I remember that Professor Alan Walters was one of its members. There was also a very distinguished gentleman from Courtaulds, Sir Archer Knight.
  Mr. Douglas Hogg: My right hon. and learned Friend might care to clarify one aspect. In that case, the parties to the planning commission had the good fortune to be represented, not least by my right hon. and learned Friend. However, what would have happened if the objectors had not been represented? Would it have been possible to safeguard their position in any way? I expect that the chairman of the commission would have been unwilling to admit an objector to the in camera session.
  Sir Derek Walker-Smith: That is an interesting speculation, although necessarily hypothetical. In cases of such magnitude it is difficult to believe that there would not be one objector who was professionally represented. Therefore, the situation is somewhat improbable. However, my hon. Friend is right in that, in theory, there would be a difficulty. However, the situation is unlikely to arise.
  I turn to the subject of commercial confidentiality. It is out of this matter that the Wiltshire case arose. It is a more difficult problem than that of defence security. There is necessarily an inherent conflict between the desirability of giving maximum information to the public and the right of commercial concerns not to have their trade secrets disclosed by a side wind.
  This same consideration of commercial security, among other factors, has led to commercial concerns

  657
  opting so widely for arbitration in resolving their disputes in preference to litigation in open court. The solution, I would think, lies in the fact that the obligation for evidence to be heard in public under the terms of my hon. Friend's Bill, when it becomes law, will apply only to part II inquiries. However, where the application for planning permission concerns only the applicant, he being a commercial concern, and the local planning authority, there is no need to hold a hearing or inquiry at all unless the planning authority or the applicant indicate a desire for one. This appears clearly in the passage I read from section 37 of the Act. If there is a wider interest, even if neither party makes the request, the Secretary of State still has the reserve power under section 282 to convene an inquiry suo moto.
  The holding of a hearing or an inquiry does not depend only on the expressed wish of the applicant and the local planning authority. Nowadays, the parties can also proceed by written representations without any hearing at all. These, in many cases, are both effective and appropriate. I believe that the Minister and hon. Members as a whole would share my wish not to derogate or discourage the practice of appeals that raise questions only between the applicant and the local authority—without wider outside interests—being dealt with by written representation. This procedure has obvious advantages in proper cases in economy of time and cost and helps to preserve a reasonable commercial confidentiality. Nothing in the Bill, I am glad to say, impugns or threatens that useful procedure.
  On analysis, the House, I think, will agree that there is not very much wrong with present procedures although these can be improved in many respects. It would be an unusual institution that was not capable of improvement. Some improvements can be made. In that context, I welcome the Bill and my hon. Friend's initiative in promoting it to secure an improvement in our procedures. I wish well to the continuing efforts of the Department of the Environment to improve and strengthen these procedures that affect so nearly and vitally so many of our citizens.
  10.53 am
  Sir Ronald Bell: I congratulate my hon. Friend the Member for Salisbury (Mr. Hamilton) on his good fortune in the ballot and also on the brevity of the Bill that he has introduced. My hon. Friend perhaps felt the need to compensate for that brevity by the amplitude of his exposition of the measure. It is, however, a very short Bill. I congratulate my hon. Friend also not merely on the assiduity but the persistence with which he has put forward the case of his constituents in the parish of Grimstead, which was affected by the development. I cannot agree entirely with all the remarks of my hon. Friend. Without being unsympathetic to his general purpose, I should like to put forward some slightly different considerations.
  One tends to forget, in planning matters, the real background to the whole procedure. To start with, the owner of land had complete freedom to develop it as he saw fit. Since, unfortunately, there are far too many of us in the country—it has become a very crowded part of the Earth's surface—it became necessary to impose certain restrictions on the use that people made of their own property. This stage was reached more or less in the 1930s
  658
  but in a somewhat tentative manner. It was finally institutionalised in the Town and Country Planning Act 1947. From then on, it has been necessary to seek permission for any kind of development as defined in the legislation. Agriculture or forestry is not included. In other cases, one has to seek permission. Obviously, someone who was refused permission to do as he would with his own had to be given the right of appeal. It would not be right that a local authority should be able simply to say "No". Local opinion is nearly always against all development. That has to be recognised.
  Like my right hon. Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) I have mainly practised for about 30 years in this branch of the law. I can count on the fingers of one hand the occasions when a local population was in favour of a development. On all too many occasions a vast congregation of objectors has been present from the local community. I have always found that among local objectors the most vocal and active are those who last move into new houses adjoining the appeal site. It is their amenity that is next proposed for development.
  One is dealing with the question of restricting the freedom of action of a person who until very recently would have been able to do what he wanted without asking anyone. In using the words "very recently," I mean within the lifetime of all hon. Members present and primarily since the end of the war. This means surely that the bias and presumption should always be in favour of the applicant. He should be able to do what he wants in a free country unless there is powerful reason of public concern why he should not do so.
  As a practising lawyer and also a politician, I feel that once the law is established in a sphere such as that under discussion, and practices, conventions and familiarities grow up, we tend to forget the domestic nature of what we are doing and begin to talk about the public right. In this very Parliament, hon. Members have imposed upon applicants the burden of paying the cost of determining their applications.
  That is something to which I was totally opposed, because it could not conceivably be justified. The argument was "He is getting the permission, so he should pay for it". That is quite the wrong way to look at the matter. The applicant is being interfered with, not for his benefit, but for the benefit of the general public. The general public should pay for the scrutiny procedure, because they are the beneficiaries. The applicant is not the beneficiary of having the general restriction lifted. A restriction of that kind has to be by way of general prohibition, which is lifted in a particular case. It is quite wrong that the applicant should pay. I mention the matter, because it is germane to the Bill.
  People often complain to me as a Member of Parliament when a consent is given by a local planning authority and they have no opportunity to object. Of course, when a local planning authority gives consent, that is virtually the end of the matter, and there is no opportunity to call evidence or object. That is quite right, because the owner is asking for permission to do something—or if it is not the owner it is an outside applicant, who cannot do anything anyway unless the owner agrees. It would be unmanageable if local objections to development were pressed on every occasion to the point of inquiry. That procedure could not be handled.

  659
  Let us assume that the local planning authority refuses consent to the man who otherwise, apart from the law, would be able to develop. If he wishes and if the planning authority agrees, as it almost always does, he can appeal by written representation. The planning authority usually agrees, because it is usually represented at planning inquiries by someone from its planning or solicitor's department, and because it is a time-consuming process. The applicant may wish to avoid the fees that have to be paid to my right hon. and learned Friend the Member for Hertfordshire, East and myself on such occasions. That is not a praiseworthy reason, but it is understandable. So we have appeals by way of written representation.
  In that case, too, there is no opportunity for publicity or cross-examination. It could well be a chalkpit. There is no scope for public participation. Again, it would be wrong if the community could indulge its desire to be unlimitedly articulate in its objection to a development in the neighbourhood, where neither the planning authority nor the applicant wants a public inquiry. There are many such occasions. In this respect the Bill is dealing with a narrow category of cases, in which either the applicant, or the planning authority, or—in his ultimate residual discretion—the Secretary of State desires a public inquiry.
  In such cases, which as I say will cover only a small part of the ground, we all agree that the issue of defence and national security must justify a hearing in camera, in whole or in part. That is obvious. However, my hon. Friend raised the question—he raised it, of course, because of the somewhat striking episode in his constituency—of commercial confidentiality. Everyone surely knows that the company concerned is English China Clays. I do not know why its name should not be on the record, because the company has nothing to be ashamed of. It wanted to develop its processes, and it did. Perhaps I should point out here that I am a shareholder in English China Clays, although I was not one in 1967, and it was only yesterday that I found out that it was the company concerned.
  In considering commercial confidentiality, I wonder whether it is right to say, as my hon. Friend the Member for Salisbury said, and, I believe, my right hon. and learned Friend the Member for Hertfordshire, East—who, I think, agreed with my hon. Friend the Member for Salisbury—that what was called the public interest must prevail over commercial confidentiality. I am not sure whether that is true—
  Sir Derek Walker-Smith: With great respect to my hon. and learned Friend the Member for Beaconsfield (Sir R. Bell), with whom I never differ without diffidence, I did not say that. I said that there were two categories of case, and I sought to deal with them quite separately.
  Sir Ronald Bell: That is why I put it in an interrogatory way and repeated it so that my right hon. and learned Friend could correct me. In that case, my hon. Friend the Member for Salisbury said it. I wonder whether that is a sound proposition in general. Of course, there will be occasions—perhaps the occasion in his constituency was one—when the interests of the surrounding inhabitants should have prevailed. I express no opinion on the matter. In general, however, we must be careful in this respect, because the local inhabitants nearly always object to any commercial or industrial development. One has to take that from experience as a general proposition. If the
  660
  interest of their amenity—a legitimate interest—is to prevail as a general rule over commercial and industrial interests, I fear that there will be a serious impediment to the necessary development in this country.
  I say that because, over the past four years, there was a series of circulars from Secretaries of State, both in the Labour Government, who were in office until 1979, and in this Government, emphasising that there should be a shift of emphasis and importance away from amenity towards industrial and commercial development. That is explicit in the circulars. My hon. Friend the Under-Secretary will know that. The series started, I think, with the Labour Government White Paper, the title of which I forget, and was subsequently developed in circulars.
  Mr. Douglas Hogg: The most recent one was circular 22/80.
  Sir Ronald Bell: I thank my hon. Friend for that information. The circulars carried into effect the Labour Government's White Paper, which was not a matter of controversy between the parties. If I remember rightly—I speak from recollection—the Labour Government's White Paper said that this country was in a bad economic state—which it was—that the contraction of our industrial base was a matter of great anxiety, that we had w give priority to the development of industry, especially small industries, that expression should be given to that in all our procedures, including planning procedures, and that the balance between amenity and industrial development should be tilted in favour of development.
  When one talks to industrialists and business men they often make the case that, compared to those with whom they compete in continental countries, the United States of America or Japan, they are subjected to grave impediments of delay and of refusal in the planning procedures. It was undoubtedly to rectify that position that those circulars were sent out.
  One must have a sensible balance in planning. If the Government take it upon themselves, as they have done since the Second World War.. to exercise a blanket control over all development except agriculture and forestry, they must maintain a sensible contemporary balance among all the circumstances that make up the national life. If one considers planning practice under existing law, that balance is maintained subject to only one qualification—that there is still a remarkably strong emphasis on amenity, even to the detriment of development. I still believe that the policy laid down by the Government and their predecessors at Secretary of State level and in circulars has not yet fully percolated through to the inspectors who conduct inquiries and that developments that should be allowed in the interests of Britain's recovery are still being refused upon inadequate considerations of amenity.
  I am the representative of a constituency that has been ravaged by gravel pits. I exempt gravel pits from everything that I have said, because one can turn part of the countryside into almost a lunar landscape by the uninhibited development of gravel pits. That is why I understand how my hon. Friend the Member for Salisbury feels about his chalk pit. Wiltshire is lucky to have only that chalk pit. If my hon. Friend came to the south of my constituency he would feel that Wiltshire had been favoured by circumstances.
  That leads to the central question in the Bill about the secrecy in planning inquiries. My right hon. and learned

  661
  Friend the Member for Hertfordshire, East said that parties have the right to be present, so we are talking only about those who are not parties. My right hon. and learned Friend was talking about a planning commission with no parties present, which is why they were refused the selective representation of objectors. However, if it had been a planning inquiry and there had been parties they could not have been excluded. A hearing in camera would apply only to those who were not parties. For example, the landowner in a planning inquiry could be excluded if he was not the applicant.
  Mr. Chapman: My hon. and learned Friend is right to say that parties should be entitled to appear at inquiries. By "parties" we mean the applicant or the appellant on the one side and the local planning authority or Government Department on the other. Does my hon. and learned Friend also believe that parties should be allowed to call whom they wish to make their case for them? In a case such as East Grimstead in 1967, where the arguments centre around specialist geological advice, a party should be allowed to call a geological expert to speak on its behalf.
  Sir Ronald Bell: Of course parties should be entitled to call any witness that they wish. They were debarred not from doing that but from having that witness present during the evidence given by the applicant's expert. That must be right if one concedes the correctness of any proceedings in camera.
  The expert whom the objectors wished to call was an expert in chalk technology or mineralogy. If he had heard the evidence from the company's expert he would have been in possession of the trade secret. It would not have been misconduct on his part to disseminate it, because he was under no duty of secrecy. He could sell the secret to a trade rival with impunity. That defeats the whole object of the exercise. It would not matter if one of us was present because we would not know what they were talking about. However, an expert in chalk is the last person to whom a company would wish to hand its secret. If one accepts the validity of the argument in favour of secrecy, one is bound to exclude the expert witnesses of the objectors during the period in camera. We are brought back to the general question whether one agrees with the argument in favour of secrecy.
  The right position is perhaps the present one. In 30 years, I have never come across an occasion where evidence was heard in camera. My right hon. and learned Friend, whose career is both longer and more ample than mine, has done so on one occasion. He is one of the longest-serving practitioners of this branch of the law, so obviously the abuse is not rampant. However, the power is there where it is believed that a highly exceptional occasion justifies its use.
  Is that perhaps not correct? Would we be right to pass primary legislation saying that it should never happen? I do not believe, with due respect to my hon. Friend, that that can be right. Some discretion is observed in planning inquiries. I sometimes think that my right hon. and learned Friend is cross-examining in camera, although some of it is also in English. I remember hearing my right hon. and learned Friend cross-examining an expert in Georgian architecture and saying "And then, Sir John"—I think that was the name—"You said to yourself, did you not,
  662
  'Victrix causa deis placuit, sed victa Catoni'? Do not answer me, Sir John. I know that you did." That part of the proceedings was in camera for some of us.
  While expressing the greatest sympathy for my hon. Friend the Member for Salisbury and my admiration for the way in which he has persisted in the matter—this is the eighth debate that we have had, which is a formidable record—he must forgive me for inclining to believe that a total statutory prohibition would be wrong. It has been an incredibly rare occurrence, which shows that inspectors and Ministers, when they come into it, have acted on the right principle by saying, almost never but once in a long time, that it may be right.
  11.19 am
  Mr. Ted Graham: The hon. Member for Salisbury (Mr. Hamilton) and others must have been impressed by the measure of interest that has been shown in the debate. The House should be especially grateful to those who have been able to impart their knowledge as Members of Parliament and from their experiences elsewhere. I am especially glad to have listened to their observations and have learnt a great deal from them.
  Without doubt, today is a red letter day for Parliament. I trust that this matter of great public importance will be thoroughly ventilated. As has been said, the House owes a debt to the hon. Member for Salisbury. To have lived with his sense of injustice for so long, to have been rebuffed or rejected so many times and yet to have presented his case so eloquently, reasonably and convincingly is a tribute to his personal qualities. Even if his perseverance is not to be rewarded today, the House may be privileged at least to see it advanced.
  I for one shall rejoice, not least because the hon. Member has a powerful case. Moreover, I have no doubt that many of his constituents who have shared his disappointments over the years, will rejoice in their good fortune in having him as their Member of Parliament. It will not merely be the removal of a niggle, or the redress of a wrong, justified or not. In the wider context, it will be a vindication of something which all hon. Members hope is true—that the House is open to every hon. Member who wishes to pursue matters of deep concern in the interests of his constituency and that the ingenuity of Members of Parliament, when applied with determination, can find new ways of achieving redress. I cannot anticipate what the Minister will say, but if he and his officials can even now produce a satisfactory formula, the Opposition will applaud his ingenuity.
  Quite rightly, much of this morning's debate has dealt with the specific issues that are the genesis of the Bill. It would be impertinent and futile for me to attempt to add one jot of fact to the full case history of the East Grimstead quarry near Salisbury. The House is dealing with the wider issues and implications that flow from that episode, and I am glad that we are doing so.
  The Opposition feel absolutely no party animus in the matter. It is our clear intention and understanding that a public inquiry is precisely what it says it is—an inquiry in public. Few who have been involved in planning matters have ever assumed other than that all evidence on which an inspector, and ultimately the Minister, will make a decision, and which was placed in evidence at the inquiry, will be made known to all interested parties. The validity

  663
  of inquiries or determinations that are resolved by written evidence as opposed to those of public inquiries has quite properly been explained to the House.
  The hon. and learned Member for Beaconsfield (Sir R. Bell) rightly said that the proportion of matters that are resolved by written evidence is probably smaller than that resolved by public inquiry.
  I was the chairman of a planning committee in the London borough of Enfield some years ago, and I know from personal experience that before a case goes to a public inquiry, much evidence is evaluated and decisions are taken by the planning authority against which an appeal is made. Not all of that process is carried out in public. I am grateful to the hon. Member for Salisbury for drawing attention to the significant advance in such matters which was promoted by the Prime Minister in a Private Member's Bill some years ago. Powers exist to exclude the public. In Enfield we call it part II of the agenda. Before the committee discusses part II of the agenda, the necessary resolution is passed.
  There is, quite rightly, a range of planning and other matters on which it is felt proper that at that stage the committee should have the benefit of confidential reports on personal or other matters. When I was on the planning committee, we often considered matters such as land use and zoning, particularly changes in zoning from residential to industrial or from green belt to housing use. We also considered valuation and such changes may involve enormous sums. Possible changes in the character and environment of a community as well as commercial considerations were also properly involved at that stage. When such matters were involved, our meetings at that stage were held in camera.
  Before the public inquiry stage is reached, a great deal of work also takes place, for example, in inviting the views of residents. Conservative Members who have served on local authorities will know that one may attend residents' meetings, and residents may also be invited to put their case at planning committee meetings. Our committee did not only hear the cases of traders. When we were perturbed by a case, we invited the developer to come to the civic centre to explain his views to the committee to help us to understand the case for the development.
  Planning committees often make site inspections, not just in relation to large and controversial matters such as a prospective chalk or gravel pit or a tower block but to see whether a proposed extension would be appropriate or obtrusive in a community. Tiny details in planning terms may be matters of life or death for the individual's peace of mind.
  Once the matter has been determined by the committee, of course, I fully support the right of the aggrieved party to press all his rights, including that of a public inquiry. There are well-established procedures to ensure that all the evidence fell to be germane to the issue is not only produced at the hearing but submitted in advance in writing by the main protagonists so that counter-arguments may be prepared.
  During the last few days, I attended a public inquiry in the borough of Enfield. The local planning committee had refused an application by a tennis club for an extension of hours, about which local residents were greatly concerned. It was not simply a matter of an extension of hours to play tennis. There were all kinds of social implications as well as lateness. The club used covered courts, a number of social and other activities were involved and local
  664
  residents were rightly upset. The inquiry was well and fairly conducted. Regardless of the outcome, people were satisfied that no evidence to be evaluated by the inspector or the Minister was withheld from the public. Moreover, they had the opportunity to check and to challenge all the evidence submitted.
  I am concerned not only about who is allowed inside the closed doors but about who is locked out. Thus I do not lightly make concessions on the basic right of an aggrieved person to hear all of the evidence on which a determination may be based. The determination may affect his environment, his health, or his job, and all of the evidence should be available. If, following an inspector's decision, a person's future is determined in part as a result of a prejudiced and biased in camera hearing, that person's sense of outrage and injustice will never be assuaged. Rightly or wrongly, the cry will be "They fixed it behind my back".
  Like the hon. and learned Member for Beaconsfield and the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith), I have sought to discover just how rampant is the type of case which properly forms the basis of today's debate. I submitted a question a few days ago asking the Secretary of State for the Environment:
  "how many planning inquiries since 1970 held under the Town and Country Planning Acts had all or part of the evidence given to them heard in camera".
  The reply I received from the Under-Secretary—I am glad to see him in his place today—was:
  "We are aware of only one instance in this period, that is the Windscale Inquiry of 1977 when the Inspector took in private a limited amount of confidential information relating to the contractual arrangements of British Nuclear Fuels Limited."—
  [Official Report, 1 February 1982; Vol. c. 45.]
  Save for the lamentable East Grimstead case and the other case, although there is some dispute whether that comes within the Act, that is the only instance. If the Secretary of State is so minded, this Bill could well be the vehicle to clarify and simplify once and for all any possibility of misunderstanding.
  Mr. Hamilton: I did not want the hon. Member for Edmonton (Mr. Graham) to finish his speech without having an opportunity to say how much I appreciate the attitude he takes to this small Bill. I was interested when he referred to the "only case" of a planning inquiry where evidence had been heard in camera. I think he said that Windscale was the only case since 1971. I suggested that there could be an amendment, with which we all agreed, on defence and national security. Windscale was concerned with the security of nuclear material and I wonder whether that might not—I do not know the hon. Gentleman's view—qualify for secret proceedings under the term "national security".
  Mr. Graham: I imagine that it would because, as I understand the terms of the contract, that was not in dispute, evidence or doubt. We know that the substantial grievance felt concerns the purely or wholly commercial contract as opposed to national defence. I hope that the Bill will reach Committee and that there will be an opportunity, not only for the amendment suggested by the hon. Member for Salisbury but for others.
  I was about to say that there are three pieces of evidence that the House should consider and on which the Minister might act. First is the relevant regulation, which has been read out more than once but which I wish to read again, which to this day forms the legal basis that still allows an

  665
  inspector at an inquiry to agree to allow certain proceedings to be held in camera. The Town and Country Planning (Inquiries Procedure) Rules of 1974 state:
  "The procedure at the Inquiry shall be such as the appointed person shall in his discretion determine."
  That is a very wide discretion and we know that until 1967 we were unaware it had been exercised. In 1967 hon. Members were entitled seriously to question whether that was the proper use of that discretion. Nevertheless, it does exist and is not argued against.
  Secondly, we move to 1972 when, due almost entirely to the diligencce and determination of the hon. Member for Salisbury, but, being fair, also to the sense and sensitivity of the then Secretary of State who is now the Minister of Agriculture, Fisheries and Food, a historic dictum was handed down from Marsham Street. The then Secretary of State said:
  "It is Government policy that inspectors should in future not accede to requests that they should hear evidence in private at planning inquiries".
  The hon. Member for Grantham (Mr. Hogg) rightly probed an earlier speaker on how one knew whether that dictum, determination or decision was given force; whether put in writing, circulated, or put before every inquiry to advise the inspector or, whether all inspectors were assumed to understand it. The Minister can help the Committee on such matters. The determination of the then Secretary of State has been upheld by successive Secretaries of State and in only one instance was it departed from—at Windscale.
  Mr. Douglas Hogg: I am grateful to the hon. Member for Edmonton (Mr. Graham) for making the point that the Secretary of State, in a parliamentary answer, made that statement. However, it must also be noted that in the debate of 29 November 1974, the speaker for the then Government made it clear that if there were to be a request for an in camera hearing the matter would be referred by the inspector to the Secretary of State. Thus, the representative for the Opposition—then the Government—was clearly contemplating the possibility that the Secretary of State would admit the application for an in camera hearing.
  Mr. Graham: With respect, I heard the hon. Member for Salisbury say that it would be referred to the Secretary of State. We know that the Secretary of State in 1974, acting under the previous Secretary of State's determination, said that in future an inspector should not accept the request.
  Mr. Hogg: I am not criticising.
  Mr. Graham: No, but the two matters ought to be taken together. If a request is made to an inspector, it is automatically passed to the Secretary of State. If the Secretary of State's announcement is set aside it will not be acceded to. I understand what the hon. Member for Grantham is saying; an inspector may not accede to it but the Secretary of State might. Again, the Secretary of State will help us on that point.
  The third piece of evidence is found in the words of the motion moved by the hon. Member for Salisbury on 29 November 1974:
  "That this House disapproves of the holding of planning inquiries in secret, except in the interests of defence and national security."—[Official Report, 29 November 1974; Vol. 882, c. 985.]
  666
  Although that motion did not make progress on procedural grounds, it had some distinguished supporters in the Lobby. The hon. Member for Salisbury fairly and significantly said that the present Secretary of State supported the motion on those grounds. However, he was too reticent to explain to the House that he had many powerful friends, including the Secretary of State, in the Lobby at that time. For example, the then Tory Chief Whip, now the Lord Privy Seal, his deputy, now the Chairman of Ways and Means, the hon. Member for Monmouth (Mr. Stradling Thomas) now the Deputy Chief Whip, the present Chancellor of the Exchequer, the Secretary of State for Defence, the Secretary of State for the Environment and other hon. Members who happened to be present on a Friday. Having been in Government and Opposition as a Whip, I consider the list and see a certain similarity with the sort of hon. Members who are traditionally about the House on a Friday.
  Mr. Hogg: The Chief Whips.
  Mr. Graham: That is right. However, such people clearly showed sympathy with what the hon. Member for Salisbury proposed.
  Sincere attempts have been made to produce satisfactory rules that meet the mood of hon. Members and those involved in these matters outside. The hon. Member for Salisbury does the House a signal service by stating that it is not merely hon. Members or their constituents, but every hon. Member and everbody in the land who could find themselves, unfortunately, if there is a miscarriage of the intent—I use that term advisedly—involved.
  Attempts have foundered in the past 10 years because of a failure to produce a form of words that kept the extremely rare case held in camera within a proper perspective. We have had safeguards through ministerial announcements but not complete satisfaction.
  It has given me considerable satisfaction to research for this debate. I have been reminded of the supreme importance under our planning law that justice must not only be done but must be seen to be done. I know that the Minister who is to reply will have done his homework no less thoroughly. Who knows, after the passage of time—15 years—he may be able not only to help the hon. Member for Salisbury but to improve planning legislation. I know that he will not lightly dismiss the opportunity presented by Second Reading. If he declines to allow the Bill to go to Committee, I should be sorry. When he presents his case, if that is it, I am certain that we will listen to it with understanding.
  I hope it may be possible to allow the Bill to be considered further in Committee, with amendments to take account of national defence and perhaps other considerations. By that means, the fundamental principle of open government can be strengthened.
  11.40 am
  Mr. Sydney Chapman: It is a pleasure to follow in the debate the hon. Member for Edmonton (Mr. Graham), an Opposition spokesman on environmental matters. I agree with almost all that he said. He referred to a debate in November 1974. Unfortunately, I was not in attendance because of a combination of ungrateful electors and unkind boundary commissioners. I hope to make up this morning for my absence on that occasion.

  667
  It is an honour to speak in the same debate as my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) and my hon. and learned Friend the Member for Beaconsfield (Sir R. Bell). They speak with great experience and expertise on this rather technical subject. I follow them with some trepidation.
  I congratulate my hon. Friend the Member for Salisbury (Mr. Hamilton) on having the good fortune to be selected in the ballot and on the eloquence and clarity with which he introduced his important Bill. Such is the wheel of fortune that in my first Session in 1970 I was lucky to draw number 10 in the ballot. I thought that that number might be an omen of what I might aspire to in a long political career, but my parliamentary service was abruptly halted after less than four years.
  I chose a Bill which in parts was not unrelated to the measure that we are discussing. My Urban and Rural Environment Bill was introduced to give greater notification to people affected by planning proposals. In different ways my hon. Friend and I believe that if the planning system is to be fair it has to be seen to be fair. The best way to achieve that is not only to consult people who may be affected but at least to notify them that a planning proposal is in the offing.
  I support the Bill. I commend it not least because of its conciseness and brevity. The Bill is 39 words long, but its purpose is pithily put in nine words. I am appalled that nine words to make a statement in a Bill costs 30p to produce in the printed format. That must be a reason for some parliamentary comment.
  I declare an interest. I hasten to say, and perhaps regret in one sense, that I have a professional rather than a financial interest. I am a fellow of the Royal Town Planning Institute. In essence and in effect, I am also a non-practising architect and private planning consultant. I am not a spokesman for the Royal Town Planning Institute, but I understand that it supports the Bill's principle.
  The East Grimstead case is the cause of my hon. Friend's long, determined and persistent campaign. It is astounding not only that part of the inquiry was held in camera but that people who felt that they would be adversely affected were not allowed to bring in their specialists to make a substantial contribution. I find that shocking.
  I support the Bill for two reasons. First, I am anxious that a unique exception should not become a rule. From my limited experience in town and country planning matters, I know that a precedent can easily become a practice. If it is an evil precedent, as I believe it is in this case, it must be stamped on by Parliament.
  My hon. and learned Friend the Member for Beaconfield might not support the Bill, but the differences between us are not great. I come down firmly on the side of my hon. Friend the Member for Salisbury.
  I also support the Bill because, however narrow it might be, it has a wider psychological significance. As my hon. and learned Friend the Member for Beaconsfield said, under planning law an applicant has the right to appeal against a planning refusal, but a third party is not allowed to appeal against a planning consent. The reason for that is that development would grind to a halt without such a rule. Rarely does a neighbour agree with a development next door and rarely does a resident agree that the green field behind his house should be developed into a housing or industrial estate.
  668
  There is a case for certain large, significant or even sensitive development proposals being subject to a procedure whereby third parties can make their views known before the decision is taken. In a real, if limited, sense that is already the position. The Secretary of State can call in a development proposal and hold a public local inquiry.
  I welcome that and think that it could be extended in certain spheres, but the concomitant of that is that the public inquiry should be what it is called. Only if it is open to the public at all stages will the public have confidence in it. The Bill is a reassuring step in that direction.
  The case assumes greater importance today than it did in the general context 15 years ago. Over 90 per cent. of planning appeals are now determined by inspectors appointed by the Secretary of State. Up to 1969 they were all determined by the Secretary of State. The decision is taken not in Marsham Street nowadays, but on the ground., in the locality. That is a greater reason for the inquiry being open to the public.
  My next point involves a technical aspect which might be more properly dealt with in Committee, but it is important. Evidence at a public inquiry need not be given verbally. It can be given in writing, at the discretion of the inspector granted to him under rule 10(1) of the Town and Country Planning (Inquiries Procedure) Rules S.I.1974 Nos. 419 and 420.
  Under the Bill an inspector could say "Since I have to hear all evidence in public the word 'hear' means that 1 cannot accept written representations, perhaps from people who are deeply affected but who cannot attend the inquiry." I am sure that my hon. Friend the Member for Salisbury would still favour written representations continuing to be made, provided they are open to scrutiny by all parties at the inquiry.
  Mr. Douglas Hogg: I apologise for intervening on what may be a Committee point, but there is a distinction between evidence, which is testimony as to the facts or opinion, and representations, which are an expression of view. My hon. Friend is talking about objectors who cannot attend an inquiry sending their objections in writing. That would be not evidence, but representations, which are not covered by the Bill.
  Mr. Chapman: I am grateful to my hon. Friend. I am sure that he accepts that valuable evidence is accepted in written form for bona fide reasons—not because people cannot be bothered to attend an inquiry but because, for special reasons, they are unable to be there. That is an important point which can be discussed further in Committee.
  Every party to an inquiry, whether applicant or appellant, local planning authority or third party—including neighbours and the public—should be allowed to put its case to the inquiry and to comment on the case of other parties. It is regrettable that that did not happen at the Salisbury inquiry.
  I pay tribute to the Secretary of State's great efforts to reduce bureaucracy and speed up the planning system. Approvals of structure plans have expedited dramatically in the past three years and more small developments now no longer need planning approval. Efforts have been made to minimise even further the duplication between the county tier and the district tier in the planning and

  669
  development control system and inspectors can take instant decisions immediately after an inquiry. Those are all solid and positive achievements.
  Inquiries and decisions can and should be speeded up. I welcome the measures taken by my right hon. Friend, but an essential prerequisite is that they must be open and fair—the expression rightly used by my hon. Friend the Member for Salisbury. I hope that the Government will support that principle. I call in aid the written answer given to my hon. Friend the Member for Salisbury by the then Secretary of State nearly 10 years ago.
  The question of commercial secrets is a vexed problem but it is up to an applicant to choose whether to reveal such secrets. There is no obligation on him to do so. In addition, I do not believe that it is beyond the wit of an applicant or appellant to make clear to an inspector, or to the Secretary of State if he is deciding a matter, why a development is necessary without giving away trade secrets or commercial confidences.
  We can turn the argument round. The fact that a planning inquiry had not gone into camera before the East Grimstead case of 1967 and no inquiry has done so since then—with the exception of the Windscale inquiry, which was an exceptional case—means that there cannot have been much of a problem. Commercial organisations seem to have been able to live with the hazard, with the one exception of the 1967 case. I hope that that will assuage the fears of any commercial interests who may be worried about the Bill.
  I understand why the Bill refers only to England and Wales, but I have urged for a long time that, save in exceptional circumstances, laws and orders and regulations made under them should be uniform throughout the United Kingdom. That applies particularly to Northern Ireland. The Scots have a different legal system and, as I am not a lawyer, I am not qualified to comment on that aspect.
  Not only planning inquiries, but planning committees that decide on applications, should be held in public whenever possible. The hon. Member for Edmonton mentioned the part I and part II procedure used in Enfield. The same procedure applies in the neighbouring London borough of Barnet, part of which I represent. I believe that planning committees make an unnecessary rod for their own backs by holding part of their meetings in private.
  Mr. Graham: The hon. Gentleman must know that the minority party on a council often opposes matters being taken under the part H procedure, because, for many reasons, not least political reasons, they wish to have issues ventilated. Majority parties usually get their way, but although a committee's determination has to be ratified by the full council meeting, where matters are dealt with in public, those affected by decisions cannot attend the planning committee to see them being taken.
  Mr. Chapman: That is a valid point. I do not dissent from what the hon. Gentleman says. My parliamentary neighbour, the present Prime Minister, introduced a Private Member's Bill 22 years ago on the admission of the public to meetings of public bodies. Council meetings and committee meetings are open to the public, though councils and committees can decide to go into camera in
  670
  certain circumstances. I believe such a system for planning committees would be preferable to the formalised part I—part II procedure.
  My hon. Friend the Member for Salisbury referred to the Franks report—the great tablet pointing the way to future planning policies. The committee was set up in 1955 and reported in July 1957. It was asked to consider, and to make recommendations on, inquiry procedures.
  I still remember two phrases in that report. The first was the recognition of the inherent problem between "private rights and public advantage". It is a delicate and difficult balance to maintain, but we are elected here to try to maintain it in the interests of our constituents.
  One of the report's main conclusions contained the now immortal phrase "openness, fairness and impartiality". Twenty-five years later, my hon. Friend the Member for Salisbury has given the House the opportunity to achieve that statement of principle. He should be congratulated, and I commend his Bill to the House.
  11.59 am
  Mr. Douglas Hogg: I echo what my hon. Friend the Member for Chipping Barnet (Mr. Chapman) said. I, too, am grateful to my hon. Friend the Member for Salisbury (Mr. Hamilton) for giving the House the opportunity to consider an important matter.
  We start from the premise that planning inquiries are of considerable importance. They are important to communities. The countryside and the way in which people live can fundamentally be changed by an inspector's or a local authority's decision. They are also of major importance to individuals, who may find their house overlooked by a monstrous building, find themselves confronted with a five-lane motorway and so on. Such matters are of profound consequence to individuals and to communities. Therefore, the proposition in the Bill that evidence at planning inquiries should be taken in public is entirely correct generally, although certain reservations should be expressed.
  However, we should not derogate from the general proposition. It applies also to courts of law. Save in exceptional cases, evidence and argument will be heard in public—in front of the two or three members of the public who choose to attend what are generally fairly turgid occasions. Curiously enough, the arguments which favour holding planning inquiries in public are more cogent than those which favour the hearing of evidence in public before courts, although both are good.
  In litigation before courts the identity of the parties to the litigation is clearly formulated. There is a public interest that justice should be seen to be done. But the parties are already known and identified. If the court goes into camera the interests of the parties will not be prejudiced, because they will be present or at least represented. But that is not so in planning inquiries.
  There is no such thing as a party to a planning inquiry. There is an applicant; there is often the local authority who is the respondent to an appeal. But every member of the public is a potential objector and to that extent is a potential party. No one can be excluded on the grounds that he is not a potential objector, and if he is a potential objector he is in a real sense a party. Therefore, the argument in favour of hearing evidence in public in planning inquiries is much more cogent than that for hearing evidence in public in courts, although, as I said, both are good.

  671
  There are, however, more reasons why we should state the principle clearly. The first relates to the procedure adopted in tribunals. As my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) said, an inspector at a planning inquiry has considerable discretion. It is to be exercised in accordance with the statutory rules, but provided that he acts within the rules—provided that he is acting intra vires—there is no appeal against the manner in which he exercises that discretion, so he is largely unfettered in his decisions, provided that he keeps within the rules.
  I do not wish to be offensive about inspectors. Many inspectors before whom I have had the pleasure to appear are extremely competent and efficient, but that is not universally true. They are normally drawn from the ranks of people who have been involved in administration, often in the Civil Service. Such persons have a slightly different approach to the conduct of public affairs and the admission of evidence than people who have spent their working lives in court. That is not a criiticism. Those who conduct judicial processes are by tradition and training conscious that it is vital that justice should be seen to be done, whereas those involved in administration tend to take the view that many things should be done behind a cloak of secrecy.
  Sir Ronald Bell: The distinction drawn by my hon. Friend is interesting. Is not a distinction also to be drawn between the function of the court, which is to dispense justice, and the function of inquiries, which have to make a political decision of what is best to be done? With a political question slightly different considerations apply. We lawyers are inclined to think in terms of justice and to think of a planning inquiry as either judicial or quasi-judicial, when it is a political body deciding a political question on which the opinion of a court may be of little value. The decision to be made is, what is the best thing to do?
  Mr. Hogg: I do not entirely agree with the proposition put forward by my hon. and learned Friend that inquiries deal with political questions. I agree that an inquiry is not exclusively a forum for doing justice in the sense that it is not determining exactly a judicial issue. It is more than that. An inquiry is trying to form a broad view as to what is appropriate in the context of the environment to which the application relates. That is not a question of justice, nor is it a purely political question. A careful balancing of the rights of individuals, commercial expediency and the overriding interest of the community is involved.
  For that purpose an inspector or the Secretary of State has to receive as much evidence as possible. More to the point, he has to receive comment on evidence adduced by others. That is not a question of justice; it is a question of pragmatic necessity. Unless the inspector receives comment on the evidence of others, it is difficult for him to assess the 'weight which he should give to the original evidence. Therefore, my first basic point is that the arguments are overwhelmingly in favour of the general proposition that evidence should be heard in public on almost every occasion.
  The next question is, are there any counterbalancing arguments? There are a number of answers to that question. Other factors must be taken into account. First, my hon. Friend the Member for Salisbury recognised the factor of national security and defence interests. He made
  672
  that reservation in his debate on 29 November 1974. I was pleased to hear him say, during his clear speech, that when the Bill goes to Committee he will move an amendment to preserve that interest. That qualification must be imposed.
  Secondly, there is the question of commercial secrecy. The case put forward by my hon. Friend, which received support from other hon. Members, was that the interests of commercial secrecy were not sufficient to displace the proposition that all evidence should be heard in public. My right hon. and learned Friend the Member for Hertfordshire, East put forward an ingenious argument. He—and few know more about this aspect of law than he—recognises that the position that arises most frequently is when a company wishes to appeal. For example, a company or commercial undertaking may have applied to a local authority for planning permission, been turned down, and wish to appeal. He says that it is entitled to appeal by written representation. Therefore, if commercial interests need be protected, that information can be set out in documents and the appeal limited to an appeal on the documents.
  That proposition has a great deal of initial charm. However, it also has the great disadvantage that, if that is regarded as a proper reason for displacing the protection that otherwise might be available in oral hearings, companies will feel that they cannot take advantage of oral hearings if their appeals rest on grounds that involve a disclosure of commercial secrets. Therefore, that is not the complete answer.
  Sir Derek Walker-Smith: Will my hon. Friend deal with my analogy of commercial arbitrations, where similar considerations apply? The logic of his argument is that by opting for arbitration companies will be forced, in the interests of commercial confidentiality, to deny themselves an open hearing in the High Court. It is exactly the same.
  Mr. Hogg: It is not the same, because an arbitration and a hearing in the High Court, although different in form, are the same in kind. Both involve the calling of witnesses, the testing of evidence by cross—examination and oral representations. Therefore, arbitrations and hearings before a High Court judge, although different in form, are the same in kind, whereas a written appeal and an oral appeal are different. 1 am sure that my right hon. and learned Friend would accept that distinction in response to his pertinent point.
  If we remove from tribunals the ability to protect secret or confidential information, we shall drive the appellants to the written procedure rather than the oral procedure. That would be unsatisfactory.
  Mr. Michael Hamilton: Will my hon. Friend comment on the principle that commerce managed perfectly well until 1967 and can, therefore, continue to do so?
  Mr. Hogg: That is a proper point, with which I shall deal in a moment. I wish to show the House where we should go from here. My third counterbalancing argument is that, although it is true that in the parliamentary answer given in 1972 the then Secretary of State made it clear that applications to inspectors for hearings in secret should not be granted, it was also clear from the speech made on 29 November 1974 by the then Under-Secretary of State that

  673
  the Secretary of State reserved to himself the right to consider applications on whether the hearing should be in camera.
  We must ask ourselves where we go from here. It is good that the House should give the Bill a Second Reading and take advantage of it to state the general proposition that hearings of evidence should be in public. Therefore, I welcome the Bill.
  I think, however, that the Bill in its present form is unacceptable. It has to be amended to take care of the reservations already put forward by my hon. Friend the Member for Salisbury concerning national security and national defence. There must be some proviso whereby confidential and secret information can be protected.
  As my hon. Friend has said, this matter was considered at some length by the Lord Chancellor's Office and by the Council on Tribunals, I think in 1972, and as a result of those consultations there was produced a substantial code of rules, to which, as my hon. Friend rightly said, the Lord Chancellor did not give statutory effect. I have not seen those rules, but I have seen a general statement of them. I think that my hon. Friend thought at the time that the rules were too complex. My feeling is that rules of this kind tend to be complex but are none the less not unworkable. I should have thought that the rules formulated in 1972 were sufficient to meet my interest and the interest of my hon. Friend.
  My basic proposal is that the Bill should go into Committee—that means, of course, that it ought to get a Second Reading here but that in Committee it must be substantially amended. The kind of amendment that I have in mind—I am not seeking to draft it on my feet—is that, save in exceptional circumstances, and as may be provided by rules made under the Bill or other legislation, evidence at planning inquiries should be heard in public. In other words, I am saying that my hon. Friend's principal objectives—that the proposition to be adhered to is that evidence should be heard in public—should be enshrined in statutory law. But, at the same time, I think that the Bill should provide for the very exceptional circumstancese which occasionally arise.
  Mr. W. R. Rees-Davies: I am in considerable agreement with the arguments which have been adduced by my hon. Friend. It would seem that the Bill should have a Second Reading, that there should certainly be one proviso which deals with defence and security, and another one which could be done by regulations tabled after consultation with the Lord Chancellor. Those regulations could lay down the conditions upon which, in very stringent circumstances, where commercial secrecy arose, evidence could be shut out, but in all other cases it would be heard in public.
  Mr. Hogg: I am very grateful to my hon. and learned Friend for his intervention, with which I entirely agree. It would be a power to make regulations either under this Bill or, alternatively, under the town and country planning legislation, under which regulations are already made. Therefore, there is a power to make regulations, and I feel sure that regulations should be made to provide that in exceptional circumstances evidence should be received in camera, and to provide also the mechanism whereby the application is made. Perhaps there could be an appeal
  674
  procedure whereby people could test the propriety of a ruling that such evidence should be heard in camera. I entirely agree with my hon. and learned Friend.
  Mr. Rees-Davies: The appeal could, of course, be an appeal to a single judge. One could have an appeal straight to the judge because it would be on a point of law on the regulations.
  Mr. Hogg: That is a helpful suggestion and one that came to my mind during the speech of my hon. Friend the Member for Salisbury. He recited suggestions that had been made in the past by other persons both inside and outside the House, one of which was that there should be an appeal procedure to the High Court. I welcome the gloss to my primary suggestion made by my hon. and learned Friend the Member for Thanet, West, and I am sure that he is right.
  We wish to give the Bill a Second Reading, conscious as we do so that it has to be examined in Committee. I am afraid that this would impose a considerable burden on my hon. Friend the Minister, partly because I feel sure that the Government would wish to table amendments to the primary clause in the Bill, and partly because I think that it would be of great assistance to the Committee if we could see the rules or a draft of the rules or be given some idea as to what draft would be likely to be recommended by his Department.
  12.22 pm
  Mr. Neil Thorne: I congratulate my hon. Friend the Member for Salisbury (Mr. Hamilton) on having, after 17 years, at last succeeded in obtaining a Private Member's Bill Second Reading. I admire his tenacity in pursuing the case through no fewer than eight debates as well as numerous questions, motions and letters to Ministers. His determination not to quit the field of battle no doubt owes much to the benefit of his experience as a member of the Household Division, whose tie he is wearing this morning.
  As a chartered surveyor I have both pleaded and given evidence at numerous public inquiries during the past 20 years. As a member of the Greater London Council I had the privilege of being responsible for the preparation of the Greater London development plan. I was succeeded in that responsibility by my hon. Friend the Member for Reading, South (Dr. Vaughan) who took over when I assumed responsibility for planning and transportation in central London in the days when we did not have the chaos over fares and other matters that exists today.
  My hon. Friend the Member for Chipping Barnet (Mr. Chapman) mentioned that the price of the Bill is 30p although it amounts to only nine words. The Bill is not the only expensive item in the planning process. The Layfield inquiry was so expensive that no cost has yet been established. It is the way with planning that if one is not careful, the process becomes extremely expensive and the taxpayer is liable to pick up the final bill.
  When I first became aware that it was possible for evidence to be heard in camera at a public inquiry I was horrified. I could not believe that it could be true. It seems to run contrary to the principle of openness that is essential to the whole basis of planning law. The original function and purpose of the public inquiry was to fill the need of a more informal system for hearing appeals or

  675
  investigating problems, particularly when the answer does not wholly depend on what the law was, but on the application of policy.
  Inquiries are used for various purposes—to hear objections without necessarily considering the merits of the scheme, to examine the scheme in the light of objections, and to examine development proposals. The functions of an inquiry are to establish the facts, to hear arguments from the principal and other parties, to satisfy parties that their arguments and views are being taken into account, and to collect and assess facts and views for the Minister to arrive at an informed decision. In a number of cases that decision may now be reached for the Minister by an inspector.
  If, for whatever reason, one party sought a hearing in camera it would be wrong not to give adequate notice that such an application had been made. If no notice was given, an adjournment of some weeks should be offered.
  I have great sympathy and admiration for the patience of the inspectors who conduct public inquiries and who have to listen—as sometimes you do, Mr. Deputy Speaker—to the same points being repeated several times by different speakers. However, the process of hearing appeals by written representations has speeded up the procedure and increased productivity. On reflection, perhaps it is as well that the planning inspectors and expert witnesses were not members of ASLEF. If they had been, the whole process would have ground to a halt, or the taxpayer would be paying for many more public inquiries than at present.
  I am glad that my hon. Friend the Member for Salisbury has offered to make an exception for defence and national security matters. However, I am still concerned about what constitutes national security. Is my hon. Friend limiting his offer to national defence security or does he mean general national security? In the present economic climate, I can envisage it often being pleaded—perhaps even in the case that has aggravated my hon. Friend over the years—that the hearing should be held in camera for reasons of national security. I hope that the Minister will give a positive undertaking that in camera hearings will be limited to cases involving national security interests. It is fundamental to planning law that justice should be seen to be done. It is wrong to contemplate giving a general ruling. As we saw a night or two ago, it is inevitable that on the introduction of new legislation, the public's attention is drawn to a sphere of which it was previously unaware. That can cause some people to apply to use the procedure provided. That would be unfortunate, because so far the matter has escaped general public notice.
  I hope that the Minister will give those undertakings and that he will bear in mind the fact that the number of cases to be heard in camera should be extremely limited. In certain instances, national security might extend beyond national defence security. Indeed, these days industrial espionage is carried out, which is expensive for a company that loses its secrets. However, as has been said, such cases would be the exception rather than the rule. Normally, it is open to the applicant to decide whether he wishes to use such an argument in support of his case. Therefore, we should approach the matter with caution. I hope that the Bill will be given a Second Reading and that it will be possible to iron out the difficulties that I have mentioned in Committee.
  12.28 pm
  Mr. W. R. Rees-Davies: The Bill certainly makes up in importance for what it lacks in size. Its contents are as follows:
  "Evidence at planning inquiries held under the Town and Country Planning Acts shall be held in public."
  I fervently believe in that principle, and I shall support the Bill on the Second Reading. My right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) ably set out the background. However, as is evident from my interventions in the speech of my right hon. Friend the Member for Grantham (Mr. Hogg)—with which speech I largely agreed—it is necessary to ensure that if all inquiries are held in public, the State and the citizen are protected in certain instances. It has already been stated and agreed by the promoter of the Bill that provisions should be made in Committee to ensure such protection in matters of national security. I agree.
  The second issue—not so easy—is the protection to be given in respect of commercial secrets and matters of that nature. I believe that this situation can be met through the Bill. I have already remarked in an intervention that believe this would be done by seeking from the Lord Chancellor the necessary code of the procedure to be applied which would be laid down and contained in a schedule to the Bill. It would be simple for what could be a highly controversial matter to be then referred to a single judge sitting alone in chambers. The judge would have the power—it would be a matter entirely of law—to rule whether the matter complied with the regulations laid down. On those lines, the right situation, that should have obtained long ago, would have been reached.
  I raised these issues first at the time of the inquiry into the development of land around St. Paul's Cathedral. The question arose of whether it was a purely administrative tribunal. In those days, it was. There was no obligation to conform with any rules of practice or otherwise. One could submit letters and documents of any sort without calling evidence to support them. There was no question in those days of calling for the inspector to give reasons for arriving at his conclusions. Nor were the Department or the Minister obliged to give reasons. We have come a long way since those days.
  The first of the major inquiries took place at the time when I was working with Jack Simon, as he then was, and many others in the Inns of Court. We published a paper relating to the Franks commission. It was from Franks that the move was made to tribunals laying down how the interests of planning inquiries could be advanced. Administrative tribunals were established and a code of practice published which has since been brought up to date and which has much improved the situation.
  I remember well the first time we made an attack through the Ministry asking that the inspector should publish his report. Lord Duncan-Sandys, who was Minister at the time, remarked that he would have the greatest difficulty in persuading the Ministry to allow this to happen. I replied that it had to happen. If people turned up before an inspector to give evidence, there was need for the facts of that inquiry to be properly set out. One wanted to see, in the first instance, whether the inspector had got his facts right. If he had not got the facts right, the opinion based on them would be wrong.
  It was another great milestone when success was achieved. Now in all these inquiries the inspector's report

  677
  is published. If the facts are disputed, they can be contested. Otherwise, the matter progresses and the inspector gives his opinion on whether he would or would not allow the particular appeal. The Minister can override the inspector on the appeal but has to give reasons. If the inspector comes to the conclusion that the appeal should be allowed, any decision by the Government through the Minister to reverse it has to be done publicly. This is at the heart of open Government.
  It shows a great act of determination by the promoter of the Bill that he should have taken the time to press on with this important principle. One could have said "This is not a matter of great public interest". I do not agree. The paucity of attendance here today is probably because few of us in the House have personal experience of these inquiries. On the other hand, almost every hon. Member has experience of constituents who have been deeply affected by an inquiry, or its improper conduct, or a failure to obtain one.
  In conclusion, I should like to give one or two basic facts. There are 450,000 applications each year. Almost all those cases are dealt with by an inquiry, in writing or otherwise. Each year there are 16,000 appeals. However, there are very few cases—apparently, only about 70 each year—which the Minister calls in for his own decision. That is a valuable process, because if there is a strong feeling in a constituency between the local council and a large number of local objectors, the objectors often find that the decision has been pre-empted by the council and they have no right to appeal against it. I very much hope that Ministers will therefore make full and effective use of their right in cases where there is a substantial local difference of opinion to call in these matters for decision. That, of course, would be done fully in the public eye. Because it is done in that way, and because it deals with the liberties of the subject, we shall be glad to give the Bill a Second Reading. We hope that it can be so amended as to be of further use in clarifying specifically the situation that all these town planning inquiries shall be held in public, with only the provisos to which I referred.
  12.37 pm
  The Under-Secretary of State for the Environment (Mr. Giles Shaw): I join those who have already congratulated my hon. Friend the Member for Salisbury (Mr. Hamilton) on his tenacity of purpose and clarity of execution in dealing with the matter which originated in his constituency way back in 1967. It is astonishing that a single incident has resulted in such a long catalogue of effort by one Member of Parliament. The degree of diligence which we all know that he applies to his tasks is such that we should never have doubted that he would not have left the matter alone. As this is the final Parliament in which he has decided to serve, it is highly appropriate that he should today seek a Second Reading for a Bill which clearly represents a decade and a half of endeavour by him.
  I must also offer my hon. Friend an apology on two levels. One concerns the distribution of documentation which the research department asked for yesterday and which I authorised, without informing my hon. Friend that, as is customary in these matters, background notes would be provided for colleagues who wished to take an interest in the matter. Secondly—my hon. Friend has
  678
  already said that I have made the point to him—I must offer an apology for the fact that he has not been persuaded by Governments of both parties on the many occasions on which he has raised the issue that they feel that his case should have been handled differently from the way in which it was handled. We have failed to present sufficient evidence either in camera or in public to assuage his genuine doubt that there was a miscarriage of justice.
  I can go a little further today in making amends for the long history of apparent unwillingness to take action. The incident at East Grimstead that has given rise to the debate was very rare. My hon. Friend and other hon. Members today have said that such occasions are rare, and for good reason. The planning inquiry system has been developed during the years to absorb within it a wide range of different matters that come before inspectors. They range from the purely domestic to the vast array of evidence that was brought before the special inquiry at Windscale.
  Within that wide range of experience, the Department of the Environment has tried to evolve a system that will allow all those matters to be fully and fairly investigated by an inspector in conformity with certain statutory rules—their genesis is in the Town and Country Planning Acts and in subsequent orders laid before the House—and rules of guidance and notes issued by the Department under its administrative powers for the determination of procedures at inquiries.
  I emphasise that the system has considerable flexibility built into it. At least a part of that flexibility is that it is not enshrined in the detail of statute law. I fully understand my hon. Friend's feeling—that it is high time that there was some addition to the statute law governing inquiries. I am sensitive to the point made by my right hon. and hon. and learned Friends that there is a place for the law in inquiries. I take note of the contribution of my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies) in which he suggested that we should amend the Bill in Committee for commercial confidentiality so that there might be a final appeal on the matter to a judge. However, I should warn the House that the further intrusion of statute law into the procedures should be undertaken only when the House is convinced that it is necessary to do so.
  The system depends on an acceptance by the public that the system is seen to be fair and works effectively. Let us not forget that decisions are not made by inspectors at a hearing. In many cases, recommendations are made to the Secretary of State. Certainly it is increasingly necessary for decisions also to be made by inspectors, based on written representations or inquiries where parties agree that they will accept a determination by the inspector. Inspectors are increasingly taking the load by acting on behalf and in the name of the Secretary of State.
  That means, however, that the final decision is not of a legal nature. I think that all my colleagues agree on that. The decision that the Secretary of State makes, or the inspector makes on his behalf, is based on the planning law and regulations. These cases deal primarily with facts which determine the use of land and facts to be weighed in considering what should be the preferred use of land. As my hon. and learned Friend the Member for Beaconsfield (Sir R. Bell) said, in many instances these emerge as decisions which are certainly not of a legal character. They are certainly outwith the normal kind of legal interpretation that would be arrived at in a court of law.

  679
  I must advise the House that in examining the Bill and deciding whether it should receive a Second Reading we must bear in mind the long tradition of the way in which planning issues have been determined, either at public inquiries or by inspectors in considering written representations. I make no apology for setting that as the context against which my hon. Friend the Member for Salisbury seeks a decision. It stems directly from the question of who should attend public inquiries.
  The case advanced by my hon. Friend arose because at a certain inquiry certain persons were excluded by the inspector from certain discussions which were subsequently held in private. My hon. Friend rightly concluded that that did not then constitute a public inquiry within the simple meaning of the term, and that it was therefore tantamount to a miscarriage either of justice or of the spirit of the planning legislation obtaining at that time.
  As has been said, the procedures adopted for the conduct of inquiries are laid down in statutory instrument No. 419 of 1974, which governs the rules of tribunals and inquiries. It should be noted that the public is not listed among those who may attend a public inquiry. Rule 10 provides:
  "Except as otherwise provided in these Rules, the procedure at the inquiry shall be such as the appointed person shall in his discretion determine."
  It goes on to mention certain persons who should be at the inquiry, and refers to the applicant, the local planning authority and so on. It also states:
  "The appointed person shall not require or permit the giving or production of any evidence, whether written or oral, which would be contrary to the public interest"
  and
  "The appointed person may allow the local planning authority or the applicant, or both of them, to alter or add to the submissions".
  it further provides:
  "If any person entitled to appear at the inquiry fails to do so, the appointed person may proceed with the inquiry at his discretion."
  and:
  "The appointed person shall be entitled (subject to disclosure thereof at the inquiry) to take into account any written representations or statements received by him before the inquiry from any person."
  The point about procedures under rule 10 is that they give very wide discretion to the person conducting the inquiry as to whom he may admit and to some extent what evidence he may accept.
  The matter of written representations, for example, was raised by my hon. Friend the Member for Grantham (Mr. Hogg), intervening in the speech of my right hon. And learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith). The question of a written representation arises perfectly fairly in the context of a public inquiry because it is a document laid on the table and available to the major parties invited under rule 10 to attend. Therefore, it has a degree of exposure and is in no sense, as it were, held back from other evidence that may be presented verbally at the inquiry.
  Sir Ronald Bell: Is the Minister satisfied that it is clear from the provision giving the inspector discretion over the procedure of the inquiry that he is able to take evidence in camera? I ask that on the point whether we should have statutory law about it because it is rather against the
  680
  argument I advanced in my speech. Is it clear that that procedure covers the exclusion of whatever is involved during in camera hearings?
  Secondly, can the Minister confirm my belief that in a planning inquiry—as distinct from a hearing before a planning commission—the parties, as defined in the regulations, cannot be excluded?
  Mr. Shaw: My hon. and learned Friend the Member for Beaconsfield is correct on the latter point; a planning commission, which sits with much broader terms of reference, is not defined purely by the rules of attendance. My right hon. and learned Friend the Member for Hertfordshire, East told the House that in recent tames a planning commission has heard evidence in camera—for example, the defence aspects in the Roskill commission.
  The first point that my hon. and learned Friend the Member for Beaconsfield raised, was whether an inspector has the right to hold part of a session in camera. Thai is not defined in the rules governing tribunals issued in 1974. Indeed, the reason for that, as my hon. and learned Friend said, was that from 1972 it was made clear by the Government of the day and by my right hon. Friend the present Minister of Agriculture, Fisheries and Food—then Secretary of State for Environment—that there would not be hearings in camera as far as that Government were concerned.
  That has not been put into the rules governing tribunals because there have been occasions since the original 1965–67 case when such evidence has been heard in camera. Although there has been guidance to inspectors that it should not be heard in camera, there is a permissive element in it which allows, on discussion, that there could be evidence taken in camera.
  The case in question concerned the Windscale inquiry in 1976. Evidence was heard in camera by the inspector conducting that inquiry on the basis that there was a high degree of commercial confidentiality in the contract that British Nuclear Fuels Ltd had with an overseas Government. In that case, it was the Japanese Government.
  I shall quote for the benefit of hon. Members a reference to that aspect in a book published entitled "Decision Making for Energy Futures" by Mr. David Pearce and others. On page 177 they say:
  "What seems essential is that the concerned citizen should be able to reassure himself that the security precautions are reasonable in scope and monitored in practice. This need not necessarily mean that detailed arrangements are disclosed, and the example of BNFL's contract with the Japanese Government may be relevant here. The company refused disclosures on commercial grounds but agreed to allow Raymond Kidwell, QC, for Friends of the Earth and David Widdicombe, for Windscale Appeal, to read the documents in the presence of their counsel Lord Silsoe and the inspector. The objectors' counsel then gave an edited account of the contents of the Inquiry. Probably the key to the acceptability of this strategy to the objectors was that a person known to be sympathetic to their cause was to be allowed to evaluate the position. It is possible that this model could be relevant in connection with the civil liberties issue."
  The key in that case was that the examination of the commercial and confidential evidence was permitted to take place in the presence of the objectors' representatives.
  Sir Ronald Bell: Will the Minister consider the word "procedure"? Is it certain that it is apt to describe an inspector's discretion to hear proceedings in camera? Might it not be wise to confer that power, subject to the necessary safeguards? One can envisage arguments about the meaning of the word "procedure".
  Mr. Shaw: I take the point. We seek to draw a peculiarly narrow line between guidance and established procedure. I take refuge in the fact that it has been found necessary to allow inspectors considerable flexibility in how they handle inquiries. That flexibility is important and it should not be lightly disregarded. The same flexibility allows inspectors to admit large numbers of people and to take evidence from individuals, sometimes at a moment's notice, if they are anxious to contribute. That allows a wide range of opinion to be expressed. It would not be the same if the flexibility were restricted to the major parties and their official representatives. In the inquiry system we have a peculiarly British compromise between the requirements of law and the requirements of public fairness to which we attach such importance.
  In only a few cases have the problems of an in camera hearing arisen during planning inquiries or inquiries on appeal. To the best of my knowledge there are only three such cases. I have already referred to Windscale. The first was the East Grimstead case and the second was an inquiry into the extracting of potash near Whitby in 1969.
  The inspector's decision in the case was:
  "I am satisfied that this additional evidence was necessary to enable a decision on these applications to be reached; that it could only be obtained by sitting in camera; that the applicants' request to be allowed to give this evidence in camera was a reasonable and proper one; that the evidence, of a highly specialised technical nature, would not have assisted those objecting to the project in the presentation of their cases; and that no one has been in any way prejudiced by the procedure adopted."
  In the inspector's view there was a significant case in relation to the technical quality of the information that the company sought to produce. There was a sufficiently persuasive case that such information should be produced only in camera.
  I go back to the genesis and history of the matter. The interest aroused in the case through the efforts of my hon. Friend the Member for Salisbury is considerable. He has said that he failed to obtain the open-handed agreement that an instant change should be made. It has taken us 15 years to reach this point. His persistent pressure about the inquiry has achieved results that are probably greater than those for which my hon. Friend is willing to give credit. The decision taken by the then Secretary of State in 1972 has been included in the guidance notes to inspectors.
  Although I have described the strict legal position, I hasten to point out that there is provision in the procedural rules for general publicity to be given to forthcoming inquiries. I wish to assure my hon. Friend the Member for Salisbury and the House that there is no question of the Government contemplating any alteration of the general policy, observed for so many years, of holding all planning inquiries in public. Neither is there any prospect of the inspectors appointed by my right hon. Friend the Secretary of State to hold such inquiries changing their long-standing practice of hearing any third party who wishes to make submissions relevant to the case. We stand firmly behind the position set out in 1972. That position was a direct result of the pressure over the years from my hon. Friend the Member for Salisbury.
  I am sure that my hon. Friend agrees that there were many peculiar circumstances attending the original case in 1967. In particular, he quoted the fact that the technical adviser, whose services had been obtained with considerable skill by certain groups, was unable to give evidence at that time.
  682
  As a result of cases such as Windscale, the current position is probably considerably different. We have been through a time when many inquiries have included highly sensitive technical judgments. In the Windscale case that technical judgment led to an acceptable device being found by the inspector that would have allowed third party representation through a qualified representative. Whereas in the original case, the evidence of the technical assessor of the mineral value of the deposit might have conflicted with the commercial secrecy of the company's requirement of that mineral, we are now able to deal with such matters provided that a third party can be the intermediary and that he can be satisfied that an objective report is given to the inquiry. That would have obviated the anxiety that objectors rightly felt in 1967.
  It is interesting to note in connection with mineral working—the subject of the original inquiry—that the Stevens Committee, which examined planning control over mineral working and reported in 1976, took the view—in page 168, paragraph 16.19:
  "We consider that it may well prove to be necessary to seek to give in camera some information relevant to a planning inquiry into a mineral application on some future occasion. The probability is small, but the possibility cannot be entirely ruled out."
  There is still some substantial anxiety about the prospects of in camera proceedings being disallowed. That was the committee's view when it examined some of the problems that attend planning inquiries into mineral workings, which include assessments of the quantity and quality of deposits and, in many cases, also include technological information.
  The simplicity of my hon. Friend's Bill requires a substantial acceptance of the consequences that would follow if it reached the statute book. I agree that there is a need to examine this matter afresh. My hon. Friend's Bill gives us that opportunity. The amendment to the rules that we made in 1972 is an important contribution, in general terms, to preventing cases that come before inspectors being heard in camera. It has been made clear in correspondence and in this House that this policy, however rigorously applied, does not completely rule out the possibility of evidence being taken in private should wholly exceptional circumstances arise to warrant it. That has been the theme of the contributions made. There is a feeling that, unamended, the Bill would probably be too sweeping a change to make. In his opening speech my hon. Friend agreed that there is a case for exemption in matters of national defence and security. My hon. Friend the Member for Ilford, South (Mr. Thorne) said that national security is not easy to define. Although we usually think of security in military defence terms, there is unfortunately now a need to consider security in the commercial and industrial sense. I refer not to technological processes but to the security of buildings and to the prevention of terrorist acts, particularly on major industrial installations, which we know are sensitive to such attacks.
  We may have to argue in Committee—I hope with my hon. Friend's understanding and support—that security should also mean the protection of buildings from terrorist attack by installing appropriate devices. Such devices could involve a planning application and hearings at a planning inquiry. That aspect should be also be considered.
  Mr. Chapman: My hon. Friend is making an important point. Does he know how many applications have been made under such circumstances?
  Mr. Shaw: The answer that I must give my hon. Friend is "No". I am not aware that any such application has required an inspector to give a decision to move into an in camera hearing. There are planning inquiries—one currently afoot—that could involve security at a major industrial installation. We may invite my hon. Friend to consider that aspect of security in Committee.
  Exceptional circumstances could involve a wider issue of commercial confidentiality than that invoked at the original East Grimstead inquiry. There are now many issues of technological development that involve the planning process. We referred earlier to the Windscale case. A major inquiry will shortly open at Sizewell on an important nuclear installation.
  We know that in many cases new technologies are involved and commercial confidentiality may be involved. A high technology process may be designed that could be a first for the country and we would wish to ensure its protection. I understand why my hon. Friend believes that commercial confidentiality in its simple sense should be excluded from the exceptions, but there could be an argument for taking a wider view of commercial considerations that may be in the national interest. Perhaps my hon. Friend would be willing to consider that an exemption should be made in those relatively few instances.
  Mr. Douglas Hogg: My hon. Friend has been clear in what he has said, but what exactly is he suggesting? He rightly says that the unqualified proposition in the Bill is unacceptable. Is he also saying that the disadvantages to the general principle are such that we should not give the Bill a Second Reading or that the Bill should be substantially amended in Committee? If the latter, does he contemplate either incorporating the exceptions in the Bill or leaving to the Secretary of State a power to do that by statutory instrument or regulation?
  Mr. Dennis Skinner: On a point of order, Mr. Deputy Speaker. This almost one-sentence Bill is important and we support it. We know that it will not be opposed. But it has been debated for over three and a half hours. The Minister and the hon. Member for Grantham (Mr. Hogg) have both spoken for some time. They are now filibustering to keep out the Death Grant (Increase) Bill. They are trying to deprive many thousands of elderly people of £190. That is what the Government are up to.
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. The hon. Gentleman has great experience in the House. He should know that he has no justification for saying that.
  Mr. Skinner: I have a lot of justification.
  Mr. Deputy Speaker: The Planning Inquiries (Attendance of Public) Bill is first on the Order Paper.
  Mr. Skinner: It is a scandal.
  Mr. Deputy Speaker: It is an important matter, as all Private Member's Bills are. I hope that the Bill to follow will also have sufficient time to be debated, but it is unusual for a second Bill to have much time on a Friday.
  Mr. Skinner: The first Bill is only a one-sentence Bill.
  Mr. Shaw: It may be a one-sentence Bill, but it is of considerable importance not only to my hon. Friend the Member for Salisbury but in relation to the application of planning law.
  Mr. Skinner: Talk about compassion and St. Francis of Assisi. We have seen it all now.
  Mr. Shaw: To answer my hon. Friend the Member for Grantham, I am not proposing now to discuss in what terms an amendment might be made should the House give the Bill a Second Reading and should my hon. Friend the Member for Salisbury agree to accept amendments to the Bill in Committee.
  The complete exclusion of commercial confidentiality from being a reason for in camera proceedings could in certain instances and at a national level be of great concern. I would hope that the Committee and my hon. Friend, if the Bill receives a Second Reading, would bear that in mind. Amendments might have to be made to the Bill, but I cannot suggest by what means at this stage.
  I come to the main issue. We wish to give the B111 a Second Reading. It is right to reaffirm, as the Government have done on many occasions, that planning inquiries should be held in public. There may be exceptional circumstances for which planning applications are best held in private—for example, the Windscale inquiry and defence, security and commercial circumstances which qualify as being in the national interest. Those circumstances should form the basis of possible amendment in Committee.
  The Government wish the Bill to proceed through Committee. We hope that it will be amended to secure some of the points that I have outlined. If that happens, what my hon. Friend seeks to do today will be a substantial service not only to his constituents but to many others.
  I should have said at the beginning of my speech that I received an apology from the hon. Member for Edmonton (Mr. Graham), who spoke on behalf of the Opposition. He has a pressing constituency engagement, and I fully understand his absence from the Chamber during my reply.
  The debate has been of great importance because planning law is of great importance, as are planning inquiries. The present position whereby in camera proceedings are heard only on rare occasions shows that the principle that underlies my hon. Friend's endeavour is largely accepted—that being that planning inquiries should be held in public. Nevertheless, I accept that in his endeavour to involve statute law we should give the Bill a Second Reading in the terms in which he has set it out.
  Mr. Michael Hamilton: By leave of the House——
  Mr. Skinner: No.
  Mr. Deputy Speaker: If leave is refused, I am afraid that the hon. Member for Salisbury (Mr. Hamilton) cannot continue. Does he have leave to speak again?
  Several Hon. Members: No.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).
  Mr. Michael Hamilton: On a point of order, Mr. Deputy Speaker. I am sorry that, because of the

  685
  Opposition's objections, I was not able to thank the hon. Member for Edmonton (Mr. Graham) for his most generous— —
  Mr. Deputy Speaker: Order.
  Mr. Bob Cryer: Further to that point of order, Mr. Deputy Speaker. I wish to place on record that the Opposition are desperately anxious to deal with the next Bill, which is an urgent necessity for many thousands of pensioners.
  Mr. Deputy Speaker: Order. We are about to discuss the next Bill.

  Death Grant (Increase) Bill
  Order for Second Reading read.
  1.18 pm
  Mr. Ernie Ross: I beg to move, That the Bill be now read a Second time.
  The Bill is only a general statement of intent. It was not my intention, nor that of the right hon. and hon. Members who support the Bill, to include the detailed and necessary amendments that will be required if the death grant is fully to reflect the aspirations of all those—— [Interruption.]
  The Minister for Social Security (Mr. Hugh Rossi): On a point of order, Mr. Deputy Speaker. I am trying to hear what the hon. Member for Dundee, West (Mr. Ross) is saying. It is an important matter. I have some difficulty in hearing his remarks above the general background noise.
  Mr. Deputy Speaker (Mr. Bernard Weatherill): I am sorry. Let us hear the hon. Member for Dundee, West (Mr. Ross) in silence.
  Mr. Ross: It was not the intention of my hon. and right hon. Friends who support the Bill—a support that I hope will come from both sides of the House—that it should specify the detailed and necessary amendments that would be required if we were to uprate and improve the death grant. That is not and never has been the intention.
  Over 1 million voices outside the House have spoken on the issue. Therefore, I hope that this Bill will be given a very speedy Second Reading in the House today. It can then move into Committee. If the Government or anybody else wish to propose amendments, they can be taken at that time. It is not our intention that the Bill should end the discussions.
  The intention of the Bill is first to increase the death grant to £190 with effect from 1 January 1983; secondly, to require the Secretary of State to review the death grant on 1 January and each subsequent year in order to retain its value in relation to the general level of prices; and, thirdly, to abolish the present half-rate provided for men born on or before 4 July 1893 and for women born on or before 4 July 1898.
  The Beveridge report on social insurance and allied services recommended that the new national insurance scheme should include a funeral grant to cover the necessary expenses for a decent funeral. The proposal was adopted by the Government, and it was included in the National Insurance Act 1946. On 5 July 1949 the death grant was introduced at the rate suggested by the Beveridge report.
  Since then, the grant has been increased only twice. In January 1958 it was increased to £25 for an adult on full benefit, £7.50 for a child under 3 years, £12.50 for a child aged between 3 and 5 years, and £18.75 for a child aged between 6 and 17 years. In October 1967 it was increased to its present rate of £30 for an adult on full benefit, £9 for a child under 3 years, £15 for a child aged between 3 and 5 years, and £22.50 for a child aged between 6 and 17 years. The half-rate grant is still payable on the death of persons who were within 10 years of the pension age in July 1948; that is, a man born between 5 July 1883 and 4 July 1893, and a woman born between 5 July 1888 and 4 July 1898.

  687
  The fact that the British social security system lacked a funeral or death grant when the Beveridge report was published had more to do with political pressures than the assessment of need.
  When the Labour Government of that day considered legislation for old-age pensions, employment benefits and national health insurance schemes, they could not ignore the pressure of the British friendly society movement. That movement was described by some as, in many ways, the most powerful single vested interest encountered by social reformers. Nor could the Labour Government of that day ignore the views of the industrial insurance industry—an extremely large, profitable and closely controlled business. Both those organisations owed much of their political significance to the provision of death benefits. B. B. Gilbert, in his book "The Evolution of National Insurance in Great Britain," said:
  "There was no more degrading aspect of the poor law, and no greater fear among the English working class, than the fear of death as a pauper".
  The fear of dying in such circumstances was shared by the Welsh, Irish and Scottish working classes.
  "Burial by the parish had always been the ultimate humiliation and the assurance of a respectable funeral was often the first motive for formation of a friendly society. Playing upon this fear, commercial insurance companies had built up a gigantic and immensely profitable business of offering funeral benefits on far less favourable terms than the friendly societies."
  The friendly societies at that time offered sick pay and medical care as well as enough death benefit for a decent funeral—approximately £10 to £15—whereas the industrial insurance companies concentrated on the provision of death benefit, preying not only on the fear of a pauper burial but, more significantly, on the inability of the poor to maintain their payments. For each 10 new policies sold in a year approximately nine lapsed.
  Mr. Tristan Garel-Jones: May I mention a matter with which the hon. Gentleman may be intending to deal? Many of us receive letters from constituents who are the children or parents of a deceased person. It frequently happens that in a moment of distress and anxiety they go ahead with what they regard as an appropriate funeral. The bills for that funeral come upon them later, and they are unable to meet them.
  Mr. Ross: I shall be coming to that point. I have received many such letters, as have other hon. Members, to that effect. Much of the material before me—hon. Members will be pleased to know that I shall not go through it all—relates to the hon. Gentleman's point.
  Industrial insurance companies profited not only from the fear of a pauper burial but, more significantly, from the inability of the poor to maintain their payments. While the Establishment argued that the profits of the companies were due to lack of economic self-management among the working classes, the reality had more to do with low incomes and the concern not to be buried by the parish.
  As the Beveridge report made clear, the absence of funeral or death grant could not be excused on the grounds that efficient public services were being provided by industrial insurance companies. Beveridge observed that every independent committee set up to investigate industrial insurance criticised strongly both its conduct and its results—particularly the number of policies held by those companies.
  For example, in 1939 there were approximately 2.25 policies for every man, woman and child in Britain.
  688
  Beveridge also strongly criticised the administrative cost, because the real administrative expense of funeral grants as social insurance could be no more than 2 or 3 per cent. of the contributions, whereas the companies' actual figure was 37.5 per cent. of contributions. Beveridge concluded:
  "There can be no justification for requiring the public who need insurance for direct funeral expenses to pay the heavy tax involved in industrial insurance".
  Beveridge was sufficiently concerned about the operation of the industry to recommend the incorporation of a funeral grant in his new social insurance scheme. The proposal was adopted by the Labour Government and included in the National Insurance Act 1946.
  The rates suggested by Beveridge were based on figures provided by the Undertakers' Association to the Cohen committee in 1932 and the then current costs of local authority funerals. The figures were the following: for adults, £20; for those between 10 and 20, £15; for children between three and nine, £10; and for those under three years, £6.
  It is interesting to note that part of the Beveridge recommendation was based on the current cost of local authority funerals. When my hon. Friend the Member For Kilmarnock (Mr. McKelvey) spoke to his local district council, Kilmarnock and Loudoun, he was informed that when the council had to bear the cost of a very basic funeral—because the deceased's estate would not bear the cost—the cost to the council in October 1981 was £328.50.
  Mr. Douglas Hogg: If the death grant were to be raised to, say, £190, it would still be only about 60 or 70 per cent. of the cost of an average funeral. When the figure was £20, it was about the same percentage of the: average cost. If we are to set a base figure—the Bill clearly contemplates that we should—should we not set a base figure higher than £190, so that the whole cost of the average funeral would be met?
  Mr. Ross: If I thought for one single instant that the Minister would agree with the suggestion just made by his hon. Friend the Member for Grantham (Mr. Hogg), 1 would immediately accept such an amendment to the Bill. If the hon. Gentleman supports the Bill, he is welcome to propose such an amendment in Committee—
  Mr. Nigel Spearing: And not to talk today.
  Mr. Ross: I am sure that such an amendment would be welcomed by everyone on the Committee.
  That is the background to the introduction of the death grant. What is it worth and why is there so much concern about it? The Act of 1956 introduced for the first time a national insurance benefit for funeral expenses. Even at that stage, the figures were not right. While the full rate of £20 was the same figure that Beveridge had recommended, his calculations were based on a cost of living assumed to be about 25 per cent. above that of 1938.
  By 1948, when the benefits were introduced, the cost of living was about 40 per cent. higher than it had been in 1938. While most benefits were raised to take account of the differences between Beveridge's estimate of the cost of living and the actual rise in price levels since 1938, this was not the case with the death grant. Not only was the new rate below the sum of £22.50 needed to keep it in line with the figures that Beveridge suggested, but the death grant was denied the smaller increase allowed to most

  689
  other benefits. If we were to implement the Beveridge proposals today the effect would be, as of August 1980, a death grant of £194.35.
  There has been a failure on both sides of the House. Successive Governments have failed to increase the death grant, and that is not a party political point. I remonstrate equally with my party as with the Conservatives for failing to increase the death grant when in office.
  What concerns us is the plight of the bereaved and their struggle to meet the cost of the funeral. The Department of Health and Social Security instituted a report into the matter. Their report, "Families, Funerals and Finances" concluded that the payment of funeral expenses was no longer the major social problem that it had been in the past. The report was published in 1980 but refers to a survey conducted in 1974. In the sample used for the survey the average cost of a funeral was £168. By August 1980, when the report was published, the equivalent figure should have been £392. Thus the death grant was contributing 18 per cent. of the total funeral costs in 1972, was still contributing 18 per cent. in 1974, but by 1980 was contributing a mere 7.4 per cent.
  The author of the report commented that whereas people might accept help from the State with expenses such as housing and fuel bills without question, they could experience misery and guilt if it became necessary to ask for help in a funeral bill. He concluded that the difference lies in the emotionally overloaded meaning that the bill has for the person concerned. It may be paid to the undertaker, but it is for someone who is dead and for whom they can do no more.
  Sir Ronald Bell: Like other hon. Members I have had letters about this and I have found that the Supplementary Benefits Commission pays the funeral bill. As far as I can see, the mechanics of the system are that it pays the bill, less the amount of the death grant. It gives direct instructions to the undertaker and pays the bill direct, leaving the undertaker to recover from the family the amount of the death grant. I am not suggesting that that is a satisfactory arrangement, but I would welcome, as would other hon. Members, the comments of the hon. Gentleman if that is the case.
  Mr. Dennis Skinner: The hon. and learned Member is talking about a pauper's funeral.
  Mr. Ross: I will come to that point later. There are many hon. Members on this side of this House who would wish to comment, but I hope that they can restrain themselves—
  Sir Ronald Bell: And on this side too.
  Mr. Ross: ——because I hope that the Bill will get a Second Reading. I am sure that many Labour Members would not share the view expressed by the hon. and learned Member for Beaconsfield (Sir R. Bell). The DHSS survey showed that low income is not compensated for by insurance in other payments from the estate. The conclusion is that those bereaved people in the lowest income group were least likely to have all their costs covered by the estate and were most likely to have to find over £100 towards the cost. In addition, although the payment of funeral expenses may no longer have been a major social problem in 1974, there is little doubt that an
  690
  inflation-proof death grant would even then have relieved many individuals of financial worry and would have significantly improved the circumstances of the most disadvantaged among a group who, on the whole, are poorer than average.
  Leaving aside the worry about ensuring that one's funeral costs can be met, Beveridge's straightforward financial argument remains valid. For substantially smaller contributions, the State social security system could and should guarantee everyone a benefit that is sufficient to meet the cost of a modest funeral. When I was fortunate enough in the ballot to be able to introduce a Bill that was needed and that I thought stood a good chance of being enacted with support from hon. Members on both sides of the House, many organisations contacted me. I am pleased to say that they were not only organisations with vested interests, such as funeral directors. People concerned in the best sense of the word, from the highest to the lowest in the land—whichever way one looks at society—contacted me.
  I received a letter from a lady who lived in Coronation Avenue, Fishburn, Stockton-on-Tees, Cleveland. She spoke about the concern she felt for her mother, aged 84. The mother worries about the cost of her funeral and has been a widow for 51 years. The lady now shares that worry about how to bury her mother. Lady Limsrick also wrote to me. She is a member of The Foundation for the Study of Infant Deaths. She took the trouble to send me statistics that she had worked out. They show the burden that results from infant deaths. I was glad to receive the support of several organisations, including the Church of Scotland committee on social responsibility. It assured me of the support not only of the committee but of the whole Church of Scotland. It hopes that the Bill will be given a Second Reading.
  The Soldiers', Sailors' and Airmen's Families Association has given its support and has asked hon. Members to support the Bill. It has given some examples of the way in which it has had to use its funds to assist with funeral costs. It states:
  "Many of those helped are widows and Mrs. N. is sadly typical. 83, poor and independent, faced with a bill of £220 for her husband's funeral, not excessive by today's standards, she was paying off the debt at the rate of £20 a week out of a total weekly income of £26.75. Not surprisingly this was only achieved by depriving herself of food and heat."
  The National Association of Local Councils has 7,500 members and it is a sub-tier of local authorities for villages and small towns in England and Wales. It also argues that the death grant should be increased. The Association of District Councils urges that the death grant should be increased, particularly in order to assist the public at a time of bereavement and to mitigate the burden on local authorities, as they have a duty under the National Assistance Act to bury or cremate the dead when there is no one else to do it. Pensioner's Voice represents many pensioners throughout the length and breadth of Britain. It states:
  "There is a great disparity in charges between the manufacturers' prices for coffin shells and the amount finally charged to the client. An undertaker enters a person's home when life is at its lowest ebb, following the death of a loved one and, obviously the family are not prepared to haggle about cost."
  A similar comment was made in a letter from the vicar of St. Mary's Church, Clymping. He said:
  "When the death grant was first introduced it is thought that there was an indication from the Government that the funeral directors should provide a funeral which the grant would cover.

  691
  As the grant has not been increased this is obviously no longer possible. If you are successful in increasing the grant we suggest the view is expressed that funeral directors should be required to provide a funeral at a figure which bears a near relation to that of the grant."
  I could continue with page after page written by people concerned with death in its full sense urging the House to take account of their concern and fears and to take some action to relieve the anxiety of those left to bury the person who has died.
  Death, particularly the death of a child, remains a taboo subject. It is probably for this reason that the DHSS payment for funerals is not promoted and advertised on the same scale as free welfare milk and vitamins. People need to be aware of their entitlement, particularly at a time of crisis. A knowledge of the benefits and procedures for claiming would alleviate a great deal of confusion and distress and ensure that payments are not delayed.
  Although my Bill does not lay down a minimal grant relating to children, I hope that this matter can be covered if the measure receives a Second Reading. I have received letters from the South Wales Association for Spina Bifida and Hydrocephalus expressing the anxiety felt by many parents when a child suffering from spina bifida or hydrocephalus dies. I should like to share the contents of one or two of those letters with the House. The first states:
  "It has been my sad experience in the past in dealing with such families who have lost a child during the first few weeks of life through spina bifida and/or hydrocephalus. Needless to say no provision has been made for life assurance cover for a child so young and with the present grant of £9, one is faced with sudden financial and emotional shock."
  Another letter refers to a mother who had lost her young son. It states:
  "She was recalling Mark's death and talked of the anxiety she and her husband felt over the bill for the funeral. They had to find about £168."
  She wondered how they could have managed this without a street collection among neighbours and a contribution from the association.
  It is terrible and tragic that street collections are required to bury a child in such circumstances. There are further letters from north Wales, Southampton, West Yorkshire, Taunton, Gloucestershire, Northumberland and Greenwich. All relate the same kind of problems faced by young families when a child suffering from spina bifida or hydrocephalus dies. There is overwhelming evidence that the country at large would like to see the grant raised to a level that would answer the anxieties and fears felt by many people. I hope that the Minister will say what the Government intend to do. There seems to be some confusion.
  Mr. Garel-Jones: Will the hon. Gentleman give way?
  Mr. Ross: Not at the moment. I wish to press on. I have urged many of my hon. Friends to keep their contributions brief. It is important that the Bill should be given a Second Reading. There is some confusion over the Government's intentions. The right hon. Member for Wanstead and Woodford (Mr. Jenkin), speaking at a British Legion meeting, said that there was to be a change in the death grant and reaffirmed this in a Radio 4 interview. Throughout the Government's period of office, Ministers have made it clear that they intend to make some statement on the death grant.
  There were opportunities before Christmas and again last night during the debate on the elderly which were not taken by the Minister to indicate the Government's
  692
  intention on the death grant. I hope that hon. Members do not have to wait for an official leak in The Guardian to discover the Government's intentions. It seems that the Government are contemplating two, three or four options. Most of the options suggested in the leaks would be unacceptable to Labour Members, to the Dignity in Death Alliance, the all-party pensioners' group and the majority of people in the country. Those options seem to be a form of clawback or means-testing. What is even worse, the latest leak seems to imply that the Treasury is now determined to push a further option, saying that the death grant is now irrelevant and therefore should be abolished. I hope that before the end of this debate we shall be told what the Government intend to do about the death grant.
  I conclude now so that other hon. Members may make their contributions, which I hope will be short. I hope that they accept that it is more important for the Bill to get a Second Reading. I urge my hon. Friends the Members for Bolsover (Mr. Skinner) and for Keighley (Mr. Crer) not to harass Conservative Members, but to allow them to make their speeches, which I hope will be brief. I hope that hon. Members on both sides will allow the Bill to receive a Second Reading. As the Dignity in Death Alliance says, 1 million voices have spoken. If the House fails to respond, those 1 million voices will be heard again and they may say something that the House will not like.
  1.46 pm
  The Minister for Social Security (Mr. Hugh Rossi): I welcome the opportunity which the Bill gives us to debate the death grant provisions. It is an issue, as the hon. Member for Dundee, West (Mr. Ross) said—I congratulate him on the way in which he presented the Bill—which has provoked much public interest, as witnessed by the attraction of more than 1 million signatures to the petition presented to the House last year by the Dignity in Death Alliance, and by a number of voluntary organisations which have expressed concern. The hon. Gentleman mentioned a few of them today. That concern is also shown by the steady stream of correspondence on the subject which I am sure that all hon. Members receive and which they have referred to me. Many of the hon. Members who are present today have written to me or have asked me questions in the House on this subject.
  I might have preferred to debate the issues before us after the Government had completed the review of death grant arrangements which has been in train since 1980. Unfortunately, that was not possible. Once the review is completed, I or my right hon. Friend will make a statement on the outcome, which I am sure will give us a full opportunity for constrructive debate. At this stage I can only assure the House that the Government are continuing to give active consideration to the matter.
  In answering the many questions that the hon. Gentleman has put to me, I shall seek to show the way in which the Government are moving and the problems that we have faced in trying to resolve a matter that has defeated successive Administrations over many years. The gap between the amount of the death grant and the cost of the funeral has not suddenly happened. The gap has been wide for a long time. The Labour Government did not give the matter any priority. At least this Government have carried out an intensive review into all the problems. We hope to come back to the House as soon as possible with the results of our deliberations on the matter.

  693
  As the hon. Gentleman said, the Bill relates to the death grant as envisaged by Beveridge. The Bill seeks to provide the universal coverage of death grant which Beveridge had intended, once we progressed beyond the transitional phase. It seeks to restore the level of grant in current price terms to the real value that it had in 1949, when it was introduced.
  The hon. Gentleman based his case on the Beveridge report. Let us examine, therefore, the Beveridge case for a universal death grant at a level sufficient to meet a major share of basic funeral costs. On what evidence was the scheme based and how does it relate to present day circumstances? It is clear that the death grant was introduced to reflect the social and economic conditions of the 1930s and the 1940s. The Beveridge report shows that the key facts that led Lord Beveridge to his proposals were, first, the large proportion of income of the poorest families that was being devoted to life insurance in the 1930s. The report quotes survey data from the Rowntree study of poor families in York in 1936, showing that some of the poorest families were devoting one fifth or more of their income to life insurance.
  The second factor is the social customs of mourning and funeral arrangements in the 1930s and the threat of the pauper's burial. The third is that the grants were determined by reference to a 1932 report by the Cohen committee with a margin added for cemetery fees. Fourthly, the importance of the contributory principle meant that no one over pension age on the introduction of the scheme could be covered by it. We still have that position today. The costs were entirely loaded on the workers' contributions with nothing coming from the employers and only limited transitional help from the Exchequer. The fifth factor is the comparatively low contribution that the working population would have to pay to cover themselves and their families for the death grant.
  We must consider the scheme in that context and see how the hon. Gentleman's proposals, if added to Beveridge as we understand it and have respected it, would apply today if the Government wished to revert to worker's contributions only.
  It is important to remember that the costs of the Beveridge scheme were intentionally spread over a lengthy maturity period. The exclusion of those over pension age in 1948 meant that in the early stages a major proportion of deaths were not covered. Those within 10 years of pension age in 1948 were allowed to claim the grant, but at half rate. Thus it is still a misnomer to describe the Beveridge scheme as universal. Even now, 30 years after its introduction, only about 75 per cent. of all deaths in a year attract the full grant. A further 15 per cent. attract grant at half rate or at one of the child rates. There are still about 500,000 people in their eighties or nineties who do not qualify for full rate death grant under the existing provisions of the scheme. Even with the present low grant, it would cost about £3 million a year to extend the entitlement to those people.
  It must also be said that no post-war Government have ever accepted the Beveridge idea of a direct link between the death grant and the costs of a simple funeral. In 1949, the grant corresponded to no more than 60 per cent. of the cost of an average funeral and successive Governments have seen fit to allow inflation progressively to reduce the
  694
  relative value of death grant to average funeral costs. The increase in 1958 left the grant at about 50 per cent. of average funeral costs and the previous increase in 1967 provided only the equivalent of 30 per cent. of the average cost. Inaction by successive Governments since then has reduced the value of the grant to less than 10 per cent. of the average cost of a funeral. Thus, even when increased in 1958 and in 1967, the grant was never fully restored to its former value.
  That suggests that this is not the only Government who have taken the view that changes in economic and social circumstances have called into question the continued relevance of a universal scheme based on the Beveridge model. On the other hand, no previous Government seem to have made a serious effort to review the scheme from first principles to see whether the time has come to change it to meet present-day circumstances.
  Mr. A. W. Stallard: In making comparisons with previous Governments, the Minister is absolutely right that no Government have done enough about this, but he is factually wrong to say that no attempt was made. In March 1980 my right hon. Friend the Member for Salford, West (Mr. Orme) attempted to increase the grant to £45 irrespective of age, but his new clause to the Social Security Bill was defeated by the Government.
  Mr. Rossi: I do not think that £45 would have made much difference for the categories of people about whom the Government are most concerned. The average cost of a funeral today is about £350, and £45 will go nowhere if the person has no money at all to pay for the funeral. The Government's concern is therefore to see how we can direct resources in such a way that it is those people who are helped.
  The matter must be seen in context, as we are dealing with a fundamental reappraisal of Beveridge in present-day circumstances. We have to consider how thinking has developed and how social and economic changes have taken place in our society so that any new scheme may be tailor-made to be relevant and appropriate to today's circumstances. As I have explained, the Beveridge death grant scheme was based upon research data from the early 1930s. These raised queries as to its relevance even in 1949.
  Major factual contributions to the Government review have been the 1977 Price Commission report on funeral charges and the 1975 DHSS research team survey into the circumstances of bereaved families and funeral costs incurred, which was eventually published in 1980 as "Families, Funerals and Finances". It is published as DHSS research report No. 6, HMSO 1980, if hon. Members wish to study the matter further.
  The Government have also considered death grant provisions in other countries, information from the probate registry and from banks and insurance companies about the level of estates, and the working of the existing scheme to help recipients of supplementary benefit when they are responsible for meeting funeral costs. We have also examined the detailed working of the present scheme. On average, every death grant claim involves an administrative cost of £13 for a maximum payment of £30. [HON. MEMBERS: "Disgraceful."] I agree that it is disgraceful, but that is the position into which successive Governments have allowed the matter to drift.
  Mr. Skinner: At this rate we shall never get this Bill either.
  Mr. Rossi: What are the key facts which emerge from that welter of information?
  Mr. Skinner: The Minister is filibustering.
  Mr. Rossi: If the hon. Gentleman interrupts, he will make me take longer.
  Mr. Skinner: The Minister is doing that deliberately.
  Mr. Rossi: I resent that. This is a serious matter which requires serious debate. I know that the hon. Gentleman does not like debate. He likes to bully people to his will. I will not be bullied by him. I intend the matter to be properly debated and I shall put the issues before the House. If the hon. Gentleman does not like it, he can go outside.
  Mr. Skinner: The Minister is trying to kill the Bill.
  Mr. Rossi: I am not trying to kill the Bill. I am trying to deal with a serious subject of intense importance to millions of people outside the House, to put before them the problems and to show that the Conservative Government are doing something which the Labour Government never attempted to do.
  Mr. Deputy Speaker: If there are interjections of that sort from seated positions, I must tell the hon. Member for Bolsover (Mr. Skinner) that they will undoubtedly lead to more delay.
  Mr. Rossi: What key facts emerge from this welter of information? First, voluntary insurance no longer has the importance it once had in meeting funeral costs. Evidence remains that under-insurance is the main problem in this area, particularly for older people who took out life cover long before the inflationary pressures of the 1960s and 1970s. However, it is also clear that most families are able to draw on a much wider range of disposable income now than was likely to have been the case in the 1930s, which was the Beveridge point of reference. There is now vastly more occupational provision for death in service benefit or for lump sum or other payments in retirement. There is also vastly increased home ownership.
  The proportion of income put aside for savings is now of a level undreamt of by most families in the 1930s. Real incomes have risen significantly since the 1940s, for pensioners as well as for the working population, as the Opposition reminded us only yesterday when they told us of the great strides they made in that field.
  Mr. Fitt: The hon. Gentleman cannot say that when there are 3 million unemployed.
  Mr. Rossi: What is the effect of this real increase in disposable incomes? For the most part, it makes it much easier for people to put aside money for their funeral. In the 1975 survey, nearly half of the families met the full costs of the funeral from the deceased's estate. At that time, the death grant represented barely one-fifth of the cost of a funeral. Of the remainder, about four out of five families reported that they experienced no significant difficulty in raising the balance of funeral costs not met from the estate. These facts cannot be ignored by those who argue for a substantial increase in death grant in respect of all deaths. That is the proposition in the Bill.
  Mr Edward Lyons: In those circumstances, could the Minister tell us how much extra
  696
  money the Government are prepared to allocate to the scheme? What would be the cost compared with the scheme put forward by the proposer of the Bill?
  Mr. Rossi: That matter is still under consideration and I am not in a position to advise the House on it. When the Government have decided that matter, a statement will be made. I am sorry that I cannot help the hon. and learned Member for Bradford, West (Mr. Lyons) at this stage.
  Sir Ronald Bell: I intervene because I think that there is a respectable argument, not for the Bill, but for the proposition that the hon. Member for Dundee, West (Mr. Ross) advanced and it would be a pity if the Minister concluded without answering it. What objection is there to covering the cost of funerals by an insurance benefit provided that the whole cost of financing it is put on the contribution? Does that not deal with the case, not of the unfortunate, but of the person who had the opportunity of putting aside money during his working life but did not and who now has to be helped out of his difficulty by receiving supplementary benefit at the expense of the taxpayer?
  Mr. Rossi: It is possible, of course, for people who want to do that, to obtain private insurance. The purpose of the Beveridge scheme was to take it out of the private sector and have a national insurance scheme. If we were to follow Beveridge and, at the same time, uprate the funeral grants to the extent that the hon. Gentleman proposed, that would cost the national insurance fund about £100 million a year in addition. Following Beveridge, that sum could only be put on employees' contributions and, given the difficulties that we had in the House only a few days ago, when there was an order before us seeking modestly to lift the employee's contributions to meet the cost of some other benefits——
  Mr. Brynmor John: At lest 1 per cent.
  Mr. Rossi: This would be at least 1 per cent. and is a question that the House and country must consider in the context of the Bill. The hon. Member for Dundee, West took almost 30 minutes when addressing the House. I wanted to take less time, but that seems to be impossible.
  The survey data also showed that for the minority of cases where the funeral costs caused real difficulty the £30 grant—less in many cases—was nowhere near sufficient help. However, there was no strong discernible pattern in the groups facing the most difficulty. Low income could be a factor, but many families on supplementary benefit did not consider it necessary to seek further help from the State and reported little difficulty in raising the money required.
  People with the highest average incomes often spent less on the funerals than people whose main income was a retirement or widow's pension. Widowers were said to encounter more difficulty than widows, and in some cases of difficulty the problem was not so much lack of resources as a delay in securing them.
  The survey also found that the average cost of a funeral does not greatly exceed the cost of a basic funeral. Cremation is now more popular than burial and tends to be less costly because of the high cost of burial plots and memorial stones. Funerals tend to be smaller and simpler and the custom of wearing mourning clothes has almost passed away. That is a sign not of poverty caused by the low death grant but of a considerable change in social attitudes since the 1930s and 1940s.

  697
  In the light of that, we must call into question the priority that should be given to the Bill. A death grant of £190 for all, would cost £100 million a year extra. It is not sensible for the hon. Member for Dundee, West to present a single proposal which would cost £100 million a year extra. I am sure that other hon. Members would like a £190 death grant payable to all, but we must consider priorities. If we gave that grant to all, would it be right for people who have been left substantial estates which more than cover the cost to benefit? When £30 is an insignificant sum to a person, is it right to give him money out of the national insurance fund?
  Sir Ronald Bell: That is financed by contributions.
  Mr. Rossi: That is so, but would employees be prepared to increase their contributions to provide the extra £100 million? The Government must consider these matters. Is it suggested that we should break the contributory principle, redistribute the money and ensure that it goes to the families in need? If we decide to do that, how do we identify those in need? The last thing that I want is a means test on the date of bereavement. If we have to identify people in need, some form of passporting will be needed. All these matters exercise our minds. There is no lack of conscientious effort to try to arrive at a conclusion.
  If the House decides, in its wisdom, that we must payout another £100 million and that it is not right to raise the contributions, is it right to pay that money to families with no real need?
  If I were presented with a windfall of £100 million by the Chancellor of the Exchequer, I should like to spend it on many things other than on families who do not require it—especially when an inheritance of thousands of pounds might be involved—and deny others who are in need of help.
  To solve the problem of the invalidity trap would cost £15 million. I am anxious to deal with that problem and if I were given £100 million I would consider spending it on that. There is a capital cut-off point of £2,000 for people on supplementary benefit. If I were given £25 million I should spend it on that. I should love to be able to introduce a general disability allowance. I should like to have £50 million for the restoration of the 5 per cent. abatement on invalidity pensions. I should love another £100 million to extend the long-term rate of supplementary benefit for the unemployed. I could carry on pointing out areas where there is a high call for extra resources, and the list would still not be exhausted.
  There is no significance in the order in which I have mentioned the matters that concern me. I have not mentioned improvements such as price-protecting all social security benefits, or increasing the supplementary benefit rates and family income supplement in real terms, or enhancing the value of child benefit. Therefore, I am more than reluctant to accept a Bill which would involve payment across the board of a death grant of £190 for every estate in the land. That is not the right way to deal with the matter unless people are prepared to face a substantial increase in national insurance contributions.
  Mr. Garel-Jones: I was a little confused when my hon. Friend said, in reply to a question from my hon. and
  698
  learned Friend the Member for Beaconsfield (Sir R. Bell), that contributions needed would be 1 per cent. Did my hon. Friend mean to say 0.1 per cent?
  Mr. Rossi: I apologise to my hon. Friend. He is correct. It was a slip of the tongue.
  There is a much stronger case for seeing whether the resources that are already available for death grant can be redistributed more effectively to the families who need help, but a selective approach can take many different forms, and there is an added difficulty in trying to ensure that the process of selection picks up the families in greatest need. The matter is still under active consideration and it would not be proper for me to anticipate a statement which will follow as soon as the review is complete.
  The Government recognise the difficulty of establishing any new means test at a time of bereavement, and recognise the concern of the House to bring forward positive proposals that give effective help where it is most necessary. We are more than conscious of the cases that are brought to our attention where hardship is experienced, because of the ever-widening gap between the level of death grant and the basic cost of a funeral. I assure the House that we shall come forward with our proposals as soon as possible.
  2.12 pm
  Mr. A. W. Stallard: I should dearly love to reply to all the points made by the Minister in what I considered to be an unnecessarily long speech, considering its content. I am sure that most of those points can be dealt with in Committee. I shall be more than happy to deal with them then.
  Mr. Rossi rose—
  Mr. Stallard: In view of the shortness of time, I am happy to sacrifice my speech and wait for the Committee stage because it is important that the Bill should go into Committee so that all the points raised in this debate and others can be dealt with on behalf of the millions of people who are waiting for a resolution of the question of death grant.
  2.13 pm
  Mr. Ivor Stanbrook: I support the principle of the Bill. I congratulate the hon. Member for Dundee, West (Mr. Ross) on bringing it before the House, having had the luck to draw an appropriate place in the ballot. I congratulate him especially on the manner in which he moved the Second Reading. He said correctly that his party had no particular credit to claim in respect of this matter any more than the Conservative Party has. It is a delusion to say, as the hon. Member for St. Pancras, North (Mr. Stallard) said, that motions brought forward by the Opposition and then turned down by the Government reflect credit on anyone. Responsible Governments take decisions on such matters and the attitude of the Opposition of the time does not necessarily reflect credit on them as to the merits of the case.
  Although the Welfare State has largely abolished poverty, acute poverty still exists in some areas, including this one. We should take steps to alleviate it either through the contributory principle or through taxation. The principle was accepted in the Beveridge report.
  It is a pity that voluntary insurance for this purpose has declined. In the 1920s, in the area of London where I was born, it was customary for mothers to insure newly born

  699
  children in case they had to pay for an early funeral. It cost a penny a week. I still have such an insurance. It is worth about £67 now. That sum would not pay for my funeral. I hope that f shall not need one soon.
  I am not certain about the financial aspects of the Bill, but we can discuss them in Committee. The council of the London borough of Bromley has asked me to support the Bill. Its own charges now exceed the death grant.
  The question is how to find the money needed to increase the grant. It is a matter of priorities as always. The DHSS could adjust its budget. There could be a contribution from the national insurance fund and from the tax revenue. The cost to the Exchequer of free contraceptives and free slimming tablets now prescribed by doctors amounts to millions of pounds. Such things should have a priority far below the need to give a measure of justice to people who fear dying in poverty and suffering a pauper's grave. That is why I am strongly in favour of the principle of the Bill.
  2.17 pm
  Mr. Gerard Fitt: Time restricts our remarks. I am glad to hear that at least one Tory Member is in favour of the Bill.
  The concluding remarks of the hon. Member for Orpington (Mr. Stanbrook) vividly reminded me of why I support the Bill. I agree with every clause, word and coma in it. I have scores of letters not from relatives of people who have died but from aged and infirm people who have known that they were dying and were fearful of the cost of their funeral. I also have a petition signed by 33,580 people in Northern Ireland—one small part of the United Kingdom.
  The Bill is one of the most important Private Member's Bills to he introduced in this Parliament. The Government's humanity and compassion will be measured by their acceptance or rejection of it. Technical points, the question of where the money is to come from and what should have priority can be hammered out in Committee.
  2.18 pm
  Mr. Tristan Garel-Jones: I support the purpose of the hon. Member for Dundee, West (Mr. Ross) in introducing the Bill. Successive Governments have failed to deal with the problem, which has increased over the years. In recent years, no Government have properly addressed the problem.
  I hope that the hon. Member for Dundee, West will not object if I mention my hon. Friend the Member for Brighton, Kemptown (Mr. Bowden), who has played a significant role in the "Dignity in Death" campaign. It is right to place that on record today. Although I favour the principles of the Bill, having listened to the comments of my hon. Friend the Minister I am not sure that the hon. Member for Dundee, West has played his cards in a tactically correct manner. Suffice it to say that even as recently as 24 November, the hon. Member for Birmingham, Perry Barr (Mr. Rooker) opened his question to the Minister by saying
  "I understand the difficulty and complexity of this issue."—[Official Report, 24 November 1981; Vol. 13, c. 743.]
  In spite of the remarks of the hon. Member for Belfast, West (Mr. Fitt), I feel uneasy about such a brief Bill that will cost a considerable sum of money being taken through the House in this manner. The hon. Member for Dundee, West would have been wiser had he followed the tactics
  700
  of the hon. Member for Tottenham (Mr. Atkinson) last week when he introduced his Private Member's Bill, which I supported. It was set out in narrow terms and the House gave it a Second Reading. I understand that the Government will move admendments in Committee to extend the scope of the Bill. I regret that the hon. Mernber for Dundee, West did not confine his Bill to certain areas and await the review announced by my hon. Friend the Minister. Some credit must be given to the Government for addressing themselves to the issue in depth. My hon. Friend gave a commitment to the House that the review will proceed and that he hopes to tell the House about its outcome in the near future.
  Mr. Bob Cryer: The hon. Gentleman should put his points about the review in Committee. If he is serious about the matter being examined, he should stop trying to talk out the Bill and allow it to be given a Second Reading. Many millions of people are anxious that it should receive a Second Reading and go into Committee.
  Mr. Garel-Jones: I have made it clear that I am anxious about a Bill that will cost £190 million going into Committee, especially as the Government have given a commitment—which preceding Governments have never given—to examine the matter. The Government intend to come forward with proposals. The hon. Member for Perry Barr, who speaks with great authority from the Opposition Front Bench, has recognised, as should all hon. Members, the complexity of this issue. It is not a matter for Committee stage of a Private Member's Bill. I would have been happier if the hon. Member for Dundee, West had confined his Bill to more narrow terms. For example, it is an iniquitous omission that stillborn children are excluded from the present provisions. [Interruption.] That is not an amendment. I should have thought that the lion. Gentleman would have been much wiser, if in coining to this House, as last week his hon. Friend——
  Mr. Douglas Hogg: Would my hon. Friend care to consider this point? The present position is that only a half grant is payable to people born between 5 July 1883 and 4 July 1893. Is it not an absurdity that when the hon. Member for Dundee, West (Mr. Ross) introduces a Bill he does not take the opportunity to kill that anomaly?
  Mr. Garel-Jones: I agree with my hon. Friend. I had already mentioned one of the anomalies about stillborn children, and my hon. Friend has just brought another anomaly to light. If the Bill had been confined to that narrow point, the inquiry that the Government are now undertaking into these matters might well have coincided with the hon. Member's Bill, and the Government might have been able to move amendments to it. [Interruption.] Labour Members know that if the Bill—
  Mr. David Ennals: Will the hon. Gentleman accept that every one of his points could be raised in the Standing Committee? Is not the important thing that the Bill should go into Committee, so that any changes that need to be made can be made there?
  Mr. Garel-Jones: I have already dealt with that point.
  Mr. Skinner: No, it has not been dealt with.
  Mr. Garel-Jones: On a purely technical point as the right hon. Member for Norwich, North (Mr. Ennals)—who is an experienced Member of the House and a former Secretary of State for Social Services—will

  701
  know, the point would not be covered by the long title of the Bill. [Interruption.] The right hon. Gentleman knows, as does his hon. Friend the Member for Perry Barr that there are many issues on which we take a personal interest, and one of them is child benefit.
  If I, as the Member for Watford, were faced with the choices mentioned to the House just now by the Minister for Social Security, and were given £190 million to spend, I am not ashamed to say that I would prefer to see that money devoted to child benefit rather than to death grant. [Interruption.] Therefore, as one of the supporters in this House of the whole principle of child benefit, and wishing not only to preserve the level of child benefit but see that level increased, I am very anxious when I see a one-page Bill, which envisages the expenditure of £190 million, about to go into Committee. I know and the House knows that if the Bill were to go into Committee, Labour Members would not be concerned with considering the alternatives that Conservative Back Benchers—
  Mr. Allen McKay rose in his place and claimed to move, That the Question be now put.
  Mr. Speaker: I am afraid that I cannot accept a closure motion, bearing in mind the time at which the debate started.
  Mr. Garel-Jones: Conservative Back Benchers do not enjoy the luxury of being able to support any expenditure whatever. [Interruption.] Together with many of my hon. Friends, I am pressing the Chancellor of the Exchequer—
  Mr. Douglas Hogg: Will my hon. Friend accept that he and I are anxious to see an uprating in short-term benefits? If the Bill were to go in Committee and evenuually to be passed, it might then not be possible to uprate short-term benefits.
  Mr. Garel-Jones: That is correct, and I am very pleased—[Interruption.]—that my hon. Friend has made the point. [Interruption] It is no good the hon. Member for Bolsover (Mr. Skinner) sitting there mouthing his own slogans. Since I have been in this House, I have never known him fail to support any measure entailing additional Government expenditure—provided that it was not concerned with the defence of this nation. I have never heard him put up any reasonable argument as to where the money could be obtained.
  Perhaps I can return to my remarks without these interruptions from Labour Members. We have read rumours in the press about the lines on which the Government's thoughts are progressing, and I am not happy—
  It being half-past Two o'clock, the debate stood adjourned.
  Debate to be resumed on Friday 12 February.

  CHILDREN'S HOMES BILL
  Order for Second Reading read
  Hon. Members: Object.
  Second Reading deferred till Friday 26 February.

  MARITIME POLLUTION (RESTRICTION, PENALTIES AND ENFORCEMENT) BILL:
  Order for Second Reading read
  Hon. Members: Object.
  Second Reading deferred till Friday 5 March.

  HOUSING ACT 1980 (AMENDMENT) BILL:
  Order for Second Reading read
  Hon. Members: Object.
  Mr. Speaker: Second Reading what day? No day named.

  SEX DISCRIMINATION ACT 1975 (AMENDMENT) BILL:
  Order for Second Reading read
  Hon. Members: Object.
  Mr. Speaker: Second Reading what day? No day named.

  TREASURY AND CIVIL SERVICE
  Ordered,
  That Mr. Ken Woolmer be discharged from the Treasury and Civil Service Committee and Mr. Austin Mitchell be added to the Committee.—[Mr. Ronald W. Brown, on behalf of the Committee of Selection.]

  EMPLOYMENT
  Ordered,
  That Mr. Raymond Powell and Dr. Oonagh McDonald be discharged from the Employment Committee and Mr. Frank R. White and Mr. Greville Janner be added to the Committee.— [Mr. Ronald W. Brown, on behalf of the Committee of Selection.]

  WELSH AFFAIRS
  Ordered,
  That Mr. Raymond Powell be added to the Committee of Welsh Affairs. — [Mr. Ronald W. Brown, on behalf of the Committee of Selection.]

  ENVIRONMENT
  Ordered,
  That Mr. Bruce Douglas-Mann be discharged from the Environment Committee.—[Mr. Ronald W. Brown, on behalf of the Committee of Selection.]

  SCOTTISH AFFAIRS
  Ordered,
  That Mr. Robert Hughes be discharged from the Committee on Scottish Affairs and that Mr. William McKelvey be added to the Committee.—[Mr. Ronald W. Brown, on behalf of the Committee of Selection.]

  LIAISON
  Ordered,
  That the Order of 31st January 1980 relating to the nomination of the Liaison Committee be amended, by leaving out Mr. Bruce Douglas-Mann and Mr. Robert Hughes and inserting Mr. Reginald Freeson and Mr. David Lambie—[Mr. John Stradling Thomas.]

  Laker Airways
  2.33 pm
  The Under-Secretary of State for Trade (Mr. lain Sproat): I learnt with great regret this morning of the decision to appoint a receiver to Laker Airways.
  Laker Airways announced last August that the strengthening of the United States dollar relative to sterling had increased substantially the cost of servicing dollar loans which the airline had obtained to finance the purchase of aircraft. Furthermore, traffic had been below expectations for the whole airline industry, but particularly for Laker. It was therefore negotiating with the syndicates of lenders, who had furnished the loans, a deferment of some of the repayments.
  Negotiations have been taking place since then, but although, as I understand it, considerable progress was made towards obtaining substantial additional financial support, at the same time Laker's trading conditions have deteriorated significantly, particularly in the last two or three weeks, and success could not in the end be achieved.
  Both the Bank of England and the Civil Aviation Authority, which has a statutory duty to monitor the financial soundness of airlines, have kept in touch with negotiations between Laker Airways and its lenders.
  Since I felt that travellers affected by this decision would look to my Department for the earliest possible advice about their position the House will understand that I thought it right to issue guidance to help them this afternoon.
  Briefly it was that in the event that the receiver decides to cease operating flights, passengers who have paid for bookings for a package holiday would be protected in the first instance by the bond, guaranteed with the bank, which Laker's tour operating companies provide as a condition of their air travel organisers' licences. This bond would be immediately available to enable alternative arrangements to be made to bring home people who are already abroad.
  Those who had booked but not yet travelled could seek compensation from the bond, and, if it proved insufficient to meet all legitimate claims, from the air travel reserve fund.
  These arrangements would not cover those travelling on Skytrain scheduled services. If Laker services were no longer operating they would have to travel by alternative means. If they had unused tickets they would be in the position of unsecured creditors, unless they could exchange them for valid tickets issued by another airline.
  I understand that the receiver is exploring every possibility of minimising the inconvenience suffered by passengers, and it will become clearer when he has had a little more time how this can be done. Travellers affected should therefore watch for further information in the media.
  Many hon. Members will share the sadness I feel at this event, after Sir Freddie Laker has done so much to make air travel available to a wider market, and I would like to express my sympathy with the employees and management of the company, and all others who may suffer loss or inconvenience as a result.
  Mr. K. J. Woolmer: The appointment of receivers to Laker Airways today will have come as a tremendous shock to many in the country, not least to the employees, passengers and creditors,
  704
  particularly in view of the reported statement by Sir Freddie only three days ago, to the effect that he could not be more confident about the future.
  Does the Minister understand that our immediate concern is for passengers travelling, or booked to travel, with Laker Airways and its holiday subsidiaries? Will the Minister give an assurance that holidaymakers will get their money back, that the funds are adequate and that the refunds will be made quickly, so that individuals and families can make alternative holiday arrangements? Does the hon. Gentleman recognise that the position facing passengers booked on sheduled services is totally unsatisfactory and that his statement falls far short of assuring them that they will be properly safeguarded? How many are involved and what does the Minister intend to do on their behalf? What is happening to Laker's air services today, and what is to happen in the next few days? How many employees are involved? I am sure that the hon. Gentleman will join us in hoping that the employees' position will be safeguarded as much as possible.
  The House will be well aware that many aspects of the affair have been building up for some time and they must leave people feeling very uneasy about past events. Is it appropriate to appoint an inspector under the powers in the Companies Act to examine the affairs of recent months? What does the Minister intend to do about route licences? How many route licences are involved and what does the hon. Gentleman intend to do to safeguard the interests of British aviation and of commerce? Does not the affair demonstrate the urgent need to review British aviation policy and the Government's apparent failure to have any such policy? The Minister's remarks to me only a few day s ago at Question Time about the North Atlantic route have been shown to be the hollow sham that they were then and are now. I ask the Minister to go away to learn some lessons, and to assure us that he will investigate and return to the House with a proper review of aviation policy.
  Mr. Sproat: Conservative Members and the Government completely share the hon. Gentleman's concern for the passengers. May I completely reassure him that funds from the bonding arrangement and the air travel reserve fund will be adequate: the total amount available from those two sources is over £23 million and that will certainly cover all those on charter holiday packages. The hon. Gentleman also asked me how many scheduled passengers were involved. I am sure that he will appreciate that it is difficult to know exactly how many are involved, but we understand that the number on each side of the Atlantic is about 5,000. The answer to the hon. Gentleman's question about the number of employees is 2,600, and everything will be done to safeguard them.
  The hon. Gentleman raised a very important point about the Companies Act. We have no evidence that an inquiry by any Department, particularly the Department of Trade, under section 165 of the Companies Act 1948 would be justified. If the receiver finds any reason to seek one, he will doubtless inform us. If the company should subsequently go into liquidation, it will be the duty of the liquidator to carry out a full investigation of the circumstances and to report if he has any reason to believe that any impropriety has taken place.
  In regard to the effect on the European route licences, Laker Airways had a kind of blanket charter. It was running charter flights—I speak from memory—into five countries in Europe and two in North Africa, Morocco and

  705
  Tunisia. In the United States, he was running services to New York, Los Angeles, Miami and Tampa. As far as these specific licences are concerned, the appropriate authorities on both sides of the Atlantic—on this side, of course, the Civil Aviation Authority—will examine them to see what can be done and who may apply for them when and if Laker Airways give them up.
  I have been asked about the general effects of the Government's policy. We remain absolutely convinced that the principle is that we should strive for a better deal for the consumer and that we should pursue our policy of competition and seeking stability for the airlines. That has been our policy. It will continue to be our policy.
  Mr. David Steel: In the absence of the Leader of the House, may I say to the Under-Secretary that this pathetic statement by a junior Minister will not satisfy the House? Is he aware that all hon. Members are conscious of the fact that Sir Freddie Laker and his company were the jewel in the crown of the free economic theories of this Government—
  Mr. Dennis Skinner: And of the Liberals.
  Mr. Steel: No, not of the Liberals—and that they have become the latest nail in the coffin of those theories? Do the Government still believe that the Civil Aviation Authority has a duty to balance the need of the consumer for competitive air fares, the interests of the taxpayer in the support of British Airways and the interests of other airways? Have not the Government consistently undermined that balancing authority? When will the House hear a full statement on aviation policy?
  Mr. Sproat: As for the disappointment that the right hon. Gentleman appears to feel about the statement, he will perhaps agree, when he has studied it further, that it is an extremely full statement. It goes into the sort of details that will be most helpful to air passengers.
  On the balance of the Government's policies, the right hon. Gentleman may care to reflect on the fact that one result has been that the three British airlines flying the North Atlantic last year carried more passengers and out-earned the nine American airlines. That is a tremendous achievement. It is precisely that balance between stability for the airlines and benefit for the consumer that we intend to continue to pursue.
  Mr. Michael Neubert: On this black day for air travel—I flew on the first charter flight to be operated by Laker Airways and salute Sir Freddie for his lifetime commitment to cheap air fares—is not one lesson to be drawn that free enterprise is unlikely to be able to flourish in conditions of world recession in competition with State-subsidised public corporations? Is it not an irony that British Airways, which made a loss of £120 million last year, is still flying today whereas Laker Airways, with debts of half that amount, is now in receivership? Can the Minister say whether there has been any positive response from other British carriers such as British Airways and British Caledonian in helping those Laker passengers who are marooned abroad or who may have paid for tickets for flights in the near future?
  Mr. Sproat: I thank my hon. Friend for his generous but no more than deserved salute to Sir Freddie. Sir Freddie is, indeed, a very great man who has done
  706
  wonderful things for passengers all around the world in providing them with cheaper air travel. My hon. Friend's remarks about Sir Freddie will be greatly appreciated at this difficult time for him.
  My hon. Friend will know that it is and will continue to be the firm policy of the Government to privatise British Airways as soon as is practicable. My hon. Friend referred, I think, to a loss made by British Airways last year amounting to £120 million. In fact the pre-tax loss was £141 million, even greater. My hon. Friend is right in saying that we have to look closely at the manner in which taxpayers' money is used to fund these nationalised industries.
  However, having said that, I should also point out that I spoke this morning to the chairman of British Airways, Sir John King, and to the chairman of British Caledonian. They both made extremely generous statements about how they would help any stranded passengers that they could. The chairman of British Caledonian, Mr. Adam Thompson, with superb generosity, said that, if necessary, he would fly stranded passengers back free to the United Kingdom. That shows what free enterprise will do, when called upon.
  Mr. David Ennals: Is the Minister aware that many on these Benches and in the country, will be horrified by the threat that he has now made to privatise British Airways, which presumably would then go down in the same way as Sir Freddie Laker has gone down? Second, does not the Minister feel any sense of responsibility? If Laker Airways was the prime example of successful private enterprise, why have his Department and the Government—as far as I can see—not raised a finger to save it to preserve the jobs of 2,000 workers, as well as the holidays of tens of thousands of customers?
  Mr. Sproat: I am astounded that apparently the right hon. Gentleman is not aware that it has been our policy for a very long time to privatise British Airways. It is extraordinary, if he does not know that; it shows what little interest he takes in the matter. Perhaps I should also tell him, as apparently he is unaware of the fact, that last year private airlines overall in this country, as opposed to British Airways, made an overall profit. He should remember that when he criticises our private airlines.
  In answer to what the right hon. Gentleman said about helping Sir Freddie, no formal approaches were made by the officials of Laker Airways to my Department, and we would not consider it appropriate in this case to intervene.
  Mr. Anthony Grant: Will my hon. Friend take no notice of the nonsense that is talked by the leader of the Liberal Party—or by the right hon. Member for Norwich, North (Mr. Ennals)—because nothing that he has said and nothing that has happened in any way detracts from the need to privatise British Airways and retain competition? Will my hon. Friend accept that Sir Freddie Laker has rendered a great service to a great number of people who otherwise would not have been able to travel by air? My hon. Friend should take on board the important fact that aviation is an international business, that it involves international agreements, and that it is vital to obtain international agreements on a common sense and fair system whereby scheduled services can be available for the regular business traveller.
  Mr. Sproat: I am glad to have the support of my hon. Friend the Member for Harrow, Central (Mr. Grant) on the

  707
  privatisation of British Airways. It is our firm intention to go ahead with that. I was also glad to hear his tribute to Sir Freddie Laker, whose vision, initiative and enterprise made worldwide travel available to many people who otherwise could never have dreamt of it. What my hon. Friend said about the worldwide implications is right. My Department is constantly trying to get the best possible air services agreements so that we get a good deal for the customers and achieve stability for the airlines concerned.
  Mr. Clinton Davis: Is it not clear that Sir Freddie Laker has been the victim of his own unwarranted optimism and of the cut-throat competition which has been engendered and encouraged by this Government and, indeed, by Sir Freddie Laker himself? Is it not also a fact that it is only as a result of the Labour Government's Air Travel Reserve Fund Act that any hope is offered to charter passengers today? Will the Minister look again at section 165 of the Companies Act, from which he will see, having regard to the reckless statements by Sir Freddie only two days ago, that passengers, creditors and others might well have been misled? Moreover, if the Minister will look at the ratio of debt to capital on which Sir Freddie was operating, he will see that there is ample ground for inspectors to be appointed. That ought to be done.
  Mr. Sproat: Although it is inappropriate to go into all the reasons why Sir Freddie is now in receivership, there is no doubt that two main reasons were the changing rate of the pound to the dollar after Sir Freddie had taken out his loans and, secondly, the worldwide recession in air travel that has affected everyone and has made a substantial contribution to the deterioration in Sir Freddie's traffic figures. As to the hon. Gentleman's other question, I undertake to reconsider section 165.
  Mr. R. A. McCrindle: The Minister has confirmed that, unless passengers have booked on Laker services through a package tour arrangement, no fund is available to compensate those who have booked on scheduled services on an advance purchase basis. Will he extend his discussions beyond British airlines to those who have flown in competition with Sir Freddie Laker across the Atlantic so as to bail out any passengers who might otherwise become stranded? In the process of his consideration, will he also remember the position of the travel agents, sometimes small firms, who may have sold advance purchase Laker tickets and against whom a law suit might be forthcoming from some stranded passengers?
  Mr. Sproat: I shall certainly consider the problem that my hon. Friend raises about small travel agents. As to his interesting point about bringing rival American airlines into the matter, I have already done so. Both Pan Am and Air Florida have said that they are prepared to make arrangements to help passengers wherever possible.
  Mr. Norman Atkinson: Does the Minister agree that, far from being a jewel in any crown, the Laker organisation seems to be the biggest airborne bucket shop in history? Will he assure the House that if discussions are to go ahead about the privatisation of British Airways neither Sir Freddie Laker nor the others mentioned will be involved in the process of privatisation? Will he also make a statement about the licensing of the
  708
  Laker organisation and explain what he meant by "a kind of blanket charter"? What will happen now to the Laker licences?
  Mr. Sproat: As to the latter part of the question, I was endeavouring to make it clear to the House that., on scheduled services, specific permission and agreement must be sought for flights between A and B. As to the seven countries outside the United States—five in Europe and two in North Africa—Laker can operate charter flights there and to anywhere that IATA rules apply in Europe without permission for specific routes. That is a clear statement of the position, which applies not only to Laker but to everyone else.
  The hon. Gentleman, in his remarks about bucket shops was, as usual, nasty and wrong. Sir Freddie Laker has made a greater contribution to the world travelling public than any other man in this country.
  Rev. Ian Paisley: Can the Minister be more forthcoming about what he will do for the employees of Laker Airways? What will he do about the 5,0tX) passengers stranded across the Atlantic who must get back home? It is not enough to give assurances now. What steps will he take so that those people can get back to their homes?
  The travelling public owe a great debt of gratitude to Sir Freddie Laker. Many people who could never have travelled were able to travel because he brought down the price of air fares. As the return air fare from Belfast to London is more expensive than a single air fare across the Atlantic, yet British Airways tells us that it is still losing money on that flight, surely credit should be given to Sir Freddie today for what he has done.
  Mr. Sproat: I am grateful to the hon. Gentleman for his well merited remarks about Sir Freddie's contribution to the benefit of air travellers in this country and elsewhere.
  With regard to the approximately 5,000—that is our best estimation—passengers stranded on the other side of the Atlantic, as I have already explained, other airlines have said that they will come to arrangements to ferry those people back. Indeed, Mr. Adam Thomson, chairman of British Caledonian, made the extraordinarily generous offer that he would transport free any passenger stranded on the other side of the Atlantic.
  As for what will happen to the 2,600 employees; that must be a matter for the receiver.
  Mr. Michael English: Is not the simple truth that Freddie Laker upset the cosy European apple cart? What precise proposals have the Government put to the Council of Ministers to exercise the powers under the Treaty of Rome, Brussels, Paris and all the others to introduce a free market for air fares in Western Europe so that fares to the consumer may be reduced to the charge per mile which obtains in North America?
  Mr. Sproat: There is much to be said for what lies at the heart of the hon. Gentleman's question. It is undoubtedly true that many routes within Europe are very highly priced as compared not only with other routes in Europe but certainly with routes within the United States. The ratio is sometimes as great as three to one.
  Mr. English: What are the Government's proposals?
  Mr. Sproat: If the hon. Gentleman will give me a chance, he will receive as succinct and concise an answer as he has ever received in the House.
  The hon. Gentleman spoke of Sir Freddie upsetting the cosy European apple cart. In fact, Sir Freddie's upset, insofar as it was an upset, was mainly concerned with the North Atlantic traffic rather than within Europe where he was operating charter flights.
  The Government placed before our European partners, during our Presidency from July to December last year, plans to liberalise air fares and to run inter-regional air services within Europe. I am sorry to say that our European partners threw out those proposals. We are now in the process of negotiations to bring the proposals back before our European partners. We shall press the matter as vigorously as we know how.
  Mr. Edward Lyons: As it is clear that in recent weeks economic conditions were continuing to deteriorate and not to improve, which is one reason why the airline collapsed, are not the Government worried that if they continue their present economic policy, which is keeping industry on the floor, a succession of well-known British companies will also bite the dust? Instead of bewailing what is happening in the world at large, is it not time that the Government took action to stimulate the economy so that other companies do not suffer the same fate as Laker?
  Furthermore, what possible chance have the 2,600 employees of Laker of finding other jobs in the British air transport industry in the foreseeable future?
  Mr. Sproat: In his remarks about the British economy, the hon. and learned Gentleman misunderstands Laker's problems. Sir Freddie's problems were concerned with his own deteriorating traffic on the North Atlantic, which was not matched among other airlines. One of his problems was that, when news was leaked in the newspapers about the discussions which were taking place, confidence in his ability to continue was reduced, resulting in his traffic figures falling still further, which in turn bred further lack of confidence. It was nothing to do with the British economy. It was mainly to do with the company's own economic situation and the world-wide recession.
  With regard to the 2,600 employees, I have already explained that that must be a matter for the receiver.
  Several Hon. Members rose—
  Mr. Speaker: Order. I propose to call those hon. Members who have been rising in their places and then to call upon the Whip to move the Adjournment.
  Mr. Albert McQuarrie: I am sure that my hon. Friend will absolutely ignore the irresponsible remarks of the hon. Member for Hackney, Central (Mr. Davis) in connection with Sir Freddie Laker's optimism at the beginning of the week. Will he confirm that although the Clydesdale bank put in the receiver, it was the German banks' withdrawal of their investment in Laker Airways which caused the bankruptcy? Does he agree that the bankruptcy would not have occurred and that Sir Freddie Laker's optimism was perfectly correct until that immediate withdrawal by the German banks yesterday?
  Mr. Sproat: My hon. Friend is correct in that there were problems with those German banks who were
  710
  members of the syndicate led by the Midland bank. However, there were other problems with members of other syndicates.
  Mr. Dennis Skinner: Does the Minister recall that when the application was made about setting up Laker Enterprises, especially on American routes, the proposal was turned down by the Labour Government? Hey presto, the British law courts knew all the answers to our economic and political ills and allowed it to go ahead. We now have the biggest failure of monetarism firmly on the map.
  Does the Minister also recall that on 20 June 1980, the same Freddie Laker—at a "do" with the Prime Minister and others—was heard to declare, when talking about trade unions, and, in particular, workers, "Turn the screw until it bleeds, Maggie, and then turn it again"? The Prime Minister has now shown that competitiveness, monetarism and market forces have not been able to work under the greatest architect of monetarism that Britain has ever had, in the name of the Prime Minister. Is it not a fact that while the—[Interruption.]
  Mr. Speaker: Order. The hon. Gentleman must be fair to the hon. Member who has the Adjournment. He must ask a question, because I want to call another hon. Member.
  Mr. Skinner: Is it not a fact that, although the Prime Minister says that there will be no U-turn, the economy is exemplified by the complete turn-about occurring in British society and that this is just another example?
  Mr. Sproat: I know nothing of remarks about trade unions reportedly made, according to the hon. Member, by Sir Freddie. The simplest way of answering him is to say that his question is as wild, imprecise and absurd as usual.
  Mr. Harry Greenway: Is it not fair to say that Sir Freddie Laker and his enterprise pitched North Atlantic and other fares at a level which could be sustained in terms of fair competition? It has been said that those fares enabled millions to travel who would otherwise never have done so.
  Is it not also true that Sir Freddie Laker has been undermined by the fact that State airlines brought their high fares down to the level he set and which have been sustained by large State subsidies? Is that not a disgrace? Once again, the taxpayers have paid for their own demise.
  Mr. Sproat: It is true that taxpayers have to pay vast amounts of money to sustain British Airways. Perhaps a £141 million loss last year will convince even the Opposition that there is a problem. I again thank my hon. Friend for the generous tribute he paid to that great man Sir Freddie Laker.
  Mr. Bob Cryer: Will the Minister accept that his remarks this afternoon sound like the funeral arrangements for Freddie Laker and Laker Enterprises as well as the funeral arrangements for the jobs of 2,600 employees who will join the 3 to 4 million people in the dole queue? Does not the Minister understand that when he talks so glibly of private enterprise competition he implies a race and that Laker happens to be a loser? Does that not point to the vulnerability of the whole private enterprise system? Does he realise how childishly absurd he sounds when he suggests that the Government will privatise British Airways? Would he like to give

  711
  confidence to British Airways employees that the organisation will not go bankrupt by saying that the threat of bankruptcy will be entirely removed from British Airways because it will never be privatised by this Government after this salutary lesson?
  Mr. Sproat: We certainly intend to continue with our plans to privatise British Airways as soon as possible. I remind the hon. Gentleman that British private airlines last year made an overall profit, which is more than British Airways did. As for what the hon. Gentleman said about funeral arrangements, I remind him of the good old saying that one cannot keep a good man down; and Sir Freddie is not only a good man.
  Mr. John Wilkinson (): Does my hon. Friend agree that Sir Freddie Laker's swashbuckling and highly individualistic style hid a great achievement in pioneering British civil aviation? In negotiations with the Americans, will my hon. Friend try to ensure that the gross over-capacity on the North Atlantic is not exacerbated by the opening of further gateways on that route? Can he also try to ensure that the infrastructural charges to British airlines, such as landing and navigation charges, are kept to the minimum? As British manufacturing interests are involved, at least indirectly through the airbus industry consortium, can the Minister say how many European airbuses Laker Airways had which are not yet paid for?
  Mr. Sproat: I welcome my hon. Friend's remarks about Sir Freddie's pioneering example, which he shared with Mr. Adam Thomson of British Caledonian. Overcapacity on the North Atlantic is a serious problem. My officials are discussing it with their counterparts in the United States. My hon. Friend and others will be delighted to know, in relation to keeping down user charges, that the British Airports Authority has decided to raise its charges by not one penny next year.
  Mr. Archie Hamilton: Has not the over-capacity on the North Atlantic route been a major factor in Sir Freddie Laker's downfall? Is not my hon. Friend surprised at the churlish attitude of Opposition Members, considering that one of the best things—and perhaps the only good thing—done by the last Labour Government, was to knight Sir Freddie?
  Mr. Sproat: I agree with the implications of my hon. Friend's remarks. It is asolutely appalling that the Opposition should take this attitude to Sir Freddie at this time. I cannot say that I am surprised by that churlishness. It is exactly what we would expect from them. So far as
  712
  over-capacity is concerned, I am well aware of the problem and we are doing everything that we can with our counterparts in the United States.
  Several Hon. Members rose——
  Mr.Speaker: Order. The hon. Members who are now on their feet rose after I made my comment
  Mr. Woolmer: The Minister said that no formal approaches for Government assistance were made. Were any informal approaches for Government assistance made? If so, what options were considered to save British services and jobs, and why were they rejected?
  Is it not unsatisfactory that 10,000 scheduled passengers should be left? However much individual institutions seek to help them, may we have an assurance that the Government will involve themselves in the process? Would it not be wrong for hon. Members on either side of the House to use euphoric tones about Sir Freddie Laker—either about his past or about his present downfall?
  Is the Minister aware that at the end of the day we shall want to know two things—whether Laker's affairs were carried out reasonably and properly, and what conclusions are to be drawn for British and international aviation policies?
  When inquiries are completed, will the Minister ensure that there is a proper debate in the House because the issues need discussing? May we have an assurance that there will be a debate on the Laker affair and the future of British aviation policies?
  Mr. Sproat: I shall answer the last question first. I should be very happy indeed for a debate to take place on the subject that the hon. Gentleman mentioned. I have no doubt that my right hon. Friend the Leader of the House will take note of what he said.
  Laker Airways did not at any time until yesterday approach the Government. Yesterday at lunchtime Sir Freddie himself telephoned me to tell me what the situation was. Naturally, I considered the implications and the possibility of using section 8 of the Industry Act, but with great reluctance I decided that it would riot be appropriate.
  As for the stranded passengers and Government involvement, I have already made it clear that I was involved by speaking both to Sir John King, chairman of British Airways, and to Mr. Adam Thomson, chairman of British Caledonian, asking them what they could do. They both made an extremely generous response.

  Index-linked Pensions
  Motion made, and question proposed, That this House do now adjourn.— [Mr. Berry.]
  3.10 pm
  Mr. R. A. McCrindle: The publicity given this week to the subject of index-linked pensions underlines the fact that this is an opportune moment to raise it in the House.
  If anyone doubted that index-linked pensions are an emotive sublect, the various strands of opinion reported in the press this week will have convinced him otherwise. Not only is it an emotive subject, but it causes great concern to many people and produces envy and outrage in those who do not have index-linked pensions and a powerful defence from those who have them and believe that they are entitlement for which they have paid. I shall explain later that that is not always so.
  I appreciate that the Government are faced with a daunting task in deciding what action to take on this difficult subject. There are three choices open to the Government. They could leave the situation as it is, they could abolish index-linked pensions for all future beneficiaries, or they could adjust the scheme to take account of the inequties to which many people have drawn attention.
  Leaving things precisely as they are would be a bad course, particularly after the setting up of the Scott committee and its interesting report last year. It would also be a bad course, because there would be continued pressure from those who consider that index-linked pensions are one of the greater contributions to inflation and favour one section of the community against the other. I suggest that that course is not open to the Government.
  The second course would be to abolish index-linked pensions. It would be impossible to do that for pensions already in payment, and even a proposal to abolish such pensions for those with a future entitlement would involve reneging on legal obligations and outraging not much less than half the working population.
  I suggest that the only course open to the Government is to adjust and improve the scheme to bring about a better balance between the haves and the have-nots.
  However restricted the Minister feels in other respects, I hope that he will restate the point that index-linked pensions for the public service must continue, for strong practical reasons. I am asking simply that he tells me that the Government cannot scrap index-linked pensions but also cannot leave the scheme untouched.
  I have a few suggestions for reforms. I do not expect a definitive reply to them today, but I hope that they will point the direction that the Government may take.
  Recent reports in The Guardian and other newspapers have suggested that the Government are receiving advice from Civil Service Ministers to the effect that some public servants should be expected to pay more for their index-linked pensions. There is a strong argument for looking at contributions.
  The Government may consider that there is a case for a cut-off point in real terms, above which index-linking should cease.
  The House will be aware of the few cases of retired admirals and permanent secretaries who, we are told, have just received an enormous increase in their index-linked pensions. Such cases are few and far between, but news
  714
  of them causes considerable upset. Perhaps the Government should set an absolute figure above which index-linking will cease.
  Thirdly, there is a case for only limited inflation-proofing. To inflation-proof a pension up to an inflation rate of about 12 per cent. may be reasonable, but above that we may be moving to hyper-inflation. Pensioners, as well as the ordinary public, have an interest in curbing such a tendency. It is reasonable to expect them to contribute to the control of hyper-inflation.
  I repeat that I expect no more from my hon. Friend than general comments. I shall be particularly pleased if he can tell me that the Government remain bound by the undertakings given in the Act passed by the 1970–74 Government that, in principle, index-linked pensions are part of their policy but that they are equally giving urgent attention to reducing costs.
  I turn to an aspect of the Scott report which some would contend has already been implemented—the extension of index-linking to private occupational pension schemes. Paragraph 6 states:
  "It is a highly desirable social objective that the standard of living of those in retirement should be protected."
  It does not say "those in retirement from the public service". It would bid fair to reduce the envy and discontent among people in private occupational pension schemes if there were a move in that direction.
  I may be pushing at an open door. Following the Scott report's recommendation that the Government should issue index-linked gilt-edged bonds, available only to private pension schemes and insurance companies, in the Budget last year the Government took a first step. The second was taken recently. I hope that the Minister can tell us that the Government are considering accepting that powerful recommendation and moving towards the index linking of all retirement pensions.
  Do the Government propose to adopt that principle? It would greatly reduce the concern. Some may consider that the issue by the Government of gilt-edged bonds to pension funds or otherwise would turn the screw of the inflationary spiral. But, had the Government held that view, it is surprising that they took the first faltering step to issue such bonds last year.
  I have a few general questions. If change is needed, is it not preferable to increase the cost to the employee instead of ending index-linking? Secondly, would not an attack on contributions and benefits affect the morale in the public services and make wage settlements more difficult? Thirdly, if it is considered that some public servants should pay more for index-linked pensions, could not such an increase be phased over a period of years?
  In calling for a restatement of the acceptance in principle of no scrapping of index-linked pensions as such, I am only too aware of the political hot potato that I have thrown at my hon. Friend.
  May I make it more palatable by saying that, if—as he and I both hope—inflation is brought under control, much of the problem will recede or even disappear?
  3.20 pm
  The Minister of State, Treasury (Mr. Barney Hayhoe): I congratulate my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle) on his responsible and constructive speech on an important subject. As he said, the whole issue of index-linked pensions generates strong feelings, both for and against, among those directly

  715
  affected who see their legitimate expectations at risk, as well as among those who resent what they see as privileged treatment of the public sector.
  Many millions of individuals are directly concerned and, as my hon. Friend recognised—he is an expert in pension matters—considerable complexity is involved. There are no easy or simple solutions if the Government are to achieve their aim which is—I reiterate the words used by my right hon. Friend the Prime Minister yesterday—to ensure that pensions for public servants are fair to taxpayers in general as well as to employees, pensioners and their dependants.
  At the outset, I wish to make it absolutely clear that I have no new statement of Government policy to make today. Anyone who listened to Prime Minister's Questions or to the response of the Leader of the House to a question on the Business Statement in the House yesterday, will recognise that both my right hon. Friends confirmed that the Government have not yet reached conclusions on the matter. I wish to put the whole question into perspective and respond, at least in some way, to some of the points raised by my hon. Friend. As my hon. Friend recognises, index-linking goes wider than simply the Civil Service. It applies virtually to the whole public sector. In addition to civil servants, it includes the Armed Forces, local government employees, teachers, the judiciary, doctors, dentists, nurses, policemen, firemen, postmen, miners and a whole host of other occupations—including Members of Parliament. Index-linking covers about half the occupational pension structure in Britain. If we include the wives of public sector employees who may one day qualify for a widow's pension, about one-quarter of the adult population are receiving index-linked pensions or are potential recipients. In all, more than 10 million people have a direct interest.
  It is useful to recall how public service pensions were increased before the 1971 Act introduced index-linking. Increases required special Acts of Parliament, which were passed every few years. Strong emotions and sharp arguments were generated. I well recall, when I first entered the House, the campaigning and lobbying by public service pensioner organisations. Inevitably, the ad hoc system threw up all sorts of anomalies. For example, a police constable who retired on full pension in 1944 saw the purchasing value of his pension decline by 25 per cent. by 1969. However, his colleague—with whom he may well have walked the beat, who retired in the same circumstances only two years later in 1946, hardly lost at all by 1969. The person who retired in 1952 had his pension increased by 10 per cent. in real terms by 1969. Similar anomalies were found in all the other services.
  Overall, the cost of pensions and their increases before 1971 was little different from what it would have been if full indexation had applied in those years. The 1971 Act, therefore, was seen as a rationalisation. Indeed, the main argument then was whether the link should be with earnings or with prices, as the then Government preferred. No one then, of course, foresaw the inflation that was to come.
  The experience before 1971 is relevant when we consider the present cost of public sector pensions. Even if we had not had index-linking under the 1971 Act, substantial increases would, I am sure, have been granted over the last decade, because prices have quadrupled during the last 11 years.
  716
  It is unrealistic to suppose that, say, a clerical officer retiring on a pension 11 years ago would have stayed at anything like the £12 a week that was relevant then, or that a ward sister retiring from the Health Service would have had a pension of £14 a week continuing right through the 1970s.
  Therefore, it is not reasonable to blame index-linking for all—and I stress that word—the increases to pensions that are now being paid. However, having made that my qualification, let me immediately refer to the very substantial sums of money that are involved in public sector pensions.
  The total cost this year of about £4 billion includes about £1 billion paid in lump sums to those who retire because, as my hon. Friend will know, there is what one might call forced commutation of part of the pension in the public sector, in that gratuities are paid and then the remainder of the pension provision is the part that is index-linked.
  The remaining £3 billion provides the 1.6 million pensioners with an average payment of about £36 a week. For men over 65 and women over 60 that is, of course, in addition to the national insurance retirement pension, which is also index-linked. The basic rate is now £29.60 for the single person, and £47.35 for the married couple.
  Perhaps understandably my hon. Friend referred to this specific point—we hear a great deal about the very biggest pensions, those paid to the retired permanent secretaries, the generals, the admirals, the judges and others. But these are a tiny minority. Taking the Civil Service as an example, more than half the 384,000 pensioners receive less than £20 a week. The average for the whole of the Civil Service sector is £32.60 a week. Fewer than one in 20 of Civil Service pensioners receives more than the national average wage after one includes the State pension, and only about one in 400 receives about twice average earnings.
  That is the position across the whole public sector. For the 280,000 Armed Forces pensioners, £33.80 a week is the average. For the 183,000 teachers now on pension, the average is £58.60. For over 200,000 ex-NHS employees, the average is £36.40. For the 356,000 local government people now on pension, the average is £25.70. For the 100,000 or so firemen and policemen, the average is £44.20.
  I give these figures so that hon. Members may get a better understanding of the position and how it applies to the very large number of people involved.
  Against that background I come to the root of the problem referred to by my hon. Friend. Few would deny—he certainly did not—that there is a widely perceived unfairness between the public and private sectors. Formal index-linking is confined to the public sector. Although some private sector pensioners have received reasonable increases in their pensions in recent years, many others have not, and as a result they have faced great difficulties over the past few years.
  Moreover, public service pension increases are financed from public funds, and people in the private sector resent paying taxes to provide index-linking for public service pensions, particularly when they have no such guarantee themselves.
  In May 1980 the Government, recognising all these problems and the strong feelings that exist, set up the Scott committee to provide an independent view of the problem. It published a thoughtful and authoritative report last year.

  717
  My hon. Friend referred to the view that is expressed that protection of an individual's retirement income against inflation was a highly desirable social objective. I trust that everyone in the House would share that view.
  The committee also went on to emphasise the widespread feeling of injustice in the private sector, which needed to be taken into account. They noted that the State scheme, as it matures over the next 16 years—this is the new earnings-related State scheme—will come to narrow the gap between the public and private sectors. In paragraph 8 of the report the committee says:
  "This will be particularly significant for those who, when employed, were on average earnings or less, since the State pensions taken with the Guaranteed Minimum Pension, where appropriate, will provide pensions of 40 per cent. or more of pre-retirement earnings, and this amount will be fully protected against inflation."
  It also noted that if the fight against inflation is successful the present inequalities will further diminish. Above all, it reminded us that good pensions, like anything else, have to be earned and paid for during working life and by all people at work.
  The Scott committee provided a valuable contribution to the public debate on this issue. The Government's task has been to consider, in the light of that analysis, whether and what changes may now be required. Two main courses of action are open to us. The first is to curtail in some way the increases granted in public service pensions. The second is to increase the contributions which public servants pay towards their pensions and a wide variety of detailed options are opened up under these two broad headings. In assessing them, our aim has been to arrive at proposals that are fair to pensioners and taxpayers, employees and employers alike.
  All this is taking a great deal of time. When the Scott report was published about a year ago we had hoped to have made our response by now, but as the work has proceeded the complexities have become more and more apparent. There are about 130 different main public-sector pension schemes. All of them have their own distinctive features. The financing arrangements vary from pay-as-you-go to notional funding, to full funding. Who pays for index-linking, how and by how much varies from scheme to scheme. The legal arrangements vary—some are provided directly under statute, others under trust law and yet others in some combination of the two.
  The Government have been very conscious of the fact that some possible changes could have a retrospective effect and could require retrospective legislation, never a popular course in the House. Added to that is the need to
  718
  get our proposals absolutely right because of the importance of the issues that are raised and the need to get a solution that will last because it is accepted as fair.
  My hon. Friend referred to the possibility of perhaps having a ceiling or a cut-off point in dealing with large pensions that attract more than their fair share of criticism. As I have explained, these large pensions are a small minority. The financial savings of doing anything would be small and would tend to discriminate against those with long service who have transferred in pension rights perhaps from previous employment or who have bought added years at their own expense and see themselves as having entered into a contractual arrangement of that kind.
  The counting of war service might also put someone on the wrong side of any line we drew. I can imagine the comments that would be made in the House if that were to happen. My hon. Friend referred to the hope that the private sector would gradually be able to match the public sector. As inflation comes under control, that will be much easier. However, it is not a matter in which the Government should intervene directly, because it involves private sector employers and employees, and insurance companies and others. As it matures, the new State earnings-related scheme will narrow the gap. Indexed gilts—although not issued in response to the Scott recommendation or as a panacea for all pension problems, as my hon. Friend will recognise—may be of some help. They are proving to be a valuable addition to the range of investments open to fund managers.
  As all hon. Members will agree, inflation is the problem. As it falls, the difference between public and private sector schemes will diminish. Therefore, we have been debating some important aspects of the problems that arise when inflation erodes the value of pensions and puts at risk the incomes that people have set aside for retirement. The problem affects private sector pension schemes just as it affects the public services. It causes them great concern.
  The conquest of inflation is of prime importance and Government policy is firmly directed towards that end. Until we have achieved that, we shall be faced with the issues raised by pension indexation and the Scott report. The Government recognise that many people are keenly awaiting its views on such matters. I assure them and my hon. Friend that the Government still have such issues under consideration. They are being dealt with carefully and as a matter of urgency and I hope that we shall reach our conclusions soon. We shall then announce them to the House.
  Question put and agreed to.
  Adjourned accordingly at twenty-three minutes to Four o' clock.